GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 1997
Short Title: Local Transit Revenue Options. (Public)
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Referred to: Finance.
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AN ACT TO AUTHORIZE SUPPLEMENTAL SOURCES OF REVENUE FOR LOCAL GOVERNMENT TRANSIT FINANCING.
The General Assembly of North Carolina enacts:
Section 1. The title of Subchapter VIII of Chapter 105 of the General Statutes reads as rewritten:
"SUBCHAPTER VIII.
LOCAL GOVERNMENT SALES AND USE TAX. TAXES."
Section 2. Subchapter VIII of Chapter 105 of the General Statutes is amended by adding two new Articles to read:
ARTICLE 43.
"Local Government Sales and Use Taxes for Public Transit.
"§ 105-505. Short title; purpose.
This Article shall be known as the Local Government Public Transit Sales Tax Act. This Article gives Regional Public Transportation Authorities and the counties of this State an opportunity to obtain an additional source of revenue with which to meet their needs for financing local public transportation systems. It provides these local governments with authority to levy one-half percent (1/2%) sales and use taxes.
"§ 105-506. Definitions.
The definitions in G.S. 160A-601 and G.S. 105-164.3 and the following definitions apply to this Article:
(1) Net proceeds. Gross proceeds less the cost of administering and collecting the tax.
(2) Public transportation system. Any combination of real and personal property established for purposes of public transportation. The systems may include one or more of the following: structures, improvements, buildings, equipment, vehicle parking or passenger transfer facilities, railroads and railroad rights-of-way, rights-of-way, bus services, shared-ride services, high-occupancy vehicle facilities, car-pool and vanpool programs, voucher programs, telecommunications and information systems, integrated fare systems, bus lanes, and busways. The term does not include, however, streets, roads, or highways except to the extent they are dedicated to public transportation vehicles or to the extent they are necessary for access to vehicle parking or passenger transfer facilities.
(3) Taxing unit. A Regional Public Transportation Authority or a county that levies a tax under this Article.
"§ 105-507. Limitations.
(a) Levy by County. A county may not levy a tax under this Article unless the county or at least one unit of local government in the county operates a public transportation system.
(b) Levy by County Located in Authority. A county may not levy a tax under this Article that has been levied by an Authority in which the county is located. A county may not levy a tax under this Article without giving an Authority in which it is located six months' written notice of its intent to levy. If a county located within an Authority has levied a tax under this Article, the Authority may levy the same tax, but the Authority's levy may not become effective before the end of six months after the adoption of a resolution levying the tax. The county's authority to levy the tax terminates upon the effective date of the levy of the same tax by the Authority in which the county is located.
(c) Levy by Authority. An Authority may not levy or increase a tax under this Article unless the special tax board of the Authority and the board of county commissioners of each county organizing the Authority have first passed a resolution approving the levy or increase, except where the levy or increase in tax is necessary for debt service on bonds or notes that the special tax board and each of the boards of county commissioners had previously approved under G.S. 159-51.
"§ 105-508. Local election on adoption of sales and use tax.
(a) Resolution. The board of commissioners of a county or the board of trustees of an Authority may direct the county board or boards of elections to conduct an advisory referendum within the county or within the jurisdiction of the Authority on the question of whether a local sales and use tax at the rate of one-half percent (1/2%) will be levied in accordance with this Article. The election shall be held on a date jointly agreed upon by the boards and shall be held in accordance with the procedures of G.S. 163-287. The board of commissioners or board of trustees shall hold a public hearing on the question at least 30 days before the date the election is to be held.
(b) Ballot Question. The form of the question to be presented on a ballot for a special election concerning the levy of a tax authorized by this Article shall be:
[ ] FOR [ ] AGAINST
One-half percent (1/2%) local sales and use taxes, in addition to the current two percent (2%) local sales and use taxes, to be used only for public transportation systems.'
"§ 105-509. Levy and collection of sales and use tax.
(a) Levy. If the majority of those voting in a referendum held pursuant to this Article vote for the levy of the tax, the board of commissioners of the county or the board of trustees of the Authority may, by resolution, levy one-half percent (1/2%) local sales and use taxes in addition to any other State and local sales and use taxes levied pursuant to law. In addition, if no referendum has been held pursuant to this Article within five years at which the tax has been defeated, the board of commissioners of a county or the board of trustees of an Authority may, by resolution, after not less than 10 days' public notice and after a public hearing, levy one-half percent (1/2%) local sales and use taxes in addition to any other State and local sales and use taxes levied pursuant to law.
(b) Administration. Except as provided in this Article, the adoption, levy, collection, administration, and repeal of these additional taxes shall be in accordance with Article 39 of this Chapter. In applying the provisions of Article 39 of this Chapter to this Article, references to this Article' mean Article 43 of Chapter 105 of the General Statutes'.
(c) Food Exempt. A tax levied under this Article does not apply to the sales price of food that is not otherwise exempt from tax pursuant to G.S. 105-164.13 but would be exempt from the State sales and use tax pursuant to G.S. 105-164.13 if it were purchased with coupons issued under the Food Stamp Program, 7 U.S.C. § 51.
"§ 105-510. Distribution and use of taxes.
(a) Distribution. The Secretary shall, on a quarterly basis, allocate to each taxing unit the net proceeds of the tax levied under this Article by that unit. If the Secretary collects taxes under this Article in a month and the taxes cannot be identified as being attributable to a particular taxing unit, the Secretary shall allocate these taxes among the taxing units in proportion to the amount of taxes collected in each unit under this Article in that month and shall include them in the quarterly distribution.
The Secretary shall distribute to each Authority the net proceeds of the tax levied by the Authority. The Secretary shall distribute the net proceeds of the tax levied by a county on a per capita basis among the county and the units of local government in the county that operate public transportation systems. No proceeds shall be distributed to a county that does not operate a public transportation system or to a unit of local government that does not operate a public transportation system.
(b) Use. An Authority may use the proceeds of a tax levied under this Article to carry out its purposes provided in Article 26 of Chapter 160A of the General Statutes. A county or other unit of local government may use the net proceeds distributed to it under this Article only for financing, constructing, operating, and maintaining local public transportation systems.
"ARTICLE 44.
"Local Government Vehicle Registration Tax for Public Transit.
"§ 105-514. Limitations.
This Article applies only to counties that are not located within the territorial jurisdiction of a Regional Public Transit Authority created pursuant to Article 26 of Chapter 160A of the General Statutes. A county may not levy a tax under this Article unless the county or at least one unit of local government in the county operates a public transportation system. A county may not levy a tax under this Article at a rate that would, when combined with the tax levied by any municipality in the county under G.S. 20-97, exceed thirty dollars ($30.00) per vehicle.
"§ 105-515. Levy of vehicle registration tax.
The board of commissioners of a county may, by resolution, after not less than 10 days' public notice and a public hearing, levy an annual registration tax on motor vehicles with a tax situs within the county. The tax must be a full dollar amount and may not exceed five dollars ($5.00). A tax levied under this section is in addition to any other motor vehicle license or registration tax.
The tax applies to vehicles required to pay a tax under G.S. 20-88, except trailers, or pay a tax under G.S. 20-87(1), (2), (4), (5), (6), or (7). The tax situs of a motor vehicle for the purpose of this Article is its ad valorem tax situs. If the vehicle is not subject to ad valorem tax, its tax situs for the purpose of this Article is the ad valorem tax situs it would have if it were subject to ad valorem tax.
The effective date of a tax levied under this section must be the first day of a calendar month set by the board of commissioners in the resolution levying the tax and shall be no earlier than the first day of the third calendar month after the adoption of the resolution.
"§ 105-516. Administration.
The Division of Motor Vehicles of the Department of Transportation shall collect and administer a tax levied under this section. Immediately after adopting a resolution levying, modifying, or repealing a tax under this section, the board of county commissioners shall deliver a certified copy of the resolution to the Division of Motor Vehicles. A tax levied under this section is due at the same time and subject to the same restrictions as the tax levied in G.S. 20-87 and G.S. 20-88. The tax shall be prorated in accordance with G.S. 20-95. The Commissioner of Motor Vehicles may adopt rules necessary to administer the tax.
"§ 105-517. Modification or repeal of tax.
The board of commissioners of a county may, by resolution, repeal the levy of the tax under this section, or increase or decrease the rate of tax, under the same procedures as provided in G.S. 105-515. The repeal, increase, or decrease of the tax shall become effective on the first day of a month and may not become effective before the first day of the third calendar month after the adoption of the resolution. The repeal or reduction of a tax under this Article does not affect a liability for a tax that attached before the effective date of the repeal or reduction, nor does it affect a right to a refund of a tax that accrued before the effective date of the repeal or reduction.
"§ 105-518. Distribution and use of tax proceeds.
The Commissioner of Motor Vehicles shall credit the proceeds of each tax levied under this Article to a special account and distribute the net proceeds on a quarterly basis. Interest on the special account shall be credited quarterly to the Highway Fund to reimburse the Division of Motor Vehicles for the cost of collecting and administering the tax.
The Commissioner of Motor Vehicles shall allocate to each taxing county the net proceeds of the tax levied by that county. The Commissioner shall distribute the tax proceeds on a per capita basis among the taxing county and the units of local government in the county that operate public transportation systems. No proceeds shall be distributed to a county that does not operate a public transportation system or to a unit of local government that does not operate a public transportation system.
A unit of local government may use the proceeds distributed to it under this Article only for financing, constructing, operating, and maintaining local public transportation systems. As used in this section, the term public transportation system' has the meaning provided in G.S. 105-506."
Section 3. Chapter 105 of the General Statutes is amended by adding a new Subchapter to read:
SUBCHAPTER IX. MULTICOUNTY TAXES.
"§ 105-550. Definitions.
The definitions in G.S. 160A-601 and G.S. 105-164.3 and the following definitions apply to this Article:
(1) Long-term lease or rental. Defined in G.S. 105-187.1.
(2) Motorcycle. Defined in G.S. 20-4.01.
(3) Private passenger vehicle. Defined in G.S. 20-4.01.
(4) Short-term lease or rental. A lease or rental that is not a long-term lease or rental.
"§ 105-551. Tax on gross receipts authorized.
(a) Tax. The Board of Trustees of an Authority may levy a privilege tax on a retailer who is engaged in the business of leasing or renting private passenger vehicles or motorcycles based on the gross receipts derived by the retailer from the short-term lease or rental of these vehicles. The tax rate must be a percentage and may not exceed five percent (5%). A tax levied under this section applies to short-term leases or rentals made by a retailer whose place of business or inventory is located within the territorial jurisdiction of the Authority. This tax is in addition to all other taxes.
(b) Restrictions. The Board of Trustees of an Authority may not levy a tax under this section or increase the tax rate of a tax levied under this section until all of the following requirements have been met:
(1) The Board of Trustees has held a public hearing on the tax or the increase in the tax rate after giving at least 10 days' notice of the hearing.
(2) The special tax board of the Authority has adopted a resolution approving the levy of the tax or the increase in the tax rate.
(3) The board of commissioners of each county included in the territorial jurisdiction of the Authority has adopted a resolution approving the levy of the tax or the increase in the tax rate.
"§ 105-552. Collection and administration of gross receipts tax.
(a) Effective Date. A tax or a tax increase levied under this Subchapter becomes effective on the date set by the Board of Trustees in the resolution levying the tax or the tax increase. The effective date must be the first day of a month and may not be earlier than the first day of the second month after the Board of Trustees adopts the resolution.
(b) Collection. A tax levied by an Authority under this Subchapter shall be collected by the Authority but shall otherwise be administered in the same manner as the optional gross receipts tax levied by G.S. 105-187.5. Like the optional gross receipts tax, a tax levied under this Subchapter is to be added to the lease or rental price of a private passenger vehicle or motorcycle and thereby be paid by the person to whom it is leased or rented.
A tax levied under this Subchapter applies regardless of whether the retailer who leases or rents the private passenger vehicle or motorcycle has elected to pay the optional gross receipts tax on the lease or rental receipts from the vehicle. A tax levied under this Subchapter must be paid to the Authority that levied the tax by the date an optional gross receipts tax would be payable to the Secretary of Revenue under G.S. 105-187.5 if the retailer who leases or rents the private passenger vehicle or motorcycle had elected to pay the optional gross receipts tax.
(c) Penalties and Remedies. The penalties and remedies that apply to local sales and use taxes levied under Subchapter VIII of this Chapter apply to a tax levied under this Subchapter. The Board of Trustees of an Authority may exercise any power the Secretary of Revenue or a board of county commissioners may exercise in collecting local sales and use taxes.
"§ 105-553. Exemptions and refunds.
No exemptions are allowed from a tax levied under this Subchapter. No refunds are allowed for a tax lawfully levied under this Subchapter.
"§ 105-554. Use of tax proceeds.
An Authority that levies a tax under this Subchapter may use the proceeds of the tax for any purpose for which the Authority is authorized to use funds. Authorized purposes for which an Authority may use funds include the following:
(1) Pledging funds in connection with the financing of a public transportation system or any part of a public transportation system.
(2) Paying a note, bond, or other obligation entered into by the Authority pursuant to Article 26 of Chapter 160A.
"§ 105-555. Repeal of tax or decrease in tax rate.
The Board of Trustees of an Authority may repeal a tax levied under this Subchapter or decrease the tax rate of a tax levied under this Subchapter. The same restrictions that apply to the levy of a tax or an increase in a tax rate under this Subchapter apply to the repeal of the tax or a decrease in the tax rate.
A tax repeal or a tax decrease becomes effective on the date set by the Board of Trustees in the resolution repealing or decreasing the tax. The effective date must be on the first day of a month and may not be earlier than the first day of the second month after the Board of Trustees adopts the resolution. Repeal or decrease of a tax levied under this Subchapter does not affect the rights or liabilities of an Authority, a taxpayer, or another person arising before the repeal or decrease."
Section 4. This act is effective when it becomes law.
Section 5. A tax levied under Article 43 of Chapter 105 of the General Statutes, as enacted by this act, does not apply to construction materials purchased to fulfill a lump sum or unit price contract entered into or awarded before the effective date of the levy or entered into or awarded pursuant to a bid made before the effective date of the levy when the construction materials would otherwise be subject to the tax levied under Article 43 of Chapter 105 of the General Statutes.