A BILL TO BE ENTITLED
AN ACT to authorize municipalities to levy an additional one‑half percent sales and use tax.
The General Assembly of North Carolina enacts:
SECTION 1.  Subchapter VIII of Chapter 105 of the General Statutes is amended by adding a new Article to read:
"Article 47.
"First One‑Half Cent (1/2¢) Municipal Sales and Use Tax.
"§ 105‑540.  Short title.
This Article is the First One‑Half Cent (1/2¢) Municipal Sales and Use Tax Act.
"§ 105‑541.  Definitions.
The following definitions apply in this Article:
(1)	Beach nourishment. – The placement of sand, from other sand sources, on a beach or dune by mechanical means and other associated activities that are in conformity with the North Carolina Coastal Management Program, or which have otherwise been authorized by the General Assembly, along North Carolina shorelines and connecting inlets for the purpose of widening the beach to benefit public recreational use and mitigating damage and erosion from storms to inland property and transportation routes. The term includes expenditures for the following:
a.	Costs directly associated with qualifying for projects either contracted through the U.S. Army Corps of Engineers or otherwise permitted by all appropriate federal and State agencies.
b.	The nonfederal share of costs required to construct these projects.
c.	The costs associated with providing enhanced public beach access.
d.	The costs of associated nonhardening activities such as the planting of vegetation, the building of dunes, and the placement of sand fences.
(2)	Net proceeds. – Defined in G.S. 105‑472.
"§ 105‑542.  Levy.
The governing body of a municipality may, by resolution, levy a local sales and use tax at a rate of one‑half percent (1/2%) in addition to any other State and local sales and use taxes levied pursuant to law. Before adopting a resolution under this section, the governing body must give at least 10 days' public notice of its intent to adopt the resolution and must hold a public hearing on the issue of adopting the resolution.
"§ 105‑543.  Administration.
Except as provided in this Article, the adoption, levy, collection, administration, and repeal of the additional taxes authorized by this Article shall be in accordance with Article 39 of this Chapter. References to "county," "counties," or "board of county commissioners" within Article 39 of this Chapter shall be interpreted as referring to "municipality," "municipalities," or "governing body of the municipality," respectively, for purposes of the tax authorized by this Article. G.S. 105‑468.1 is an administrative provision that applies to this Article. A tax levied under this Article does not apply to the sales price of food that is exempt from tax pursuant to G.S. 105‑164.13B or to the sales price of a bundled transaction taxable pursuant to G.S. 105‑467(a)(5a).
"§ 105‑544.  Distribution and use.
(a)	Distribution. – The Secretary shall, on a monthly basis, distribute to each taxing municipality for which the Secretary collects the tax the net proceeds of the tax collected in that municipality under this Article. If the Secretary collects local sales or use taxes in a month and the taxes cannot be identified as being attributable to a particular taxing municipality, the Secretary shall allocate the taxes among the taxing municipalities in proportion to the amount of taxes collected in each municipality under this Article during that month and shall include them in the monthly distribution. Amounts collected by electronic funds transfer payments are included in the distribution for the month in which the return that applies to the payment is received.
(b)	Use. – A municipality may use the net proceeds of a tax levied under this Article for beach nourishment; street and sidewalk construction and improvements; traffic signals; street lighting; street and directional signage; police, fire, and rescue services support; and services to support public events and festivals."
SECTION 2.  This act is effective when it becomes law.