GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2001
S	2
SENATE BILL 165
Judiciary I Committee Substitute Adopted 3/20/01

Short Title:	Revenue Laws Technical Changes.	()	
Sponsors:	     	
Referred to:	     	
February 19, 2001

A BILL TO BE ENTITLED
AN ACT TO MAKE TECHNICAL AND CLARIFYING CHANGES TO THE REVENUE LAWS AND RELATED STATUTES.

The General Assembly of North Carolina enacts:
SECTION 1.  Section 10(h) of S.L. 2000‑56, as amended by Section 92A(c) of S.L. 2000‑140, reads as rewritten:
"Section 10.(h)  Technical Correction. – Section 9 of this act becomes effective May 1, 1999, and applies to taxes paid on or after that date. Section 9 is repealed for taxes paid on or after January 1, 2008."
SECTION 2.  G.S. 105‑111 is repealed.
SECTION 3.  G.S. 105‑113.85 reads as rewritten:
"§ 105‑113.85. Discount.
Each wholesaler or importer who remits the excise taxes on malt beverages or wine may deduct from the amount payable a discount of four percent (4%). This discount covers losses due to spoilage and breakage, expenses incurred in preparing the records and reports required by this Article, and the expense of furnishing a bond."
SECTION 4.  G.S. 105‑129.3A(c) reads as rewritten:
"(c)	Relationship With Enterprise Tiers. – For the purpose of the wage standard requirement of G.S. 105-129.4, the credit for investing in machinery and equipment allowed in G.S. 105‑129.9, and the credit for worker training allowed in G.S. 105‑129.11, a development zone is considered an enterprise tier one area. For all other purposes, a development zone has the same enterprise tier designation as the county in which it is located."
SECTION 5.  G.S. 105‑129.4(b) reads as rewritten:
"(b)	Wage Standard. – A taxpayer is eligible for the credit for creating jobs or the credit for worker training if the jobs for which the credit is claimed meet the wage standard at the time the taxpayer applies for the credit. No credit is allowed for jobs not included in the wage calculation. A taxpayer is eligible for the credit for investing in machinery and equipment, the credit for research and development, or the credit for investing in real property for a central office or aircraft facility if the jobs at the location with respect to which the credit is claimed meet the wage standard at the time the taxpayer applies for the credit. In making the wage calculation, the taxpayer must include any positions that were filled for at least 1,600 hours during the immediately preceding taxable year even if they are not filled at the time the taxpayer applies for the credit.
Jobs meet the wage standard if they pay an average weekly wage that is at least equal to the applicable percentage times the applicable average weekly wage for the county in which the jobs will be located, as computed by the Secretary of Commerce from data compiled by the Employment Security Commission for the most recent period for which data are available. The applicable percentage for jobs located in an enterprise tier one area is one hundred percent (100%). The applicable percentage for all other jobs is one hundred ten percent (110%). The applicable average weekly wage is the lowest of the following: (i) the average wage for all insured private employers in the county, (ii) the average wage for all insured private employers in the State, and (iii) the average wage for all insured private employers in the county multiplied by the county income/wage adjustment factor. The county income/wage adjustment factor is the county income/wage ratio divided by the State income/wage ratio. The county income/wage ratio is average per capita income in the county divided by the annualized average wage for all insured private employers in the county. The State income/wage ratio is the average per capita income in the State divided by the annualized average wage for all insured private employers in the State."
SECTION 6.  G.S. 105‑129.8(a) reads as rewritten:
"(a)	Credit. – A taxpayer that meets the eligibility requirements set out in G.S. 105‑129.4, has five or more full‑time employees, and hires an additional full‑time employee during the taxable year to fill a position located in this State is allowed a credit for creating a new full‑time job. The amount of the credit for each new full‑time job created is set out in the table below and is based on the enterprise tier of the area in which the position is located. In addition, if the position is located in a development zone, the amount of the credit is increased by four thousand dollars ($4,000) per job.
	Area Enterprise Tier	Amount of Credit
Tier One	$12,500
Tier Two	4,000
Tier Three	3,000
Tier Four	1,000
Tier Five	500
A position is located in an area if more than fifty percent (50%) of the employee's duties are performed in the area. The credit may not be taken in the taxable year in which the additional employee is hired. Instead, the credit must be taken in equal installments over the four years following the taxable year in which the additional employee was hired and is conditioned on the continued employment by the taxpayer of the number of full‑time employees the taxpayer had upon hiring the employee that caused the taxpayer to qualify for the credit.
If, in one of the four years in which the installment of a credit accrues, the number of the taxpayer's full‑time employees falls below the number of full‑time employees the taxpayer had in the year in which the taxpayer qualified for the credit, the credit expires and the taxpayer may not take any remaining installment of the credit. The taxpayer may, however, take the portion of an installment that accrued in a previous year and was carried forward to the extent permitted under G.S. 105‑129.5.
Jobs transferred from one area in the State to another area in the State are not considered new jobs for purposes of this section. If, in one of the four years in which the installment of a credit accrues, the position filled by the employee is moved to an area in a higher‑ or lower‑numbered enterprise tier, or is moved from a development zone to an area that is not a development zone, the remaining installments of the credit must be calculated as if the position had been created initially in the area to which it was moved."
SECTION 7.  G.S. 105‑129.13(c) reads as rewritten:
"(c)	Certification. – Before certifying that a development zone agency will undertake an improvement project in a development zone, the Secretary of Commerce must require the agency to provide sufficient documentation to establish the identity of the agency, the nature of the project, and that the project is for a community development purpose and is located in a development zone. The Secretary of Commerce shall not certify a development zone agency under this section if the agency, any of the agency's officers or directors, or any partner of the agency has ever used any part of a contribution made under this section for any purpose other than an improvement project."
SECTION 8.  G.S. 105‑129.19 reads as rewritten:
"§ 105‑129.19. (See Editor's note for repeal) Reports.
The Department of Revenue must report to the Revenue Laws Study Committee and to the Fiscal Research Division of the General Assembly by May 1 of each year the following information for the 12‑month period ending the preceding April 1:
(1)	The number of taxpayers that claimed the credits allowed in this Article.
(2)	The cost of business property and renewable energy property with respect to which credits were claimed.
(2a)	The location of each qualified North Carolina low‑income building with respect to which a low‑income housing credit was claimed.
(3)	The total cost to the General Fund of the credits claimed."
SECTION 9.  G.S. 105‑163.013(g) reads as rewritten:
"(g)	Report by Secretary of State. – The Secretary of State shall report to the Revenue Laws Study Committee by October 1 of each year all of the businesses that have registered with the Secretary of State as qualified business ventures and qualified grantee businesses. The report shall include the name and address of each business, the location of its headquarters and principal place of business, a detailed description of the types of business in which it engages, whether the business is a minority business as defined in G.S. 143‑128, the number of jobs created by the business during the period covered by the report, and the average wages paid by these jobs."
SECTION 10.  G.S. 105‑163.41(a) reads as rewritten:
"(a)	Except as provided in subsection (d), if the amount of estimated tax paid by a corporation during the taxable year is less than the amount of tax imposed upon the corporation under Article 4 of this Chapter for the taxable year, the corporation must be assessed an additional tax as a penalty in an amount determined by multiplying the amount of  the underpayment as determined under subsection (b), for the period of the underpayment as determined under subsection (c), by the percentage established as the rate of interest on assessments under G.S. 105‑241.1(i) that is in effect for the period of the underpayment. For the purpose of this section, the amount of tax imposed under Article 4 of this Chapter is the net amount after subtracting the credits against the tax allowed by this Chapter other than the credit allowed by this Article."
SECTION 11.  G.S. 105‑164.27A(d) reads as rewritten:
"(d)	Revocation. – A direct pay certificate is valid until the holder returns it to the Secretary or it is revoked by the Secretary. The Secretary may revoke a direct pay certificate if the holder of the certificate does not file a sales and use tax return on time, does not pay sales and use tax on time, or otherwise fails to comply with the sales and use tax laws."
SECTION 12. G.S. 105‑228.90 reads as rewritten:
"§ 105‑228.90. Scope and definitions.
(a)	Scope. – This Article applies to Subchapters I, V, and VIII of this Chapter, to the annual report filing requirements of G.S. 55‑16‑22, to the primary forest product assessment levied under Article 12 of Chapter 113A of the General Statutes, and to inspection taxes levied under Article 3 of Chapter 119 of the General Statutes.
(b)	Definitions. – The following definitions apply in this Article:
(1)	Charter school. – A nonprofit corporation that has a charter under G.S. 115C‑238.29D to operate a charter school.
(1a)	City. – A city as defined by G.S. 160A‑1(2). The term also includes an urban service district defined by the governing board of a consolidated city‑county, as defined by G.S. 160B‑2(1).
(1b)	Code. – The Internal Revenue Code as enacted as of January 1, 2000, including any provisions enacted as of that date which become effective either before or after that date.
(1c)	County. – Any one of the counties listed in G.S. 153A‑10. The term also includes a consolidated city‑county as defined by G.S. 160B‑2(1).
(2)	Department. – The Department of Revenue.
(3)	Electronic Funds Transfer. – A transfer of funds initiated by using an electronic terminal, a telephone, a computer, or magnetic tape to instruct or authorize a financial institution or its agent to credit or debit an account.
(4)	Reserved.
(5)	Person. – An individual, a fiduciary, a firm, an association, a partnership, a limited liability company, a corporation, a unit of government, or another group acting as a unit. The term includes an officer or employee of a corporation, a member, a manager, or an employee of a limited liability company, and a member or employee of a partnership who, as officer, employee, member, or manager, is under a duty to perform an act in meeting the requirements of Subchapter I, V, or VIII of this Chapter, of G.S. 55-16-22, of Article 12 of Chapter 113A of the General Statutes, or of Article 3 of Chapter 119 of the General Statutes.
(6)	Secretary. – The Secretary of Revenue.
(7)	Tax. – A tax levied under Subchapter I, V, or VIII of this Chapter, the primary forest product assessment levied under Article 12 of Chapter 113A of the General Statutes, or an inspection tax levied under Article 3 of Chapter 119 of the General Statutes. Unless the context clearly requires otherwise, the terms "tax" and "additional tax" include penalties and interest as well as the principal amount.
(8)	Taxpayer. – A person subject to the tax or reporting requirements of Subchapter I, V, or VIII of this Chapter, of Article 12 of Chapter 113A of the General Statutes, or of Article 3 of Chapter 119 of the General Statutes."
SECTION 13.  G.S. 105‑256 is amended by adding a new subsection to read:
"(d)	Other Requirements. – The following requirements apply to the Secretary:
(1)	Video Poker. – G.S. 14-306.1(j) requires the Department to provide summary reports quarterly to the Joint Legislative Commission on Governmental Operations.
(2)	Escheats. – G.S. 116B-60(g) requires the Secretary to furnish information to the Escheat Fund on October 1 of each year."
SECTION 14.  G.S. 105‑449.60(41) reads as rewritten:
"(41)	User. – A person who owns or operates a licensed highway vehicle that has a registered gross vehicle weight of at least 10,001 pounds and who does not maintain storage facilities for motor fuel."
SECTION 15.  G.S. 105‑466(c) reads as rewritten:
"(c)	Collection of the tax, and liability therefor, must begin and continue only on and after the first day of the month of either January or July, as set by the board of county commissioners in the resolution levying the tax. In no event may the tax be imposed, or the tax rate changed, earlier than the first day of the second succeeding calendar month after the date of the adoption of the resolution. The county must give the Secretary at least 90 days advance notice of a new tax levy or tax rate change."
SECTION 16. G.S. 20‑79.7(b) reads as rewritten:
"(b)	Distribution of Fees. – The Special Registration Plate Account and the Collegiate and Cultural Attraction Plate Account are established within the Highway Fund. The Division must credit the additional fee imposed for the special registration plates listed in subsection (a) among the Special Registration Plate Account (SRPA), the Collegiate and Cultural Attraction Plate Account (CCAPA), and the Natural Heritage Trust Fund (NHTF), which is established under G.S. 113‑77.7, as follows: 
Special Plate	SRPA	CCAPA	NHTF
Animal Lovers	$10	$10	0
Ducks Unlimited	$10	$10	0
Goodness Grows	$10	 $15	0
Historical Attraction	$10	$20	0
In‑State Collegiate Insignia	$10	$15	0
Kids First	$10	$15	0
Litter Prevention	$10	$10	0
March of Dimes	$10	$10	0
Olympic Games	$10	$15	0
Omega Psi Phi Fraternity	$10	$10	0
Out‑of‑state Collegiate Insignia	$10	0	$15
Personalized	$10	0	$10
Scenic Rivers	$10	$10	0
School Technology	$10	$10	0
Soil and Water Conservation	$10	$10	0
Special Olympics	$10	$10	0
State Attraction	$10	$20	0
Support Public Schools	$10	$10	0
University Health Systems of
Eastern Carolina	$10	$15	0
Wildlife Resources	$10	$10	0
All other Special Plates	$10	0	0".
SECTION 17.  G.S. 96‑8(8) is recodified as G.S. 96‑8(7c).
SECTION 18.  G.S. 96‑8 is amended by adding a new subdivision to read:
"(7f)	Internal Revenue Code. – The Code as defined in G.S. 105‑228.90."
SECTION 19.  G.S. 96‑8(5)k. reads as rewritten:
"k.	Notwithstanding any other provision of this Chapter, any nonprofit organization or a group of organizations (hereafter, where the words "nonprofit organization" are used in this Chapter, it shall include a group of nonprofit organizations), any corporation, or any community chest, fund, or foundation that is organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or for the prevention of cruelty to children or animals, and that is exempt or may be exempted from federal income tax under section 501(c)(3) of the Internal Revenue Code, as long as the employing unit for some portion of a day in each of 20 different calendar weeks within the current or preceding calendar year (whether or not the weeks are or were consecutive) has or had in employment four or more individuals (not necessarily simultaneously and irrespective of whether the same individuals are or were employed in each week)."
SECTION 20.  G.S. 96‑8(6)k.12. reads as rewritten:
"12.	Service in any calendar quarter in the employ of any organization exempt from income tax under the provisions of section 501(a) of the Internal Revenue Code (other than an organization described in section 401(a) of the Internal Revenue Code) or under section 521 of the Internal Revenue Code, if the remuneration for the service is less than fifty dollars ($50.00)."
SECTION 21.  G.S. 96‑8(6)k.16. reads as rewritten:
"16.	Notwithstanding the provisions of G.S. 96‑8(6)f.3. and 96‑8(6)k.6., service performed by an individual on a boat engaged in catching fish or other forms of aquatic animal life under the arrangement with the owner or operator of such boat pursuant to which: (A) The individual does not receive any cash remuneration (other than as provided in subparagraph (B)), (B) The individual receives a share of the boat's (or the boats' in the case of a fishing operation involving more than one boat) catch of fish or other forms of aquatic animal life or a share of the proceeds from the sale of such catch, and (C) The amount of the individual's share depends on the amount of the boat's (or the boats' in the case of a fishing operation involving more than one boat) catch of fish or other forms of aquatic animal life, but only if the operating crew of the boat (or each boat from which the individual receives a share in the case of a fishing operation involving more than one boat) is normally made up of fewer than 10 individuals. In order to preserve the State's right to collect State unemployment taxes for which a credit against federal unemployment taxes may be taken for contributions paid into a State unemployment insurance fund, this paragraph 16 does not apply, with respect to any individual, to service during any period for which an assessment for federal unemployment taxes is made by the Internal Revenue Service pursuant to the Federal Unemployment Tax Act which assessment becomes a final determination (as defined by section 1313 of the Internal Revenue Code.)"
SECTION 22.  G.S. 96‑8(13)b. reads as rewritten:
"b.	"Wages" shall not include:
1.	Any payment made to, or on behalf of, an employee or the employee's beneficiary from or to a trust that qualifies under the conditions set forth in sections 401(a)(1) and (2) of the Internal Revenue Code;
2.	Any payment made to, or under, an annuity plan which at the time of the payment meets the requirements of sections 401(a)(3), (4), (5) and (6) of the Internal Revenue Code and exempt from tax under section 501(a) of the Internal Revenue Code at the time of the payment, unless the payment is made to an employee of the trust as remuneration for services rendered as an employee and not as beneficiary of the trust; or
3.	Any payment made to, or on behalf of, an employee or his beneficiary under a Cafeteria Plan within the meaning of section 125 of the Internal Revenue Code."
SECTION 23.  The first paragraph of G.S. 96‑9(d) reads as rewritten:
"(d)	Benefits paid to employees of nonprofit organizations shall be financed in accordance with the provisions of this paragraph. For the purposes of this paragraph, a nonprofit organization is an organization (or group of organizations) described in section 501(c)(3) of the Internal Revenue Code that is exempt from income tax under section 501(a) of the Internal Revenue Code."
SECTION 24.  G.S. 96‑12(g)(3) reads as rewritten:
"(3)	The individual may elect to have federal individual income tax deducted and withheld from the individual's payment of unemployment compensation at the amount specified in section 3402 of the Internal Revenue Code. "
SECTION 25.  G.S. 96‑12.01(a) is recodified as G.S. 91‑12.01(a1).
SECTION 26.  The first sentence of G.S. 96‑12.01 is designated as subsection (a) of that section and reads as rewritten:
"(a)	Extended benefits shall be paid under this Chapter as provided in this section."
SECTION 27.  G.S. 96‑12.01(a1)(11) reads as rewritten:
"(11)	"State law" means the unemployment insurance law of any state approved by the United States Secretary of Labor under section 3304 of the Internal Revenue Code."
SECTION 28.  G.S. 116D‑11(g) reads as rewritten:
"(g)	University Improvement Bonds Fund. – The proceeds of university improvement general obligation bonds and notes, including premium thereon, if any, except the proceeds of bonds the issuance of which has been anticipated by bond anticipation notes or the proceeds of refunding bonds or notes, shall be placed by the State Treasurer in a special fund to be designated 'University Improvement Bonds Fund'. Moneys in the University Improvement Bonds Fund shall be used for the purposes set forth in this Article.
Any additional moneys that may be received by means of a grant or grants from the United States of America or any agency or department thereof or from any other source to aid in financing the cost of any university improvements authorized by this Article may be placed by the State Treasurer in the University Improvement Bonds Fund or in a separate account or fund and shall be disbursed, to the extent permitted by the terms of the grant or grants, without regard to any limitations imposed by this Article.
The proceeds of university improvement general obligation bonds and notes may be used with any other moneys made available by the General Assembly for the making of university improvements, including the proceeds of any other State bond issues, whether previously made available or which may be made available after the effective date of this Article. The proceeds of university improvement bonds and notes shall be expended and disbursed under the direction and supervision of the Director of the Budget. The funds provided by this Article for university improvements shall be disbursed for the purposes provided in this Article upon warrants drawn on the State Treasurer by the State Controller, which warrants shall not be drawn until requisition has been approved by the Director of the Budget and which requisition shall be approved only after full compliance with the Executive Budget Act, Article 1 of Chapter 143 of the General Statutes."
SECTION 29.  G.S. 116D‑46(g) reads as rewritten:
"(g)	Community College Bonds Fund. – The proceeds of community college general obligation bonds and notes, including premium thereon, if any, except the proceeds of bonds the issuance of which has been anticipated by bond anticipation notes or the proceeds of refunding bonds or notes, shall be placed by the State Treasurer in a special fund to be designated 'Community College Bonds Fund'. Moneys in the Community College Bonds Fund shall be used for the purposes set forth in this Article.
Any additional moneys that may be received by means of a grant or grants from the United States of America or any agency or department thereof or from any other source to aid in financing the cost of any community college capital facilities authorized by this Article may be placed by the State Treasurer in the Community College Bonds Fund or in a separate account or fund and shall be disbursed, to the extent permitted by the terms of the grant or grants, without regard to any limitations imposed by this Article.
The proceeds of community college general obligation bonds and notes may be used with any other moneys made available by the General Assembly for the making of grants to community colleges for capital facilities, including the proceeds of any other State bond issues, whether previously made available or which may be made available after the effective date of this Article. The proceeds of community college bonds and notes shall be expended and disbursed under the direction and supervision of the Director of the Budget. The funds provided by this Article for grants to community colleges shall be disbursed for the purposes provided in this Article upon warrants drawn on the State Treasurer by the State Controller, which warrants shall not be drawn until requisition has been approved by the Director of the Budget and which requisition shall be approved only after full compliance with the Executive Budget Act, Article 1 of Chapter 143 of the General Statutes."
SECTION 30.  G.S. 143B‑221 reads as rewritten:
"§ 143B‑221. Department of Revenue – organization.
The Department of Revenue shall be organized in accordance with Article 1 of this Chapter.
The Secretary of Revenue may create, appoint, and disband committees and councils to consult with and advise the Department on matters relating to the duties, responsibilities, or functions of the Department."
SECTION 31.  G.S. 160A‑215.1(e) reads as rewritten:
"(e)	The following definitions apply in this section:
(1)	Vehicle. – Any of the following:
a.	A motor vehicle of the passenger type, including a passenger van, minivan, or sport utility vehicle.
b.	A motor vehicle of the cargo type, including cargo van, pickup truck, or truck with a gross vehicle weight rating of 26,000 pounds or less used predominantly in the transportation of property for other than commercial freight and that does not require the operator to posses a commercial drivers license.
c.	A trailer or semitrailer with a gross vehicle weight of 6,000 pounds or less.
(2)	Short‑term lease or rental. – Defined in G.S. 105‑187.1."
SECTION 32.  Section 16 of this act is effective retroactively to August 2, 2000.  The remainder of this act is effective when it becomes law.