North Carolina § 105-523 - County hold harmless for repealed local taxes.

§ 105-523. County hold harmless for repealed local taxes.

Intent. - It is the intent of the General Assembly that each county be held harmless from the exchange of a portion of the local sales and use taxes for the State's agreement to assume the responsibility for the non-administrative costs of Medicaid. Definitions. - The following definitions apply in this section: City hold harmless amount. - The hold harmless amount determined under G.S. 105-522 for the eligible municipalities in a county. Hold harmless threshold. - The amount of a county's Medicaid service costs and Medicare Part D clawback payments assumed by the State under G.S. 108A-54 for the fiscal year. A county's Medicaid service costs for fiscal years 2008-2009, 2009-2010, and 2010-2011 are determined without regard to the changes made to the Federal Medical Assistance Percentage by section 5001 of the American Recovery and Reinvestment Act of 2009. Repealed sales tax amount. - The sum of the following amounts allocated for distribution to a county for a month. The references in this subdivision to Article 39 of this Chapter and Chapter 1096 of the 1967 Session Laws and Articles 40 and 42 of this Chapter do not include the adjustment made pursuant to G.S. 105-524. The amounts are as follows: The amount of sales and use tax revenue allocated under G.S. 105-486. This calculation determines the effect of repealing a one-half percent (1/2%) sales and use tax distributed on a per capita basis. An amount determined by subtracting twenty-five percent (25%) of the amount of sales and use tax revenue allocated under G.S. 105-472 or Chapter 1096 of the 1967 Session Laws from fifty percent (50%) of the amount of sales and use tax revenue allocated under G.S. 105-486. This calculation determines the effect of distributing a one-quarter percent (.25%) tax on the basis of point of origin instead of on a per capita basis. Requirement. - If a county's repealed sales tax amount plus its city hold harmless amount for a fiscal year exceeds the county's hold harmless threshold for that fiscal year, the State is required to hold the county harmless for the difference by paying the amount of the difference to the county. The Secretary must withhold from sales and use tax collections under Article 5 of this Chapter the amount needed to make the county hold harmless payments required by this section. Method. - The Secretary must estimate a county's repealed sales tax amount, city hold harmless amount, and hold harmless threshold for a fiscal year to determine if the county is eligible for a hold harmless payment. The Secretary must send to an eligible county with the distribution made under G.S. 105-472 for March of that year an amount equal to ninety percent (90%) of its estimated hold harmless payment. At the end of each fiscal year, the Secretary must determine each county's hold harmless payment for that year. The Secretary must send by August 15 the remainder of the county's hold harmless payment for the fiscal year that ended on June 30. The Secretary of the Department of Health and Human Services must give the Secretary of Revenue the data needed to determine a county's hold harmless threshold by February 24th of each year, and the data needed for the final calculation of each county's hold harmless threshold by July 24th of each year. History (2007-323, s. 31.16.4(d); 2007-345, s. 14.4(b); 2008-134, s. 15(a), (d), (f), (h); 2009-399, s. 4(a); 2010-95, s. 14; 2014-100, s. 37.2(a)-(d); 2015-268, s. 10.1(e4).) Editor's Note. - "For fiscal year 2009-2010, the hold harmless amount determined for a municipality under G.S. 105-522 and the repealed sales tax amount determined for a county under G.S. 105-523 is reduced by the amount distributed in October, November, and December of 2009 to the municipality or county on the basis of point of origin under repealed G.S. 105-520(a)." Session Laws 2015-268, s. 10.1(i), made the amendment to this section by Session Laws 2015-268, s. 10.1(e4), effective July 1, 2016, and applicable to local option sales taxes collected on or after that date and distributed to counties and cities on or after September 1, 2016. Effect of Amendments. - Session Laws 2007-323, s. 31.16.4(d), effective October 1, 2009, and applicable to distributions for months beginning on or after October 1, 2009, rewrote subdivision (b)(2). Session Laws 2007-345, s. 14.4(b), effective October 1, 2009, and applicable to distributions for months beginning on or after that date, added "distributed to a county for the month" at the end of the introductory paragraph, deleted "to a county" following "distributed" in sub-subdivision (b)(2)a., and rewrote sub-subdivision (b)(2)c. Session Laws 2008-134, s. 15(a), effective October 1, 2008, and applicable to distributions for months beginning on or after that date, rewrote subsection (b); in subsection (c), inserted "plus its city hold harmless amount" near the beginning, and inserted "county" near the end of the second sentence; and in subsection (d), substituted "tax amount, city hold harmless amount " for "tax amount" in the first sentence, and substituted "each county's hold harmless payment" for "the difference between a county's repealed sales tax amount and its hold harmless threshold" near the end of the third sentence. Session Laws 2008-134, s. 15(h), effective October 1, 2009, and applicable to distributions for months beginning on or after that date, rewrote subdivision (b)(3). Session Laws 2008-134, s. 4(a), effective July 31, 2009, and applicable to distributions for months beginning or after October 1, 2008, added the second sentence in subdivision (b)(2). Session Laws 2010-95, s. 14, effective July 17, 2010, in the last sentence of subsection (d), substituted "Secretary of the Department of Health and Human Services" for "Secretary of the Department of Human Resources" and added "by February 24 th of each year, and the data needed for the final calculation of each county's hold harmless threshold by July 24 th of each year" at the end. Session Laws 2014-100, s. 37.2(a), effective July 1, 2014, substituted "three hundred seventy-five thousand dollars ($375,000)" for "five hundred thousand dollars ($500,000)" in subsection (a) and subdivision (b)(2). Session Laws 2014-100, s. 37.2(b), effective July 1, 2015, substituted "two hundred fifty thousand dollars ($250,000)" for "three hundred seventy-five thousand dollars ($375,000)" in subsection (a) and subdivision (b)(2). Session Laws 2014-100, s. 37.2(c), effective July 1, 2016, substituted "one hundred twenty-five thousand dollars ($125,000)" for "two hundred fifty thousand dollars ($250,000)" in subsection (a) and subdivision (b)(2). Session Laws 2014-100, s. 37.2(d), effective July 1, 2017, in subsection (a), substituted "be held harmless" for "benefit by at least one hundred twenty-five thousand dollars ($125,000)"; and in subdivision (b)(2), substituted "fiscal year." for "fiscal year, less one hundred twenty-five thousand dollars ($125,000)." Session Laws 2015-268, s. 10.1(e4), added the last sentence of subdivision (b)(3). For effective date and applicability, see Editor's note.