House amendments make the following changes to the 4th edition.

House amendment #1 changes the proposed statute of limitations provisions for land-use violations. 

Amends GS 1-51, concerning the statute of limitations to commence an action, adding new subdivision (5) providing for a five-year statute of limitations for a unit of local government to begin an action against the owner for a violation of a land use statute, ordinance, permit, or other official action in regards to land use (the 4th edition amended GS 1-52 and set a three-year statute of limitations). The action accrues upon the earlier of (1) the facts constituting the violation are known to the governing body or (2) the violation can be determined from the public record of the unit of local government. 

Amends GS 1-49 to add a new subdivision (3) to establish a seven-year statute of limitation for an action against the owner of an interest in real property by a unit of local government for a violation of a land use statute, ordinance, or permit or any other official action concerning land use carrying the effect of law (the 4th edition amended GS 1-50(a) and set a six-year statute of limitations). Provides that subdivision (8) does not limit the remedy of injunction for conditions actually injurious or dangerous to the public health or safety, but does prescribe an outside limitation of seven years from the earlier of the occurrence of any of the following: (1) the violation is apparent from a public right-of-way or (2) the violation is in plain view from a place to which the public is invited. Effective October 1, 2018, applying to actions commenced on or after that date.

House amendment #2

Deletes the proposed changes to GS 87-97 pertaining to the permitting, inspection, and testing of private drinking water wells, and now provides the following changes in GS 87-97.

Amends subsection (a) to establish that the local health department is the exclusive authority for the permitting of wells and well systems as described in GS 143-138(b17)(2).

Amends subsection (b) to allow the appropriate building inspector to request from the local health department the opportunity to inspect the activities authorized by a well permit. Requires the inspection to be performed prior to the final inspection performed by the local health department. Does not require the well inspector to be onsite for the inspection by the building inspector. Establishes that if an inspection by a building inspector after  the final inspection has been performed by the local health department is determined to be necessary for the protection of public health, safety, or welfare, the local building inspections department is responsible for (1) the additional costs for the inspection and related activities necessary for the inspection and (2) any damages to the well system caused during the inspection. Moves existing language providing for the authorizations included in a permit issued under the statute to new subsection (b2). 

Amends proposed subsection (b17) of GS 143-138, excluding private drinking water well installation, construction, and maintenance from the NC State Building Code. Modifies the second qualification for the exemption to require the scope of the work to be limited to the connection or disconnection of a well system to either the plumbing served by the well system or the electrical service that serves the well system. Adds new provision to clarify that, for purposes of subsection (b17), a well system includes the well, the pressure tank, the pressure switch, and all plumbing and electrical equipment in the well and between the well, pressure tank, and pressure switch. 

House amendment #3

Further amends GS 143-215.107A(c) to remove Haywood County from the counties required to perform motor vehicle emissions inspections. 

House amendment #4

Amends proposed subsection (b18) of GS 143-138, specifying certain building code classifications from the energy efficiency standards. Adds provision to clarify that the exclusion provided in new subsection (b18) applies to the entire floor area of any structure for which the primary use of occupancy is listed in the new subsection. 

Part I.

Amends GS 143B-431.01 by also prohibiting the Department of Commerce (Department) from contracting with a nonprofit for (1) site certification functions and activities performed by the Department or (2) the performance of functions, powers, duties, or obligations of any other State agency. Amends the mandatory contract terms for any contract that the Department enters into with a nonprofit for the performance of any of the Department's functions, powers, duties, and obligations, as follows: (1) requires the nonprofit's report on prior State fiscal year program activities, objectives, and accomplishments, as well as expenditures and fund sources, to also include for jobs anticipated to result from the nonprofit's efforts, the name and contact person of each company creating new jobs in the State and the location of each project; (2) specifies requirements for bonuses that are awarded for job performance, as reported in the nonprofit's report; and (3) adds that the contract must include a provision prohibiting the nonprofit from contracting with any State agency other than the Department for the performance of one or more of the agency's functions, powers, duties, or obligations.

Part II.

Amends the definitions used in Part 2F, E-NC Initiative, of Article 10 (Department of Commerce) of GS Chapter 143B. Specifies that the term eligible position does not include a position filled by a worker with an H-1B visa or H-1B status. Effective January 1, 2017.

Amends GS 143B-437.52 by amending the conditions that the Economic Investment Committee must find before entering into an agreement with business to provide grants, to require that the project be consistent with economic development goals for the State and for the area where it will be located, including anticipated effects the project described in the application will have on the development factors, as calculated under GS 143B-437.08, of the area. Effective January 1, 2017.

Effective January 1, 2018, amends the limitations on grant awards under GS 143B-437.52 to add of the maximum amount of total annual liability for grants awarded in a single calendar year, no more than 50% may be awarded for projects located in whole or in part in development tier three areas. Specifies that of the amount awarded for projects located in whole or in part in development tier three areas, no more than 50% may be awarded for projects located in whole or in part in attainment areas. These limitations  do not apply to a grant awarded to a high‑yield project.

Amends GS 143B-437.56, which limits the amount of a grant awarded in each case to a percentage of the withholdings of eligible positions for a period of years. Amends those percentages so that they are no more than: (1) 80% for a development tier one area; (2) 70% for a development tier two area; (3) 60% for a development tier three area that is not designated as an attainment area; and (4) 50% for a county designated as an attainment area (was, no more than 75% of any area other than a development tier one, which was no more than 80%). Adds that for any eligible position located in a county designated as an attainment area, 50% of the annual grant is payable to the business and 50% is payable to the Industrial Development Fund Utility Account (Utility Account). For any position located in a development tier three area that is not designated as an attainment area, 70% of the grant is payable to the business (was 75%) and 30% (was, 25%) is payable to the Utility Account. Effective January 1, 2017.

Amends GS 143B-437.72 by amending the provisions that must be included in an agreement between a local government and a grantee business. Prohibits the provisions concerning a commitment to create or retain a specified number of jobs within a specified salary range at a specified location from including the number of jobs filled by workers with H-1B visas or H-1B status. Amends the provisions that must be included in an agreement between the State and local governments by making the current matching requirements for local governments in a tier three area applicable to those that are not designated as an attainment area. Adds that for a local government in an attainment area, the State will provide no more than $1 for every $4 provided by the local government. Effective January 1, 2017.

Amends GS 143B-437.01, concerning the Utility Account, by adding that the Utility Account is to provide funds to assist in retaining, as well as creating, jobs, including expanding the existing job base. Makes conforming changes.

Part III.

Amend GS 143B-437.08 by deleting the provisions requiring adjustments to the development factor and specified exceptions. Adds that the Secretary of Commerce (Secretary) must cost adjust the national value for per capita income to determine the State value for that factor and determine the State value for the specified factors used in calculating the development factor. Using these metrics, requires the Secretary to create an index, as follows: (1) the State average rate of unemployment divided by the county's average rate, (2) the county's per capita income divided by the per capita income value for the State determined pursuant to this subsection, (3) the county's percentage growth in population divided by the State's percentage growth, and (4) the county's adjusted assessed property value per capita divided by the State adjusted assessed property value per capita. Requires the Secretary to then rank and publish all the counties according to their index scores, along with the value against which the factor is compared, from lowest to highest, with a separate designation for any county with performance greater than that of the benchmarks for all indexed development factors as an attainment area. An index score average and achievement area designation is effective only for the calendar year following the designation. Makes conforming changes to GS 143B-437.01, GS 143B-472.127, and GS 143B-472.128. Applies to economic development awards made and related determinations occurring on or after January 1, 2018.

Part IV.

Requires for each Collaboration for Prosperity Zone established in GS 143B‑28.1, the employees of the Department in the zone must examine each annual update of the plan; collate all information relevant to the zone, county, region, and other unit of local government in the zone; and provide a copy of the collated information to each unit of local government within the zone. Requires that the collated information also identify any additional regional assets not otherwise contained in the annual update. Requires for any asset identified in the annual update or identified by the employees an analysis to be performed to identify appropriate potential industries best suited to maximize the beneficial economic impact of each asset. Requires the Department to give the Economic Development and Global Engagement Joint Oversight Committee a list of any assets remaining in the collated information for more than two years by January 1 of each year.

Requires, for each Collaboration for Prosperity Zone established in GS 143B‑28.1, the employees of the Department in the zone to submit a report to the Joint Legislative Economic Development and Global Engagement Oversight Committee and the Fiscal Research Division on the following: (1) jobs anticipated to result from efforts of the employees, including the name and contact person of each company creating new jobs in the zone; (2) the location of each project, including the development tier designation of the location; and (3) project leads that were not submitted to the Department for possible discretionary incentives.

Part V.

Amends GS 143B-428, which sets out he Department's declaration of policy, by adding that the coordination of the state's economic development efforts is to emphasize maximizing the return on investment of economic development dollars by selecting projects and locations on the basis of providing the greatest relief to communities experiencing chronic economic distress.

Requires the Department to study ways to effectuate this policy clarification. Specifies issues to be included in the study. Requires a report to the Joint Legislative Oversight Committee on Economic Development and Global Engagement by October 1, 2017.

Amends GS 143B-437.07 to require the Department to use the index required by GS 143B‑437.08(c1) to create a plan for improving the performance of each county underperforming the benchmark in one or more indexed development factors to the benchmark performance level at the time the plan was created. Requires the plan to cover five years, and requires a new plan upon the plan's expiration. Requires the Department to publish and submit an annual progress report to the Joint Legislative Oversight Committee on Economic Development and Global Engagement that includes specified information. Requires that a copy of a plan for the first year be submitted after it is created and each progress report be submitted on or before April 1 of each year. Makes additional clarifying changes.

Specifies that for purposes of the initial plan required under GS 143B‑437.07, the Department must consult with and use data compiled by the Center for Competitive Economies at the Kenan‑Flagler Business School at UNC-CH for the study performed for the Joint Legislative Oversight Committee on Economic Development and Global Engagement.

Part VI.

Unless otherwise provided, the act is effective when it becomes law. 

Part I. Business Tax Changes

Amends GS 105-114, deleting subsection (a), which provides that taxes levied upon persons and partnerships in Article 3 are for the privilege of engaging in business or doing the act named. Modifies subsection (a1) setting out the scope of the tax levied under Article 3, providing that the tax levied under the Article upon corporations is a privilege tax (currently, a privilege or excise tax) levied upon corporations organized under the laws of North Carolina and corporations not organized under the laws of North Carolina, as described. Makes conforming changes to subsections (a2), (a3), and (a4). Amends subsection (a3) to provide that the tax levied in Article 3 is for the income year of the corporation in which the taxes become due (currently, for the fiscal year of the State in which taxes become due, except that the taxes levied in GS 105-122 are for the income year of the corporation in which the taxes become due). Amends subsection (a4), prohibiting double taxation of holding companies under GS 105-122 and GS 105-202.2, to remove the provision limiting the application of GS 105-122 only to the extent those taxes levied exceed the taxes levied in other sections of Article 3 on the corporation or on a limited liability company whose assets must be included in the corporations's tax base under GS 105-114.1.

Amends GS 105-120.2(c), describing a holding company as a corporation that satisfies at least one of the specified conditions, to amend the second condition that constitutes a holding company to be that the corporation receives during a taxable year more than 80% of its gross income from corporations in which it owns directly or indirectly more than 50% of the outstanding stock, voting capital interests, or ownership interests (currently, owning ownership interests is not included).

Expands GS 105-122(a), providing that an annual franchise or privilege tax is imposed on a corporation doing business in North Carolina for the privilege of doing business in North Carolina and for the continuance of articles of incorporation or domestication of each corporation in North Carolina. Makes organizational change to separate existing provisions concerning the corporate tax base and tax rate, both currently in subsection (d). Places provisions concerning the corporate tax base in subsection (d). Provides that a corporation's tax base is the greater of (1) the proportion of its net worth, (2) 55% of its appraised value as determined for ad valorem taxation of all the real estate and tangible personal property in the state, or (3) its total actual investment in tangible property in the state. Makes further organizational and technical changes to subsection (d). Adds new subsection (d2) providing for the corporate tax rate, substantively identical to the current tax rate. Sets the tax rate at $1.50 per $1,000 of the corporation's tax base as determined in subsection (d), and prohibits the tax imposed to be less than $200. Effective for taxable years beginning on or after January 1, 2018, and is applicable to the calculation of franchise tax reported on the 2017 and later corporate income tax returns.

Amends GS 105-129.106(b), concerning the tax credit for rehabilitating a non-income-producing historic structure, clarifying that in the event that the taxpayer is a transferee of a State-certified historic structure for which rehabilitation expenses were made, the taxpayer is allowed a credit for the rehabilitation expenses made by the transferor if the transfer takes place before the structure is placed in service. Adds requirement for the transferor to provide the transferee with documentation detailing the amount of rehabilitation expenses and credit. Effective for taxable years beginning on or after January 1, 2017.

Amends GS 105-130.4(a), containing the definitions for terms pertaining to the allocation and apportionment of income for corporations. Amends the definition provided for apportionable income to now define the term to mean all income that is apportionable under the US Constitution, including income that arises from transactions and activities in the regular course of the taxpayer's trade or business, or tangible and intangible property if the acquisition, management, employment, development, or disposition of the property is or was related to the operation of the taxpayer's trade or business. Adds the term "business activity" (previously provided in subsection (b)). Makes technical and organizational changes.

Makes further clarifying, conforming and technical changes to GS 105-130.4 concerning the allocation and apportionment of income for corporations. Amends subsection (m), pertaining to apportionable income of a railroad company, to provide that the records from which the company is to apportion NC income must be kept in accordance with generally accepted accounting principles (previously, in accordance with the standard classification of accounts prescribed by the Interstate Commerce Commission). Makes organizational changes to subsection (m)'s defined terms. Deletes subsections (n) and (q), setting out provisions for the apportionable income of telephone and telegraph companies. Consolidates subsection (p), concerning approtionable income of a motor carrier of passengers (now referred to as a motor carrier of people) into subsection (o), concerning apportionable income of a motor carrier of property. Now provides that vehicle miles in amended subsection (o) means miles traveled by vehicles owned or operated by the company based on (1) miles on a scheduled route, (2) miles hauling property for a charge, or (3) miles carrying passengers for a fare. Amends subsection (r), concerning the apportionable income of an excluded corporation and of all other public utilities, to set out the definitions of excluded corporation and public utility (previously provided in subsection (a)). Adds new subsection (s2), establishing that receipts from transportation of a petroleum-based liquids pipeline company or gas pipeline company are to be apportioned by multiplying the income by a fraction, the numerator being the number of traffic units in North Carolina during the tax year, and the denominator being the total number of traffic units everywhere during the tax year. Provides that traffic unit means (1) barrel mile, (2) cubic foot mile, and/or (3) another appropriate measure of product movement. Effective for taxable years beginning on or after January 1, 2017.

Amends GS 105-130.7B, concerning limitations on qualified interest for certain indebtedness, to modify the definition of qualified interest expense as the amount of net interest expense paid or accrued to a related member in a taxable year with the amount limited to the taxpayer's proportionate share of interest paid or accrued to a person who is not a related member during the same taxable year (previously, limited the amount to the greater of 15% of the taxpayer's adjusted taxable income or the taxpayer's described proportionate share). Makes conforming change to repeal GS 105-130.7B(b)(1), defining adjusted taxable income for purposes of the statute. Effective for taxable years beginning on or after January 1, 2017. 

Amends GS 105-131.5, pertaining to prorating a part-year resident shareholder of an S corporation's attributable income to the State, to refer to GS 105-153.4 (provisions for calculating NC taxable income for taxable years beginning on or after January 1, 2014, and before January 1, 2015) instead of GS 105-134.5 for determining the pro rata share. Effective for taxable years beginning on or after January 1, 2014.

Amends GS 105-131.7 to make technical corrections to the statutory references concerning income attributable to the State and income not attributable to the State of an S corporation.

Amends GS 105-134.1 and GS 105-153.3, the definitions applicable to individual income tax provisions, to add a new subsection (5a) to each statute defining guaranteed payments as the term is defined in section 707(c) of the Internal Revenue Code.

Amends GS 105-134.5(d) and GS 105-153.4(d) to make clarifying changes to the formula used to determine a shareholder's pro rata share of S corporation income. In order to calculate the numerator of the fraction provided in subsection (b) of each statute for a partner in a partnership or a member of another unincorporated business that has one or more nonresident partners or members and operates in one or more other states, the amount of the partner's or member's distributive share of income of the business (as modified by GS 105-153.5 and GS 105-153.6 for the calculation in GS 105-153.4) plus any guaranteed payments made to a partner from the partnership that is includable in the numerator is determined by multiplying the total net income of the business by the ratio ascertained under the provisions of GS 105‑130.4.

Amends GS 105-154(c), pertaining to information returns of partnerships. Requires the information return filed with the Secretary of Revenue to include each partner's distributive share of the partnership's income (previously, the part of each person's distributive share of the net income that represents corporation dividends). Provides that a partner's distributive share of partnership net income includes any guaranteed payments made to a partner as defined in GS 105-134.1. Amends GS 105-154(d), pertaining to the payment of tax on behalf of a nonresident owner or partner. Requires the manager of the business to report information concerning the earnings of the business in North Carolina (previously, just the earnings of the business in North Carolina), the distributive share of the income of each nonresident owner or partner, and any other information required by the Secretary. Adds that the distributive share of the income of each nonresident partner includes any guaranteed payments made to the partner as defined in GS 105-134.1. In requiring the manager to pay the tax on each nonresident owner or partner's share of the income, permits the business to deduct the payment for each nonresident owner or partner from the owner or partner's distributive share of the income of the business in North Carolina (was, of the profits of the business in North Carolina).

Amends GS 105-228.4A, concerning tax on captive insurance companies. Provides that two or more captive insurance companies under common ownership and control are taxed under the statute as a single captive insurance company, other than when a protected cell captive insurance company or a special purpose captive insurance company is structured in a manner similar to that of a protected cell captive insurance company. Modifies subsection (f), concerning total tax liability under the statute for a captive insurance company, to now provide the following. Establishes that the aggregate amount of tax payable under the statute for a captive insurance company, which has a cell or series structure similar to that of a protected cell captive insurance company, to be no more than $100,000 and no less than $5,000. Sets the minimum tax under the statute for a protected cell captive insurance company or a special purpose captive insurance company, which has a cell or series structure similar to that of a protected cell captive insurance company, to not be less than $5,000 and applies to the protected cell captive insurance company or special purpose captive insurance company as a whole and not to each cell or series. The maximum tax to be paid by a protected cell captive insurance company or a special purpose captive insurance company, which has a cell or series structure, is to be the greater of either $5,000 or the aggregate of the tax liabilities of the core and each cell or series within the insurance company. The maximum tax liability attributed to any one cell or series of the insurance company is set at $100,000. Adds new subsection (g) to define common ownership and ownership and control. Effective for taxable years beginning on or after January 1, 2017.

Amends GS 105-228.5(d)(3), setting forth an additional tax on property coverage contracts, to clarify that the additional tax imposed on property coverage contracts is a special purpose assessment based on gross premiums and not a gross premiums tax.

Provides the following clarifications: The gross premiums tax is a tax imposed on the gross premiums of insurers, Article 65 corporations, health maintenance organizations, and self‑insurers; entities subject to the gross premiums tax are not subject to franchise or income taxes; and in SL 2009‑548, the General Assembly broadened the taxes against which the business and energy tax credits could be taken from income and franchise taxes to income, franchise, and gross premiums taxes.

Further provides: The gross premiums tax rate is set in GS 105‑228.5(d)(1) and (2); separate and apart from the gross premiums taxes, GS 105‑228.5(d)(3) imposes an additional tax that is calculated using a person's gross premiums but is not considered part of the gross premiums tax imposition; the Department of Revenue has historically administered the gross premiums tax and the additional tax imposed under GS 105‑228.5 as two separate and distinct taxes; satisfied with this administration, the General Assembly did not address the separate treatment of the two taxes in SL 2009‑548; and it is the intent of this provision to further clarify for taxpayers the accuracy of and to endorse the Department's interpretation of the current and continuing state of the law by expressly codifying the long‑standing interpretation of the additional tax imposed by GS 105‑228.5(d)(3) as a separate and distinct tax that is based upon gross premiums but is not a gross premiums tax.

Part II. Sales and Use Tax

Amends GS 105-164.3, setting forth the definitions for the sales and use tax provisions. Amends the definitions provided for bundled transaction; landscaping service; motor vehicle service contract; real property; real property contract; repair, maintenance, and installation services; and service contract. Adds and defines the terms capital improvement, free-standing appliance, and mixed transaction contract.

Amends GS 105-164.4(a), setting forth the percentage rates for the privilege tax imposed on retailers and certain facilitators. Amends subdivision (1), providing that the general rate of tax applies to the sales price of each item or article of tangible personal property sold at retail and not subject to tax under another subdivision of subsection (a). Adds that a sale of a free-standing appliance is a retail sale of tangible personal property, regardless of whether the property is installed or applied to real property. Makes organizational and technical changes to consolidate subdivision (13) into subdivision (16), providing that a mixed transaction contract and real property contract are taxed in accordance with GS 105-164.4H.

Amends GS 105-164.4B(a) to establish that a service is sourced where the purchase can potentially first make use of the service, except as otherwise provided by the statute.

Amends GS 105-164.4H, pertaining to taxation of real property contracts.

Adds new subsection (a1), providing as follows. Generally, services to real property are retail sales of, or the gross receipts derived from, repair, maintenance, and installation services and subject to tax in accordance with GS 105‑164.4(a)(16) (as amended) unless a person substantiates that a transaction is subject to tax as a real property contract in accordance with subsection (a) of this section, subject to tax as a mixed transaction in accordance with subsection (d) of this section, or the transaction is not subject to tax. A person may substantiate that a contract is a real property contract by records that establish the transaction is a real property contract or by receipt of an affidavit of capital improvement. The receipt of an affidavit of capital improvement from another person accepted in good faith establishes that the subcontractor or other person receiving the affidavit should treat the transaction as a capital improvement, and the transaction is subject to tax in accordance with subsection (a) of this section. A person that issues an affidavit of capital improvement is liable for any tax on the transaction if it is determined that the transaction is not a capital improvement. Directs the Secretary to determine when a person must issue an affidavit of capital improvement. The Secretary can establish guidelines for transactions where an affidavit of capital improvement is not required, but rather a person may establish by records that such transactions are subject to tax in accordance with subsection (a) of this section. Adds to subsection (b1), concerning joint and several liability in real property contracts, to provide that a person who receives an affidavit of capital improvement accepted in good faith is not liable for any tax on the gross receipts from the transaction if it is determined that the transaction is not a capital improvement. 

Amends subsection (d), pertaining to taxation of mixed transaction contracts. Provides that (1) if the price of the taxable repair, maintenance, and installation services included in the contract does not exceed 25% (was, 10%) of the contract price, then the repair, maintenance, and installation services portion of the contract, and the tangible personal property, digital property, or services used to perform that service, are taxable as a real property contract in accordance with this provision and (2) if the price of the taxable repair, maintenance, and installation services included in the contract is equal to or greater than 75% (was, 10%) of the contract price, then the gross receipts derived from the capital improvement portion of the contract are taxable as repair, maintenance, and installation services in accordance with Article 5. Amends subsection (e), setting forth the definitions that apply to the Article. Modifies the definitions for capital improvement and remodeling. Adds and defines the term renovation. 

Amends GS 105-164.4I, pertaining to the taxation of service contracts, to delete the exemptions provided in subsection (b). Expands the exceptions set out in subsection (c) to add a contract to provide a certified operator for a wastewater system and a contract to provide landscaping, pest control, or moving services. Makes technical and clarifying changes.

Amends GS 105-164.13, delineating express exemptions from the retail sale and use tax. Modifies and adds to five subdivisions (subdivision (61), concerning a motor vehicle service contract; subdivision (61a), concerning certain repair, maintenance, and installation services and service contracts; subdivision (61c), concerning installation charges that are part of the sales price of tangible personal property purchased by a real property contractor to fulfill a real property contract for an item installed or applied to real property; subdivision (62), concerning an item or repair, maintenance, and installation services to maintain, monitor, inspect, or repair tangible personal property, real property, or digital property pursuant to a service contract; and subdivision (65), concerning sales of certain items from a professional motorsports racing team). Makes further clarifying, organizational, and technical changes to those subdivisions. 

Amends GS 105-164.14(a) to authorize a tax refund for an interstate carrier of part of the sales and use taxes paid by it on the purchase in this state of railway cars and locomotives and fuel, lubricants, repair parts, accessories, and repair, maintenance, and installation services of a motor vehicle, railroad car, locomotive, or airplane the carrier operates (previously, did not include in the refund the repair, maintenance, and installation services for the vehicles, cars, locomotives or airplanes). Makes conforming changes to subdivision (1) concerning the information and proof required to be furnished by an applicant to the Secretary for a refund. Effective retroactively to January 1, 2017.

Establishes that, if the Secretary of Revenue determines that a seller paid sales and use taxes on a product and the seller used the product purchased for a taxable repair, maintenance, and installation service to real property, the Secretary may allow the seller to offset the sales tax liability on the taxable repair, maintenance, and installation service with the sales and use tax paid on the products. Effective retroactively to January 1, 2017, and expires on July 1, 2018.

Part III. Tax Collection and Enforcement

Amends GS 105-236(a), setting forth civil penalties and criminal offenses.

Modifies subdivision (7), making any person who willfully attempts or any person who aids or abets any person to attempt in any manner to evade or defeat a tax or its payment, in addition to other penalties provided by law, guilty of either (1) a Class F felony if violation involves less than $100,000 or (2) a Class C felony for any other violation (currently, guilty of a Class H felony, with no differentiation as to the amount involved in the violation). 

Modifies subdivision (9) to make the willful failure to file a tax return, supply information, or pay any tax a Class 1 misdemeanor for the first offense and a Class H felony for any second or subsequent offense (currently, Class 1 misdemeanor for any offense).

Adds new subdivision (9b), providing that a person who commits identity theft in violation of GS 14-113.20 is guilty as provided in GS 14-113.22(a) (punishable as a Class G felony or a Class F felony depending on aggravated factors). Provides that each document filed with identifying information of another can be considered a separate offense. Provides that identifying information can also include legal name, date of birth, taxpayer identification number, and federal identification number. 

Amends GS 105-235, to permit the Secretary of Revenue, at the Secretary's discretion (previously, mandatory), to consider each day of the described failure, refusal, or neglect to be a separate and distinct offense. 

Amends GS 105-251.2, pertaining to compliance information requests, to add two new subsections. New subsection (c) requires, for any year in which a payment settlement entity is required to make a return pursuant to Section 6050W of the Internal Revenue Code, the entity to submit the information in the return to the Secretary at the time the return is made. New subsection (d) requires reports made under the statute to be submitted in electronic format as requested by the Secretary, and subjects any report not timely filed under the statute to a $1,000 penalty.

Amends GS 39-23.1, setting out the definitions that apply to the Uniform Voidable Transactions Act, to define voidable transaction, providing the term does not include payment to the State or a political subdivision of the State of taxes, debts, fines, penalties, or other obligations or amounts. Makes conforming change to GS 39-23.8(e), listing transfers that are not voidable under GS 39-23.4(a)(2) or GS 39-23.5.

Part IV. Administrative Changes

Amends GS 105-241.7(d) to provide that a notice of the proposed denial of a request for a refund issued pursuant to subsection (c) and a notice of denial of a request for a refund issued pursuant to subsection (c1) of the statute must contain the specified information. Makes conforming changes to the specified information to be included in the notice under subsection (d). Amends GS 105-241.7(f), establishing that a proposed denial of a refund and a denial of a refund by the Secretary of Revenue are presumed to be correct.

Amends GS 105-241.11, requiring a taxpayer's request for a Department review of a proposed denial of a refund or a proposed assessment of tax to be in the form prescribed by the Secretary of Revenue and include an explanation for the request for review. Makes clarification in subsection (c) to provide that a taxpayer who does not request a Departmental review of a proposed assessment cannot request a Departmental review of a failure to pay a penalty based on the assessment but is assessed on a subsequent date in another notice. Makes clarifying change to the statute's title.

Renames GS 105-241.12, as Taxpayer inaction. Expands the statute's provisions to include when a taxpayer fails to respond to the Department's request for additional information under GS 105-241.13(a), resulting in the proposed denial as final and not subject to further administrative or judicial review. Makes conforming change to subsection (b), which requires the Department of Revenue to send the taxpayer a notice of collection before the Department collects a proposed assessment that becomes final under subsection (b).

Modifies the actions the Department of Revenue must take when a taxpayer files a timely request for a Department review of a proposed denial of a refund or a proposed assessment in GS 105-241.13(a). Now provides that the Department must conduct a review of the proposed denial or proposed assessment and (1) grant the refund or remove the assessment, (2) adjust the amount of the tax due or refund owed, or (3) request additional information from the taxpayer concerning the requested refund or proposed assessment. Makes conforming changes providing that a taxpayer's failure to respond to the Department's request for additional information by the requested response date will result in the refund or assessment being subject to the provisions of GS 105‑241.12. Adds new subsection (a1), setting out that if a taxpayer timely requests a Departmental review of a proposed assessment and thereafter pays the amount due or the amount due as adjusted by the Department, the Department may accept payment and take no further action on the request for Departmental review, unless the taxpayer states in writing that the taxpayer wishes to continue the Departmental review. In the case that the review is not continued, the taxpayer may request a refund of taxes paid pursuant to GS 105‑241.7(b).

Modifies subsection (b) of GS 105-241.13, requiring the Department to schedule a conference with the taxpayer when the actions under subsection (a) or (a1) of the statute do not resolve the Departmental review. Clarifies that the taxpayer is not limited by the explanation set forth in the taxpayer's request for review in presenting any objections to the proposed denial of refund or proposed assessment at the conference. Modifies subsection (c) that sets forth at least one outcome that must occur after the conference, providing that one outcome can be that the Department and the taxpayer agree on a resolution (was, agree on a settlement).

Makes technical change to GS 105-241.16 (judicial review of decision after contested case hearing) to replace the term "taxpayer" with "party." 

Makes conforming change to GS 105-241.22 (collection of tax) to reflect changes made to GS 105-241.12 concerning taxpayer inaction.

Makes technical change to GS 105-113.4A (tobacco product licenses) to reference a licensee instead of a license holder. Renames GS 105-113.4B, Cancellation or revocation of license (was, Reasons why the Secretary can cancel a license). Conforms the language of GS 105-241.22 and GS 105-113.4A to this change. Clarifies that the Secretary can revoke the license of a licensee that fails to obtain a license in a timely manner or for all places of business as required by Article 2A after holding a hearing on whether the license should be revoked.

Renames GS 105-449.47 Licensure of vehicles (was, Registration of vehicles). Makes conforming changes to the following statutes in Articles 36B: GS 105-449.44(c), GS 105-449.45(b), GS 105-449.47A, GS 105-449.49(a), GS 105-449.51, and GS 105-449.52.

Makes clarifying change to GS 105-449.44(c), providing how to determine the amount of fuel used in the State for purposes of taxing carriers using fuel purchased outside the State, to provide that the number of qualified motor vehicles of a carrier that is not licensed under Article 36B is the number of qualified motor vehicles licensed or registered by the motor carrier in the carrier's base state under the International Registration Plan.

Amends GS 105-449.47, renamed Licensure of vehicles, to provide that the statute applies to a motor carrier that operates a recreational vehicle used in connection with any business endeavor (was, that is considered a qualified motor vehicle).

Renames GS 105-449.47A Denial of license application and decal issuance. Makes change to refer to the Secretary's revocation (instead of cancellation) of a license. Makes conforming changes. 

Renames GS 105-449.73 Denial of license application, establishing that the Secretary of Revenue can refuse to issue a license if the applicant has done any of the specified actions. Provides for denial when the applicant had a license or registration issued under Article 36C or 36A revoked by the Secretary (was, revoked for cause), or had a motor fuel license or registration issued in another state revoked (was, cancelled for cause). Amends GS 105-449.74 (Issuance of a license for gasoline, diesel, and blends) to refer to a licensee instead of a license holder. Makes conforming changes to reflect the above revisions to: GS 105-449.68, GS 105-449.75, GS 105-449.76, GS 105-449.77(b), GS 105-449.92, GS 105-449.97(a), GS 105-449.98(b), and GS 105-449.104. Makes clarifying changes to GS 105-449.76.

Amends GS 105-449.110(a) to require the Secretary of Revenue, upon determining that an application for refund is incorrect, to send the applicant a proposed denial of the request for a refund. Establishes that the provisions of Article 9 apply to the procedure for requesting a review of proposed denial of a refund sought under Article 36C.

Renames GS 105-449.134 Denial, revocation, or cancellation of a license and adds that the Secretary may also revoke a license. Amends GS 105-449.135 (Issuance of license and notification of changes pertaining to alternative fuel in Article 36D) to refer to a "licensee" instead of a "license holder." Makes conforming changes to reflect those revisions to GS 105-449.135 and GS 105-449.139.

Makes clarifying changes to GS 119-19 (in Article 3, Gasoline and Oil Inspection). Authorizes the Secretary of Revenue to cancel or revoke a license issued under the Article. Changes language to refer to a "licensee" instead of a "license holder." Makes conforming changes.

Amends GS 105-259(b) to allow tax information to be disclosed for the purpose of providing to the Office of Child Support and Enforcement of the Department of Health and Human Services State tax information that relates to noncustodial parent location information as required under 45 CFR 303.3 and Title IV-D of the Social Security Act.

Part IV is effective when it becomes law and applies to requests for review filed on or after that date and to requests for review pending on that date for which the Department reissues a request for additional information, allows the taxpayer time to respond by the requested response date, and provides notification to the taxpayer that failure to timely respond to the request will result in the request for review being subject to the provisions of GS 105‑241.12.

Part V. Property Tax

Amends GS 105-330.3(a1), pertaining to the listing requirements for unregistered classified motor vehicles. Modifies the provisions that apply to any months for which the applicable vehicle was not taxed between the date the registration expired and the start of the current registered vehicle tax year. Provides that the value of the motor vehicle is determined as of January 1 of the year in which the taxes are computed. Further provides that the taxes are due on September 1 following the date the notice was prepared. Adds that taxes are payable at par or face amount if paid before January 6 following the due date, and taxes paid on or after January 6 following the due date are subject to interest charges. Provides that interest accrues on taxes paid on or after January 6 pursuant to GS 105-360. Eliminates previous interest provisions. Effective for taxes imposed for taxable years beginning on or after July 1, 2017.

Amends GS 105-330.6(c), concerning the surrendering of plates and applying for a tax release or refund, to apply the statute's provisions to an owner of a classified motor vehicle who pays the tax as required by GS 105-330.4(a) (currently, to the owner of a classified motor vehicle listed pursuant to GS 105-330.3(a)(1)).

Makes organizational change to GS 105-338, concerning the allocation of the valuations of public service property among local taxing units. 

Part VI provides a severability clause.

Identical to H 566, filed 4/4/17.

Amends GS 74C-3 to include persons or other entities discovering, locating, or disengaging devices intended to block the transmission of electronic signals for valuable consideration, and individuals and other entities that for valuable consideration provide security measures to ensure the safety of business executives, public officials, celebrities, or other individuals with elevated personal risk, in the definition of private protective services profession. Excludes persons under contract or employed by an occupational licensing board while performing an investigation solely for that board from the definition of private protective services.

Amends GS 74C-5 to further authorize the Private Protective Services Board (Board) to do four additional listed things, including adopting and publishing a code of professional conduct for licencees, registrants, certificate holders, and permit holders.

Amends GS 74C-7 to authorize the Secretary of Public Safety to investigate complaints, allegations, or suspicions of wrongdoing or violations of GS Chapter 74C involving unlicensed individuals, licensed individuals, or individuals to be licensed (currently, only individuals licensed and to be licensed). Authorizes the Secretary to enforce GS Chapter 74C and impose any authorized penalty against any individual or entity under investigation for and charged with a violation of the Chapter.

Amends GS 74C-8 to extend the time period in which a business entity has to find a replacement qualifying agent from 30 to 90 days, and authorizes the Board to extend the 90-day period for an additional 30 days upon the filing of a petition by the business entity and a hearing by the Board. Authorizes the Board to require a late fee of $100 for missing the deadline. Requires filing of a certificate of liability insurance with the Board to issue a license. Requires applicants to pay the initial license fee and make the required contribution to the Fund within 90 days of the date the applicant receives notice of pending licensure approval unless the Board extends the period by an additional 30 days upon the filing of a petition by the applicant and a hearing by the Board. Authorizes the Board to require a late fee of $100 for an applicant who misses the deadline.

Amends GS 74C-9 to cross-reference GS 74C-13 (concerning firearm registration permits for licensees) and to make conforming changes.

Amends GS 74C-10 to further require trainees supervised by licensees, carrying a firearm while engaged in private protective services activities, to obtain a liability insurance policy as specified. Authorizes a licensee to provide liability insurance coverage for a trainee under the licensee's supervision, but failure to do so does not exempt the trainee from this statute. Makes technical and conforming changes.

Amends GS 74C-12 to apply that statute to trainees, and to further authorize the Board to deny, suspend, or revoke a certification under that statute. Authorizes the Board to also take the disciplinary actions in that statute for violation of any State or federal firearms law, fraudulently holding oneself out as employed or licensed by the Department of Public Safety (was, State Bureau of Investigation), and for violations of the code of professional conduct adopted by the Board.

Amends GS 74C-13 to require proprietary employers to register individuals carrying a firearm within 30 days of employment. Directs a proprietary security organization employing an armed security guard to submit to the Board an application for license, and to renew its license every two years. Requires the firearms training program under subsection (h) to cover legal limitations on the use of, and range firing and safety procedures for, firearms (was, hand guns). Makes conforming changes.

Enacts new GS 74C-13.1. Exempts four listed classes of persons from the firearms training requirements of GS 74C-13(b), including persons who have successfully completed the North Carolina Basic Law Enforcement Training and the first year of probationary employment. Requires specified documentation from applicants claiming one of the exceptions. Directs the Board to deny exemptions if the applicant fails to provide documentation. Requires exempted applicants to qualify within the first three attempts on the required firearm qualification course. Failure to qualify on both courses of fire requires the applicant to undergo the entire 20-hour course of instruction. Applicants claiming an exemption must still complete the training required in GS 74C-13(h).

Amends GS 74C-17 to apply the civil penalty limit of $2,000 as a limit on each individual violation, instead of as a general limit. Authorizes the Board to charge costs, including attorneys' fees for any proceeding governed by GS Chapter 150B or authorized by this statute.

Amends GS 74C-23 to require companies, firms, or corporations licensed under this Chapter to provide the Director with notice of change of ownership within 10 days (was, 60 days) prior to the effective date of the transaction, and a list of all registrants and licensees affected by the transaction. Requires notice to the Director within 60 days from the effective date of the transaction by written confirmation of the completion of any necessary changes for the acquiring party to comply with this Chapter and applicable Board rules.

Amends GS 14-269.3, regarding weapons into assemblies and establishments serving alcoholic beverages, to provide that the statute does not apply to a person registered as a security guard or hired by the owner, lessee, or person or organization sponsoring the event or a person employed by an entity licensed under GS 74C-2 who is hired by the owner, lessee, or person or organization sponsoring the event, effective December 1, 2017.

Except as otherwise provided, effective July 1, 2017.

Increases the annual salaries for the following judicial branch officials by 20% for 2017-18, effective July 1, 2017: Supreme Court Chief Justice and Associate Justices, Court of Appeals Chief Judge and Judges, Senior Regular Resident Superior Court Judges and Superior Court Judges, and Chief District Court and District Court Judges.

Appropriates from the General Fund to the Administrative Office of the Courts $19,760,000 in nonrecurring funds for 2017‑18 to increase salary and benefits for all judges and justices and to increase the annual contribution into the Consolidated Judicial Retirement System.

Effective July 1, 2017, for the 2017‑2018 fiscal year.

States that the intent of the act is to require the North Carolina Commission on Indian Affairs (Commission) to act on petitions as they are received so that there may be more than one petition pending a hearing before the Commission's Recognition Committee at any one time and specifies that the Commission should ensure that it expeditiously reviews petitions and measures each petition against the required criteria for recognition that have been adopted by rule and provides the petitioner with the result of the screening on a timely basis.

Sets out procedures that the Commission must follow as part of its responsibility to review petitions for State recognition submitted by an Indian group, including time lines for acknowledging receipt of the notice of intent to petition, for conducting a preliminary review, providing preliminary findings, and conducting the required hearing. 

Appropriates from the General Fund to the Department of Administration, Commission on Indian Affairs, $178,141 for 2017‑18 and $178,141 for 2018‑19 to create two full‑time equivalent Paralegal I positions, one full‑time equivalent Administrative Officer I position, and one temporary contract position for a Genealogist/Research Specialist. 

Appropriates from the General Fund to Department of Administration, Commission on Indian Affairs, $1.4 million for 2018‑19 to be expended for additional tribal recognitions acted upon during that year.

Effective July 1, 2017.

Requires the Joint Legislative Transportation Oversight Committee (Committee) to study the effect, if any, the construction of the US Highway 64 Bypass had on the flooding associated with Hurricane Matthew that occurred in Princeville and requires the Committee to report its findings to the 2018 Regular Session of the 2017 General Assembly.

Requires that $500,000 for 2016‑17 appropriated in SL 2016‑94 for the purpose of HB2 legal defense instead be transferred to the Hurricane Matthew Resiliency Planning fund to be used for bridge, infrastructure, and dam construction in Edgecombe, Bertie, and Tyrrell counties.

Amends GS 115C-218.100(b), setting out that all the net assets of a charter school purchased with public funds is deemed the property of the local school administrative unit in which the charter school is located upon the dissolution of the charter school. Excepts from this provision capital funds provided to a charter school by one or more counties pursuant to GS 115C-218.106(c), enacted below. Provides that all net assets of a charter school purchased or improved with the capital funds, up to the total amount of the funds provided, are deemed the property of the county or counties providing the funding, and, if applicable, are to be divided between the counties in proportion to the funds provided.  

Amends GS 115C-218.105 to eliminate subsections (c), (d), and (e) relating to local funds for a charter school. Makes conforming change to the statute's title.

Enacts GS 115C-218.106 to provide for local funds for a charter school. Subsection (a) directs each board of county commissioners to adopt a resolution on the method of appropriating county funds to any charter school that has a student enrolled who resides in the county. Allows the board of county commissioners to determine the method of appropriation of county funds to a charter school that is in the best interests of the county. Prohibits a resolution to reduce or release a local school administrative unit from its obligation to transfer charter school funds other than county appropriations in accordance with subsection (e) of this statute.

Subsection (b) requires the State Board of Education to determine and certify to the charter school and the board of county commissioners, by October 1 of each school year, the total membership of students residing in the county who attend charter schools for the budget year.

Subsection (c) details purposes for which funds can be used when a county has adopted a resolution authorizing the direct appropriation of county funds to charter schools for capital outlay purposes. Includes the purposes of: (1) the acquisition of real property; (2) the acquisition, construction, reconstruction, enlargement, renovation, or replacement of buildings and other structures; and (3) the acquisition or replacement of furniture and furnishings, instructional apparatus, and similar items of furnishings and equipment. 

Subsection (d) requires that when funds are used to acquire or improve property for a charter school pursuant to subsection (c), the amount provided by the county must be evidenced by a promissory note and secured by a deed of trust on the property acquired or improved by the funds. Provides for the county to subordinate the deed and for the county to release the deed upon satisfaction.

Subsection (e) directs a local board to transfer an amount equal to the per pupil share of the local current expense fund of the local school administrative unit for the fiscal year.  If the board of county commissioners provides in the resolution adopted pursuant to subsection (a) that county funds appropriated to a local board of education of a local school administrative unit located in the county are to be transferred to a charter school for a student who resides in the unit and attends a charter school, the local current expense funds transferred under this subsection includes county funds. The per pupil share of the local current expense fund is to be transferred to the charter school within 30 days of the receipt of monies into the local current expense fund. Clarifies that the amount transferred under this subsection that consists of revenue derived from supplemental taxes must be transferred only to a charter school located in the tax district for which these taxes are levied and in which the student resides. Permits the local school administrative unit and charter school to use the process of mediation of differences between the State Board of Education and a charter school provided in GS 115C-218.95(d) to resolve differences on the calculation and transference of the per pupil share of the local current expense fund.

Subsection (f) requires each local school administrative unit to provide each charter school to which it transfers a per pupil share of its local current expense fund with the specified information within the 30-day time period provided in subsection (e), including how the per pupil share of the local current expense fund was calculated. Additionally requires the local school administrative unit to provide the same information to the State Board of Education (State Board) by November 1 of each year for each charter school to which it transfers a per pupil share to its local current expense fund. Directs the State Board to adopt a policy to govern the collection of the information. Requires the State Board to issue a letter of noncompliance to a local school administrative unit that does not provide the State Board with the information required by subsection (f).

Subsection (g) provides for the case of a dispute between a charter school and local board of education. Requires the complaining party to give the other party 15 days' written notice of the alleged violation prior to commencing an action under subsection (e). Directs the court to award the prevailing party reasonable attorneys' fees and costs incurred in an action under subsection (e). Directs the court to order any delinquent funds, costs, fees, and interest to be paid in equal monthly installments and to establish a time for payment in full that is no later than one year from the entry of any judgment. 

Amends GS 115C-426(c), setting out the requirements of the uniform budget format. Makes organizational changes to divide the existing language of subsection (c) to new subsections (c1) and (c2). Subsection (c) contains existing language providing that the uniform budget format must include the State Public School Fund, the local current expense fund, and the capital outlay fund. New subsection (c1) provides that, in addition to the requirements of subsection (c), other funds can be used only for 14 listed purposes (replaces existing language in subsection (c)). New subsection (c2) contains existing language requiring each local school administrative unit to maintain those funds shown in the uniform budget format that are applicable to its operations. Deletes provisions of subsection (c) providing that the appropriation or use of fund balance or interest income by a local school administrative unit is not a local current expense appropriation included as part of the local current expense fund. Adds new subsection (e1) to provide for what other moneys made available or accruing to the local school administrative unit can include.

Makes conforming changes to GS 115C-448(d).

Amends GS 153A-149(b)(7) to expand the school purpose for which each county can levy property taxes without restriction as to the rate or amount to include the purpose of providing for the county's share of the cost of kindergarten, elementary, and secondary public schools, including charter schools chartered under Article 14A of GS Chapter 115C (currently does not specify includes charter schools), and post-secondary public education. 

Enacts GS 153A-458 to expressly authorize each county to appropriate funds to schools chartered under Article 14A of GS Chapter 115C. Permits counties to provide funds in accordance with GS 115C-218.106, as enacted.

Amends Section 8.35(e) of SL 2014-100 to now require the State Board of Education to provide state funding to a virtual charter school participating in the virtual charter school pilot program as provided in GS 115C-218.105, and to provide the amount of local funds provided to participating charter schools pursuant to GS 115C-218.106 is to be the lesser of $790 per pupil or the amount computed in accordance with GS 115C-218.106. Provides that participating virtual charter schools are also subject to the requirements of GS 115C-218.105(b) and GS 115C-218.106.

Effective July 1, 2017, and applies beginning with the 2017-18 school year. 

Enacts new Article 54, Reliability of In-Custody Informant Statements, in GS Chapter 15A. Enacts new GS 15A-981, providing that a defendant may not be convicted of an offense or receive an aggravated sentence based solely on the testimony of an in-custody informant unless the testimony is corroborated. Directs the judge to provide the jury with specific instructions on factors to consider the reliability of in-custody informant testimony in cases where the testimony is admissible. Directs district attorneys to adopt policies and procedures governing the recording and use of testimony. Provides requirements for recording testimony of in-custody informants. Prohibits destruction or modification of recordings until one year after the completion of all appeals.

Effective December 1, 2017, and applies to offenses committed on or after that date.

Identical to H 562, filed 4/4/17.

Amends GS 14-159.13 (Second degree trespass) to provide that violations of this statute are Class 1 misdemeanors instead of Class 3 misdemeanors if the offense occurs in a multi-occupancy bathroom, shower, or changing facility. Effective December 1, 2017, and applies to offenses committed on or after that date.

 

Amends GS 163-231(b) by amending one of the three conditions under which absentee ballots received after the required hour can still be accepted, to allow the ballots to be accepted when there is no postmark but they are are received by the county board of elections no later than one day after the election by 5 pm. Requires when a ballot is received by mail one day after the election without a postmark that the county board of elections verify receipt of the ballot by stamping on the ballot the date it was received.