GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 1997
SESSION LAW 1998-55
TABLE OF CONTENTS
I. BILL LEE ACT/DEVELOPMENT ZONES
II. INFRASTRUCTURE FUNDS
III. AIR COURIER HUBS
IV. RECYCLING INDUSTRY
V. EFFECTIVE DATES
The General Assembly of North Carolina enacts:
PART I. BILL LEE ACT/DEVELOPMENT ZONES
Section 1. Article 3A of Chapter 105 of the General Statutes reads as rewritten:
"ARTICLE 3A.
"Tax Incentives for New and Expanding Businesses.
[Repealed effective January 1, 2002]
"§ 105-129.2. (Repealed effective January 1, 2002 - see note) Definitions.
The following definitions apply in this Article:
(1) Air courier services. -
Defined in the Standard Industrial Classification Manual issued by the United
States Office of Management and Budget. A person is engaged in the air
courier services business if the person's primary business is furnishing air
delivery of individually addressed letters and packages for compensation,
except by the United States Postal Service.
(2) Central administrative office. - Defined in the North American Industry Classification System adopted by the United States Office of Management and Budget.
(3) Cost. - In the case of property owned by the taxpayer, cost is determined pursuant to regulations adopted under section 1012 of the Code. In the case of property the taxpayer leases from another, cost is value as determined pursuant to G.S. 105-130.4(j)(2).
(4) Data processing. - Defined in the North American Industry Classification System adopted by the United States Office of Management and Budget.
(5) Development zone. - An area designated as a development zone pursuant to G.S. 105-129.3A.
(6) Enterprise tier. - The classification assigned to an area pursuant to G.S. 105-129.3.
(7) Full-time job. - A position that requires at least 1,600 hours of work per year and is intended to be held by one employee during the entire year. A full-time employee is an employee who holds a full-time job.
(8) Reserved.
(9) Large investment. - Defined in G.S. 105-129.4(b1).
(10) Machinery and equipment. - Engines, machinery, tools, and implements used or designed to be used in the business for which the credit is claimed. The term does not include real property as defined in G.S. 105-273 or rolling stock as defined in G.S. 105-333.
(11) Manufacturing. - Defined in the North American Industry Classification System adopted by the United States Office of Management and Budget.
(12) Purchase. - Defined in section 179 of the Code.
(13) Warehousing and wholesale trade. - Defined in the North American Industry Classification System adopted by the United States Office of Management and Budget.
(1a) Central administrative
office. - Defined in the Standard Industrial Classification Manual issued by
the United States Office of Management and Budget.
(1b) Cost. - Determined
pursuant to regulations adopted under section 1012 of the Code.
(2) Data
processing. - Defined in the Standard Industrial Classification Manual issued
by the United States Office of Management and Budget.
(3) Enterprise
tier. - The classification assigned to an area pursuant to G.S. 105-129.3.
(4) Full-time
job. - A position that requires at least 1,600 hours of work per year and is
intended to be held by one employee during the entire year. A full-time
employee is an employee who holds a full-time job.
(4a) Reserved.
(5) Machinery
and equipment. - Engines, machinery, tools, and implements that are capitalized
by the taxpayer for tax purposes under the Code and are used or designed to be
used in the business for which the credit is claimed. The term does not include
real property as defined in G.S. 105-273 or rolling stock as defined in G.S.
105-333.
(6) Manufacturing
and processing. - Defined in the Standard Industrial Classification Manual
issued by the United States Office of Management and Budget.
(7) Purchase. -
Defined in section 179 of the Code.
(8) Warehousing
and distribution. - Defined in the Standard Industrial Classification Manual
issued by the United States Office of Management and Budget.
"§ 105-129.3. (Repealed effective January 1, 2002) Enterprise tier designation.
(a) Tiers Defined. - An enterprise tier one area is a county whose enterprise factor is one of the 10 highest in the State. An enterprise tier two area is a county whose enterprise factor is one of the next 15 highest in the State. An enterprise tier three area is a county whose enterprise factor is one of the next 25 highest in the State. An enterprise tier four area is a county whose enterprise factor is one of the next 25 highest in the State. An enterprise tier five area is any area that is not in a lower-numbered enterprise tier.
(b) Annual Designation. - Each year, on or before December 31, the Secretary of Commerce shall assign to each county in the State an enterprise factor that is the sum of the following:
(1) The county's rank in a ranking of counties by average rate of unemployment from lowest to highest, for the preceding three years.
(2) The county's rank in a ranking of counties by average per capita income from highest to lowest, for the preceding three years.
(3) The county's rank in a ranking of counties by percentage growth in population from highest to lowest.
The Secretary of Commerce shall then rank all the counties within the State according to their enterprise factor from highest to lowest, identify all the areas of the State by enterprise tier, and provide this information to the Secretary of Revenue. An enterprise tier designation is effective only for the calendar year following the designation.
In measuring rates of unemployment and per capita income, the Secretary shall use the latest available data published by a State or federal agency generally recognized as having expertise concerning the data. In measuring population growth, the Secretary shall use the most recent estimates of population certified by the State Planning Officer.
(c) Exception for Enterprise Tier One Areas. - Notwithstanding the provisions of this section, an enterprise tier one area may not be redesignated as a higher-numbered enterprise tier area until it has been an enterprise tier one area for at least two consecutive years.
(d) Exception for Two-County Industrial Park. - For the purpose of this Article, an eligible two-county industrial park that meets all of the following conditions has the lower enterprise tier designation of the designations of the two counties in which it is located:
(1) It is located in two contiguous counties, one of which has a lower enterprise tier designation than the other.
(2) At least one-third of the park is located in the county with the lower tier designation.
(3) It is owned by the two counties or a joint agency of the counties.
(4) The county with the lower tier designation contributed at least one-half of the cost of developing the park.
"§ 105-129.3A. Development zone designation.
(a) Development Zone Defined. - A development zone is an area comprised of one or more contiguous census tracts, census block groups, or both in the most recent federal decennial census that meets all of the following conditions:
(1) It is located in whole or in part in a city with a population of more than 5,000 according to the most recent annual population estimates certified by the State Planning Officer.
(2) It has a population of 1,000 or more according to the most recent annual population estimates certified by the State Planning Officer.
(3) More than twenty percent (20%) of its population is below the poverty level according to the most recent federal decennial census.
(b) Designation. - Upon request of a taxpayer or a local government, the Secretary of Commerce shall designate whether an area is a development zone that meets the conditions of subsection (a) of this section. A development zone designation is effective for 48 months following the designation.
(c) Relationship With Enterprise Tiers. - For the purpose of the wage standard requirement of G.S. 105-129.3(b), 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.
"§ 105-129.4. (Repealed effective January 1, 2002) Eligibility; forfeiture.
(a) Type of Business. - A taxpayer is eligible for a credit allowed by G.S. 105-129.12 if the real property for which the credit is claimed is used for a central administrative office that creates at least 40 new jobs. A taxpayer is eligible for the other credits allowed by this Article if the taxpayer engages in one of the following types of businesses and the jobs with respect to which a credit is claimed are created in that business, the machinery and equipment with respect to which a credit is claimed are used in that business, and the research and development for which a credit is claimed are carried out as part of that business:
(1) Air courier services.
(2) Central administrative office that creates at least 40 new jobs.
(3) Data processing.
(4) Manufacturing or
processing. Manufacturing.
(5) Warehousing or distribution.
wholesale trade.
(a1) Central Administrative
Office. - A central administrative office creates at least 40 new
jobs if, during the taxable year the taxpayer first uses the property as a
central administrative office, if the taxpayer hires at least 40
additional full-time employees to fill new positions at the office. office
either in the year the taxpayer first uses the property as a central
administrative office or in the preceding 24 months while using temporary space
for the central administrative office functions during completion of the
administrative office property. Jobs transferred from one area in the
State to another area in the State are not considered new jobs for purposes of
this subsection.
(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. 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 administrative office 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. 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.
(b1) Large Investment. - A taxpayer who is otherwise eligible for a tax credit under this Article becomes eligible for the large investment enhancements provided for credits under this Article if the Secretary of Commerce certifies that the taxpayer will purchase or lease, and place in service in connection with the eligible business within a two-year period, at least one hundred fifty million dollars ($150,000,000) worth of one or more of the following: real property, machinery and equipment, or central administrative office property. If the taxpayer fails to make the level of investment certified within this two-year period, the taxpayer forfeits the large investment enhancements as provided in subsection (d) of this section.
(c) Worker
Training. - A taxpayer is eligible for the tax credit for worker training only
for training workers who occupy jobs for which the taxpayer is eligible to
claim an installment of the credit for creating jobs or which are full-time
positions at a location with respect to which the taxpayer is eligible to claim
an installment of the credit for investing in machinery and equipment for the
taxable year.
The credit for worker training is allowed only with
respect to employees in positions not classified as exempt under the Fair Labor
Standards Act, 29 U.S.C. § 213(a)(1) and for expenditures for training that
would be eligible for expenditure or reimbursement under the Department of
Community Colleges' New and Expanding Industry Program, as determined by
guidelines adopted by the State Board of Community Colleges. The credit is not
allowed for expenditures that are paid or reimbursed by the New and Expanding
Industry Program. To establish eligibility, the taxpayer must obtain as part of
the application process under G.S. 105-129.6 the certification of the
Department of Community Colleges that the taxpayer's planned worker training
would satisfy the requirements of this paragraph. A taxpayer shall apply to the
Department of Community Colleges for this certification. The application must
be on a form provided by the Department of Community Colleges, must provide a
detailed plan of the worker training to be provided, and must contain any
information required by the Department of Community Colleges to determine
whether the requirements of this paragraph will be satisfied. If the Department
of Community Colleges determines that the planned worker training meets the
requirements of this paragraph, the Department of Community Colleges shall
issue a certificate describing the location with respect to which the credit is
claimed and stating that the planned worker training meets the requirements of
this paragraph. The State Board of Community Colleges may adopt rules in
accordance with Chapter 150B of the General Statutes that are needed to carry
out its responsibilities under this paragraph.
(d) Forfeiture. - A taxpayer forfeits a credit allowed under this Article if the taxpayer was not eligible for the credit at the time the taxpayer applied for the credit. In addition, a taxpayer forfeits a large investment enhancement of a tax credit if the taxpayer fails to make the level of investment certified by the Secretary of Commerce under subsection (b1) of this section within the required two-year period. A taxpayer that forfeits a credit under this Article is liable for all past taxes avoided as a result of the credit plus interest at the rate established under G.S. 105-241.1(i), computed from the date the taxes would have been due if the credit had not been allowed. The past taxes and interest are due 30 days after the date the credit is forfeited; a taxpayer that fails to pay the past taxes and interest by the due date is subject to the penalties provided in G.S. 105-236. If a taxpayer forfeits the credit for creating jobs or the credit for investing in machinery and equipment, the taxpayer also forfeits any credit for worker training claimed for the jobs for which the credit for creating jobs was claimed or the jobs at the location with respect to which the credit for investing in machinery and equipment was claimed.
(e) Change in Ownership
of Business. - The sale, merger, acquisition, or bankruptcy of a business, or
any other transaction by which an existing business reformulates itself
as another business, does not create new eligibility in a succeeding business
with respect to credits for which the predecessor was not eligible under this
Article. A successor business may, however, take any installment of or
carried-over portion of a credit that its predecessor could have taken if it
had a tax liability. The acquisition of a business is a new investment
that creates new eligibility in the acquiring taxpayer under this Article if
any of the following conditions are met:
(1) The business closed before it was acquired.
(2) The business was required to file a notice of plant closing or mass layoff under the federal Worker Adjustment and Retraining Notification Act, 29 U.S.C. § 2102, before it was acquired.
(3) The business was acquired by its employees through an employee stock option transaction or another similar mechanism.
"§ 105-129.5. (Repealed effective January 1, 2002) Tax election; cap.
(a) Tax Election. - The credits provided in this Article are allowed against the franchise tax levied in Article 3 of this Chapter and the income taxes levied in Article 4 of this Chapter. The credit for investing in central administrative office property provided in G.S. 105-129.12 is also allowed against the gross premiums tax levied in Article 8B of this Chapter. The taxpayer shall elect the tax against which a credit will be claimed when filing the return on which the first installment of the credit is claimed. This election is binding. Any carryforwards of the credit must be claimed against the same tax.
(b) Cap. - The credits
allowed under this Article may not exceed fifty percent (50%) of the tax
against which they are claimed for the taxable year, reduced by the sum of all
other credits allowed against that tax, except tax payments made by or on
behalf of the taxpayer. This limitation applies to the cumulative amount of
credit, including carryforwards, claimed by the taxpayer under this Article
against each tax for the taxable year. Any unused portion of the a credit
with respect to a large investment may be carried forward for the
succeeding five years. 20 years. Any unused portion of any
other credit may be carried forward for the succeeding five years.
"§ 105-129.6. (Repealed effective January 1, 2002) Application; reports.
(a) Application. - To claim the credits allowed by this Article, the taxpayer must provide with the tax return the certification of the Secretary of Commerce that the taxpayer meets all of the eligibility requirements of G.S. 105-129.4 with respect to each credit. A taxpayer shall apply to the Secretary of Commerce for certification of eligibility. The application must be on a form provided by the Secretary of Commerce and must contain any information necessary for the Secretary of Commerce to determine whether the taxpayer meets the eligibility requirements. If the Secretary of Commerce determines that the taxpayer meets all of the eligibility requirements of G.S. 105-129.4 with respect to a credit, the Secretary shall issue a certificate describing the location with respect to which the credit is claimed, outlining the eligibility requirements for the credit, and stating that the taxpayer meets the eligibility requirements. If the Secretary of Commerce determines that the taxpayer does not meet all of the eligibility requirements of G.S. 105-129.4 with respect to a credit, the Secretary must advise the taxpayer in writing of the eligibility requirements the taxpayer fails to meet. The Secretary of Commerce may adopt rules in accordance with Chapter 150B of the General Statutes that are needed to carry out the Secretary of Commerce's responsibilities under this section.
(a1) Fee. - When filing an application for certification under this section, the taxpayer must pay the Department of Commerce a fee of seventy-five dollars ($75.00). Fees collected under this subsection are receipts of the Department of Commerce.
(b) Reports. - The Department of Commerce shall report to the Department of Revenue 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 applications for each credit allowed in this Article.
(2) The number and enterprise tier area of new jobs with respect to which credits were applied for.
(3) The cost of machinery and equipment with respect to which credits were applied for.
(4) The number of new jobs created within development zones, and the percentage of those jobs that were filled by residents of the zones.
"§ 105-129.7. (Repealed effective January 1, 2002) Substantiation.
To claim a credit allowed by this Article, the taxpayer must provide any information required by the Secretary of Revenue. Every taxpayer claiming a credit under this Article shall maintain and make available for inspection by the Secretary of Revenue any records the Secretary considers necessary to determine and verify the amount of the credit to which the taxpayer is entitled. The burden of proving eligibility for the credit and the amount of the credit shall rest upon the taxpayer, and no credit shall be allowed to a taxpayer that fails to maintain adequate records or to make them available for inspection.
"§ 105-129.8. (Repealed effective January 1, 2002) Credit for creating jobs.
(a) Credit. - A taxpayer
that meets the eligibility requirements set out in G.S. 105-129.4, has five or
more employees for at least 40 weeks during the taxable year, and hires an
additional full-time employee during that 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:
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 shall be taken in equal installments over the four years following the taxable year in which the additional employee was hired and shall be 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 shall not be 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 shall be calculated as if the position had been created initially in the area to which it was moved.
(b) Repealed by Session Laws 1989, c. 111, s. 1.
(b1), (c) Repealed by Session Laws 1996, Second Extra Session, c. 13, s. 3.3.
(d) Planned Expansion. - A taxpayer that signs a letter of commitment with the Department of Commerce to create at least twenty new full-time jobs in a specific area within two years of the date the letter is signed qualifies for the credit in the amount allowed by this section based on the area's enterprise tier and development zone designation for that year even though the employees are not hired that year. The credit shall be available in the taxable year after at least twenty employees have been hired if the hirings are within the two-year commitment period. The conditions outlined in subsection (a) apply to a credit taken under this subsection except that if the area is redesignated to a higher-numbered enterprise tier or loses its development zone designation after the year the letter of commitment was signed, the credit is allowed based on the area's enterprise tier and development zone designation for the year the letter was signed. If the taxpayer does not hire the employees within the two-year period, the taxpayer does not qualify for the credit. However, if the taxpayer qualifies for a credit under subsection (a) in the year any new employees are hired, the taxpayer may take the credit under that subsection.
(e), (f) Repealed by Session Laws 1996, Second Extra Session, c. 13, s. 3.3 for taxable years beginning on or after January 1, 1996.
"§ 105-129.9. (Repealed effective January 1, 2002) Credit for investing in machinery and equipment.
(a) Credit. - If a taxpayer that has purchased or leased eligible machinery and equipment places it in service in this State during the taxable year, the taxpayer is allowed a credit equal to seven percent (7%) of the excess of the eligible investment amount over the applicable threshold. Machinery and equipment is eligible if it is capitalized by the taxpayer for tax purposes under the Code and is not leased to another party. In addition, in the case of a large investment, machinery and equipment that is not capitalized by the taxpayer is eligible if the taxpayer leases it from another party. The credit may not be taken for the taxable year in which the equipment is placed in service but shall be taken in equal installments over the seven years following the taxable year in which the equipment is placed in service.
(b) Eligible Investment Amount. - The eligible investment amount is the lesser of (i) the cost of the eligible machinery and equipment and (ii) the amount by which the cost of all of the taxpayer's eligible machinery and equipment that is in service in this State on the last day of the taxable year exceeds the cost of all of the taxpayer's eligible machinery and equipment that was in service in this State on the last day of the base year. The base year is that year, of the three immediately preceding taxable years, in which the taxpayer had the most eligible machinery and equipment in service in this State.
(c) Threshold. - The applicable threshold is the appropriate amount set out in the following table based on the enterprise tier of the area where the eligible machinery and equipment are placed in service during the taxable year. If the taxpayer places eligible machinery and equipment in service in more than one area during the taxable year, the threshold applies separately to the eligible machinery and equipment placed in service in each area. If the taxpayer places eligible machinery and equipment in service in an area over the course of a two-year period, the applicable threshold for the second taxable year is reduced by the eligible investment amount for the previous taxable year.
Area Enterprise Tier Threshold
Tier One $ -0-
Tier Two 100,000
Tier Three 200,000
Tier Four 500,000
Tier Five 1,000,000
(d) Expiration. - If, in one of the seven years in which the installment of a credit accrues, the machinery and equipment with respect to which the credit was claimed are disposed of, taken out of service, or moved out of State, 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.
If, in one of the seven years in which the installment of a credit accrues, the machinery and equipment with respect to which the credit was claimed are moved to an area in a higher-numbered enterprise tier, or are moved from a development zone to an area that is not a development zone, the remaining installments of the credit are allowed only to the extent they would have been allowed if the machinery and equipment had been placed in service initially in the area to which they were moved.
(e) Planned Expansion. - A taxpayer that signs a letter of commitment with the Department of Commerce to place specific eligible machinery and equipment in service in an area within two years after the date the letter is signed may, in the year the eligible machinery and equipment are placed in service in that area, calculate the credit for which the taxpayer qualifies based on the area's enterprise tier and development zone designation for the year the letter was signed. All other conditions apply to the credit, but if the area has been redesignated to a higher-numbered enterprise tier or has lost its development zone designation after the year the letter of commitment was signed, the credit is allowed based on the area's enterprise tier and development zone designation for the year the letter was signed. If the taxpayer does not place part or all of the specified eligible machinery and equipment in service within the two-year period, the taxpayer does not qualify for the benefit of this subsection with respect to the machinery and equipment not placed in service within the two-year period. However, if the taxpayer qualifies for a credit in the year the eligible machinery and equipment are placed in service, the taxpayer may take the credit for that year as if no letter of commitment had been signed pursuant to this subsection.
"§ 105-129.10. (Repealed effective January 1, 2002) Credit for research and development.
(a) General
Credit. - A taxpayer that claims for the taxable year a federal income tax
credit under section 41 41(a) of the Code for increasing research
activities is allowed a credit equal to five percent (5%) of the State's
apportioned share of the taxpayer's expenditures for increasing research
activities. The State's apportioned share of a taxpayer's expenditures for
increasing research activities is the excess of the taxpayer's qualified
research expenses for the taxable year over the base amount, as determined
under section 41 of the Code, multiplied by a percentage equal to the ratio of
the taxpayer's qualified research expenses in this State for the taxable year
to the taxpayer's total qualified research expenses for the taxable year.
(b) Alternative Credit. - A taxpayer that claims the alternative incremental credit under section 41(c)(4) of the Code for increasing research activities is allowed a credit equal to twenty-five percent (25%) of the State's apportioned share of the federal credit claimed. The State's apportioned share of the federal credit claimed is the amount of the alternative incremental credit the taxpayer claimed under section 41(c)(4) of the Code for the taxable year multiplied by a percentage equal to the ratio of the taxpayer's qualified research expenses in this State for the taxable year to the taxpayer's total qualified research expenses for the taxable year. For the purpose of this subsection, the amount of the alternative incremental credit claimed by a taxpayer is determined without regard to any reduction elected under section 280C(c) of the Code.
(c) Definitions. - As used in this section, the terms 'qualified research expenses' and 'base amount' have the meaning provided in section 41 of the Code.
"§ 105-129.11. (Repealed effective January 1, 2002) Credit for worker training.
(a) Credit. - A taxpayer
that provides worker training for five or more of its eligible employees during
the taxable year is allowed a credit equal to fifty percent (50%) of its
eligible expenditures for the wages paid to the eligible employees
during the training. Wages paid to an employee performing his or her job
while being trained are not eligible for the credit. For positions located
in an enterprise tier one area, the credit may not exceed one thousand dollars
($1,000) per employee trained during the taxable year. For other positions, the
credit may not exceed five hundred dollars ($500.00) per employee trained
during the taxable year. A position is located in an area if more than fifty
percent (50%) of the employee's duties are performed in the area.
(b) Eligibility. - The
eligibility of a taxpayer's expenditures and employees is determined as
provided in G.S. 105-129.4. An employee is eligible if the employee is
in a full-time position not classified as exempt under the Fair Labor Standards
Act, 29 U.S.C. § 213(a)(1) and meets one or more of the following conditions:
(1) The employee occupies a job for which the taxpayer is eligible to claim an installment of the credit for creating jobs.
(2) The employee is being trained to operate machinery and equipment for which the taxpayer is eligible to claim an installment of the credit for investing in machinery and equipment.
"§ 105-129.12. (Repealed effective January 1, 2002) Credit for investing in central administrative office property.
(a) Credit. - If a taxpayer that has purchased or leased real property in this State begins to use the property as a central administrative office during the taxable year, the taxpayer is allowed a credit equal to seven percent (7%) of the eligible investment amount. The eligible investment amount is the lesser of (i) the cost of the property and (ii) the amount by which the cost of all of the property the taxpayer is using in this State as central administrative offices on the last day of the taxable year exceeds the cost of all of the property the taxpayer was using in this State as central administrative offices on the last day of the base year. The base year is that year, of the three immediately preceding taxable years, in which the taxpayer was using the most property in this State as central administrative offices. In the case of property that is leased, the cost of the property is not determined as provided in G.S. 105-129.2 but is considered to be the taxpayer's lease payments over a seven-year period, plus any expenditures made by the taxpayer to improve the property before it is used as the taxpayer's central administrative office if the expenditures are not reimbursed or credited by the lessor. The maximum credit allowed a taxpayer under this section for property used as a central administrative office is five hundred thousand dollars ($500,000). The entire credit may not be taken for the taxable year in which the property is first used as a central administrative office but shall be taken in equal installments over the seven years following the taxable year in which the property is first used as a central administrative office. The basis in any real property for which a credit is allowed under this section shall be reduced by the amount of credit allowable.
(b) Mixed Use Property. - If the taxpayer uses only part of the property as the taxpayer's central administrative office, the amount of the credit allowed under this section is reduced by multiplying it by a fraction the numerator of which is the square footage of the property used as the taxpayer's central administrative office and the denominator of which is the total square footage of the property.
(c) Expiration. - If, in one of the seven years in which the installment of a credit accrues, the property with respect to which the credit was claimed is no longer used as a central administrative office, the credit expires and the taxpayer may not take any remaining installment of the credit. If, in one of the seven years in which the installment of a credit accrues, part of the property with respect to which the credit was claimed is no longer used as a central administrative office, the remaining installments of the credit shall be reduced by multiplying it by the fraction described in subsection (b) of this section. If, in one of the seven years in which the installment of a credit accrues, the total number of employees the taxpayer employs at all of its central administrative offices in this State drops by 40 or more, the credit expires and the taxpayer may not take any remaining installment of the credit.
In each of these cases, the taxpayer may nonetheless 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."
Section 2. G.S. 105-129.15(2) reads as rewritten:
"(2) Cost. - Determined In
the case of property owned by the taxpayer, cost is determined pursuant to
regulations adopted under section 1012 of the Code, subject to the limitation
on cost provided in section 179 of the Code. In the case of property the
taxpayer leases from another, cost is value as determined pursuant to G.S.
105-130.4(j)(2)."
Section 3. G.S. 143B-437.04 reads as rewritten:
"§
143B-437.04. Economic Community development block grants.
(a) The Department
of Commerce shall adopt guidelines for the awarding of Community Development
Block Grants for economic development that will ensure that no to
ensure that:
(1) No local
match is required for grants awarded for projects located in enterprise tier
one areas as defined in G.S. 105-129.3 and, to 105-129.3.
(2) To the
extent practicable, that priority consideration for grants is given to
projects located in enterprise tier one areas as defined in G.S. 105-129.3. 105-129.3
or in development zones that have met the conditions of subsection (b) of this
section.
(b) In order to qualify for the benefits of this section, after an area is designated a development zone under G.S. 105-129.3A, the governing body of the city in which the zone is located must adopt a strategy to improve the zone and establish a development zone committee to oversee the strategy. The strategy and the committee must conform with requirements established by the Secretary of Commerce."
PART II. INFRASTRUCTURE FUNDS
Section 4. It is the intent of the General Assembly to appropriate funds from the General Fund to the Department of Commerce for the 1998-99 fiscal year to be allocated to the Utility Account of the Industrial Development Fund for use in accordance with G.S. 143B-437.01(b1).
Section 5. It is the intent of the General Assembly to appropriate funds from the General Fund to the Department of Commerce for the 1998-99 fiscal year to be allocated to the Industrial Development Fund for use in accordance with G.S. 143B-437.01(a).
Section 6. G.S. 143B-437.01 reads as rewritten:
"§ 143B-437.01. Industrial Development Fund.
(a) Creation and Purpose of Fund. - There is created in the Department of Commerce the Industrial Development Fund to provide funds to assist the local government units of the most economically distressed counties in the State in creating jobs in certain industries. The Department of Commerce shall adopt rules providing for the administration of the program. Those rules shall include the following provisions, which shall apply to each grant from the fund:
(1) The funds shall be
used for (i) installation of or purchases of equipment for manufacturing or
processing, eligible industries, (ii) structural repairs,
improvements, or renovations of existing buildings to be used for expansion of manufacturing
or processing, eligible industries, or (iii) construction of or
improvements to new or existing water, sewer, gas, or electrical utility
distribution lines or equipment for existing or new or proposed industrial
buildings to be used for manufacturing or processing operations. eligible
industries. To be eligible for funding, the water, sewer, gas, or
electrical utility lines or facilities shall be located on the site of the
building or, if not located on the site, shall be directly related to the
operation of the specific manufacturing or processing eligible
industrial activity.
(1a) The funds shall be used for projects located in economically distressed counties except that the Secretary of Commerce may use up to one hundred thousand dollars ($100,000) to provide emergency economic development assistance in any county that is documented to be experiencing a major economic dislocation.
(2) The funds shall be
used by the city and county governments for projects that will directly result
in the creation of new jobs. The funds shall be expended at a maximum rate
of four thousand dollars ($4,000) five thousand dollars ($5,000) per
new job created up to a maximum of four hundred thousand dollars ($400,000) five
hundred thousand dollars ($500,000) per project.
(3) There shall be no local match requirement if the project is located in an enterprise tier one area as defined in G.S. 105-129.3.
(4) The Department may authorize a local government that receives funds under this section to use up to two percent (2%) of the funds, if necessary, to verify that the funds are used only in accordance with law and to otherwise administer the grant or loan.
(a1) Definitions. - The following definitions apply in this section:
(1) Air courier services. - A person is engaged in the air courier services business if the person's primary business is furnishing air delivery of individually addressed letters and packages, except by the United States Postal Service.
(2) Central administrative office. - Defined in the North American Industry Classification System adopted by the United States Office of Management and Budget.
(3) Data processing. - Defined in the North American Industry Classification System adopted by the United States Office of Management and Budget.
(4) Economically distressed county. - A county designated as an enterprise tier one, two, or three area pursuant to G.S. 105-129.3.
(5) Eligible industry. - A central administrative office or a person engaged in the business of air courier services, data processing, manufacturing, or warehousing and wholesale trade.
(6) Reserved.
(7) Major economic dislocation. - The actual or imminent loss of 500 or more manufacturing jobs in the county or of a number of manufacturing jobs equal to at least ten percent (10%) of the existing manufacturing workforce in the county.
(8) Manufacturing. - Defined in the North American Industry Classification System adopted by the United States Office of Budget and Management.
(9) Reserved.
(10) Warehousing and wholesale trade. - Defined in the North American Industry Classification System adopted by the United States Office of Management and Budget.
(1) Economically
distressed county. - A county designated as an enterprise tier one, two, or
three area pursuant to G.S. 105-129.3.
(2) Major
economic dislocation. - The actual or imminent loss of 500 or more
manufacturing jobs in the county or of a number of manufacturing jobs equal to
at least ten percent (10%) of the existing manufacturing workforce in the
county.
(3) Manufacturing
and processing. Defined in the Standard Industrial Classification Manual issued
by the United States Bureau of the Census.
(b) Repealed by Session Laws 1996, Second Extra Session, c. 13, s. 3.5.
(b1) Utility Account. - There is
created within the Industrial Development Fund a special account to be known as
the Utility Account to provide funds to assist the local government units of
enterprise tier one and tier two areas, as defined in G.S. 105-129.3, in
creating jobs in manufacturing and processing, warehousing and distribution,
and data processing, as defined in the Standard Industrial Classification
Manual issued by the United States Bureau of the Census. eligible
industries. The Department of Commerce shall adopt rules providing
for the administration of the program. Except as otherwise provided in this
subsection, those rules shall be consistent with the rules adopted with respect
to the Industrial Development Fund. The rules shall provide that the funds in
the Utility Account may be used only for construction of or improvements to new
or existing water, sewer, gas, or electrical utility distribution lines or
equipment for existing or new or proposed industrial buildings to be used for industrial
operations in manufacturing or processing, warehousing or distribution, or data
processing. eligible industrial operations. To be eligible for
funding, the water, sewer, gas, or electrical utility lines or facilities shall
be located on the site of the building or, if not located on the site, shall be
directly related to the operation of the specific industrial activity. There
shall be no maximum funding amount per new job to be created or per project.
(c) Reports. - The Department of Commerce shall report annually to the General Assembly concerning the applications made to the fund and the payments made from the fund and the impact of the payments on job creation in the State. The Department of Commerce shall also report quarterly to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division on the use of the moneys in the fund, including information regarding to whom payments were made, in what amounts, and for what purposes.
(c1) In addition to the reporting
requirements of subsection (b1) (c) of this section, the
Department of Commerce shall report annually to the General Assembly concerning
the payments made from the Utility Account and the impact of the payments on
job creation in the State. The Department of Commerce shall also report
quarterly to the Joint Legislative Commission on Governmental Operations and
the Fiscal Research Division on the use of the moneys in the Utility Account
including information regarding to whom payments were made, in what amounts,
and for what purposes.
(d) Repealed by Session Laws 1996, Second Extra Session, c. 13, s. 3.5."
PART III. AIR COURIER HUBS
Section 7. G.S. 105-164.3 is amended by adding two new subdivisions to read:
"(6a) Interstate air courier. - A person engaged in the air courier services business, as defined in G.S. 105-129.2, in interstate commerce.
(6b) Hub. - An interstate air courier's airport in this State that meets all of the following conditions:
a. The air courier has allocated to the airport under G.S. 105-388 more than sixty percent (60%) of its aircraft value apportioned to this State.
b. The air courier's primary function at the airport is to sort and distribute letters and packages received from multiple consolidation locations.
c. The air courier's primary function at the airport is not to consolidate letters and packages and deliver them to another airport for sorting and distribution."
Section 8. G.S. 105-164.4(a)(1d) is amended by adding a new sub-subdivision to read:
"k. Sales of the following items to an interstate air courier for use at its hub: materials handling equipment, racking systems, and related parts and accessories, for the storage or handling and movement of tangible personal property at an airport or in a warehouse or distribution facility."
Section 9. G.S. 105-164.13 is amended by adding a new subdivision to read:
"(44) Sales of the following items to an interstate air courier for use at its hub: aircraft lubricants, aircraft repair parts, and aircraft accessories."
Section 10. G.S. 105-275 is amended by adding a new subdivision to read:
"(24a) Aircraft that is owned or leased by an interstate air courier, is apportioned under G.S. 105-337 to the air courier's hub in this State, and is used in the air courier's operations in this State. For the purpose of this subdivision, the terms 'interstate air courier' and 'hub' have the meanings provided in G.S. 105-164.3."
Section 11(a). The Piedmont Triad International Airport Authority may contract for design and construction of an air freight distribution facility on Airport property without being subject to the requirements of Article 8 of Chapter 143 of the General Statutes.
Section 11(b). The Piedmont Triad International Airport Authority may contract for supplies, materials, equipment, and contractual services of the Authority related to an air freight distribution facility on Airport property without being subject to the requirements of Article 3 of Chapter 143 of the General Statutes.
PART IV. RECYCLING INDUSTRY
Section 12. Chapter 105 of the General Statutes is amended by adding a new Article to read:
"ARTICLE 3C.
"Tax Incentives for Recycling Facilities.
"§ 105-129.25. Definitions.
The following definitions apply in this Article:
(1) Reserved.
(2) Reserved.
(3) Large recycling facility. - A recycling facility that qualifies under G.S. 105-129.26(b).
(4) Machinery and equipment. - Engines, machinery, tools, and implements used or designed to be used in the business for which the credit is claimed. The term does not include real property as defined in G.S. 105-273 or rolling stock as defined in G.S. 105-333.
(5) Major recycling facility. - A recycling facility that qualifies under G.S. 105-129.26(a).
(6) Owner. - A person who owns or leases a recycling facility.
(7) Post-consumer waste material. - Any product that was generated by a business or consumer, has served its intended end use, and has been separated from the solid waste stream for the purpose of recycling. The term includes material acquired by a recycling facility either directly or indirectly, such as through a broker or an agent.
(8) Purchase. - Defined in section 179 of the Code.
(9) Recycling facility. - A manufacturing plant at least three-fourths of whose products are made of at least fifty percent (50%) post-consumer waste material measured by weight or volume. The term includes real and personal property located at or on land in the same county and reasonably near the plant site and used to perform business functions related to the plant or to transport materials and products to or from the plant. The term also includes utility infrastructure and transportation infrastructure to and from the plant.
"§ 105-129.26. Qualification; forfeiture.
(a) Major Recycling Facility. - A recycling facility qualifies for the tax benefits provided in this Article and in Article 5 of this Chapter for major recycling facilities if it meets all of the following conditions:
(1) The facility is located in an area that, at the time the owner began construction of the facility, was an enterprise tier one area pursuant to G.S. 105-129.3.
(2) The Secretary of Commerce has certified that the owner will, by the end of the fourth year after the year the owner begins construction of the recycling facility, invest at least three hundred million dollars ($300,000,000) in the facility and create at least 250 new, full-time jobs at the facility.
(3) The jobs at the recycling facility meet the wage standard in effect pursuant to G.S. 105-129.4(b) as of the date the owner begins construction of the facility.
(b) Large Recycling Facility. - A recycling facility qualifies for the tax credit provided in G.S. 105-129.27 for large recycling facilities if it meets all of the following conditions:
(1) The facility is located in an area that, at the time the owner began construction of the facility, was an enterprise tier one area pursuant to G.S. 105-129.3.
(2) The Secretary of Commerce has certified that the owner will, by the end of the second year after the year the owner begins construction of the recycling facility, invest at least one hundred fifty million dollars ($150,000,000) in the facility and create at least 155 new, full-time jobs at the facility.
(3) The jobs at the recycling facility meet the wage standard in effect pursuant to G.S. 105-129.4(b) as of the date the owner begins construction of the facility.
(c) Forfeiture. - If the owner of a large or major recycling facility fails to make the required minimum investment or create the required number of new jobs within the period certified by the Secretary of Commerce under this section, the recycling facility no longer qualifies for the applicable recycling facility tax benefits provided in this Article and in Article 5 of this Chapter and forfeits all tax benefits previously received under those Articles. Forfeiture does not occur, however, if the failure was due to events beyond the owner's control. Upon forfeiture of tax benefits previously received, the owner is liable under Part 1 of Article 4 of this Chapter for a tax equal to the amount of all past taxes under Articles 3, 4, and 5 previously avoided as a result of the tax benefits received plus interest at the rate established in G.S. 105-241.1(i), computed from the date the taxes would have been due if the tax benefits had not been received. The tax and interest are due 30 days after the date of the forfeiture. An owner that fails to pay the tax and interest is subject to the penalties provided in G.S. 105-236.
(d) Substantiation. - To claim a credit allowed by this Article, the owner must provide any information required by the Secretary of Revenue. Every owner claiming a credit under this Article shall maintain and make available for inspection by the Secretary of Revenue any records the Secretary considers necessary to determine and verify the amount of the credit to which the owner is entitled. The burden of proving eligibility for the credit and the amount of the credit shall rest upon the owner, and no credit shall be allowed to an owner that fails to maintain adequate records or to make them available for inspection.
(e) Reports. - The Department of Commerce shall report 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 and location of large and major recycling facilities qualified under this Article.
(2) The number of new jobs created by each recycling facility.
(3) The amount of investment in each recycling facility.
(4) The amount of reinvestment credit refunded to each major recycling facility under G.S. 105-129.28.
"§ 105-129.27. Credit for investing in large or major recycling facility.
(a) Credit. - An owner that purchases or leases machinery and equipment for a major recycling facility in this State during the taxable year is allowed a credit equal to fifty percent (50%) of the amount payable by the owner during the taxable year to purchase or lease the machinery and equipment. An owner that purchases or leases machinery and equipment for a large recycling facility in this State during the taxable year is allowed a credit equal to twenty percent (20%) of the amount payable by the owner during the taxable year to purchase or lease the machinery and equipment.
(b) Taxes Credited. - The credit provided in this section is allowed against the franchise tax levied in Article 3 of this Chapter and the income tax levied in Part 1 of Article 4 of this Chapter. Any other nonrefundable credits allowed the owner are subtracted before the credit allowed by this section.
(c) Carryforwards. - The credit provided in this section may not exceed the amount of tax against which it is claimed for the taxable year, reduced by the sum of all other credits allowed against that tax, except tax payments made by or on behalf of the owner. Any unused portion of the credit may be carried forward for the succeeding 25 years.
(d) Change in Ownership of Facility. - The sale, merger, acquisition, or bankruptcy of a recycling facility, or any transaction by which the facility is reformulated as another business, does not create new eligibility in a succeeding owner with respect to a credit for which the predecessor was not eligible under this section. A successor business may, however, take any carried-over portion of a credit that its predecessor could have taken if it had a tax liability.
(e) Forfeiture. - If any machinery or equipment for which a credit was allowed under this section is not placed in service within 30 months after the credit was allowed, the credit is forfeited. A taxpayer that forfeits a credit under this section is liable for all past taxes avoided as a result of the credit plus interest at the rate established under G.S. 105-241.1(i), computed from the date the taxes would have been due if the credit had not been allowed. The past taxes and interest are due 30 days after the date the credit is forfeited; a taxpayer that fails to pay the past taxes and interest by the due date is subject to the penalties provided in G.S. 105-236.
(f) No Double Credit. - A recycling facility that is eligible for the credit allowed in this section is not allowed the credit for investing in machinery and equipment provided in G.S. 105-129.9.
"§ 105-129.28. Credit for reinvestment.
(a) Credit. - A major recycling facility that is accessible by neither ocean barge nor ship and that transports materials to the facility or products away from the facility is allowed a credit against the tax imposed by Part 1 of Article 4 of this Chapter equal to its additional transportation and transloading expenses incurred with respect to the materials and products due to its inability to use ocean barges or ships. The additional expenses for which credit is allowed are expenses due to using river barges and expenses due to having to use another mode of transportation because the quantity that is transported by river barge is insufficient to meet the facility's needs. In order to claim the credit allowed by this section, the facility must provide the Secretary of Commerce audited documentation of the amount of its additional transportation and transloading expenses incurred during the taxable year.
(b) Cap. - The credit allowed to a major recycling facility under this section for the taxable year may not exceed the applicable annual cap provided in the following table:
Taxable Year Cap
1998 $150,000
1999 $640,000
2000 $3,860,000
2001 $8,050,000
2002 $9,550,000
2003 $10,100,000
2004-2007 $10,400,000
(c) Reduction. - For the first ten taxable years after the owner begins transporting materials and products to and from the major recycling facility, the credit allowed by this section must be reduced by the amount of credit allowed in previous years that was used for a purpose other than an allowable purpose under subsection (d) of this section, as certified by the Secretary of Commerce.
(d) Use of Credited Amount. - For the first ten taxable years after the owner begins construction of the major recycling facility, the owner must use the amount of credit allowed under this section to pay for (i) investment in rail or roads associated with the facility, (ii) investment in water system infrastructure designed to reduce the expense of transporting materials and products to and from the recycling facility, and (iii) investment in land and infrastructure for other industrial sites located in the same county as the recycling facility. If the owner determines that there are no reasonable economic opportunities in a given year to use the total amount of credit for the expenditures described above, the owner may use the excess for investment at or in connection with the recycling facility above the initial required investment of three hundred million dollars ($300,000,000).
Expenses incurred for the purposes allowed in this subsection during a taxable year in the ten-year period may be counted toward a credit allowed in a later taxable year in the ten-year period. If the owner is not able to use the full amount of the credit during a taxable year for any of the purposes allowed by this subsection, the excess may be used for these purposes in subsequent taxable years.
The owner must provide the Secretary of Commerce with annual audited documentation demonstrating that the amount of credit received under this section during the previous twelve-month period has not been used for a purpose inconsistent with this subsection. If the Secretary of Commerce determines that the owner has used any of the credit for a purpose that is inconsistent with the requirements of this subsection, the Secretary of Commerce shall certify the amount so used to the Secretary of Revenue and the credit allowed the owner under this section for the following taxable year shall be reduced by that amount in accordance with subsection (c) of this section.
After the end of the ten-year period, the amount of any credit allowed under this section that has not yet been used may be used for investment at or in connection with the recycling facility above the initial required investment of three hundred million dollars ($300,000,000).
(e) Credit Refundable. - If the credit allowed by this section exceeds the amount of tax imposed by Part 1 of Article 4 of this Chapter for the taxable year reduced by the sum of all credits allowable, the Secretary shall refund the excess to the taxpayer. The refundable excess is governed by the provisions governing a refund of an overpayment by the taxpayer of the tax imposed in Part 1 of Article 4 of this Chapter. In computing the amount of tax against which multiple credits are allowed, nonrefundable credits are subtracted before refundable credits."
Section 13. G.S. 105-164.3 is amended by renumbering subdivision (8) as (7b) and adding a new subdivision to read:
"(8) Major recycling facility. - Defined in G.S. 105-129.25."
Section 14. G.S. 105-164.4(a)(1d) is amended by adding a new sub-subdivision to read:
"j. Sales to a major recycling facility of the following tangible personal property for use in connection with the facility: cranes, structural steel crane support systems, foundations related to the cranes and support systems, port and dock facilities, rail equipment, and material handling equipment."
Section 15. G.S. 105-164.13 is amended by adding two new subdivisions to read:
"(10a) Sales to a major recycling facility of (i) lubricants and other additives for motor vehicles or machinery and equipment used at the facility and (ii) materials, supplies, parts, and accessories, other than machinery and equipment, that are not capitalized by the taxpayer and are used or consumed in the manufacturing and material handling processes at the facility.
(10b) Sales to a major recycling facility of electricity used at the facility."
Section 16. G.S. 105-164.14 is amended by adding a new subsection to read:
"(g) Major Recycling Facilities. - The owner of a major recycling facility is allowed an annual refund of sales and use taxes paid by it under this Article on building materials, building supplies, fixtures, and equipment that become a part of the real property of the recycling facility. Liability incurred indirectly by the owner for sales and use taxes on these items is considered tax paid by the owner. A request for a refund must be in writing and must include any information and documentation required by the Secretary. A request for a refund is due within six months after the end of the major recycling facility's fiscal year. Refunds applied for after the due date are barred."
Section 17. G.S. 105-164.14(f) reads as rewritten:
"(f) Information to
Counties. - Upon written request of a county, the Secretary shall, within 30
days after the request, provide the designated county official a list of each
claimant that has, within the past 12 months, received a refund under
subsection (b) or (c) (b), (c), or (g) of this section of at
least one thousand dollars ($1,000) of tax paid to the county. The list shall
include the name and address of each claimant and the amount of the refund it
has received from that county. Upon written request of a county, a claimant
that has received a refund under subsection (b) or (c) (b), (c), or
(g) of this section shall provide the designated county official a copy of
the request for the refund and any supporting documentation requested by the
county to verify the request. For the purpose of this subsection, the
designated county official is the chair of the board of county commissioners or
a county official designated in a resolution adopted by the board. Information
provided to a county under this subsection is not a public record and may not
be disclosed except in accordance with G.S. 153A-148.1. If a claimant
determines that a refund it has received under subsection (b) or (c) (b),
(c), or (g) of this section is incorrect, it shall file an amended request
for the refund."
Section 18. G.S. 105-275(8) is amended by adding a new sub-subdivision to read:
"d. Real or personal property that is used or, if under construction, is to be used by a major recycling facility as defined in G.S. 105-129.25 predominantly for recycling or resource recovering of or from solid waste, if the Department of Environment and Natural Resources furnishes a certificate to the tax supervisor of the county in which the property is situated stating the Department of Environment and Natural Resources has found that the described property has been or will be constructed or installed for use by a major recycling facility, complies or will comply with the rules of the Department of Environment and Natural Resources, and has, or will have as a purpose recycling or resource recovering of or from solid waste."
Section 19. G.S. 105-129.28, as enacted by Section 12 of this act, is repealed effective for taxable years beginning on or after January 1, 2008. This section does not affect the rights or liabilities of the State, a taxpayer, or another person arising under G.S. 105-129.28 before the effective date of its repeal; nor does it affect the right to any refund or credit of a tax that accrued under G.S. 105-129.28 before the effective date of its repeal.
The sole purpose of this ten-year sunset provision is to allow a determination to be made whether any major recycling facility continues to experience additional transportation and transloading expenses due to its inability to use ocean barges or ships to transport materials and products to and from the facility. It is the expectation and intent that the General Assembly will postpone the sunset of G.S. 105-129.28 if it is determined that, based on audited documentation submitted by a major recycling facility and verified by the Secretary of Commerce, that any major recycling facility continues to experience these additional transportation and transloading expenses as of 2008.
PART V. EFFECTIVE DATES
Section 20. G.S. 105-129.6(a1), as enacted by Section 1 of this act, becomes effective January 1, 1999, and applies to applications filed on or after that date. The amendment to G.S. 105-129.9(c) made by Section 1 of this act is effective for taxable years beginning on or after January 1, 1998. Section 3 of this act becomes effective January 1, 1999. The remainder of Part I of this act is effective for taxable years beginning on or after January 1, 1999.
Section 21. Part II of this act becomes effective July 1, 1998.
Section 22. Section 10 of this act is effective for taxes imposed for taxable years beginning on or after July 1, 2001. Section 11 of this act becomes effective January 1, 1999, and expires January 1, 2004. The remainder of Part III of this act becomes effective January 1, 2001, and applies to sales made on or after that date.
Section 23. Section 12 of this act is effective for taxable years beginning on or after January 1, 1998. Sections 13 through 17 of this act become effective July 1, 1998, and apply to sales made on or after that date. Section 18 of this act is effective for taxes imposed for taxable years beginning on or after July 1, 1999. The remainder of Part IV of this act is effective when it becomes law.
In the General Assembly read three times and ratified this the 23rd day of July, 1998.
s/ Dennis A. Wicker
President of the Senate
s/ Harold J. Brubaker
Speaker of the House of Representatives
s/ James B. Hunt, Jr.
Governor
Approved 2:50 p.m. this 23rd day of July, 1998