GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1997

H	1 

HOUSE BILL 1326*

Short Title:  Update IRC Reference/Conform Gift Tax. 	(Public)

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Sponsors: Representatives Gray, C. Wilson (Cosponsors), Brawley, Cansler, Capps, Hill, Neely, Ramsey; Hurley, Starnes, and Hill.

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Referred to:  Finance.

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May 19, 1998

A BILL TO BE ENTITLED
AN ACT TO UPDATE THE REFERENCE TO THE INTERNAL REVENUE CODE USED IN DEFINING AND DETERMINING CERTAIN STATE TAX PROVISIONS AND TO CONFORM TO FEDERAL GIFT TAX TREATMENT OF CONTRIBUTIONS TO QUALIFIED TUITION PROGRAMS.
The General Assembly of North Carolina enacts:
Section 1.  G.S. 105-228.90(b)(1a) reads as rewritten:
"(1a)	Code. – The Internal Revenue Code as enacted as of June 1, 1998, including any provisions enacted as of that date which become effective either before or after that date."
Section 2.  G.S. 105-134.6(b)(12) is repealed.
Section 3.  G.S. 105-134.6(b)(13) reads as rewritten:
"(13)	The amount that is distributed to a beneficiary of the Parental Savings Trust Fund of the State Education Assistance Authority unless the distribution is a refund of earnings described in section 529 of the Code."
Section 4.  G.S. 105-188 is amended by adding a new subsection to read:
"( k)	Qualified Tuition Programs. – The provisions of section 529(c)(2) and (5) of the Code apply to this Article.  If a donor elects to take a contribution into account ratably over a five-year period as provided in section 529(c)(2) of the Code, that election applies for the purposes of this Article."
Section 5.  Notwithstanding Section 1 of this act, to the extent an amendment to the Internal Revenue Code enacted after January 1, 1997, would increase North Carolina taxable income for a taxpayer's tax year beginning before January 1, 1998, the amendment does not apply to the taxpayer for that tax year.
Section 6.  Section 4 of this act becomes effective for taxable years beginning on or after January 1, 1998.  The remainder of this act is effective when it becomes law.