GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1999

H	1 

HOUSE BILL 1467

Short Title:  Voters Must Approve Taxes.	(Public)

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Sponsors: Representative Wood.

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Referred to:  Rules, Calendar and Operations of the House.

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May 12, 1999

A BILL TO BE ENTITLED
AN ACT TO AMEND THE CONSTITUTION OF NORTH CAROLINA TO REQUIRE VOTER APPROVAL BEFORE MOST TAXES MAY BE LEVIED OR INCREASED, EXCEPT IN THE CASE OF AN EMERGENCY DECLARED BY THE GOVERNOR.
The General Assembly of North Carolina enacts:
Section 1.  Section 5 of Article III of the North Carolina Constitution is amended by adding a new subsection to read:
"(12)	Tax emergency. The Governor may declare that a state of emergency exists necessitating the enactment of an emergency law levying a tax upon the people of the State without the prior approval of the people of the State, as provided in Section 2(1a) of Article V.  Such a state of emergency may not exceed a period of two years."
Section 2.  Section 2 of Article V of the North Carolina Constitution reads as rewritten:
"Sec. 2. State and local taxation.
(1)	Power of taxation.  The power of taxation shall be exercised in a just and equitable manner, for public purposes only, and shall never be surrendered, suspended, or contracted away.
(1a)	Voter approval required for State taxes.  Except as provided in this subsection for emergency taxes, no law levying a tax upon the people of the State may become effective unless it is first approved by a majority of the qualified voters of the State who vote on the question, except that approval by the qualified voters of the State is not required for a law that repeals a specific tax exemption or a law that authorizes one or more local taxing units to levy a tax.
If the Governor declares that a state of emergency exists necessitating the enactment of an emergency law levying a tax upon the people of the State, the General Assembly may enact such a law, which may become effective without first being approved by the people of the State.  Such an emergency tax law may not remain in effect for more than two years unless it is approved by the people of the State during the two-year period after it becomes effective.
(2)	Classification.  Only the General Assembly shall have the power to classify property for taxation, which power shall be exercised only on a State-wide basis and shall not be delegated.  No class of property shall be taxed except by uniform rule, and every classification shall be made by general law uniformly applicable in every county, city and town, and other unit of local government.
(3)	Exemptions.  Property belonging to the State, counties, and municipal corporations shall be exempt from taxation.  The General Assembly may exempt cemeteries and property held for educational, scientific, literary, cultural, charitable, or religious purposes, and, to a value not exceeding $300, any personal property.  The General Assembly may exempt from taxation not exceeding $1,000 in value of property held and used as the place of residence of the owner.  Every exemption shall be on a State-wide basis and shall be made by general law uniformly applicable in every county, city and town, and other unit of local government.  No taxing authority other than the General Assembly may grant exemptions, and the General Assembly shall not delegate the powers accorded to it by this subsection.
(4)	Special tax areas.  Subject to the limitations imposed by Section 4, the General Assembly may enact general laws authorizing the governing body of any county, city, or town to define territorial areas and to levy taxes within those areas, in addition to those levied throughout the county, city, or town, in order to finance, provide, or maintain services, facilities, and functions in addition to or to a greater extent than those financed, provided, or maintained for the entire county, city, or town.
(5)	Purposes of property tax.  The General Assembly shall not authorize any county, city or town, special district, or other unit of local government to levy taxes on property, except for purposes authorized by general law uniformly applicable throughout the State, unless the tax is approved by a majority of the qualified voters of the unit who vote thereon. 
(5a)	Levy of other local taxes.  Except as provided in Section 2(5) of this Article, the General Assembly shall not authorize any unit of local government to levy taxes unless the tax is approved by a majority of the qualified voters of the unit who vote on the question.
(6)	Income tax.  The rate of tax on incomes shall not in any case exceed ten percent, and there shall be allowed personal exemptions and deductions so that only net incomes are taxed.
(7)	Contracts.  The General Assembly may enact laws whereby the State, any county, city or town, and any other public corporation may contract with and appropriate money to any person, association, or corporation for the accomplishment of public purposes only."
Section 3.  Section 23 of Article II of the North Carolina Constitution reads as rewritten:
"Sec. 23.  Revenue bills.  No law shall be enacted to raise money on the credit of the State, or to pledge the faith of the State directly or indirectly for the payment of any debt, or to impose any tax upon the people of the State, or to allow the counties, cities, or towns to do so, unless the bill for the purpose has been read three several times in each house of the General Assembly and passed three several readings, which readings must have been on three different days, and agreed to by each house respectively, and unless the yeas and nays on the second and third readings of the bill have been entered on the journal.  No laws to impose any tax upon the people of the State shall become effective unless any applicable voter approval requirements of Section 2(1a)	of Article V have been satisfied."
Section 4.  The amendments set out in Sections 1 through 3 of this act shall be submitted to the qualified voters of the State at the general election in November 2000.  The election shall be conducted under the laws then governing elections in the State.  Ballots, voting systems, or both may be used in accordance with Chapter 163 of the General Statutes.  The question to be used in the voting systems and ballots shall be:
"[ ] FOR    [ ] AGAINST
Constitutional amendments requiring that most new taxes and tax increases must be approved by the voters, except in the case of an emergency declared by the Governor."
Section 5.  If a majority of votes cast on the question are in favor of the amendments set out in Sections 1 through 3 of this act, the State Board of Elections shall certify the amendments to the Secretary of State.  The Secretary of State shall enroll the amendments so certified among the permanent records of that office.  If approved, the amendments set out in Sections 1 through 3 of this act become effective January 1, 2001, and apply to taxes authorized or levied on or after that date.  If a tax has been authorized by a vote of the people of the taxing unit before the effective date of this act, an additional vote is not required.
Section 6.  This act is effective when it becomes law.