GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 2013

SESSION LAW 2013-244

HOUSE BILL 784

AN ACT to provide that the remedies and penalties for worthless checks also apply when a check that has been paid in full is presented again for payment and to provide that checks refused to be honored by a bank may be submitted as evidence if they are stamped or marked with one of a number of different listed terms.

The General Assembly of North Carolina enacts:

SECTION 1.  G.S. 6-21.3(a) reads as rewritten:

"(a)       Notwithstanding any criminal sanctions that may apply, a person, firm, or corporation who knowingly draws, makes, utters, or issues and delivers to another any check or draft drawn on any bank or depository that refuses to honor the same because the maker or drawer does not have sufficient funds on deposit in or credit with the bank or depository with which to pay the check or draft upon presentation, presentation or because the check has previously been presented and honored for the payment of money or its equivalent, and who fails to pay the same amount, any service charges imposed on the payee by a bank or depository for processing the dishonored check, and any processing fees imposed by the payee pursuant to G.S. 25-3-506 in cash to the payee within 30 days following written demand therefor, shall be liable to the payee (i) for the amount owing on the check, the service charges, and processing fees and (ii) for additional damages of three times the amount owing on the check, not to exceed five hundred dollars ($500.00) or to be less than one hundred dollars ($100.00). If the amount claimed in the first demand letter is not paid, the claim for the amount of the check, the service charges and processing fees, and the treble damages provided for in this subsection may be made by a subsequent letter of demand prior to filing an action. In an action under this section the court or jury may, however, waive all or part of the additional damages upon a finding that the defendant's failure to satisfy the dishonored check or draft was due to economic hardship.

The initial written demand for the amount of the check, the service charges, and processing fees shall be mailed by certified mail to the defendant at the defendant's last known address and shall be in the form set out in subsection (a1) of this section. The subsequent demand letter demanding the amount of the check, the service charges, the processing fees, and treble damages shall be mailed by certified mail to the defendant at the defendant's last known address and shall be in the form set out in subsection (a2) of this section. If the payee chooses to send the demand letter set out in subsection (a2) of this section, then the payee may not file an action to collect the amount of the check, the service charges, the processing fees, or treble damages until 30 days following the written demand set out in subsection (a2) of this section."

SECTION 2.  G.S. 6-21.3(d) reads as rewritten:

"(d)      The remedy provided for herein shall apply only if the check was drawn, made, uttered or issued with knowledge there were insufficient funds in the account oraccount, that no credit existed with the bank or depository with which to pay the check or draft upon presentation.presentation, or that the check was presented with the knowledge that the check had previously been presented and honored for the payment of money or its equivalent."

SECTION 3.  G.S. 6-21.3 is amended by adding a new subsection to read:

"(e) A check or draft refused by a bank or depository, or the image of that check or draft, may be submitted as evidence for the remedy provided by this section if the bank or depository has returned it in the regular course of business stamped, marked, or with an attachment indicating the reason for the dishonor with terms that include, but are not limited to, the following: "insufficient funds," "no account," "account closed," "NSF," "uncollected," "unable to locate," "stale dated," "postdated," "endorsement irregular," "signature irregular," "nonnegotiable," "altered," "unable to process," "refer to maker," "duplicate presentment," "forgery," "noncompliant," or "UCD noncompliant.""

SECTION 4.  G.S. 14-107 reads as rewritten:

"§ 14-107.  Worthless checks.checks; multiple presentment of checks.

(a)        It is unlawful for any person, firm or corporation, to draw, make, utter or issue and deliver to another, any check or draft on any bank or depository, for the payment of money or its equivalent, knowing at the time of the making, drawing, uttering, issuing and delivering the check or draft, that the maker or drawer of it it:

(1) has Has not sufficient funds on deposit in or credit with the bank or depository with which to pay the check or draft upon presentation.presentation, or

(2) Has previously presented the check or draft for the payment of money or its equivalent.

(b)        It is unlawful for any person, firm or corporation to solicit or to aid and abet any other person, firm or corporation to draw, make, utter or issue and deliver to any person, firm or corporation, any check or draft on any bank or depository for the payment of money or its equivalent, being informed, knowing or having reasonable grounds for believing at the time of the soliciting or the aiding and abetting that the maker or the drawer of the check or draft draft:

(1) has Has not sufficient funds on deposit in, or credit with, the bank or depository with which to pay the check or draft upon presentation.presentation, or

(2) Has previously presented the check or draft for the payment of money or its equivalent.

(c)        The word "credit" as used in this section means an arrangement or understanding with the bank or depository for the payment of a check or draft.

(d)        A violation of this section is a Class I felony if the amount of the check or draft is more than two thousand dollars ($2,000). If the amount of the check or draft is two thousand dollars ($2,000) or less, a violation of this section is a misdemeanor punishable as follows:

(1)        Except as provided in subdivision (3) or (4) of this subsection, the person is guilty of a Class 2 misdemeanor. Provided, however, if the person has been convicted three times of violating this section, the person shall on the fourth and all subsequent convictions (i) be punished as for a Class 1 misdemeanor and (ii) be ordered, as a condition of probation, to refrain from maintaining a checking account or making or uttering a check for three years.

(2)        Repealed by Session Laws 1999-408, s. 1.

(3)        If the check or draft is drawn upon a nonexistent account, the person is guilty of a Class 1 misdemeanor.

(4)        If the check or draft is drawn upon an account that has been closed by the drawer, or that the drawer knows to have been closed by the bank or depository, prior to time the check is drawn, the person is guilty of a Class 1 misdemeanor.

(e)        In deciding to impose any sentence other than an active prison sentence, the sentencing judge shall consider and may require, in accordance with the provisions of G.S. 15A-1343, restitution to the victim for (i) the amount of the check or draft, (ii) any service charges imposed on the payee by a bank or depository for processing the dishonored check, and (iii) any processing fees imposed by the payee pursuant to G.S. 25-3-506, and each prosecuting witness (whether or not under subpoena) shall be entitled to a witness fee as provided by G.S. 7A-314 which shall be taxed as part of the cost and assessed to the defendant."

SECTION  5.  G.S. 14-107.1(e) reads as rewritten:

"(e)       If the bank or depository dishonoring a check or draft has returned it in the regular course of business stamped or marked or with an attachment indicating the reason for dishonor ("insufficient funds," "no account," "account closed" or words of like meaning), dishonor, the check or draft and any attachment may be introduced in evidence and constitute prima facie evidence of the facts of dishonor if the conditions of subdivisions (5) through (7) of subsection (b) or subdivisions (5) through (7) of subsection (c) have been met. The reason for dishonor may be indicated with terms that include, but are not limited to, the following: "insufficient funds," "no account," "account closed," "NSF," "uncollected," "unable to locate," "stale dated," "postdated," "endorsement irregular," "signature irregular," "nonnegotiable," "altered," "unable to process," "refer to maker," "duplicate presentment," "forgery," "noncompliant," or "UCD noncompliant." The fact that the check or draft was returned dishonored may be received as evidence that the check passer had no credit with the bank or depository for payment of the check or draft."

SECTION 6.  This act becomes effective December 1, 2013, and applies to offenses committed on or after that date.

In the General Assembly read three times and ratified this the 25^th day of June, 2013.

                                                                    s/  Daniel J. Forest

                                                                         President of the Senate

                                                                    s/  Tim Moore

                                                                         Presiding Officer of the House of Representatives

                                                                    s/  Pat McCrory

                                                                         Governor

Approved 10:34 a.m. this 3^rd day of July, 2013