§ 105-521. Transitional local government hold harmless for repealed reimbursements. - North Carolina Statutes

§ 105‑521.  Transitionallocal government hold harmless for repealed reimbursements.

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

(1)        Local government. – Acounty or municipality that received a distribution of local sales taxes in themost recent fiscal year for which a local sales tax share has been calculated.

(2)        Local sales taxshare. – A local government's percentage share of the two‑cent (2¢) salestaxes distributed during the most recent fiscal year for which data areavailable.

(3)        Repealedreimbursement amount. – The total amount a local government would have beenentitled to receive during the 2002‑2003 fiscal year under G.S. 105‑164.44C,105‑275.1, 105‑275.2, 105‑277.001, and 105‑277.1A, ifthe Governor had not withheld any distributions under those sections.

(3a)      Replacement revenue.– The sum of the following:

a.         Fifty percent (50%)of the amount of sales and use tax revenue distributed under Article 40 of thisChapter, other than revenue from the sale of food that is subject to local taxbut is exempt from State tax under G.S. 105‑164.13B.

b.         Twenty‑fivepercent (25%) of the amount of sales and use tax revenue distributed underArticle 39 of this Chapter or under Chapter 1096 of the 1967 Session Laws,other than revenue from the sale of food that is subject to local tax but isexempt from State tax under G.S. 105‑164.13B.

(4)        Two‑cent (2¢)sales taxes. – The first one‑cent (1¢) sales and use tax authorized inArticle 39 of this Chapter and in Chapter 1096 of the 1967 Session Laws, thefirst one‑half cent (1/2¢) local sales and use tax authorized in Article40 of this Chapter, and the second one‑half cent (1/2¢) local sales anduse tax authorized in Article 42 of this Chapter.

(b)        Distributions. – Onor before August 15, 2008, and every August 15 through August 15, 2012, theSecretary must multiply each local government's local sales tax share by theestimated amount of replacement revenue that all local governments are expectedto receive during the current fiscal year. If the resulting amount is less thanone hundred percent (100%) of the local government's repealed reimbursementamount, the Secretary must pay the local government the difference, but notless than one hundred dollars ($100.00).

On or before May 1 of eachfiscal year through May 1, 2012, the Department of Revenue and the FiscalResearch Division of the General Assembly must each submit to the Secretary andto the General Assembly a final projection of the estimated amount ofreplacement revenue that all local governments would be expected to receiveduring the upcoming fiscal year. If, after May 1 and before a distribution ismade, a law is enacted that would affect the projection, an updated projectionmust be submitted as soon as practicable. If the Secretary does not use thelower of the two final projections to make the calculation required by thissubsection, the Secretary must report the reasons for this decision to theJoint Legislative Commission on Governmental Operations within 60 days afterreceiving the projections.

(c)        Source of Funds. – TheSecretary must draw the funds distributed under this section from sales and usetax collections under Article 5 of this Chapter.

(d)        Reports. – TheSecretary must report to the Revenue Laws Study Committee by January 31, 2004,and each January 31 through January 31, 2013, the amount distributed under thissection for the current fiscal year. (2001‑424, s. 34.14(a); 2003‑284, s. 37.1;2003‑349, s. 6; 2004‑124, s. 6.3; 2007‑323, s. 31.16.3(c).)