A BILL TO BE ENTITLED
AN ACT to create a combined motor vehicle registration renewal and property tax collection system.
The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 105‑330 is amended by adding two new subdivisions to read:
"(4)	Collecting authority. The Division of Motor Vehicles or an agent contracting with the Division of Motor Vehicles.
(5)	Municipal corporation. Defined in G.S. 105‑273(11)."
SECTION 2.  G.S. 105‑330.2 reads as rewritten:
"§ 105‑330.2.  Appraisal, ownership, and situs.
(a)	Date Determined. – The value of a classified motor vehicle listed pursuant to G.S. 105‑330.3(a)(1) (registered vehicles) shall be determined as of January 1 of the year the taxes are due. If the value of a new motor vehicle cannot be determined as of that date, the value of that vehicle shall be determined for that year as of the date that model vehicle is first offered for sale at retail in this State.
The ownership, situs, and taxability of a classified motor vehicle listed pursuant to G.S. 105‑330.3(a)(1) (registered vehicles) shall be determined annually as of the day on which a new registration is applied for or the day on which the current vehicle registration is renewed, regardless of whether the registration is renewed after it has expired.
The value of a classified motor vehicle listed pursuant to G.S. 105‑330.3(a)(2) (unregistered vehicles) shall be determined as of January 1 of the year in which the motor vehicle is required to be listed pursuant to G.S. 105‑330.3(a)(2). The ownership, situs, and taxability of a classified motor vehicle listed or discovered pursuant to G.S. 105‑330.3(a)(2) (unregistered vehicles) shall be determined as of January 1 of the year in which the motor vehicle is required to be listed.
(b)	Value; Appeal. – A classified motor vehicle shall be appraised by the assessor at its true value in money as prescribed by G.S. 105‑283. The Property Tax Division of the Department of Revenue shall annually adopt a schedule of values, standards, and rules to be used in the valuation of motor vehicles to ensure equitable statewide valuations, taking into account local market conditions and allowing adjustments for mileage and the condition of the vehicles. The owner of a classified motor vehicle may appeal the appraised value of the vehicle in the manner provided by G.S. 105‑312(d) for appeals in the case of discovered property and may appeal the situs or taxability of the vehicle in the manner provided by G.S. 105‑381. The owner of a classified motor vehicle must file an appeal of appraised value with the assessor before the taxes become delinquent pursuant to G.S. 105‑330.4. Notwithstanding G.S. 105‑312(d), an owner who appeals the appraised value of a classified motor vehicle shall pay the tax on the vehicle when due, subject to a full or partial refund if the appeal is decided in the owner's favor.
(c)	Administration. – The Department of Revenue, acting through the Property Tax Division, and the Department of Transportation, acting through the Division of Motor Vehicles, shall enter into a memorandum of understanding concerning the vehicle identification information, name and address of the owner, and other information that will be required on the motor vehicle registration forms to implement the tax listing and collection provisions of this Article. The memorandum of understanding shall also include a procedure for the administration of the listing, appraisal, and assessment of classified motor vehicles."
SECTION 3.  G.S. 105‑330.4(a) reads as rewritten:
"(a)	Taxes on a classified motor vehicle listed pursuant to G.S. 105‑330.3(a)(2) are due on September 1 following the date by which the vehicle was required to be listed. Taxes on a classified motor vehicle listed pursuant to G.S. 105‑330.3(a)(1) are due each year on the 	date a new registration is applied for or the fifteenth day of the month following the month in which the registration renewal sticker expired pursuant to G.S. 20‑66(g).
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SECTION 4.  G.S. 105‑330.4(b) reads as rewritten:
"(b)	Subject to the provisions of G.S. 105‑395.1, interest on unpaid taxes on classified motor vehicles listed pursuant to G.S. 105‑330.3(a)(1) accrues at the rate of five percent (5%) for the first month following the date the taxes were due and three‑fourths percent (3/4 %) for each month thereafter until the taxes are paid, unless the  notice required by G.S. 105‑330.5 is prepared after the date the taxes are due. In that circumstance, the interest accrues beginning the second month following the date of the notice until the taxes are paid. Subject to the provisions of G.S. 105‑395.1, interest on delinquent taxes on classified motor vehicles listed pursuant to G.S. 105‑330.3(a)(2) accrues as provided in G.S. 105‑360(a) and discounts shall be allowed as provided in G.S. 105‑360(c)."
SECTION 5.  G.S. 105‑330.4(b), as amended by Section 4 of this act, reads as rewritten:
"(b)	Subject to the provisions of G.S. 105‑395.1, interest on unpaid taxes and registration fees on classified motor vehicles listed pursuant to G.S. 105‑330.3(a)(1) accrues at the rate of five percent (5%) for the remainder of the month following the month in which the registration renewal sticker expired pursuant to G.S. 20‑66(g). Interest accrues at the rate of three‑fourths percent (3/4 %) for each month thereafter until the taxes and fees are paid, unless the notice required by G.S. 105‑330.5 is prepared after the date the taxes and fees are due. In that circumstance, the interest accrues beginning the second month following the date of the notice until the taxes and fees are paid. Subject to the provisions of G.S. 105‑395.1, interest on delinquent taxes on classified motor vehicles listed pursuant to G.S. 105‑330.3(a)(2) accrues as provided in G.S. 105‑360(a) and discounts shall be allowed as provided in G.S. 105‑360(c)."
SECTION 6.  G.S. 105‑330.5 reads as rewritten:
"§ 105‑330.5.  Listing and collecting procedures.
(a)	For classified motor vehicles listed pursuant to G.S. 105‑330.3(a)(1), upon receiving the registration lists from the Division of Motor Vehicles each month, the Property Tax Division of the Department of Revenue shall prepare a combined tax and registration notice for each vehicle. The combined tax and registration notice shall contain all county and municipal corporation taxes and fees due on the motor vehicle as computed by the assessor in the county of registration. In computing the taxes, the assessor shall appraise the motor vehicle in accordance with G.S. 105‑330.2 and shall use the tax rates of the various taxing units in effect on the first day of the month in which the current vehicle registration expires or the new registration is applied for. This procedure shall constitute the listing and assessment of each classified motor vehicle for taxation. The combined tax and registration notice shall contain:
(1)	The date of the combined tax and registration notice.
(2)	The appraised value of the motor vehicle.
(3)	The tax rate of the taxing units.
(4)	A statement that the appraised value of the motor vehicle may be appealed to the assessor before the taxes and fees become delinquent.
(5)	The registration fee imposed by the Division of Motor Vehicles and any other information required by the Division of Motor Vehicles to comply with the provisions of Chapter 20 of the General Statutes.
(a1)	When a new registration is obtained for a vehicle registered under the annual system in a month other than December, the taxes shall be prorated for the remainder of the calendar year. The amount of prorated taxes due is the product of the proration fraction and the taxes computed according to subsection (a). The numerator of the proration fraction is the number of full months remaining in the calendar year following the date the registration is applied for and the denominator of the fraction is 12.
(b)	When the combined tax and registration notice required by subsection (a) is prepared, the Property Tax Division of the Department of Revenue or a third‑party contractor shall mail a copy of the notice, with appropriate instructions for payment, to the motor vehicle owner. The Department shall establish a fee equal to the actual cost of printing and sending the notice. The Department may receive a fee for each notice generated for a vehicle registered in a county or municipal corporation from the taxes and fees remitted to the county or municipal corporation in which the vehicle is registered. The collecting authority is responsible for collecting county and municipal taxes and fees assessed under this Article and may retain a fee for collecting these taxes and fees.  The fee retained by the collecting authority shall be an amount equal to at least one‑third of the compensation paid for registration renewals conducted by contract agents under G.S. 20‑63(h). The Property Tax Division shall establish procedures to ensure that tax payments and fees received pursuant to this Article and Chapter 20 of the General Statutes are properly accounted for and taxes and fees due other taxing units and the Division of Motor Vehicles are remitted  at least once each month. Each collecting authority shall provide a weekly financial report containing information required by the Property Tax Division to the taxing units and Division of Motor Vehicles to enable them to account for  payments received.
(b1)	Repealed by Session Laws 1995, c. 329, s. 2.
(c)	For classified motor vehicles listed pursuant to G.S. 105‑330.3(a)(2), the assessor shall appraise each vehicle in accordance with G.S. 105‑330.2. The assessor shall prepare a tax notice for each vehicle before September 1 following the January 31 listing date; the tax notice shall include all county and special district taxes due on the motor vehicle. In computing the taxes, the assessor shall use the tax rates of the taxing units in effect for the fiscal year that begins on July 1 following the January 31 listing date. Municipalities shall list, assess, and tax classified motor vehicles listed pursuant to G.S. 105‑330.3(a)(2) as provided in G.S. 105‑326, 105‑327, and 105‑328 and shall send tax notices as provided in this section.
(d)	The county shall include taxes on classified motor vehicles listed pursuant to G.S. 105‑330.3(a)(1) in the tax levy for the fiscal year in which the taxes become due and shall charge the taxes to the tax collector for that year, unless the tax notice required by subsection (a) is prepared after the date the taxes are due. If that occurs, the county shall include the taxes from that notice in the tax levy for the current fiscal year and shall charge the taxes to the tax collector for that year."
SECTION 7.  G.S. 105‑330.7 is repealed.
SECTION 8.  Article 22A of Chapter 105 of the General Statutes is amended by adding a new section to read:
"§ 105‑330.10.  Disposition of interest.
Sixty percent (60%) of the interest collected on unpaid taxes pursuant to G.S. 105‑330.4 shall be transferred on a monthly basis to the Combined Motor Vehicle and Registration Account created within the Treasurer's Office. The North Carolina Association of County Commissioners shall direct the Treasurer to distribute the funds in the Account to the Division of Motor Vehicles for the purpose of developing and implementing an integrated computer system within the Division of Motor Vehicles that would allow for the combined assessment, billing, and collection of property taxes on motor vehicles and the issuance of registration plates. The Treasurer shall report to the Revenue Laws Study Committee semiannually with the first report due by April 30, 2006. The report shall contain a detailed description of the amount of moneys transferred to the Account and distributed from the Account."
SECTION 9.  G.S. 105‑330.10, as enacted by Section 8 of this act, reads as rewritten:
"§ 105‑330.10. Disposition of interest.
 The interest collected on unpaid registration fees pursuant to G.S. 105‑330.4 shall be transferred on a monthly basis to the North Carolina Highway Fund for technology improvements within the Division of Motor Vehicles. "
SECTION 10.  G.S. 20‑50.3 is repealed.
SECTION 11.  G.S. 20‑50.4 reads as rewritten:
"§ 20‑50.4.  Division to refuse to register vehicles on which county and municipal taxes and fees are not paid and when there is a failure to meet court‑ordered child support obligations.
(a)	Property Taxes Paid with Registration. – The Division shall refuse to register a vehicle on which county and municipal taxes and fees have not been paid.
(b)	Delinquent Child Support Obligations. – Upon receiving a report from a child support enforcement agency that sanctions pursuant to G.S. 110‑142.2(a)(3) have been imposed, the Division shall refuse to register a vehicle for the owner named in the report until the Division receives certification pursuant to G.S. 110‑142.2 that the payments are no longer considered delinquent."
SECTION 12.  The Property Tax Division within the Department of Revenue and the Division of Motor Vehicles within the Department of Transportation shall jointly study and develop a plan for determining the method of valuation of motor vehicles to be taxed and for implementing an integrated computer system needed to combine the registration renewal and property tax collection for motor vehicles in the State.  The Divisions shall consult with representatives from the North Carolina Association of County Commissioners, the North Carolina League of Municipalities, the North Carolina Association of Assessing Officers, the North Carolina Automobile Dealers Association, the North Carolina Independent Automobile Dealers Association, and the North Carolina Tax Collectors Association.  The Divisions shall submit a report of its findings and recommendations to the Revenue Laws Study Committee, the Joint Legislative Transportation Oversight Committee, and the Fiscal Research Division by April 30, 2006.
SECTION 13.  Sections 4 and 8 of this act become effective January 1, 2006.  Sections 1, 2, 3, 5, 6, 7, 9, 10, and 11 of this act become effective July 1, 2009, or when the Division of Motor Vehicles and the Department of Revenue certify that the integrated computer system for registration renewal and property tax collection for motor vehicles is in operation, whichever occurs first.  Sections 12 and 13 of this act are effective when they become law. Nothing in this act shall require the General Assembly to appropriate funds to implement it for the biennium ending June 30, 2007.