GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 2001

S                                                                                                                                                     2

SENATE BILL 1292

Finance Committee Substitute Adopted 6/11/02

Short Title:     Budget Revenue Act of 2002.	(Public)
Sponsors:
Referred to:

June 10, 2002

A BILL TO BE ENTITLED

AN ACT TO raise revenues to support the current operations of state and local government and to update the reference date to the internal revenue code used to define and determine certain state tax provisions.

The General Assembly of North Carolina enacts:

PART I. ACCELERATE LOCAL OPTION SALES TAX

SECTION 1.1. G.S. 105‑517(c) reads as rewritten:

"(c)      Effective Date. – A tax levied under this Article may not become effective before July 1, 2003.August 1, 2002."

SECTION 1.2.  G.S. 105‑518(b) reads as rewritten:

"(b)      Ballot Question. – The question to be presented on a ballot for a special election concerning the levy of the taxes authorized by this Article must be in the following form:

'[ ] FOR           [ ] AGAINST

one‑half percent (½%) local sales and use taxes, to replace the current one‑half percent (½%) State sales and use taxes that end July 1, 2003.'in addition to all current State and local sales and use taxes.' "

SECTION 1.3.(a)  Effective July 1, 2002, G.S. 105‑520 reads as rewritten:

"§ 105‑520.  Distribution of taxes.

(a)       Point of Origin. – The Secretary must, on a monthly quarterly basis, allocate to each taxing county one‑half of the net proceeds of the tax collected in that county under this Article. If the Secretary collects taxes under this Article in a month quarter and the taxes cannot be identified as being attributable to a particular taxing county, the Secretary must allocate one‑half of the net proceeds of these taxes among the taxing counties in proportion to the amount of taxes collected in each county under this Article in that month.quarter.

(b)       Per Capita. – The Secretary must, on a monthly quarterly basis, allocate the remaining net proceeds of the tax collected under this Article among the taxing counties on a per capita basis according to the most recent annual population estimates certified to the Secretary by the State Budget Officer. The Secretary must then adjust the amount allocated to each county as provided in G.S. 105‑486(b).

(c)       Distribution Between Counties and Cities. – The Secretary must divide and distribute the funds allocated under this section each month quarter between each taxing county and the municipalities located in the county in accordance with the method by which the one percent (1%) sales and use taxes levied in that county pursuant to Article 39 of this Chapter or Chapter 1096 of the 1967 Session Laws are distributed. No municipality may receive any funds under this subsection for a month quarter if it is not entitled to a distribution under G.S. 105‑501 for the same month.quarter."

SECTION 1.3.(b)  This section is repealed effective July 1, 2003.

SECTION 1.4.  G.S. 105‑521 reads as rewritten:

"§ 105‑521. Transitional local government hold harmless.

(a)       Definitions. – The following definitions apply in this section:

(1)       Local government. – A county or municipality that received a distribution of local sales taxes in the most recent fiscal year for which a local sales tax share has been calculated.

(2)       Local sales tax share. – A local government's percentage share of the two‑cent (2¢) sales taxes distributed during the most recent fiscal year for which data are available.

(3)       Repealed reimbursement amount. – The total amount a local government would have been entitled to receive during the 2002‑2003 2001-2002 fiscal year under G.S. 105‑164.44C, 105‑275.1, 105‑275.2, 105‑277.001, and 105‑277.1A, if the Governor had not withheld any distributions under those sections.

(4)       Two‑cent (2¢) sales taxes. – The first one‑cent (1¢) sales and use tax authorized in Article 39 of this Chapter and in Chapter 1096 of the 1967 Session Laws, the first one‑half cent (½¢) local sales and use tax authorized in Article 40 of this Chapter, and the second one‑half cent (½¢) local sales and use tax authorized in Article 42 of this Chapter.

(b)       Distributions. – 2002-2003 Distribution. – On or before September 15, 2002, the Secretary must multiply each local government's local sales tax share by the sum of three hundred nine million ten thousand six hundred sixty-seven dollars ($309,010,667). If the resulting amount is less than one hundred percent (100%) of the local government's repealed reimbursement amount, the Secretary must pay the local government the difference, but not less than one hundred dollars ($100.00).

(c) Subsequent Distributions. – On or before September 15, 2003, and each September 15 thereafter, the Secretary must multiply each local government's local sales tax share by the estimated amount that all local governments would be expected to receive during the current fiscal year under G.S. 105‑520 if every county levied the tax under this Article for the year. If the resulting amount is less than one hundred percent (100%) of the local government's repealed reimbursement amount, the Secretary must pay the local government the difference, but not less than one hundred dollars ($100.00).

(d) Estimated Amounts. – On or before May 1, 2003, and each May 1 thereafter, the Office of State Budget and Management and the Fiscal Research Division of the General Assembly must each submit to the Secretary and to the General Assembly a final projection of the estimated amount that all local governments would be expected to receive during the upcoming fiscal year under G.S. 105‑520 if every county levied the tax under this Article for the fiscal year. If the Secretary does not use the lower of the two final projections to make the calculation required by this subsection, the Secretary must report the reasons for this decision to the Joint Legislative Commission on Governmental Operations within 60 days after receiving the projections.

(c)(e)  Source of Funds. – The Secretary must draw the funds distributed under this section from sales and use tax collections under Article 5 of this Chapter.

(d)(f)   Reports. – The Secretary must report to the Revenue Laws Study Committee by January 31, 2004,2003, and each January 31 thereafter, the amount distributed under this section for the current fiscal year."

SECTION 1.5.  Effective for taxable years beginning on or after January 1, 2002, G.S. 105‑269.14(b) reads as rewritten:

"(b)      Distribution. – The Secretary must distribute one-thirda portion of the net use tax proceeds collected under this section to counties and cities in proportion to their total distributions under Articles 39, 40, and 42 of this Chapter and Chapter 1096 of the 1967 Session Laws for the most recent period for which data is available.cities. The portion to be distributed to all counties and cities shall be the total net use tax proceeds collected under this section multiplied by a fraction. The numerator of the fraction is the local use tax proceeds collected under this section. The denominator of the fraction is the total use tax proceeds collected under this section. The Secretary shall then distribute this portion to the counties and cities in proportion to their total distributions under Articles 39, 40, 42, 43, and 44 of this Chapter and Chapter 1096 of the 1967 Session Laws for the most recent period for which data are available. The provisions of G.S. 105‑472, 105‑486, and 105‑501 do not apply to tax proceeds distributed under this section."

SECTION 1.6.  G.S. 159‑15 reads as rewritten:

"§ 159‑15.  Amendments to the budget ordinance.

Except as otherwise restricted by law, the governing board may amend the budget ordinance at any time after the ordinance's adoption in any manner, so long as the ordinance, as amended, continues to satisfy the requirements of G.S. 159‑8 and 159‑13. However, except as otherwise provided in this section, no amendment may increase or reduce a property tax levy or in any manner alter a property taxpayer's liability, unless the board is ordered to do so by a court of competent jurisdiction, or by a State agency having the power to compel the levy of taxes by the board.

If after July 1 the local government receives additional and unanticipated revenues, the governing body may, before January 1, amend the budget ordinance to reduce the property tax levy to account for the unanticipated revenues.

The governing board by appropriate resolution or ordinance may authorize the budget officer to transfer moneys from one appropriation to another within the same fund subject to such limitations and procedures as it may prescribe. Any such transfers shall be reported to the governing board at its next regular meeting and shall be entered in the minutes."

SECTION 1.7.  Section 34.14(b) of S.L. 2001‑424 reads as rewritten:

"SECTION 34.14.(b)  Notwithstanding the provisions of G.S. 105‑466(c), a tax levied during the 2003 2002 calendar year under Article 44 of Chapter 105 of the General Statutes, as enacted by this act, may become effective on the first day of any calendar month during 2002 beginning on or after July 1, 2003.August 1, 2002. Notwithstanding the provisions of G.S. 105‑466(c), if a county levies a tax during the 2003 2002 calendar year under Article 44 of Chapter 105 of the General Statutes, as enacted by this act, that is to become effective on or before January 1, 2003, the county is required to give the Secretary of Revenue only the following notice:

(1) If the tax is to become effective August 1, 2002, the county must notify the Secretary on or before July 15, 2002.

(2) If the tax is to become effective on the first day of any other calendar month beginning on or before January 1, 2003, the county must give the Secretary 30 days' advance notice of the tax levy.

For taxes levied on orthat are to become effective after January 1, 2004,2003, the provisions of G.S. 105‑466(c) apply."

SECTION 1.8.  Section 34.15(b) of S.L. 2001‑424 reads as rewritten:

"SECTION 34.15.(b)  This section becomes effective July 1, 2003.2002."

SECTION 1.9.  Notwithstanding any other provision of law, for the months of August and September 2002, the administration and distribution of taxes collected under Article 44 of Chapter 105 of the General Statutes shall be in accordance with this section.  For each of those months, the Secretary of Revenue shall create a separate account for the collection of taxes under Article 44 of Chapter 105 of the General Statutes.  In each of those months, retailers shall report taxes collected under Article 44 of Chapter 105 of the General Statutes on a form separate from that on which the retailer reports other sales and use taxes collected.  In each of those months, the Secretary shall allocate to each county that has imposed a tax under Article 44 of Chapter 105 of the General Statutes a portion of the total amount of tax collected under that Article.  A county's allocation shall be determined by multiplying the total amount of tax collected under Article 44 of Chapter 105 of the General Statutes for that month by a fraction.  The numerator of the fraction is the amount allocated under G.S. 105‑472, 105‑486, and 105‑501 for the first quarter of the 2002‑2003 fiscal year to the county.  The denominator of the fraction is the total amount allocated under G.S. 105‑472, 105‑486, and 105‑501 for the first quarter of the 2002‑2003 fiscal year to all counties that have imposed a tax under Article 44 of Chapter 105 of the General Statutes.  The Secretary shall distribute these taxes at the end of the quarter in accordance with G.S. 105‑520(c).

SECTION 1.10.  To the extent the Department of Revenue's nonrecurring costs of implementing and administering Article 44 of Chapter 105 of the General Statutes, as amended, exceed funds available in its budget for the 2002‑2003 fiscal year, the Department may pay the excess cost by withholding up to three hundred thousand dollars ($300,000) from collections under Subchapter VIII of Chapter 105 of the General Statutes.

SECTION 1.11.  The Department of Revenue may contract for supplies, materials, equipment, and contractual services related to the provision of notice, the creation of tax forms and instructions, and the development of computer software necessitated by the amendments in this act without being subject to the requirements of Article 3 or Article 8 of Chapter 143 of the General Statutes.

SECTION 1.12.(a)  The title of Article 39 of Chapter 105 of the General Statutes reads as rewritten:

"Article 39.

First One-Cent (1¢) Local Government Sales and Use Tax."

SECTION 1.12.(b)  G.S. 105‑463 reads as rewritten:

"§ 105‑463.  Short title.

This Article shall be known as the 'Local First One-Cent (1¢) Local Government Sales and Use Tax Act.'Act."

SECTION 1.13.(a)  The title of Article 40 of Chapter 105 of the General Statutes reads as rewritten:

"Article 40.

Supplemental First One-Half Cent (1/2¢) Local Government Sales and Use Taxes.Tax."

SECTION 1.13.(b)  G.S. 105‑480 reads as rewritten:

"§ 105‑480.  Short title.

This Article shall be known as the Supplemental First One-Half Cent (1/2¢) Local Government Sales and Use Tax Act."

SECTION 1.14.(a)  The title of Article 42 of Chapter 105 of the General Statutes reads as rewritten:

"Article 42.

Additional Supplemental Second One-Half Cent (1/2¢) Local Government Sales and Use Taxes.Tax."

SECTION 1.14.(b)  G.S. 105‑495 reads as rewritten:

"§ 105‑495.  Short title.

This Article shall be known as the Additional SupplementalSecond One-Half Cent (1/2¢) Local Government Sales and Use Tax Act."

SECTION 1.15.  Notwithstanding the provisions of G.S. 105‑517(b), a county may levy a tax by resolution that becomes effective on or before January 1, 2003, under Article 44 of Chapter 105 of the General Statutes without giving at least 10 days' public notice of its intent to adopt the resolution and without holding a public hearing on the issue of adopting the resolution.

PART II. DELAY 2001 TAX BREAKS

SECTION 2.1.(a)  Section 34.16(d) of S.L. 2001‑424 reads as rewritten:

"SECTION 34.16.(d)  This section becomes effective January 1, 2002,2003, and applies to sales made on or after that date."

SECTION 2.1.(b)  Section 18(c) of S.L. 2001‑476 reads as rewritten:

"SECTION 18.(c) This Subsection (b) of this section becomes effective January 1, 2003, and applies to sales made on or after that date. The remainder of this section becomes effective January 1, 2002, and applies to sales made on or after that date. The Codifier is authorized to modify G.S. 105‑164.3 to change the format of the existing definitions to match the format of the new definitions enacted during 2001, but not to change the format of the new definitions enacted in 2001 to match the format of the existing definitions. The Codifier is authorized to renumber these definitions as necessary to maintain their alphabetical order."

SECTION 2.2.(a)  The lead‑in language of Section 34.19(a) of S.L. 2001‑424 reads as rewritten:

"SECTION 34.19.(a)  Effective for taxable years beginning on or after January 1, 2002,2003, G.S. 105‑134.6(c)(3) and (4) reads as rewritten:".

SECTION 2.2.(b)  The lead‑in language of Section 34.19(b) of S.L. 2001‑424 reads as rewritten:

"SECTION 34.19.(b)  Effective for taxable years beginning on or after January 1, 2003,2004, G.S. 105‑134.6(c)(4), as amended by this section, reads as rewritten:".

SECTION 2.3.(a)  The lead‑in language of Section 34.20(a) of S.L. 2001‑424 reads as rewritten:

"SECTION 34.20.(a)  Effective for taxable years beginning on or after January 1, 2002,2003, G.S. 105‑151.24 reads as rewritten:".

SECTION 2.3.(b)  The lead‑in language of Section 34.20(b) of S.L. 2001‑424 reads as rewritten:

"SECTION 34.20.(b)  Effective for taxable years beginning on or after January 1, 2003,2004, G.S. 105‑151.24, as amended by this section, reads as rewritten:".

PART III. UPDATE IRC REFERENCE

SECTION 3.1.  G.S. 105‑228.90(b)(1b) reads as rewritten:

"(1b)    Code. – The Internal Revenue Code as enacted as of January 1, 2001,May 1, 2002, including any provisions enacted as of that date which become effective either before or after that date."

SECTION 3.2.(a)  G.S. 105‑130.5(a) is amended by adding a new subdivision to read:

"(a)      The following additions to federal taxable income shall be made in determining State net income:

…

(15) The amount allowed as a thirty percent (30%) accelerated depreciation deduction under section 168(k) or section 1400L of the Code. In addition, a taxpayer who was allowed a thirty percent (30%) accelerated depreciation deduction under section 168(k) or section 1400L of the Code in a taxable year beginning before January 1, 2002, and whose North Carolina taxable income in that earlier year reflected that accelerated depreciation deduction must add to federal taxable income in the taxpayer's first taxable year beginning on or after January 1, 2002, an amount equal to the amount of the deduction allowed in the earlier taxable year. This adjustment does not result in a difference in basis of the affected assets for State and federal income tax purposes."

SECTION 3.2.(b)  G.S. 105‑134.6(c) is amended by adding a new subdivision to read:

"(c)      Additions. – The following additions to taxable income shall be made in calculating North Carolina taxable income, to the extent each item is not included in taxable income:

…

(8) The amount allowed as a thirty percent (30%) accelerated depreciation deduction under section 168(k) or section 1400L of the Code. In addition, a taxpayer who was allowed a thirty percent (30%) accelerated depreciation deduction under section 168(k) or section 1400L of the Code in a taxable year beginning before January 1, 2002, and whose North Carolina taxable income in that earlier year reflected that accelerated depreciation deduction must add to federal taxable income in the taxpayer's first taxable year beginning on or after January 1, 2002, an amount equal to the amount of the deduction allowed in the earlier taxable year. This adjustment does not result in a difference in basis of the affected assets for State and federal income tax purposes."

SECTION 3.2.(c)  This section is effective for taxable years beginning on or after January 1, 2002.

SECTION 3.3.(a)  G.S. 105‑130.5(b) is amended by adding a new subdivision to read:

"(b)      The following deductions from federal taxable income shall be made in determining State net income:

…

(21) In each of the taxpayer's first five taxable years beginning on or after January 1, 2005, an amount equal to twenty percent (20%) of the amount added to taxable income in a previous year as accelerated depreciation under subdivision (a)(15) of this section."

SECTION 3.3.(b)  G.S. 105‑134.6(b) is amended by adding a new subdivision to read:

"(b)      Deductions. – The following deductions from taxable income shall be made in calculating North Carolina taxable income, to the extent each item is included in taxable income:

…

(17) In each of the taxpayer's first five taxable years beginning on or after January 1, 2005, an amount equal to twenty percent (20%) of the amount added to taxable income in a previous year as accelerated depreciation under subdivision (c)(8) of this section."

SECTION 3.3.(c)  This section is effective for taxable years beginning on or after January 1, 2002.

SECTION 3.4.(a)  G.S. 105‑32.2(b) reads as rewritten:

"(b)      Amount. – The amount of the estate tax imposed by this section is the maximum credit for state death taxes allowed under section 2011 of the Code. Code without regard to the phase‑out of that credit under subdivision (b)(2) of that section. If any property in the estate is located in a state other than North Carolina, the amount of tax payable is the North Carolina percentage of the credit.

If the decedent was a resident of this State at death, the North Carolina percentage is the net value of the estate that does not have a tax situs in another state, divided by the net value of all property in the estate. If the decedent was not a resident of this State at death, the North Carolina percentage is the net value of real property that is located in North Carolina plus the net value of any personal property that has a tax situs in North Carolina, divided by the net value of all property in the estate, unless the decedent's state of residence uses a different formula to determine that state's percentage. In that circumstance, the North Carolina percentage is the amount determined by the formula used by the decedent's state of residence.

The net value of property that is located in or has a tax situs in this State is its gross value reduced by any debt secured by that property. The net value of all the property in the estate is its gross value reduced by any debts and deductions of the estate."

SECTION 3.4.(b)  This section is effective on and after January 1, 2002, and applies to the estates of decedents dying on or after that date. This section is repealed effective for the estates of decedents dying on or after January 1, 2004.

SECTION 3.5.  Effective for taxable years beginning on or after January 1, 2002, G.S. 105‑134.6(b)(13) is repealed.

SECTION 3.6.  Notwithstanding Section 3.1 of this act, any amendments to the Internal Revenue Code enacted in 2001 that increase North Carolina taxable income for the 2001 taxable year become effective for taxable years beginning on or after January 1, 2002.

PART IV. UNAUTHORIZED SUBSTANCE TAX EXPENSES

SECTION 4.1. G.S. 105‑501 is amended by adding a new subdivision to read:

"…

In determining the net proceeds of the tax to be distributed, the Secretary shall deduct from the collections to be allocated an amount equal to one‑fourth of the costs during the preceding fiscal year of:

…

(1a) Seventy percent (70%) of the expenses of the Department of Revenue in performing the duties imposed by Article 2D of this Chapter.

…."

SECTION 4.2.  This Part becomes effective July 1, 2002.

PART V. INSURANCE REGULATORY CHARGE

SECTION 5.(a)  The percentage rate to be used in calculating the insurance regulatory charge under G.S. 58‑6‑25 is six and one‑half percent (6.5%) for the 2002 calendar year.

SECTION 5.(b)  This section is effective when it becomes law.

PART VI. REGULATORY FEE FOR UTILITIES COMMISSION

SECTION 6.(a)  The percentage rate to be used in calculating the public utility regulatory fee under G.S. 62‑302(b)(2) is one‑tenth percent (0.1%) for each public utility's North Carolina jurisdictional revenues earned during each quarter that begins on or after July 1, 2002.

SECTION 6.(b)  The electric membership corporation regulatory fee imposed under G.S. 62‑302(b1) for the 2002‑2003 fiscal year is two hundred thousand dollars ($200,000).

SECTION 6.(c)  This section becomes effective July 1, 2002.

PART VII. VARIOUS COURT FEES

SECTION 7.1.(a)  G.S. 15A‑1371(i) reads as rewritten:

"(i)       A fee of one hundred dollars ($100.00) one hundred fifty dollars ($150.00) shall be paid by all persons who participate in the Community Service Parole Program. That fee must be paid to the clerk of court in the county in which the parolee is released. The fee must be paid in full within two weeks unless the Post‑Release Supervision and Parole Commission, upon a showing of hardship by the person, allows him the person additional time to pay the fee. The parolee may not be required to pay the fee before he the person begins the community service unless the Post‑Release Supervision and Parole Commission specifically orders that he the person do so. Fees collected under this subsection shall be deposited in the General Fund. The fee imposed under this section subsection may be paid as prescribed by the supervising parole officer."

SECTION 7.1.(b)  G.S. 20‑179.4(c) reads as rewritten:

"(c)      A fee of one hundred dollars ($100.00) one hundred fifty dollars ($150.00) shall be paid by all persons serving a community service sentence. That fee shall be paid to the clerk of court in the county in which the person is convicted. The fee shall be paid in full within two weeks unless the court, upon a showing of hardship by the person, allows additional time to pay the fee. The person may not be required to pay the fee before beginning the community service unless the court specifically orders the person to do so."

SECTION 7.1.(c)  G.S. 143B‑262.4(b) reads as rewritten:

"(b)      Unless a fee is assessed pursuant to G.S. 20‑179.4 or G.S. 15A‑1371(i), a fee of one hundred dollars ($100.00) one hundred fifty dollars ($150.00) shall be paid by all persons who participate in the program or receive services from the program staff. Fees collected pursuant to this subsection shall be deposited in the General Fund. If the person is convicted in a court in this State, the fee shall be paid to the clerk of court in the county in which he the person is convicted. If the person is participating in the program as a result of a deferred prosecution or similar program, the fee shall be paid to the clerk of court in the county in which the agreement is filed. Persons participating in the program for any other reason shall pay the fee to the clerk of court in the county in which the services are provided by the program staff. The fee shall be paid in full within two weeks from the date the person is ordered to perform the community service, and before he begins his the person may participate in the community service, service program, except that:

(1)       A person convicted in a court in this State may be given an extension of time or allowed to begin the community service before he the person pays the fee by the court in which he the person is convicted; or

(2)       A person performing community service pursuant to a deferred prosecution or similar agreement may be given an extension of time or allowed to begin his community service before the fee is paid by the official or agency representing the State in the agreement.

Fees collected pursuant to this subsection shall be deposited in the General Fund."

SECTION 7.1.(d)  This section becomes effective October 1, 2002, and applies to fees assessed or collected on or after that date.

SECTION 7.2.(a)  G.S. 15A‑1343(c1) reads as rewritten:

"(c1)    Supervision Fee. – Any person placed on supervised probation pursuant to subsection (a) shall pay a supervision fee of twenty dollars ($20.00) thirty dollars ($30.00) per month, unless exempted by the court. The court may exempt a person from paying the fee only for good cause and upon written motion of the person placed on supervised probation. No person shall be required to pay more than one supervision fee per month. The court may require that the fee be paid in advance or in a lump sum or sums, and a probation officer may require payment by such methods if he is authorized by subsection (g) to determine the payment schedule. Supervision fees must be paid to the clerk of court for the county in which the judgment was entered or the deferred prosecution agreement was filed. Fees collected under this subsection shall be transmitted to the State for deposit into the State's General Fund."

SECTION 7.2.(b)  G.S. 15A‑1368.4(f) reads as rewritten:

"(f)      Required Supervision Fee. – The Commission shall require as a condition of post‑release supervision that the supervisee pay a supervision fee of twenty dollars ($20.00) thirty dollars ($30.00) per month. The Commission may exempt a supervisee from this condition only if it finds that requiring payment of the fee is an undue economic burden. The fee shall be paid to the clerk of superior court of the county in which the supervisee was convicted. The clerk shall transmit any money collected pursuant to this subsection to the State to be deposited in the State's General Fund. In no event shall a supervisee be required to pay more than one supervision fee per month."

SECTION 7.2.(c)  G.S. 15A‑1374(c) reads as rewritten:

"(c)      Supervision Fee. – The Commission must require as a condition of parole that the parolee pay a supervision fee of twenty dollars ($20.00) thirty dollars ($30.00) per month. The Commission may exempt a parolee from this condition of parole only if it finds that requiring him to pay the fee will constitute an undue economic burden. The fee must be paid to the clerk of superior court of the county in which the parolee was convicted. The clerk must transmit any money collected pursuant to this subsection to the State to be deposited in the general fund of the State. In no event shall a person released on parole be required to pay more than one supervision fee per month."

SECTION 7.2.(d)  This section becomes effective October 1, 2002, and applies to supervision fees assessed or collected on or after that date.

SECTION 7.3.(a)  Article 5 of Chapter 7A of the General Statutes is amended by adding a new section to read:

"§ 7A-38.7. Dispute resolution fee for cases resolved in mediation.

(a) In each criminal case filed in the General Court of Justice that is resolved through referral to a community mediation center, a dispute resolution fee shall be assessed in the same amount as the General Court of Justice fee imposed under G.S. 7A-304(a)(4) for cases in the district court. Fees assessed under this section shall be paid to the clerk of superior court in the county where the case was filed and remitted by the clerk to the State Treasurer.

(b) Each criminal case filed in the General Court of Justice and resolved through referral to a community mediation center shall include, as a part of the resolution, an agreement on which of the parties shall be responsible for the payment of the dispute resolution fee assessed under this section. Before providing the parties with a signed copy of the mediation agreement, the community mediation center shall require proof that the dispute resolution fee has been paid as required by subsection (a) of this section."

SECTION 7.3.(b)  Each community mediation center shall maintain records as to the number of cases in which dispute resolution fees are assessed and paid. The Mediation Network of North Carolina shall collect this information from each center annually.

Each community mediation center shall also maintain records as to the source of referral for all court‑referred cases. Each center receiving State funds shall use a standardized form and methodology to determine the referral source and report that information annually to the Mediation Network of North Carolina.

The Mediation Network shall report by March 15, 2003, to the Chairs of the Senate and House Appropriations Committees and the Chairs of the Senate and House Appropriations Subcommittees on Justice and Public Safety on the fees collected year‑to‑date and the sources of referral of court‑referred cases during the 2002‑2003 fiscal year.

SECTION 7.3.(c)  This section becomes effective October 1, 2002, and applies to cases resolved on or after that date.

SECTION 7.4.(a)  G.S. 20‑135.2A(e) reads as rewritten:

"(e)      Any driver or passenger who fails to wear a seat belt as required by this section shall have committed an infraction and shall pay a penalty of twenty‑five dollars ($25.00). Conviction of an infraction under this section has no consequence other than payment of a penalty. A person found responsible for a violation of this section may not be assessed court costs."

SECTION 7.4.(b)  This section becomes effective October 1, 2002, and applies to costs assessed or collected on or after that date.

SECTION 7.5.(a)  G.S. 7A‑304(a)(4) reads as rewritten:

"(a)      In every criminal case in the superior or district court, wherein the defendant is convicted, or enters a plea of guilty or nolo contendere, or when costs are assessed against the prosecuting witness, the following costs shall be assessed and collected, except that when the judgment imposes an active prison sentence, costs shall be assessed and collected only when the judgment specifically so provides, and that no costs may be assessed when a case is dismissed.

…

(4)       For support of the General Court of Justice, the sum of sixty-five dollars ($65.00) seventy-five dollars ($75.00) in the district court, including cases before a magistrate, and the sum of seventy-two dollars ($72.00) eighty-two dollars ($82.00) in the superior court, to be remitted to the State Treasurer. The State Treasurer shall remit the sum of one dollar and five cents ($1.05) of each fee collected under this subdivision to the North Carolina State Bar for the provision of services described in G.S. 7A‑474.4.

…."

SECTION 7.5.(b)  This section becomes effective October 1, 2002, and applies to costs assessed or collected on or after that date.

SECTION 7.6.(a)  G.S. 15A‑145(c) reads as rewritten:

"(c)      The court shall also order that the said misdemeanor conviction be expunged from the records of the court, and direct all law‑enforcement agencies bearing record of the same to expunge their records of the conviction. The clerk shall forward a certified copy of the order to the sheriff, chief of police, or other arresting agency. The sheriff, chief or head of such other arresting agency shall then transmit the copy of the order with a form supplied by the State Bureau of Investigation to the State Bureau of Investigation, and the State Bureau of Investigation shall forward the order to the Federal Bureau of Investigation. The cost of expunging such records shall be taxed against the petitioner."

SECTION 7.6.(b)  G.S. 15A‑145 is amended by adding a new subsection to read:

"(e) A person who files a petition for expunction of a criminal record under this section must pay the clerk of superior court a fee of sixty-five dollars ($65.00) at the time the petition is filed. Fees collected under this subsection shall be deposited in the General Fund. This subsection does not apply to petitions filed by an indigent."

SECTION 7.6.(c)  G.S. 15A‑146(b) reads as rewritten:

"(b)      The court may also order that the said entries shall be expunged from the records of the court, and direct all law‑enforcement agencies bearing record of the same to expunge their records of the entries. The clerk shall forward a certified copy of the order to the sheriff, chief of police, or other arresting agency. The sheriff, chief or head of such other arresting agency shall then transmit the copy of the order with the form supplied by the State Bureau of Investigation to the State Bureau of Investigation, and the State Bureau of Investigation shall forward the order to the Federal Bureau of Investigation. The costs of expunging such records shall be taxed against the petitioner."

SECTION 7.6.(d)  G.S. 15A‑146 is amended by adding a new subsection to read:

"(d) A person who files a petition for expunction of a criminal record under this section must pay the clerk of superior court a fee of sixty-five dollars ($65.00) at the time the petition is filed. Fees collected under this subsection shall be deposited in the General Fund. This subsection does not apply to petitions filed by an indigent."

SECTION 7.6.(e)  G.S. 90‑96 is amended by adding a new subsection to read:

"(f) A person who files a petition for expunction of a criminal record under this section must pay the clerk of superior court a fee of sixty-five dollars ($65.00) at the time the petition is filed. Fees collected under this subsection shall be deposited in the General Fund. This subsection does not apply to petitions filed by an indigent."

SECTION 7.6.(f)  This section becomes effective October 1, 2002, and applies to petitions filed on or after that date.

PART VIII. EFFECTIVE DATE

SECTION 8.  Except as otherwise provided, this act is effective when it becomes law.  Notwithstanding G.S. 105‑163.15 and G.S. 105‑163.41, no addition to tax may be made under those statutes for a taxable year beginning on or after January 1, 2002, and before January 1, 2003, with respect to an underpayment of corporate or individual income tax to the extent the underpayment was created or increased by this act.