Today's Bills: Senate

Today's Bills: Senate

PUBLIC/HOUSE BILLS
H 99 (2019-2020) TRANSFER ALE. Filed Feb 18 2019, AN ACT TO ESTABLISH ALCOHOL LAW ENFORCEMENT AS A SEPARATE DIVISION OF THE DEPARTMENT OF PUBLIC SAFETY AND TO CLARIFY THE JURISDICTION AND PRIMARY RESPONSIBILITIES OF ALCOHOL LAW-ENFORCEMENT AGENTS.
Summary date: May 28 2019

Senate committee substitute makes the following changes to the 2nd edition. Appropriates $300,000 in recurring funds for each year of the 2019-21 biennium from the General Fund to the Department of Public Safety, Division of Alcohol Law Enforcement (ALE), to fund office space. Also appropriates $213,638 for 2019-20 and $427,276 for 2020-21 from the General Fund in recurring funds to ALE to fund eight full-time equivalent administrative positions.

Intro. by McNeill, Boles.APPROP, GS 18B, GS 18C, GS 19, GS 105, GS 143, GS 143B
H 99 (2019-2020) TRANSFER ALE. Filed Feb 18 2019, AN ACT TO ESTABLISH ALCOHOL LAW ENFORCEMENT AS A SEPARATE DIVISION OF THE DEPARTMENT OF PUBLIC SAFETY AND TO CLARIFY THE JURISDICTION AND PRIMARY RESPONSIBILITIES OF ALCOHOL LAW-ENFORCEMENT AGENTS.
Summary date: Apr 30 2019

House committee substitute makes the following changes to the 1st edition.

Adds to GS 18B-500 to grant the Secretary of the Department of Public Safety (DPS) appointing authority and supervisory responsibility of the Director of the Division of Alcohol and Law Enforcement (ALE), as transferred to DPS by the act. Adds that the ALE Director can appoint and supervise assistants (was, appoint only). Additionally authorizes the ALE Director to appoint a regular employee of the Alcoholic Beverage Control Commission (ABC Commission) as an ALE Agent so long as the employee is employed by the ABC Commission and serving as an ALE Agent on January 1, 2019. Makes organizational changes and modifies ALE agents' primary responsibilities to include enforcement of GS Chapter 18B. No longer includes enforcement of the provisions of GS Chapter 143B (executive organization laws).  Modifies ALE agents' subject matter jurisdiction (SMJ), now set out to include enforcement for any criminal offense:

  • Occurring, encountered, or otherwise discovered on the premises or elsewhere relating to a location under application for or holding a permit issued by the ALE Commission or the Education Lottery Commission;
  • Encountered or otherwise discovered while investigating or enforcing matters for the ALE Commission or the Lottery Commission, or provisions of the laws of which the agents are primarily charged with enforcing (previously, SMJ did not specifically include offenses encountered or discovered while investigating or enforcing matters of either Commission);
  • Encountered or discovered while carrying out any duty or function assign to the Division by law (this SMJ not previously limited to criminal offenses);
  • Occurring in an agent's presence; and
  • When assisting another law enforcement agency (this SMJ not previously limited to criminal offenses but was limited to during investigations only).

Now specifies that ALE agents have full power and authority as peace officers to execute criminal process, respond to and take enforcement action for any crime of violence or breach of peace, and additional duties directed by the Governor or the Secretary of DPS when necessary for security at a public event, or protection of persons or property due to a disaster or state of emergency. Modifies the ALE Director's authority regarding shifting personnel from districts to no longer subject the action to rules adopted by DPS.

Amends the definition of ABC system set forth in GS 18B-101 to include the designated ABC law enforcement officers employed under GS 18B-501 rather than the ALE Division and all of its employees. Makes a clarifying change.

Amends GS 143-63.1 to authorize the ALE Division to sell, trade, or dispose of any surplus weapons it possesses to any federally licensed firearm dealers.

Amends GS 143-341 to exempt motor vehicles under the ownership, custody, or control of the ALE Division from the Department of Administration's scheduled transfer of ownership, custody, or control to that Department.

Intro. by McNeill, Boles.GS 18B, GS 18C, GS 19, GS 105, GS 143, GS 143B
H 99 (2019-2020) TRANSFER ALE. Filed Feb 18 2019, AN ACT TO ESTABLISH ALCOHOL LAW ENFORCEMENT AS A SEPARATE DIVISION OF THE DEPARTMENT OF PUBLIC SAFETY AND TO CLARIFY THE JURISDICTION AND PRIMARY RESPONSIBILITIES OF ALCOHOL LAW-ENFORCEMENT AGENTS.
Summary date: Feb 18 2019

Relocates the Alcohol Law Enforcement Branch (ALE) of the State Bureau of Investigation as a Division of the Department of Public Safety (DPS). Directs DPS to continue consolidation of ALE and State Bureau of Investigation (SBI) regions and regional offices so that all district offices remain co-located.

Enacts new GS Chapter 143B, Article 13, Part 4, Subpart F (Alcohol Law Enforcement Division), creating the ALE as a Division of the Department of Public Safety.

Repeals GS 143B-928 (locating ALE within the State Bureau of Investigation).

Amends GS 18B-500 (Alcohol law-enforcement agents). Authorizes the Director of the Division of Alcohol Law Enforcement (Director) to appoint a sufficient number of assistants who shall be competent and qualified to do the work of the Division. Makes the Director responsible for all hiring and personnel decisions of the Division, and authorizes the Director to hire or fire personnel and transfer personnel within the Division. Sets forth ALE agents' subject matter jurisdiction, providing for the primary responsibilities of enforcing:

  • The provisions of GS Chapter 143B (executive organization laws), GS Chapter 18C (lottery laws), GS 14-313 (youth access to tobacco product law), and Parts 1 and 2 of Article 37 of GS Chapter 14 (lottery and gaming laws);
  • Any criminal offense occurring in the agent's presence;
  • When assisting another law-enforcement agency during an investigation;
  • While carrying out any other duty assigned to the Division by law;
  • Any criminal offense discovered during the enforcement of the above.

Makes conforming, technical and clarifying changes to GS 18B-500, GS 18B-101, GS 143-651, GS 143-652.1, GS 143-652.2, and specified statutes in GS Chapters 18B, 18C, 19, 105, and 143.

Effective July 1, 2019.

Intro. by McNeill, Boles.GS 18B, GS 18C, GS 19, GS 105, GS 143, GS 143B
H 389 (2019-2020) ABC/UNIV ATHLETIC FACILITY. Filed Mar 19 2019, AN ACT TO AUTHORIZE PUBLIC COLLEGES AND UNIVERSITIES TO ALLOW ALCOHOL SALES AT STADIUMS, ATHLETIC FACILITIES, AND ARENAS LOCATED ON SCHOOL PROPERTY.
Summary date: Jun 12 2019

Senate committee substitute to the 2nd edition makes the following changes.

Amends GS 18B-1006(a)(7) to allow the sale of malt beverages, unfortified wine, or fortified wine at any stadium that supports a NASCAR-sanctioned one-fourth mile asphalt flat oval short track owned or leased by a public college or university (removing the requirement that the sales be limited to events that are not sponsored or funded by the public college or university).

Intro. by Bell, Boles, Goodman, Lewis.GS 18B
H 389 (2019-2020) ABC/UNIV ATHLETIC FACILITY. Filed Mar 19 2019, AN ACT TO AUTHORIZE PUBLIC COLLEGES AND UNIVERSITIES TO ALLOW ALCOHOL SALES AT STADIUMS, ATHLETIC FACILITIES, AND ARENAS LOCATED ON SCHOOL PROPERTY.
Summary date: Apr 2 2019

House committee substitute to the 1st edition makes the following changes. Amends proposed GS 18B-1006(a)(9) as follows. Adds that if a Board of Trustees votes to allow the issuance of permits for the sale of alcoholic beverages at stadiums, athletic facilities, and arenas, then the Board must provide written notice to the North Carolina Alcoholic Beverage Control Commission that it has voted to allow the issuance of permits. Adds that the term "public college or university" does not include a community college. Adds that (a)(9) does not apply to any sales authorized under (a)(1)-(8) (which list other exceptions to the prohibition on issuing a permit for the sale of alcoholic beverages to a business on the campus or property of a public school, college, or university). 

Intro. by Bell, Boles, Goodman, Lewis.GS 18B
H 389 (2019-2020) ABC/UNIV ATHLETIC FACILITY. Filed Mar 19 2019, AN ACT TO AUTHORIZE PUBLIC COLLEGES AND UNIVERSITIES TO ALLOW ALCOHOL SALES AT STADIUMS, ATHLETIC FACILITIES, AND ARENAS LOCATED ON SCHOOL PROPERTY.
Summary date: Mar 19 2019

Identical to S 296, filed 3/19/19.

Amends GS 18B-1006, which prohibits the issuance of permits for the sale of alcoholic beverages to a business on the campus or property of a public school, college, or university. Adds new subdivision (a)(9) to the prohibition's exemptions, now exempting a stadium, athletic facility, or arena on the campus or property of a public college or university, so long as the Board of Trustees of the public college or university has voted to allow the issuance of permits for use at said facility. Specifically authorizes permits described in GS 18B-1001 (identifying 20 types of permits, including malt beverage permits, unfortified wine permits, and tasting permits), GS 18B-1002(a)(2) (one-time permits for nonprofits for fund raising events), or GS 18B-1002(a)(5) (one-time permits for local government, nonprofit, or political organization for fund raising events). Limits the premises of a stadium, athletic facility, or arena to include any area that meets three criteria, including designation on a map or written description clearly defining the boundary area, and includes the map or written description in the permit application. Specifies that the subdivsion does not authorize the sale of mixed beverages when the stadium, athletic facility, or arena is being used for a sports event sponsored by the public college or university. Makes conforming changes.

Intro. by Bell, Boles, Goodman, Lewis.GS 18B
H 658 (2019-2020) ALLOW DONATIONS OF UNEXPIRED DRUGS. Filed Apr 9 2019, AN ACT MODIFYING THE EXPIRED DRUG PROVISION OF THE DRUG, SUPPLIES, AND MEDICAL DEVICE REPOSITORY PROGRAM TO ALLOW FOR THE ACCEPTANCE AND DISPENSING OF DRUGS THAT HAVE NOT REACHED THEIR EXPIRATION DATE FOR THE PURPOSE OF INCREASING ACCESS FOR INDIVIDUALS WHO ARE UNINSURED OR UNDERINSURED.
Summary date: Apr 9 2019

Amends GS 90-85.44 to allow dispensing of unexpired drugs, as the title indicates, provided that the already specified additional requirements are also met. 

Intro. by Sasser, Hanig, Humphrey.GS 90
H 924 (2019-2020) TEACHER CONTRACT CHANGES. Filed Apr 16 2019, AN ACT TO CLARIFY ELIGIBILITY FOR EXTENDED TEACHER CONTRACTS, TO REQUIRE COMPLETION OF AN ECONOMICS AND PERSONAL FINANCE COURSE AS A HIGH SCHOOL GRADUATION REQUIREMENT IN PUBLIC SCHOOLS, TO CLARIFY REQUIREMENTS FOR HIGH SCHOOL CIVIC LITERACY, AND TO REQUIRE PROFESSIONAL DEVELOPMENT FOR ECONOMICS AND PERSONAL FINANCE TEACHERS.
Summary date: Jun 5 2019

Senate committee substitute to the 3rd edition makes the following changes.

Amends GS 115C-81.65 to no longer require the State Board of Education (State Board) to review the high school standard course of study to determine which courses and grade levels personal financial literacy will be integrated. Beginning with the 2020-21 school year, directs the State Board to require a full credit course in high school focused on economics and personal finance (EPF). Requires that the content of the course include the specified standards, at minimum. Requires that the EPF course provide instruction on economic principles and that it provide, at minimum, the already required personal financial literacy instruction components with the addition of planning and paying for postsecondary education.

Additionally amends GS 115C-81.65 to direct the State Board to require that EPF teachers get the professional development necessary to ensure that the intent and provisions of the statute are carried out. Provides that to the extent funds are made available for this purpose, the State Board must require the employing entity to make available the EPF professional development course provided by the specified entity. Adds that when practicable, teachers must complete the EPF professional development course prior to teaching the EPF course in public schools, and if necessary, teachers only begin teaching the EPF course in public schools while awaiting the next possible opportunity to complete a session of the EPF professional development course. Requires the EPF professional development course be taken at an approved location most conveniently located to the local school administrative unit to the extent possible. 

Amends GS 115C-81.45. Makes organizational changes to the current requirement for instruction in civic citizenship education in the standard course of study for high school social studies, integrating the requirement and its encouraged components into the civic literacy requirement for high school students. Now requires instruction in civic citizenship education in the standard course of study for high school social studies through teaching a full credit course called the Founding Principles of the United States of America and North Carolina: Civic Literacy (was, a semester course during the high school years on the founding principles of the United States and North Carolina). Maintains the requirements of a passing score for graduation and for 13 specified subjects to be included in the course. Specifies that the course must be solely focused on civics and citizenship education. Makes technical changes. Applies to students entering the ninth grade in the 2021-22 school year. Makes organizational and clarifying changes regarding the requirement for instruction in civic and citizenship education in the standard course of study for middle school social studies. 

Amends GS 115C-218.85 (concerning charter schools), GS 115C-238.66 (concerning regional schools), and GS 116-239.8 (concerning laboratory schools) to require the provision of financial literacy instruction as required by the State Board pursuant to GS 115C-81.65, as amended. Amends Section 6(d) of SL 2018-42, adding the provisions of GS 115C-81.65 to which renewal school systems are subject.

Directs the State Board to (1) begin the process for review and revision of the standard course of study for social studies in grades K-12 in the 2019-20 school year and (2) revise the high school standard course of study for the EPF course and the Founding Principles of the United States of America and North Carolina: Civic Literacy courses and review the standard course of study to determine the grade level during which the course can be completed. Prohibits the State Board from requiring more than four full course credits in social studies for high school graduation.

Repeals Section 7.18(a)-(i) of HB 966 of the 2019 Regular Session (identical provisions set forth in the 2019 Appropriations Act) if enacted.

Makes organizational changes. Makes conforming changes to the act's long title.

Intro. by D. Hall, Horn.GS 115C, GS 116
H 924 (2019-2020) TEACHER CONTRACT CHANGES. Filed Apr 16 2019, AN ACT TO CLARIFY ELIGIBILITY FOR EXTENDED TEACHER CONTRACTS, TO REQUIRE COMPLETION OF AN ECONOMICS AND PERSONAL FINANCE COURSE AS A HIGH SCHOOL GRADUATION REQUIREMENT IN PUBLIC SCHOOLS, TO CLARIFY REQUIREMENTS FOR HIGH SCHOOL CIVIC LITERACY, AND TO REQUIRE PROFESSIONAL DEVELOPMENT FOR ECONOMICS AND PERSONAL FINANCE TEACHERS.
Summary date: May 2 2019

House committee substitute to the 2nd edition makes the following changes.

Deletes the proposed changes to GS 115C-325.3, concerning teacher contracts or renewals for terms of one, two, or four school years, and instead amends the statute to provide the following. Clarifies that a new contract or renewal contract for terms of one, two, or four school years is only applicable for a teacher who has been employed by the local board as a teacher for three or more years (previously did limit qualification to employment as a teacher only). Now allows a local board to require by policy that the three years of qualifying employment be consecutive (the previous edition restricted qualification to teachers employed as a teacher by the local board for three consecutive years immediately preceding the effective date of the new or renewed contract). Requires that a year be no less than 120 workdays performed as a teacher in a full-time permanent position (similar to the requirement of the previous edition). Requires local board policies that require consecutive employment to include in the policy that if a teacher did not work at least 120 workdays as a teacher in a year because the teacher was on approved or legally entitled leave, that year does not constitute a year of employment but is not considered a break in the continuity of consecutive years of employment (similar to the specifications of the previous edition concerning sick leave, disability leave, or FMLA leave). Prohibits suspension from being considered an approved or legally entitled leave under the provision. Clarifies that teachers may have additional rights under specified federal law.

Intro. by D. Hall, Horn.GS 115C
H 924 (2019-2020) TEACHER CONTRACT CHANGES. Filed Apr 16 2019, AN ACT TO CLARIFY ELIGIBILITY FOR EXTENDED TEACHER CONTRACTS, TO REQUIRE COMPLETION OF AN ECONOMICS AND PERSONAL FINANCE COURSE AS A HIGH SCHOOL GRADUATION REQUIREMENT IN PUBLIC SCHOOLS, TO CLARIFY REQUIREMENTS FOR HIGH SCHOOL CIVIC LITERACY, AND TO REQUIRE PROFESSIONAL DEVELOPMENT FOR ECONOMICS AND PERSONAL FINANCE TEACHERS.
Summary date: Apr 30 2019

House committee substitute to the 1st edition makes the following changes.

Makes clarifying and organizational changes to the proposed changes to GS 115C-325.3, concerning teacher contracts or renewals for terms of one, two, or four school years. Clarifies that for a full-time, permanent teacher who did not work for at least 120 workdays in a school year because of sick leave, disability leave, or leave under the Family and Medical Leave Act, the school year is not deemed to constitute a consecutive year of employment for the teacher (previously, provided that any previous consecutive years worked are consecutive to the following year). Maintains that such a school year is not considered a break in service.

Intro. by D. Hall, Horn.GS 115C
H 924 (2019-2020) TEACHER CONTRACT CHANGES. Filed Apr 16 2019, AN ACT TO CLARIFY ELIGIBILITY FOR EXTENDED TEACHER CONTRACTS, TO REQUIRE COMPLETION OF AN ECONOMICS AND PERSONAL FINANCE COURSE AS A HIGH SCHOOL GRADUATION REQUIREMENT IN PUBLIC SCHOOLS, TO CLARIFY REQUIREMENTS FOR HIGH SCHOOL CIVIC LITERACY, AND TO REQUIRE PROFESSIONAL DEVELOPMENT FOR ECONOMICS AND PERSONAL FINANCE TEACHERS.
Summary date: Apr 22 2019

Under GS 115C-325.3, which requires a contract or renewal of a contract between a local school board of education and teacher employed by the local board of education for three years or more to be for a term of one, two, or four school years. Now sets out the following conditions that must be met for contracts or renewal of contracts for those terms: (1) the teacher must have been employed by the local board of education as a teacher for three or more consecutive years immediately preceding the effective date of the contract; (2) the teacher has worked for at least 120 days as a teacher in a full-time, permanent position in each consecutive year; and (3) days the teacher did not actually work due to leave must not court toward the 120 days (if the teacher did not work 120 days in a year only because of sick leave, disability leave, or leave under the Family and Medical Leave act of 1993, the year is not considered a break in service and any previous consecutive years worked are consecutive to the following year).

Intro. by D. Hall, Horn.GS 115C
H 1015 (2019-2020) CONFIRM CHRIS AYERS/EX. DIR. UTILITES COMM PS. Filed May 22 2019, A JOINT RESOLUTION PROVIDING FOR THE CONFIRMATION OF CHRISTOPHER J. AYERS AS EXECUTIVE DIRECTOR OF THE PUBLIC STAFF OF THE NORTH CAROLINA UTILITIES COMMISSION.
Summary date: May 22 2019

Includes whereas clauses. Confirms the appointment of Christopher Ayers as Executive Director of the Public Staff of the NC Utilities Commission for a term beginning July 1, 2019, and expiring June 30, 2025.

Intro. by Rules, Calendar, and Operations of the House.JOINT RES

Today's Bills: Senate

PUBLIC/SENATE BILLS
S 148 (2019-2020) PUBLIC RECORDS/RELEASE OF LEO RECORDINGS. Filed Feb 26 2019, AN ACT TO ALLOW LAW ENFORCEMENT AGENCIES TO DISCLOSE OR RELEASE RECORDINGS FOR PURPOSES OF SUSPECT IDENTIFICATION OR APPREHENSION OR TO LOCATE A MISSING OR ABDUCTED PERSON.
Summary date: Jun 5 2019

House committee substitute to the 2nd edition makes the following changes. Amends the act's long title to more accurately reflect the bill's content. 

Intro. by D. Davis.GS 132
S 148 (2019-2020) PUBLIC RECORDS/RELEASE OF LEO RECORDINGS. Filed Feb 26 2019, AN ACT TO ALLOW LAW ENFORCEMENT AGENCIES TO DISCLOSE OR RELEASE RECORDINGS FOR PURPOSES OF SUSPECT IDENTIFICATION OR APPREHENSION OR TO LOCATE A MISSING OR ABDUCTED PERSON.
Summary date: Apr 11 2019

Senate committee substitute to the 1st edition makes the following changes.

Amends GS 132-1.4A(h), by no longer providing that the release of the records is at the custodial law enforcement agency's sole discretion. Amends the purposes for which the disclosure or release of a recording may be made to include locating a missing or abducted person and by removing the proposed language allowing release for noncriminal investigative purposes such as community-oriented publicity or good will. Makes technical changes.

Intro. by D. Davis.GS 132
S 148 (2019-2020) PUBLIC RECORDS/RELEASE OF LEO RECORDINGS. Filed Feb 26 2019, AN ACT TO ALLOW LAW ENFORCEMENT AGENCIES TO DISCLOSE OR RELEASE RECORDINGS FOR PURPOSES OF SUSPECT IDENTIFICATION OR APPREHENSION OR TO LOCATE A MISSING OR ABDUCTED PERSON.
Summary date: Feb 26 2019

Amends GS 132-1.4A(h), allowing a custodial law enforcement agency to disclose or release a recording in its sole discretion to a district attorney for any of the three existing purposes identified. Adds the following to the purposes for which a recording can be disclosed or released: suspect identification or apprehension and noncriminal investigative purposes such as community-oriented publicity or goodwill. 

Intro. by D. Davis.GS 132
S 315 (2019-2020) NORTH CAROLINA FARM ACT OF 2019. Filed Mar 20 2019, AN ACT TO MAKE VARIOUS CHANGES TO THE AGRICULTURAL LAWS OF THE STATE.
Summary date: Jun 12 2019

Senate committee substitute to the 3rd edition makes the following changes. 

Amends GS 105-277.4 as follows. Only requires the assessor to provide written notice of a determination that the properly has lost its eligibility for present-use value classification to instances where eligibility is lost for a reason other than failure to file a timely application required due to transfer of the land. No longer requires the notice to be provided separately from a regular yearly tax notice or tax bill. Deletes duplicate language. Adds that a new appeal to a decision of the assessor regarding the disqualification of property for which notice was received is not required to be submitted for subsequent tax years while the appeal of that disqualifying event is outstanding. Provides that when a property's present-use value classification is reinstated upon appeal of the disqualifying, it is reinstated retroactive to the date the classification was revoked. Deletes the provision providing that if no notice is given to the owner regarding the subsequent decision to disqualify, a reinstatement of the property by the specified entities is deemed effective for any assessments occurring from the date of the assessor's decision under appeal to the date of the final decision of that entity to reinstate the property. Makes the changes to GS 105-277.4 effective when the act becomes law (was, effective for taxes imposed for taxable years beginning or or after July 1, 2019). 

Intro. by B. Jackson, Sanderson, Johnson.STUDY, GS 20, GS 62, GS 75, GS 89C, GS 90, GS 99E, GS 105, GS 106, GS 120, GS 136, GS 139, GS 143, GS 153A, GS 160A
S 315 (2019-2020) NORTH CAROLINA FARM ACT OF 2019. Filed Mar 20 2019, AN ACT TO MAKE VARIOUS CHANGES TO THE AGRICULTURAL LAWS OF THE STATE.
Summary date: Jun 11 2019

Senate committee substitute modifies and adds to the 2nd edition as follows. 

Deletes the proposed changes to GS 90-95 concerning penalties for hemp licensees with regard to Schedule VI controlled substance violations. Instead, enacts GS 90-94.5 to establish immunity for individuals possessing a valid hemp license issued by the NC Hemp Commission (Commission) from prosecution under the specified controlled substance laws with respect to the commodity cultivated by the licensee containing a THC level that exceeds the federally defined THC level for hemp. Excludes willful, knowing, or intentional violations from immunity. Specifies that no criminal penalty can attach to the specified negligent violations concerning production of cannabis with more than the federally defined THC level for hemp. Instead establishes that the penalty for a licensee's negligent violation will be determined by the Commission pursuant to GS 106-568.55B, as enacted. Effective and applies to offenses committed on or after the later of December 1, 2019, or 30 days after the effective date of specified regulations adopted by the US Department of Agriculture, and expire July 1, 2021. Enacts the same statute with nearly identical provisions, effective July 1, 2021; however, provides immunity for individuals possessing hemp licenses issued by the Department of Agriculture and Consumer Services rather than the Commission. Makes a conforming change to the statutory cross reference concerning disciplinary action for licensees.

Intro. by B. Jackson, Sanderson, Johnson.STUDY, GS 20, GS 62, GS 75, GS 89C, GS 90, GS 99E, GS 105, GS 106, GS 120, GS 136, GS 139, GS 143, GS 153A, GS 160A
S 315 (2019-2020) NORTH CAROLINA FARM ACT OF 2019. Filed Mar 20 2019, AN ACT TO MAKE VARIOUS CHANGES TO THE AGRICULTURAL LAWS OF THE STATE.
Summary date: Jun 6 2019

Senate committee substitute modifies and adds to the 1st edition as follows. 

Changes the act’s long title and makes organizational changes.

Sections 1 through 7

Makes the following changes to Article 50E of GS Chapter 106. Retitles the Article as North Carolina Hemp Commission (was, Industrial Hemp). Amends the legislative findings and purpose set forth for the Article, declaring hemp to be a viable agricultural commodity and the promotion of the hemp industry to be in the best interest of citizens (previously established an agricultural pilot program for the cultivation of industrial hemp). Adds to the Article’s defined terms: cannabidiol, cannabinoid, commercial sale, cultivating, federally defined THC level for hemp, handling, hemp, hemp extract, licensee, processing, and smokable hemp. Removes commercial use, grower, industrial hemp, industrial hemp research program, state land grant university, and verified propagule from the defined terms given. Modifies the definitions for hemp product and tetrahydrocannabinol.

Renames the NC Industrial Hemp Commission as the NC Hemp Commission (Commission) and sets current members’ terms to expire July 1, 2021. Now allows the two appointments of the Governor to the Commission to be a full-time faculty member or Emeritus faculty member of a State land grant university who regularly works in agricultural science or research (previously, limited to only full-time faculty members). Modifies and adds to the powers and duties of the Commission, now charging the Commission with establishing the NC Hemp Program (Program) to cultivate hemp in the state, issuing licenses for cultivating and handling hemp, and adopting necessary rules that prescribe sampling and testing procedures and set a schedule of nonrefundable fees for administering the Program. Eliminates all powers and duties related to the industrial hemp research program and cultivation licenses. Provides for hemp licensing qualifications for persons to cultivate or handle hemp in the state, issuable by the Commission and limited to qualifying farmers or conditional qualifying farmers. Allows the Commission to grant a license to cultivate hemp to a State agency or higher-learning institution, or an employee thereof for use in the scope of the employee's duties. Makes ineligible for licensure for a period of ten years any person convicted of a felony relating to a controlled substance under state or federal law. Honors licenses issued by the former NC Industrial Hemp Commission for the term of the license. Eliminates the funding limitations set forth for the Commission. Establishes a $250,000 minimum bonding requirement for hemp handler licensees, recoverable by any cultivator injured by a contracted handler, as specified.

Directs the Commission to require compliance with corrective action plans for persons required to obtain a hemp license under the Article and determined to have negligently violated any of the Article’s provisions. Details corrective action plan requirements, including correcting the violation by a specified date and periodic reporting to the Commission for at least two years. Makes ineligible to obtain a hemp license for a period of five years any person who negligently violates the Article or related rules three times in a five-year period, in addition to being subject to criminal and civil penalties for additional violations during that period. Requires the Commission to immediately report to the Commissioner of Agriculture (Commissioner), the Attorney General, and the appropriate law enforcement authority any violation of the Article or related rules that is reckless, willful, knowing, or intentional. Maintains the civil and criminal penalties under the Article, made applicable to hemp rather than industrial hemp.

Adds that licenses are not required to possess, handle, transport, or sell hemp products or hemp extracts. Provides for export of hemp products consistent with the laws of the receiving jurisdiction.

Establishes the NC Hemp Program Fund, housed in the Department of Agriculture and Consumer Services (Department), to be used by the Commission and the Department for the costs of personnel, program administration, testing, and any other costs incurred in administering the Article, including promotion, marketing, and branding of hemp grown and processed in the state.

Directs (rather than authorizes) the Commission to adopt temporary rules to implement the above provisions of Section 1 of the act, effective until permanent rules are adopted (was, for 180 days after the effective date of the section).

Deletes the previous provisions concerning the consideration of current members of the Industrial Hemp Commission in the appointment of members to the Commission. 

Repeals Article 50E in its entirety, effective July 1, 2021.

Amends GS 90-87 to exclude from the definition of marijuana hemp, hemp products, hemp extracts, and smokable hemp (was, excluded industrial hemp only) when produced and used in compliance with the Controlled Substances Act and rules adopted by the Commission. Amends GS 90-94 to exclude from schedule VI controlled substances tetrahydrocannabinols in hemp, hemp products, hemp extracts, or smokable hemp. Amends GS 90-95 to provide that any person who manufactures, sells or delivers, or possesses with intent to manufacture, sell, or deliver a controlled substance classified in Schedule VI is to be punished by being required to comply with a corrective action plan issued by the Commission for a first or second offense so long as the person has a valid hemp license and they did not willfully, knowingly, or intentionally cause the controlled substance to exceed the federally defined THC level for hemp. Sets out the same punishment for any person with a valid hemp license who possesses a controlled substance classified in Schedule VI. 

The above changes are effective and apply to offenses committed on or after the later of December 1, 2019, or 30 days after the effective date of specified regulations adopted by the US Department of Agriculture, and expire July 1, 2021. 

Amends GS 105-113.106 to define hemp as used in Article 2D, Unauthorized Substances Taxes, to mean hemp, hemp extracts, and hemp products. Exempts lawfully possessed hemp from unauthorized substance taxes under GS 105-113.107A. Effective for taxable years beginning on or after July 1, 2019, and expire July 1, 2021.

Now requires the Commissioner (in consultation with the Governor and Attorney General) to submit to the Secretary of the US Department of Agriculture a State plan for the regulation of hemp production (was, six months after the specified regulations are adopted by the US Department of Agriculture). Sets out six elements (was, four) that must be included in the plan, including a procedure to maintain information regarding land on which hemp is produced in the state, and a procedure for the disposal of products that are produced in violation of new Article 50F or any rule adopted by the Commission. Additionally requires the plan to include a procedure for conducting annual inspections and submitting information on each hemp producer to the US Department of Agriculture Secretary. Maintains that an amended plan must be submitted if the initial plan is disapproved. 

Amends SL 2015-299, Section 4, to change the expiration of the act (establishing Article 50E, which regulates industrial hemp) until the later of December 1, 2019, or 30 days after the effective date of the specified regulations adopted by the US Department of Agriculture (was, the date that the NC Industrial Hemp Commission adopts and submits to the Governor and Revisor a resolution that a State industrial hemp pilot program is no longer necessary because federal legislation has been enacted and taken effect that removes industrial hemp from the federal Controlled Substances Act). 

Sections 8 through 11

Modifies proposed Article 50F, North Carolina Hemp Program, GS Chapter 106, as follows. 

Adds cannabinoid and smokable hemp to the defined terms, and modifies the definitions set forth for hemp extract, hemp product, and tetrahydrocannabinol, mirroring the definitions of those terms provided in Article 50E, as amended. Eliminates the NC Hemp Commission. Makes changes throughout the Article to refer to the Department rather than the Commission, including granting the Department and the Commissioner the powers and duties previously granted to the Commission. Eliminates the previous provisions which directed that rules required to be adopted regarding sampling and testing procedures use a decarboxylation testing method. Modifies the Article’s civil penalties, authorizing a civil penalty not exceeding $2,500 per violation against any person who knowingly or intentionally manufactures, delivers, sells, or possesses smokable hemp, except for hemp plants or parts of a hemp plant grown or handled by a licensee for processing or manufacturing into a legal hemp product. Additionally makes it a Class 1 misdemeanor to knowingly or intentionally manufacture, deliver, sell, or possess smokable hemp, except for hemp plants or parts of a hemp plant grown or handled by a licensee for processing or manufacturing into a legal hemp product (mirroring the civil and criminal penalties set out in Article 50E, as amended). Modifies the provision which specifies that no license is required to possess, handle, transport, or sell hemp products or hemp extracts, no longer specifically including those containing CBD or other hemp-derived cannabinoids. Makes further conforming and technical changes.

Now grants the Department enforcement authority of rules adopted by the Commission to implement Section 1 of the act until the Department amends or repeals the rules.

Further amends GS 90-87 to also exclude from the definition of marijuana smokable hemp. Changes the statutory cross-reference. Amends GS 90-94 to exclude from schedule VI controlled substances tetrahydrocannabinols in hemp, hemp products, hemp extracts, or smokable hemp (mirroring the changes made to GS 90-94 by the act, expiring July 1, 2021). Modifies the proposed changes to GS 90-95 to provide that any person who manufactures, sells or delivers, or possesses with intent to manufacture, sell, or deliver a controlled substance classified in Schedule VI is to be punished by being required to comply with a corrective action plan issued by the Department (rather than the Commission, eliminated by the act) for a first or second offense so long as the person has a valid hemp license and they did not willfully, knowingly, or intentionally cause the controlled substance to exceed the federally defined THC level for hemp (rather than a specified concentration). Makes the same changes to the provisions setting out the same punishment for any person with a valid hemp license who possesses a controlled substance classified in Schedule VI. 

Amends GS 105-113.106 to define hemp as used in Article 2D, Unauthorized Substances Taxes, to mean hemp, hemp extracts, and hemp products. Exempts lawfully possessed hemp from unauthorized substance taxes (mirroring the changes made to GS Chapter 105 made by the act, expiring July 1, 2021, with necessary changes to statutory references). 

Effective July 1, 2021 (was the date that the NC Industrial Hemp Commission adopts and submits to the Governor and Revisor a resolution that a State industrial hemp pilot program is no longer necessary because federal legislation has been enacted and taken effect that removes industrial hemp from the federal Controlled Substances Act).

Section 12

Amends GS 106-121, adding the term cannabinoid related compounds, applicable to Article 12, Food, Drugs and Cosmetics. Modifies the proposed changes to GS 106-139, now directing the Board of Agriculture to adopt rules to establish current good manufacturing practices in manufacturing, packaging, labeling, or holding operations cannabinoid-related compounds derived from hemp (was, compounds related to industrial hemp), and prohibits engaging in manufacturing, packaging, labeling, processing, holding or selling of cannabinoid-related compounds without a valid license (previously did not include selling). Now directs the Board of Agriculture to develop a schedule of license fees to be used to cover costs of administering the licensing program. Eliminates the proposed provision which excluded retail establishments, wholesalers, and warehousing operations that do not engage in the manufacturing, packaging, or labeling of cannabinoid related compounds from licensure requirements. Makes the changes effective January 1, 2020 (was, effective on the date that the Commission adopts and submits the specified resolution to the Governor and to the Revisor of Statutes) and sunsets the provisions on July 1, 2021. Makes similar changes to the proposed changes to GS 106-139 to allow the Board of Agriculture to adopt rules to establish current good manufacturing practices in manufacturing, packaging, labeling, holding, or selling cannabinoid-related compounds derived from hemp, now effective July 1, 2021 (was, the date the Industrial Hemp Commission adopts and submits the resolution). Directs the Board of Agriculture to adopt temporary rules to implement Section 12 by November 1, 2019. 

Section 13

Further amends GS 106-550 to make technical changes. Maintains proposed GS 106-554.1 regarding applications for hemp referendums, now providing for the statute to expire July 1, 2021. Provides that the changes to GS 106-550 and proposed GS 106-554.1 are effective when the act becomes law (was, the date that the NC Industrial Hemp Commission adopts and submits to the Governor and Revisor a resolution that a State industrial hemp pilot program is no longer necessary because federal legislation has been enacted and taken effect that removes industrial hemp from the federal Controlled Substances Act).

Section 14

Amends GS 106-568.56, as amended, adding to the civil penalties provisions. Authorizes a civil penalty not exceeding $2,500 per violation against any person who knowingly or intentionally manufactures, delivers, sells, or possesses smokable hemp, except for hemp plants or parts of a hemp plant grown or handled by a licensee for processing or manufacturing into a legal hemp product. Amends GS 106-568.57, as amended, making it a Class 1 misdemeanor to knowingly or intentionally manufacture, deliver, sell, or possess smokable hemp, except for hemp plants or parts of a hemp plant grown or handled by a licensee for processing or manufacturing into a legal hemp product. Applies to offenses occurring on or after December 1, 2020.

Requires the Department, the NC Industrial Hemp Association, the Commission, the State Bureau of Investigation, and other law enforcement agencies and district attorneys at the request of the SBI, to meet at least quarterly to discuss best practices for the hemp industry. Directs the Department to report any findings and recommendations from the meetings to the specified Commission within 30 days.

Requires the State Bureau of Investigation to notify the Agriculture and Forestry Awareness Study Commission when the US Drug Enforcement Agency has adopted an approved immediate testing method to determine whether hemp is within the federally defined THC level for hemp, at which time the Commission must conduct a study on whether the prohibition on the sale of smokable hemp should be repealed.

Sections 15 and 16

Maintains proposed GS 62-193, concerning disposition of certain unused easements, and GS 20-150(e1), concerning right-of-way for farm equipment turning left.

Section 17

Modifies the proposed changes to GS 136-129 concerning outdoor advertising devices, to exempt specified outdoor advertising promoting a bona fide farm from the prohibition on outdoor advertising within 660 feet of the right-of-way of the interstate or primary highway system, so long as the outdoor advertising promotes a bona fide farm that is exempt from specified zoning regulations and the sign is more than three feet long on any side and it is located on any bona fide farm property owned or leased by the owner or lessee of the bona fide farm (previously did not specify that the sign must be located on a property owned or leased by the owner or lessee of the bona fide farm; instead required the sign to be located on the bona fide farm property).

Sections 18 and 19

Maintains the proposed changes to GS 120-150, concerning the Agriculture and Forestry Awareness Study Commission, and the directives regarding the implementation of the odorous emissions rule by the Environmental Review Commission. 

Section 20

Modifies the proposed changes to GS 99E-30 and GS 153A-340 to additionally include equestrian activities in the definition of agritourism activity, and to no longer explicitly exclude hunting or shooting sporting involving semiautomatic centerfire rifles from the definition of agritourism acitivity. Instead, amends GS 99E-30 and GS 153A-340 to require properties used for shooting sports to comply with guidelines for design and site evaluation as established by the Wildlife Resources Commission. Further amends GS 153A-340 to require a vote of the full board of county commissioners to determine whether a property used for shooting sports is in compliance with the Wildlife Resource Commission's guidelines. Makes technical changes.

Enacts GS 153A-145.8 (concerning counties) and GS 160A-203.2 (concerning cities) to prohibit counties and cities from requiring catering permits for businesses located on property used for bona fide farm purposes that provide catering services on- and off-site from the property. Clarifies that the statutes do not exempt the businesses from any health and safety rules adopted by the local health department, the Department of Health and Human Services, or the Commission of Public Health.

Section 21

Modifies proposed Article 87 of GS Chapter 106, now titling the Article as the NC Sweetpotato Act (was, the NC Sweet Potato Act of 2019), and making conforming changes throughout to refer to sweetpotatoes instead of sweet potatoes. Makes further technical changes. Now requires the Commissioner to remit all royalties and license fees under the Article to the NC SweetPotato Commission for the promotion of North Carolina sweetpotatoes, less any costs for regulating trademarks (previously, the Commissioner was to keep all royalties and fees for the promotion of the crop as well as to cover the costs for trademark regulation). No longer specifically refers to the US Standards for Grades of Sweetpotatoes effective April 21, 2005; instead adopts the most recently adopted US Standards for Grades by reference. Adds a new requirement for membership of the NC Sweetpotato Advisory Council to include at least one sweetpotato processor and at least one sweetpotato retailer. Makes further technical changes.

Section 22

Maintains the proposed changes to GS 89C-25, GS 139-3, and GS 139-4, concerning the program for granting job approval authority to the Soil and Water Conservation District staff and employees of the Division of Soil and Water Conservation. Makes technical changes to the proposed changes to GS 89C-25 and GS 139-4.

Section 23

Maintains the proposed changes to GS 105-277.4, regarding present use value of agricultural, horticultural, and forestland.

Section 24

Amends Section 10.24(a) of SL 2017-57, renaming the Food Processing Innovation Center Committee as the NC Food Innovation Lab Committee.

Section 25

Enacts GS 139-8.2, requiring information collected by soil and water conservation districts from farm owners, animal owners, agricultural producers, or owners of agricultural land that is confidential under federal or state law to be held confidential by the soil and water conservation districts. Specifically includes information provided by an agricultural producer or owner of agricultural land concerning the agricultural operation, farming, or conservation practices, or the land itself, in order to participate in soil water conservation programs and geospatial information otherwise maintained by the district about agricultural lands or operations for which information described as confidential is provided. Excludes applications for cost share assistance and associated contract documents that require the approval of the soil and water conservation district or the Soil and Water Conservation Commission. Effective October 1, 2019.

Section 26

Enacts Article 9, Right to Repair Act, to GS Chapter 75. Sets forth 12 defined terms. Requires original farm equipment manufacturers (manufacturers) of farm equipment sold or used in North Carolina to make diagnostic and repair information available to independent repair facilities, as defined, or owners of the manufacturer's products, free of charge and in the same manner the manufacturer makes them available to its authorized repair providers. Defines farm equipment to mean equipment that is used or intended for use in a farm operation, including any combine, tractor, implement, engine, motor, or attachment; excludes motor vehicles. Requires those manufacturers to make farm equipment parts available for purchase by the owner, owner’s agent, or any independent repair provider on fair and reasonable terms. Prohibits manufacturers that sell information to independent repair providers or owners in a standardized format, on conditions more favorable than those under which an authorized repair provider obtains the same information, from requiring the authorized repair provider to continue to purchase that information in a proprietary format, unless the proprietary format includes documentation or functionality not available in the standardized format. Requires manufacturers to make diagnostic repair tools available for purchase by owners and independent repair providers available to any authorized repair providers. Manufacturers that provide repair information to aftermarket service information publications and systems have fully satisfied their obligations under this statute. Requires farm equipment manufactured and sold or used for security-related functions to include necessary documentation to reset a security-related electronic function from information provided to owners and independent repair facilities, and authorizes provision of the information through an appropriate secure data release system. 

Does not require divulging of trade secrets. Does not affect agreements between authorized repair providers and manufacturers. Grants authorized repair providers all rights under this statute, except in the case of a dispute under an existing agreement. Does not require manufacturers or authorized repair providers to provide an owner or independent repair provider with nondiagnostic and nonrepair information provided to an authorized repair provider by the manufacturer pursuant to an agreement or contract.

Places enforcement authority with the Attorney General and authorizes civil penalties of up to $500 per violation of the Article. Also establishes a claim for an owner or independent repair provider to recover from a manufacturer up to $500 per violation.

Effective October 1, 2019.

Section 27

Amends GS 143-215.10I, concerning swine farm modifications, to condition modification of an animal waste management system permit upon the permitting action not resulting in an increase in the permitted capacity of the swine farm, as measured by the annual steady state live weight capacity of the farm. Makes further organizational and clarifying changes. 

Section 28

Amends GS 143-215.71 and GS 143B-135-238 (appears to intend GS 143B-135.238) to specify that projects cannot receive grant funding from both the Environmental Quality Incentives Program and the Clean Water Management Trust Fund.

Directs the Department of Environmental Quality (DEQ) and the Department of Natural and Cultural Resources to jointly report to the specified NCGA committee by September 30, 2019, regarding funding overlaps between water resources development grant funding and Clean Water Management Trust Fund grants for the Western Stream Initiative (Initiative) and the efforts of the Departments to improve administration of grants for the Environmental Quality Incentives Program.

Section 29

Directs DEQ to develop performance management procedures for projects funded as part of the Initiative, including the collection and reporting of 10 specified measures for all projects receiving grant funding. Requires the Department of Natural and Cultural Resources to provide DEQ with the specified measures relevant to funding for the Initiative provided by the Clean Water Management Trust Fund. 

Amends GS 143-215.72, establishing an annual reporting requirement for DEQ regarding grants for projects funded through the Initiative (defined as the portion of the federal Environmental Quality Incentives Program funding provided to the Western Stream Initiative for certain counties). Requires the report to be submitted to the specified NCGA committee and division by November 1, and requires the report to include measures of grant administration and grant implementation efficiency and effectiveness.

Section 30

Directs the Office of the State Auditor to audit all State funds ever paid to the Resources Institute for the Initiative through the Clean Water Management Trust Fund and Water Resources Development Grants for the Environmental Quality Incentives Program no later than June 1, 2020. Directs the Director and Board of Trustees of the Clean Water Management Trust Fund and DEQ to seek recoupment of any identified overpayment of State funds based on the audit’s findings.

Section 31

Maintains the act’s severability clause and effective date provision. 

Intro. by B. Jackson, Sanderson, Johnson.STUDY, GS 20, GS 62, GS 75, GS 89C, GS 90, GS 99E, GS 105, GS 106, GS 120, GS 136, GS 139, GS 143, GS 153A, GS 160A
S 315 (2019-2020) NORTH CAROLINA FARM ACT OF 2019. Filed Mar 20 2019, AN ACT TO MAKE VARIOUS CHANGES TO THE AGRICULTURAL LAWS OF THE STATE.
Summary date: Mar 20 2019

Enacts new Article 50F, North Carolina Hemp Commission, in GS Chapter 106, providing as follows. Includes the NCGA’s findings related to hemp. Defines hemp as the plant Cannabis sativa (L.) and any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing or not, within the federally defined THC level for hemp. Defines hemp extract as an extract from hemp, or a mixture or preparation containing hemp plant material or compounds. Defines hemp product as any product within the federally defined THC level for hemp derived from, or made by, processing hemp plants or plant parts, that are prepared in a form available for commercial sale, including, but not limited to, cosmetics, personal care products, food intended for animal or human consumption, cloth, cordage, fiber, fuel, paint, paper, particleboard, plastics, and any product containing one or more hemp-derived cannabinoids, such as cannabidiol.

Establishes the nine-member North Carolina Hemp Commission (Commission). Provides that members, appointed by the Commissioner of Agriculture (Commissioner), NCGA, and Governor, serve four-year terms with initial terms effective July 1, 2019, with staggered membership terminating on specified dates. Establishes the Commission’s duties, including issuing licenses allowing a person, firm, or corporation to cultivate or handle hemp. Allows the Commission to adopt temporary rules to implement the act for 180 days after effective date.

Prohibits a person from cultivating or handling hemp in this state without a hemp license issued by the Commission. Limits individuals who are able to obtain a license to cultivate hemp to those who are qualifying farmers or a conditional qualifying farmer.  Makes any person convicted of a felony related to a controlled substance ineligible to obtain any hemp license for 10 years following conviction. Any person who materially falsifies license application information is ineligible to obtain a license.

Requires licensees to furnish the Commissioner with a bond in the amount of no less than $25,000. Allows a new bond or increased bond amount if the Commissioner finds it necessary for the cultivator’s protection.

Requires any person who is required to obtain a hemp license issued to comply with a corrective action plan if the Commission determines that the person has negligently violated any provision of this Article or any rule adopted by the Commission. Requires the corrective action plan to include at least the date by which the violation will be corrected and a requirement that the person will periodically report on the person's compliance for at least the next two calendar years. Sets the penalty for a negligent violation of any provision of this Article or any rule adopted by the Commission as compliance with a corrective action plan; negligent violations of this Article or any rule adopted by the Commission three times in a five-year period makes the individual ineligible to obtain a hemp license for five years beginning on the date of the third violation and the individual is subject to criminal and civil penalties for additional violations during that period.

Allows civil penalties of no more than $2,500 per violation against any person who: (1) violates any provision of this Article or a rule adopted by the Commission, or conditions of any license, permit, or order issued by the Commission; (2) manufactures, distributes, dispenses, delivers, purchases, aids, abets, attempts, or conspires to manufacture, distribute, dispense, deliver, purchase, or possesses with the intent to manufacture, distribute, dispense, deliver, or purchase marijuana on property used for hemp production, or in a manner intended to disguise the marijuana due to its proximity to hemp; (3) provides the Commission with false or misleading information in relation to a license application or renewal, inspection, or investigation authorized by this Article; or (4) tampers with or adulterates a hemp crop lawfully planted.

Makes it a Class I felony to willfully, knowingly, or intentionally manufacture, distribute, dispense, deliver, purchase, aid, abet, attempt, or conspire to manufacture, distribute, dispense, deliver, purchase, or possess with the intent to manufacture, distribute, dispense, deliver, or purchase marijuana on property used for hemp production, or in a manner intended to disguise the marijuana due to its proximity to hemp. Makes it a Class 1 misdemeanor to (1) willfully, knowingly, or intentionally provide the Commission with false or misleading information or (2) willfully, knowingly, or intentionally tamper with or adulterate a hemp crop lawfully planted.

Exempts from licensing possessing, handling, transport, or selling hemp products or hemp extracts. Allows hemp products to be transported to other states and exported to foreign nations.

Establishes the North Carolina Hemp Program Fund (Fund) in the Department of Agriculture and Consumer Services (DACS), consisting of amounts received from appropriations and any other proceeds from gifts, grants, federal funds, application fees, license fees, and any other funds made available for purposes of this Article. Limits the Fund’s use to the costs of personnel, program administration, testing, and any other costs incurred in administering this Article, including promotion, marketing, and branding of North Carolina grown and processed hemp.

Amends GS 106-139 by adding the following provisions. Allows the Board of Agriculture to adopt rules to establish current good manufacturing practices in manufacturing, packaging, labeling, or holding operations for cannabinoid-related compounds derived from industrial hemp. Prohibits the manufacture, sale, delivery, holding, or offering for sale of any cannabinoid-related compounds that does not comply with the Board’s rules. Prohibits engaging in manufacturing, packaging, labeling, processing, or holding of cannabinoid-related compounds without a valid license. Exempts retail establishments, wholesalers, and warehousing operations that do not engage in the manufacturing, packaging, or labeling of cannabinoid-related compounds. Specifies information that is to be included on the license application. Makes failure to comply with Article 12 (Food, Drugs and Cosmetics) or related regulations cause for license suspension or revocation.

The above provisions are effective on the date that the Commission adopts and submits to the Governor and to the Revisor of Statutes a resolution that a State pilot program allowing farmers to lawfully grow industrial hemp is no longer necessary because (1) the United States Congress has enacted legislation that removes industrial hemp from the federal Controlled Substances Act and (2) the legislation has taken effect.

Effective on the date that the Commission adopts and submits the resolution to the Governor and to the Revisor of Statutes, amends GS 106-139 again to allow the Board of Agriculture to adopt rules to establish current good manufacturing practices in manufacturing, packaging, labeling, or holding operations for cannabinoid-related compounds derived from hemp (was, industrial hemp).

Amends GS 90-87 to exclude from the definition of marijuana hemp, hemp products, or hemp extracts (was, excluded industrial hemp only). Amends GS 90-95 to provide that any person who manufactures, sells or delivers, or possesses with intent to manufacture, sell, or deliver a controlled substance classified in Schedule VI is to be punished by being required to comply with a corrective action plan for a first or second offense so long as the person has a valid hemp license and they did not willfully, knowingly, or intentionally cause the controlled substance to exceed the specified concentration. Sets out the same punishment for any person with a valid hemp license who possesses a controlled substance classified in Schedule VI. Effective on the date that the Commission adopts and submits to the Governor and to the Revisor of Statutes a resolution that a State pilot program allowing farmers to lawfully grow industrial hemp is no longer necessary because (1) the United States Congress has enacted legislation that removes industrial hemp from the federal Controlled Substances Act and (2) the legislation has taken effect.

Requires within six months of the adoption of rules by the US Department of Agriculture pursuant to Section 297D of the Agriculture Marketing Act of 1946, as amended by the Agriculture Improvement Act of 2018, that the Commissioner (in consultation with the Governor and Attorney General) submit to the Secretary of the US Department of Agriculture a State plan for the regulation of hemp production. Sets out four elements that must be included in the plan including a procedure to maintain information regarding land on which hemp is produced in the state, and a procedure for the disposal of products that are produced in violation of new Article 50F or any rule adopted by the Commission. Requires an amended plan be submitted if the initial plan is disapproved. Effective when the act becomes law.

Amends GS 106-550 to declare it in the interests of the public welfare that the state’s farmers who produce hemp (along with producers of other specified crops) be permitted and encouraged to act in cooperation with growers, handlers, dealers, and processors in promoting and stimulating the increased production, use, and sale of such agricultural commodities. Enacts new GS 106-554.1 making the Commission the entity that provides certification and approval for the purpose of conducting a referendum among hemp growers or producers. Requires the Commission to perform the same function as the Board of Agriculture in all other respects for cultivators of hemp.  Effective on the date that the Commission adopts and submits to the Governor and to the Revisor of Statutes a resolution that a State pilot program allowing farmers to lawfully grow industrial hemp is no longer necessary because (1) the United States Congress has enacted legislation that removes industrial hemp from the federal Controlled Substances Act and (2) the legislation has taken effect.

Amends SL 2015-299, Section 4, to change the expiration of the act (establishing Article 50E, which regulates industrial hemp) until the date that the North Carolina Industrial Hemp Commission adopts and submits to the Governor and Revisor a resolution that a State pilot program allowing farmers to lawfully grow industrial hemp is no longer necessary because (1) the United States Congress has enacted legislation that removes industrial hemp from the federal Controlled Substances Act and (2) the legislation has taken effect (was, expired on June 30 of the fiscal year in which such a resolution was adopted).

Enacts GS 62-193, allowing the underlying fee owner of land encumbered by any easement acquired by a utility company to file a complaint with the Utilities Commission for an order requiring the utility company to terminate the easement, in exchange for payment of its fair market value, when construction has not been commenced by the utility company for the purpose for which the easement was acquired within 20 years of the date of acquisition (whether acquired by purchase or condemnation). Provides for service and response of the complaint, including disagreement with termination by the utility company, in which case the Commission must determine (1) whether the easement is necessary or advisable for the utility company’s long-range needs for the provisions of services to its service area or (2) whether the termination of the easement would be contrary to the using and consuming public’s interest. Permits a hearing on the matter, and provides an appeals process for an appeal of the Commission’s decision by either party. Places the burden of proof on the utility company. Provides a process for instances when the underlying fee owner and the utility company cannot reach a mutually agreed upon fair market value of the easement. Prohibits the underlying fee owner from filing a second complaint with the Commission regarding the same easement for a period of five years if the Commission decides that the easement should not be terminated. Defines utility company. Effective October 1, 2019.

Amends GS 20-150 to prohibit drivers from overtaking and passing self-propelled farm equipment proceeding in the same direction that is making a left turn or signaling an intent to do so. Applies to offenses committed on or after December 1, 2019.

Amends GS 136-129 to exempt specified outdoor advertising promoting a bona fide farm from the prohibition on outdoor advertising within 660 feet of the right-of-way of the interstate or primary highway system.  In order to be exempt, the outdoor advertising must promote a bona fide farm that is exempt from specified zoning regulations if the sign is more than three feet long on any side and it is located on the bona fide farm property (this replaces the exemption that applied to advertisements for the sale of any fruit or vegetable crop by the grower at a roadside stand or by having the purchaser pick the crop on the property if the sign met specified requirements). 

Amends GS 120-150 by adding that the cochairs of the Agriculture and Forestry Awareness Study Commission serve two-year terms that begin on the convening of the NCGA in each odd-numbered year. Sets out provisions governing lack of successor, completion of service when not seeking reelection, and resignation.

Requires that the Environmental Management Commission classify facilities storing products that are (1) grown, produced or generated on one or more agricultural operations and (2) that are renewable energy resources, as agricultural operations that are exempt from the requirements of 15A NCAC 02D .1806 (control and prohibition of odorous emissions). Requires adoption rules to amend 15A NCAC 02D .1806 consistent with this provision.

Amends the definition of agritourism activity as it applies to Article 4, Argitourism Activity Liability of GS Chapter 99E, so that it also includes any activity carried out on a farm or ranch that allows members of the general public to view or enjoy hunting, fishing, and shooting sports (but excludes hunting or shooting sports involving semiautomatic centerfire rifles). Amends GS 153A-340(b)(2a) concerning the qualifications for a building or structure that is used for agritourism to meet a bona fide farm purpose by amending the definition of agritourism in the same manner as above.

Enacts new Article 87, North Carolina Sweet Potato Act of 2019, in GS Chapter 87. Specifies that only sweet potatoes grown in the state may be designated for sale inside or outside of the state as North Carolina sweet potatoes. Allows the Commissioner of Agriculture (Commissioner) to create, register, license, promote, and protect a trademark for use on or in connection with the sale or promotion of North Carolina sweet potatoes and products containing North Carolina sweet potatoes. Allows collection of a reasonable royalty or license fee, to be determined by the Commissioner in consultation with representatives of the sweet potato industry and the Marketing Division of the Department of Agriculture and Consumer Services. Requires that funds from the royalties and license fees be used to promote North Carolina sweet potatoes and to pay costs associated with monitoring the use of the trademark, prohibiting the unlawful or unauthorized use of the trademark, and enforcing rights in the trademark. Allows the Board of Agriculture to adopt rules on quality standards, grades, packing, handling, labeling, and marketing practices for the marketing of sweet potatoes in this state, and other rules necessary to administer this Article. Also allows the adoption of rules establishing a registration, inspection, and verification program for the production and marketing of North Carolina sweet potatoes in the state. Requires all North Carolina sweet potatoes sold to conform to the prescribed standards and grades and be labeled. Provides for inspections by the Commissioner and the Commissioner's agents. Adopts as the standards for grades in this state the specified standard for grades adopted by the US Department of Agriculture, Agricultural Marketing Service. Requires the Commissioner to appoint a North Carolina Sweet Potato Advisory Council to render advice regarding the Commissioner's authority to regulate and promote sweet potatoes.

Amends GS 89C-25 by providing that GS Chapter 89C (Engineering and Land Surveying) does not prevent practice by employees of the DACS Division of Soil and Water Conservation who have engineering job approval authority issued by the Natural Resources Conservation Service or the Soil and Water Conservation Commission that involves the planning, designing, or implementation of best management practices on agricultural lands, or for the planning, designing, or implementation of best management practices approved for cost-share funding pursuant to the specified programs. Amends GS 139-3 by defining the term job approval authority. Amends GS 139-4 by adding to the Soil and Water Conservation Commission’s duties developing and implementing a program for granting job approval authority to Soil and Water Conservation District staff and employees of the Division of Soil and Water Conservation to plan, design, and certify the installation of best management practices approved for cost-share funding pursuant to specified programs.

Amends GS 105-277.4 by adding that if an assessor determines that property loses its eligibility for present-use value classification, the assessor must give written notice to the owner, including specified information; requires the notice to be separate from the regular yearly tax notice or bill. Requires that an appeal of the assessor’s determination be made within 60 days after date of the written notice. Adds that while an assessor’s decision of lost eligibility is under appeal, if the assessor determines that the property is no longer eligible because of an additional disqualifying event independent of the one that is the basis of the disqualification under appeal, the assessor must follow the same notice and appeal procedure for the subsequent disqualification. If notice is not given for the subsequent disqualification, reinstatement of the property is deemed effective for any assessments occurring from the date of the assessor’s decision under appeal to the date of the final decision of the county board or Property Tax Commission to reinstate the property. Effective for taxes imposed for taxable years beginning on or after July 1, 2019.

Includes a severability clause.

Intro. by B. Jackson, Sanderson, Johnson.GS 20, GS 62, GS 89C, GS 90, GS 99E, GS 105, GS 106, GS 120, GS 136, GS 139
S 500 (2019-2020) MODIFY ADVANCED MATH COURSE ENROLLMENT. Filed Apr 2 2019, AN ACT TO MAKE CERTAIN MODIFICATIONS TO THE IMPLEMENTATION OF ADVANCED MATH COURSES OFFERED WHEN PRACTICABLE FOR GRADES SIX AND HIGHER.
Summary date: Jun 12 2019

House amendment to the 4th edition makes the following changes.

Amends GS 115C-81.36(b) to reinstate the requirement that a seventh grade student be enrolled in a high school level mathematics course in eighth grade if scoring the specified level on the end-of-grade test and changes that level from a level five to the highest level on the seventh grade mathematics end-of grade test. Makes conforming changes. Amends the Department of Public Instruction's annual reporting requirement to specify that the report must include data collected for the current school year on the number and demographics of students who were eligible for advanced mathematics courses under the statute (previously did not include reference to the statute) and adds that this includes high school level mathematics courses in eighth grade. Makes additional clarifying changes. 

Adds that schools that did not offer Math I to eighth graders during the 2018-19 school year are not required to offer Math I to eighth graders for the 2019-20 school year. Requires that local boards of education with schools that meet this exemption for 2019-20 to develop a plan to implement GS 115C-81.36(b) beginning with the 2020-21 school year. Requires the plan to be submitted by January 15, 2020 (previously required each local board of education to develop a plan to implement GS 115C-81.36(b) by that date). Amends what is be included in the plan to no longer require a list of each advanced mathematics course offered in grades six and higher in each school, and limits the other requirements to eight grade Math I courses.

Deletes the provision providing that local board of education are not required to comply with GS 115C-81.36(b) for the 2019-20 school year. 

Intro. by Smith, Tillman, Chaudhuri.GS 115C
S 500 (2019-2020) MODIFY ADVANCED MATH COURSE ENROLLMENT. Filed Apr 2 2019, AN ACT TO MAKE CERTAIN MODIFICATIONS TO THE IMPLEMENTATION OF ADVANCED MATH COURSES OFFERED WHEN PRACTICABLE FOR GRADES SIX AND HIGHER.
Summary date: Jun 5 2019

House committee substitute to the 3rd edition makes the following changes.

Further amends GS 115C-81.36 to no longer require students in seventh grade scoring at the highest level on the seventh grade math end-of-grade test to enroll in a high school level math course in eighth grade. Removes the proposed provision which allowed local boards of education to administer diagnostic assessments upon enrollment in the high school math course to provide supplemental content enrichment. Changes the initial reporting requirement of the Department of Public Instruction from December 15, 2019, to December 15, 2020, and specifies that the annual report must contain data collected for the current school year on students eligible for advanced math courses and whether or not they were placed in the courses (previously, did not specify the year the data is to reflect).

Adds a new requirement for local boards to develop a plan to implement the provisions of GS 115C-81.36(b), as amended, concerning advanced math placement in grades six and higher, to be submitted to the Superintendent of Public Instruction (Superintendent) by January 15, 2020. Details information that must be included in the plans, including a list of each advanced math course offered, an explanation of advanced math course staffing, and an estimate of the expected enrollment increase in the courses for the 2020-21 school year, as specified. Requires the Superintendent to compile the plans submitted into a summary report to be submitted to the specified NCGA committee by March 15, 2020. 

Specifies that local boards are not required to comply with GS 115C-81.36(b), as amended, for the 2019-20 school year.

Makes conforming changes. Changes the act's long title.

Intro. by Smith, Tillman, Chaudhuri.GS 115C
S 500 (2019-2020) MODIFY ADVANCED MATH COURSE ENROLLMENT. Filed Apr 2 2019, AN ACT TO MAKE CERTAIN MODIFICATIONS TO THE IMPLEMENTATION OF ADVANCED MATH COURSES OFFERED WHEN PRACTICABLE FOR GRADES SIX AND HIGHER.
Summary date: May 7 2019

Senate amendment #1 makes the following changes to the 2nd edition.

Further amends GS 115C-81.36, requiring local boards of education to offer advanced learning opportunities in math in grades three through five and advanced courses in math in grades six and higher (previously provided no distinction, requiring local boards to offer advanced math courses in grades three and higher). Defines advanced learning opportunities to mean services and curricular modifications in math for academically or intellectually gifted students approved as part of the local plan pursuant to specified state law. Requires any student scoring at the highest level on the end-of-grade test in grades three through five where advanced learning opportunities are offered to be provided advanced learning opportunities in math approved for the student's grade level for the next school year. Requires written, informed parental consent for a qualifying student to be excluded or removed from the advanced learning opportunity. Makes conforming changes. Changes the initial reporting requirement of the Department of Public Instruction from October 15 to December 15, 2019.

Intro. by Smith, Tillman, Chaudhuri.GS 115C
S 500 (2019-2020) MODIFY ADVANCED MATH COURSE ENROLLMENT. Filed Apr 2 2019, AN ACT TO MAKE CERTAIN MODIFICATIONS TO THE IMPLEMENTATION OF ADVANCED MATH COURSES OFFERED WHEN PRACTICABLE FOR GRADES SIX AND HIGHER.
Summary date: May 1 2019

Senate committee substitute makes the following changes to the 1st edition. 

Amends GS 115C-81.36 by removing the addition of charter schools to those who can to offer advanced courses in math in grades three and higher when practicable. Makes conforming deletions.

Intro. by Smith, Tillman, Chaudhuri.GS 115C
S 500 (2019-2020) MODIFY ADVANCED MATH COURSE ENROLLMENT. Filed Apr 2 2019, AN ACT TO MAKE CERTAIN MODIFICATIONS TO THE IMPLEMENTATION OF ADVANCED MATH COURSES OFFERED WHEN PRACTICABLE FOR GRADES SIX AND HIGHER.
Summary date: Apr 2 2019

Amends GS 115C-81.36, concerning advanced courses in mathematics, as follows. Requires charter schools, in addition to the already listed local boards of education, to offer advanced courses in math in grades three and higher when practicable. Requires, when advanced math courses are offered, any student scoring at the highest level (was, scoring a level five) on the end-of-grade or end-of grade test for math to be enrolled in the advanced course for the next math course in which the student is enrolled; makes the same changes for seventh grade students whose next level course will be at a high school level. Allows local boards of education to administer diagnostic assessments upon enrollment in the high school level math course to provide identified students with supplemental content enrichment. 

Requires the Department of Public Instruction (DPI) to report annually, beginning October 15, 2019, to the specified NCGA committee on data collected on students eligible for advanced math courses and information as to how many were and were not placed in advanced math courses. Specifies information to be included in the report.

Requires DPI to provide guidance to local boards of education and charter schools on how to best develop programming and courses to ensure that all impacted students receive rigorous, academically appropriate instruction in mathematics.

Makes conforming changes to GS 115C-218.85.

Applies beginning with the 2019-20 school year. 

Intro. by Smith, Tillman, Chaudhuri.GS 115C
S 523 (2019-2020) REV. LAWS CLARIFYING & ADMINISTRATIVE CHANGES. Filed Apr 2 2019, AN ACT TO MAKE VARIOUS CLARIFYING AND ADMINISTRATIVE CHANGES TO THE REVENUE LAWS.
Summary date: Jun 13 2019

Senate committee substitute to the 1st edition makes the following changes.

Part III. Sales and Use Tax Changes

Eliminates the proposed changes to the terms capital improvement and lease or rental as defined in GS 105-164.3, which modified the scope of the terms to include improvement or transfer of certain digital property.

Amends the proposed changes to GS 105-164.6 regarding complementary use tax to impose the complementary use tax on certain digital property purchased (was, purchased, leased, or rented) inside or outside the state for storage, use, or consumption in the state so long as the property is subject to tax under GS 105-164.4 (providing for the privilege tax imposed on retailers).

Further amends GS 105-164.13 to exempt from sales and use tax sales of items to the NC Life and Health Insurance Guaranty Association.

Makes the following modifications to the proposed changes to GS 105-164.4 (Tax imposed on retailers and certain facilitators). Specifies that the combined general tax rate on retailers applies to the gross receipts derived from providing telecommunications service and ancillary service or video programming to a subscriber in the state, and sales of electricity and piped natural gas, including any separately stated charges billed to a customer for repair, maintenance, and installation services or a contribution in aid of construction (previously, specified for the installation of utilities only).

Modifies the proposed changes to GS 105-164.3 to further amend the definition of capital improvement to include the installation of a transmission, distribution, or other network asset on land owned by a service provider or on a right-of-way or easement in favor of a service provider (previously, included installation of utilities on utility-owned land, a utility right-of-way, or a utility easement), no matter that any separately stated charges billed to a customer for repair, maintenance, and installation services or a contribution in aid of construction are included in the gross receipts derived from services subject to the combined general tax rate under GS 105-164.4 (previously, provided for the inclusion notwithstanding that a utility could recover a portion of the cost of the installation as a contribution in aid of construction and that those charged are included in the gross receipts derived from services subject to the combined general tax rate). Defines services provider and lists the provision of services applicable under the provision to include telecommunications service or ancillary service, video programming, and electricity or piped natural gas, or water or sewer service. Further amends GS 105-164.13 to make conforming changes to include in the sales and use tax exemption services performed on a transmission, distribution, or other network asset on land owned by a service provider or on a right-of-way or an easement in favor of a service provider. Maintains the proposed change that the exemption does not apply to charges included in the gross receipts derived from services subject to the combined general rate under GS 105-164.4, more specifically referring to charges billed to a customer for repair, maintenance, and installation services or a contribution in aid of construction. Adds statutory cross-references to define service provider and governmental entity

Amends the proposed definition of property management contract in GS 105-164.3 to eliminate the specifications regarding the contract amount. Additionally, amends the proposed term property management services, now more specifically termed as real property management services, and modifying the definition to include providing repair, maintenance, and installation services to comply with obligations of a homeowners’ association or a landlord under a lease, rental, or management agreement (no longer requiring the direct provision of these services, and no longer including the provision of these services for compliance with facility-related needs of the real property’s occupants). Also provides that real property management services includes incurring and paying expenses for the management, repair, and maintenance of the real property (was, incurring and paying expenses derived from the operation of the real property). Terms "property manager" as "real property manager." Makes further conforming changes. 

Amends proposed GS 105-164.4K concerning the taxability of services under a real property management contract. Makes conforming terminology changes to refer to real property managers and real property management services. Eliminates the provision exempting property management services provided by a property manager under a property management contract from sales and use tax other than as provided in the statute. Subjects services to sales and use tax when more than 25% of the time spent managing the real property for a billing or invoice period is attributable to taxable repair, maintenance, and installation services and not otherwise excluded under the statute (previously, when more than 25% of the specified contract amount payable during the period of the contract or per year for the taxable services). Clarifies that under this circumstance, the tax applies to the sales price of or the gross receipts derived from the taxable services portion of the property management contract. More specifically requires the real property manager to determine an allocated sales price for the services portion of the contract based on a reasonable allocation of revenue supported by the person’s business records kept in the ordinary course of business. Clarifies that the charges for the services must be separately stated on the invoice given to the customer at the time of sale. Adds tax exemptions for the real property manager’s troubleshooting, inspecting, and monitoring of the real property pursuant to the real property management contract, as specified. Adds requiring substantiation for tax exemption for the services. Adds a grace period, prohibiting the Department of Revenue from taking action to access any tax due for a filing period beginning on or after January 1, 2019, through January 1, 2021, if the retailer did not assess tax on the specified taxable services. Makes the grace period inapplicable to retailers who received specific written advices from the Secretary of Revenue for the transactions at issue for the applicable period. Makes further clarifying, conforming, and technical changes. 

Amends GS 105-237.1 to allow the Secretary of Revenue to compromise a taxpayer’s liability when the Secretary determines it is in the best interest of the State and finds the assessment is for sales tax the taxpayer failed to collect for or use tax the taxpayer failed to pay on specified services provided by a real property manager under a property management contract. Requires the Secretary to determine the taxpayer made a good-faith effort to comply with the law, which is presumed if the taxpayer substantiated the time spent managing real property for the specified period, absent fraud or other egregious activities. 

Amends GS 105-164.13(11) to exclude from the sales and use tax exemption for specified motor fuel, motor fuel eligible for a monthly refund under GS 105-449.105A.

Further amends GS 105-164.13 to exempt from sales and use tax limited-service vehicle washes in addition to self-service car washes and vacuums. Defines limited-service vehicle washes to include the cleaning of a vehicle by mechanical means where the only activities performed by an employee include receipt of payment, guiding the vehicle, applying low-pressure spray of chemicals, or placing protective tape or covers on the vehicle; excludes activities whereby the employee physically touches the vehicle for cleaning or restoring purposes, enters or cleans the vehicle’s interior, or any other activity. Defines self-service vehicle washes and vacuums to exclude any employee-performed activity. Applies to sales made on or after October 1, 2019.

Amends proposed GS 105-113.4F concerning delivery sales of certain tobacco products. Eliminates the provisions concerning delivery service requirements, including requiring that the delivery seller must obtain the signature and proof of age of the person accepting the delivery. 

Eliminates the proposed changes to GS 105-449.81, which made changes to include in the motor fuel rate tax fuel alcohol. 

Eliminates the proposed changes to GS 105-449.105A to remove kerosene sales for the purpose of heating from those distributors who can obtain a monthly refund.

Amends GS 105-113.29 to make it illegal to maintain a place of business required to be licensed to be engaged in the business of selling, offering for sale, or possessing with the intent to sell (was, selling or offering for sale only) cigarettes or other tobacco products without obtaining the licenses first. Effective December 1, 2020.

Changes the effective date of the changes to GS 105-243.1 from when the act becomes law to January 1, 2020.

Amends GS 105-241.22, allowing the Department of Revenue to collect tax when a petition for a contested case at the Office of Administrative hearings is dismissed and the period for timely filing a petition has expired (was, when the Office dismisses a petition only for lack of jurisdiction due to the constitutionality of a statute, and not the application of a statute).

Adds new Part VII. Other Changes

Amends GS 66-252 concerning peddlers and sellers at specialty markets, to deem the requirement to display a certificate of registration to be satisfied when the vendor displays evidence that the certificate has been applied for within 30 days before the date the certificate was required to be displayed (no longer also requiring the applicable registration fee to have been paid).

Makes conforming organizational changes. 

Intro. by Tillman, Hise, Newton.GS 66, GS 105
S 523 (2019-2020) REV. LAWS CLARIFYING & ADMINISTRATIVE CHANGES. Filed Apr 2 2019, AN ACT TO MAKE VARIOUS CLARIFYING AND ADMINISTRATIVE CHANGES TO THE REVENUE LAWS.
Summary date: Jun 12 2019

Senate committee substitute to the 1st edition is to be summarized.

Intro. by Tillman, Hise, Newton.GS 105
S 523 (2019-2020) REV. LAWS CLARIFYING & ADMINISTRATIVE CHANGES. Filed Apr 2 2019, AN ACT TO MAKE VARIOUS CLARIFYING AND ADMINISTRATIVE CHANGES TO THE REVENUE LAWS.
Summary date: Apr 5 2019

Part I. Business Tax Changes

Amends GS 105-154(d), concerning payment of tax by a manager of a business on behalf of nonresident owners or partners of the business. Prohibits the manager from requesting a refund of an overpayment made on behalf of a nonresident owner or partner if the manager has previously filed the return and paid the tax due. Instead, permits the nonresident owner or partner to request a refund of an overpayment made on its behalf by the manger on its own income tax return, within the statute of limitations provisions of GS 105-241.6. Effective for taxable years beginning on or after January 1, 2019, and applies to a request for refund filed on or after that date.

Part II. Personal Income Tax Changes

Amends GS 105-153.8(e), concerning jointly filed income tax returns, to provide relief from liability on state tax returns for a spouse who qualifies for relief from liability for federal tax under section 6015 of the Internal Revenue Code (previously described the relief from tax liability attributive to a substantial understatement by the other spouse). Effective for taxable years beginning on or after January 1, 2018.

Part III. Sales and Use Tax Changes

Section 3.1

Amends GS 105-164.3, which sets forth defined terms applicable to Article 5, Sales and Use Tax. Adds the term item and defines the term to mean personal property, certain digital property, or a service, unless the context requires otherwise. Makes conforming changes throughout the statute and the Article to refer to an item, as appropriate, and modify the current use of "item" which does not intend the new term's meaning. Amends advertising and promotional direct mail and bundled transaction to refer to an item rather than a product. Amends capital improvement to exclude performing repairs or replacement of electrical components, gas logs, water heaters and similar tangible personal property (was, similar individual items) that are not part of new construction, reconstruction, or remodeling; repair, replacement or installation of electrical or plumbing components, water heaters, gutters, and similar tangible personal property (was, similar individual items) that are not part of new construction, reconstruction, or remodeling; or repair, replacement, or installation of gas logs, water heaters, pool heaters, and similar tangible personal property (was, similar individual items) that are not part of new construction, reconstruction, or remodeling. Adds a new defined term, certain digital property, and defines the term to mean an audio work, an audiovisual work, a book, magazine, a newsletter, a report, or another publication, or a photograph or greeting card, that is delivered or accessed electronically. Specifies that certain digital probably items specified are not considered tangible personal property and are taxable under the Article if sold in a tangible medium. Excludes an information service from certain digital property. Makes conforming changes throughout the statute and the Article to refer to certain digital property rather than digital property. Deletes the term computer supply. Amends delivery charges to refer to an item rather than personal property or services. Amends engaged in business to  include maintaining in the State certain digital property for the purpose of lease or rental. Amends landscaping to exclude services to trees, shrubs, flowers, or similar tangible personal property (was, similar items) in ports or in buildings. Modifies remote sale to include sale of an item by mobile phone application and making items accessible or performing a service sourced in this State. Amends sale or selling to include a transaction in which possession of the tangible personal property or certain digital property (was, property) is transferred but the seller retains title or security for the payment of consideration. Amends secondary metals recycler to refer to products rather than items. Updates streamlined agreement to reflect the agreement amended as of December 14, 2018. Excludes certain digital property, as defined, from telecommunications service. Makes further technical, clarifying, and conforming changes. 

Effective October 1, 2019, amends certain digital property, as enacted, to remove the qualification that the items described which are delivered or accessed electronically would be taxable under the Article if sold in a tangible medium.

Authorizes the Revisor of Statutes to make necessary technical and conforming changes. 

Section 3.2

Amends GS 105-164.4 to apply the general privilege tax rate of retailers, 4.75%, of the sales price of certain digital property, applicable regardless of whether the purchaser of the property has a right to use it permanently or to use it without making continued payments. Now provides that the general tax rate applies to the sales price of or gross receipts derived from the sale, repair, maintenance, and installation services to tangible personal property or certain digital property (previously did not include digital property), which generally becomes a part of or is applied to a purchaser's property, regardless of whether the property is taxed under another subdivision of the statute or is subject to a maximum tax under the statute. Adds that the use tax exemption in GS 105-164.27A(a3) for boats and aircraft can apply to these services. Makes conforming changes. 

Section 3.3

Amends GS 105-164.4B, regarding sourcing principles, to refer to sourcing the sale of an item rather than a product. Makes identical changes to the tax application provisions set forth in GS 105-164.4D regarding bundled transactions. 

Amends GS 105-164.4G, regarding tax on entertainment property. Specifies that the tax does not apply to tuition, registration fees, or charges to attend instructional seminars, conferences, or workshops for educational purposes, regardless that the activity is offered as an ancillary purpose of the event. Makes further conforming technical changes.

Makes technical, clarifying and conforming changes to GS 105-164.6 (Complementary use tax).

Amends GS 105-164.11B to specify that the provisions regarding recovering sale tax paid on items resold at retail to specify that the provisions apply to a retailer who pays tax on an item that is separately stated on an invoice or similar billing document given to the retailer at the time of sale. Make clarifying and technical changes.

Amends GS 105-164.12C, concerning food and drink merchants who give away food and drink to patrons or employees for immediate consumption, to make clarifying and technical changes.

Amends GS 105-164.13 to clarify that food and other products (was, items) lawfully purchased under the Supplemental Nutrition Assistance Program, as specified, are exempt frin sales tax under the statute. Also clarifies that the removal of waste, trash, debris, grease, snow, and other similar tangible personal property (was other similar items) from property, other than a motor vehicle, are exempt from tax under the Article. Similarly, clarifies the exemption (expiring January 1, 2020) for sales of repair, maintenance, and installation services for a transmission, engine, or rear-end gears, or any tangible personal property (was, any other item) that is purchased, leased, or rented to a professional motor sporting team or team member, as specified. Makes further clarifying and conforming changes.

Makes conforming and clarifying changes to GS 105-164.13E, concerning exemptions for farmers, specifying items (rather than tangible personal property and services) which can be exempt from tax under the statute. Makes further technical changes. 

Amends GS 105-164.14(a), concerning refunds for interstate carriers, to clarify that the refund applicant is to furnish the purchase price of the taxable personal property and services (rather than items) listed by the statute. Makes conforming changes.

Amends GS 105-164.16 to make organizational and technical changes.

Makes clarifying and conforming changes to GS 105-164.27A regarding a boat and aircraft direct pay permit.

Amends GS 105-164.42I, concerning certified service provider liability, to refer to a seller's liability for misrepresentation of types of items sold rather than types of products sold.

Amends GS 105-467 to provide local school administrative units and a joint agency created by interlocal agreement among units an annual refund of sales and use taxes on direct purchases of items, rather than direct purchases of tangible personal property and services.

Section 3.4

Further amends GS 105-164.4 to specify that separately stated charges billed to a customer for the installation of utilities is included in the combined general tax for gross receipts derived from providing telecommunication service and ancillary service, video programming to a subscriber, and from sales of electricity and piped natural gas. Further amends the definition of capital improvement in GS 105-164.3 to make clarifying changes, and specify that a utility can recover a portion of the cost of installation of utilities as a contribution in aid of construction, and those charges are included in the general gross receipts derived from services subject to the combined general rate under GS 105-164.4. Further amends GS 105-164.13 to clarify that the exemption does not apply to charges that are included in the gross receipts derived from services subject to the combined general rate under GS 105-164.4.

Section 3.5

Adds the terms taxing district and taxing area to GS 105-164.3. Amends GS 105-164.42L, authorizing the Secretary of Revenue (Secretary) to develop databases that provide information on the boundaries of taxing districts and their applicable tax rates (previously referred to taxing jurisdictions). Now provides that the databases can assign the proper tax rate and taxing district to each taxing area within the State. Requires the Secretary to assign the lowest combines tax rate within a specific taxing area where more than one tax rate applies. Provides for similar assignment for street address by nine-digit zip code or five-digit zip code. Makes further clarifying changes.

Section 3.6

Makes clarifying changes to GS 105-244.3 regarding sales tax base expansion protection.

Section 3.7

Makes clarifying changes to GS 105-244.4 regarding the reduction of certain sales tax assessments.

Section 3.8

Amends GS 105-537 to prohibit a county election of whether to levy a sales and use tax in the county from being held within one year from the date of the last preceding election under the same provision. Applies to elections held on or after July 1, 2019.

Section 3.9

Repeals Section 38.5(x) through Section 38.5(z) of SL 2018-5, which provided for various sales and use tax changes in GS Chapter 105. Makes conforming repeal to the applicable effective dates in Section 38.5(aa) of SL 2018-5.

Adds the terms property management contract, property management services and property manager to GS 105-164.3. Amends GS 105-164.4 to specify that a property management contract is taxable in accordance with GS 105-164.4K, as enacted. Enacts GS 105-164.4K to exempt property management services provided by a property manager under a property management contract from sales and use tax. Details three circumstances whereby repair, maintenance, and installation services taxable under the Article and provided by a property manager under a property management contract are subject to sales and use tax, including services directly provided for an additional charge which the property manager is not obligated to provide under the property management contract. When the property management services are not taxable, a retailer is to collect tax on items sold at retail from the property manager as the consumer, unless an exemption under GS 105-164.13 applies. When property management services are taxable, the property manager acts as a retailer, as specified. 

Part IV. Excise Tax Changes

Section 4.1

Amends GS 105-113.4A, concerning tobacco product licenses under Article 2A, to clarify that no tax refund is allowed when a licensee cancels (was, surrenders) a license.

Amends GS 105-113.4B to provide for the immediate return of a license by the licensee when the Secretary cancels a license. Also makes changes to refer to certified mail rather than registered mail regarding notice of revocation and notice of hearing.

Amends GS 105-113.21 to specify that the discount and refund provisions apply to licensed distributors.

Amends GS 105-113.10 to specify that the tax exemption applies to licensed manufacturers shipping to other licensed distributors. Clarifies that the exemption does not relieve the manufacturers from filing a report required of Part 2. Also clarifies that a tax exemption for a manufacturer shipping or temporarily storing its cigarettes at an affiliated manufacturer does not relieve the manufacturer from filing a report required of Part 2.

Section 4.2

Amends GS 105-113.5 to specify that the cigarette tax is levied on sales by a licensed distributor. Places primary liability of the tax with the licensed distributor who first acquires or otherwise handles subject cigarettes. Specifies that a licensed distributor who bring cigarettes made outside the State into the State is the first person to handle cigarettes in the State. Adds that a licensed distributor that is the cosignee of cigarettes made outside the State and shipped into the State is the first person to handle the cigarettes in the State.

Further amends GS 105-113.4A to require licensees to file applications for renewal in the same way as applications are filed to obtain a license. Expands the statute's provisions to apply to renewals. Adds that the Secretary can refuse to issue or renew a license if the applicant has failed to meet any of the license requirements set forth in existing subsection (b). Further amends GS 105-113.4B to allow the Secretary to revoke a license if the licensee fails to meet or maintain the requirements set out in GS 105-113.4A(b).

Amends GS 105-113.12 to provide that a distributor license is in effect until June 30 of the year following the second calendar year after the date of issuance or renewal. Establishes that a license for each place of business is renewable upon signed application with no renewal license tax unless applies for after the June 30 expiration date. Makes conforming changes. Requires an out of state distributor to also meet the provisions of GS 105-113.4A in order to obtain a license.

Amends GS 105-113.36 to clarify that wholesale dealers and retail dealers must obtain a tobacco products license and pay a license tax for each place of business, as defined in existing law. Maintains the license tax at $25 for wholesale dealers and $10 for retail dealers. Provides for the license to be in effect until June 30 of the year following the second calendar year after the date of issuance or renewal, unless canceled or revoked prior to expiration. Provides that a license for each place of business is renewable upon signed application with no renewal license tax unless applied for after expiration. Requires out-of-state whole sale dealers of tobacco products other than cigarettes to obtain a license upon compliance with GS 105-113.4A and payment of a $25 license tax.

Effective January 1, 2020. Establishes that any license issued under Article 2A on or before January 1, 2020, expires on June 30, 2020. Requires the Department of Revenue to notify licensees of the requirement of filing for renewal before June 30, 2020.

Section 4.3

Amends GS 105-113.18 to clarify reporting requirements accompanying cigarette tax payments. Provides that licensed distributors are required to file a monthly report covering cigarettes sold, shipped, delivered, or otherwise disposed of in the State, due within 20 days after the end of the month covered in the report (previously concerned sales and other activities; and provided separate reporting requirements for free cigarettes). Adds that the report must show the quantity of all cigarettes transported or caused to be transported into the State by the licensed distributor or licensed manufacturer in the State for sales in the State.

Amends GS 105-113.37 to clarify reporting requirements accompanying tobacco product tax payments. Provides that a monthly report must be filed that covers tobacco products sold, shipped, or otherwise disposed of in the State, due within 20 days after the end of the month covered by the report (previously, the report covered sales and other activities, and provided for designating exempt sales regarding intent to resell).

Section 4.4

Amends GS 105-113.26 to require licensees to keep complete and accurate records of all purchases, inventories, sales, shipments, and deliveries (was, all sales). Requires the records to be open for inspection by the Secretary or authorized agent at all times. Makes changes to enact identical provisions regarding wholesale dealers and retail dealers of tobacco products under GS 105-113.40, and further requires those dealers to safely preserve the records for a period of three years in a manner to ensure their security and accessibility for inspection.

Section 4.5

Amends GS 105-113.35 to provide that the tax on tobacco products and vapor products does not apply to a no cost sample tobacco product, other than cigarettes, limited to distribution at a qualified adult-only facility, as defined by specified federal law. Makes clarifying changes to subsection (d) concerning certain manufacturer's exemption from the tax if shipping tobacco products other than cigarettes to either a licensed wholesale dealer or retail dealer. Specifies that the exemption does not relieve the manufacturer of the statute's filing requirements. Modifies the limitations provided, to now prohibit a licensed wholesale dealer from selling, borrowing, loaning, or exchanging non-tax-paid tobacco products other than cigarettes to, from, or with another licensed dealer. Makes further clarifying and technical changes. 

Section 4.6

Enacts GS 105-113.35A to establish a tax for the sale or possession for sale by persons other than licensed wholesale dealers or retail dealers, and upon use, consumption, and possession for use or consumption tobacco products other than cigarettes within the State. Sets the rate as provided in GS 105-113.35, which is 12.8%. Exempts tobacco products other than cigarettes upon which the tax levied in GS 105-113.35 has been paid. Effective for taxable years beginning on or after January 1, 2019.

Section 4.7

Adds the terms consumer, delivery sale, deliver seller and delivery service to GS 105-113.4. Enacts GS 105-113.4F, applicable to delivery sales of tobacco products, other than cigars, to consumers in the State regardless of where the delivery occurs. Requires a delivery seller to obtain a license before accepting an order, comply with certain age verification requirements, and report, collect, and transmit all taxes levied on tobacco products other than cigars under  Articles 2A and 5. Requires a delivery seller to use a delivery service which obtains a signature of the person accepting delivery who is at least 18 years old and obtains proof of the age of the person accepting the delivery, as specified. Details additional filing requirements for a delivery seller, to be submitted to the Secretary in a memo or a copy of an invoice, no later than the tenth day of the month. Provides for compliance under the statute if a specified federal statute is complied with respect to tobacco products covered under the statute. Details information the memo or invoice must contain. Establishes a penalty of no more than $1,000 for the first violation, and no more than $5,000 for subsequent violations. Exempts tobacco products sold by a retailer who purchased them from a licensed distributor or wholesale dealer. Makes all laws applicable to tobacco product retailers also applicable to delivery sellers that sell tobacco products in the State.

Applies to delivery sales occurring on or after October 1, 2019.

Section 4.8

Amends the definition of wholesaler or importer in GS 104-113.68 as it applies to Article 2C, Alcoholic Beverage License and Excise Taxes. Now includes a resident winery and wine producer (previously did not include resident wine producer) that sells its wines, or wine produced from the permit under contract, at wholesale to a retailer or at retail and a resident brewery that sells its malt beverages or malt beverages produced for the permittee under contract at wholesale to a retailer or at retail (previously only resident breweries producing fewer than 25,000 barrels per year). Limits the terms to person who hold an unfortified winery permit, fortified winery permit, brewery permit, wine importer permit, wine wholesaler permit, malt beverages importer permit, malt beverages wholesaler permit, or wine producer permit.

Section 4.9

Amends GS 105-113.84 to expand the monthly reporting requirements to include resident wine producers. Clarifies that the report is informational, and adds that the report must include the amount of beverages sold, delivered, or shipped (was only delivered) to resident wholesalers, importers and purchasers under GS 18B-1001.1 during the period covered by the report. 

Section 4.10

Amends GS 105-449.47A, regarding tax on motor carriers, to allows the Secretary to refuse a license and issues a decal if the applicant failed to maintain motor vehicle registration on the qualified motor vehicle.

Section 4.11

Adds the term tank wagon for-hire to GS 105-449.60, concerning Article 36C, Gasoline, Diesel, and Blends. Defines the term as a truck designed or used to carry at least 1,000 gallons of motor fuel and the transporter is compensated for transporting motor fuel owned by another person. Includes the term in motor fuel transporter and transport truck. Makes technical change to refer to building storage rather than storage facilities in bulk-end user, and to remove the requirement of assigned of a terminal control number in terminal.

Section 4.12

Amends GS 105-449.81 to include in the motor fuel rate tax fuel alcohol (was referred to as fuel grade ethanol) which meets one of the qualifications previously specified. Makes conforming changes.

Section 4.13

Amends GS 105-449.105A to remove kerosene sales for the purpose of heating from those distributors can obtain a monthly refund.

Section 4.14

Amends GS 105-449.115 to require biodiesel providers to give a shipping document to the person who operated a railroad tank car or transport truck into which motor fuel is loaded at the terminal track or bulk plant rack.

Section 4.15

Amends GS 105-449.115A to add the destination state of the fuel to the information which must be included in the shipping document required of a person operating a tank wagon into which motor fuel is loaded for some other source.

Part V. Tax Compliance Changes

Amends GS 105-243.1 to extend the date by which a collection assistance fee is imposed from 30 to 60 days after an overdue tax debt remains unpaid. Makes technical and clarifying changes. 

Amends GS 105-236 to expand the civil penalty provisions of subdivision (a)(10) to include failure to return file the information returns required under Articles 2A and 2C. Applies to returns due to be filed on or after January 1, 2020.

Enacts GS 105-251.2(c1), authorizing the Secretary to request information of a franchisor with at least one resident franchisee, and the franchisor must provide the information, no more than one time per calendar year. Specifies information the Secretary can request, such as a return or a report. Defines the term as defined in specified federal law.

Enacts GS 105-251.3 to require every person that buys real property in the State from a nonresident seller to give information to the Secretary within 15 days of the closing date of the sale, including the seller's name, address and tax identification number if known, sales price, property address, and any other information required by the Secretary. Allows the Secretary to prescribe the manner of the report. 

Part VI. General Tax Administration Changes

Amends GS 105-241.6 to modify the contingent event exception from the general statute of limitations to request a refund of an overpayment. Allows the period to be extended once, as specified and subject to the restrictions and limitations provided, for litigation or a state audit, or other contingent events. Requires filing a written request to the Secretary prior to the expiration of the statute of limitations.

Amends GS 105-241.8 to specify that the date a federal amended return was filed is presumed to be the date recorded by the IRS.

Amends GS 105-228.90 to modify federal determination to mean a change or correction arising from an audit by the IRS Commissioner or an agreement of the US competent authority, and the change or correction has become final (previously did not provide for an agreement, and did not specify the correction is final). Describes when a federal determination is final. Makes conforming changes to GS 105-130.20 and GS 105-159 regarding federal determinations of federal taxable income.

Amends GS 105-163.1, which holds defined terms applicable to Article 4, Withholding. Adds the term Individual Taxpayer Identification Number (ITIN) and Taxpayer Identification Number (TIN). Specifies that applied for or expired ITIN numbers are included in ITIN holder. Adds the term payee. Makes conforming changes. Makes conforming changes to GS 105-163.3 concerning payors' withholding taxes. Effective January 1, 2020.

Amends GS 105-241.20, regarding delivery of notice, to include in the scope of the statute's provisions a denial of a refund (previously only the proposed denial of a refund).

Recodifies GS 105-128, Power of attorney, as GS 105-258.3, and makes clarifying and technical changes to the statute.

Intro. by Tillman, Hise, Newton.GS 105

Today's Bills: Senate

LOCAL/HOUSE BILLS
H 383 (2019-2020) TOPSAIL BEACH CHARTER/BOARD VACANCIES. Filed Mar 19 2019, AN ACT AMENDING THE CHARTER OF THE TOWN OF TOPSAIL BEACH TO PROVIDE FOR THE FILLING OF VACANCIES ON THE BOARD OF COMMISSIONERS.
Summary date: Jun 11 2019

Senate committee substitute makes the following changes to the 1st edition.

Modifies the proposed changes to Section 4 of the Charter of the Town of Topsail Beach set out in SL 1963-67, as amended. Concerning vacancies in the office of mayor or commissioner, provides that when a vacancy occurs within 90 days of the next regular town election, the person appointed to fill the vacancy must serve the remainder of the unexpired term (previously, also applied to instances in which the term of office expires immediately following the next regular town election). In other instances in which a successor is elected, provides that the elected successor must serve (1) the remainder of the unexpired term or (2) a four-year term if the office was slated in the election to be for a full term of office (previously, only provided for the elected successor to serve the remainder of the unexpired term). Makes language gender-neutral. Clarifies that the act applies to vacancies existing on or after the date the act becomes law.

Intro. by C. Smith.Pender
H 383 (2019-2020) TOPSAIL BEACH CHARTER/BOARD VACANCIES. Filed Mar 19 2019, AN ACT AMENDING THE CHARTER OF THE TOWN OF TOPSAIL BEACH TO PROVIDE FOR THE FILLING OF VACANCIES ON THE BOARD OF COMMISSIONERS.
Summary date: Mar 19 2019

Amends Section 4 of the Charter of the Town of Topsail Beach set out in SL 1963-67, as amended, which currently provides for any vacancy occurring in the office of mayor or commissioner to be filled for the remainder of the unexpired term by a majority vote of the remaining members of the board of commissioners. Modifies the term of persons appointed to fill such a vacancy, to now provide for the person appointed to serve the remainder of the unexpired term only if the term of office expires immediately following the next regular Town election or if the next regular Town election will be held within 90 days after the vacancy occurs. Otherwise, requires a successor to be elected at the next regularly scheduled Town election held more than 90 days after the vacancy occurs, and the person appointed to fill the vacancy serves only until the elected successor takes office, with the elected successor serving the remainder of the unexpired term. Removes the provision requiring a mayor or a member of the board of commissioners to immediately forfeit their respective office upon conviction of a crime while in office.

Intro. by C. Smith.Pender

Today's Bills: Senate

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