Every act of the General Assembly levying a tax shall state the special object to which it is to be applied, and it shall be applied to no other purpose.
(1969, c. 1200, s. 1.)
History Note. - This section is identical to Article V, § 8 of the Constitution of 1868. In 1873, Article V of the Constitution was amended and section 8 became section 7.
Legal Periodicals. - For note on taxation and revenue bonds to finance low-income housing, see 49 N.C.L. Rev. 830 (1971).
For survey of 1980 constitutional law, see 59 N.C.L. Rev. 1116 (1981).
For note on the rejection of the "public purpose" requirement for state tax exemption, see 17 Wake Forest L. Rev. 293 (1981).
CASE NOTES
Statute Authorizing County to Impose Tax. - Where a statute authorizes a county to impose a tax for necessary expenses, it is a delegation of the power to be exercised by the county as an agency for the State for the convenience of local administration, and the statute is not void in failing to state the special object to which it is to be applied, nor is the tax itself invalid if this constitutional requirement has been observed by the county authority in the imposition of the special tax. Norfolk S.R.R. v. Reid, 187 N.C. 320, 121 S.E. 534 (1924), decided under former Art. V, § 7, Const. 1868, as amended in 1873.
Governor's order directing the revenue secretary to halt expenditures for capital improvements, further reduce expenditures throughout state agencies, and withhold funds appropriated to local governments was authorized by N.C. Const. art. III, § 5(3) to prevent a deficit, and did not violate the separation of powers doctrine; further N.C. Const. art. V, § 5, which was directed at the general assembly, did not conflict with N.C. Const. art. III, § 5. County of Cabarrus v. Tolson, 169 N.C. App. 636, 610 S.E.2d 443 (2005).
Section Does Not Apply to Levy by Counties, Cities or Towns for General Purposes. - The provisions of this section do not extend to taxes levied by counties or incorporated cities or towns for general municipal purposes. Cabe v. Board of Aldermen, 185 N.C. 158, 116 S.E. 419 (1923), decided under former Art. V, § 7, Const. 1868, as amended in 1873.
This section has no application to taxes levied by the county authorities for county purposes. Parker v. Board of Comm'rs, 104 N.C. 166, 10 S.E. 137 (1889), decided under former Art. V, § 7, Const. 1868 as amended in 1873.
Subsequent Act Changing Purpose of Levy First Authorized to Pay County Bonds. - Where an act authorized the levy and collection of a special tax for the payment of certain county bonds, and a later act directed that the special tax collected under the first act should be turned into the general county fund, the first act was in conflict with this section, which provides that every act of the General Assembly levying a tax shall state the special object to which it is to be applied. McCless v. Meekins, 117 N.C. 34, 23 S.E. 99 (1895), decided under former Art. V, § 7, Const. 1868, as amended in 1873.
A law authorizing a bond issue for various purposes which does not declare what proportion of the proceeds of the bonds shall be applied to each specific purpose is not void. Such matter may properly rest within the sound discretion of the municipal authorities. Coggins v. City of Asheville, 278 N.C. 428, 180 S.E.2d 149 (1971).
Discretion of Municipal Corporation in Use of Bond Money. - With respect to the use of bond money, the court will not interfere with the exercise of discretionary powers of a municipal corporation unless its actions are so unreasonable and arbitrary as to amount to an abuse of discretion. Coggins v. City of Asheville, 278 N.C. 428, 180 S.E.2d 149 (1971).
Transfer of Funds from Bond Issue from One Project to Another. - While a municipality has a limited authority, under certain conditions, to transfer or allocate funds from one project to another included within the general purpose for which bonds are authorized, the transfer must be to a project included in the general purpose as stated in the bond resolution, and the funds may be diverted to the proposed purposes only in the event that the municipality finds in good faith that conditions have so changed since the bonds were authorized that proceeds therefrom are no longer needed for the original purpose. Coggins v. City of Asheville, 278 N.C. 428, 180 S.E.2d 149 (1971).
Immaterial or Temporary Changes in Use of Bond Proceeds. - While the law will not justify the use of the proceeds of a State or municipal bond issue for purposes other than those specified in the act authorizing the issue, it does not follow that immaterial or temporary changes consistent with the general purpose of the legislative act should be interpreted as unlawful diversions of public funds. Coggins v. City of Asheville, 278 N.C. 428, 180 S.E.2d 149 (1971).
As to Changes Necessary to Accomplish General Purpose of bond money, see Coggins v. City of Asheville, 278 N.C. 428, 180 S.E.2d 149 (1971).
Elective Abortions. - State funding of elective abortions does not violate this section of the Constitution. Stam v. State, 302 N.C. 357, 275 S.E.2d 439 (1981).
Section 113-156.1 does not violate this section, which provides that every act of the General Assembly levying a tax shall state the special object to which it is to be applied and that it shall be applied to no other purpose, as it is part of Subchapter IV of Chapter 113, the special purpose of which is the conservation of marine and estuarine and wildlife resources, and it is evident that the license tax is levied and applied for this purpose. State v. Rippy, 80 N.C. App. 232, 341 S.E.2d 98 (1986).
Applied in In re Denial of Approval to Issue Hous. Bonds, 307 N.C. 52, 296 S.E.2d 281 (1982).
Cited in In re Arcadia Dairy Farms, Inc., 43 N.C. App. 459, 259 S.E.2d 368 (1979).