GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1997

H	1 

HOUSE BILL 136

Short Title:  Late Video Return/Sales Tax.	(Public)

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Sponsors: Representatives Weatherly; Arnold, Baker, Brown, Cansler, Davis, McCombs, Mitchell, Preston, Rayfield, and Shubert.

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Referred to:  Judiciary II, if favorable, Finance.

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February 13, 1997

A BILL TO BE ENTITLED
AN ACT TO PROVIDE THAT CERTAIN LATE CHARGES FOR THE LATE RETURN OF RENTED PROPERTY ARE SUBJECT TO SALES TAX AND TO PROVIDE FOR TREBLE DAMAGES IN A CIVIL ACTION TO ENFORCE PAYMENT OF CERTAIN LATE CHARGES FOR THE LATE RETURN OF A RENTED VIDEOCASSETTE TAPE.
The General Assembly of North Carolina enacts:
Section 1.  G.S. 105-164.3(16) is amended by adding a new sub-subdivision to read:
“g.	The term ‘sales price' includes a late charge for the late return of leased or rented personal property to the extent the charge for the late period does not exceed the rental charge for an equivalent period.  The term ‘sales price' does not include the excess of the late charge for the late period over the rental charge for an equivalent period if the following conditions are met:
1.	The late charge is imposed only if the lessee violates the terms of the lease or rental agreement by failing to return the property on time.
2.	The late charge is charged and accounted for separately from the charge for leasing or renting the property."
Section 2.  Article 13 of Chapter 66 of the General Statutes is amended by adding a new section to read:
"§ 66-67.4.  Remedies for failure to pay extra-day charges for late return of video.
(a)	The following definitions apply in this section:
(1)	Extra-day charge. – A charge for the late return of a rented videocassette at the same rate as the daily rental charge rate or the regular per day rental charge rate.
(2)	Member of record. – A person in whose name a video rental store membership is held and on whose membership a videocassette is rented.
(3)	Videocassette. – The term includes video cartridges.
(4) 	Video rental store. – Any entity whose principal business is the rental of videocassette tapes for noncommercial use.
(b)	A member of record who fails to pay the extra-day charges assessed for the late return of a videocassette within 30 days after written demand for its return is liable to the video rental store for a minimum amount of fifty dollars ($50.00) or three times the amount of the extra-day charges, whichever is greater.
(c)	The written demand shall be mailed by certified mail to the member of record's last known address.
(d)	The damages provided for in this section do not apply unless at the time of the rental of the videocassette tape the video rental store conspicuously displayed in the vicinity of the checkout counter a sign that displays the following warnings in block letters not less than one inch in height:
‘STATE LAW PROVIDES THAT FAILURE TO PAY THE LATE RETURN, EXTRA-DAY CHARGES DUE ON ANY RENTED VIDEOCASSETTE TAPE MAY RESULT IN DAMAGES OF TRIPLE THE AMOUNT OF THE LATE CHARGES, WITH A MINIMUM OF $50.00. (G.S. 66-67.4).'
(e)	The presiding judge or magistrate may award the prevailing party, as part of the court costs payable, a reasonable attorney's fee for the licensed attorney representing the prevailing party in an action under this section.
	(f)  Nothing contained in this section shall prohibit recovery upon any other theory of law."
Section 3.  This act becomes effective October 1, 1997, and applies to rentals occurring on or after that date.