A BILL TO BE ENTITLED
AN ACT to clarify the Application of the additional gross premiums taxes on fire and lightning coverage and to apply the additional tax to all policies that provide fire and lightning coverage.
The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 105‑228.5(d)(3) reads as rewritten:
"(d)	Tax Rates; Disposition. –
…
(3)	Additional Statewide Fire and Lightning Rate. – An additional tax at the rate of one and thirty‑three hundredths percent (1.33%) applies to gross premiums on insurance contracts that provide fire and lightning coverage, except in the case of marine and automobile policies. The tax is a percentage of the gross premiums from the contracts, determined in accordance with the table in this subdivision. Twenty‑five percent (25%) of the net proceeds of this additional tax shall be deposited in the Volunteer Fire Department Fund established in Article 87 of Chapter 58 of the General Statutes. The remaining net proceeds shall be credited to the General Fund.
Type of Insurance Contract			Taxable Percentage
Fire Loss								100%
Commercial Multiple Peril 
	Nonliability portion					100%
	Liability portion						    0%
Homeowner's							 50%
Farm Owner's 							 35%."
SECTION 2.  G.S. 105‑228.5(d)(4) reads as rewritten:
"(d)	Tax Rates; Disposition. –
…
(4)	Additional Local Fire and Lightning Rate. – An additional tax at the rate of one‑half of one percent (0.5%) applies to gross premiums on insurance contracts that provide fire and lightning coverage within a fire district. The tax is a percentage of the gross premiums from the contracts, determined in accordance with the table in subdivision (3) of this subsection. The net proceeds shall be credited to the Department of Insurance for disbursement pursuant to G.S. 58‑84‑25."
SECTION 3.  G.S. 105‑228.5(d)(3), as amended by Section 1 of this act, reads as rewritten:
"(d)	Tax Rates; Disposition. – 
…
(3)	Additional Statewide Fire and Lightning Rate. – An additional tax at the rate of one and thirty‑three hundredths percent (1.33%) applies to gross premiums on insurance contracts that provide fire and lightning coverage. The tax is a percentage of the gross premiums from the contracts, determined in accordance with the table in this subdivision. Twenty‑five percent (25%) of the net proceeds of this additional tax shall be deposited in the Volunteer Fire Department Fund established in Article 87 of Chapter 58 of the General Statutes. The remaining net proceeds shall be credited to the General Fund.
Type of Insurance Contract			Taxable Percentage
Fire Loss								100%
Commercial Multiple Peril 
	Nonliability portion					100%
	Liability portion  					    0%
Homeowner's							 50%
Farm Owner's 							 35%
Marine								 20%
Automobile							 10%
Other									 10%."
SECTION 4.  Sections 1 and 2 of this act are effective for taxable years beginning on or after January 1, 2006. Section 3 of this act is effective for taxable years beginning on or after January 1, 2007. The remainder of this act is effective when it becomes law.