Temp. Local Sales Tax Changes/Buncombe Co.

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
S 3
SENATE BILL 131
Finance Committee Substitute Adopted 4/9/25
Third Edition Engrossed 4/15/25

Short Title: Temp. Local Sales Tax Changes/Buncombe Co. (Local)
Sponsors:
Referred to:
February 24, 2025
*S131-v-3*
A BILL TO BE ENTITLED 1
AN ACT TO TEMPORARILY MODIFY BUNCOMBE COUNTY'S USE OF ONE-HALF OF 2
ARTICLE 39 LOCAL SAL ES AND USE TAX PROCE EDS TO INCLUDE BOTH 3
SCHOOL CAPITAL OUTLA Y AND SCHOOL OPERATI NG EXPENSES AND TO 4
MAKE TECHNICAL CHANG ES TO THE BUNCOMBE S CHOOL CAPITAL FUND 5
COMMISSION. 6
The General Assembly of North Carolina enacts: 7
8
TEMPORARILY MODIFY DISTRIBUTION AND USE OF ONE -HALF OF THE NET 9
PROCEEDS FROM THE FIRST ONE CENT OF LOCAL SALES AND USE TAX 10
ALLOCATED TO BUNCOMBE COUNTY 11
SECTION 1.(a) Notwithstanding Section 6 of Chapter 134 of the 1983 Session 12
Laws, as amended by Chapter 534 of the 1983 Session Laws and S.L. 2016 -19, directing that 13
one-half of the local government sales and use tax revenue be distributed to the School Capital 14
Fund Co mmission for Buncombe County (Commission), the Secretary of Revenue shall 15
distribute one hundred percent (100%) of the net proceeds of the local government sales and use 16
tax revenue collected by Buncombe County under Article 39 of Chapter 105 of the Genera l 17
Statutes in accordance with G.S. 105-472 using the ad valorem method of distribution. 18
Notwithstanding the provision in G.S. 105-472 allowing counties to change the method of 19
distribution, Buncombe County is not permitted to change the method of distribution for any year 20
for which the distribution and use provisions of this act apply. 21
SECTION 1.(b) Notwithstanding the use provisions in Sections 9 through 12 of 22
Chapter 134 of the 1983 Session Laws, as amended by Chapter 534 of the 1983 Session Laws 23
and S.L. 2016-19, and applicable to the funds distributed to the Commission, Buncombe County 24
shall use the net proceeds of the local government sales and use tax revenue collected under 25
Article 39 of Chapter 105 of the General Statutes and allocated to Buncombe C ounty under 26
subsection (a) of this section as follows: 27
(1) Fifty percent (50%) for school capital outlay purposes, as defined in 28
G.S. 115C-426(f), or to retire any indebtedness incurred by the County for 29
these purposes, and for school operating expenses. T he Commission shall 30
serve in an advisory capacity to the Buncombe County Board of County 31
Commissioners with respect to the use of funds under this subdivision for 32
school capital outlay purposes by considering the capital needs of both the 33
Buncombe County S chool System and the Asheville City School System, 34
prioritizing those needs, and recommending projects to be funded. However, 35
General Assembly Of North Carolina Session 2025
Page 2 Senate Bill 131-Third Edition
the use of funds under this subdivision shall not be under the control of the 1
Commission and shall be determined by the board of commissioners. 2
(2) Fifty percent (50%) for any public purpose. 3
SECTION 1.(c) This section applies only to Buncombe County. 4
SECTION 1.(d) This section is effective when it becomes law and applies to net 5
proceeds distributed to Buncombe County by the Secret ary of Revenue under Article 39 of 6
Chapter 105 of the General Statutes on or after July 1, 2025, and expires on June 30, 2027. 7
8
MAKE TECHNICAL CHANGES TO BUNCOMBE SCHOOL CAPITAL FUND 9
COMMISSION 10
SECTION 2.(a) Chapter 134 of the 1983 Session Laws, as amended by Chapter 534 11
of the 1983 Session Laws and S.L. 2016-19, is rewritten and recodified as subsections (b) through 12
(m) of this section. 13
SECTION 2.(b) There is hereby created a Commission to be known as the School 14
Capital Fund Commission for Buncombe County, which Commission shall have and possess all 15
the powers conferred by this act and such other powers as may be useful or necessary to permit 16
it fully to carry out the purposes of this act. The Commission is hereby declared to be a 17
corporation with perpetual succession, the right to adopt and use a corporate seal, to sue and to 18
be sued, and to hold, manage and control the moneys and properties received by it under the 19
provisions of this act. It shall have the right to make reasonable rules and regulations for the 20
conduct of its business. 21
SECTION 2.(c) The Commission shall consist of five members. Members of the 22
Commission shall serve two-year terms and shall be appointed as follows: one appointed by the 23
Asheville City Board of Education, one appointed by the Buncombe County Board of Education, 24
two appointed by the Buncombe County Board of Commissioners, and one appointed by the 25
other four appointees. A member appointed by a local governing board or a school board shall 26
serve at the pleasure of that board. The member appointed by the other appointees shall serve at 27
the pleasure of the majority of the other appointees. Any vacancy shall be filled by the appointing 28
authority of the member creating the vacancy to fill the unexpired term. 29
SECTION 2.(d) A quorum shall be three members of the Commission. 30
SECTION 2.(e) The Commission shall organize, adopt bylaws or rules and 31
regulations to govern its procedure and the conduct of the business and affairs of the Commission 32
and appoint a chairman and vice -chairman fr om among its membership who shall serve a 33
one-year term and appoint a secretary for a one-year term and until their successors are appointed 34
by the Commission. The finance officer for Buncombe County shall be the finance officer of the 35
Commission. The co unty finance officer shall give bond for the faithful performance of his 36
duties as the finance officer of the Commission in an amount determined by the Commission. 37
The finance officer of the Commission shall manage the funds of the Commission only as 38
directed by the Commission. The Commission may select and appoint an attorney of the 39
Commission to serve at the pleasure of the Commission. The Commission may fix the 40
compensation for the attorney. 41
SECTION 2.(f) Regular or stated meetings of the Commission shall be held at such 42
time and place as may be provided by the Commission in its bylaws or rules and regulations, and 43
special meetings may be held on the call of the chairman after due notice. 44
SECTION 2.(g) One-half of any local government sales and use tax revenue 45
distributed to Buncombe County under G.S. 105-472 shall be paid to the Commission by the 46
Secretary of Revenue; provided that if distribution of the local government sales and use tax 47
revenue is made under G.S. 105-472(2), (the ad valorem method), t hen taxing districts shall 48
receive their funds under G.S. 105-472(2) as if no funds had been paid to the Commission by the 49
Secretary of Revenue, and in computing what amount is one-half of the sales and use tax revenue, 50
the Secretary of Revenue shall not reduce the total by the amount to be distributed to the taxing 51
General Assembly Of North Carolina Session 2025
Senate Bill 131-Third Edition Page 3
districts. This section does not affect the distribution of any local or State sales and use tax 1
revenue to the municipalities in Buncombe County. 2
SECTION 2.(h) Any other capital funds appropri ated by Buncombe County 3
pursuant to Article 40 and Article 42 of Chapter 105 of the General Statutes shall be apportioned 4
among the Asheville City Board of Education and the Buncombe County Board of Education 5
according to the membership of each unit using the process set forth in G.S. 115C-430. 6
Buncombe County shall maintain separate internal accounts for each school board in order to 7
comply with this section. These funds are not under the control of the School Capital Fund 8
Commission. 9
SECTION 2.(i) All funds received by the Commission under subsection (g) of this 10
section shall be placed in a capital reserve fund as provided in Part 2 of Article 3 of Chapter 159 11
of the General Statutes. The capital reserve fund shall be known as the Public School Capital 12
Needs Fund. 13
SECTION 2.(j) All funds in the Public School Capital Needs Fund shall be used to 14
finance new public school construction, to finance public school improvement and renovation 15
projects that exceed one hundred thousand dollars ($100,000), or to reti re any indebtedness 16
incurred by the county for these purposes. 17
The Commission shall consider the capital needs of both the Buncombe County 18
School System and the Asheville City School System, prioritize those needs, and recommend 19
projects to be funded from the Public School Capital Needs Fund to the board of county 20
commissioners based on the priority of needs determined. 21
By joint agreement of the Board of County Commissioners and both boards of 22
education, money may be transferred from the account under this section of one board of 23
education to the account under this section of the other board of education, provided that the 24
agreement must require a transfer back of an equal amount of funds at some fixed date in the 25
future, plus a sum to be determined at that date which represents interest which would have 26
accrued on the funds if they had remained in the first account. 27
SECTION 2.(k) Moneys in the Public School Capital Needs Fund shall be subject 28
to appropriation by the board of county commissioners. The Commission shall disburse such 29
moneys as a ministerial duty upon receiving a written request from the board of county 30
commissioners after the county board of commissioners has adopted an ordinance and after 31
receipt of a written request from the appropriate board of education indicating it is prepared to 32
enter into a contract, and G.S. 115C-521 shall continue to apply. 33
SECTION 2.(l) Notwithstanding any other provision of this act, if the Buncombe 34
County Board of Commissioners appropriates any federal revenue sharing funds to the 35
Commission for the purpose of substituting revenue sharing funds for sales tax funds, then it 36
must at the same time appropriate from the Commission to the county an equal amount of funds 37
received under subsection (g) of this section to be used for such purposes as the Board of 38
Commissioners shall deem appropriate and are otherwise authorized by law, provided tha t such 39
federal revenue sharing funds shall be divided pro rata under subsection (j) of this section. 40
SECTION 2.(m) The reasonable and necessary expenses of the Commission, 41
including the compensation of its officers and employees and the cost of any bond required by 42
it, shall be paid by the County of Buncombe. The chairman of the Commission shall, on or about 43
the first day of each calendar month, certify to the governing body of Buncombe County the 44
expenses of the Commission incurred during the preceding month, and the governing body of the 45
county shall forthwith, and within five days thereafter, cause to be paid to t he Commission the 46
expenses required to be paid. All such payments shall be charged to the general fund of the 47
county. 48
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EFFECTIVE DATE 50
General Assembly Of North Carolina Session 2025
Page 4 Senate Bill 131-Third Edition
SECTION 3. Except as otherwise provided, this act is effective when it becomes 1
law. 2