NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE SUPERIOR COURT DIVISION
WAKE COUNTY 02 CVS
COMPLAINT (Writ of Mandamus- Claims for Mandatory and Prohibitory Injunctions)
COUNTY OF CABARRUS, COUNTY OF ALAMANCE, COUNTY OF STOKES, COUNTY OF CALDWELL, COUNTY OF DAVIE, TOWN OF VALDESE, TOWN OF GARNER, TOWN OF YANCEYVILLE, COUNTY OF NEW HANOVER and ADDITIONAL LOCAL GOVERNMENTS TO BE JOINED UPON THEIR MOTION,
Plaintiffs,.
vs.
NORRIS L.TOLSON, SECRETARY OF REVENUE OF THE STATE OF NORTH CAROLINA,
Plaintiffs, complaining that Defendant unlawfully un-balanced the budgets of the counties, cities and towns of North Carolina in order to balance the State's budget and threatens to continue doing so, seek a court order requiring Defendant to obey his clear legal duties under the law, and hereby allege:
I. PARTIES AND JURISDICTION
1. Plaintiff Counties of Cabarrus, Alamance, Stokes, Caldwell, Davie, New Hanover and other North Carolina counties similarly situated who hereafter join this action as "Additional Plaintiffs," and the Plaintiff Towns of Valdese, Garner and Yanceyville, and other North Carolina municipal corporations similarly situated who hereafter join this action as "Additional Plaintiffs," are each a "body politic and corporate" created by and under authority of the General Assembly of North Carolina.
2. Defendant, Norris L. Tolson, is the duly appointed and acting Secretary of Revenue of the State of North Carolina at all times mentioned in this Complaint. He is an
appointed official, employee and agent of the Executive Branch of the State and holds this office in the Wake County. Defendant has clear legal duties pursuant to numerous statutory laws enacted by the General Assembly. By his oath of office Defendant has sworn to uphold the law and support and defend the federal and state constitutions.
II. LEGAL RESPONSIBILITIES OF PARTIES
3. In matters purely governmental in character, local governments are under the absolute control of the legislative power. Asbury v. Town of Albemarle, 152 N.C. 247 (1913). Plaintiffs are required by law to enact and execute local laws and ordinances including annual budget ordinances for receipt of local tax revenue and spending public funds for the safety, health and welfare of its citizens. G.S. ¿ 159 - 8.
4. Citizens of each county, town and city under law constitute a "body politic and corporate." The citizens and taxpayers of each Plaintiff are, respectively, "vested with all the property and rights in property belonging to the corporation." Pursuant to law Plaintiffs have a right to sue and be sued. Under the name of the county, city or town, Plaintiffs may "sue and be sued." G.S ¿ 153A-11 (counties) and G.S. ¿160A-11 (cities).
5. Elected and appointed officials of North Carolina cities, towns and counties have a fiduciary responsibility and by oath of office are sworn to protect the property rights of their respective citizens as well as to uphold the law and support and defend the federal and state constitutions.
6. Law and public policy of North Carolina is the sole province of the General Assembly. The Constitution provides:
Legislative power. The legislative power of the State shall be vested in the General Assembly, which shall consist of a Senate and House of Representatives. Art. II, Sec 1.
7. City and county governments, under the Constitution, are created and empowered solely by the Legislative Branch. The Executive Branch has no authority to manipulate the taxing and spending authority of local governments. The Constitution provides:
General Assembly to provide for local government. The General Assembly shall provide for the organization and government and the fixing of boundaries of counties, cities and towns, and other governmental sub-divisions, and, except as otherwise prohibited by this constitution, may give such powers and duties to counties, cities and towns, and other governmental sub-divisions as it may deem advisable. Art. VII, Sec. 1.
8. State government and local governments are both the People's governments. The Constitution places in the Legislative Branch exclusive power over and control of local governments. This constitutional grant by the People includes authorization of local taxing power and permits the requirement that local governments, like the state, operate on a balanced budget.
9. The People of North Carolina are sovereign. The Constitution of North Carolina
states:
Sovereignty of the people. All political power is vested in and derived from the people; all government of right originates from the people, is founded upon their will only, and is intended solely for the good of the whole. Art. I, Sec. 2.
10. Under the Constitution, tax laws must state specifically how the People's tax money is to be spent and it can be spent in no other way:
Acts levying taxes to state objects. Every act of the General Assembly levying a tax shall state the special object to which it is to be applied, and it shall be applied to no other purpose. -Art. V, Sec. 5.
11. In reference to collecting and disbursing local tax revenues essential to balance budgets of the Plaintiff cities, towns and counties, North Carolina law sets forth specific objects
to which certain taxes are to be applied, namely applied to the operation costs of local units of government including Plaintiff cities, towns and counties.
12. Among his duties according to law, the Defendant Secretary has a clear legal duty to disburse to Plaintiffs and such Additional Plaintiffs who join herein, the tax revenues specifically required by law to be collected by Defendant Secretary on items made taxable purposely for local units of government. Local taxable items includes gross receipts from sales of electric power, natural gas, regional gas districts and telephone companies, beer and wine, food stamps, motor fuels, reimbursements equal to wholesale, retail and manufacturers inventory tax, and others. The Defendant has failed to perform his clear legal duty in that he has withheld payment of these legally owed tax revenues.
13. Distribution by the Defendant of local tax revenue collected by him that belongs to Plaintiffs is mandatory. The obligation of payment to Plaintiffs is neither permissive nor discretionary. Examples of the clear legal duty to disburse local funds to Plaintiffs as expressed in local tax revenue laws include:
a. "The Secretary must distribute..." G.S. ¿ 105 - 116(b), line 1, 5 (utilities)
b. "The Secretary must distribute.. ." G.S. ¿ 105-187.44(b). (natural gas)
c. "The Secretary shall distribute. .." G.S.105-113.82(d) (beer and wine)
d. "The Secretary shall distribute..." G.S. ¿ 105-277.001(b), line 1. (inventory)
e. "The Secretary shall distribute.. ." G.S. ¿ 105-277.001(b), line 3.
f. "The Secretary shall distribute..." G.S. ¿ 105 -277.001(b), line 8. "
g. "The Secretary shall distribute.. ." G.S. ¿ 105-277.001(b), line 11. "
h. "The Secretary shall distribute..." G.S. ¿ 105 - 277.001(c), line 5. "
i. "The Secretary shall distribute. .." G.S. ¿ 105 - 277.001(cl), line 1. "
j. "The Secretary shall distribute. .." G.S. ¿ 105 - 277.001(cl), line 7. "
k. "The Secretary shall distribute. .. " G.S. ¿ 105 - 277.001(c2), line 7. "
1. "The Secretary shall distribute.. ." G.S. ¿ 105 - 277.001(c2), line 12. "
n. "The Secretary shall pay to each. .." G.S. ¿ 105-275.1(a), line 23. (inventory)
o. "The Secretary shall also pay..." G.S. ¿ 105-275.1(a), line 29
p. "The Secretary shall pay. .." G.S. ¿ 105-275.1(b), line 1.
q. "The Secretary shall also pay..." G..S. ¿ 105-275.1(b), line 7. "
r. "The Secretary shall also pay. .." G.S. ¿ 105-275.1(b), linel4. "
s. "The Secretary shall also distribute. .." G.S. ¿ 105 - 275.1(b), line 20. "
t. "The Secretary shall also distribute. .." G.S. ¿ 105 - 275.1(b), line 22. "
u. "The Secretary shall also distribute. .." G.S. ¿ 105 - 275.1(b), line 25. "
v. "Shall be paid in cash" to eligible municipalities. G.S. ¿136-41.1,
G.S. ¿136-176(b)(3), G.S.¿105, Article36C, from Highway Trust Fund (motor fuels)
w. "The Secretary shall also distribute..." G.S. ¿ 105 - 164.44C (food stamp sales tax)
x. "The Secretary shall distribute. .." G.S. ¿ 105 - 275.2(al, a2), (intangibles)
14. Local taxes collected by the Secretary of Revenue are not state funds. Local funds are not deposited to the State Treasury as state funds by law must be. The Secretary must distribute local funds on the days set by law and from current collections as provided by law.
15. Local revenue is clearly defined in various "Source of Funds" provisions of the General Statutes. For example, the statute relating to county inventory tax reimbursements, provides:
Source of funds. To pay for the distribution required by this section and the costs of making the distribution, the Secretary shall draw from collections received under Part I of Article 4 of this Chapter an amount equal to the amount distributed and the cost of making the distribution. G.S. ¿ 105 - 277.001 (f) See also G.S. ¿ 105 - 275.2(c) as to county and city intangible tax reimbursements.
Part I of Article 4 of Chapter 150 refers to collections of corporate income tax, which continue to be made on a regular and on-going basis.
16. The current General Assembly in Special Session on September 9, 2002 enacted House Bill 1490 as amended by the Senate on August 29, 2002. (Copy attached as Exhibit A and incorporated herein by reference.)
17. House Bill 1490 was sponsored by 74 Representatives. Numerous other bills were submitted by members of the General Assembly but not enacted. Some of the other bills expressly "find" that local revenue collected by the Defendant, described above, "is local revenue." Some Bills seek a Constitutional Amendment prohibiting the withholding of local revenue by the Executive Branch. Other Bills declare withholding of local revenue a criminal offense. No Bills are introduced in support of the Executive Branch's purported authority to confiscate and spend Plaintiffs' property.
18. The Constitution provides money may be drawn from the State Treasury only by appropriation enacted by the Legislature. The Constitution provides:
Drawing public money. (1) State treasury. No money shall be drawn from the State Treasury but in consequence of appropriations made by law ... Article V, Section 7.
19. To the extent the Defendant has remitted to the Treasury the local funds he collected that belong to Plaintiffs and as to funds that have been withdrawn from the Treasury and spent, if any, the Defendant has also violated the Constitution.
20. Presumably, the Defendant will claim that the Governor instructed him to withhold such lawfully owed funds from the Plaintiffs. Respectfully, "the Governor is not above the law. He is as much subject to the obligations and penalties as the humblest citizen." State vs. Holden, 64 N.C. 829 (1870). It stands that no officer of the State, no man or woman is above the law. The People choose to vest in the Legislative Branch of government exclusive power to make their laws. The Executive Branch is authorized by the People only to execute the law; the
Judicial Branch has authority only to interpret the law. Only the Legislative Branch can make law and public policy or change existing law. If a change in the law is necessary to meet today's emergencies ". . . the Legislature must make it; for neither the Governor nor the Judges have authority to strain the law to meet the emergency." In the Matter of Austin, 60 N.C. 168 (1863).
21. Until changed or amended by the Legislature, statutory law prevails. The only duty of the Court is to enforce the law as written.
22. The law commands that each local government carry out its legislative functions for the respective municipalities according to a balanced budget:
Each local government ... shall operate under an annual balanced budget adopted and administered in accordance with (Article 3, Chapter 159 of the General Statutes) . . ." (G.S. ¿ 159 - 8)
22. The General Assembly further provides it is the "intent of the General Assembly by enactment of this Article" that:
[n]o general law ... may be construed to modify, amend or repeal any portion of Part I or Part III of this Article unless it expressly so provides by specific reference to the appropriate section. G.S. ¿ 159-7 [c].
Part I relates to municipal budgets, G.S. ¿159-7 through ¿159-17.1. Part III relates to fiscal control of municipal budgets, G.S. ¿ 159-24 through ¿ 159-38.
23. To carry out the mandate of balanced local budgets, city, town and county governments are granted limited taxing authority and the legal right to certain tax revenue by the Legislature. For administrative efficiency, the Secretary. of Revenue collects local taxes periodically and holds local tax funds in trust to be disbursed periodically as commanded by law to the Plaintiff towns, cities and counties.
24. The "source of funds" specified by law from which the Secretary is to pay Plaintiffs counties the amounts due them, respectively, is Defendant Secretary's monthly
collections of "corporate income taxes." G.S. ¿ 105 - 277.001 (f). Other taxes payable- to local governments are paid through the Secretary of Revenue who, by law, collects a fee for his administrative costs of collection.
25. Tax revenues belonging to the State, on the other hand, are required to be deposited in the name of the State Treasurer in the General Fund within 24 hours of collection. G.S. ¿ 147 - 77.
26. Legislative enactments are interpreted according to the general rule of statutory construction that legislative intent expressed in specific laws shall govern and be applied rather than general laws containing non-specific or ambiguous terms. The words of the Executive Budget Act purportedly relied upon by the Defendant are in general terms and ambiguous. The words of the statutes securing the local revenues and other funds belonging to the Plaintiffs, on the other hand, are specific as alleged in Paragraph 13.
27. Local tax revenue in question is a debt of the taxed entity owed to local governments. When paid by the taxed entity to Defendant Secretary, the money becomes vested property belonging to citizens and taxpayers of units of local government.
28. Local tax revenue is, by law, not "state funds." The local funds cannot be converted to any use not specified by law. Neither the Defendant Secretary nor any other state office can arbitrarily, by executive fiat, transform "local funds" into "state funds." In addition, the Executive Branch can only spend money appropriated by express action of the Legislative Branch.
29. In addition, the Defendant cannot do something the Legislature has ordered not be done. The rule is:
[W]here a power has never been before exercised and is doubtful, the courts will not presume that it was the intention of the
Legislature to assume it, but will require a clear expression of an intention to do so.... Expressio unius exclusio alterius is a wellestablished rule of construction that the courts are not at liberty to disregard; and its soundness, when the object is to ascertain the intention of the Legislature and neither to fall short of it nor go beyond it, is fully illustrated by this case. In the Matter of Austin, supra.
30. Neither the Defendant nor any other officer of another branch of government can make, repeal, amend or violate the laws enacted by the Legislative Branch. The Constitution provides:
Separation of powers. The legislative, executive, and supreme judicial powers of the State government shall be forever separate and distinct from each other. Art. 1, Sec. 6.
III. ACTION TAKEN BY DEFENDANT CONTRARY TO LAW
31. For fiscal year 2001-2002, Defendant failed to make payments to the Plaintiffs as required by law. No legal authority or written opinion from the North Carolina Attorney General exists that supports the withholding of legally owed funds. Furthermore, upon information and belief, Defendant will not be making any of the reimbursements for intangibles taxes and inventory taxes in fiscal year 2002- 2003.
32, Upon information and belief, there were substantial funds in excess of $120,000,000 on hand as of the close of the Fiscal Year on June 30, 2002 with which to make the required Fiscal Year 2001-2002 payments to Plaintiffs.
33. Pursuant to G.S. ¿143-32, civil and criminal penalties exist for an officer or employee of the State's failure to appropriate monies as directed by law.
34. Plaintiffs, in reliance on then existing law that assures the local revenue, enter into contracts with their employees, vendors, contractors and other third parties. Plaintiffs also
provide numerous public services to their taxpayers and citizens based upon the payments of lawfully owed taxes and reimbursements from the Defendant.
35. It is not possible for Plaintiffs to comply with their clear legal duty to balance local budgets if the Defendant does not comply with his duties to remit the legally owed funds to the Plaintiffs.
36. Plaintiffs have sustained substantial losses by reason of Defendant's failure to comply with his clear legal duties to make payment due through the end of Fiscal Year 20012002, i.e., June 30, 2002 and payments due from the Fourth Quarter of Fiscal Year 2002 due in September and October, 2002.
37. Neither the Constitution nor General Statutes authorize the Defendant nor the Executive Branch to violate the law in order to balance the state budget by un-balancing budgets of local governments as the Defendant is doing by his actions.
38. Plaintiffs are obligated, morally as well as legally to their respective citizens and taxpayers to provide for people's safety, welfare, health and education. Defendant's actions and failure to act promptly seriously impairs and will continue to impair fulfillment of Plaintiffs' obligations to their citizens. Examples include being forced to lay off law enforcement personnel, school operations and school facility funds, decrease health care and assistance to elderly, diminish water, sewer and sanitation services, lower maintenance of adequate fire protection, etc.
39. Plaintiffs and their constituents will sustain future irreparable loss if the payments due in FY 2002-2003 are not made promptly as required by law, including among others the following payments:
a. August 30, 2002 Intangibles Tax Reimbursements relating to the former
local tax.
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September 15, 2003 - Utility Franchise Tax, Piped Natural Gas Excise |
b. September 15, 2002 - Utility Franchise Tax, Piped Natural Gas Excise Tax, Telecommunications Sales Tax.
c. September 30, 2002 - Inventory Property Tax Reimbursement.
d. October 1, 2002 - Powell Bill hinds.
e. December 15, 2002 - Utility Franchise Tax, Piped Natural Gas Excise Tax, Telecommunications Sales Tax.
f. March 15, 2003 - Utility Franchise Tax, Piped Natural Gas Excise Tax, Telecommunications Sales Tax.
g. April 30, 2003 - Inventory Property Tax Reimbursement.
h. May 31, 2003 - Homestead Exemption Reimbursement, Beer and Wine
Tax.
i. June 15, 2003 - Utility Franchise Tax, Piped Natural Gas Excise Tax, Telecommunications Sales Tax.
Tax, Telecommunications Sales Tax.
k. September 30, 2004 - (for Qtr 4, FY 2003) Inventory Property Tax Reimbursement.
40. Plaintiffs are entitled to a declaration that the Defendant shall pay all funds that are due and owing under the law.
FIRST CLAIM FOR RELIEF
(Mandamus to Perform Clear Legal Duty)
41.. The allegations of Paragraphs 1 through 40 are herein incorporated by reference.
42. The acts of Defendant hereinbefore described are in direct violation of his clear legal- duties to disburse local tax revenues to the Plaintiffs and those Additional Plaintiffs who join herein. The threat to withhold all or part of the distribution for FY 2002-2003 is likewise a violation of Plaintiffs' rights. Plaintiffs have suffered and will continue .to suffer substantial, irreparable harm if these funds are not paid to Plaintiffs by the Defendant.
SECOND CLAIM FOR RELIEF
(Due Process of Law)
43. The allegations of Paragraphs I through 42 are herein incorporated by reference.
44. Acts of Defendant herein described are unconstitutional in that property belonging to the Plaintiffs and Additional Plaintiffs is taken by the Defendant without due process of law and without notice and opportunity to be heard in violation of Amendments V and XIV of the U.S. Constitution and Art. 1, See. 19 of the N. C. Constitution.
THIRD CLAIM FOR RELIEF
(Impairment of the Obligation of Contracts)
45. The allegations of Paragraphs 1 through 44 are herein incorporated by reference.
46. The acts of Defendant hereinbefore described are unconstitutional in that such actions cause a violation of laws requiring Plaintiffs and Additional Plaintiffs to maintain and operate on balanced budgets and, in turn, impairs obligations of contracts between Plaintiffs and Additional Plaintiffs and third parties in violation of Article I, Sec. 10 of the U. S. Constitution and Art. 1, Sec. 19 of the N. C. Constitution.
PRAYER FOR RELIEF
NOW THEREFORE, Plaintiffs pray that the Court enter judgment as follows:
1. Judgment for mandatory injunction requiring the Defendant to comply with his clear legal duty to pay to Plaintiff Cities, Towns and Counties for Fiscal Year 2001-2002 all local revenues collected by him and all revenues due by law to be paid them.
2. Judgment for prohibitory injunction requiring the Defendant to pay Plaintiff Cities, Towns and Counties all local revenues he collects and disburse all revenues due Plaintiffs and Additional Plaintiffs as such payments become due in Fiscal Year 2002-2003.
3. Order that failure by the Defendant, and any other person or official acting by, through, or in concert with said Defendant, to comply with the Orders of this Court and the clear legal duties found to exist by law shall constitute. contempt of court and subject him, her and them to imposition of punishment and other appropriate-sanctions authorized by law.
4. Order Defendant to appear before the Court forthwith and upon ten days notice to show cause why a Preliminary Injunction should not be entered requiring immediate compliance with his clear legal duty to disburse to Plaintiffs and Additional Plaintiffs all properties and tax revenues due them without further delay.
5. Order that all other counties, cities and towns that wish to join this action be allowed to become Additional Plaintiffs and that all counties, cities and towns that do not wish- to join in this action be allowed to waive their right to participate in any settlement or recovery as may be approved and ordered herein.
6. Order that all costs, fees and expenses of this action be taxed to the Defendant.
7. Order such other and further relief as the Court deems just and proper. This the C7 day of September, 2002.
Boyce & Isley, PLLC
Eugene Boyce, N B # 435
R. Daniel Boyce, NCSB # 12329 Philip R. Isley, NCSB # 19094 Attorneys for Plaintiffs Post Office Box 1990 Raleigh, NC 27602-1990 Telephone: (919) 833-7373
North Carolina General Assembly - [ H 1490vr vr ] Short Title: Page 1 of 4
GENERAL ASSEMBLY OF NORTH CAROLINA SESSION 2001
HOUSE BILL 1490 RATIFIED BILL
AN ACT TO PROVIDE THAT LOCAL REVENUES MAY NOT BE WITHHELD OR IMPOUNDED BY THE GOVERNOR AND TO CLARIFY THE FRANCHISE TAX ON ELECTRIC POWER COMPANIES.
The General Assembly of North Carolina enacts:
SECTION 1. G.S. 105-113.82(d) reads as rewritten:
"(d)Time. - The revenue shall be distributed to cities and counties within 60 days after March 31 of each year. The General Assembly finds that the revenue distributed under this section is local revenue, not a State expenditure, for the purpose of Section 5(3) of Article III of the North Carolina Constitution. Therefore, the Governor may not reduce or withhold the distribution."
SECTION 2. G.S. 105-116.1(b) reads as rewritten:
"(b)Distribution. - The Secretary must distribute to the cities part of the taxes collected under this Article on electric power companies. Each city's share for a calendar quarter is the percentage distribution amount for that city for that quarter minus one-fourth of the city's hold-back amount and one-fourth of the city's proportionate share of the annual cost to the Department of administering the distribution. The Secretary must make the distribution within 75 days after the end of each calendar quarter. The General Assembly finds that the revenue distributed under this section is local revenue, not a State expenditure, for the purpose of Section 5(3) of Article III of the North Carolina Constitution. Therefore, the Governor may not reduce or withhold the distribution."
SECTION 3. G.S. 105-187.44(b) reads as rewritten:
"(b)Distribution. - Within 75 days after the end of each calendar quarter, the Secretary must distribute to the cities part of the tax proceeds collected under this Article during that quarter. The amount to be distributed to a city is one-half of the amount of tax attributable to that city for that quarter under subsection (a) of this section. The General Assembly finds that the revenue distributed under this section is local revenue, not a State expenditure, for the purpose of Section 5(3) of Article III of the North Carolina Constitution. Therefore, the Governor may not reduce or withhold the distribution."
SECTION 4 G.S. 105-164.44F is amended by adding a new subsection to read:
"(f) Nature. - The General Assembly finds that the
revenue distributed under this section is local revenue, not a State expenditure, for the purpose of Section 5(3) of Article III of the North Carolina Constitution. Therefore, the Governor may not reduce or withhold the distribution."
North Carolina General Assembly - [ H 1490vr vr ] Short Title: Page 2 of 4
SECTION 5. G.S. 136-41.1 is amended by adding a new subsection to read:
"(d) Nature. - The General Assembly finds that the
revenue distributed under this section is local revenue, not a State expenditure, for the purpose of Section 5(3) of Article III of the North Carolina Constitution. Therefore, the Governor may not reduce or withhold the distribution."
SECTION 6. G.S. 159B-27(d) reads as rewritten:
"(d)The State shall distribute to cities and towns which receive electric power and energy from their ownership share of a project or to which electric power and energy is sold by a joint agency an amount equal to a tax of three and nine hundredths percent (3.09%) of all moneys expended by a municipality on account of its ownership share of a project, including payment of principal and interest on bonds issued to finance such ownership share, or an amount equal to a tax of three and nine hundredths percent (3.09%) of the gross receipts from all sales of electric power and energy to such city or town by a joint agency, as the case may be. The General Assembly finds that the revenue distributed under this section is local revenue, not a State expenditure, for the purpose of Section 5(3) of Article III of the North Carolina Constitution. Therefore, the Governor may not reduce or withhold the distribution."
SECTION 7. G.S. 143-25 reads as rewritten:
"S 143-25. Maintenance appropriations dependent upon
adequacy of revenues to support them.
(a) All maintenance appropriations now or
hereafter made are hereby declared to be maximum, conditional and proportionate appropriations, the purpose being to make the appropriations payable in full in the amounts named herein if necessary and then only in. the event the aggregate revenues collected and available during each fiscal year of the biennium for which such appropriations are made, are sufficient to pay all of the appropriations in full; otherwise, the said appropriations shall be deemed to be payable in such proportion as the total sum of all appropriations bears to the total amount of revenue available in each of said fiscal years. Except as provided in subsection (b) of this section, the Director of the Budget is y given full power and authority to examine and survey the progress of the collection of the revenue out of which such appropriations are to be made, and to declare and determine the amounts that can be, during. each quarter of each of the fiscal years of the biennium properly allocated to each respective appropriation. In making such examination and survey, ho the Director of the Budqet shall receive
estimates of the prospective collection of revenues from the Secretary of Revenue and every other revenue collecting agency of the State. The Director of the Budget may reduce all of said appropriations pro rata when necessary to prevent an overdraft or deficit to the fiscal period for which such appropriations are made. The Governor may also reduce all of said appropriations pursuant to Article III, Section 5(3) of the Constitution in accordance with subsection (b) of this section, after consulting with the Joint Legislative Commission on Governmental Operations under G.S. 120-76(8) if prior consultation is required by that section. The purpose and policy of this Article are to provide and insure that there shall be no overdraft or deficit in the general fund of the
North Carolina General Assembly - [ H 1490vr vr ] Short Title: Page 3 of 4
State at the end of the fiscal period, growing out of appropriations for maintenance and the Director of the Budget is directed and required to so administer this Article as to prevent any such overdraft or deficit. Prior to taking any action under this section to reduce appropriations pro rata, the Governor may consult with the Advisory Budget Commission.
(b) The General Assembly recognizes that it has
required units of local government to adopt and maintain annual balanced budgets and take other steps to assure financially sound operations under the Local Government Budget and Fiscal Control Act and other provisions of Chapter 159 of the General Statutes. Accordingly, the General Assembly finds that in order to satisfy those statutory requirements and provide adequate services to their citizens, units of local government must be able to rely on the funds and local revenue sources the General Assembly has provided.
It is the intent of the General Assembly that funds that
have been collected by the State on behalf of local governments and funds that the General Assembly has appropriated or otherwise committed to local governments shall not be reduced except as provided in this section. In exercising the powers contained in Section 5(3) of Article III of the North Carolina Constitution, the Governor shall not withhold from distribution funds that have been collected by the State on behalf of local governments or funds that the General Assembly has appropriated or otherwise committed to local governments unless, after making adequate provision for the prompt payment of principal of and interest-on bonds and notes of the State according to their terms, the Governor has exhausted all other sources of revenue of the State including surplus remaining in the treasury at the beginning of the fiscal period.
This subsection does not authorize the Governor to
withhold revenues from taxes levied by units of local governments and collected by the State. The General Assembly recognizes that under Section 19 of Article I of the North Carolina Constitution and under the Due Process Clause of the United States Constitution, the State is prohibited from taking local tax revenue."
SECTION 8. G.S. 105-116 is amended by adding a new subsection to read:
"(el)An electric power company engaged in the
business of furnishing electricity, electric lights, current, or power that collects the annual franchise or privilege tax pursuant to subsection (a) of this section and remits the tax collected to the Secretary shall not be subject to any additional franchise or privilege tax imposed upon it by any city or county."
SECTION 9. The provisions of this act are
severable. If any provision of this act is held invalid by a court of competent jurisdiction, the invalidity does not affect other provisions of the act that can be given effect without the invalid provision.
SECTION 10. This act is effective when it becomes law.
In the General Assembly read three times and ratified this the 12th day of September, 2002.
North Carolina General Assembly - [ H 1490vr vr J Short Title: Page 4 of 4
Beverly E. Perdue President of the Senate
James B. Black
Speaker of the House of
Representatives
"'Michael F. Easley Governor
Approved____________ m. this________________ day of 2002
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, that he has read the foregoing Complaint, that the matters and things alleged |
Before me personally appeared this day the undersigned, who being first duly sworn,
a
deposes and says that he is AV duty elected Commissioner____________ of the Coun v of
therein are true of his own knowledge and those matters alleged to be the law and matters of
which he does not have personal knowledge, he verily believes it to be true, this the September, 2002.
Sworn to and subscribed before me this day-of September, 2002.
My Commission Expires 5/02006
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