13B_.1500_FiscalNote

FISCAL AND REGULATORY IMPACT ANALYSIS
READOPTION AND AMENDMENTS TO 15A NCAC 13B SECTION .1500 -
STANDARDS FOR SPECIAL TAX TREATMENT OF RECYCLING AND RESOURCE
RECOVERY EQUIPMENT AND FACILITIES
Approved July 29, 2020, revised September 21, 2020
GENERAL INFORMATION
Agency: Department of Environmental Quality
Division: Division of Waste Management
Solid Waste Section
https://deq.nc.gov/about/divisions/waste-management/solid-waste-
section
Contacts: Jessica Montie
Environmental Program Consultant
Solid Waste Section Rule -Making Contact
[e-mail]
[phone]
Title of Rule Set: Standards for Special Tax Treatment of Recycling and Resource
Recovery Equipment and Facilities
Citations: 15A NCAC 13B .1501 - .1514
Authority: G.S. 130A-294(a)(3), G.S. 105-275(8)(b), and G.S. 15013-21.3A
Impact Summary: - State Government Impact? Yes, as a benefit in reduced staff time
- Requires expenditure, distribution, or reallocation of State funds? No
- Local Government Impact? Yes
- Impacts local government expenditures or revenues? Yes
- Private Industry Impact? Yes
- Substantial Economic Impact? No
- Federal Requirement? No
Appendices Proposed Rule Text

PROPOSED RULE -MAKING SCHEDULE (SUBJECT TO CHANGE)
Date
Action
09/24/2020
DEQ: Approval of proposed text and regulatory impact
analysis to go to public comment, submit to OAH.
10/15/2020
Rules published in NC Register and DEQ website
Comment Period Begins.
10/30/2020
Earliest date for public hearing.
12/14/2020
Comment Period Ends.
01/15/2021
DEQ: Approval of Hearing Officer's Report and Adoption of
Rules, submit to RRC.
02/18/2021
RRC meeting: Approval of rule text
03/01/2021
Earliest effective date for rules.
NECESSITY OF RULE CHANGES
The Division of Waste Management (Division) Solid Waste Section (Section) is
responsible for regulating solid waste management within the state under the statutory
authority of the Solid Waste Management Act, Article 9 of Chapter 130A of the General
Statutes. Existing rules adopted by the Department of Environmental Quality (DEQ) under
the authority of G.S. 130A-294(a)(3) are codified at Title 15A, Subchapter 13B of the
North Carolina Administrative Code, Section .1500 Standards for Special Tax Treatment
of Recycling and Resource Recovery Equipment and Facilities. Section .1500 establishes
standards for qualification as a "recycling, reduction or resource recovering facility" or as
"recycling, reduction or resource recovering equipment" for the purpose of special tax
classifications or treatment, and to certify as qualifying those applicants which meet the
established standards. These rules are proposed for readoption in accordance with G.S.
15013-21.3A, and are required to be readopted by DEQ by the deadline set by the Rules
Review Commission of April 30, 2021.
The Section's webpage regarding tax certifications can be found at this link:
https://deq.nc.gov/about/divisions/waste-management/solid-waste-section/tax-
certification.
The Section's webpage regarding the rule readoption process can be found at this link:
httDS://dea.nc.aov/about/divisions/waste-manaaement/solid-waste-section/rules-review.
BASELINE
The baseline for the proposed rules include the existing rules in 15A NCAC 13B Section
.1500; Article 1, and Article 9 of Chapter 130A of the General Statutes, specifically 130A-
294(a)(3) for the Department's rule adoption authority, G.S. 105-275(8)(b) Property
classified and excluded from the tax base which prompted the need for rules, and the

existing interdepartmental Tax Certification Guidance Document, previously required to
be developed by Rule .1511 that was allowed to expire as a part of this rule review
process.
G.S. 130A-294(a)(3) states: "The Department is authorized and directed to engage in
research, conduct investigations and surveys, make inspections and establish a
statewide solid waste management program. In establishing a program, the Department
shall have authority to: Develop and adopt rules to establish standards for qualification as
a "recycling, reduction or resource recovering facility" or as "recycling, reduction or
resource recovering equipment" for the purpose of special tax classifications or treatment,
and to certify as qualifying those applicants which meet the established standards. The
standards shall be developed to qualify only those facilities and equipment exclusively
used in the actual waste recycling, reduction or resource recovering process and shall
exclude any incidental or supportive facilities and equipment;"
G.S. 105-275(8)(b) states: "The following classes of property are designated special
classes under Article V, Sec. 2(2), of the North Carolina Constitution and are excluded
from tax: Real or personal property that is used or, if under construction, is to be used
exclusively for recycling or resource recovering of or from solid waste, if the Department
of Environmental Quality furnishes a certificate to the tax supervisor of the county in which
the property is situated stating the Department of Environmental Quality has found that
the described property has been or will be constructed or installed, complies or will comply
with the rules of the Department of Environmental Quality, and has, or will have as its
primary purpose recycling or resource recovering of or from solid waste."
The statutes above require that the materials that are being recovered or recycled meet
the statutory definition of a solid waste in G.S. 130A-290. The Division of Waste
Management will make this determination as the first step of the application review
process. If the material accepted at the facility for processing is not a solid waste, then
the activity being conducted at the facility is not a recycling or resource recovery process
under these rules, and nothing in the facility or their processes would qualify for tax
certification.
The Report for the Periodic Review of Existing Rules designated Rule. 1511 Pamphlet as
unnecessary, and this rule expired effective February 1, 2018. The purpose of this expired
rule was to require the Department to create a guidance document, or pamphlet, that
explained the guidelines for qualification for tax certification under G.S. 105-275(8)(b). A
pamphlet was issued, and it provided guidelines for compliance with all of G.S. 105-
275(8) across the Departments of Revenue (DOR) and Environmental Quality (DEQ) for
pollution abatement and animal waste management, recycling or resource recovery
facilities and equipment, reduction of cotton dust, and major recycling facilities.
The official Tax Certification Guidelines document was approved by the Directors of DOR
and the DEQ Divisions of Water Quality, Air Quality, and Waste Management, and was
last revised in May 2008. This document is published on the websites of all three DEQ
Divisions and DOR, and can be viewed on the Solid Waste Section's website here:

https://files.nc.gov/ncdeg/Waste%20Management/DWM/SW/Field°/o200perations/Tax%
20Certification/tax certification guidelines.pdf
The guidelines that are applicable to compliance with 15A NCAC 13B Section .1500 are
found in Chapters 1, 2, and 5 of the guidelines document. Tax certifications for pollution
abatement facilities and equipment are administered by the Division of Water Resources
and the Division of Air Quality and are not addressed by these rules. Tax certifications for
animal waste management facilities and equipment are also administered by the Division
of Water Resources because animal waste is excluded from the statutory definition of a
solid waste. However, these facilities often have some crossover with DWM because they
may recycle some solid waste in addition to handling animal waste. In practice under
existing rule, DWM will review and process an application for such a facility only if the
amount of waste received is more than 50% solid waste. If the feedstock is 50% or more
animal waste, DWR will process the application. DOR determines a facility's compliance
with the requirements for cotton dust, and also determines whether a facility meets the
definition of a major recycling facility.
PARTIES POTENTIALLY AFFECTED BY THE RULE CHANGES
Private Industries and Businesses
The rule changes could affect the businesses that apply in the future for tax certification
and tax exemption for facilities, land, and equipment used for recycling and resource
recovery of or from a solid waste. The businesses are not required to be recycling
businesses specifically; they can be any kind of business that conducts recycling
activities. For example, a cardboard baler at a grocery store can qualify for certification
as long as the cardboard is being sent for recycling, and the baler is not also used to bale
waste for disposal. Any businesses that previously applied for and received tax
certification would not be affected since proposed Rule .1503 clarifies that previously
issued certifications will remain valid under the proposed rule.
Local Governments
Rule changes to existing rules in Section .1500 could potentially affect the local
government's property tax revenues received by county and municipal governments in
NC for facility space and land areas (real property) and equipment items (personal
property). The rule changes could also affect staff time in the local government (mainly
county) tax collector's office.
State Government
The rule changes could also affect state government staff in DEQ's Division of Waste
Management (DWM), Solid Waste Section that review the applications, inspect the
facilities, provide technical assistance, and issue the tax certifications. DEQ's Division of
Environmental Assistance and Customer Service (DEACS) also regularly provides
technical assistance for applicants since they provide customer service to recycling
businesses in NC; and will refer applicants to the Solid Waste Section for these tax
certifications. G.S. 130A-294(a)(3) does not give the Department the authority to establish
a fee for reviewing the applications, inspecting the facilities, providing frequent technical
assistance, and issuing the tax certifications, so the work is completed using funds

appropriated by the General Assembly. The Division estimates that this work utilizes
approximately three to four FTEs in the Department, distributed between approximately
18 employees, all of whom are required to train and stay current on the statutes, rules,
guidelines, standards, and practices for tax certification as further described in the impact
analysis below.
RULE SUMMARY
Purpose of Existing Rules .1501 - .1514
Rules .1501 - .1514 establish standards for DEQ to certify recycling or resource recovery
facilities and equipment as qualifying for tax exemption from county and municipal real
and personal property taxes as set forth in G.S. 105-275(8)(b). Rules .1501 - .1514 were
effective in June 1976, and some rules were later amended, but no amendments have
been made to any of these rules since 1991. As described beginning on Page 17 of the
Tax Certification Guidelines pamphlet, existing Rules .1501 through .1506 generally serve
as definitions to assist with determination of compliance with G.S. 130A-294(a)(3) and
G.S. 105-275(8)(b). Existing Rule .1507 provides some clarification of the requirement for
compliance with DEQ rules in G.S. 105-275(8)(b). Existing Rule .1508 establishes
requirements for tax certification application, review, and issuance. Existing Rule .1510
contains a basic severability clause, which was language that may have been considered
necessary in 1976 when the rule was promulgated, but is no longer necessary. Existing
Rules .1512 and .1513 establish requirements for tax certifications for the reduction of
hazardous waste generated, and existing Rule .1514 provides a reference to G.S. 150B
for appeal procedures.
Description and Scope of Existing Tax Certification Process/Procedures
The Division on average receives between 150 — 200 applications per year and issues a
similar number of certifications per year. Based on the original costs for equipment
provided by the applicants in their applications, the certifications issued by the Division
for the last decade allow for property tax exemption for personal property valued at almost
$1.3 billion. This estimate does not include the value of real property certified by the
Division. The Division does not have this information because the value of real property
at the time of purchase has never been requested in the application. The estimate also
does not include any personal property value certified between 1976 and 2009 that might
still be in use and receiving tax exemption.
Once a certificate is issued for a particular equipment item, facility space, or land area
that certificate remains valid from year to year unless there is a change in ownership or
use for that property, or the facility is out of compliance with DEQ rules (note the Division
has never had to revoke a tax certification for compliance status to date). Although the
Department may only review the property and issue a tax certification one time, that
certification is used on an annual basis to apply to the local tax collector for tax exemption
for the real or personal property. This is a recurring benefit that could become invalid if
circumstances change, such as the use or ownership of the property, or could be revoked
if the applicant ceases to comply with DEQ regulations. Because a change in ownership
invalidates a certification, property that is under a lease agreement is issued a certification
that provides the lessor and lessee information, and also an expiration date that is the

same as the expiration of the lease. In this case the person receiving the tax exemption
must reapply for certification when the lease is renewed.
A tax certification for owned (not leased) property does not have an expiration date listed
on the certificate. Because the applicant and the local tax collector are not required to
notify the Division if the certified facility or equipment is sold or no longer used, and is no
longer receiving property tax exemption, the Division cannot be certain of the value or
amount of real and personal property these businesses are still receiving tax exemption
for at any given time. It is the responsibility of the applicant to notify the local tax collector
if they no longer own the property.
The entire facility is not certified in whole as a recycling facility. The certifications issued
by the Division include a list of the amount of facility space and land areas (real property)
and the specific equipment items (tangible personal property) that the Division has
approved under one application as being used exclusively and integrally in a recycling or
resource recovery process. This means that when a facility buys new equipment or
expands the recycling areas in their facility, that new equipment and those new areas
also need to be certified, which results in the same facility submitting multiple applications
over many years, so one facility may have any number of certifications on file that they
submit with their annual tax exemption application.
Summary of Rule Amendments
DEQ is required to review and readopt these rules in accordance with G.S. 150B-21.3A;
and is updating the rules to be compliant with G.S. 150B. As a part of the readoption
process, the Division is attempting to incorporate into rule most of the guidelines provided
in the Tax Certification Guidelines pamphlet previously required to be developed by Rule
.1511, which was allowed to expire in 2018. The Division is also updating the rules to
incorporate the current practices and procedures used and enforced by the Division for
the application process and the standards used to qualify real and personal property for
certification. The proposed amendments to Rules .1501 - .1503 consolidate and
reorganize the requirements for tax certification in existing Rules .1501 - .1508. Instead
of having each rule serve as a type of definition, the rules will now be structured to be
similar to other Sections in Subchapter 13B as follows:
Rule .1501 — Definitions
Rule .1502 —Application Requirements
Rule .1503 — Standards for Qualification for Tax Certification
Rule .1501 is proposed for amendment to establish the definitions that apply to all of
Section .1500, and therefore the language that served as definitions in existing Rules
.1501 through .1506 is proposed to be removed. Rule .1502 is proposed for amendment
to establish the application requirements for tax certification, which are being moved here
from existing Rule .1508. Rule .1503 is proposed for amendment to establish the
standards and requirements for qualification for tax certification, which are consolidated
here from various existing rules in Section .1500, and the guidance document. These are
the standards that the Department will use to determine if facility space, land areas, or
equipment qualify for tax certification as recycling or resource recovery facilities and
equipment.

Rules .1504 through .1508, .1510, and .1512 through .1514 are proposed for repeal
because the requirements are unnecessary, or the requirements were moved to Rules
.1501 through .1503. Rule .1510 is not required to be readopted by this deadline since it
was determined during the periodic rule review to be necessary without substantive
interest, but upon further review has been determined to be unnecessary. Note that the
reason that Rules .1512 and .1513 are unnecessary is because the Division is not aware
of an applicant ever applying for tax certification for the reduction of hazardous waste in
accordance with these rules since they were effective. In accordance with G.S. 150B-
21.4(d), no fiscal note is required for the repeal of existing rules. Therefore, the impact
analysis provided below does not address these rules for repeal except where
requirements were moved to Rules .1501 through .1503.
The existing rules for tax certification are somewhat vague and provide very little actual
requirements or procedures regarding the process of applying for and receiving a tax
certification. Department staff spend a great deal of time in internal discussions and
seeking legal advice on the interpretation and implementation of the existing statutes and
rules for tax certification. Department staff also spend a great deal of time answering
questions and providing technical assistance on the application requirements and the
standards for qualification. Department staff provide technical assistance to local tax
assessors and applicants by researching and providing information on previously issued
tax certifications including copies of the certifications, their current status, and whether a
new or updated certification is needed, even though the applicants are responsible for
keeping track of their past certifications.
Department staff also spend time developing and updating internal training and guidance
documents and external application documents, giving external training and
presentations to local government tax assessors, and communicating with DOR staff to
stay somewhat current on changes to property tax, sales tax, franchise tax, and corporate
tax as they pertain to recycling benefits. The proposed amendments are intended to
provide clarification to the applicants, the local tax assessor's office, and Department staff
on the procedures for application, qualification, and issuance of tax certifications for the
purpose of reducing uncertainty, questions, and time spent in discussion and on technical
assistance, both among Department staff and between Department staff and the
applicants and local governments.
As mentioned previously, a tax certification allows real and personal property to be eligible
for local property tax exemption (county and municipal). Therefore, any proposed rule
amendment that increases the benefit to a business by allowing more of their property to
be excluded from the tax base will impose an equal cost to the local government in lost
revenues from property taxes; and the same is true in reverse.
IMPACT ANALYSIS
Description and Rationale for Amendments
Rule .1501 — Definitions
Proposed amendments to Rule .1501 incorporate, clarify, and add to what served as

definitions in existing Rules .1501 - .1506, and will apply to all of Section .1500. The
proposed new definitions are putting into rule how the Department has defined or
interpreted these terms in practice. The amendments also incorporate or refer to some
definitions in the tax laws in G.S. 105-273 since they apply to G.S. 105-275. Notable
additions or revisions that may impact the practical application of the rule requirements
because of increased clarification are the definitions for "new material", "production
scrap", and "spare parts". These added definitions and the clarification in the proposed
rule reflect how the Department has generally interpreted these terms or scenarios in
practice and/or based on the existing guidelines document for these topics under existing
rule for past applications, and would have made similar interpretations and decisions in
the future. The remaining definitions were either in the existing rules, or were added or
amended only for clarification, or to reflect long-standing guidelines or practice.
The term "new material" is meant to replace the term "new product" in existing Rule .1504.
The term "new product" was not defined under existing rule or statute; and has often been
subject to interpretation, especially where the business is conducting a unique or
uncommon process. While the Department has a clear review process with multiple levels
of review to ensure consistency in interpretation across current regional office inspectors,
staff changes over the last 44 years of reviewing these applications has made it difficult
to ensure consistency. Defining the term "new material" is essential because the recycling
process is defined in the existing and proposed rules as ending when a new product or
new material has been created. Because facility space, land, or equipment only qualifies
if it is a part of a recycling or resource recovery process, determining where that process
ends affects the determination of whether the property is a part of the process. This
means that any facility space, land, or equipment used to handle or process materials
after the point in the process where a new material is created have not and do not qualify
for tax certification.
A definition of the term "production scrap" is being added to define a type of material and
a process that does not qualify for tax certification, as stated in proposed Rule .1503.
Production scrap is a pre -consumer material that is considered excess virgin material that
was not fully utilized in a manufacturing process, or that did not meet specifications, which
is returned to the first step in the same manufacturing process as feedstock.
A definition of the term "spare parts" is being added to define and clarify another type of
personal property (equipment) that does not qualify for tax certification. The Tax
Certification Guidelines document states that spare parts are considered incidental or
supportive equipment and do not qualify for tax certification (top of Page 20). However,
no definition for spare parts was provided in the guidelines or in rule or statute; therefore,
the determination of what was a spare part was left up to interpretation which was not
always consistent over time.
Rule .1502 — Application for Tax Certification
The proposed amendments to this rule establish the application requirements for tax
certification. The application requirements are proposed to be moved here from existing
Rule .1508.

Proposed Paragraph (a) - The proposed amendments to the existing application
requirements provide greater clarity and are more specific than existing Rule .1508; and
reflect what has been required in practice for the last decade if not longer. The Division
currently has an application form posted on the tax certification website that requests all
of the information that is proposed to be required in Rule .1502(a), in addition to what was
required by existing Rule .1508(b). The application form states that the Division does not
accept applications that do not include all of the requested information. The Division
requests that additional information be submitted before the application will be further
processed and/or returns incomplete applications in practice under existing rule. The
Division also states on the tax certification webpage that applications may be submitted
in electronic format and only one copy is necessary; and has been accepting applications
in that format in practice for at least the last eight years.
The proposed amendments now clearly state that the applicant must also submit their
application for tax exemption to the tax collector, in addition to applying to the Department
for tax certification. This was a requirement in practice under the existing rule as stated
on the application form and on the webpage. This seemed to be a common point of
confusion because some applicants in the past have been under the impression that if
they submitted an application to the Department, they did not also need to submit
something to the tax collector, despite the fact that the application form and website stated
that it was required. The proposed amendments also state in Paragraph (g) that the
Department will notify the local tax collector if an application for tax certification is
returned. Notification would be via e-mail.
The proposed amendments also state that the application must be sent internally at the
business to the person who is responsible for the requested property at the facility. While
this may seem to be something that is generally understood as being self-explanatory or
obvious, the purpose in adding this requirement is because often the application is filled
out by an accountant in the central office of the business using spreadsheets or electronic
records and asset numbers to generate the list of requested property. When DWM staff
attempt to conduct an inspection of the requested property at the facility, the facility staff
are often not aware of the application, do not understand why DWM needs to visit their
facility, and cannot recognize or determine what physical property matches up with what
was listed on the equipment list in the application. This confusion often requires DWM
staff to have to conduct a second or third visit; and follow up with multiple phone calls to
the facility staff and to the central office accountant. This is one of the most common
causes for delays in the review and approval process.
Proposed Paragraph (b) clarifies who is required to sign the application. The applicant's
signature provides verification that the information provided in the application is correct.
The signature of the person/business receiving the tax benefit provides verification that
they are in compliance with DEQ requirements. Requiring both signatures is necessary
because it is often the case that the person or business filling out the application and the
person or business receiving the benefit are not the same person or business, especially
when a lease agreement is involved. (Note that "person" is defined in the general statutes
as including a business entity.)

Proposed Paragraph (c) clarifies that facilities and equipment used for air or water
pollution abatement should not be included on applications for recycling of solid waste
because the Division of Waste Management does not make the determination of whether
pollution abatement property can qualify for tax certification. Applications for pollution
abatement facilities and equipment must be included on the forms provided on the
websites for the Division of Air Quality or the Division of Water Resources, must be
submitted to those Divisions, and will be processed by those Divisions. This is what has
been done in practice as noted in the Tax Certification Guidelines document. This is
proposed to be added because in the past there has been a great deal of confusion over
these different categories of tax certification, and they are often regarded by the
applicants as being the same type of tax certification that can all be processed by the
Division of Waste Management, which is not the case. The Division of Waste
Management receives multiple applications per year that have pollution abatement
property listed, and the Division will have to process the rest of the application but deny
the pollution abatement items, and provide instruction that the applicant has to submit
these items to DAQ or DWR for consideration, which delays the applicant's process for
receiving tax exemption. The Division hopes that adding this statement and the note
pointing to DAQ and DWR's websites to the proposed rule will make the process clear to
applicants from the start so that no time is wasted.
Proposed Paragraph (d) clarifies and puts into rule a standing agreement between the
Division of Waste Management and the Division of Water Resources regarding facilities
that receive solid waste for recycling, but are also under a permit with the Division of
Water Resources for the management of animal waste. They are usually facilities that
accept sludge from wastewater treatment plants, which is a solid waste, and also fecal
waste from fowls and animals, which is not a solid waste. The sludge might be accepted
for composting or recycling, but they also have pollution abatement equipment for animal
waste. The agreement between the Divisions which is proposed to be clarified in this rule
is that any facility that has a feedstock ratio of solid waste to animal waste that is a majority
animal waste will be processed for tax certification by the Division of Water Resources.
Note that this same agreement applies to the permitting of these facilities.
Proposed Paragraphs (e) through (g) are intended to provide information or clarification
of the application process in general; and put into rule the current practice under existing
rule.
Rule .1503 — Standards for Qualification
The proposed amendments to this rule establish the standards to determine whether real
or personal property qualify for tax certification in accordance with G.S. 105-275(8)(b).
Under existing rule, the Division has utilized a combination of the requirements of G.S.
105-275(8)(b), G.S. 130A-294(a)(3), existing Rules .1501 - .1506 serving as definitions,
Rule .1507, and the Tax Certification Guidelines document to make a determination on
whether real or personal property qualifies for tax certification. The Division is proposing
amendments to this rule to incorporate all of the baseline standards and requirements for
qualification used under existing rule in practice. Requirements that may be considered
"new" because they were not clearly stated in any of the baseline regulations or guidelines
documents are described below.

Proposed Subparagraphs (c)(6) and (d)(6) state that real or personal property does not
qualify if it is used to handle or store production scrap. The Division is proposing to add
this requirement, in addition to the definition in Rule .1501 described above, to clarify that
production scrap does not qualify for the purpose of these rules. Adding this statement is
necessary because there has been confusion surrounding this type of material in the past
and whether it can qualify for tax certification. The confusion is based on the fact that an
applicant may state that if they did not reuse the excess material or scraps, they would
have to send it to a landfill. However, the materials are not generally discarded and still
have the same value and can be used in the same way as raw materials. Also, the
material has not yet served its intended purpose as a consumer product. Production scrap
is returned to the process as a best practice for saving money on raw material and
disposal fees, and the process that production scrap is being returned to is not a recycling
process but is a manufacturing process. Based on the above, the process for reusing
production scrap is not a recycling or resource recovery process for the purpose of these
rules. This is consistent with the majority of past decisions made by the Division in practice
when reviewing applications for this type of process.
Proposed Subparagraphs (c)(7) and (d)(7) require that the building and structures and
equipment be constructed or installed before the Department issues the tax certification.
This language is necessary because while an applicant may submit an application for tax
certification for the Department's review before the requested property is constructed or
installed, the Department cannot verify or certify that the requested property is being used
in a recycling or resource recovery process until it is actually installed or put into use. The
Department has had occasions in the past where the Department has issued certifications
for facilities, land, or equipment that had not yet been constructed or installed, and after
issuing the certification, the property may never have been constructed or installed, and
the applicant could have been receiving a tax exemption for the property even though
they never conducted recycling or resource recovery (notably for land and buildings).
Proposed Subparagraph (d)(2) states that equipment must be labeled in some way with
the asset or serial number provided in the application, so that the Department is able to
match the equipment viewed in person during the inspection to the equipment listed on
the application. This language is necessary because without an identification number, the
Department has no way of knowing if the equipment they are observing is the requested
equipment, and is not a previously certified item, or other item that would not qualify. The
existing application form states this request on Page 2, and the majority of facilities have
complied with this request in practice. Generally, equipment will have an associated serial
number or vehicle identification number (VIN) affixed to the equipment, and that serial or
VIN number is the preferred number to include on the application to allow quick
identification. If no serial or VIN number is on the equipment, the applicant may create or
use an assigned asset or tracking number, and affix that asset number to the equipment
by means such as a sticker, metal plate, or written in permanent marker.
Paragraph (e) clarifies that if none of the requested property qualifies, the Department will
issue a denial letter stating the reasons for denial to the applicant and the local tax
collector. While the Department has always issued a letter of denial to the applicant if the

application was denied in whole, the Department has not consistently sent a copy of the
denial to the tax collector, which may have caused confusion for the tax collector.

Proposed Paragraphs 0) through (m) clarify that a tax certification is issued to a particular
owner/user that is in compliance with DEQ rules, for a particular use, and/or under a
particular lease agreement; and any change to ownership, compliance status, use, or
lease agreement invalidates the certification, and the applicant must apply for a new
certification if they believe the property still meets the requirements. Proposed Paragraph
(n) also clarifies that a tax certification may be revoked if false information was provided
and describes the process for revocation. Proposed Paragraph (o) clarifies a point of
frequent confusion by the applicants, which is that the Department is only certifying to the
local tax collector that the property is used for recycling. The Department has no
involvement whatsoever in the application or implementation of the tax exemption to the
applicant's property taxes, which is handled by and subject to the requirements of the
local tax collector.
Proposed Paragraphs (p) and (q) clarify how previously certified equipment or the
replacement of certified equipment will be treated once the proposed rule amendments
are effective, to ensure that the changes to these rules do not cause any previously
certified equipment to no longer qualify solely because of the changes to the rules, and
the applicant may continue to receive the benefit of exemption on that property. The rule
changes should in general only apply to applications received after the proposed rules
are effective.
However, the rule amendments may impact a facility that previously received a tax
certification, but the certification expired or there was a change in use, ownership, or
compliance status, because the applicant would have to submit a new application, and
that new application would be evaluated by the Department in accordance with the new
rules. This circumstance could result in the Department determining that some property
does not qualify which previously did qualify, and the property would no longer be eligible
for exclusion from the tax base. The proposed amendments allow for a five-year transition
period, where for five years following the readopted effective date of the rules, if an
applicant has to re -apply for property for no reason other than that a lease expired and
was renewed, or because they directly replaced that property, they can still receive a
certification for that leased or replacement property that will remain valid until there is
some other change requiring a new application.
Costs and Benefits by Entity
Private Industry and Businesses
Costs
Because the proposed amendments allow all existing and valid certifications to remain
valid, the amendments should not affect any existing valid certifications; and only have
the potential to impact future applications. It is possible that the proposed amendments
may impact businesses that apply for tax certification in the future, because the additional
clarification in the rules on the standards for qualification could change the decisions
made by Department staff on whether the requested property qualifies for tax certification.
The addition of definitions for "new material" and "spare parts" and the clarification that
equipment and space used for production scrap do not qualify may change the scope of
what qualifies for certification. The changes are expected to be minimal because the
Department has drafted these definitions and made these clarifications to reflect the

decisions that the Department has generally made in practice and/or based on the
existing guidelines document on these topics under existing rule for past applications,
and would have made similar decisions in the future. The Department cannot quantify the
impact on potential future applications from businesses, since it cannot be predicted what
businesses might decide to apply in the future, or the value of potential requested
property.
The proposed amendments could impact future applications for only a handful of existing
businesses that have received certifications in the past if they have new equipment to
request for certification. The existing certifications apply only to the specific facility space,
land areas, and equipment that were listed on the certificate(s) when they were issued. If
a business has existing certifications and qualifying property under the existing rules, but
purchases new equipment, expands their recycling areas at the facility, falls under new
ownership, or moves their location, they would have to submit a new application to have
the new or changed property certified. The application for that new property would be
evaluated in accordance with the new rules, and this may mean that a business that had
been receiving certifications in the past for their recycling process might not qualify for the
new or changed items, but would still receive tax exemption for the existing certifications.
However, the Department expects potential impacts to be minimal, since the
requirements for qualification generally remain the same as they were under existing rule.
The proposed amendment to require labeling of equipment with a unique identification
number may impact future applications. This change will not impact certification of past
equipment or replacement of that equipment within five years. The amendment will
require that future applicants find some way to label the requested equipment for future
inspections or the requested equipment will be denied. The majority of businesses that
have received certifications in the past and are likely to apply again in the future already
label their equipment and are familiar with the process. They would only need to label
equipment that did not already have an affixed serial or VIN number provided on the
application. Because this procedure was requested in practice under existing rule on the
application form, and labeling can be by whatever means is simplest and most cost-
effective (such as hand-written with a permanent marker), the cost would be minimal, and
would mainly be in staff time spent labeling the equipment. The time spent could vary
depending on the amount of equipment requested.
The proposed amendment to require that the structures or equipment be installed prior to
the effective date of the tax certification may delay the issuance of a tax certifications
where construction or installation is not complete. The delay would not have a cost unless
the delay went past the required deadline for requesting tax exemption from the tax
collector, and the applicant was charged for the property tax for that year. However,
applicants will often request and receive an extension on their property taxes while waiting
for the Department to issue a tax certification. The Department has in practice requested
that the property be constructed or installed prior to issuance of the certificate since it is
not logically possible to verify a process or use if the property is not in use, but may on
occasion have issued certificates prior to installation of equipment. The Department has
received very few applications for structures that have not yet been constructed and
generally has not issued the certificate until it was constructed under existing rule. The

Department receives some applications for replacement equipment that have been
approved prior to being replaced. Since replacement equipment is usually replaced with
a few months, a delay this short should not impact the tax exemption.
Benefits
The proposed amendments will benefit private industry and businesses by providing
much -needed clarification on the application process, the standards for qualification, and
the status and validity of the certification. The clarification should reduce the applicant's
time spent looking for information on the application process and contacting Department
staff and the local tax collector for technical assistance and guidance. The proposed
amendments also provide clarity to DWM staff in making decisions on whether property
meets the standards for qualification, which will also benefit the applicant by expediting
the application and review process. An expedited review process could assist the
applicant in meeting any tax exemption application deadlines required by the local tax
collector for a given year. Clarification of standards for qualification might also assist a
business by preventing them from spending time completing and submitting an
application for property that does not qualify.
Local Governments
Costs
The proposed amendments are not expected to impose any additional costs to local
governments.
Benefits
The proposed amendments will provide a benefit to local governments by providing
clarification of the requirements for tax certification to the applicants and the local tax
collectors, which may reduce local tax collector's time spent seeking technical assistance
from Department staff, and providing technical assistance to applicants. The proposed
amendments will also benefit local government revenues (county and municipal) from
property tax because the definition of "new material", and the clarification that spare parts
and equipment and space used for production scrap do not qualify may change the scope
of what qualifies for certification. The changes are expected to be minimal because the
Department has drafted these definitions and made these clarifications to reflect the
decisions that the Department has generally made in practice and/or based on the
existing guidelines document on these topics under existing rule for past applications,
and would have made similar decisions in the future. A reduction in property that qualifies
for exemption will result in an increase in property tax revenues for local governments,
and vice versa. This benefit will not apply to all local governments, but only to local
governments in counties/municipalities where there are businesses seeking tax
certification for property that the Department had or could have determined that the
property qualified under existing rule, because nothing in existing rule explicitly stated
that it could not qualify. The benefits to local governments in that case will be equal to the
costs to private industries discussed above.

State Government
Costs
The proposed amendments may cause Department staff to have to spend additional
minimal time in the first year after the effective date of the rules updating the tax
certification webpage and application form to be consistent with rule amendments, and
providing additional technical assistance regarding the effects of the rule changes. The
minimal time spent will be outweighed by time saved after the first year as described in
the benefits below.
Benefits
The requirements under existing rule are provided in seven different locations: G.S. 105-
275(8)(b), G.S. 130A-294(a)(3), 15A NCAC 13B .1500, the Tax Certification Guidelines
document, the application document, the tax certification document, and the Division's
webpage. The proposed amendments consolidate all of these requirements into one
place for ease of review, clarification, and transparency for applicants, local tax collectors,
and Division staff. Department staff time will be saved after the first year from a reduction
in staff time spent providing technical assistance on the statutory and rule requirements
and the application process to applicants and tax collectors, updating internal and
external guidance, and providing internal and external training and presentations.
The amendments will also save DWM staff time spent in internal discussions, processing
and review of applications for processes or property that do not qualify because existing
rules did not make that clear, research of past decisions to ensure consistency, and
seeking legal advice on interpretation and applicability of the existing statutes and rules,
all of which should expedite the application review process.
Public and the Environment
Costs
The proposed amendments are not expected to impose any additional costs to the public
or the environment.
Benefits
The proposed amendments to these rules will provide a benefit to the public by providing
clarification of the requirements for tax certifications and what can or cannot be exempt
from the property tax base in their county. The proposed amendments may also benefit
the environment by clarifying and making transparent the fact that businesses cannot
continue receiving tax exemption if they are out of compliance with DEQ rules, which may
increase compliance by the businesses receiving tax certification.
CONCLUSION
• The proposed rule amendments may impact future applications from businesses
that conduct recycling or resource recovery processes that may have had property
eligible for tax certification under the existing rules; but which may not be eligible
under the proposed rules. The costs and benefits are expected to be minimal
because the Department has drafted these definitions and made these
clarifications to reflect the decisions that the Department has generally made in
practice and/or based on the existing guidelines document for past applications,

and would have made similar decisions in the future. The costs and benefits are
difficult to quantify since the Department cannot predict who will apply for tax
certification or what property they will apply for in the future. Any previously issued
certifications would not be affected by the rule amendments.
• The proposed rule amendments will provide a benefit to local government property
tax revenues equal to the cost to businesses conducting a recycling or resource
recovery process discussed above. The proposed rule amendments will also
provide a benefit to local government tax collectors through clarification of
requirements and expectations, and reduced staff time spent providing technical
assistance.
• The proposed rule amendments will benefit Department staff through reduced time
spent providing technical assistance and guidance on application and qualification
requirements for tax certification, and internal discussions and review.
• The proposed rule amendments are not expected to have an annual aggregate
impact to the affected parties of greater than or equal to $1 million.
• The proposed rule amendments are expected to benefit the public and the
environment through clarification and transparency of requirements to all parties.

I 15A NCAC 13B .1501 is proposed for readoption with substantive changes as follows:
2
3 15A NCAC 13B .1501 RESOURCE RECONIEPdNG FACILITIESDEFINITIONS
4 The definitions in Article 9 of Chapter 130A of the General Statutes, the definitions in Rule .0101 of this Subchapter,
5 and the following definitions shall apply to the rules of this Section.
6 (1) "Applicant" means a person that submits an application to the Department to request tax certification
7 for real property or personal property. The applicant shall be a business conducting a recycling or
8 resource recovery process or shall be a person that owns real or personal property that is being used
9 by or leased to a business conducting a recycling or resource recoveryprocess.
10 (2) "Incidental or supportive equipment" means personal property that is used at any time for a purpose
l l other than recycling or resource recovery; is not necessary for recycling or resource recovery to
12 occur; or has a primary pMose that is not recycling or resource recovery. Incidental or supportive
13 equipment includes personal property that is used at any time for administrative, safety, or
14 maintenance services, even though it t may be used in support of a recycling or resource recovery
15 process, or that is used to provide comfort, safety, or convenience for employees such as:
16 (a) spare parts;
17 ( office furniture or equipment;
18 (c) employee personal protective or safety quipment;
19 (d) kitchen or breakroom furniture, equipment, or appliances;
20 (e) heating or air conditioning equipment for employee comfort;
21 (f) fire alarms or fire suppression systems;
22 (a) vehicles used to transport employees, new materials, or waste for disposal at any time; and
23 (h) landfill gas vents or wells that are required by permit issued by the Department.
24 (3) "Incidental or supportive facilities" means real property or parts thereof that is used at any time for
25 apurpose other than recycling or resource recovery; is not necessary for recycling or resource
26 recovery to occur, or has a primaU purpose that is not recycling or resource recovery. Incidental or
27 supportive facilities include real property that is used at any time for administrative, safety, or
28 maintenance services, even though it may be used in support of a recycling or resource recovery, or
29 that is used to provide comfort, safety, or convenience for the employees such as:
30 (a) office space;
31 (bb,) conference rooms;
32 (c) bathrooms;
33 (d) kitchens;
34 (e) employee breakrooms;
35 (f) employparking,
36 (g) maintenance sheds;
37 (h) maintenance areas:
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I (i) stormwater basins; and
2 (j) unused areas.
3 (4) "Manufacturing process" means a process by which goods are produced for sale or use from raw
4 materials or from new materials resulting from a recycling or resource recovery process, or a
5 combination of these materials.
6 (5) "New material" means a material that was ,generated from a recycling or resource recovery process
7 that can be used without further processing in the same way as a raw material in a manufacturing
8
process.
9
(6)
"Production scrap" means excess or unusable material that is generated during a manufacturing
10
process and is returned to be reused in the same manufacturing process. An example of production
11
scrap is excess metal or cardboard or textiles from a sheet of metal or cardboard or batting that
12
remains after a portion of the sheet is cut, stamped, trimmed, or formed to make a product, and the
13
excess material is collected and returned to the process or equipment where the original sheet or
14
batting was created. Another example of production scrap is a material that does not meet the quality
15
standards or customer specifications for sale or use as determined by person or business; and are
16
returned to the manufacturing process. Production scrap does not include excess materials that are
17
combined with recovered materials and returned to be reused in a recycling process.
18
(77)"Qualifying
property" means requested property that meets the standards set forth in Rule .1503(c)
19
or (d) of this Section to qualify for certification as a recycling, or resource recover, f�, or as
20
recycling, or resource recoveryquipment for the purpose of special tax classification or treatment
21
in accordance with G.S. 130A-294(a)(3) to be eligible for exclusion from the tax base as set forth
22
in G.S. 105-275(8)(b).
23
(8)
"Real property" means land and buildings, structures, improvements, or permanent fixtures on land,
24
or a portion thereof.
25
(9)
"Recycling" means the term defined in G.S. 130A-290. Recycling ends when a new material has
26
been created from the recovered material. The term does not include the subsequent manufacturing
27
process that utilizes the new material.
28
(10)
"Requested property" means the real and personal property that have been included in an application
29
for tax certification submitted in accordance with Rule .1502 of this Section because the applicant
30
is requesting that the Department make a determination on whether these items qualify for exclusion
31
from the property tax base.
32
(11)
"Resource recovery" means the term defined in G.S. 130A-290. The term includes the transportation
33
and storage of recyclable materials and recovered materials.
34
(12)
"Spare parts" means parts of equipment that are purchased for future or speculative use, but that
35
have not been installed in the equipment for which they were purchased.
36
(13)
"Personal property" means equipment that is used by a business that is not permanently affixed to
37
real property.
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1 (14) "Tax certification" means a certification issued by the Department of Environmental Quality
2 certifying that the Department has determined that the real or personal property listed on the
3 certification document meet the requirements of the rules of this Section to qualify for certification
4 as a recycling or resource recovery facility or as recycling or resource recovery equipment for the
5 purpose of special tax classifications or treatment in accordance with G.S. 130A-294(a)(3) to be
6 eligible for exclusion from the tax base as set forth in G.S. 105-275(8)(b).
7 (15) "Tax collector" means the tax collector for the taxing unit as defined in G.S. 105-273 for the
8 requested property.
9 (a) A Fesoufee reeovering faeility is a building, oF buildings, or- parts theFeofl, and ineltides any equiptnent exclusively
10
and inteffr-allv ttsed ther-ein for obtainine material or- enerffv Fesettrees from solid waste. The faeilitv also ineludes 1-
12 , sei4, or- other -wise prepare solid waste for- r-euse or feeyeling are r-esoufee r-eeever
13 r 'es.
14 (e) ineidental or- suppoi4ive faeilities a -ad equipfnent as defined ift .1506(a) of this Seetion do not qualify for- speeial
16
17 His toryNote: Authority G.S. 130A-294(a)(3);
18 Eff. June 2, 1976;
19 Readopted Eff. December 5, 1977;
20 Amended Eff. December 6, 199-�1991:
21 Readopted Eff. March 1, 2021.
22
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I 15A NCAC 13B .1502 is proposed for readoption with substantive changes as follows:
2
3 15A NCAC 13B .1502 RESOURCE RECONIEPdNG EQUIPAIENT—APPLICATION REQUIREMENTS
4 (a) An applicant for a tax certification for real and personal property used in recycling or resource recovery shall
5 submit one electronic copy of an application to the Department. The applicant shall submit a copy of the application
6 to the tax collector in accordance with the requirements of the tax collector. The applicant shall provide a cop. of the
7 application to the person responsible for management, operation, and maintenance of the requested property. The
8 application form may be obtained from the Dgp_artment's website at htt2s:Hdeq.ne.gov/about/divisions/waste-
9 management/solid-waste-section/tax-certification. An application for tax certification shall contain the following
10 information:
1 l (1) the applicant name, address, phone number, and e-mail address;
12 (2) the name, address, and phone number for the location of the requested property
13 (3) the name, phone number, and email address for the person responsible for management, operation,
14 and maintenance of the requested property;
15 (4) the name, phone number, and email address of the person filling out the application;
16 (5) a description of facility operations, including the following information:
17 (A) the types of business conducted at the facility location, such as manufacturing, retail, solid
18 waste management, recycling, or resource recovery;
19 (B) the We and source of recyclable material that is received at the facility for resource
20 recovery, or recovered material that is received at the facility for recycling;
21 (C) a description of the recycling or resource recovery process showingthe he steps involved the
22 process, which may be in the form of a flow chart or a narrative; and
23 (D) the intended destination of any solid waste, recovered material, or new material leaving the
24 facili
25 (6) the following information for each item of personal property for which certification is requested:
26 (A) name, make, and model number;
27 (B) a unique identification number that is affixed to the personal property such as a serial
28 number, vehicle identification number, or asset number;
29 (C) the cost or value at the time of acquisition;
30 (D) the year of acquisition, provided as the last two -digits of a four -digit year;
31 (E) a description of how the personal property is used for recycling or resource recovery;
32 (F) the percent of time the personal property is used for recycling or resource recovery; and
33 (G) the vehicle registration or the invoice from the purchase of the personal property if the
34 personal property is a vehicle, trailer, or container that will be in use off site at the time of
35 inspection by the Department. If an invoice is required to be submitted and the trailer or
36 container has no serial number that can be matched to the invoice. the invoice number from
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I the purchase of the trailer or container may be used as the unique identification number
2 required by Part (B) of this Subparagraph,
3 (7) the following information for the real property for which certification is requested:
4 (A) a facility drawing and aerial map outlining the recycling or resource recovery areas,
5 including the measurements of these areas;
6 (B) a description of the real property, including the parcel number of the land and the requested
7 square footage of the facility space and the acreage of the land areas; and
8 (C) a description of how the areas are used for recycling or resource recovery;
9 (8) a copy of any notice of violation issued by the Department for violations of G.S. 113A, 130A, or
10 143, or the rules adopted under G.S. 113A, 130A, or 143 that are under the authority of the
l l Department to administer or enforce, that have not been resolved at the time of application submittal;
12 (9) if the real or personal property is under a lease agreement, the contact information for the lessor and
13 lessee stated in the agreement, the expiration date of the lease agreement, and a copy of the executed
14 lease agreement and amendments signed by the lessor and lessee; and
15 (10) a list of permit numbers for permits issued by the Department, or a unit of local government under
16 delegated authority by the Department, in accordance with G.S. I I3A, 130A, and 143 and the rules
17 adopted under G.S. I I3A, 130A, and 143. The Department may request a copy of the permit if it is
18 necessary to determine compliance with the rules of this Section.
19 ( The application shall be signed by the applicant and the person receiving the benefit of the tax exemption.
20 (c) The rules of this Section shall not apply to the certification of real and personal property that is required by a
21 permit issued by the Division of Water Resources or the Division of Air Quality or the Division of Energy, Mining,
22 and Land Resources for the purpose of pollution abatement.
23 (dd,) The Division of Waste Management may return an application if the Department determines that the real or
24 personal prope , is required to be submitted in an application for pollution abatement property to the Division of
25 Water Resources because the real or personal property is located at a facility where the majority of the feedstock
26 accepted at the facility is excluded from the definition of a solid waste pursuant to G.S. 130A-290(35).
27 (e) Requested property that is owned under a lease agreement shall be listed on a separate application from requested
28 property that is not owned under a lease agreement. A separate application shall be required for each separate lease
29 agreement, unless the lessor, lessee, and expiration date for the lease agreements are the same.
30 (fl The Department may request additional information if it is necessary to determine compliance with the rules of
31 this Section, G.S. 105-275(8)(b), or G.S. 130A-294(a)(3). If the Department requests additional information, the
32 Department shall request the information in writing via e-mail at the e-mail address provided in the application in
33 accordance with Subpara rg aph (a)(4) of this Rule. The applicant shall provide the requested information within 15
34 days of the request.
35 (g) The Department shall review the application to determine if the application complies with the requirements of this
36 Rule. If the Department determines that the application does not comply with this Rule, the Department shall return
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I the application to the applicant, and shall state in writing the reasons why the application is not in compliance with
2 this Rule, and shall also provide a copy of this notice to the county tax collector.
3
4
fnmer-ial or- energy r-esewees ffafn solid waste. To "alify, the e"ipment need net be speeially designed for-
5 .
7 History Note: Authority G.S. 130A-294(a)(3);
8 Eff.' June 2, 1976;
9 Readopted Eff. March 1, 2021; December 5, 1977.
10
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I 15A NCAC 13B .1503 is proposed for readoption with substantive changes as follows:
2
3 15A NCAC 13B .1503 STANDARDS FOR QUALIFICATION FOR TAX
4 CERTIFICATION
5 (a) This Rule establishes only qualification for tax certification by the Department. Nothing in this Rule shall establish
6 or supersede requirements for tax exemption application established or enforced by the tax collector.
7 (b) When the Department receives an application for tax certification that complies with Rule .1502 of this Section,
8 the Department shall conduct an inspection, investigation, or verification of the requested property to confirm that it
9 qualifies as a recycling or resource recovery facility or as recycling or resource recovery equipment for the purpose
10 of special tax classifications or treatment in accordance with G.S. 130A-294(a)(3) and the requirements of this Rule.
11 (c) Real property shall qualify as a recycling or resource recover,, facility in accordance with G.S. 130A-294(a)((3) if
12 the following conditions are met:
13 (1) the real property was included in the application for tax certification submitted to the Department in
14 accordance with Rule .1502 of this Section,
15 (2) the person that will receive the benefit of exclusion from the property tax base for the real property
16 complies with G.S. 113A, 130A, and 143 and the rules adopted under G.S. 113A, 130A, and 143
17 that are under the authority of the Department to administer or enforce;
18 (3) the real property shall not be used at any time for a purpose other than recycling or resource
19 recovery;
20 (4) the real property shall be necessary for recycling or resource recovery to occur,
21 (5) the real property shall not be incidental or supportive facilities;
22 (6) the real property shall not be used for handling or storing production scrap;
23 (7) the buildings, structures, improvements, or permanent fixtures on land shall be constructed prior to
24 the effective date of the tax certification; and
25 (8) the land itself shall not be located beneath any area of a building or structure that does not meet the
26 requirements of Subparagraphs (1) through (7) of this Paragraph.
27 (d) Personal property shall qualify as recycling or resource recovery equipment in accordance with G.S. 130A-
28 294(a)(3) if the following conditions are met:
29 (1) the personal property was included in the application for tax certification submitted to the
30 Department in accordance with Rule .1502 of this Section;
31 (2) the unique identification number required to be included in the application in accordance with Rule
32 1502(a)(6)(B) of this Section can be matched to the same identification number affixed to the
33 personal property during the inspection, unless the personal property meets the conditions of Rule
34 .1502(a)(6)(G);
35 (3) the person that will receive the benefit of exclusion from the property tax base for the equipment
36 shall comply with G.S. 113A, 130A, and 143 and the rules adopted under G.S. 113A, 130A, and
37 143 that are under the authority of the Department to administer or enforce;
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1 (4) the personal property shall not be used at any time for a purpose other than recycling or resource
2 recovery;
3 (5) the personal property shall be necessary for recycling or resource recovery to occur;
4 (6) the personal property shall not be incidental or supportive equipment;
5 (7) the personal property shall not be used for handling or storing production scrap; and
6 (8) the personal property shall be installed prior to the effective date of the tax certification.
7 (e) If the Department determines that none of the requested property in an application qualifies for exclusion from
8 the property tax base in accordance with this Rule, the Department shall notify the applicant and the county tax
9 collector of the reasons for this determination in writing.
10 (f) The tax certification shall be effective upon the date of signature by the Department.
11 (a) The tax certification shall list the qualifying property,
12 (h) The Department shall provide a copy of the tax certification to the applicant and to the office of the county tax
13 collector.
14 (i) The applicant shall be responsible for maintaining records of all tax certifications issued to the applicant.
15 (j) Unless an expiration date is provided on the tax certification, the tax certification shall remain valid until there is
16 a change in use, ownership, or lease agreement of the qualifying property.
17 (k) Tax certifications are not transferrable. If there is a change in ownership or lease agreement or if the facility
18 changes locations of qualifying property after the Department issues a tax certification, then the real or personal
19 property shall no longer qualify for exclusion from the property tax base. The new owner, lessor, or lessee of the real
20 or personal property that was previously listed on a tax certification may apply for a new tax certification in accordance
21 with Rule .1502 of this Section.
22 (1) If there is a change in the use of the qualifying property after the Department issues the tax certification, and the
23 new use does not comply with the requirements of Para ragr phs (c) or (d) of this Rule, then the real or personal property
24 shall no longer qualify for exclusion from the property tax base.
25 (m) If the person receiving the benefit of exclusion from the property tax base ceases to be in compliance with G.S.
26 113A, 130A, or 143 or the rules adopted under G.S. 113A, 130A, or 143 that are under the authority of the Department
27 to administer or enforce after the Department issues the tax certification, the Department may determine that the real
28 or personal property no longer qualifies for exclusion from the property tax base and revoke the tax certification if the
29 person does not comply y the deadline for compliance required by the Department. If the Department revises or
30 revokes a tax certification, the Department shall notify the applicant, the person receiving the tax benefit, and the
31 county tax collector's office of the determination in writing. The applicant may submit a new application for tax
32 certification in accordance with Rule .1502 of this Section when the person receiving the benefit complies with G.S.
33 113A, 130A, and 143 and the rules adopted under G.S. 113A, 130A, and 143 that are under the authority of the
34 Department to administer or enforce.
35 (n) The Department may revoke a tax certification if the Department discovers that false information was provided
36 in the application for tax certification submitted in accordance with Rule .1502 of this Section. If the Department
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I revokes a tax certification, the Denartment shall notifv the applicant, the Derson receiving the tax benefit. and the
2 county tax collector's office of the determination in writing
3 (o) The Department shall not be required to verify or confirm the cost or value of requested property that is provided
4 by the applicant. The Department may include the cost of requested personal property provided by the applicant on
5 the tax certification for ease of reference. Any change in cost or value shall not change the qualification status of the
6 real or personal property.
7 (p) Real or personal property that was listed on a tax certification issued prior to the readopted effective date of this
8 Rule, and equivalent real or personal property purchased to replace such property within five years of the readopted
9 effective date of this Rule, shall be deemed qualifying property for the purpose of this Section if the following
10 conditions are met:
l l (1) the use of the real or personal property has not changed;
12 (2) the person that is receiving the benefit of exclusion from the property tax base for the real property
13 complies with G.S. 113A, 130A, and 143 and the rules adopted under G.S. 113A, 130A, and 143
14 that are under the authority of the Department to administer or enforce:
15 O the real or personal Rroperty has not changed ownership since the tax certification was issued, and
16 (4) any expiration date on the tax certification has not passed.
17 (q) If an application meeting the requirements of Rule .1502 of this Section is submitted within five years of the
18 readopted effective date of this Rule for requested property that was previously certified under a lease agreement, the
19 requested property that meets the requirements of Para rg anh (,p) of this Rule, except Subpara.ranh pZ4) of this Rule,
20 shall be deemed qualifying property for the purpose of this Section.
21 (a) A recycling facility is a building, or buildings, or parts thereof, and includes any equipment exclusively and
22
23 .
25 (b) lneiden4a! or- supportive feeilities and equipment as defined in. 1506(a) of this Section do not qualify for special
26 tax treatmen4 as recycling
27
28 History Note: Authority G.S. 130A-294(a)(3);
29 Eff June 2, 1976;
30 Readopted Eff. December 5, 1977;
31 Amended Eff. December 6, 4494-.1991;
32 Readopted Eff. March 1, 2021.
33
9of13

I 15A NCAC 13B .1504 - .1508 are proposed for readoption as a repeal as follows:
2
3
4
5
6
7
8
9
10
11
12
13
14
15A NCAC 13B .1504 RECYCLING PROCESS
15A NCAC 13B .1505 RECYCLING EQUIPMENT
15A NCAC 13B .1506 INCIDENTAL OR SUPPORTIVE FACILITIES AND EQUIPMENT
15A NCAC 13B .1507 OPERATIONAL REQUIREMENTS FOR FACILITIES AND EQUIPMENT
15A NCAC 13B .1508 APPLICATION FOR TAX CERTIFICATION
History Note: Authority G.S. 130A-294(a)(3);
Eff. June 2, 1976;
Readopted Eff. December S, 1977;
Amended Eff. December 6, 1991; September 1, 1990; July 1, 1985;
Repealed E,(f. March 1, 2021.
10 of 13

I 15A NCAC 13B .1510 is proposed for repeal as follows:
2
3 15A NCAC 13B .1510 SEVERABILITY
4
5 His toryNote: Authority G.S. 130A-294(a)(3);
6 Eff. June 2, 1976;
7 Readopted Eff. December 5, 1977;
8 Pursuant to G.S. 150B-21.3A, rule is necessary without substantive public interest Eff. January 9,
9 24 4- 8-. 1OEI
10 Repealed f f. March 1, 2021.
11
11 of 13

I 15A NCAC 13B .1512 - .1513 are proposed for readoption as a repeal as follows:
3 15A NCAC 13B .1512 FACILITIES FOR REDUCING HAZARDOUS WASTE GENERATED
4 15A NCAC 13B .1513 EQUIPMENT FOR REDUCING HAZARDOUS WASTE GENERATED
6 History Note: Authority G.S. 130A-294(a)(3);
7 Eff. October 1, 1983;
8 Amended Eff. December 6, 1991; September 1, 4990. 1 990;
9 Revealed Eff' March 1, 2021.
10
12 of 13

I 15A NCAC 13B .1514 is proposed for readoption as a repeal as follows:
3 15A NCAC 13B .1514 APPEALS PROCEDURE
4
5 His toryNote: Authority G.S. 130A-294(a)(3);
6 Eff. February 1, 1987;
7 Amended Eff. September 1, 49999-1990;
8 Repealed f f. March 1, 2021.
13 of 13

Montie, Jessica
From: Hollis, Carrie
Sent: September 22, 2020 3:30 PM
To: Montie, Jessica; Everett, Jennifer; Watkins, Jason
Cc: Masich, Molly; McGhee, Dana; Grozav, Anca
Subject: RE: Approval - Tax treatment of recycling and resource recovery equipment and facilities, 15A NCAC
13B Section .1500
Attachments: DEQ2020-07-29Rev9-22.pdf
OSBM approved the Division of Waste Management's changes to rules in 15A NCAC 13B Section .1500 on July 29 (see
email below). Since that time, the agency has decided to repeal an additional rule .1510. The analysis has been updated
to reflect the change and is approved for publication. Please ensure that the state government and local government
impacts are included in the Notice of Text and that the NC League of Municipalities and Association of County
Commissioners are notified.
The .pdf file of the rule impact analysis (attached) will be posted on our website at the following URL (please allow for
some time):
https://files.nc.gov/ncosbm/documents/files/DEQ 2020-09-22.pdf
Regards,
Carrie
From: Hollis, Carrie
Sent: Wednesday, July 29, 2020 12:06 PM
To: Montie, Jessica <[e-mail]>; Everett, Jennifer <[e-mail]>; Watkins, Jason
<[e-mail]>
Cc: Molly Masich ([e-mail]) <[e-mail]>; McGhee, Dana
<[e-mail]>; Grozav, Anca <[e-mail]>
Subject: Approval - Tax treatment of recycling and resource recovery equipment and facilities, 15A NCAC 13B Section
.1500
OSBM has reviewed Division of Waste Management's proposed changes to rules in 15A NCAC 13B Section .1500 in
accordance with G.S. 150E-21.4 and with E.O. 70 from 10/21/2010 as amended by E.O.48 from 4/9/2014. The fiscal
note has been approved for publication. Please ensure that the state government and local government impacts are
included in the Notice of Text and that the NC League of Municipalities and Association of County Commissioners are
notified.
The .pdf file of the rule impact analysis (attached) will be posted on our website at the following URL (please allow for
some time):
https://files.nc.gov/ncosbm/documents/files/DEQ 2020-07-29.pdf
Carrie Hollis
Economist
NC Office of State Budget and Management
984-236-0689
carrie.hollis(cb-osbm.nc.gov

-ouDSM n°
Hit
OFFICE bF SYAFE 8416GtiT {*Up�Mk
AND MANASEHEW • �...
Email correspondence to and from this address may be subject to the North Carolina Public Records Law and may be disclosed to third parties by an authorized
state official.