A BILL TO BE ENTITLED
AN ACT TO LIMIT THE TOTAL LOCAL GOVERNMENT SALES AND USE TAX RATE TO TWO AND ONE‑HALF PERCENT; TO GIVE COUNTIES THE FLEXIBILITY TO USE UP TO ONE‑HALF PERCENT OF THE LOCAL SALES AND USE TAX FOR PUBLIC TRANSPORTATION, FOR PUBLIC EDUCATION, FOR GENERAL PURPOSES, OR FOR A COMBINATION THEREOF; AND TO MAKE VARIOUS CHANGES TO TAX AND ECONOMIC DEVELOPMENT LAWS.
Senate committee substitute makes the following changes to the 2nd edition.
Deletes language which prohibits a tax levied under new Article 43A of GS Chapter 105,County Sales and Use Tax for Public Education from being in effect in a county at the same time as a tax levied under Article 43 of GS Chapter 105,Local Government Sales and Use Taxes for Public Transportation. Declares that Articles 43, 43A, and 46 of GS Chapter 105 provide the counties of this state with an opportunity for additional source of revenue (was, Articles 43 and 43A). Allows a county to choose to use this source of revenue to finance local public transportation systems, as provided in Article 43, for public education needs, as provided in new Article 43A, and for general purposes, as provided in Article 46 of GS Chapter 105 (was, permitted use of the revenue source to finance local public transportation systems or public education needs).
Makes conforming changes to GS 105-506.
Replaces new GS 105-506.3 with GS 105-506.4. Amends GS 105-506.4 to provide that the local sales and use tax levied under Article 43 of GS Chapter 105 must be at a rate that would not result in a total local sales and use tax rate in the county (was, in the county or special district) that exceeds 2 1/2%. Makes technical corrections, replacing occurrences of GS 105-506.3 with GS 105-506.4.
Amends Part 1 of Article 43 of GS Chapter 105, as amended by this act, and again enacts new subsection GS 105-506.3 to provide that a tax levied under Part 4 (Regional Public Transportation Authority, Triangle) of this Article may not be in effect in a county at the same time as a tax levied by that county under Part 6 (counties other than Durham, Forsyth, Guilford, Mecklenburg, Orange, or Wake) of this Article.
Amends GS 105-511 to provide that this Part (Article 43, Part 6 GS Chapter 105) applies only in counties other than Durham, Forsyth, Guilford, Mecklenburg, or Orange (was, included Wake County).
Declares that Article 46 of GS Chapter 105 is to be known as the One-Quarter Cent or One-Half Cent County Sales and Use Tax Act (was,One-Quarter Cent County Sales and Use Tax).Amends GS 105-537 to to provide that the board of county commissioners may by resolution and after 10 days' public notice levy a local sales and use tax at the applicable rate (was, 0.25%) if the majority of those voting in a referendum held under Article 46 vote in favor of the levy of the tax. Requires that the rate be in 1/4% increments, and must be a rate that, if levied, would not result in a total local sales and use tax rate in the county exceeding 2 1/2%. Makesadditionalconforming changes.
Deletes proposed subsection (e), whichprohibited conducting an advisory referendum on the question of whether to levy a local sales and use tax in the county on or after August 1, 2014. Also deletes subsection which provided that regardless of GS 105-537(e) a county could place the question of levying a local sales and use tax in the county in the 2014 elections providing that the total sales and use tax in the county was less than 2 1/2%.
Enacts GS 105-539 to provide that a county that approves the levy of a tax under Article 46 in a referendum held on or before January 1, 2015 must use the tax proceeds for any lawful purpose. Provides that a county that approves the levy of a tax under this Article in a referendum held after January 1, 2015 must use the proceeds of a tax levied under this Article for any lawful purpose, except that the proceeds may not be used for a purpose for which a tax levied under Article 43 of GS Chapter 105 must be used.
Adds new subdivision (20) to GS 78A-17 to provide that an offer or sale of a security by an issuer is exempt from registration requirements under GS 78-24 andfiling requirements under GS 78A-49(d) providing that the offer or sale is conducted in accordance with requirementsas specified in new GS 78A-17.1.EnactsGS 78A-17.1 (Invest NC exemption).Permits North Carolina companies formed under the laws of this state and registered with the Secretary of State (Administrator) to sell unregistered securities to NC residents. Sets out requirements for the sale, including the following. Caps the aggregate amount received for all sales of securities by the issuing entity at $1 million if the issuer has not undergone a financial audit for its most recently completed fiscal year and made that audit available to each prospective investor and the Administrator. Caps the aggregate amount received for all sales of securities in reliance on this exemption at $2 million if the issuer has undergone and made available to each prospective investor and the Administrator a financial audit for its most recently completed fiscal year. Requires the issuer to provide a disclosure document to all prospective purchasers declaring that the securities have not been registered under federal or state securities law and are subject to limitations on resale. Specifies the content of the disclosure statement and provides that it is to be conspicuously displayed on the cover page of the disclosure document. Directs the issuer to require each purchaser to certify in writing the purchaser's understanding and acknowledgement of the financial risks inherent in the transaction. Sets out requirements for sales made online.
Requires an issuer of security for which the offer of sale is exempt under this sectionto submit a free-of-charge quarterly report to the issuer's shareholders until there are no outstanding securities issued under this section. Permits the reporting requirement to be satisfied by making the information available on a web site if the information is made available within 45 days at the end of each fiscal quarter and remains available until the succeeding quarterly report. Requires an issuer to provide a written copy of the report to any shareholder upon request. Specifies content required to be in the report. Provides criteria for offers and sales to controlling persons, defined as an officer, director, partner, trustee, or individuals having similar status or performing similar functions as the issuer, or a person owning10% or more of the outstanding shares of any class or classes of securities of the issuer. Provides for a disqualification for the exemption allowed by this section if any of certain specifications apply to an issuer or a person affiliated with the issuer or offering. However, makes the disqualification provisions inapplicable if there is a (1) showing of good cause and without prejudice to any other action by the Administrator, the Administrator determines that itis not necessary that an exemption be deniedand (2) the issuer shows that the issuer made factual inquiry as to the existence of any disqualificationand could not have known that a disqualification existed even with the exercise of reasonable care.
Provides that the Administrator may adopt rules to implement the provisions of this section and to protect investors who purchase securities under this section. Authorizes the Administrator to collect a nonrefundable filing fee of $150 for filing an exemption notice as required under this section. Provides that the fees are to be used to pay the costs of administering and enforcing this Chapter and that the revenue from the filing fee is to be credited to a nonreverting agency revenue account.
Makes a conforming change to GS 78A-49(d) regarding the informational filing requirement.
Requiresthe Secretary of State (Administrator) to adopt rules to implement this act within 12 months. Provides for a 15-day notice and comment period and requires the Administrator to hold at least one public hearing on the rules. Provides that the rules become effective on the first day of the month following the date the rules are adopted and sent to the Codifier of Rules for entry into the Administrative Code. Provides that this provision expires 12 months after the effective date of this act.
Provides that Part V of this act, which enacts new GS 78A-17.1 is effective when it becomes law and expires on July 1, 2017 unless otherwise noted. Provides that the remainder of this act is effective when it becomes law.
Makes conforming changes to the short and long title of this act.
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