A BILL TO BE ENTITLED
AN ACT to require a vote of the people for the state of north carolina to issue certificates of participation.
The General Assembly of North Carolina enacts:
SECTION 1.  Section 3 of Article V of the North Carolina Constitution reads as rewritten:
"Sec. 3. Limitations upon the increase of State debt.
(1)	Authorized purposes; two‑thirds limitation. The General Assembly shall have no power to contract debts secured by a pledge of the faith and credit of the State, unless approved by a majority of the qualified voters of the State who vote thereon, except for the following purposes:
(a)	to fund or refund a valid existing debt;
(b)	to supply an unforeseen deficiency in the revenue;
(c)	to borrow in anticipation of the collection of taxes due and payable within the current fiscal year to an amount not exceeding 50 per cent of such taxes;
(d)	to suppress riots or insurrections, or to repel invasions;
(e)	to meet emergencies immediately threatening the public health or safety, as conclusively determined in writing by the Governor;
(f)	for any other lawful purpose, to the extent of two‑thirds of the amount by which the State's outstanding indebtedness shall have been reduced during the next preceding biennium.
(1a)	Certificates of Participation. The General Assembly shall have no power to authorize the State to purchase, or finance or refinance the purchase of, real property by installment contracts that create in some or all of the property purchased a security interest to secure payment of the purchase price to the seller or to an individual or entity advancing moneys or supplying financing for the purchase transaction, unless approved by a majority of the qualified voters of the State who vote thereon at an election held at the same time as the general election for members of the General Assembly. This subsection also applies to the financing of improvements to real property.
(2)	Gift or loan of credit regulated. The General Assembly shall have no power to give or lend the credit of the State in aid of any person, association, or corporation, except a corporation in which the State has a controlling interest, unless the subject is submitted to a direct vote of the people of the State, and is approved by a majority of the qualified voters who vote thereon.
(3)	Definitions. A debt is incurred within the meaning of this Section when the State borrows money. A pledge of the faith and credit within the meaning of this Section is a pledge of the taxing power. A loan of credit within the meaning of this Section occurs when the State exchanges its obligations with or in any way guarantees the debts of an individual, association, or private corporation.
(4)	Certain debts barred. The General Assembly shall never assume or pay any debt or obligation, express or implied, incurred in aid of insurrection or rebellion against the United States. Neither shall the General Assembly assume or pay any debt or bond incurred or issued by authority of the Convention of 1868, the special session of the General Assembly of 1868, or the General Assemblies of 1868‑69 and 1869‑70, unless the subject is submitted to the people of the State and is approved by a majority of all the qualified voters at a referendum held for that sole purpose.
(5)	Outstanding debt. Except as provided in subsection (4), nothing in this Section shall be construed to invalidate or impair the obligation of any bond, note, or other evidence of indebtedness outstanding or authorized for issue as of July 1, 1973."
SECTION 2.  The amendment set out in Section 1 of this act shall be submitted to the qualified voters of the State at the statewide general election on November 6, 2012, which 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 amendment providing that a vote of the people is required for the State to finance the purchase of real property or the construction of buildings or other improvements where the property is pledged to secure payment."
SECTION 3.  If a majority of votes cast on the question are in favor of the constitutional amendment set out in this act, the State Board of Elections shall certify the amendment to the Secretary of State. The constitutional amendment is effective upon certification. The Secretary of State shall enroll the amendments so certified among the permanent records of that office.
SECTION 4.  This act is effective when it becomes law.