GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1999

H	1 

HOUSE BILL 857*

Short Title:  Chatham, Orange Revenue Options.	(Local)

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Sponsors: Representatives Insko, Hackney; and Culp.

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Referred to:  Rules, Calendar and Operations of the House.

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April 1, 1999

A BILL TO BE ENTITLED
AN ACT TO AUTHORIZE CHATHAM COUNTY TO LEVY AN IMPACT TAX AND A VEHICLE REGISTRATION TAX, TO AUTHORIZE ORANGE COUNTY TO LEVY AN IMPACT TAX, TO AUTHORIZE THE TOWN OF CHAPEL HILL TO LEVY AN IMPACT TAX IN ADDITION TO ITS IMPACT FEES, TO AUTHORIZE THE TOWN OF CARRBORO TO LEVY A ROOM OCCUPANCY TAX, AND TO MODIFY THE HILLSBOROUGH MEALS TAX PENALTIES.
The General Assembly of North Carolina enacts:
TABLE OF CONTENTS
PART 1. CHATHAM IMPACT TAX
PART 2. CHATHAM VEHICLE REGISTRATION FEES
PART 3. ORANGE IMPACT TAX
PART 4. CHAPEL HILL IMPACT TAX
PART 5. CARRBORO ROOM TAX
PART 6. HILLSBOROUGH MEALS TAX CHANGES
PART 7. EFFECTIVE DATES
PART 1. IMPACT TAX
Section 1.  This part applies only to Chatham County.
Section 2.  The following definitions apply to this part:
(1)	Commercial building enclosed floor space. – All enclosed floor space used for any purpose except:
a.	Dwelling units and accessory structures to dwelling units.
b.	Recreational facilities constructed as part of a residential development and used primarily by residents of the development.
c.	Buildings owned by the United States, the State of North Carolina, any county, or any municipal corporation.
d.	Buildings owned and operated by nonprofit entities for noncommercial and nonresidential purposes.
e.	Schools or day care centers.
(2)	Dwelling unit. – An enclosure containing sleeping, kitchen, and bathroom facilities designed for and used or held ready for use as a permanent residence by one family.
(3)	Land development. –
	a.  Land development includes any of the following:
1.	Construction of any dwelling unit, other than one excluded under sub-subdivision b. of this subdivision, for which a building permit was issued or should have been issued after the effective date of an ordinance adopted under this part.
2.	Construction of any commercial building enclosed floor space for which a building permit was issued or should have been issued after the effective date of an ordinance adopted under this part.
3.	Conversion of a building that adds one or more new dwelling units or that creates new commercial building enclosed floor space.
4.	The initial location of a manufactured home or other dwelling or commercial structure within Chatham County.
b.	For purposes of determining the impact of land development for this part, land development does not include:
1.	Construction of an addition to a dwelling unit.
2.	The relocation within Chatham County of any structure located within the county on the effective date of an ordinance adopted pursuant to this part or any structure with respect to which an impact tax pursuant to this part has been paid.
3.	Within the county, the reconstruction or replacement of one dwelling unit by another or the replacement or reconstruction of commercial building enclosed floor space that was in existence on the effective date of an ordinance adopted pursuant to this part or of any such floor space with respect to which an impact tax adopted pursuant to this part has been paid.
(4)	Net proceeds. – The gross proceeds of the tax less the cost to the county of collecting and administering the tax.
(5)	Person. – An individual, a partnership, a corporation, or another legal entity.
(6)	Person responsible for the impact of land development. – The owner of any dwelling unit or commercial building enclosed floor space on the date an occupancy permit is issued for the dwelling unit or commercial floor space or, if no occupancy permit is issued, the date the dwelling unit or commercial floor space is occupied.
Section 3.  The Chatham County School Capital Impact Tax.
Section 3.(a)	Except as provided in subsection (b) of this section, Chatham County may adopt an ordinance levying a tax on the impact of land development within the county and provide for the administration, enforcement, and collection of the tax.
Section 3.(b)	Chatham County may not adopt an ordinance pursuant to this part if any ordinance pertaining to a system of impact fees to provide for capital improvements to public schools within Chatham County, adopted pursuant to Sections 4 through 12.1 of Chapter 460 of the 1987 Session Laws, is in effect.
Section 4.  Use of Tax Proceeds. – The purpose of the tax authorized by this part is to generate funds to partially offset the cost of constructing new school capital facilities or replacing, expanding, or improving existing school capital facilities necessitated in part by new growth within Chatham County.  Accordingly, the net proceeds generated by the tax authorized by this part shall be deposited by Chatham County in its capital reserve improvements fund or funds established under Part 2 of Article 3 of Chapter 159 of the General Statutes and may be expended, to the extent otherwise authorized by law, only for capital improvements projects related to public schools.
Section 5.  Liability; Administration. – An ordinance adopted pursuant to this part shall provide that:
(1)	A person responsible for the impact of land development shall pay an impact tax for each square foot of dwelling space and commercial building enclosed floor space for which an occupancy permit is issued or, if no occupancy permit is issued, for each square foot of dwelling space in an occupied dwelling and for each square foot of occupied enclosed floor space in a commercial building.
(2)	The tax shall be due on or before the date an occupancy permit is initially issued for the dwelling unit or commercial building enclosed floor space in question or, if no occupancy permit is issued, the date the dwelling unit or commercial floor space is initially occupied.  However, no tax due shall be considered delinquent until 60 days after the tax becomes due.  There shall be added to delinquent taxes interest at the legal rate.
(3)	Taxes authorized by this part may be collected pursuant to G.S. 153A-147 or G.S. 160A-207.  In addition, taxes authorized by this part may be recovered in a civil action in the nature of debt including an award of reasonable attorneys' fees as part of costs.
Section 6.  Rates. – Chatham County shall establish annually at the time of the adoption of its annual budget the tax rate to be levied per square foot of dwelling space and per square foot of commercial building enclosed floor space for the ensuing fiscal year.  Different tax rates may be established for different types of dwelling units and different types of commercial building enclosed floor space.
Section 7.  Provisions for Repeal of Other Local Acts. – Chatham County may repeal all or part of an ordinance pertaining to a system of impact fees to provide for capital improvements to public schools within Chatham County, adopted pursuant to Sections 4 through 12.1 of Chapter 460 of the 1987 Session Laws.  With respect to an ordinance pertaining to a system of impact fees to provide for capital improvements to public schools within Chatham County, Chatham County may not adopt an ordinance pursuant to Sections 4 through 12.1 of Chapter 460 of the 1987 Session Laws while an ordinance adopted pursuant to this part is in effect.
Section 8.  Disclosure Requirements. – Whenever the sale of real property located in Chatham County involves new construction, the seller shall prepare and sign, and the buyer shall receive and sign, a disclosure statement.  The disclosure statement shall either be included in a contract or sale or contained in a separate document executed prior to the execution of a sales contract.  This disclosure statement shall fully and completely disclose that the owner of the property at the time an occupancy permit issued for the new construction or, if no occupancy permit is issued, the date the new construction is occupied, may be subject to a tax levied by the county on the impact of land development.  If a seller fails to make this disclosure and the buyer suffers injury as a result of the seller's failure to disclose, the seller is liable to the buyer to the extent of the buyer's injury.
PART 2. CHATHAM VEHICLE REGISTRATION FEES
Section 9.  G.S. 20-97(b) reads as rewritten:
"(b)	General Municipal and County Vehicle Tax. –Cities, counties, and towns may levy a tax of not more than five dollars ($5.00) per year upon any vehicle resident in the city, county, or town. The proceeds of the tax may be used for any lawful purpose."
Section 10.  This part applies to Chatham County only.
PART 3. ORANGE IMPACT TAX
Section 11.  This part applies to Orange County only.
Section 12.  The following definitions apply to this part:
(1)	Commercial building enclosed floor space. – All enclosed floor space used for any purpose except:
a.	Dwelling units and accessory structures to dwelling units.
b.	Recreational facilities constructed as part of a residential development and used primarily by residents of the development.
c.	Buildings owned by the United States, the State of North Carolina, any county, or any municipal corporation.
d.	Buildings owned and operated by nonprofit entities for noncommercial and nonresidential purposes.
e.	Schools or day care centers.
(2)	Dwelling unit. – An enclosure containing sleeping, kitchen, and bathroom facilities designed for and used or held ready for use as a permanent residence by one family.
(3)	Land development. –
	a.  Land development includes any of the following:
1.	Construction of any dwelling unit, other than one excluded under sub-subdivision b. of this subdivision, for which a building permit was issued or should have been issued after the effective date of an ordinance adopted under this part.
2.	Construction of any commercial building enclosed floor space for which a building permit was issued or should have been issued after the effective date of an ordinance adopted under this part.
3.	Conversion of a building that adds one or more new dwelling units or that creates new commercial building enclosed floor space.
4.	The initial location of a manufactured home or other dwelling or commercial structure within Orange County.
b.	For purposes of determining the impact of land development for this part, land development does not include:
1.	Construction of an addition to a dwelling unit.
2.	The relocation within Orange County of any structure located within the county on the effective date of an ordinance adopted pursuant to this part or any structure with respect to which an impact tax pursuant to this part has been paid.
3.	Within the county, the reconstruction or replacement of one dwelling unit by another or the replacement or reconstruction of commercial building enclosed floor space that was in existence on the effective date of an ordinance adopted pursuant to this part or of any such floor space with respect to which an impact tax adopted pursuant to this part has been paid.
(4)	Net proceeds. – The gross proceeds of the tax less the cost to the county of collecting and administering the tax.
(5)	Person. – An individual, a partnership, a corporation, or another legal entity.
(6)	Person responsible for the impact of land development. – The owner of any dwelling unit or commercial building enclosed floor space on the date an occupancy permit is issued for the dwelling unit or commercial floor space or, if no occupancy permit is issued, the date the dwelling unit or commercial floor space is occupied.
Section 13.  The Orange County School Capital Impact Tax.
Section 13.(a)	Except as provided in subsection (b) of this section, Orange County may adopt an ordinance levying a tax on the impact of land development within the county and provide for the administration, enforcement, and collection of the tax.
Section 13.(b)	Orange County may not adopt an ordinance pursuant to this part if any ordinance pertaining to a system of impact fees to provide for capital improvements to public schools within Orange County, adopted pursuant to Sections 17 through 18.1 of Chapter 460 of the 1987 Session Laws and Chapter 324 of the 1991 Session Laws, is in effect.
Section 14.  Use of Tax Proceeds. – The purpose of the tax authorized by this part is to generate funds to partially offset the cost of constructing new school capital facilities or replacing, expanding, or improving existing school capital facilities necessitated in part by new growth within Orange County.  Accordingly, the net proceeds generated by the tax authorized by this part shall be deposited by Orange County in its capital reserve improvements fund or funds established under Part 2 of Article 3 of Chapter 159 of the General Statutes and may be expended, to the extent otherwise authorized by law, only for capital improvements projects related to public schools.
Section 15.  Liability; Administration. – An ordinance adopted pursuant to this part shall provide that:
(1)	A person responsible for the impact of land development shall pay an impact tax for each square foot of dwelling space and commercial building enclosed floor space for which an occupancy permit is issued or, if no occupancy permit is issued, for each square foot of dwelling space in an occupied dwelling and for each square foot of occupied enclosed floor space in a commercial building.
(2)	The tax shall be due on or before the date an occupancy permit is initially issued for the dwelling unit or commercial building enclosed floor space in question or, if no occupancy permit is issued, the date the dwelling unit or commercial floor space is initially occupied.  However, no tax due shall be considered delinquent until 60 days after the tax becomes due.  There shall be added to delinquent taxes interest at the legal rate.
(3)	Taxes authorized by this part may be collected pursuant to G.S. 153A-147 or G.S. 160A-207.  In addition, taxes authorized by this part may be recovered in a civil action in the nature of debt including an award of reasonable attorneys' fees as part of costs.
Section 16.  Rates. – Orange County shall establish annually at the time of the adoption of its annual budget the tax rate to be levied per square foot of dwelling space and per square foot of commercial building enclosed floor space for the ensuing fiscal year.  Different tax rates may be established for different types of dwelling units and different types of commercial building enclosed floor space.
Section 17.  Provisions for Repeal of Other Local Acts. – Orange County may repeal all or part of an ordinance pertaining to a system of impact fees to provide for capital improvements to public schools within Orange County, adopted pursuant to Sections 17 through 18.1 of Chapter 460 of the 1987 Session Laws and Chapter 324 of the 1991 Session Laws.  With respect to an ordinance pertaining to a system of impact fees to provide for capital improvements to public schools within Orange County, Orange County may not adopt an ordinance pursuant to Sections 17 through 18.1 of Chapter 460 of the 1987 Session Laws and Chapter 324 of the 1991 Session Laws while an ordinance adopted pursuant to this part is in effect.
Section 18. Disclosure Requirements. – Whenever the sale of real property located in Orange County involves new construction, the seller shall prepare and sign, and the buyer shall receive and sign, a disclosure statement.  The disclosure statement shall either be included in a contract or sale or contained in a separate document executed prior to the execution of a sales contract.  This disclosure statement shall fully and completely disclose that the owner of the property at the time an occupancy permit issued for the new construction or, if no occupancy permit is issued, the date the new construction is occupied, may be subject to a tax levied by the county on the impact of land development.  If a seller fails to make this disclosure and the buyer suffers injury as a result of the seller's failure to disclose, the seller is liable to the buyer to the extent of the buyer's injury.
PART 4. CHAPEL HILL IMPACT TAX
Section 19.  The Charter of the Town of Chapel Hill, being Chapter 473, Session Laws of 1975, as amended, is further amended by adding a new Article 8 to Chapter V to read as follows:
"ARTICLE 8.  IMPACT TAXES.
"§ 5.43.  Impact Tax Authorized.
The Town of Chapel Hill may adopt an ordinance levying an excise tax on the impact of land development within the Town and providing for the administration, enforcement, and collection of the tax.
"§ 5.44.  Definitions.
The following definitions apply in this Article:
(1)	Commercial building enclosed floor space. – All enclosed floor space designed or intended to be used for any purpose except:
a.	Single-family, two-family, or multifamily residences and accessory structures.
b.	Recreational facilities constructed as part of a residential development and used primarily by residents of the development.
c.	Governmentally owned buildings.
d.	Buildings owned and operated by nonprofit entities for noncommercial and nonresidential purposes.
e.	Buildings designed and constructed to be used as schools or day care centers.
(2)	Land development. – Either of the following:
a.	Construction of any dwelling unit for which a building permit was issued or should have been issued after the effective date of an ordinance adopted under this Article.
b.	Construction of any commercial building enclosed floor space for which a building permit was issued or should have been issued after the effective date of an ordinance adopted under this Article.
(3)	Person. – An individual, a partnership, a corporation, or another legal entity.
(4)	Person responsible for the impact of land development. – The owner of any dwelling unit or commercial building enclosed floor space on the date an occupancy permit is issued for the dwelling unit or commercial floor space or, if no occupancy permit is issued, the date the dwelling unit or commercial floor space is occupied.
"§ 5.45.  Purpose of Tax.
The purpose of the tax authorized by this Article is to generate funds to partially offset the cost of constructing new capital facilities or replacing, expanding, or improving existing capital facilities necessitated in part by new growth within the Town.  Accordingly, the net proceeds generated by the tax authorized by this Article shall be deposited in the Town's capital reserve improvements fund or funds established under Part 2 of Article 3 of Chapter 159 of the General Statutes.
"§ 5.46.  Persons Responsible for Tax; Collection.
An ordinance adopted under this Article shall provide that:
(1)	A person responsible for the impact of land development shall pay an excise tax for each square foot of dwelling space and commercial building enclosed floor space for which an occupancy permit is issued or, if no occupancy permit is issued, for each square foot of dwelling space in an occupied dwelling and for each square foot of occupied enclosed floor space in a commercial building.
(2)	The tax shall be due on or before the date an occupancy permit is issued for the dwelling unit or commercial building enclosed floor space in question or, if no occupancy permit is issued, the date the dwelling unit or commercial floor space is occupied.  However, no tax due shall be considered delinquent until 60 days after the tax becomes due.  There shall be added to delinquent taxes interest at the legal rate.
(3)	Taxes authorized by this Article may be collected pursuant to G.S. 160A-207.  In addition, taxes authorized by this Article may be recovered in a civil action in the nature of debt including an award of reasonable attorneys' fees as part of costs.
"§ 5.47.  Tax Rate to be Set Annually.
The Town of Chapel Hill shall establish annually at the time of the adoption of the annual budget the rate of tax to be levied per square foot of dwelling space and per square foot of commercial building enclosed floor space for the ensuing fiscal year.  Different tax rates may be established for different types of commercial construction and for dwelling units containing a different number of bedrooms.
"§ 5.48.  Disclosure Required.
Whenever the sale of real property located in the Town involves new construction, the seller shall prepare and sign, and the buyer shall receive and sign, a disclosure statement.  This disclosure statement shall fully and completely disclose that the owner of the property at the time an occupancy permit is issued for the new construction or, if no occupancy permit is issued, the date the new construction is occupied, may be subject to an excise tax on the impact of land development.  If a seller fails to make this disclosure and the buyer suffers injury as a result of the seller's failure to disclose, the seller is liable to the buyer to the extent of the buyer's injury."
PART 5. CARRBORO ROOM TAX
Section 20.  Occupancy tax.  (a)	Authorization and scope.  The governing body of the Town of Carrboro may levy a room occupancy tax of up to three percent (3%) of the gross receipts derived from the rental of any room, lodging, or accommodation furnished by a hotel, motel, inn, tourist camp, or similar place within the town that is subject to sales tax imposed by the State under G.S. 105-164.4(a)(3).  This tax is in addition to any State or local sales tax.  This tax does not apply to accommodations furnished by nonprofit charitable, educational, or religious organizations when furnished in furtherance of their nonprofit purpose.
Section 20.(b)	Administration.  A tax levied under this section shall be levied, administered, collected, and repealed as provided in G.S. 160A-215.  The penalties provided in G.S. 160A-215 apply to a tax levied under this section.
Section 20.(c)	Use of tax revenue.  The governing body of the Town of Carrboro shall decide on the allocation of the net proceeds of the tax levied under this section annually during its budgeting process, with particular consideration given to providing funding to promote travel and tourism and for tourism-related expenditures, and not less than ten percent (10%) of the net proceeds shall be used for those purposes.
The following definitions apply in this subsection:
(1)	Net proceeds. – Gross proceeds less the cost to the town of administering and collecting the tax, as determined by the finance officer, not to exceed three percent (3%) of the first five hundred thousand dollars ($500,000) of gross proceeds collected each year and one percent (1%) of the remaining gross receipts collected each year.
(2)	Promote travel and tourism. – To advertise or market an area or activity, publish and distribute pamphlets and other materials, conduct market research, or engage in similar promotional activities that attract tourists or business travelers to the area; the term includes administrative expenses incurred in engaging in the listed activities.
(3)	Tourism-related expenditures. – Expenditures that, in the judgment of the governing body of the town, are designed to increase the use of lodging facilities, meeting facilities, or convention facilities in a town or to attract tourists or business travelers to the town.  The term includes tourism-related capital expenditures.
Section 21.  Town administrative provisions.  – Section 3 of S.L. 1997-410, as amended by Section 2 of S.L. 1997-447 and Section 4 of S.L. 1998-112, reads as rewritten:
"Section 3.  Municipal Administrative Provisions.  G.S. 160A-215, as enacted by S.L. 1997-361 and S.L. 1997-364, applies to the Cities of Goldsboro, Lumberton, Mount Airy, Shelby, and Statesville, to the Towns of Carrboro and St. Pauls, and to the municipalities in Brunswick County."
PART 6. HILLSBOROUGH MEALS TAX CHANGES
Section 22.  Subsection (g) of Section 1 of Chapter 449 of the 1993 Session Laws reads as rewritten:
"(g)	Penalties. – A person, firm, corporation, or association who fails or refuses to file a return required by this section or pay the tax due under this act is subject to the civil and criminal penalties set by G.S. 105-236 for failure to pay or file a return for State sales and use taxes.  In addition, for failure or refusal to file the return for a period of 30 days after it is due, the taxpayer is subject to an additional tax, as a penalty, of one hundred dollars ($100.00).  The town board has the same authority to waive the penalties for a tax levied under this act that the Secretary of Revenue has to waive the penalties for State sales and use taxes.  The remedies provided in G.S. 160A-207 apply to taxes, interest, and penalties that accrue under this act.  
."
PART 7. EFFECTIVE DATES
Section 23.  Section 22 of this act becomes effective July 1, 1999, and applies to taxes due on or after that date.  The remainder of this act is effective when it becomes law.