GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1997

S	2 

SENATE BILL 1229
Second Edition Engrossed 5/27/98

Short Title:  Abolish Inheritance Tax Waivers.	(Public)

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Sponsors: Senators Kerr, Cochrane, Dalton, Hartsell, Hoyle, and Webster.

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Referred to:  Finance.

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May 21, 1998

A BILL TO BE ENTITLED
AN ACT TO ABOLISH TAX WAIVERS FOR THE TRANSFER OR DELIVERANCE OF A DECEDENT'S PROPERTY.
The General Assembly of North Carolina enacts:
Section 1.  G.S. 105-2.1 reads as rewritten:
"§ 105-2.1.  Definitions.
" The following definitions apply in this Article:
(1)	Code. – Defined in G.S. 105-228.90.
(2)	Collector. – Defined in G.S. 28A-1-1.
(3)	Personal representative. – Defined in G.S. 28A-1-1."
Section 2.  G.S. 105-11 is repealed.
Section 3.  G.S. 105-11.1 is repealed.
Section 4.  G.S. 105-12 is repealed.
Section 5.  Article 1 of Chapter 105 of the General Statutes is amended by adding a new section to read:
"§ 105-13.1.  Notices to Secretary of certain payments.
(a)	Life Insurance Policy. – When a company pays the proceeds of a life insurance policy as a result of the death of an individual who owned the policy and was the named insured under the policy, the company must notify the Secretary of the payment on a form approved by the Secretary unless one of the following applies:
(1)	The payment is to the surviving spouse.
(2)	The payment is to a Class A beneficiary, as described in G.S. 105-4(a), and the proceeds of the policy do not exceed one hundred thousand dollars ($100,000).
(b)	Annuity and IRA. – When a company pays the initial payment of an annuity or the initial distribution of an IRA as a result of the death of the annuitant or owner of the IRA, the company must notify the Secretary of the payment or distribution on a form approved by the Secretary unless one of the following applies:
(1)	The payment or distribution is to the surviving spouse.
(2)	The payment or distribution is to a Class A beneficiary, as described in G.S. 105-4(a), and the total amount to be paid under the annuity or distributed under the IRA does not exceed one hundred thousand dollars ($100,000)."
Section 6.  G.S. 105-20 reads as rewritten:
"§ 105-20. Taxes are a lien on real property in an estate.
The taxes imposed by this Article on the transfer of real or personal property are a lien on the real property in an estate and on the proceeds arising from the sale of real property.  The lien is created at the date of death of the decedent and continues until the tax is paid, 10 years have elapsed since the date of the decedent's death, or the lien is released.  A lien is released when the Secretary issues a tax waiver for the lien, the Secretary issues an inheritance tax certificate, or the personal representative files a tax certification with the clerk of superior court.  A tax waiver may be filed in the office of the register of deeds of each county where the property is located.  No formalities as to acknowledgment, probate, or approval by any officer are required as a condition to filing.  The filing of a tax waiver is conclusive evidence that the real property described in the waiver is not subject to a lien for taxes imposed by this Article."
Section 7. G.S. 105-24 reads as rewritten:
"§ 105-24.  Inventory of safe-deposit boxes.
	(b)	Except as provided in subsection (c) of this section, every safe deposit company, trust company, corporation, bank or other institution, person, or persons engaged in the business of renting safe-deposit boxes for the safekeeping of valuable papers and personal effects, or having in their possession or supervision in such safe-deposit boxes such valuable papers or personal effects shall, upon the death of any person using or having access to such safe-deposit box, as a condition precedent to the opening of such safe-deposit box by the personal representative, collector, lessee, or cotenant of such deceased person, require the presence of the clerk of the superior court of the county in which the box is located. It shall be the duty of the clerk of the superior court, or his representative, in the presence of a representative of the safe deposit company, trust company, corporation, bank, or other institution, person or persons, to make an inventory of the contents of the box and to furnish a copy of such inventory to the personal representative, collector, lessee, or cotenant of the decedent, and a copy to the safe deposit company, trust company, corporation, bank, or other institution, person, or persons having possession of the safe-deposit box; provided, that for boxes to which decedent merely had access the inventory shall include only assets in which the decedent has or had an interest. After the clerk of superior court has made an inventory of the contents of the safe-deposit box, the safe deposit company, trust company, corporation, bank or other institution, or person shall, upon request, release to the personal representative, collector, lessee, or cotenant of the box the contents of the box.
(c)	Notwithstanding the provisions of subsection (b) of this section, if the personal representative, collector, lessee, or cotenant believes upon reliable information that a safe-deposit box to which the decedent had access is empty, that person may so certify to the clerk of superior court of the county in which the box is located. Upon receipt of this certificate, the clerk may authorize in writing the personal representative, collector, lessee, or cotenant to open the box outside of the clerk's presence. The authorized person shall open the box in the presence of a representative of the institution having control or custody of the box, and shall certify to the clerk whether the box is or is not empty. The certificate shall include the name of the representative of the institution who was present at the time the box was opened and shall be signed by the representative to indicate that the representative was present. If the safe-deposit box is not empty, the representative of the institution shall close the box at once and the box may be reopened only in accordance with subsection (b) of this section.
	(e)	Failure to comply with the provisions of this section shall render such safe deposit company, trust company, corporation, bank or other institution, person or persons liable for the amount of the taxes and interest due under this Article on property transferred by the decedent. In any action brought under this provision it shall be a sufficient defense that the delivery or transfer of securities, deposits, assets, or property was made in good faith without knowledge of the death of the decedent and without knowledge of circumstances sufficient to place the defendant on inquiry."
Section 8. G.S. 105-30 is repealed.
Section 9. G.S. 105-31 reads as rewritten:
"§ 105-31. Action to collect tax due.
Taxes payable under this Article are a debt that may be recovered in an action brought by the Secretary against the personal representative or against any other person having in hand any property with respect to which the taxes have been imposed."
Section 10.  G.S. 25-4-405(c) reads as rewritten:
"(c)	A transaction, although subject to this Article, is also subject to G.S. 41-2.1, 53-146.1, 54-109.58, and 54B-129, and in case of conflict between the provisions of this section and either of those sections, the provisions of those sections control."
Section 11.  G.S. 41-2.1(f) reads as rewritten:
"(f)	This section does not repeal or modify any provisions of the law relating to inheritance taxes."
Section 12.  G.S. 41-2.2(d) reads as rewritten:
"(d)	This section does not repeal or modify any provisions of the law relating to inheritance taxes."
Section 13.  G.S. 53-146.1(b) reads as rewritten:
"(b)	This section does not repeal or modify any provisions of laws relating to estate taxes.  This section regulates and protects the bank in its relationship with joint owners of deposit accounts."
Section 14.  G.S. 53-146.2(d) reads as rewritten:
"(d)	This section does not repeal or modify any provisions of laws relating to estate taxes."
Section 15.  G.S. 54-109.58(b) reads as rewritten:
"(b)	This section does not repeal or modify any provisions of laws relating to estate taxes.  This section regulates and protects the credit union in its relationship with joint owners of accounts."
Section 16.  G.S. 54B-129(b) reads as rewritten:
"(b)	This section does not repeal or modify any provisions of law relating to estate taxes. This section regulates and protects the association in its relationships with joint owners of deposit accounts."
Section 17.  G.S. 54B-130(d) reads as rewritten:
"(d)	This section does not repeal or modify any provisions of laws relating to estate taxes."
Section 18.  G.S. 54C-165(b) reads as rewritten:
"(b)	This section does not repeal or modify any law relating to estate taxes.  This section regulates and protects the savings bank in its relationships with the joint owners of deposit accounts."
Section 19.  G.S. 54C-166(d) reads as rewritten:
"(d)	This section does not repeal or modify any law relating to estate taxes."
Section 20.  This act becomes effective July 1, 1998, and applies to estates of decedents who die on or after that date.