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Distribution Within a County Area: Distribution of the proceeds of the 1/2% sales tax within m county as between the county government and the mnnicipal governments will be according to the method in effect-in e~ch p~ticipating county for dis- tributing the present 1% sales tax proceeds. (G.S. 105-472 authorizes a board of county commissioners to select one of two alternative methods for the distribution: (1) the combined per-capita approach, or (2) the ad valorem taxation approach.) Use of 1/2% Tax Proceeds by County: For the fi~fi~"~year~'after enactment of the 1/2% sales tax, 'a~¢~un~y may use'60% of its proceeds from th~ tax for any lawful purpose in an unrestricted m~nner. 'The remaining '40%.~'t:be~.~sed f~ ~6~1i~ ~dho~l efip{~al~ih~ P~bd~h~o~ ~0"~e~ira ~hyi~d~bted~e~/i~e~ By the county for gu'ch purposes. A 6odnty' iS~ a~rize~ to expend part or gll ~f the revenue re- stricted for.public school capital needs in the same year in which the revenue is received by the county, or-the.county may place p'a~t Or"Rllf~ 6h~ revenue i~ a d&~ital"reserve fund for'future use. : {F°'r the ngx~lfi~ ~a~"after enactment of th~ 'tax, 70% of the proceeds may be used ~g~ any ~-~u~rpose, and 30% M6B~'~e'~d foM pUblic.school capital~outlay-needs~ After ten years, 100% of"the proceeds may be used for any 'lawful purpose. Note - The 40% and 30% earmarks for public school capital outlay needs are not to '~e considered maximum limits. A county clearly may use up to 100% of the additional 1/2% sales tax for public school capital outlay purposes. Use of Proceeds for Municipalities: Municipalities have the same restrictions on use of the tax proceeds distributed to them as do counties, except that municipal- ities must use the funds for water and sewage capital outlay purposes rather than for public school purposes. "Opting Out" of Public School Capital Outlay Restrictions : A county may petition the Local Government Commission for permission to utilize s smaller percentage of the tax proceeds for public school capital outlay purposes, if the county can demonstrate to the satisfaction of the Commission that the county can provide for its public school capital needs without restricting the use of part or al! of the designated perceutage of the additional 1/2% sales tax proceeds. The Local Govern- ment Commission will isshe a written decision on each petition, and such decision is final. However, a county whose petition is denied in whole or in part may subse- quently submit a new petition to the Commission. Other Features of H 426: (1) It specifically repeals the authorit~ for the Governor to call a statewide ~300 million Clean Water Bond Election in November, 1983. (2) It authorizes a local option hotel/motel tax for Buncombe, Forsyth,Haywood, Mecklenburg and New Hanover Counties, and for the towns of Ocean Isle Beach, Surf City, and Topsail Beach. (3) It deletes any reference to local government employers' responsibility to pay the employer contribution for their law enforcement officers in the Law Enforcement Officers' Benefit and Retirement Fund. This leaves it up to the Appropriations Act to ~ddresa the subject. (4) It authorizes any c~it~ with population of at least 75,000 to expend up to 20% of the proceeds derived from the i/2% sales tax for housing projects undertaken