§ 105-164.44F. Distribution of part of telecommunications taxes to cities. - North Carolina Statutes

§ 105‑164.44F. Distribution of part of telecommunications taxes to cities.

(a)        (Effective untilJuly 1, 2011) Amount. – The Secretary must distribute part of the taxesimposed by G.S. 105‑164.4(a)(4c) on telecommunications service andancillary service. The Secretary must make the distribution within 75 daysafter the end of each calendar quarter. The amount the Secretary mustdistribute is the following percentages of the net proceeds of the taxescollected during the quarter:

(1)        Sixteen and thirty‑sixhundredths percent (16.36%) minus two million six hundred twenty thousand ninehundred forty‑eight dollars ($2,620,948), must be distributed to citiesin accordance with this section. The deduction is one‑fourth of theannual amount by which the distribution to cities of the gross receiptsfranchise tax on telephone companies, imposed by former G.S. 105‑20, wasrequired to be reduced beginning in fiscal year 1995‑96 as a result ofthe "freeze deduction."

(2)        Six and seventy‑fourhundredths percent (6.74%) must be distributed to counties and cities asprovided in G.S. 105‑164.44I.

(a)        (Effective July1, 2011) Amount. – The Secretary must distribute part of the taxes imposedby G.S. 105‑164.4(a)(4c) on telecommunications service and ancillaryservice. The Secretary must make the distribution within 75 days after the endof each calendar quarter. The amount the Secretary must distribute is thefollowing percentages of the net proceeds of the taxes collected during thequarter:

(1)        Eighteen and seventyone hundredths percent (18.70%) minus two million six hundred twenty thousandnine hundred forty‑eight dollars ($2,620,948), must be distributed tocities in accordance with this section. The deduction is one‑fourth ofthe annual amount by which the distribution to cities of the gross receiptsfranchise tax on telephone companies, imposed by former G.S. 105‑20, wasrequired to be reduced beginning in fiscal year 1995‑96 as a result ofthe "freeze deduction."

(2)        Seven and seventenths percent (7.7%) must be distributed to counties and cities as provided inG.S. 105‑164.44I.

(b)        Share of CitiesIncorporated on or After January 1, 2001. – The share of a city incorporated onor after January 1, 2001, is its per capita share of the amount to bedistributed to all cities incorporated on or after this date. This amount isthe proportion of the total to be distributed under this section that is thesame as the proportion of the population of cities incorporated on or afterJanuary 1, 2001, compared to the population of all cities. In making thedistribution under this subsection, the Secretary must use the most recentannual population estimates certified to the Secretary by the State BudgetOfficer.

(c)        Share of CitiesIncorporated Before January 1, 2001. – The share of a city incorporated beforeJanuary 1, 2001, is its proportionate share of the amount to be distributed toall cities incorporated before this date. A city's proportionate share for aquarter is based on the amount of telephone gross receipts franchise taxes attributedto the city under G.S. 105‑116.1 for the same quarter that was the lastquarter in which taxes were imposed on telephone companies under repealed G.S.105‑120. The amount to be distributed to all cities incorporated beforeJanuary 1, 2001, is the amount determined under subsection (a) of this section,minus the amount distributed under subsection (b) of this section.

The following changes applywhen a city incorporated before January 1, 2001, alters its corporatestructure. When a change described in subdivision (2) or (3) occurs, theresulting cities are considered to be cities incorporated before January 1,2001, and the distribution method set out in this subsection rather than themethod set out in subsection (b) of this section applies:

(1)        If a city dissolvesand is no longer incorporated, the proportional shares of the remaining citiesincorporated before January 1, 2001, must be recalculated to adjust for thedissolution of that city.

(2)        If two or morecities merge or otherwise consolidate, their proportional shares are combined.

(3)        If a city dividesinto two or more cities, the proportional share of the city that divides isallocated among the new cities on a per capita basis.

(d)        Share of CitiesServed by a Telephone Membership Corporation. – The share of a city served by atelephone membership corporation, as described in Chapter 117 of the GeneralStatutes, is computed as if the city was incorporated on or after January 1,2001, under subsection (b) of this section. If a city is served by a telephonemembership corporation and another provider, then its per capita share underthis subsection applies only to the population of the area served by thetelephone membership corporation.

(e)        Ineligible Cities.– An ineligible city is disregarded for all purposes under this section. A cityincorporated on or after January 1, 2000, is not eligible for a distributionunder this section unless it meets both of the following requirements:

(1)        It is eligible toreceive funds under G.S. 136‑41.2.

(2)        A majority of themileage of its streets is open to the public.

(f)         Nature. – TheGeneral Assembly finds that the revenue distributed under this section is localrevenue, not a State expenditure, for the purpose of Section 5(3) of ArticleIII of the North Carolina Constitution. Therefore, the Governor may not reduceor withhold the distribution.  (2001‑424, s. 34.25(b); 2001‑430, s. 10;2001‑487, s. 67(d); 2002‑120, s. 4; 2004‑203, s. 5(g); 2005‑276,s. 33.19; 2005‑435, s. 34(c); 2006‑33, s. 8; 2006‑66, ss.24.1(d), (e), (f), (g); 2006‑151, s. 7; 2007‑145, s. 9(a); 2007‑323,ss. 31.2(a), (b); 2009‑451, s. 27A.2(c).)