# co Charlotte-Douglas · INTERNATIONAl AIRPORT

December 8, 20 15 Mr. Randall S. Fiertz Director, Office ofAirport Comp liance and Management Analysis Federal Aviation Administration 800 [ndependence Avenue SW. Washington, DC 20591 RE: 14 CFR Chapter I [Docket No. FAA- 2013- 0988] Policy and Procedures Concerning the Use of Airport Revenue; Proceeds From Taxes on Aviation Fuel- Action Plan for Char l otte Douglas International Airport Dear 

### Mr. Fiertz: In compliance w ith th e requirements set forth in CFR Chapter I [Docket No. FAA- 2013

- 0988] Policy and Procedures Concerni ng the Use o f Airport Revenue ; Proceeds From Taxes on Aviation Fuel (the

" Policy") Charlotte Douglas International Airport ("CL T " ) submits the following Action Plan ou tlining the State and Local taxes applicable to aviation fuel at CLT and their curr ent and future use. Current law appear s not t o be in com pliance with the Pol i cy, CLT believes the changes implemented by the North Carol ina ('NC " ) Legislature this year w ill bring the law into compliance as ofJanuary I, 20 16. 

### C urrent State and Local Taxes As the NC sales and use tax law on aviation fuel currently stands, a port ion ofthe tax ( 

### 1.75% at the State l evel and .5% at the County l evel) is neither grandfathered n or properly utilized as required under the Policy. NC sales and use tax was first permanently implemented in 1939 at a rate of3% but did not become applicabl e to aviation fue l unti l February I , 1976. The sales and use tax rate increased to 4% in 199 1 and since then the rate has fluctua ted until reaching the current tax rate of4.75%. County govern ments are also empower ed to impose sales and use tax. In Mecklenburg County, wher e CLT resides, an additional2
. 5% sal es and use tax applies to aviation fuel. Ofthe taxes imposed by Mecklenburg Coun ty, 2% was imposed prior to December 30, 1 987 and the remaining .5% is earmarked specifically for the public transportation system. Neither the Sta te nor the County imposed sa les and use tax applicable to aviation fuel is treated as airport revenue or earmarked for a State aviation program . 

### F uture State and Local Taxes On September 30 , 2015 the NC Legislat ur

e enacted Session Law 2015-259 which will bring t he taxes on aviati on fuel into comp liance with the Policy as ofJanuary 1, 2016. Part IV ofthis law makes sales and use tax on aviation fuel a State tax onl y set at the combined general rate. Revenue generated from this tax

charlotteai rport .com 

### I PO Box 1 9066 

### I Char lotte NC 28219 

### I P: 704.359.4000 

### I F: 704.359.4030 0w'1nd 1nd Oo<"r1tf'd by th e C 1 ty o f Cha rlotteis remitted to the Highway Fund which then appropriates this money to the Division ofAviation ofthe Department ofTransportation on an annual basis. The law specifically states that the revenue generated from aviation fuel is to be used for " prioritized capital improvements to public airports and time-sensi tive aviation capital improvement projects for economic development purposes." It exempts commercial air carriers from the aviation fuel sales and use tax through January 1, 2020. A copy ofthe Session Law is attached for your review. As the changes will be implemented well before December 8, 2017 and provide that all funds from aviation fuel sales and use tax are remitted to the Division Aviation for airport purposes, CL T b eli eves that it is in compliance with the Policy and its applicable Grant Assurances
. Moving forward, C LT will continue to inspect any propose changes to this law and ifnecessary take all steps within our power to ensure continued comp liance with the Policy. 

### Notification Reg ui remen ts Under the Policy, C L T has the obligation to notify those third party entities that have taxing authori ty over aviation fuel oftheir requirements under the Policy. These notifica tions were sent to the State of North Carolina as well as to Mecklenburg County. Copies ofthese letters are also attached for your refer ence. Thank you for your review ofthis matter and please let me know if you need anything further.
Sincerely

-

Brent Cagle Interim Aviation Director

charlotteairport.com 1 PO Box 19066 1 Charlotte, NC 28219 I P: 704

.359.4000 I F. 704.359. 4030 OwnPd and operated by the C1ty of ChJrlotte

### GENERAL ASSEMBLY OF NORTH CAROLINA SESSION 

### 2015
SESSION LAW 

### 2015-259 HOUSE BILL 117
AN ACT TO ENACT THE NORTH CAROUNA COMPETES ACT. The General Assembly ofNorth Car olina enacts: PART 

### I. JDIG MODIFICATIONS read: SECTION 1.(a) 

### G.S. 1438-437.51 is amended by adding a new subdivision to 

### "§ 

### 1438-437.51. Definitions. The following definitions apply in this Part: (I) Agreement.

- A community economic development agreement under G.S. 1438-437.57. (2) Base period.- The period of time set by the Committee during which new employees are to be hired for the positions on which the grant is based. (3) Business. - A corporation, so l e proprietorship, cooperative association, partnership, S corporation, limited liability company, nonprofit corporation, or other form of business organization, located either within or outside this State. (4) Committee.- The Economic Investment Committee established pursuant to G.S. 1438-437.54. (4a) Development tier.

- The classification assigned to an area pursuant to G.S. 1438-437.08. (5) Eligible position.

- A position created by a business and filled by a new full-time employee in this State during the base period. (6) Full-time employee.

- A person who is emp l oyed for consideration for at least 

### 35 hours a week, whose wages are subject to wit hho lding under Article 4A of Chapter 105 of the General Statutes, and who is determined by the Committee to be employed in a permanent position according to criteria it develops in consultation with the Attorney General. The term does not include any person who works as an independent contractor or on a consulting basis for the business. (6a) High-yield project.

- A project for which the agreement requires that a business invest at least five hundred million dollars ($500.000.000) in private funds and create at least 1.750 eligible positions. (7) New e mployee. - A full -time employee who represents a net increase in the number ofthe business's employees statewide. (8) Overdue tax debt.- Defined in G.S. 105-243.1. (9) Related member.- Defined in G.S. 105-130.7A. (10) Withholdings.

- The amount withheld by a business from the wages of employees in eligible positions under Article 4A of Chapter 105 of the General Stat utes." SECTION 

### l.(b) G.S. 1438-437.52 reads as rewritten: 

### "§ 

### 1438-437.52. Job Development Investment Grant Program. (a) Program.- There is established the Job Development Investment Grant Program to be administered by the Economic Investment Committee. In 

### order to foster job creation and investment in the economy of th is State, the Committ ee may enter int o agr eements w i th businesses to provide grants in accordance with the provisions of this Part. The Committee, in consultati on with the Attorney General, shall develop criteria to be used in determining whether the conditions of this section are satisfied and whether the project described in the application 

# I

**~** 

# I

**~** 

# I

* H 1 1 7 - V

- 3 *location with the highest development tier area designation determines the minimum number of eligible positions that must be created. Development Tier Area Number ofEligible Positions 10

II Tier One Tier Two Tier Three 20

**~50** 

### SECTION l.(d) G.S. 143B-437.55(c) reads as rewritten: "(c) Annual Reports
. - The Committee shall publish a report on the Job Development Investment Grant Program on or before Apri l 30 of each year. The Committee shall submit the report electronically to the House of Representatives Finance Committee, the Senate Finance Committee, the House of Representatives Appropriations Subcommittee on Natural and Economic Resources, the Senate Appropriations Committee on Natural and Economic Resources , and the Fiscal Research Division. The report shall include the following: (L I) A listing of all bus inesses making an applica t ion under this Part and an explanation of whether each business ul timately located the project in this State regardless of whether the business was awarded a grant for the project under this Part
. 

## .c.u_ru A lis ting. itemized by development tier, of the number of offers that have been calculated, estimated, or extended but were not accepted and the total award value ofthe offers. II 

### SECTION l.(e) G
.S. 1438-437.56 reads as rewritten: 

### "§ 143B-437.56. Calculation of minimum and maximum grants; factors considered
. (a) Subject to the

**liFRt~tieRs** provisions of

**s~:~eseetieR** subsections (a I) and (d) of this section, the amount of the grant awarded in each case shall be a percentage ofthe withholdings of eligible pesitioRs. Tke pereeRtage shall ee RO less theA teA perceRt (I 0%) aRd RO more tkaR se\ 'eRty fh'e perceRt (75%) of tke \\'itkkoldiRgs of tke eligible positions for a period of years. The percentage shall be no more than eighty percent (80%) for a development tier one area and no more than seventy-five percent (75%) for any ot her area. If the project will be located in more than one area designation, the location with the highest area designation determines the maximum percentage to be used. The percentage used to determine the amount of the grant shall be based on criteria developed by the Committee, in consultation with the Attorney General, after considering at least the following: 

### (1) The number ofeligible positions to be created
. (2) The expected duration ofthose positions. (3) The type of contribution the bu siness can make to the long-term growth of the State's economy. (4) The amount of other financ ial assistance the project will receive from the State or local governments. (5) The total dollar investment the busines s is making in the project. (6) Whether the project utilizes existing infrastructure and resources in the community. (7) Whether the pro j ect is located in a development zone. (8) The number of eligible positions that wou l d be filled by residents of a development zone. (9) The extent to which the project will mitigate unemployment in the State and locality
. 

### .@11 Notwithstanding the percentage specified by subsection (a) of th is section. if the project is a high-yield project, the business has met the investment and job creation requirements, and, for three consecutive years. the business has met all terms of the agreement the amount of the grant awarded shall be no more than one hundred percent (100%) of the withholdings of eligible positions for each consecutive year the business maintains the minimum job creation requirement and meets all terms of the agreement. A business rece iving an enhanced percentage of the withho l dings of eligible pos itions under this subsection that fails to maintain the minimum job crea tion requirement or meet all terms of the agreement will be disqualified from receiving the enhanced percentage and will have the applicab l e percentage set
House Bill 117

-Ratified Session Law 2015-259 Page 3the period kOFH

**J~:~ly** 

### I , 20 15 , to December 

### 31,2015 , the FHOKiFHI:Iffi total liability for grants awardee,

**iRci~:~Eiing ar:Ho~:~nts**  traa:sferreEi to the Util ity

**Aeco~:~nt p~:~rs~:~aRt**  to G.S. 143B 437.61, is seven FHillion fi•;e

**h~:~nEireEi tho~:~sanEi**  elollars 

### ($7,500,000). thirty-five million dollars ($35.000,000) if no grant is awarded for a high-yield project and is fifty million dollars ($50,000,000) if a grant is awarded for a high-yield project. No agreement may be entered into that, when considered together with other existing agreements governing grants awarded during an applicable time period provided in this subsection , could cause the State's potential total annual liability for grants awarded in that time period to exceed the designated maximum amount." SECTION l.(i) The Department of Commerce shall study the factors that have contributed to the termination of grants awarded pursuant to Part 2G of Article I 0 of Chapter 1438 of the General Statutes. 

### In conducting the study required by this subsection , the Department shall examine the efforts of other states that have permitted s imilar economic development programs to incent businesses to create jobs for the purpose of determining best practices for remediatin g underperformance of participating businesses in order to lower the incidence of community economic development agreements under G.S. 1438-437.57 ending in termination. The Department sha ll submit the report to the H!ouse of Representatives Finance Committee, the Senate Finance Committee, the House of Representatives Committee on Agriculture and Natural and Economic Resources, the Senate Appropriations Committee on Natural and Economic Resources, and the fiscal Research Division no later than March 1 , 2016. SECTION 

### 1.(j) Subsections (d) and 

### (h) of this section are effective when this act becomes law. The remainder of th is secti on becomes effective July 

### I , 2015, and applies to awards made under Part 2G of Artic l e 10 of Chapter 143B of the General Statutes on or after that date. PART II. ONE NC MODIFICATIONS SECTION 2.(a) G.S. 143B-437.72(c) reads as rewritten: "(c) Local Government Grant Agreement.- An agreement between the State and one or more local governments shall contain the following provisions: 

### (1) A commitment on the part of the local government to match the funds allocated by the State:-State, as provided 

### in this subdivision. A local match may include cash, fee waivers , in-kind services, the donation of assets , the provision of infrastructure, or a combination of these.



### " a. For a local government in a development tier one area, as defined in G.S. 1438-437.08, the State shall provide no more than three dollars ($3.00) for every one dollar ($1.00) provided by the local government. 

## .!1. For a local government in a development tier two area, as defined in G.S. 1438-437.08 , the State shall provide no more than two dollars ($2.00) for every one dollar ($1.00) provided by the local government. c. For a local government in a development tier three area. as defined in G.S. 1438-437.08. the State shall provide no more than one dollar ($1.00) for every one dollar ($1.00) provided by the local government. SECTION 

### 2.(b) This section is effective when this act becomes law. PART III
. DATA CENTER INFRASTRUCTURE ACT SECTION 

### 3.(a) G.S. 105-164.3 reads as rewritten: 

### "§ 105-164.3. Definitions. The following definitions apply in thi s Article: (33c) Qualifying datacenter.

- A datacenter that satisfies each of the following conditions: a. The datacenter meets the wage standard and health insurance requirements ofG.S. l 43B-437 .08A.
House Bill 117

-Ratified Session Law 2015-259 Page 5computed from the date the taxes would have been due ifthe exemption had not been allowed. For all other forfeitures, interest is computed from the time as of which the datacenter support equipment or electricity was put to a disqualifying use. The past taxes and interest are due 30 days after the date the exemption is forfeited. A taxpayer that fails to pay the past taxes and interest by the due date is subject to the provisions ofG.S. 105-236." SECTION 3.(c) This section becomes effective January l , 2016, and applies to sales made on or after that date. PART IV. SALES TAX RELATIVE TO AVIATION SECTION 

### 4.1.(a) G.S. 

### I 05-164.3 is amended by adding the following new subdivis i ons to read: "§ 

### 105-164.3. Definitions. The following definitions apply in this Article: .{lh} Aviation gasoline.- Defined in G.S. 105-449.60. (16b) Jet fuel.- Defined in G.S. 105 -449 .60. II SECTION 

### 4.l.(b) G.S. 105-164.4(a) is amended by adding a new subdivision to read: "(a) A privilege tax is imposed on a retailer engaged in business in the State at the percentage rates ofthe retailer's net taxable sales or gross receipts, listed in this subsection. The general rate of tax is four and three-quarters percent (4.75%). The percentage rates are as follows:

read: .(12} The combined general rate applies to the gross receipts derived from the sale of aviation gaso line and jet fuel." SECTION 

### 4.1.( c) G.S. 1 05-164.13 is amended by adding a new subdivision 

### to "§ 

### 105-164.13. Retail sales and use tax. The sale at retail and the use , storage, or consumption in this State ofthe following tangible personal property, digital property, and services are specifically exempted from the tax imposed by this Article: Motor Fuels Group. (lla) Sales of diesel fuel to railroad companies for use in rol ling stock other than motor vehicles. The definitions in G.S. I 05-333 apply in this subdivision. 

### il.lhl Sales ofaviation gasoline and jet fuel to an interstate air business for use in a commercial aircraft. For purposes of this subdivision, the term "commercial aircraft" has the same meaning as defined in s ubdi vis i on (45a) of this subsection. This subdivision expires January 1, 2020. II SECTION 

### 4.l
. (d) Part 

### 8 of Article 

### V of Chapter 105 of the General Statutes is amended by adding a new section to read: "§ 

### 105-164.44M. Transfer to Division of Aviation. The net proceeds ofthe tax collected o n aviation gasoline and jet fuel under G.S. 105-164.4 must be transferred within 75 days after the end of each fiscal year to the Highway Fund. This amount is annually appropriated from the Highway Fund to the Division of Aviation of the Department of Transportation for prioritized capital improvements to public airports and time-sensitive aviation capital improvement projects for economic development purposes." SECTION 

### 4.l.(e) Notwit hstanding G.S. 105-164.14A(a)( l) , an interstate passenger air carrier is allowed a refund of the sales and use tax paid by it on fuel in excess of one million two hundred fifty thousand dollars 

### ($1 ,250,000) for the period beginning July 

### l , 2015 , and ending December 31, 2015. SECTION 

### 4.1.(t) Subsections (a) through (d) of this section become effective January I , 2016, and apply to sa les made on or after that date. The remainder of this section is effective when this act becomes law. House Bill 11 7

-Ratified Session Law 2015

-259 Page 7

### SECTION 4.2.( d) G.S. l 05-164.13 is amended by adding a new subdivision to read: 

### "§ 

### 105-164.13. Retail sales and use tax. The sale at retail and the use, storage, or consumption 

### in this State of the following tangible personal property, digital property, and services are specifically exempted from the tax imposed by this Article: (45d) Parts and accessories for use in the repair or maintenance of a qualified aircraft or a qualified jet engine
. 

### " SECTION 4.2.(e) G.S. 105-164.27A is amended by adding a new subsection to r ead: "(a2) 

### Qualified Jet Engine.- A person who purchases a qualified jet engine may apply to the Secretary for a direct pay permit for the purchase of a qualified jet engine. A direct pay permit issued for a qualified jet engine does not apply to any purchase other than the purchase of a qualified jet engine. The maximum
. use tax on a qualified jet engine is two thousand five hundred dollars C$2,500). A person who purchases a qualified jet engine under a direct pay permit must file a return and pay the tax due monthly to the Secretary." SECTION 4.2.(t) G.S. I 

### 05

-467(a) r eads as rewritten: "(a) Sales Tax.- The sales tax that may be imposed under this Article is limited to a tax at the rate ofone percent (1 

### %) of the following: (I) 

### A r etailer's net taxable sales and gross receipts that are subject to the general rate of sales tax imposed by the State under G.S. I 

### 05-164.4 except the tax does not apply to the sales price of a

**maR~::~faemreel** 

### Rome or a

**moel~::~lar**

**~an** 

### item taxable under G.S. 1 05-164.4(a)(la). 

### " SECTION 4.2.(g) This Part becomes effective October I, 2015, and applies to sales made on or after that date. PART V. EXEMPT MOTOR VEHICLE SERVICE CONTRACTS FROM SALES TAX SECTION 5.(a) G.S. 105-164.4l(b)(l ) reads as rewritten: "(b) Exemptions.- The tax imposed by this section does not apply to the sales price of or the gross receipts derived from a servi ce contract app licable to any ofthe following items: (I) 

### An item exempt from tax under this l\rtiele, otRer tRaR a motor veRiele eKeFR}3t 

### from taK 

### l-:IReier G.S. I Q5 

### 1 

### e4 .13(32).Article." SECTION 5.(b) G.S. 105-164. 13 is amended by adding a new s ubdivision to read: "§ 

### 105-164.13. Retail sales and use tax. The sale at retail and the use, storage, or consumption in this State of the following tangible personal property, digital property, and services are specifically exempted from the tax imposed by this Article: (62a) A replacement item, a repair part. or repair, maintenance, and installati on serv ices to maintain or repair tangible personal property or a motor vehicle pursuant to a manufacturer's warranty or a deal er's warranty. For purposes of this subdivision. the following definitions apply: a. Dealer's warranty.
- An explicit warranty the seller of an item extends to the purchaser of the item as part of the purchase price of the item
. 

### .11. Manufacturer's warranty.
- An explicit warranty the manufacturer of an item extends to the purchaser of the item as part of the purchase price of the item." SECTION 5.(c) If House Bill 97,2015 Regular Session ofthe General Assembly, becomes law, then G.S. 105-164.13(61a), as enacted by Section 32.18(e) of House Bill 97 , 2015 Regular Session of the General Assembly, and G.S. 105-164.13(62), as amended by S.L. 2015-6 and by House Bill 97 , 2015 Regular Session of the General Assemb l y, read a s rewritten: "§ 

### 105

- 164.13. Retail sales and use tax.

House Bill 117-Ratified Session Law 20 15-259 Page 9

### (25a) Operator.

- A person provided with the lease or rental of tangible personal property or a motor vehicle to operate, drive, or maneuver the tangibl-e personal property or motor vehicle and whose presence. skil l, knowledge. and expertise are necessary to bring about a desired or appropriate effect. The person must do more than calibrate, test, analyze, research, probe, or monitor the tangible personal property or motor vehicle. II 

### SECTION 6.(b) G.S. 1 05-164.13 is amended by adding a new subdivision to read: "§ 

### 105

- 164.13. Retail sales 

### and use tax. The sale at retail and the use, storage, or consumption in this State ofthe following tang ible personal property, digital property, and services are specifically exempted from the tax imposed by this Article: ,(Q.2} 

### The sale of an engine provided with an operator to a professional motorsports racing team or a related member of a team for use in competition in a sanctioned race series. This subdivision expires January l, 2020." SECTION 6.(c) G.S. 105-164.4l(b)(3) reads as rewritten: "(b) Exemptions.- The tax 

### imposed by this secti on does not apply to the sales price of or the gross receipts derived from a service contract app licable to any ofthe following items: (3) Aft-A 

### transmission, an engine. rear-end gears. and any other item purchased by a professional motorsports racing team or a related member of a team for which the team may receive a sales tax refund under 

### G.S. 105

**1~4.14A(5).G.S.** 

### 105

- 164.14A(a)(5). This subdivision expires January I, 

### 2020." SECTION 6.(d) G.S. l05-164.14A(a) reads as r ewritten: "(a) Refund.

- The following taxpayers are allowed an annual refund of sales and use taxes paid under this Article: (4) Motorsports team or sanctioning body. -A professional motorsports racing team, a motorsports sanctioning body, or a related member of such a team or body is allowed a refund of the sal es and use tax paid by it in this State on aviation fuel that is used to travel to or from a motorsports event in this State, to travel to a motorsports event in another state from a locati on in this State, or to travel to this State from a motorsports event in another state. For purposes of this subdivision, a "motorsports event" includes a motorsports race, a motorsports sponsor event, and motorsports testing. This subdivision is repealed for purchases made on or after JaRHary 

### 1, 201 

# a .January I, 

### 2020. (5) Professional motorsports team.
- A professional motorsports racing team or a related member of a team is allowed a refund of

### fifty percent (50%) of the sales and use tax paid by it in this State on tangible personal property, other than tires or accessories, that comprises any part of a professional motorsports vehicle. For purposes of this subd i vision , "motorsports accessories" includes instrumentation, telemetry, consumables, and paint. This subdivision is repealed for purchases made on or after JaRHary I ,

**~January** 

### 1. 2020. 

### " SECTION 6.(e) This section is effective when this act becomes law. Subsection 

### (c) ofthis section applies retroactively to service contracts purchased on or after January I, 

### 2014. PART VII. TAX COMPLIANCE AND TAX FRAUD PREVENTION SECTION 7.l .(a) G.S. 105-163.7 reads as rewritten: "§ 

### 105-163.7. Statement to emplo yees; information to Secretary. (a) Report to Employee.

- Every employer required to deduct and withhold from an employee's wages under G.S. l 05-l63.2 shall furnish to the employee in respect to the remuneration paid by the employer to such employee during the calendar year, on or before January 31 of the succeeding year, or, i f the employment is terminated before the close of the
House Bill 117

- Ratified Session Law 2015-259 Page IISECTION 7.1.(e) G.S. 105-163.3 reads as rewritten: "§ 

### 105-163.3. Certain payers must withhold taxes. 

## W

**Rett:~rns.** A payer

**mt:~st** file a

**ret~:~rn** ....·ith: th:e Secreta£)' and pay the '+Yithh:eld ta){es to the Secretary in accordaRce with the

**reqt:~irements** in G.S. 105 163.6. (d) Returns, Annual Statement Statement, and Report.

- A payer required to deduct and withhold from a contractor's compensation under this sect ion must file a return. pay the withheld taxes, and report the amount withheld in the time and manner required under G.S. 105

- 163.6 and G.S. 105

- 163.7 as if the compensation were wages.giYe the contractor a written statement that sets

**o~::~t** tke following information and any other information

**req~:~ired** ay t:Ae Secretary: 

## f8

**~**



### ~ 

### f41 Tl:le payer's name, adaress , ana taxpayer identifieation

**n~::~maer.** Tl:le eontraetor's name, aeieiress, ana taxpayer iaentification

**n~::~maer.** Tl:le total

**amo~::~Rt** of compensation paid

**a~::~ring** tke calendar year. Tl:le total amo1::1nt Eieaucteel anel witkkeld 1:1naer t!:tis sectioA

**d~::~ring** ti:te ealendar year. Tkis statement is

**Elt:~e** ay

**Jan~::~ary** 31 following tl=te end of the calenEiar year, l:lnless tke personal serYices for wkick tke payer is paying are eompleted aefore th:e end oftJ:te calendar year and tJ:te contractor

**reett:~ests** tke statement wken tke serYices are completed. In tkis

**circ~:~mstance,** tke statement is

**d~::~e** 'Nitl:lin 45 days after ti'le payer's last payment of compensation to the contractor. Eack payer sllall file with th:e Secretary an aAfll:l&l report tllat compiles the information contained in each of the payer's statements to contractors and any other information required 

### i:J)' th:e Secretary in ti'le manner

**reet~:~i:reei** ay t:Ae Secretary. This report is al:le on tke aate preseriaeei ay th:e Secretary and is in

**lie~:~** ofth:e information report

**req~::~ired** by G.S. 105 154. 

### " SECTION 7.1.(f) Subsection (b) of this section is effective for taxable years beginning on or after January 1, 2016, and applies to information returns required to be filed with the Secretary in 2017 for the 20 1 6 taxable year. The remainder of this section is effective for taxable years beginning on or after January 1, 2015, and applies to informat ion returns required to be filed with the Secretary in 20 16 for the 2015 taxable year. SECTION 7.2. G.S. 105

-237 reads as rewritten: "§ 

### 105

-237.

**Wai~'eF** 

### efpe&<iessWaiver; installment payments. (a) Waiver.- The Secretary may, upon making a record of the reasons therefor,

**red~:~ce** do the following: 

## ill 

## ill Reduce or wai ve any penal ties provided for in this Subchapter. Reduce or waive any interest provided for in this Subchapter on taxes imposed prior to or during a period for which a taxpayer has declared bankruptcy under Chapter 7 or Chapter 13 of Title 11 of the United States Code. (b) Installment Payments.

- After a proposed assessment of a tax becomes final, the Secretary may enter into an agreement with the taxpayer for payment of the tax in installments if the Secretary determines that the agreement will faci litate collection of the tax. The agreement may include a waiver ofpenalties but may not include a waiver of liability for tax or interest due. The Secretary may modify or terminate the agreement if one or more of the following findings is made: (I) Information prov ided by the taxpayer in support of the agreement was inaccurate o r incomplete. (2) Collection oftax to which the agreement applies is in jeopardy. (3) The taxpayer's financial condition has changed. 

### (4) The taxpayer has failed to pay an installment when due or to pay another tax when due. (5) The taxpayer has failed to provide information requested by the Secretary. The Secretary must give a taxpayer who has entered into an installment agreement at least 30 days' written notice before modifying or terminating the agreement on the grounds that the taxpayer's financial condition has changed unless the taxpayer failed to disc l ose or concealed assets or i ncome when the agreement was made or the taxpayer has acquired assets since the agreement was made that can satisfy all or part of the tax liability. A notice must specify the bas is for the Secretary's finding of a change in the taxpayer's financ ial condition
. " House Bill 117

-Ratified Session Law 2015-259 Page 1 3

### PART VIII. EFFECTIVE DATE SECTION 8. Except as otherwise provided, this act is effective when it becomes law. In the General Assembly read three times and ratified this the 24th day of September, 2015.
s/ Daniel J. Forest President ofthe Senate
s/ Paul Starn Presiding Officer ofthe House of Representatives
s/ Pat McCrory Governor Approved 11:38 a.m. this 30th day of September, 2015

House Bill 117-Ratified Session Law 20 

### I 5-259 Page 15

# co Charlotte·Douglas·

I NTERNATIONAL AIRPORT

December 8, 2015 Governor Pat McCrory North Carolina Office ofthe Governor 20301 Mail Service Center Raleigh, NC 27699

Re: 14 CFR Chapter I [Docket No. FAA

- 2013- 0988] Policy and Procedures Concerning the Use of Airport Revenue; Proceeds From Taxes on Aviation Fuel

Dear Governor McCrory: On November 3, 2014, the Federal Aviation Administration ("FAA") issued 14 CFR Chapter I [Docket No. FAA- 2013

- 0988] Policy and Procedures Concerning the Use of Airport Revenue; Proceeds From Taxes on Aviation Fuel ("Policy"). Under this Policy the FAA clarified that all revenue from taxes applicable to aviation fuel, regardless ofwhether the tax is specific to aviation fuel or generally applicable, must be treated as airport revenue or applied to a State aviation program. The Policy also obligates Charlotte Douglas International Airport ("CL T") to notify all third parties with the power to impose applicable taxes oftheir obligations under the Policy

. The State ofNorth Carolina is a third party entity with the power to impose taxes on aviation fuel at CL T
. As such, under the Policy the State ofNorth Carolina is obligated to ensure that all taxes on aviation fuel are either used for "the capital or operating cost ofthe airport, the local airport system, or other local facilities owned or operated by the airport owner or operator and directly and substantially related to air transportation ofpassengers or property" or a State aviation program. Non-compliance with the Policy could result 

### in civil penalties imposed by the Department ofJustice of up to fifty thousand dollars ($50,000) or additional sanctions under the State Block Grant Program. North Carolina Legislature passed Session Law 2015-259 on September 30,2015 which goes into effect on January 1, 2016 and may fulfill the State ofNorth Carolina's obligat i ons under the Policy. Part IV of this law makes sales and use tax on aviation fuel a State only tax and sets the rate at the combined general rate. Revenue generated from this tax is remitted to the Highway Fund which then appropriates this money to the Division ofAviation ofthe Department ofTransportation on annual basis. The law specifically states that the revenue generated from aviation fuel is to be used for "prioritized capital improvements to public airports and time-sensitive aviation capital improvement projects for economic development purposes." 

### It exempts commercial air carriers from the aviation fuel sales and use tax through January 1, 2020.

charlotteairport.com 1 PO Box 19066 I Charlotte, NC 28219 I P: 704

. 359.4000 I F: 704.359.4030 Owned an d operated by the City of C h arlottePlease be aware that any future changes or additions to taxes on aviation fuel will need to continue to be in compliance wi th the Poli cy . Ifyou have any questions or concerns, please feel free to reach out to me at (704) 359

- 4035.SincerelyBrent Cagle Interim Aviation Director

charlottea i rport

.com 

### 1 PO Box 19066 

### I Charl otte, NC 28219 

### I P: 704.359.4000 

### I F: 704 .359.4030 Owned and operated by the C it y of Charlotte

# co Charlotte-Douglas·

INTERNATIONAL AIRPORT

December 8, 2015 Commissioner Trevor Fuller Chairman, Mecklenburg County Commissioners 600 East 4 1 h Street Char l otte, NC 28202

Re: 14 CFR Chapter I [Docket No. FAA- 2013- 0988] Policy and Procedures Concerning the Use of Airport Revenue; Proceeds From Taxes on Aviation Fuel

Dear Commissioner Fuller: On Novem ber 3, 2014, the Federal Aviation Administration ("FAA") issued 14 CFR Chapter I [Docket No. FAA

- 2013

- 0988] Policy and Procedures Concerning the Use ofAirport Revenue ; Proceeds From Taxes on Aviation Fuel ("Policy"). Under this Policy the FAA clarified that all revenue from taxes applicable to aviation fuel, regardless ofwhether the tax i s specific to aviation fuel or generally applicable, must be treat ed as airport revenue or applied to a State aviation program. The Policy also obl igates Charlotte Douglas International Airport ("CLT") to notifY all third parties with the power to impose applicable taxes oftheir obligations under the Policy. Mecklenburg County is a third party entity with the power to impose taxes on aviation fuel at CL 

### T. As such, under the Policy Mecklenburg County is obligated to ensure that all taxes on aviation fuel are either used for ''the capital or operating cost ofthe airport, the local airport system, or other local facilities owned or operated by the airport owner or operator and directly and substantially related to air transportation ofpassenge rs or property" or a State aviation program. Non

-compliance with the Policy could result 

### in c i vil penalties imposed by the Department ofJustice ofup to fifty thousand dollars ($50,000) or additional sanctions under the State Block Grant Program. North Carolina Legislatur e passed Session Law 20 15-259 on September 30, 2015 which goes into effect on January 1, 2016 and may fulfill Mecklenburg County's obligations under the Policy. Part IV ofthis law makes sales and use tax on aviation fuel a State only tax and sets the rate at the combined genera l ra

te. Revenue generated from this tax is remitted to the Highway Fund which then appropriates this money to the Division ofAviation ofthe Department ofTransportation on annual basis. The law specifica lly states that the revenue generated from aviation fuel is to be used for "prior itized capital improvements to public airports and time-sensitive aviation capita l improvement projects for economic development purposes." It exem pts commercial air carriers from the aviation fuel sales and use tax through January 1, 2020.

charlotteairport.com 

### I PO Box 19066 

### I Charlotte, NC 28219 

### I P: 704.359. 4000 

### I F: 704.359.4030 Owned and operated by the City of Charlotte