GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1999

H	2 

HOUSE BILL 1575
Committee Substitute Favorable 6/20/00

Short Title:  Revenue Laws Technical Changes.	(Public)

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Sponsors:

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Referred to:  

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May 18, 2000

A BILL TO BE ENTITLED
AN ACT TO MAKE TECHNICAL AND CONFORMING CHANGES TO THE REVENUE LAWS AND RELATED STATUTES AND TO BETTER NOTIFY MOTOR VEHICLE OWNERS OF THE ABILITY TO CONSOLIDATE THEIR VEHICLES' REGISTRATION RENEWAL DATES FOR PURPOSES OF CONSOLIDATING THE VEHICLES' PROPERTY TAXES.
The General Assembly of North Carolina enacts:
Section 1.  Section 33 of S.L. 1999-360 reads as rewritten:
"Section 33. Affordable Housing Credit. – Part III of this act is effective for taxable years beginning on or after January 1, 2000. Sections 10 through 15 of Part III apply to buildings to which federal credits are allocated on or after January 1, 2000."
Section 2.(a) Section 10.2(3) of Chapter 13 of the Session Laws of the 1996 Second Extra Session, as amended by Section 1 of S.L. 1999-360, reads as rewritten:
"(3)	Quality jobs and business expansion tax credits. – Sections 3.5, 3.6, and 3.8 through 3.10 of Part III of this act become effective August 1, 1996.  G.S. 105-129.11, as enacted by Part III of this act, becomes effective for taxable years beginning on or after January 1, 1997, and applies to training expenditures made on or after July 1, 1997.  The remainder of Part III of this act is effective for taxable years beginning on or after January 1, 1996, and applies to jobs created on or after August 1, 1996, and property placed in service on or after August 1, 1996.  Article 3A of Chapter 105 of the General Statutes is repealed as provided in that Article. Article 3B of Chapter 105 of the General Statutes is repealed as provided in that Article. "
Section 2.(b) Section 4 of S.L. 1997-277, as amended by Section 18.1 of S.L. 1999-360, is recodified as G.S. 105-129.2A(b), (c), and (d).
Section 2.(c)	G.S. 105-129.2A, as enacted by this act, reads as rewritten:
"§ 105-129.2A.  Sunset; studies.
(a)	Sunset. – This Article is repealed effective for applications for credits filed under G.S. 105-129.6 on or after January 1, 2006."
(b)	Equity Study. –  The Department of Commerce shall study the effect of the tax incentives provided in this Article on tax equity.  This study shall include the following:
(1)	Reexamining the formula in G.S. 105-129.3(b) used to define enterprise tiers, to include consideration of alternative measures for more equitable treatment of counties in similar economic circumstances.
(2)	Considering whether the assignment of tiers and the applicable thresholds are equitable for smaller counties, for example those under 50,000 in population.
(3)	Compiling any available data on whether expanding North Carolina businesses receive fewer benefits than out-of-State businesses that locate to North Carolina.
(c)	Impact Study. – The Department of Commerce shall study the effectiveness of the tax incentives provided in this Article.  This study shall include:
(1)	Study of the distribution of tax incentives across new and expanding industries.
(2)	Examination of data on economic recruitment for the period 1994 through 2000 by county, by industry type, by size of investment, and by number of jobs, and other relevant information to determine the pattern of business locations and expansions before and after the enactment of the William S. Lee Act incentives.
(3)	Measuring the direct costs and benefits of the tax incentives.
(4)	Compiling available information on the current use of incentives by other states and whether that use is increasing or declining.
(d)	Report. –  The Department of Commerce shall report the results of these studies and its recommendations to the 2001 General Assembly by April 1, 2001."
Section 2.(d)	Article 3B of Chapter 105 of the General Statutes is amended by adding a new section to read:
"§ 105-129.15A.  Sunset.
G.S. 105-129.16 is repealed effective for business property placed in service on or after January 1, 2002. The remainder of this Article is repealed effective January 1, 2006.  The repeal of G.S. 105-129.16A applies to renewable energy property placed in service on or after January 1, 2006.  The repeal of G.S. 105-129.16B applies to buildings to which federal credits are allocated on or after January 1, 2006."
Section 3.(a) G.S. 105-129.17(b) reads as rewritten:
"(b)	Cap. –The credits allowed in this Article may not exceed fifty percent (50%) of the tax against which they are claimed for the taxable year, reduced by the sum of all other credits allowed against that tax, except tax payments made by or on behalf of the taxpayer. This limitation applies to the cumulative amount of credit, including carryforwards, claimed by the taxpayer under this Article against each tax for the taxable year. Any unused portion of the credits may be carried forward for the succeeding five years."
Section 3.(b)	G.S. 105-129.18 reads as rewritten:
"§ 105-129.18. Substantiation.
To claim a credit allowed by this Article, the taxpayer must provide any information required by the Secretary of Revenue. Every taxpayer claiming a credit under this Article must maintain and make available for inspection by the Secretary of Revenue any records the Secretary considers necessary to determine and verify the amount of the credit to which the taxpayer is entitled. The burden of proving eligibility for a credit and the amount of the credit rests upon the taxpayer, and no credit may be allowed to a taxpayer that fails to maintain adequate records or to make them available for inspection."
Section 3.(c)	G.S. 105-129.19 reads as rewritten:
"§ 105-129.19. Reports.
The Department of Revenue shall report to the Legislative Research Commission and to the Fiscal Research Division of the General Assembly by May 1 of each year the following information for the 12-month period ending the preceding April 1:
(1)	The number of taxpayers that claimed the credits allowed in this Article.
(2)	The cost of business property and renewable energy property with respect to which credits were claimed.
(2a)	The location of each qualified North Carolina low-income building with respect to which a low-income housing credit was claimed.
(3)	The total cost to the General Fund of the credits claimed."
Section 4.  The catchline of G.S. 105-40 reads as rewritten:
"§ 105-40. Amusements – Certain exhibitions, performances, and entertainments exempt from tax."
Section 5. Effective July 1, 2000, G.S. 105-88(e) reads as rewritten:
"(e)	Counties, cities, and towns may levy a license tax on the business taxed under this section.  Except as provided in G.S. 160A-211 and G.S. 153A-152, the tax may not exceed one hundred dollars ($100.00)."
Section 6. G.S. 105-113.21(a) reads as rewritten:
"(a)	Discount. – A distributor who files a timely report under G.S. 105-113.18 and who sends a timely payment may deduct from the amount due with the report a discount of four percent (4%).  This discount covers expenses incurred in preparing the records and reports required by this Part, and the expense of furnishing a bond."
Section 7. G.S. 105-113.39 reads as rewritten:
"§ 105-113.39.  Discount.
A wholesale dealer or a retail dealer who is primarily liable under G.S. 105-113.35(b)	for the excise taxes imposed by this Part and who files a timely report under G.S. 105-113.37 and who sends a timely payment may deduct from the amount due with the report a discount of four percent (4%).  This discount covers losses due to damage to tobacco products, expenses incurred in preparing the records and reports required by this Part, and the expense of furnishing a bond."
Section 8.  G.S. 105-113.82 reads as rewritten:
"§ 105-113.82. Distribution of part of beer and wine taxes.
(a)	Amount, Method. – The Secretary shall distribute annually the following percentages of the net amount of excise taxes collected on the sale of malt beverages and wine during the preceding 12-month period ending March 31, less the amount of the net proceeds credited to the Department of Agriculture and Consumer Services under G.S. 105-113.81A, to the counties and cities in which the retail sale of these beverages is authorized in the entire county or city:
(1)	Of the tax on malt beverages levied under G.S. 105-113.80(a), twenty-three and three-fourths percent (23 3/4%);
(2)	Of the tax on unfortified wine levied under G.S. 105-113.80(b), sixty-two percent (62%); and
(3)	Of the tax on fortified wine levied under G.S. 105-113.80(b), twenty-two percent (22%).
If malt beverages, unfortified wine, or fortified wine may be licensed to be sold at retail in both a county and a city located in the county, both the county and city shall receive a portion of the amount distributed, that portion to be determined on the basis of population. If one of these beverages may be licensed to be sold at retail in a city located in a county in which the sale of the beverage is otherwise prohibited, only the city shall receive a portion of the amount distributed, that portion to be determined on the basis of population. The amounts distributed under subdivisions (1), (2), and (3) shall be computed separately.
	(c)	Exception. – Notwithstanding subsection (a), in a county in which ABC stores have been established by petition, the revenue shall be distributed as though the entire county had approved the retail sale of a beverage whose retail sale is authorized in part of the county.
(d)	Time. – The revenue shall be distributed to cities and counties within 60 days after March 31 of each year.
(e)	Population Estimates. – To determine the population of a city or county for purposes of the distribution required by this section, the Secretary shall use the most recent annual estimate of population certified by the State Planning Officer.
(f)	City Defined. – As used in this section, the term "city”means a city as defined in G.S. 153A-1(1) or an urban service district defined by the governing body of a consolidated city-county.
(g)	Use of Funds. – Funds distributed to a county or city under this section may be used for any public purpose.
(h)	Disqualification. – No municipality may receive any funds under this section if it was incorporated with an effective date of on or after January 1, 2000, and is disqualified from receiving funds under G.S. 136-41.2. No municipality may receive any funds under this section, incorporated with an effective date on or after January 1, 2000, unless a majority of the mileage of its streets are open to the public. The previous sentence becomes effective with respect to distribution of funds on or after July 1, 1999."
Section 9.  G.S. 105-113.84 reads as rewritten:
"§ 105-113.84.  Report of resident brewery, resident winery, or nonresident vendor.
							A resident brewery, resident winery, and nonresident vendor must file a monthly report with the Secretary. The report must list the amount of beverages delivered to North Carolina wholesalers and importers during the month.  The report is due by the 15th day of the month following the month covered by the report.  The report must be filed on a form approved by the Secretary and must contain the information required by the Secretary."
Section 10.  G.S. 105-113.85 reads as rewritten:
"§ 105-113.85. Discount.
Each wholesaler or importer who files a timely return and sends a timely payment may deduct from the amount payable by him a discount of four percent (4%). This discount covers losses due to spoilage and breakage, expenses incurred in preparing the records and reports required by this Article, and the expense of furnishing a bond. "
Section 11. G.S. 105-113.88 reads as rewritten:
"§ 105-113.88. Record-keeping requirements.
		A person who is required to file a report or return under this Article must keep a record of all documents used to determine information the person provides in a report or return.  The records must be kept for three years from the due date of the report or return to which the records apply."
Section 12. G.S. 105-116(d) reads as rewritten:
"(d)	Distribution. – Part of the taxes imposed by this section on electric power companies is distributed to cities under G.S. 105-116.1."
Section 13. G.S. 105-119 and G.S. 105-120.1 are repealed.
Section 14. G.S. 105-114 reads as rewritten:
"§ 105-114. Nature of taxes; definitions.
(a)	Nature of Taxes. – The taxes levied in this Article upon persons and partnerships are for the privilege of engaging in business or doing the act named. 
(a1)	Scope. – The taxes levied in this Article upon corporations are privilege or excise taxes levied upon:
(1)	Corporations organized under the laws of this State for the existence of the corporate rights and privileges granted by their charters, and the enjoyment, under the protection of the laws of this State, of the powers, rights, privileges and immunities derived from the State by the form of such existence; and
(2)	Corporations not organized under the laws of this State for doing business in this State and for the benefit and protection which these corporations receive from the government and laws of this State in doing business in this State.
		(a2)	Condition for Doing Business. – If the corporation is organized under the laws of this State, the payment of the taxes levied by this Article is a condition precedent to the right to continue in the corporate form of If the corporation is not organized under the laws of this State, payment of these taxes is a condition precedent to the right to continue to engage in doing business in this State. 
(a3)	Tax Year. – The taxes levied in this Article are for the fiscal year of the State in which the taxes become due, except that the taxes levied in G.S. 105-122 are for the income year of the corporation in which the taxes become due.
		(a4)	No Double Taxation. – G.S. 105-122 does not apply to holding companies taxed under G.S. 105-120.2. G.S. 105-122 applies to a corporation taxed under another section of this Article only to the extent the taxes levied on the corporation in G.S. 105-122 exceed the taxes levied on the corporation in other sections of this Article.
(b)	Definitions. – The following definitions apply in this Article:
(1)	City. – Defined in G.S. 105-228.90.
(1a)	Code. – Defined in G.S. 105-228.90.
(2)	Corporation. – A domestic corporation, a foreign corporation, an electric membership corporation organized under Chapter 117 of the General Statutes or doing business in this State, or an association that is organized for pecuniary gain, has capital stock represented by shares, whether with or without par value, and has privileges not possessed by individuals or partnerships. The term includes a mutual or capital stock savings and loan association or building and loan association chartered under the laws of any state or of the United States. The term does not include a limited liability company.
(3)	Doing business. – Each and every act, power, or privilege exercised or enjoyed in this State, as an incident to, or by virtue of the powers and privileges granted by the laws of this State.
(4)	Income year. – Defined in G.S. 105-130.2(5)."
Section 15.(a) G.S. 105-130.15(a) reads as rewritten:
"(a)	The net income of a corporation shall be computed in accordance with the method of accounting it regularly employs in keeping its books.  The method must be consistent with respect to both income and deductions.  If this method does not clearly reflect the income, the computation shall be made in accordance with a method that, in the Secretary's opinion, does clearly reflect the income, but shall follow as nearly as practicable the federal practice, unless contrary to the context and intent of this Part.
The Secretary may adopt the rules and regulations and any guidelines administered or established by the Internal Revenue Service unless contrary to any provisions of this Part."
Section 15.(b) G.S. 105-130.17(a) reads as rewritten:
"(a)	Returns must be filed as prescribed by the Secretary at the place prescribed by the Secretary.  Returns must be in the form prescribed by the Secretary.  The Secretary shall furnish forms in accordance with G.S. 105-254. "
Section 15.(c) G.S. 105-130.18 reads as rewritten:
"§ 105-130.18.  Failure to file returns; supplementary returns.
If the Secretary determines that a corporation has failed to file a return or to include in a return filed, either intentionally or through error, items of taxable income, the Secretary may require from the corporation a return or supplementary return, under affirmation, of all the items of income that the corporation received during the year for which the return is made, whether or not taxable under this Part. If from a supplementary return or otherwise the Secretary finds that any items of income, taxable under this Part, have been omitted from the original return, that any items returned as taxable are not taxable, or that any item of taxable income is overstated or understated, the Secretary may require that the item be disclosed under affirmation of the corporation, and be added to or deducted from the original return. The filing of a supplementary return and the correction of the original return does not relieve the corporation from any of the penalties under G.S. 105-236. The Secretary may proceed under the provisions of G.S. 105-241.1, whether or not the Secretary requires a return or a supplementary return under this section."
Section 16. G.S. 105-134.6(b) is amended by adding a new subdivision to read:
"(b)	Deductions. – The following deductions from taxable income shall be made in calculating North Carolina taxable income, to the extent each item is included in taxable income:
…
(5b)	The amount received during the taxable year from one or more State, local, or federal government retirement plans to the extent the amount is exempt from tax under this Part pursuant to a court order entered in Wake County in settlement of the following cases: Bailey v. State, 92 CVS 10221, 94 CVS 6904, 95 CVS 6625, 95 CVS 8230; Emory v. State, 98 CVS 0738; and Patton v. State, 95 CVS 04346.  Amounts deducted under this subdivision may not also be deducted under subdivision (6) of this subsection."
Section 17. G.S. 105-163.44 is repealed.
Section 18. G.S. 105-164.3(8a) reads as rewritten:
"(8a)	‘Manufactured home' means a structure that is designed to be used as a dwelling and is manufactured in accordance with the specifications for manufactured homes issued by the United States Department of Housing and Urban Development. 
				."
Section 19.(a) G.S. 105-164.4(c) reads as rewritten:
"(c)	Certificate of Registration. – Before a person may engage in business as a
retailer or a wholesale merchant, the person must obtain a certificate of registration from the 
Department in accordance with G.S. 105-164.29."
Section 19.(b) G.S. 105-164.29 reads as rewritten:
"§ 105-164.29. Application for certificate of registration by wholesale merchants and retailers.
(a)	Application. –To obtain a certificate of registration, a person must register with the Department.  A wholesale merchant or retailer who has more than one business is required to obtain only one certificate of registration to cover all operations of the business throughout the State. An application for registration must be signed as follows:
(1)	By the owner, if the owner is an individual.
(2)	By a manager, member, or partner, if the owner is an association, a partnership, or a limited liability company.
(3)	By an executive officer or some other person specifically authorized by the corporation to sign the application, if the owner is a corporation. If the application is signed by a person authorized to do so by the corporation, written evidence of the person's authority must be attached to the application.
(b)	Issuance. –A certificate of registration is not assignable and is valid only for the person in whose name it is issued.  A copy of the certificate of registration must be displayed at each place of business.
(c)	Term. – A certificate of registration is valid unless it is revoked for failure to comply with the provisions of this Article or becomes void. A certificate issued to a retailer who makes taxable sales becomes void if, for a period of 18 months, the retailer files no returns or files returns showing no sales. 
(d)	Revocation. – Whenever a wholesale merchant or retailer fails to comply with this Article or violates G.S. 14-401.18, the Secretary, upon hearing, after giving 10 days' notice in writing, specifying the time and place of hearing and requiring the wholesale merchant or retailer to show cause why the certificate of registration should not be revoked, may revoke or suspend the certificate of registration. The notice may be served personally or by registered mail directed to the last known address of the wholesale merchant or retailer. All provisions with respect to review and appeals of the Secretary's decisions as provided by G.S. 105-241.2, 105-241.3, and 105-241.4 apply to this section.
."
Section 19.(c) G.S. 105-164.38 reads as rewritten:
"§ 105-164.38.  Tax is a lien.
(a)	The tax imposed by this Article is a lien upon all personal property of any person who is required by this Article to obtain a certificate of registration to engage in business and who stops engaging in the business by transferring the business, transferring the stock of goods of the business, or going out of business. A person who stops engaging in business must file the return required by this Article within 30 days after transferring the business, transferring the stock of goods of the business, or going out of business.
(b)	Any person to whom the business or the stock of goods was transferred must withhold from the consideration paid for the business or stock of goods an amount sufficient to cover the taxes due until the person selling the business or stock of goods produces a statement from the Secretary showing that the taxes have been paid or that no taxes are due. If the person who buys a business or stock of goods fails to withhold an amount sufficient to cover the taxes and the taxes remain unpaid after the 30-day period allowed, the buyer is personally liable for the unpaid taxes to the extent of the greater of the following:
(1)	The consideration paid by the buyer for the business or the stock of goods.
(2)	The fair market value of the business or the stock of goods.
(c)	The period of limitations for assessing liability against the buyer of a business or the stock of goods of a business and for enforcing the lien against the property expires one year after the end of the period of limitations for assessment against the person who sold the business or the stock of goods. Except as otherwise provided in this section, a person who buys a business or the stock of goods of a business and that person's liability for unpaid taxes are subject to the provisions of G.S. 105-241.1, 105-241.2, 105-241.3, and 105-241.4 and to other remedies for the collection of taxes to the same extent as if the person had incurred the original tax liability."
Section 20.(a)	G.S. 105-187.1 is amended by adding a new subdivision to read:
"(3a)	Retailer. – A retailer as defined in G.S. 105-164.3 who is engaged in the business of selling, leasing, or renting motor vehicles."
Section 20.(b) G.S. 105-187.5(a) reads as rewritten:
"(a)	Election. – A retailer may elect not to pay the tax imposed by this Article at the rate set in G.S. 105-187.3 when applying for a certificate of title for a motor vehicle purchased by the retailer for lease or rental. A retailer who makes this election shall pay a tax on the gross receipts of the lease or rental of the vehicle. Like the tax imposed by G.S. 105-187.3, this alternate tax is a tax on the privilege of using the highways of this State. The tax is imposed on a retailer, but is to be added to the lease or rental price of a motor vehicle and thereby be paid by the person who leases or rents the vehicle."
Section 20.(c)	G.S. 20-4.01(5) reads as rewritten:
"(5)	Dealer. – Every person engaged in the business of buying, selling, distributing, or exchanging motor vehicles, trailers, or semitrailers in this State, and having an established place of business in this State.
	The terms ‘motor vehicle dealer,' ‘new motor vehicle dealer,' and ‘used motor vehicle dealer' as used in Article 12 of this Chapter have the meaning set forth in G.S. 20-286."
Section 21.  G.S. 105-187.6(b) reads as rewritten:
"(b)	Partial Exemptions. – A maximum tax of forty dollars ($40.00) applies when a certificate of title is issued as the result of a transfer of a motor vehicle:
(1)	To a secured party who has a perfected security interest in the motor vehicle.
(2)	To a partnership, limited liability company, or corporation as an incident to the formation of the partnership, limited liability company, or corporation, and no gain or loss arises on the transfer of the motor vehicle under section 351 or section 721 of the Code, or to a partnership, limited liability company, or corporation by merger, conversion, or consolidation in accordance with applicable law."
Section 22.  G.S. 105-228.90(b) is amended by adding a new subdivision to read:
"(2)	Department. – The Department of Revenue."
Section 23.  G.S. 105-236(10) reads as rewritten:
"(10)	Failure to File Informational Returns. – 
a.	Repealed by Session Laws 1998-212, s. 29A.14(m).
b.	The Secretary may request a person who fails to file timely statements of payment to another person with respect to wages, dividends, rents, or interest paid to that person to file the statements by a certain date. If the payer fails to file the statements by that date, the amounts claimed on the payer's income tax return as deductions for salaries and wages, or rents or interest shall be disallowed to the extent that the payer failed to comply with the Secretary's request with respect to the statements.
c.	For failure to file an informational return required by Article 36C or 36D of this Chapter by the date the return is due, there shall be assessed a penalty of fifty dollars ($50.00)."
Section 24.  G.S. 105-259(b)(15) reads as rewritten:
"(b)	Disclosure Prohibited. – An officer, an employee, or an agent of the State who has access to tax information in the course of service to or employment by the State may not disclose the information to any other person unless the disclosure is made for one of the following purposes:
…
(15)	To exchange information concerning a tax imposed by Articles 2A, 2C, or 2D of this Chapter with one of the following agencies when the information is needed to fulfill a duty imposed on the Department or the agency:
a.	The North Carolina Alcoholic Beverage Control Commission.
b.	The Division of Alcohol Law Enforcement of the Department of Crime Control and Public Safety.
c.	The Bureau of Alcohol, Tobacco, and Firearms of the United States Treasury Department.
d.	Law enforcement agencies.
e.	The Division of Adult Probation and Parole of the Department of Correction."
Section 25.  G.S. 105-275(40) reads as rewritten:
"(40)	Computer software and any documentation related to the computer software. As used in this subdivision, the term "computer software”means any program or routine used to cause a computer to perform a specific task or set of tasks. The term includes system and application programs and database storage and management programs.
The exclusion established by this subdivision does not apply to computer software and its related documentation if the computer software meets one or more of the following descriptions:
a.	It is embedded software. "Embedded software”means computer instructions, known as microcode, that reside permanently in the internal memory of a computer system or other equipment and are not intended to be removed without terminating the operation of the computer system or equipment and removing a computer chip, a circuit, or another mechanical device.
b.	It is purchased or licensed from a person who is unrelated to the taxpayer and it is capitalized on the books of the taxpayer in accordance with generally accepted accounting principles, including financial accounting standards issued by the Financial Accounting Standards Board. A person is unrelated to a taxpayer if (i) the taxpayer and the person are not subject to any common ownership, either directly or indirectly, and (ii) neither the taxpayer nor the person has any ownership interest, either directly or indirectly, in the other.
	This subdivision does not affect the value or taxable status of any property that is otherwise subject to taxation under this Subchapter.
	The provisions of the exclusion established by this subdivision are not severable. If any provision of this subdivision or its application is held invalid, the entire subdivision is repealed."
Section 26. Effective January 1, 2001,  G.S. 105-369(b1) reads as rewritten:
"(b1)	Notice to Owner. – After the governing body orders the tax collector to advertise the tax liens, the tax collector must send a notice to the listing owner and to the record owner of each affected parcel of property, as determined as of December 31 of the fiscal year for which the taxes are due. The notice must be sent to each owner's last known address by first-class mail at least 30 days before the date the advertisement is to be published. The notice must state the principal amount of unpaid taxes that are a lien on the parcel to be advertised and inform the owner that the names of the listing owner and the record owner will appear in a newspaper advertisement of delinquent taxes if the taxes are not paid before the publication date. Failure to mail the notice required by this section to the correct listing owner or record owner does not affect the validity of the tax lien or of any foreclosure action."
Section 27.  G.S. 105-449.37(a)(1a) reads as rewritten:
"(1a)	Motor vehicle. – A motor vehicle as defined in G.S. 105-164.3 other than special mobile equipment as defined in G.S. 105-164.3."
Section 28.  G.S. 105-449.44 reads as rewritten:
"§ 105-449.44. How to determine the amount of fuel used in the State; presumption of amount used.
(a)	Calculation. – The amount of motor fuel or alternative fuel a motor carrier uses in its operations in this State for a reporting period is the ratio of the number of miles the motor carrier travels in this State during that period to the total number of miles the motor carrier travels inside and outside this State during that period, multiplied by the total amount of fuel the motor carrier uses in its operations inside and outside the State during that period.
(b)	Presumption. – The Secretary must check reports filed under this Article against the weigh station records and other records of the Division of Motor Vehicles of the Department of Transportation concerning motor carriers to determine if motor carriers that are operating in this State are filing the reports required by this Article. The Department may assess a motor carrier for the amount payable based on the presumed mileage. A motor carrier that does either of the following for a quarter is presumed to have traveled in this State during that quarter the number of miles equal to 10 trips of 450 miles each for each of the motor carrier's vehicles:
(1)	Fails to file a report for the quarter and the records of the Division indicate the carrier operated in this State during the quarter.
(2)	Files a report for the quarter that, based on the records of the Division, understates by at least twenty-five percent (25%) the carrier's mileage in this State for the quarter.
(c)	Vehicles. – The number of vehicles of a motor carrier that is registered under this Article is the number of identification markers issued to the carrier. The number of vehicles of a carrier that is not registered under this Article is the number of vehicles registered by the motor carrier in the carrier's base state under the International Registration Plan. "
Section 29.(a) Effective July 1, 2000, G.S. 105-449.60(31) and (40) read as rewritten:
"§ 105-449.60. Definitions.
The following definitions apply in this Article:
… 
(31)	Supplier. – Any of the following:
a.	A position holder or a person who receives motor fuel pursuant to a two-party exchange.
b.	A fuel alcohol provider.
…
(40)	Two-party exchange. – A transaction in which motor fuel is transferred from one licensed supplier to another licensed supplier pursuant to an exchange agreement under which the supplier that is the position holder agrees to deliver motor fuel to the other supplier or the other supplier's customer at the rack of the terminal at which the delivering supplier is the position holder."
Section 29.(b)	Effective July 1, 2000, G.S. 105-449.88 is amended by adding a new subdivision to read:
"§ 105-449.88. Exemptions from the excise tax.
The excise tax on motor fuel does not apply to the following:
…
(1a)	Motor fuel removed by transport truck from a terminal for export if the motor fuel is removed by a licensed distributor or licensed exporter, the supplier that is the position holder for the motor fuel sells the motor fuel to another supplier as the motor fuel crosses the terminal rack, the purchasing supplier or its customer receives the motor fuel at the terminal rack for export, and the supplier that is the position holder collects tax on the motor fuel at the rate of the motor fuel's destination state."
Section 30.(a)	G.S. 105-449.60(41) reads as rewritten:
"§ 105-449.60. Definitions.
The following definitions apply in this Article:
… 
(41)	User. – A person who owns or operates a licensed highway vehicle that has a registered gross vehicle weight of at last 10,001 pounds and who does not maintain storage facilities for motor fuel."
Section 30.(b) G.S. 105-449.68 reads as rewritten:
"§ 105-449.68.  Restrictions on who can get a license as a distributor.
A bulk-end user of motor fuel may not be licensed as a distributor unless the bulk-end user also acquires motor fuel from a supplier or from another distributor for subsequent sale. This restriction does not apply to a bulk-end user that was licensed as a distributor on January 1, 1996. If a distributor license held by a bulk-end user on January 1, 1996, is subsequently cancelled, the bulk-end user is subject to the restriction set in this section."
Section 30.(c) G.S. 105-449.97(c) reads as rewritten:
"(c)	Percentage Discount. – A supplier that sells motor fuel directly to an unlicensed distributor or to the bulk-end user, the retailer, or the user of the fuel may take the same percentage discount on the fuel that a licensed distributor may take under G.S. 105-449.93(b) when making deferred payments of tax to the supplier."
Section 31. G.S. 105-449.88(1) reads as rewritten:
"§ 105-449.88. Exemptions from the excise tax.
The excise tax on motor fuel does not apply to the following:
(1)	Motor fuel removed, by transport truck or another means of transfer outside the terminal transfer system, from a terminal for export, if the motor fuel is removed by a licensed distributor or a licensed exporter and the supplier of the motor fuel collects tax on it at the rate of the motor fuel's destination state."
Section 32.  The catchline of G.S. 105-449.105 reads as rewritten:
"§ 105-449.105. Refunds upon application for tax paid on exempt fuel, lost fuel, and fuel unsalable for highway use."
Section 33.  G.S. 105-449.105A reads as rewritten:
"§ 105-449.105A. Monthly refunds for kerosene.
(a)	Refund. – A distributor who sells kerosene to any of the following may obtain a refund for the excise tax the distributor paid on the kerosene, less the amount of any discount allowed on the kerosene under G.S. 105-449.93:
(1)	The end user of the kerosene, if the distributor dispenses the kerosene into a storage facility of the end user that contains fuel used only for heating.
(2)	A retailer of kerosene, if the distributor dispenses the kerosene into a storage facility that is marked with the phrase ‘Undyed, Untaxed Kerosene, Nontaxable Use Only' and either has a dispensing device that is not suitable for use in fueling a highway vehicle or is kept locked by the retailer and must be unlocked by the retailer for each sale of kerosene.
(b)	Liability. – If the Secretary determines that the Department overpaid a distributor by refunding more tax to the distributor than is due under this section, the distributor is liable for the amount of the overpayment.  This liability applies regardless of whether the actions of a retailer of kerosene contributed to the overpayment."
Section 34.  G.S. 105-449.121(b)(2) reads as rewritten:
"(b)	Inspection. – The Secretary or a person designated by the Secretary may do any of the following to determine tax liability under this Article:
…
(2)	Audit a distributor, a retailer, a bulk-end user, or a motor fuel user that is not licensed under this Article."
Section 35.  Section 14 of S.L. 1998-22 reads as rewritten:
"Section 14.  (a)	Notwithstanding G.S. 105-187.44(b), as enacted by this act, the amount distributed to a city under G.S. 105-187.44(b) for taxes collected for each of the quarters in the 1999-2000 and 2000-2001 fiscal years may not exceed its benchmark amount until each city receives an amount equal to its benchmark amount.  Each quarter, the Secretary of Revenue shall determine a city's benchmark amount and the amount it would receive under G.S. 105-187.44(b) if not for the redistribution required by this section.  The Secretary shall identify those cities whose distribution amounts under G.S. 105-187.44(b) are less than their benchmark amounts and shall determine the total dollar amount of the shortfall.  The Secretary shall reduce the amount to be distributed to those cities whose distribution amount under G.S. 105-187.44(b) exceeds their benchmark amount by the total dollar amount of the shortfall determined for that quarter in proportion to each city's excess.  However, in no event may a city's distribution amount be reduced below its benchmark amount.  The Secretary will redistribute these monies to the cities whose distribution amounts under G.S. 105-187.44(b) are less than their benchmark amounts in proportion to each city's shortfall.  In any quarter that a city does not have a prior year's distribution for the corresponding quarter in fiscal year 1998-99, that city is excluded from the redistribution required under this section for that quarter.  In that case, the city will receive the amount it is entitled to receive under G.S. 105-187.44(b), as enacted by this act.
For the purposes of this subsection, the term ‘benchmark amount' means the amount a city received under G.S. 105-116.1 attributable to piped natural gas for the corresponding quarter during the fiscal year 1998-99.
(b)	The Department of Revenue must calculate the amount a city received for taxes collected for each of the quarters in fiscal year 1998-99 under G.S. 105-116.1 that was attributable to piped natural gas.  The Department must also calculate the amount each city would have received under G.S. 105-187.44(b), as enacted by this act, for taxes collected for each of the quarters in fiscal year 1999-2000.  The Department shall give this information to the Revenue Laws Study Committee.  The Revenue Laws Study Committee shall study the impact of this act on the distribution of part of the proceeds of the excise tax on piped natural gas to the cities and report its findings, and any recommendation, to the 2001 General Assembly."
Section 36.  G.S. 62-302 reads as rewritten:
"§ 62-302. Regulatory fee.
(a)	Fee Imposed. – It is the policy of the State of North Carolina to provide fair regulation of public utilities in the interest of the public, as provided in G.S. 62-2. The cost of regulating public utilities is a burden incident to the privilege of operating as a public utility. Therefore, for the purpose of defraying the cost of regulating public utilities, every public utility subject to the jurisdiction of the Commission shall pay a quarterly regulatory fee, in addition to all other fees and taxes, as provided in this section. The fees collected shall be used only to pay the expenses of the Commission and the Public Staff in regulating public utilities in the interest of the public. 
It is also the policy of the State to provide limited oversight of certain electric membership corporations as provided in G.S. 62-53.  Therefore, for the purpose of defraying the cost of providing the oversight authorized by G.S. 62-53 and G.S. 117-18.1, each fiscal year each electric membership corporation whose principal purpose is to furnish or cause to be furnished bulk electric supplies at wholesale as provided in G.S. 117-16 shall pay an annual fee as provided in this section.
	(b)	Public Utility Rate. – 
	(2)	The public utility regulatory fee for each fiscal year shall be the greater of (i) a percentage rate, established by the General Assembly, of each public utility's North Carolina jurisdictional revenues for each quarter or (ii) six dollars and twenty-five cents ($6.25) each quarter.
When the Commission prepares its budget request for the upcoming fiscal year, the Commission shall propose a percentage rate of the public utility regulatory fee. For fiscal years beginning in an odd-numbered year, that proposed rate shall be included in the budget message the Governor submits to the General Assembly pursuant to G.S. 143-11. For fiscal years beginning in an even-numbered year, that proposed rate shall be included in a special budget message the Governor shall submit to the General Assembly. The General Assembly shall set the percentage rate of the public utility regulatory fee by law.
The percentage rate may not exceed the amount necessary to generate funds sufficient to defray the estimated cost of the operations of the Commission and the Public Staff for the upcoming fiscal year, including a reasonable margin for a reserve fund. The amount of the reserve may not exceed the estimated cost of operating the Commission and the Public Staff for the upcoming fiscal year. In calculating the amount of the reserve, the General Assembly shall consider all relevant factors that may affect the cost of operating the Commission or the Public Staff or a possible unanticipated increase or decrease in North Carolina jurisdictional revenues.
(3)	If the Commission, the Public Staff, or both experience a revenue shortfall, the Commission shall implement a temporary public utility regulatory fee surcharge to avert the deficiency that would otherwise occur. In no event may the total percentage rate of the public utility regulatory fee plus any surcharge established by the Commission exceed twenty-five hundredths percent (0.25%).
(4)	As used in this section, the term ‘North Carolina jurisdictional revenues' means all revenues derived or realized from intrastate tariffs, rates, and charges approved or allowed by the Commission or collected pursuant to Commission order or rule, but not including tap-on fees or any other form of contributions in aid of construction.
(b1)	Electric Membership Corporation Rate. –The electric membership corporation regulatory fee for each fiscal year shall be a dollar amount as established by the General Assembly by law.
When the Commission prepares its budget request for the upcoming fiscal year, the Commission shall propose the amount of the electric membership corporation regulatory fee. For fiscal years beginning in an odd-numbered year, the proposed amount shall be included in the budget message the Governor submits to the General Assembly pursuant to G.S. 143-11. For fiscal years beginning in an even-numbered year, the proposed amount shall be included in a special budget message the Governor shall submit to the General Assembly.
The amount of the electric membership corporation regulatory fee proposed by the Commission may not exceed the amount necessary to defray the estimated cost of the operations of the Commission and the Public Staff for the regulation of the electric membership corporations in the upcoming fiscal year, including a reasonable margin for a reserve fund. The amount of the reserve may not exceed the estimated cost of the Commission and the Public Staff for the regulation of the electric membership corporations for the upcoming fiscal year. 
(c)	When Due. – The electric membership corporation regulatory fee imposed under this section shall be paid in quarterly installments.  The fee is due and payable to the Commission on or before the 15th day of the second month following the end of each quarter.
The public utility regulatory fee imposed under this 	section is due and payable to the Commission on or before the 15th day of the second month following the end of each quarter. Every public utility subject to the public utility regulatory fee shall, on or before the date the fee is due for each quarter, prepare and render a report on a form prescribed by the Commission. The report shall state the public utility's total North Carolina jurisdictional revenues for the preceding quarter and shall be accompanied by any supporting documentation that the Commission may by rule require. Receipts shall be reported on an accrual basis.
If a public utility's report for the first quarter of any fiscal year shows that application of the percentage rate would yield a quarterly fee of twenty-five dollars ($25.00) or less, the public utility shall pay an estimated fee for the entire fiscal year in the amount of twenty-five dollars ($25.00). If, after payment of the estimated fee, the public utility's subsequent returns show that application of the percentage rate would yield quarterly fees that total more than twenty-five dollars ($25.00) for the entire fiscal year, the public utility shall pay the cumulative amount of the fee resulting from application of the percentage rate, to the extent it exceeds the amount of fees, other than any surcharge, previously paid.
(d)	Use of Proceeds. – A special fund in the office of State Treasurer, the Utilities Commission and Public Staff Fund, is created. The fees collected pursuant to this section and all other funds received by the Commission or the Public Staff, except for the clear proceeds of civil penalties collected pursuant to G.S. 62-50(d) and the clear proceeds of funds forfeited pursuant to G.S. 62-310(a), shall be deposited in the Utilities Commission and Public Staff Fund. The Fund shall be placed in an interest bearing account and any interest or other income derived from the Fund shall be credited to the Fund. Moneys in the Fund shall only be spent pursuant to appropriation by the General Assembly.
The Utilities Commission and Public Staff Fund shall be subject to the provisions of the Executive Budget Act except that no unexpended surplus of the Fund shall revert to the General Fund. All funds credited to the Utilities Commission and Public Staff Fund shall be used only to pay the expenses of the Commission and the Public Staff in regulating public utilities in the interest of the public as provided by this Chapter and in regulating electric membership corporations as provided in G.S. 117-18.1.
The clear proceeds of civil penalties collected pursuant to G.S. 62-50(d)	and the clear proceeds of funds forfeited pursuant to G.S. 62-310(a) shall be remitted to the Civil Penalty and Forfeiture Fund in accordance with G.S. 115C-457.2."
Section 37.(a) G.S. 62A-5(d) reads as rewritten:
"(d)	Any taxes due on 911 service provided by the service supplier will be billed to the local government subscribing to that service.  "
Section 37.(b) G.S. 105-130.5(b)(17) reads as rewritten:
"(17)	The amount of 911 charges collected under G.S. 62A-5 and remitted to a local government under G.S. 62A-6,  and the amount of wireless Enhanced 911 service charges collected under G.S. 62A-23 and remitted to the Wireless Fund under G.S. 62A-24."
Section 38.  Section 3 of S.L. 1999-321 is repealed.
Section 39.  G.S. 159-13(b)(6) reads as rewritten:
"(6)	The estimated percentage of collection of property taxes shall not be greater than the percentage of the levy actually realized in cash as of June 30 during the preceding fiscal year. For purposes of the calculation under this subdivision only, the levy for the registered motor vehicle tax under Article 22A of Chapter 105 of the General Statutes shall be based on the nine-month period ending March 31 of the preceding fiscal year, and the collections realized in cash with respect to this levy shall be based on the twelve-month period ending June 30 of the preceding fiscal year."
Section 40. G.S. 20-66(i) reads as rewritten:
"(i)	Property Tax Consolidation. – The Division must develop an application form for an owner of motor vehicles to use when the owner wants to consolidate the vehicles' registration renewal dates for the purpose of consolidating the property taxes payable on the vehicles by the owner.  The Division must notify motor vehicle owners of the ability to consolidate their vehicles' registration renewal dates through information on the registration renewal cards and on the Division's web site.  A copy of the application form must also be made available on the Division's web site.  
When the Division receives an application under subsection (a)	for the renewal of registration before the current registration expires, the Division shall grant the application if it is made for the purpose of consolidating the property taxes payable by the applicant on classified motor vehicles, as defined in G.S. 105-330. The registration fee for a motor vehicle whose registration cycle is changed under this subsection shall be reduced by a prorated amount. The prorated amount is one-twelfth of the registration fee in effect when the motor vehicle's registration was last renewed multiplied by the number of full months remaining in the motor vehicle's current registration cycle, rounded to the nearest multiple of twenty-five cents (25¢)."
Section 41.  Except as otherwise provided in this act, this act is effective when it becomes law.