Bill Summary for H 1224 (2013-2014)

Summary date: 

Jul 16 2014

Bill Information:

View NCGA Bill Details2013-2014 Session
House Bill 1224 (Public) Filed Tuesday, May 27, 2014
A BILL TO BE ENTITLED AN ACT TO LIMIT THE TOTAL LOCAL GOVERNMENT SALES AND USE TAX RATE TO TWO AND ONE‑HALF PERCENT; TO GIVE COUNTIES THE FLEXIBILITY TO USE UP TO ONE‑HALF PERCENT OF THE LOCAL SALES AND USE TAX FOR PUBLIC TRANSPORTATION, FOR PUBLIC EDUCATION, FOR GENERAL PURPOSES, OR FOR A COMBINATION THEREOF; AND TO MAKE VARIOUS CHANGES TO TAX AND ECONOMIC DEVELOPMENT LAWS.
Intro. by Presnell.

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Bill summary

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

Changes the short and long titles.

Enacts new GS Chapter 105, Article 43A, County Sales and Use Tax for Public Education, providing that the purpose of the Article is to give the counties of NC an opportunity to obtain an additional source of revenue to meet certain needs. Allows counties to use the revenue source to finance local public transportation systems under Article 43 or public education needs under Article 43A. 

Authorizes counties to levy a local sales and use tax at a rate up to 1/2% if approved by the voters in a referendum. Requires the tax to be set in increments of 1/4% and must be at a rate that results in a total local sales and use tax rate in the county of 2 1/2%. Sets out additional procedures and requirements for administration of the tax.

Provides that the proceeds from the tax are not shared with the municipalities in the county. Also sets out three purposes that the tax can be used for including (1) for public school capital outlay purposes or to retire county indebtedness for these purposes, (2) for salaries of classroom teachers and teacher assistants, and teacher salary supplements, and (3) financial support of community colleges, including funds to supplement State financial support of community colleges. 

Amends GS 115C-429(b), concerning school boards budgets and allocations, authorizing a board of county commissioners to direct the amount of funds to be used for salaries of classroom teachers, salaries of classroom teacher assistants, and supplements of classroom teacher salaries. Sets out standards by which a teacher is considered an employee of a local board of education. 

Amends GS 115C-433(b) to provide that a board of education would need approval from the board of county commissioners before decreasing the funds that are allocated by the board of county commissioners for salaries and salary supplements. 

Amends GS 115D-55(a) and GS 115D-58(b), concerning community colleges, to allow the tax-levying authority to direct the use of tax proceeds as well as requiring a board of trustees to obtain approval from the local tax-levying authority before decreasing the funds that are directed by the  tax-levying authority. 

Amends GS 105-506, concerning the Local Government Public Transportation Sales Tax Act, allowing all counties to levy the public transportation tax, once approved by referendum, to fund local public transportation systems. Provides that this tax cannot be levied at the same time that the tax in GS 105, Article 43A is levied. Provides that the tax under Article 43 must set in increments of 1/4% and must be at a rate that results in a total local sales and use tax rate in the county of 2 1/2%. Provides additional provisions regarding caps for local sales and use tax rates, depending on the tax rates in a specific county. 

Amends GS 105-507.1, 105-507.2, 105-509, 105-509.1, 105-510, 105-510.1, 105-511.2, and 105-511.3, all concerning the levy of the sales and use tax, making conforming changes. 

Amends GS 105-537 to provide that a tax levied under GS Chapter 105, Article 46 (1/4 cent county sales and use tax) must be approved in a referendum. Also enacts new GS 105-537(e) providing that a board of county commissioners can not direct the county board of elections to conduct an advisory referendum on the question of whether to levy a local sales and use tax in the county as provided in Article 46, on or after August 1, 2014. Provides exceptions to the prohibition, allowing counties to direct the county board of elections to conduct an advisory referendum if (1) the county has already directed the county board of elections to conduct the advisory referendum on a ballot in a general election to be held in 2014 and (2) the total rate of local sales and use tax in the county is less than 2 1/2%. 

Amends GS 143B-437.012, concerning the Job Maintenance and Capital Development Fund, altering an eligibility condition for a grant for a large manufacturer, providing that if the large manufacturer  is investing in its manufacturing process by enhancing pollution controls or transitioning the manufacturing process from using coal to using natural gas for the purpose of becoming more energy efficient or reducing emissions it may be eligible for a grant if other specific conditions are met. 

Amends GS Chapter 143B, Article 10 Part 2G to provide for the creation of the Job Catalyst Fund(Fund). Amends GS 143B-437.51, adding and defining the term "full-time worker". Enacts new GS 143B-437.67, Job Catalyst Fund, a special, non-reverting account in the Department of Commerce that provides funds to local governmental units for certain projects that result in the creation of jobs. Directs the Secretary of Commerce to adopt guideline for the administration of the program. Specifies 10 provisions that must be included in the guidelines including, that the project be for a business that agrees, for the greater of 10 years or the term of the grant plus five years, to create and maintain 500, 800, or 1,200 full-time jobs depending on the corresponding development tier, and that the funds are used to acquire or improve land or infrastructure, for facility development, or for capital investment and used for manufacturing projects. 

Includes a forfeiture and recapture provision which, when a project fails to timely create and maintain the required new jobs, level of investment, or to meet other requirements, requires local governments to provide a means for recapture from the business/project an amount equal to the amount disbursed from the Fund and to reimburse the Fund that amount.

Requires businesses receiving grants to maintain records available for inspection by the Secretary of Commerce. Also requires the Department of Commerce to report annually, on or before April 30 of each year on the Fund. The report must be submitted to House of Representatives Finance Committee, the Senate Finance Committee, the House of Representatives Appropriations Subcommittee on Natural and Economic Resources, the Senate Appropriations Committee on Natural and Economic Resources and the Fiscal Research Division. Sets out nine items of information that must be in the report including, an update on the status of projects under grants awarded before the preceding calendar year and the number and development tier area of new worker positions to be created by projects with respect to which grants have been awarded.

Provides that the Secretary of Commerce must publish on the Department's website proposed guidelines for the Fund at least 20 days before the effective date and allow oral and written public comment during the 15 business days beginning on the first day the notice requirement has been completed. Provides in GS 150B-1 that the Secretary is exempt from rulemaking requirements of the APA for the purpose of creating guidelines and the administration of the Fund.  

Makes conforming and organizational changes necessary for the creation and implementation of the Job Catalyst Fund. 

Amends Section 15.19(a1) of SL 2013-360 to provide that the Job Development Investment Grant Program, for the 2013-15 fiscal biennium, has a total liability for grants awarded of $36.5 million (was, $22.5 million). 

Amends GS 143B-437.52 adjusting one of the conditions for qualifying for a grant from the Job Development Investment Grant Program, providing that if the total costs of a project to the State outweigh the benefits as a result of an award from the Fund then the award from the Fund can be disregarded in determining whether a grant is appropriate for the project (previously, required the total benefits of the project to the State outweigh its costs and render the grant appropriate for the project). 

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