§ 105-116.1. Distribution of gross receipts taxes to cities. - North Carolina Statutes

§ 105‑116.1. Distribution of gross receipts taxes to cities.

(a)        Definitions. – Thefollowing definitions apply in this section:

(1)        Freeze deduction. –The amount by which the percentage distribution amount of a city was requiredto be reduced in fiscal year 1995‑96 in determining the amount todistribute to the city.

(2)        Percentagedistribution amount. – Three and nine hundredths percent (3.09%) of the grossreceipts derived by an electric power company from sales within a city that aretaxable under G.S. 105‑116.

(b)        Distribution. – TheSecretary must distribute to the cities part of the taxes collected under thisArticle on electric power companies. Each city's share for a calendar quarteris the percentage distribution amount for that city for that quarter minus one‑fourthof the city's hold‑back amount and one‑fourth of the city'sproportionate share of the annual cost to the Department of administering thedistribution. The Secretary must make the distribution within 75 days after theend of each calendar quarter. The General Assembly finds that the revenuedistributed under this section is local revenue, not a State expenditure, forthe purpose of Section 5(3) of Article III of the North Carolina Constitution.Therefore, the Governor may not reduce or withhold the distribution.

(c)        Limited Hold‑HarmlessAdjustment. – The hold‑back amount for a city that, in the 1995‑96fiscal year, received from gross receipts taxes on electric power companies andnatural gas companies less than ninety‑five percent (95%) of the amountit received in the 1990‑91 fiscal year but at least sixty percent (60%)of the amount it received in the 1990‑91 fiscal year is the amountdetermined by the following calculation:

(1)        Adjust the city's1995‑96 distribution by adding the city's freeze deduction attributableto receipts from electric power companies and natural gas companies to theamount distributed to the city for that year.

(2)        Compare the adjusted1995‑96 amount with the city's 1990‑91 distribution.

(3)        If the adjusted 1995‑96amount is less than or equal to the city's 1990‑91 distribution, the hold‑backamount for the city is zero.

(4)        If the adjusted 1995‑96amount is more than the city's 1990‑91 distribution, the hold‑backamount for the city is the city's freeze deduction attributable to receiptsfrom electric power companies and natural gas companies minus the differencebetween the city's 1990‑91 distribution and the city's 1995‑96distribution.

(c1)      Additional LimitedHold‑Harmless Adjustment. – The hold‑back amount for a city that,in the 1995‑96 fiscal year, received from gross receipts taxes onelectric power companies and natural gas companies less than sixty percent(60%) of the amount it received in the 1990‑91 fiscal year is the amountdetermined by the following calculation:

(1)        Adjust the city's1999‑2000 distribution by adding the city's freeze deduction attributableto receipts from electric power companies and natural gas companies to theamount distributed to the city for that year.

(2)        Compare the adjusted1999‑2000 amount with the city's 1990‑91 distribution.

(3)        If the adjusted 1999‑2000amount is less than or equal to the city's 1990‑91 distribution, the hold‑backamount for the city is zero.

(4)        If the adjusted 1999‑2000amount is more than the city's 1990‑91 distribution, the hold‑backamount for the city is the city's freeze deduction attributable to receiptsfrom electric power companies and natural gas companies minus the differencebetween the city's 1990‑91 distribution and the city's 1999‑2000 distribution.

(d)        Allocation of Hold‑HarmlessAdjustment. – The hold‑back amount for a city that, in the 1995‑96fiscal year, received from gross receipts taxes on electric power companies andnatural gas companies at least ninety‑five percent (95%) of the amount itreceived in the 1990‑91 fiscal year is the amount determined by thefollowing calculation:

(1)        Determine the amountby which the freeze deduction attributable to receipts from electric powercompanies and natural gas companies is reduced for all cities whose hold‑backamount is determined under subsections (c) and (c1) of this section. Thisamount is the total hold‑harmless adjustment.

(2)        Determine the amountof gross receipts taxes that would be distributed for the quarter to citieswhose hold‑back amount is determined under this subsection if thesecities received their percentage distribution amount minus one‑fourth oftheir freeze deduction attributable to receipts from electric power companiesand natural gas companies.

(3)        For each city includedin the calculation in subdivision (2) of this subsection, determine that city'spercentage share of the amount determined under that subdivision.

(4)        Add to the city'sfreeze deduction attributable to receipts from electric power companies andnatural gas companies an amount equal to the city's percentage share undersubdivision (3) of this subsection multiplied by the total hold‑harmlessadjustment.

(e)        Disqualification. –No municipality may receive any funds under this section if it was incorporatedwith an effective date of on or after January 1, 2000, and is disqualified fromreceiving funds under G.S. 136‑41.2. No municipality may receive anyfunds under this section, incorporated with an effective date on or afterJanuary 1, 2000, unless a majority of the mileage of its streets is open to thepublic. The previous sentence becomes effective with respect to distribution offunds on or after July 1, 1999. (1997‑118, s. 1; 1997‑426, s. 3.1; 1997‑439,s. 3; 1997‑456, s. 55.5; 1998‑22, s. 3; 1999‑458, s. 11; 2000‑128,s. 2; 2001‑430, s. 11; 2002‑120, s. 2; 2005‑435, s. 34(b).)