GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1997

S	3 

SENATE BILL 352
Appropriations Committee Substitute Adopted 4/22/97
Third Edition Engrossed 4/23/97

Short Title: Current Operations & Capital Budget Act. 	(Public)

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Sponsors:

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Referred to:  

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March 10, 1997

A BILL TO BE ENTITLED
AN ACT TO MAKE APPROPRIATIONS FOR CURRENT OPERATIONS AND FOR CAPITAL IMPROVEMENTS FOR STATE DEPARTMENTS, INSTITUTIONS, AND AGENCIES, AND FOR OTHER PURPOSES.
The General Assembly of North Carolina enacts:

PART I.  INTRODUCTION, TITLE OF ACT, AND INDEX

INTRODUCTION
Section 1.  The appropriations made in this act are for maximum amounts necessary to provide the services and accomplish the purposes described in the budget.  Savings shall be effected where the total amounts appropriated are not required to perform these services and accomplish these purposes and, except as allowed by the Executive Budget Act, or this act, the savings shall revert to the appropriate fund at the end of each fiscal year.

TITLE OF ACT
Section 1.1.  This act shall be known as "The Current Operations and Capital Improvements Appropriations Act of 1997."

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An outline of the provisions of the act follows this section.  The outline shows the heading "––-CONTENTS/INDEX––-" and it lists by general category the descriptive captions for the various sections and groups of sections that make up the act.

––-CONTENTS/INDEX––-

(This outline is designed for reference only, and the outline and the corresponding entries throughout the act in no way limit, define, or prescribe the scope or application of the text of the act.)

PART I.  INTRODUCTION, TITLE OF ACT, AND INDEX 	1
INTRODUCTION 	1
Section 1. 	1
TITLE OF ACT 	1
Section 1.1. 	1
PART II.  CURRENT OPERATIONS/GENERAL FUND 	18
Section 2. 	18
PART III.  CURRENT OPERATIONS AND EXPANSION/HIGHWAY FUND 	20
Section 3. 	21
PART IV.  HIGHWAY TRUST FUND 	21
Section 4. 	21
PART V. BLOCK GRANT FUNDS 	21
DHR BLOCK GRANT PROVISIONS 	21
Section 5. 	21
NER BLOCK GRANT FUNDS 	27
Section 5.1. 	27
PART VI.  GENERAL FUND AND HIGHWAY FUND AVAILABILITY STATEMENTS 	30
GENERAL FUND AVAILABILITY STATEMENTS 	30
Section 6. 	30
HIGHWAY FUND AVAILABILITY 	31
Section 6.1. 	31
PART VII.  GENERAL PROVISIONS 	31
SPECIAL FUNDS, FEDERAL FUNDS, AND DEPARTMENTAL RECEIPTS/AUTHORIZATION FOR EXPENDITURES  31
Section 7. 	31
INSURANCE AND FIDELITY BONDS 	32
Section 7.1. 	32
CONTINGENCY AND EMERGENCY FUND ALLOCATION 	32
Section 7.2. 	32
AUTHORIZED TRANSFERS 	32
Section 7.3. 	32
EXPENDITURES OF FUNDS IN RESERVES LIMITED 	33
Section 7.4. 	33
STATE MONEY RECIPIENTS/CONFLICT OF INTEREST POLICY 	33
Section 7.5. 	33
BUDGETING OF PILOT PROGRAMS 	33
Section 7.6. 	33
AUTHORIZATION OF PRIVATE LICENSE TAGS ON STATE-OWNED MOTOR VEHICLE  33
Section 7.7. 	33
MODIFICATIONS TO THE EXECUTIVE BUDGET ACT 	34
Section 7.8. 	34
PART VIII.  PUBLIC SCHOOLS 	37
SUBPART A.  GENERAL PROVISIONS 	37
CAREER DEVELOPMENT 	37
Section 8.1. 	37
SUPPLEMENTAL FUNDING IN LOW-WEALTH COUNTIES 	37
Section 8.2. 	37
SMALL SCHOOL SYSTEM SUPPLEMENTAL FUNDING 	41
Section 8.3. 	41
LITIGATION RESERVE 	43
Section 8.4. 	43
EXCEPTIONAL CHILDREN FUNDS 	43
Section 8.5. 	43
MINIMUM VACATION LEAVE FOR BUS DRIVERS 	43
Section 8.6. 	44
TRANSFER OF FUNDS FOR CHILDREN WITH SPECIAL NEEDS TO PROGRAMS FOR ACADEMICALLY OR GIFTED STUDENTS AUTHORIZED.  44
Section 8.7. 	44
DELETE REPORT ON GUARANTEED ENERGY SAVINGS CONTRACTS 	45
Section 8.8. 	45
SCHOOL PAY DATE FLEXIBILITY PILOT PROGRAM 	45
Section 8.9. 	45
SCHOOL RESOURCE OFFICERS IN MIDDLE SCHOOLS 	45
Section 8.10. 	45
ADVANCED PLACEMENT TESTS 	45
Section 8.11. 	46
DATA ON TEACHER ASSISTANTS' YEARS OF EXPERIENCE, CREDENTIALS, AND PLACEMENT ON LOCALLY ADOPTED SALARY SCHEDULES  46
Section 8.12. 	46
CLASS-SIZE COMPUTATION FOR K-2 	46
Section 8.13. 	46
ABC'S PERFORMANCE RECOGNITION FOR PERSONNEL SERVING KINDERGARTEN THROUGH TWELFTH GRADE ONLY  47
Section 8.14. 	47
SCHOOL LAW REVISION SUBCOMMITTEE EXTENDED 	47
Section 8.15. 	47
AVID PROGRAM 	48
Section 8.16. 	48
DISTANCE LEARNING PROGRAM 	48
Section 8.17. 	48
CRIME CONTROL GRANTS FOR THE N.C. CENTER FOR THE PREVENTION OF SCHOOL VIOLENCE  48
Section 8.18. 	48
CHARTER SCHOOL ACCOUNTABILITY REQUIREMENTS 	48
Section 8.19. 	48
CIVIL PENALTY AND FORFEITURE FUND ESTABLISHED 	48
Section 8.20. 	48
AVAILABILITY OF FUNDS ALLOCATED FOR STAFF DEVELOPMENT 	49
Section 8.21. 	49
LATERAL ENTRY PROGRAM 	49
Section 8.22. 	49
FUNDS FOR NATIONAL BOARD FOR PROFESSIONAL TEACHING
STANDARDS 	49
Section 8.23. 	49
OUT-OF-STATE TEACHER CERTIFICATION 	50
Section 8.24. 	50
PUBLIC-PRIVATE PARTNERSHIP TO EXPAND TECHNOLOGY IN PUBLIC SCHOOLS  50
Section 8.25. 	50
UNIFORM EDUCATION REPORTING SYSTEMS FUNDS 	51
Section 8.26. 	52
LEGISLATORS MAY SERVE ON SCHOOL TECHNOLOGY COMMISSION 	52
Section 8.27. 	52
NORTH CAROLINA STANDARDS AND ACCOUNTABILITY COMMISSION 	53
SPECIAL NEEDS CHILDREN FUNDS 	54
Section 8.29. 	54
TEACHER APPRENTICESHIP PROGRAM 	54
Section 8.30. 	54
SAFE SCHOOLS 	54
Section 8.31. 	54
SCHOOL-BASED ADMINISTRATOR SALARIES 	62
Section 8.32. 	62
SCHOOL CENTRAL OFFICE SALARIES 	64
Section 8.33. 	64
NONCERTIFIED PUBLIC SCHOOL EMPLOYEES' SALARY INCREASE 	65
Section 8.34. 	65
TEACHER SALARY SCHEDULES 	66
Section 8.35. 	66
FUNDS TO IMPLEMENT THE ABC'S OF PUBLIC EDUCATION PROGRAM 	68
Section 8.36. 	68
EXTRA PAY FOR MENTOR TEACHERS 	68
Section 8.37. 	68
EXTRA PAY FOR NEW TEACHER DEVELOPMENT 	68
Section 8.38. 	68
EXTRA PAY FOR PROFESSIONAL DEVELOPMENT 	68
Section 8.39. 	68
PUBLIC SCHOOL CALENDAR CHANGES/EXTRA PAY FOR EXTRA DAYS AND EXTRA DUTIES  69
Section 8.40. 	69
PART IX. COMMUNITY COLLEGES 	75
COMMUNITY COLLEGE FUNDING FLEXIBILITY 	76
Section 9. 	76
COMMUNITY COLLEGE TUITION AND FEE PAYMENTS 	76
Section 9.1. 	76
ASSESSMENT OF OCCUPATIONAL EXTENSION FORMULA 	76
Section 9.2. 	76
MODIFICATIONS IN THE FTE FUNDING FORMULA TO REFLECT FLUCTUATIONS IN ENROLLMENT  76
Section 9.3. 	76
STUDENT CENSUS DATE 	76
Section 9.4. 	76
NEW AND EXPANDING INDUSTRY REPORT DATE MODIFIED 	76
Section 9.5. 	76
NEW AND EXPANDING INDUSTRY GUIDELINES 	77
Section 9.6. 	77
ESTABLISHMENT OF A NEW MULTICAMPUS COMMUNITY COLLEGE TO SERVE ANSON AND UNION COUNTIES AUTHORIZED  77
Section 9.7. 	77
COMMUNITY COLLEGE PROGRAM EFFICIENCY 	77
Section 9.8. 	77
HOSPITAL-BASED NURSING PROGRAMS 	77
Section 9.9. 	78
STATE BOARD OF COMMUNITY COLLEGES – FUNDS TO REWARD EXCELLENCE IN TEACHING  78
Section 9.10. 	78
HRD MULTI-ENTRY/MULTI-EXIT CLASSES 	78
Section 9.11. 	78
PART X. UNIVERSITIES 	78
WAKE FOREST AND DUKE MEDICAL SCHOOL ASSISTANCE/FUNDING FORMULA 	78
Section 10. 	78
AID TO STUDENTS ATTENDING PRIVATE COLLEGES PROCEDURE 	79
Section 10.1. 	79
AID TO STUDENTS ATTENDING PRIVATE COLLEGES/LEGISLATIVE TUITION GRANT LIMITATIONS  80
Section 10.2. 	80
DISTINGUISHED PROFESSORS ENDOWMENT TRUST FUND 	80
Section 10.3. 	80
UNC EQUITY FUNDS 	81
Section 10.4. 	81
MANUFACTURING EXTENSION PARTNERSHIP 	81
Section 10.5. 	81
MILITARY RESIDENCY/UNC TUITION 	81
Section 10.6. 	81
UNC OVERHEAD RECEIPT FLEXIBILITY 	81
Section 10.7. 	81
UNC ASSISTANCE TO PUBLIC SCHOOLS 	82
Section 10.8. 	82
AREA HEALTH EDUCATION CENTERS FUNDING 	82
Section 10.9. 	82
UNC LIBRARIES FUNDING 	82
Section 10.10. 	82
COOPERATIVE EXTENSION SERVICES 	83
Section 10.11. 	83
REVIEW OF LAND-USE REGULATION 	83
Section 10.12. 	83
SCHOLARSHIP FUND BALANCES 	84
Section 10.13. 	84
UNIVERSITY FIRE SAFETY COSTS LIMITED 	84
Section 10.14. 	84
UNIVERSITY OF NORTH CAROLINA SYSTEM – FUNDS TO REWARD EXCELLENCE IN TEACHING  84
Section 10.15. 	84
UNC OVERHEAD RECEIPTS 	84
Section 10.16. 	84
UNC MANAGEMENT FLEXIBILITY 	84
Section 10.17. 	84
ACADEMIC ENHANCEMENT FUNDS CLARIFICATION 	85
Section 10.18. 	85
JOHN KERNODLE FUND 	85
Section 10.19. 	85
PART XI.  DEPARTMENT OF HUMAN RESOURCES 	85
DISPOSITION OF DISPROPORTIONATE SHARE RECEIPT
CLARIFICATION 	86
Section 11. 	86
DHR STUDY OF PROVIDER REIMBURSEMENT RATES/REPORT 	86
Section 11.1. 	86
RECEIPTS OF FEDERAL FUNDS FOR EMERGENCY ASSISTANCE 	86
Section 11.2. 	86
SET STANDARDS FOR HEALTH CARE QUALITY/ACCESS 	86
Section 11.3. 	86
TRANSFER OF CERTAIN FUNDS AUTHORIZED 	86
Section 11.4. 	86
PROCEDURE FOR AWARD OF HUMAN SERVICES GRANTS 	87
Section 11.5. 	87
MEDICAID 	87
Section 11.6. 	87
NONMEDICAID REIMBURSEMENT CHANGES 	92
Section 11.7. 	92
MEDICAID TRUST FUND 	93
Section 11.8. 	93
MEDICAID GROWTH REDUCTION 	93
Section 11.9. 	93
DHR EMPLOYEES/IN-KIND MATCH 	94
Section 11.10. 	94
FIRE PROTECTION REVOLVING LOAN FUND 	94
Section 11.11. 	94
MEDICAL DATA PROCESSING FUNDS 	94
Section 11.12. 	94
SENIOR CENTER OUTREACH 	94
Section 11.13. 	94
SENIOR CENTER FUNDS 	95
Section 11.14. 	95
IN-HOME AND CAREGIVER SUPPORT FUNDS 	95
Section 11.15. 	95
ADULT CARE HOMES REIMBURSEMENT RATE/ADULT CARE HOME ALLOCATION OF NONFEDERAL COST OF MEDICAID PAYMENTS  95
Section 11.16. 	95
ADULT CARE HOMES REPORT 	95
Section 11.17. 	95
FOSTER CARE ASSISTANCE PAYMENTS 	96
Section 11.18. 	96
AUTHORIZED ADDITIONAL USE OF HIV FOSTER CARE AND ADOPTIVE FAMILY FUNDS  96
Section 11.19. 	96
ADOPTION ASSISTANCE PAYMENTS 	97
Section 11.20. 	97
CHILD PROTECTIVE SERVICES 	97
Section 11.21. 	97
FOOD STAMP ELECTRONIC BENEFITS TRANSFER FUNDS
SPECIFICATIONS 	97
Section 11.22. 	97
WORK FIRST FRAUD CONTROL PROGRAM/DEBT SETOFF/CLIENT PROTECTION 	97
Section 11.23. 	97
ANNUAL REPORT ON CARING PROGRAM FOR CHILDREN, INC. 	98
Section 11.24. 	98
REVIEW OF AUTOMATED COLLECTION AND TRACKING SYSTEM 	98
Section 11.25. 	98
MIXED BEVERAGE TAX FOR AREA MENTAL HEALTH PROGRAMS 	98
Section 11.26. 	98
PHYSICIAN SERVICES 	98
Section 11.27. 	98
CLINICAL SOCIAL WORKER EXEMPTION 	99
Section 11.28. 	99
LIABILITY INSURANCE 	99
Section 11.29. 	99
PRIVATE AGENCY UNIFORM COST FINDING REQUIREMENT 	99
Section 11.30. 	99
CAROLINA ALTERNATIVES 	100
Section 11.31. 	100
WILLIE M. 	100
Section 11.32. 	100
THOMAS S. 	102
Section 11.33. 	102
THOMAS S. LAWSUIT COMPLIANCE 	103
Section 11.34. 	103
THOMAS S./COST CONTAINMENT MEASURES 	104
Section 11.35. 	104
THOMAS S. FUNDS 	104
Section 11.36. 	104
EXTEND ADMINISTRATION OF TRI-COUNTY AREA AUTHORITY 	104
Section 11.37. 	104
LIMITATION ON USE OF SPECIAL ALZHEIMER'S UNIT IN WILSON 	104
Section 11.38. 	104
ALLOCATION OF MENTAL HEALTH, DEVELOPMENTAL DISABILITIES, AND SUBSTANCE ABUSE EXPANSION FUNDS  104
Section 11.39. 	104
SUBSTANCE ABUSE PROGRAM GRANTS 	104
Section 11.40. 	104
EARLY INTERVENTION FUNDING 	105
Section 11.41 	105
ANNUAL EVALUATION OF WILDERNESS CAMP, COACH MENTOR TRAINING, AND GOVERNOR'S ONE-ON-ONE PROGRAMS  105
Section 11.42. 	105
DYS TRAINING SCHOOLS/STUDENT EVALUATIONS 	105
Section 11.43. 	105
COMMUNITY-BASED ALTERNATIVES PARTICIPATION 	105
Section 11.44. 	105
S.O.S. AND FAMILY RESOURCE CENTER GRANT PROGRAMS ADMINISTRATIVE COST LIMITS  106
Section 11.45. 	106
FAMILY SUPPORT/DEAF AND HARD OF HEARING SERVICES
CONTRACT 	106
Section 11.46. 	106
IMPLEMENT ABC'S PLAN FOR RESIDENTIAL SCHOOLS 	106
Section 11.47. 	106
DIVISION OF SERVICES FOR BLIND/PERFORMANCE AUDIT 	107
Section 11.48. 	107
SERVICES FOR BLIND/EXTENDED SERVICE PROVIDER POSITIONS 	107
Section 11.49. 	107
GOVERNOR MOREHEAD SCHOOL/TEXTBOOK FUNDS 	107
Section 11.50. 	107
REIMBURSEMENT AND COMPENSATION OF MEMBERS OF THE NORTH CAROLINA VOCATIONAL REHABILITATION ADVISORY COUNCIL, THE STATEWIDE INDEPENDENT LIVING COUNCIL, AND THE COMMISSION FOR THE BLIND  108
Section 11.51. 	108
CHILD CARE SUBSIDIES 	108
Section 11.52. 	108
CHILD CARE ALLOCATION FORMULA 	110
Section 11.53. 	110
CHILD CARE FUNDS MATCHING REQUIREMENT 	110
Section 11.54. 	110
CHILD DAY CARE REVOLVING LOAN FUND 	110
Section 11.55. 	110
EARLY CHILDHOOD EDUCATION AND DEVELOPMENT INITIATIVES PROGRAM  110
Section 11.56. 	110
MEDICAL RECORDS COPY FEES/SOCIAL SECURITY DISABILITY
CLAIMS 	116
Section 11.57. 	116
PART XII. DEPARTMENT OF AGRICULTURE 	116
MOUNTAIN STATE FAIR TO BECOME ENTERPRISE FUND 	116
Section 12. 	116
TIMBER SALES FOR MAINTENANCE OF STATE FARMS FORESTLAND 	116
Section 12.1. 	116
TRANSFER MARITIME MUSEUM TO CULTURAL RESOURCES 	117
Section 12.2. 	117
WESTERN NORTH CAROLINA DEVELOPMENT ASSOCIATION 	117
Section 12.3. 	117
INCREASE GRAPE GROWERS FUNDS 	117
Section 12.4. 	117
AUTHORIZE THE AGRICULTURAL FINANCE AUTHORITY TO USE THE INTEREST FROM THE RESERVE FOR FARM LOANS FOR ADMINISTRATIVE EXPENSES  118
Section 12.5. 	118
PART XIII.  DEPARTMENT OF ENVIRONMENT, HEALTH, AND NATURAL RESOURCES  119
ENVIRONMENTAL EDUCATION GRANTS 	119
Section 13. 	119
GRASSROOTS SCIENCE PROGRAM 	119
Section 13.1. 	119
ANIMAL WASTE COMPLIANCE PROGRAM REPORT 	120
Section 13.2. 	120
DEFER SOME ANIMAL WASTE MANAGEMENT SYSTEM
REQUIREMENTS 	120
Section 13.3. 	120
ODOR CONTROL STUDY FUNDS 	121
Section 13.4. 	121
SOUTH MOUNTAINS GAMELANDS FUNDS 	121
Section 13.5. 	121
SUPERFUND PROGRAM FUNDS 	121
Section 13.6. 	121
FUNDS FOR VOLUNTARY REMEDIAL ACTIONS 	121
Section 13.7. 	121
POLLUTION PREVENTION AND ENVIRONMENTAL ASSISTANCE TO SMALL BUSINESSES WITH NEED  122
Section 13.8. 	122
PERMIT INFORMATION CENTER 	122
Section 13.9. 	122
AGRICULTURE WASTE RESEARCH REPORTS 	122
Section 13.10. 	122
TOWN FORK CREEK SOIL CONSERVATION PROJECT 	122
Section 13.11. 	122
CITIZEN WATER QUALITY MONITORING PROGRAM 	123
Section 13.12. 	123
ROANOKE/PAMLICO WATER QUALITY FUNDS 	123
Section 13.13. 	123
RESERVE FOR CAPE FEAR RIVER FUNDS 	123
Section 13.14. 	123
WATER QUALITY PERMIT PROGRAMS/RESERVE FUNDS 	124
Section 13.15. 	124
FEDERAL FUNDS FOR WATER QUALITY INDIRECT COSTS USED FOR WATER QUALITY  125
Section 13.16. 	125
REGIONAL WASTEWATER MANAGEMENT 	125
Section 13.17. 	125
CLEAN WATER TRUST FUND/PRIORITIZE BETWEEN SAVINGS RESERVE ACCOUNT AND CLEAN WATER MANAGEMENT TRUST FUND  125
Section 13.18. 	125
PARTNERSHIP FOR THE SOUNDS 	126
Section 13.19. 	126
COMMUNICABLE DISEASE CONTROL AID TO COUNTIES FLEXIBILITY 	126
Section 13.20. 	126
DWI TEST CHANGES 	127
Section 13.21. 	127
STATE TRAINING/ENVIRONMENTAL HEALTH SPECIALISTS 	127
Section 13.22. 	127
EVALUATE SEPTIC TANKS IN THE NEUSE RIVER BASIN 	127
Section 13.23. 	127
MONITOR COASTAL WATER QUALITY 	128
Section 13.24. 	128
REISSUE CERTAIN WASTEWATER PERMITS 	128
Section 13.25. 	128
CHILDHOOD LEAD EXPOSURE CONTROL 	129
Section 13.26. 	129
EXTEND HEART DISEASE AND STROKE PREVENTION TASK FORCE 	129
Section 13.27. 	129
CANCER CONTROL FUNDS 	129
Section 13.28. 	129
OSTEOPOROSIS TASK FORCE 	129
Section 13.29. 	130
IMMUNIZATION PROGRAM FUNDING 	132
Section 13.30. 	132
WIC PROGRAM FUNDS 	132
Section 13.31. 	132
ADOLESCENT PREGNANCY PREVENTION COALITION OF NC/
REPORTING 	133
Section 13.32. 	133
NORTH CAROLINA HEALTHY START FOUNDATION/REPORTING 	134
Section 13.33. 	134
PREVENT BLINDNESS, INC./REPORTING 	134
Section 13.34. 	134
FEDERAL ABSTINENCE EDUCATION FUNDS 	135
Section 13.35. 	135
PART XIV.  DEPARTMENT OF COMMERCE 	135
WORKER TRAINING TRUST FUND APPROPRIATIONS 	135
Section 14. 	135
JOB TRAINING STUDY COMMISSION 	136
Section 14.1. 	136
NC REAL ENTERPRISES REPORTING 	137
Section 14.2. 	137
SPECIAL EMPLOYMENT SECURITY ADMINISTRATION FUND 	138
Section 14.3. 	138
INDUSTRIAL RECRUITMENT COMPETITIVE FUND 	138
Section 14.4. 	138
COUNCIL OF GOVERNMENT FUNDS 	138
Section 14.5. 	138
PETROLEUM OVERCHARGE ATTORNEYS' FEES 	139
Section 14.6. 	139
PETROLEUM OVERCHARGE FUNDS ALLOCATION 	139
Section 14.7. 	140
INDUSTRIAL DEVELOPMENT FUND/LOCAL MATCH 	140
Section 14.8. 	140
INDUSTRIAL DEVELOPMENT FUND 	140
Section 14.9. 	140
REGIONAL COMMISSION REPORTS 	141
Section 14.10. 	141
REGIONAL ECONOMIC DEVELOPMENT COMMISSION ALLOCATIONS 	142
Section 14.11. 	142
TOURISM PROMOTION FUNDS 	142
Section 14.12. 	142
RURAL TOURISM DEVELOPMENT FUNDS 	143
Section 14.13. 	143
WANCHESE SEAFOOD INDUSTRIAL PARK FUNDS 	143
Section 14.14. 	143
FUNDS FOR ECONOMIC DEVELOPMENT 	143
Section 14.15. 	143
TECHNOLOGICAL DEVELOPMENT AUTHORITY REPORT 	144
Section 14.16. 	144
WORLD TRADE CENTER FUNDS 	145
Section 14.17. 	145
CENTER FOR COMMUNITY SELF-HELP FUNDS 	145
Section 14.18. 	145
MCNC 	146
Section 14.19. 	146
BIOTECHNOLOGY CENTER 	147
Section 14.20. 	147
BIOTECHNOLOGY FUNDS FOR MINORITY UNIVERSITIES 	148
Section 14.21. 	148
RURAL ECONOMIC DEVELOPMENT CENTER 	148
Section 14.22. 	148
COMMUNITY DEVELOPMENT INITIATIVE 	151
Section 14.23. 	151
OPPORTUNITIES INDUSTRIALIZATION CENTER FUNDS 	151
Section 14.24. 	151
RECREATION DISTRICT ABC PERMITS 	152
Section 14.25. 	152
GUEST ROOM CABINETS FOR CERTAIN PRIVATE CLUBS 	153
Section 14.26. 	153
PART XV.  JUDICIAL DEPARTMENT 	153
TRANSFER OF EQUIPMENT AND SUPPLY FUNDS 	153
Section 15. 	153
N.C. STATE BAR FUNDS 	153
Section 15.1. 	153
INDIGENT PERSONS' ATTORNEY FEE FUND 	154
Section 15.2. 	154
REPORT ON DISPUTE SETTLEMENT CENTERS 	155
Section 15.3. 	155
COMMUNITY PENALTIES PROGRAM 	156
Section 15.4. 	156
DRUG TREATMENT COURT FUNDS 	156
Section 15.5. 	156
MAKE SENTENCING COMMISSION PERMANENT 	156
Section 15.6. 	156
VICTIM'S RIGHTS AMENDMENT/VICTIM WITNESS ASSISTANTS 	157
Section 15.7. 	157
COMPUTER TRAINING 	157
Section 15.8. 	157
CRIMINAL CASE MANAGEMENT FUNDS 	157
Section 15.9. 	157
RESERVE FOR TECHNOLOGY 	157
Section 15.10. 	158
DRUG COURT STUDY 	158
Section 15.11. 	158
ADDITIONAL ASSISTANT DISTRICT ATTORNEYS/REESTABLISH ASSISTANT DISTRICT ATTORNEY POSITIONS IN DISTRICTS 19B
AND 20 	158
Section 15.12. 	158
ADDITIONAL DISTRICT COURT JUDGES 	159
Section 15.13. 	159
AUTHORIZE ADDITIONAL MAGISTRATES 	162
Section 15.14. 	162
ASSISTANT PUBLIC DEFENDERS 	164
Section 15.15. 	164
JUVENILE RECORDS FOR RECIDIVISM 	164
Section 15.16. 	164
IRMC REVIEW OF INFORMATION TECHNOLOGY PLANS OF THE ADMINISTRATIVE OFFICE OF THE COURTS  165
Section 15.17. 	165
LRC STUDY OF THE ALLOCATION OF JUDICIAL RESOURCES 	166
Section 15.18. 	166
PART XVI.  DEPARTMENT OF CORRECTION 	166
REIMBURSE COUNTIES FOR HOUSING AND EXTRAORDINARY MEDICAL COSTS FOR INMATES, PAROLEES, AND POST-RELEASE SUPERVISEES AWAITING TRANSFER TO STATE PRISON SYSTEM  166
Section 16. 	166
INMATE HOUSING FUNDS 	167
Section 16.1. 	167
EXEMPTION FROM LICENSURE AND CERTIFICATE OF NEED 	167
Section 16.2. 	167
LIMIT USE OF OPERATIONAL FUNDS 	167
Section 16.3. 	168
USE OF FACILITIES CLOSED UNDER GPAC 	168
Section 16.4. 	168
FEDERAL GRANT REPORTING 	168
Section 16.5. 	168
HARRIET'S HOUSE FUNDS/FUNDS SHALL NOT REVERT 	168
Section 16.6. 	168
REPORT ON SUMMIT HOUSE 	169
Section 16.7. 	169
MODIFICATION OF FUNDING FORMULA FOR THE NORTH CAROLINA STATE- COUNTY CRIMINAL JUSTICE PARTNERSHIP ACT  169
Section 16.8. 	169
POST-RELEASE SUPERVISION AND PAROLE COMMISSION/REPORT ON STAFFING REORGANIZATION AND REDUCTION  169
Section 16.9. 	169
FEDERAL MATCHING FUNDS 	169
Section 16.10. 	170
USE OF FEDERAL PRISON CONSTRUCTION GRANT FUNDS 	170
Section 16.11. 	170
SUBSTANCE ABUSE FUNDS 	170
Section 16.12. 	170
REPORT ON DART/DWI PROGRAM AT CHERRY HOSPITAL 	171
Section 16.13. 	171
ADDITIONAL PRISON BEDS/INCREASE THE CRIMINAL PENALTY FOR THE SALE OF CERTAIN CONTROLLED SUBSTANCES/INCREASE THE CRIMINAL PENALTY FOR CERTAIN EMBEZZLEMENT OFFENSES/RECLASSIFY OFFENSE OF ACCESSORY AFTER THE FACT/INCREASE PENALTY FOR VOLUNTARY MANSLAUGHTER FROM A CLASS E FELONY TO A CLASS D FELONY/REQUIRE ACTIVE TIME FOR HABITUAL IMPAIRED DRIVING CONVICTIONS/INCREASE THE PENALTY FOR CERTAIN OFFENSES COMMITTED WHILE A PERSON IS INCARCERATED/ADD TO THE LIST OF AGGRAVATING FACTORS THAT CERTAIN PEOPLE WERE SERIOUSLY INJURED AS A RESULT OF THE OFFENSE/INCREASE THE PENALTY FOR THE ESTABLISHMENT OF PYRAMID DISTRIBUTION PLANS/ESTABLISH THE OFFENSES OF TRESPASS ON PINE STRAW PRODUCTION LAND AND LARCENY OF PINE STRAW/INCREASE THE PENALTY FROM A MISDEMEANOR TO A CLASS H FELONY FOR THE OFFENSES OF FALSELY REPORTING THAT A BOMB OR OTHER DESTRUCTIVE DEVICE MAY EXPLODE AND PERPETRATING A HOAX BY USING A FALSE DESTRUCTIVE DEVICE/ADD TO THE LIST OF AGGRAVATING FACTORS THAT THE OFFENSE WAS COMMITTED IN ASSOCIATION WITH A CRIMINAL STREET GANG/FELONY TO CONCEAL MERCHANDISE BY USING A LEAD-LINED OR ALUMINUM-LINED BAG OR OTHER DEVICE THAT WILL PREVENT THE ACTIVATION OF AN ANTISHOPLIFTING CONTROL DEVICE  172
Section 16.14. 	172
PART XVII.  DEPARTMENT OF JUSTICE 	184
DEPARTMENT OF JUSTICE SALARY FUNDS 	184
Section 17. 	184
SBI FUNDS/SPENDING PRIORITIES 	184
Section 17.1. 	184
SBI USE OF COURT-ORDERED REIMBURSEMENT FUNDS 	184
Section 17.2. 	184
PRIVATE PROTECTIVE SERVICES AND ALARM SYSTEMS LICENSING BOARDS PAY FOR USE OF STATE FACILITIES AND SERVICES  184
Section 17.3. 	184
LIMITS ON COMPUTER SYSTEM UPGRADE 	185
Section 17.4. 	185
CERTAIN LITIGATION EXPENSES TO BE PAID BY CLIENTS 	185
Section 17.5. 	185
REIMBURSEMENT FOR UNC BOARD OF GOVERNORS LEGAL
REPRESENTATION 	185
Section 17.6. 	185
USE OF SEIZED AND FORFEITED PROPERTY TRANSFERRED TO STATE LAW ENFORCEMENT AGENCIES BY THE FEDERAL GOVERNMENT  185
Section 17.7. 	185
DEPARTMENT OF JUSTICE RECORD CHECKS FUNDS AND REPORTS 	186
Section 17.8. 	186
SALARY EQUITY FOR SBI LAW ENFORCEMENT 	186
Section 17.9. 	186
EXTEND EXPIRATION DATE OF THE PROVISION AUTHORIZING ADDITIONAL FICTITIOUS LICENSES AND REGISTRATION PLATES ON PUBLICLY OWNED MOTOR VEHICLES  186
Section 17.10. 	186
PART XVIII.  DEPARTMENT OF CRIME CONTROL AND PUBLIC SAFETY 	186
LEGISLATIVE REVIEW OF DRUG LAW ENFORCEMENT AND OTHER
GRANTS 	187
Section 18. 	187
VICTIMS ASSISTANCE NETWORK FUNDS 	187
Section 18.1. 	187
REPORT ON COMMUNITY SERVICE WORKERS 	187
Section 18.2. 	187
REPORT ON CRIME VICTIMS COMPENSATION FUND 	187
Section 18.3. 	187
PART XIX. GENERAL ASSEMBLY 	188
ANALYSIS OF STATE BUDGET DURING THE INTERIM 	188
Section 19. 	188
HEALTH CARE OVERSIGHT COMMITTEE 	188
Section 19.1. 	188
PART XX.  OFFICE OF THE GOVERNOR 	190
HOME PROGRAM MATCHING FUNDS 	190
Section 20. 	190
FIRE PROTECTION GRANT FUNDS 	190
Section 20.1. 	190
PART XXI.  DEPARTMENT OF SECRETARY OF STATE 	191
INFORMATION RESOURCES MANAGEMENT COMMISSION 	191
Section 21. 	191
PART XXII.  DEPARTMENT OF STATE AUDITOR 	192
ADVICE OF GOVERNMENTAL OPERATIONS ON PRIORITIZING REQUESTS FOR ASSISTANCE  192
Section 22. 	192
PERFORMANCE AUDIT OF SIPS 	192
Section 22.1. 	192
PART XXIII.  DEPARTMENT OF INSURANCE 	193
CONSTRUCTION CODE RECEIPTS 	193
Section 23. 	193
EXPAND USE OF INSURANCE REGULATORY FUND 	193
Section 23.1. 	193
PART XXIV.  DEPARTMENT OF ADMINISTRATION 	193
COMBINE PROGRAMS TO HELP WOMEN AND CHILDREN 	193
Section 24. 	193
PROCUREMENT CARD PILOT PROGRAM 	194
Section 24.1. 	194
STATE HEALTH PLAN PURCHASING ALLIANCE BOARD OPERATING FUNDS REVERT  194
Section 24.2. 	194
GOVERNOR'S ADVOCACY COUNCIL FOR PERSONS WITH DISABILITIES 	194
Section 24.3. 	194
FEES FOR USE OF STATE-OWNED OFFICE SPACE 	195
Section 24.4. 	195
PARKING REVENUES 	195
Section 24.5. 	195
PART XXV.  OFFICE OF STATE CONTROLLER 	195
NORTH CAROLINA INFORMATION HIGHWAY 	195
Section 25. 	195
FUNDS FOR YEAR 2000 CONVERSION OF THE STATE'S COMPUTER
SYSTEM 	195
Section 25.1. 	196
PART XXVI.  DEPARTMENT OF REVENUE 	196
STUDY REVENUE'S STAFF REQUIREMENTS 	196
Section 26. 	196
EXTEND AND MODIFY PORTS TAX CREDIT 	196
Section 26.1. 	196
ALLOW CORPORATE ANNUAL REPORTS TO BE FILED WITH DEPARTMENT OF REVENUE AND TO EXTEND TIME FOR REINSTATEMENT AFTER ADMINISTRATIVE DISSOLUTION  197
Section 26.2. 	197
PART XXVII. DEPARTMENT OF CULTURAL RESOURCES 	202
DEPARTMENT OF CULTURAL RESOURCES RETAIN HISTORICAL PUBLICATIONS RECEIPTS  202
Section 27. 	202
MODIFY THE AREAS OF RESPONSIBILITY OF THE ROANOKE ISLAND COMMISSION  203
Section 27.1. 	203
TRANSFER FIRST FLIGHT CENTENNIAL COMMISSION TO DOT 	203
Section 27.2. 	203
MUSEUM OF HISTORY RESTAURANT 	204
Section 27.3. 	204
FUNDS FOR MUSEUM OF THE ALBEMARLE 	204
Section 27.4. 	204
PROCEDURE FOR AWARD OF CULTURAL RESOURCES GRANTS 	204
Section 27.5. 	204
PART XXVIII. STATE BOARD OF ELECTIONS 	205
STATEWIDE DATA ELECTIONS MANAGEMENT SYSTEM 	205
Section 28. 	205
PART XXIX.  DEPARTMENT OF TRANSPORTATION 	205
GLOBAL TRANSPARK AUTHORITY TO REIMBURSE HIGHWAY FUND FROM FEDERAL SOURCES  205
Section 29. 	205
AIRCRAFT AND FERRY ACQUISITIONS 	206
Section 29.1. 	206
DEPARTMENT OF TRANSPORTATION TO PAY DEPARTMENT OF CORRECTION ONLY FOR ACTUAL MEDIUM CUSTODY INMATE LABOR  206
Section 29.2. 	206
HIGHWAY FUND ALLOCATIONS BY CONTROLLER 	206
Section 29.3. 	206
SMALL URBAN CONSTRUCTION PROGRAM DISCRETIONARY FUNDS 	206
Section 29.4. 	206
USE OF ANNUAL UNRESERVED HIGHWAY FUND CREDIT BALANCE 	207
Section 29.5. 	207
DRIVERS EDUCATION FUNDING 	208
Section 29.6. 	208
BRANCH AGENT REIMBURSEMENT RATE 	208
Section 29.7. 	208
INTERNATIONAL REGISTRATION PLAN BUDGET CODE MERGED INTO VEHICLE REGISTRATION BUDGET CODE  209
Section 29.8. 	209
PRIVATIZATION OF THE SCHOOL BUS DRIVER TRAINING PROGRAM 	209
Section 29.9. 	209
HIGHWAY FUND LIMITATIONS ON OVEREXPENDITURES 	210
Section 29.10. 	210
DEPARTMENT OF TRANSPORTATION EXEMPTION FROM GENERAL STATUTES FOR EXPERIMENTAL PROJECT–CONGESTION MANAGEMENT  210
Section 29.11. 	211
RESURFACED ROADS MAY BE WIDENED 	211
Section 29.12. 	211
CASH FLOW HIGHWAY FUND AND HIGHWAY TRUST FUND
APPROPRIATIONS 	211
Section 29.13. 	211
F.E.M.A. RECEIVABLES 	211
Section 29.14. 	211
FEASIBILITY STUDY OF DRIVERS EDUCATION TESTING 	212
Section 29.15. 	212
GLOBAL TRANSPARK AUTHORITY BUSINESS PLAN FOR DISADVANTAGED BUSINESS PARTICIPATION  212
Section 29.16. 	212
USE OF PUBLIC TRANSPORTATION AND PASSENGER RAIL FUNDING 	212
Section 29.17. 	212
FEDERAL FUNDS FOR PUBLIC TRANSPORTATION IMPROVEMENTS 	212
Section 29.18. 	213
BIENNIAL REPORT ON MAINTENANCE REQUIREMENTS 	213
Section 29.19. 	213
GRADUATED DRIVERS LICENSE PROGRAM 	213
Section 29.20. 	213
OREGON INLET STABILIZATION PROJECT 	214
Section 29.21. 	214
PART XXX. SALARIES AND BENEFITS 	217
GOVERNOR AND COUNCIL OF STATE/SALARY INCREASES 	217
Section 30. 	217
NONELECTED DEPARTMENT HEADS/SALARY INCREASES 	217
Section 30.1. 	217
CERTAIN EXECUTIVE BRANCH OFFICIALS/SALARY INCREASES 	217
Section 30.2. 	217
DEPARTMENT OF HUMAN RESOURCES SECRETARY SALARY FLEXIBILITY 	218
Section. 30.3. 	218
SALARIES OF MEMBERS AND CHAIR OF THE INDUSTRIAL
COMMISSION 	218
Section 30.4. 	218
DEPARTMENT OF ENVIRONMENT, HEALTH, AND NATURAL RESOURCES LAW ENFORCEMENT SALARIES EQUALIZED  219
Section 30.5. 	219
TEMPORARY SALES TAX TRANSFER FOR WILDLIFE RESOURCES COMMISSION SALARY INCREASES  219
Section 30.6. 	219
JUDICIAL BRANCH OFFICIALS/SALARY INCREASES 	219
Section 30.7. 	219
CLERKS OF SUPERIOR COURT/SALARY INCREASES 	220
Section 30.8. 	220
GENERAL ASSEMBLY PRINCIPAL CLERKS/SALARY INCREASES 	220
Section 30.9. 	220
SERGEANT-AT-ARMS AND READING CLERKS 	220
Section 30.10. 	220
LEGISLATIVE EMPLOYEES/SALARY INCREASES 	221
Section 30.11. 	221
COMMUNITY COLLEGES PERSONNEL/SALARY INCREASES 	221
Section 30.12. 	221
UNIVERSITY OF NORTH CAROLINA SYSTEM - EPA SALARY INCREASES 	221
Section 30.13. 	221
MOST STATE EMPLOYEES/SALARY INCREASES 	221
Section 30.14. 	221
ALL STATE-SUPPORTED PERSONNEL 	222
Section 30.15. 	222
SALARY ADJUSTMENT FUND 	223
Section 30.16. 	223
1997 RETIREMENT BENEFITS ACT 	223
Section 30.17. 	223
SALARY-RELATED CONTRIBUTIONS/EMPLOYERS 	231
Section 30.18. 	231
INCREASE THE MONTHLY BENEFITS FROM THE NORTH CAROLINA FIREMEN'S AND RESCUE SQUAD WORKERS' PENSION FUND  231
Section 30.19. 	231
RETIREMENT SYSTEM ADMINISTRATIVE EXPENSES TO COMPLY WITH SUPREME COURT DECISIONS  233
Section 30.20. 	233
EXTEND SUNSET ON FICA SAVINGS USE 	233
Section 30.21. 	233
PART XXXI. GENERAL CAPITAL APPROPRIATIONS/PROVISIONS 	233
INTRODUCTION 	233
Section 31. 	233
CAPITAL APPROPRIATIONS/GENERAL FUND 	233
Section 31.1. 	233
CAPITAL APPROPRIATIONS/HIGHWAY FUND 	236
Section 31.2. 	236
EXPENDITURE OF FUNDS FROM RESERVE FOR REPAIRS AND
RENOVATIONS 	236
Section 31.3. 	236
HISTORIC SITES REPAIRS AND RENOVATIONS FUNDS 	237
Section 31.4. 	237
WATER RESOURCES DEVELOPMENT PROJECTS FUNDS 	237
Section 31.5. 	237
HIGHWAY PATROL–UNDERGROUND FUEL TANK REMOVAL AND REMEDIATION FUNDS  239
Section 31.6. 	239
PROCEDURES FOR DISBURSEMENT 	239
Section 31.7. 	239
RESERVE FOR ADVANCE PLANNING 	239
Section 31.8. 	239
ENCUMBERED APPROPRIATIONS AND PROJECT RESERVE FUND 	240
Section 31.9. 	240
PROJECT COST INCREASE 	240
Section 31.10. 	240
NEW PROJECT AUTHORIZATION 	240
Section 31.11. 	240
ADVANCE PLANNING OF CAPITAL IMPROVEMENT PROJECTS 	240
Section 31.12. 	240
APPROPRIATIONS LIMITS/REVERSION OR LAPSE 	241
Section 31.13. 	241
PART XXXII.  MISCELLANEOUS PROVISIONS 	241
EXECUTIVE BUDGET ACT APPLIES 	241
Section 32. 	241
COMMITTEE REPORT 	241
Section 32.1. 	241
MOST TEXT APPLIES ONLY TO 1997-99 	242
Section 32.2. 	242
EFFECT OF HEADINGS 	242
Section 32.3. 	242
SEVERABILITY CLAUSE 	242
Section 32.4. 	242
EFFECTIVE DATE 	242
Section 32.5. 	242

PART II.  CURRENT OPERATIONS/GENERAL FUND

Section 2.  Appropriations from the General Fund of the State for the maintenance of the State departments, institutions, and agencies, and for other purposes as enumerated are made for the biennium ending June 30, 1999, according to the following schedule:

Current Operations - General Fund	1997-98	1998-99

General Assembly	$   31,226,277	$  34,642,598

Judicial Department	330,494,045	327,026,897

Office of the Governor
01.	Office of the Governor	5,338,531	5,248,662
02.	Office of State Budget
and Management	8,798,018	6,980,838
03.	Office of State Planning	1,802,450	1,815,850
04.	Housing Finance Agency	7,300,000	2,300,000

Office of the Lieutenant Governor	609,230	609,390

Department of Secretary of State	6,553,012	5,310,680

Department of State Auditor	10,184,864	10,207,231

Department of State Treasurer	18,608,824	18,591,281

Department of Public Education	4,494,511,060	4,474,255,103

Department of Justice	65,645,494	65,251,598

Department of Administration	57,570,275	58,050,143

Department of Agriculture	51,352,521	49,658,593

Department of Labor	15,888,309	15,808,138

Department of Insurance	23,340,279	23,388,786

Department of Transportation	10,609,854	11,246,445

Department of Environment, Health, and
Natural Resources	287,567,592	253,734,207

Office of Administrative Hearings	2,357,389	2,357,389

Rules Review Commission	521,892	273,441

Department of Human Resources
01.	Office of the Secretary	36,756,324	32,522,064
02.	Division of Aging	23,391,916	22,695,592
03.	Division of Child Development	145,295,712	148,361,531
04.	Division of Services for the
Deaf and Hard of Hearing	27,917,978	27,871,807
05.	Division of Social Services	178,018,722	182,638,757
06.	Division of Medical Assistance	1,214,561,594	1,365,738,621
07.	Division of Services
for the Blind	15,365,511	15,383,493
08.	Division of Mental Health,
Developmental Disabilities, and
Substance Abuse Services	525,288,587	545,054,856
09.	Division of Facility Services	9,580,211	8,981,543
10.	Division of Vocational
Rehabilitation Services	32,534,755	32,834,876
11.	Division of Youth Services	87,480,359	89,215,373
Total Department of Human Resources	2,296,191,669	2,471,298,513

Department of Correction	827,096,649	871,187,159

Department of Commerce
01.	Commerce	46,799,494	39,822,339
02.	Biotechnology Center	15,164,396	7,664,396
03.	MCNC	4,500,000	2,500,000
04.	Rural Economic Development
Center	8,520,000	5,920,000
05.	State Aid to non-State
Entities	10,155,000	-0-   

Department of Revenue	67,321,074	68,399,075

Department of Cultural Resources	65,190,328	56,198,672

Department of Crime Control
and Public Safety	33,496,663	33,506,097

Office of the State Controller	20,892,773	10,705,706

University of North Carolina - Board
of Governors
01.	General Administration	37,443,621	37,490,589
02.	University Institutional
Programs	97,214,520	96,928,593
03.	Related Educational Programs	66,719,781	68,927,746
04.	University of North Carolina
at Chapel Hill
a.  Academic Affairs	162,467,906	164,447,736
b.  Health Affairs	132,016,759	132,683,647
c.  Area Health Education
    Centers	38,509,297	38,490,957
05.	North Carolina State University
at Raleigh
a.  Academic Affairs	211,354,779	212,008,650
b.  Agricultural Research Service	41,079,652	41,103,356
c.  Cooperative Extension Service	32,591,088	32,583,657
06.	University of North Carolina at
Greensboro	62,615,773	63,259,089
07.	University of North Carolina at
Charlotte	68,572,932	69,126,175
08.	University of North Carolina at
Asheville	20,148,640	20,203,241
09.	University of North Carolina at
Wilmington	38,963,548	39,379,132
10.	East Carolina University
a.  Academic Affairs	85,275,602	85,913,647
b.  Division of Health Affairs	41,088,406	41,131,370
11.	North Carolina Agricultural and
Technical State University	49,636,690	50,018,152
12.	Western Carolina University	43,611,199	43,669,964
13.	Appalachian State University	62,165,987	62,475,339
14.	The University of North
Carolina at Pembroke	18,657,889	18,532,989
15.	Winston-Salem State University	20,085,918	20,107,862
16.	Elizabeth City State
University	18,063,568	18,081,627
17.	Fayetteville State University	23,655,086	23,823,586
18.	North Carolina Central
University	35,630,746	36,325,468
19.	North Carolina School of the
Arts	11,842,424	11,889,783
20.	North Carolina School of
Science and Mathematics	9,519,375	9,582,725
21.	UNC Hospitals at Chapel Hill	42,004,841	42,004,841
Total University of North
Carolina - Board of Governors	1,470,936,027	1,480,189,921

Department of Community Colleges	520,210,489	500,518,415

State Board of Elections	1,552,787	2,135,381

Contingency and Emergency	1,125,000	1,125,000

Reserve for Compensation Increase	306,139,421	306,139,421

Reserve for Salary Adjustments	9,073,829	9,573,829

Debt Service	156,436,663	209,371,883

Reserve for Structured Sentencing	400,000	400,000

Postage Reduction	(300,000)	(300,000)

Debt Service - Federal	1,155,948	1,155,948

GRAND TOTAL CURRENT OPERATIONS –
GENERAL FUND	$11,292,338,126	$11,444,269,025

PART III.  CURRENT OPERATIONS AND EXPANSION/HIGHWAY FUND

Section 3.  Appropriations from the Highway Fund of the State for the maintenance and operation of the Department of Transportation, and for other purposes as enumerated, are made for the biennium ending June 30, 1999, according to the following schedule:

Current Operations - Highway Fund	1997-98	1998-99  
Department of Transportation
01.	Administration	$   57,934,614	$   58,109,718
02.	Operations	34,667,27834,723,375
03.	Construction and Maintenance
a.	Construction
(01)	Primary Construction	  -    	-    
(02)	Secondary Construction	80,656,000	83,283,000
(03)	Urban Construction	14,000,000	14,000,000
(04)	Access and Public
Service Roads	2,000,000	2,000,000
(05)	Discretionary Fund	10,000,000	10,000,000
(06)	Spot Safety Construction	9,100,000	9,100,000
b.	State Funds to Match Federal
Highway Aid	27,329,255	36,112,802
c.	State Maintenance	455,042,811	443,575,794
d.	Ferry Operations	18,098,290	18,098,290
e.	Capital Improvements	12,100,000	 0
f.	State Aid to Municipalities	80,656,000	83,283,000
g.	State Aid for Public
Transportation & Railroads	42,846,921	29,446,921
h.	OSHA - State	925,000	425,000
04.	Governor's Highway Safety Program	311,609	312,080
05.	Division of Motor Vehicles	89,841,542	89,755,363
06.	Reserves and Transfers	  236,277,924	  232,400,394
GRAND TOTAL CURRENT OPERATIONS
AND EXPANSION	$1,171,787,244	$1,144,625,737

PART IV.  HIGHWAY TRUST FUND

Section 4.  Appropriations from the Highway Trust Fund are made for the fiscal biennium ending June 30, 1999, according to the following schedule:

Highway Trust Fund	1997-98	1998-99  
01.	Intrastate System	$381,880,586	$397,487,432
02.	Secondary Roads Construction	80,411,583	82,983,836
03.	Urban Loops	145,502,060	151,443,802
04.	State Aid - Municipalities	40,068,181	41,705,703
05.	Program Administration	25,918,895	27,072,575
06.	Transfer to General Fund	170,000,000	170,000,000
GRAND TOTAL - HIGHWAY TRUST FUND	$843,781,305	$870,693,348

PART V. BLOCK GRANT FUNDS

Requested by:   Senator Martin of Guilford
DHR BLOCK GRANT PROVISIONS
Section 5.  (a)	Appropriations from federal block grant funds are made for the fiscal year ending June 30, 1998, according to the following schedule:

COMMUNITY SERVICES BLOCK GRANT

01.	Community Action Agencies	$ 11,546,034
02.	Limited Purpose Agencies	641,446

03.	Department of Human Resources
to administer and monitor
the activities of the
Community Services Block Grant	641,446

TOTAL COMMUNITY SERVICES BLOCK GRANT	$ 12,828,926

SOCIAL SERVICES BLOCK GRANT

01.	County departments of social services	$ 31,121,352

02.	Allocation for in-home services provided
by county departments of
social services	2,101,113

03.	Division of Mental Health, Developmental
Disabilities, and Substance Abuse Services	4,764,124

04.	Division of Services for the Blind	3,205,711

05.	Division of Youth Services	950,674

06.	Division of Facility Services	343,341

07.	Division of Aging - Home and Community
Care Block Grant	1,915,234

08.	Day care services	15,694,900

09.	Division of Vocational Rehabilitation - 
United Cerebral Palsy	71,484

10.	State administration	1,954,237

11.	Child Medical Evaluation Program	238,321

12.	Adult day care services	599,551

13.	County departments of social services for
child abuse/prevention and
permanency planning	394,841

14.	Transfer to Preventive Health
Block Grant for emergency medical services	213,128

15.	Allocation to Preventive Health Block
Grant for AIDS education, counseling,
and testing	66,939

16.	Transfer to Department of Administration
for the N.C. Commission of Indian Affairs
In-Home Services Program for the elderly	203,198

17.	Division of Vocational Rehabilitation -
Easter Seals Society	116,779

18.	UNC-CH CARES Program for training and
consultation services	247,920

19.	Transfer to Department of Environment, Health,
and Natural Resources for the Adolescent
Pregnancy Prevention Program	239,261

20.	Office of the Secretary - Office of Economic
Opportunity for N.C. Senior Citizens'
Federation for outreach services to
low-income elderly persons	41,302

21.	County departments of social services
for foster care workers	1,000,000

22.	Division of Mental Health, Developmental
Disabilities, and Substance Abuse
Services for juvenile offenders	1,182,280

TOTAL SOCIAL SERVICES BLOCK GRANT	$ 66,665,690

LOW-INCOME ENERGY BLOCK GRANT

01.	Energy Assistance Programs	$ 6,284,055

02.	Crisis Intervention	6,393,661

03.	Administration	1,428,386

04.	Weatherization Program	4,128,479

05.	Indian Affairs	33,022

TOTAL LOW-INCOME ENERGY BLOCK GRANT	$ 18,267,603

MENTAL HEALTH SERVICES BLOCK GRANT

01.	Provision of community-based
services in accordance with the
Mental Health Study Commission's
Adult Severe and Persistently
Mentally Ill Plan	$ 3,794,179

02.	Provision of community-based
services in accordance with the
Mental Health Study Commission's
Child Mental Health Plan	1,819,931

03.	Administration	624,231

TOTAL MENTAL HEALTH SERVICES BLOCK GRANT	$ 6,238,341

BLOCK GRANT FOR THE PREVENTION AND 
TREATMENT OF SUBSTANCE ABUSE

01.	Provision of community-based
alcohol and drug abuse services,
tuberculosis services, and services
provided by the Alcohol, Drug Abuse
Treatment Centers	$ 10,935,939

02.	Continuation of services for
pregnant women and women
with dependent children	5,060,076

03.	Continuation and expansion of
services to IV drug abusers and others
at risk for HIV diseases	4,836,407

04.	Provision of services in accordance with
the Mental Health Study Commission's
Child and Adolescent Alcohol and Other
Drug Abuse Plan	5,964,093

05.	Former SSI recipient services	1,123,757

06.	Gender specific services and Employee
Assistance Program services for Work First
recipients	893,811

07.	Juvenile offender services and substance
abuse pilot	300,000

08.	Administration	1,841,742

TOTAL BLOCK GRANT FOR PREVENTION
AND TREATMENT OF SUBSTANCE ABUSE	$ 30,955,825

CHILD CARE AND DEVELOPMENT BLOCK GRANT

01.	Child care services	$ 17,581,167

02.	Administrative expenses and quality
and availability initiatives	 488,366

03.	Before and After School Child Care Programs
and Early Childhood Development Programs	1,750,000

04.	Quality improvement activities	740,000

TOTAL CHILD CARE AND DEVELOPMENT
BLOCK GRANT	$ 20,559,533

CHILD CARE AND DEVELOPMENT FUND BLOCK GRANT

01.	Child care subsidies	$ 99,845,334

02.	Quality and availability initiatives	4,388,806

03.	Administrative expenses	5,486,007

04.	Transfer from TANF Block Grant for 
child care subsidies and support	27,034,556

TOTAL CHILD CARE AND DEVELOPMENT FUND
BLOCK GRANT	$136,754,703

TEMPORARY ASSISTANCE TO NEEDY FAMILIES
BLOCK GRANT 

01.	Work First Cash Assistance	$262,747,194

02.	Block Grants to county departments
of social services (partial funding)	19,281,882

03.	Transfer to Child Care and Development
Fund for child care subsidies to replace
State funds used for Smart Start and 
other expansion	23,276,545

04.	Transfer to the Child Care and 
Development Fund for Work First child
care subsidies	3,758,011

05.	Allocation to the Division of Mental
Health, Developmental Disabilities, and
Substance Abuse Services for Work First
substance abuse treatment services	1,000,000

06.	Allocation to the Division of Social
Services for evaluation	700,000

07.	Allocation to the Division of Social
Services for Community College
collaboration	500,000

08.	Allocation to the Division of Social
Services for staff development	500,000

09.	Allocation to the Department of 
Environment, Health, and Natural
Resources for the reduction of
out-of-wedlock births	1,600,000

10.	Allocation to the Division of Mental
Health, Developmental Disabilities, and
Substance Abuse Services for screening,
diagnostic, and counseling services
related to substance abuse services
for Work First participants	2,300,000

11.	Transfer to the Social Services Block Grant
for substance abuse services for juveniles	1,182,280

12.	Carryforward to Fiscal Year 1998-99	565,203

TOTAL TEMPORARY ASSISTANCE TO NEEDY FAMILIES
BLOCK GRANT	$317,411,115

(b)	Decreases in Federal Fund Availability
If federal funds are reduced below the amounts specified above after the effective date of this act, then every program in each of the federal block grants listed above shall be reduced equally to total the reduction in federal funds.
(c)	Increases in Federal Fund Availability - Block Grant Funds Except the Social Services Block Grant
Any block grant funds appropriated by the United States Congress in addition to the funds specified in this act shall be expended by the Department of Human Resources, provided that the resultant increases are in accordance with federal block grant requirements, by allocating the additional funds pro rata among the programs funded in this section.
(d)	Increases in Federal Fund Availability - Social Services Block Grant
Any block grant funds appropriated by the United States Congress in addition to the funds specified in this act shall be expended by the Department of Human Resources, provided the resultant increases are in accordance with federal block grant requirements, as follows:
(1)	Fifty percent (50%) of the funds shall be allocated to the county departments of social services; and
(2)	The remaining fifty percent (50%) shall be allocated pro rata among the programs funded in this section.
All these budgeted increases shall be reported to the Joint Legislative Commission on Governmental Operations and to the Fiscal Research Division.
(e)  If funds appropriated through the Child Care and Development Fund, which includes the Child Care and Development Block Grant, for any program cannot be obligated or spent in that program within the obligation or liquidation periods allowed by the federal grants, the Department may move funds to other programs, in accordance with federal requirements of the grant, in order to use the federal funds fully.
(f)  Funding for the Weatherization Program from the Low-Income Energy Block Grant is contingent upon approval of a federal waiver to increase funding.  In the event the federal waiver is not approved, the funds appropriated for the Weatherization Program will be reduced to fifteen percent (15%) of the Block Grant, and excess funds will be transferred to the Crisis Intervention Program.
(g)  The Department of Environment, Health, and Natural Resources and the county departments of public health shall consult with the Department of Human Resources and the county departments of social services on the expenditure of the funds allocated to the Department of Environment, Health, and Natural Resources from the Temporary Assistance to Needy Families Block Grant to ensure that those funds are used for meeting the goal of reducing out-of-wedlock births.
(h)  The Department of Human Resources, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, shall consult with the county departments of social services and the area mental health programs on the expenditure of funds allocated to the Department of Human Resources from the Temporary Assistance to Needy Families Block Grant to ensure that those funds are used for substance abuse services.
(i)  The Department of Human Resources, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, shall consult with the Department of Human Resources, Division of Youth Services, the Administrative Office of the Courts, local juvenile court counselors, and local area mental health programs on the expenditure of the funds allocated to the Department of Human Resources from the Social Services Block Grant to ensure that those funds are used for substance abuse services for juveniles.
(j)  By January 1, 1998, the Department of Human Resources shall report to the Senate and House Appropriations Subcommittees on Human Resources on the process undertaken for determining how the funds described in subsections (g), (h), and (i) of this section will be allocated. 
(k)  The Department of Human Resources shall administer Community Service Block Grant Funds for community action agencies and the General Fund base budget reduction for community action agencies so that no community action agency receives less from State and federal funds for the 1997-98 fiscal year than it received for the 1996-97 fiscal year.

NER BLOCK GRANT FUNDS
Section 5.1.  (a) Appropriations from federal block grant funds are made for the fiscal year ending June 30, 1998, according to the following schedule:

COMMUNITY DEVELOPMENT BLOCK GRANT

01.	State Administration	$  1,000,000

02.	Urgent Needs and Contingency	   2,177,500

03.	Community Empowerment	   2,000,000

04.	Economic Development	   8,710,000

05.	Community Revitalization	  29,000,000

06.	State Technical Assistance	     450,000

07.	Housing Development	1,662,500

TOTAL COMMUNITY DEVELOPMENT
BLOCK GRANT - 1998 Program Year	$ 45,000,000

MATERNAL AND CHILD HEALTH BLOCK GRANT

01.	Healthy Mother/Healthy Children
	Block Grants to Local Health
	Departments	$ 9,838,074

02.	High Risk Maternity Clinic Services,
	Perinatal Education and Training, 
	Childhood Injury Prevention,
	Public Information and Education, and
	Technical Assistance to Local Health
	Departments	1,722,869

03.	Services to Children With Special Health
	Care Needs	4,954,691

TOTAL MATERNAL AND CHILD
HEALTH BLOCK GRANT	$ 16,515,634

PREVENTIVE HEALTH SERVICES BLOCK GRANT

01.	Emergency Medical Services	$     213,128

02.	Hypertension Programs	      711,813

03.	Statewide Health Promotion Programs	    2,777,924

04.	Dental Health for Fluoridation
	of Water Supplies	      224,170

05.	Rape Prevention and Rape
	Crisis Programs	      187,110

06.	Rape Prevention and Rape Education	935,552

07.	AIDS/HIV Education, Counseling,
	and Testing	       66,939

08.	Office of Minority Health and
	Minority Health Council	      186,478

09.	Administrative and Indirect Cost	217,762

TOTAL PREVENTIVE HEALTH SERVICES BLOCK GRANT	$   5,520,876

(b)	Decreases in Federal Fund Availability
Decreases in federal fund availability shall be allocated as follows:
(1)	For the Community Development Block Grants – If federal funds are reduced below the amounts specified above after the effective date of this act, then every program in each of these federal block grants shall be reduced by the same percentage as the reduction in federal funds.
(2)	For the Maternal and Child Health and Preventive Health Services federal block grant – If federal funds are reduced less than ten percent (10%) below the amounts specified above after the effective date of this act, then every program in the Maternal and Child Health and in the Preventive Health Services block grants shall be reduced by the same percentage as the reduction in federal funds. If federal funds are reduced by ten percent (10%) or more below the amounts specified above after the effective date of this act, then for the Maternal and Child Health and the Preventive Health Services block grants the Department of Environment, Health, and Natural Resources shall allocate the decrease in funds after considering the effectiveness of the current level of services.
(c)	Increases in Federal Fund Availability
Any block grant funds appropriated by the Congress of the United States in addition to the funds specified in this act shall be expended as follows:
(1)	For the Community Development Block Grant – Each program category under the Community Development Block Grant shall be increased by the same percentage as the increase in federal funds.
(2)	For the Maternal and Child Health Block Grant – Thirty percent (30%) of these additional funds shall be allocated to services for children with special health care needs and seventy percent (70%) shall be allocated to local health departments to assist in the reduction of infant mortality.
(3)	For the Preventive Health Block Grants –  These additional funds may be budgeted by the appropriate department, with the approval of the Office of State Budget and Management, after considering the effectiveness of the current level of services and the effectiveness of services to be funded by the increase, provided the resultant increases are in accordance with federal block grant requirements and are within the scope of the block grant plan approved by the General Assembly.
(d)	Changes to budgeted allocations to the Maternal and Child Health and the Preventive Health Services block grants due to increases or decreases in federal funds shall be reported to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division within 30 days of the allocation.  All other increases shall be reported to the Joint Legislative Commission on Governmental Operations and to the Director of the Fiscal Research Division.
(e)  Limitations on Community Development Block Grant Funds
Of the funds appropriated in this section for the Community Development Block Grant, the following shall be allocated in each category for each program year: up to one million dollars ($1,000,000) may be used for State administration; up to two million one hundred seventy-seven thousand five hundred dollars ($2,177,500) may be used for Urgent Needs and Contingency; up to two million dollars ($2,000,000) may be used for Community Empowerment; up to eight million seven hundred ten thousand dollars ($8,710,000) may be used for Economic Development; not less than twenty-nine million dollars ($29,000,000) shall be used for Community Revitalization; up to four hundred fifty thousand dollars ($450,000) may be used for State Technical Assistance; up to one million six hundred sixty-two thousand five hundred ($1,662,500) may be used for Housing Development.  If federal block grant funds are reduced or increased by the Congress of the United States after the effective date of this act, then these reductions or increases shall be allocated in accordance with subsection (b) or (c) of this section, as applicable.  If funds are available from program income, deobligated funds, or urgent needs and contingency, then the Department of Commerce shall use up to five hundred thousand dollars ($500,000) for an Infrastructure Demonstration Project that will focus on innovative approaches to straight piping and pit privy problems.
(f) Limitations on Preventive Health Service Block Grant Funds
Twenty-five percent (25%) of funds allocated for Rape Prevention and Rape Education shall be allocated as grants to nonprofit organizations to provide rape prevention and education programs targeted for middle, junior high, and high school students.  Any rape crisis center or other nonprofit organization that receives funds under this section to provide rape education and rape prevention programs to schools shall give priority to schools with an abstinence-based sex education curriculum.

PART VI.  GENERAL FUND AND HIGHWAY FUND AVAILABILITY STATEMENTS

GENERAL FUND AVAILABILITY STATEMENTS
Section 6.  The General Fund and availability used in developing the 1997-99 budget is as shown below:

Budget Reform Statement
	($ Millions)
(1)	Composition of the 1997-98 beginning availability:
a.	Revenue collections unaddressed in 1996-97	$  85.0
b.	Revenue collections in 1996-97 in excess of
  authorized estimates	228.6
c.	Unexpended appropriations during
  1996-97 (reversions)	151.0
d.	Adjustment for Emergency Appropriation to
  Community Colleges	   (4.7)
Subtotal	459.9
e.	Transfer to Savings Reserve	(115.0)
f.	Transfer to Reserve for Repairs
  and Renovations	(135.0)
g.	Transfer to Clean Water Management Reserve	(30.0)
h.	Appropriation Adjustment in 1996-97	     .3
Ending Fund Balance	180.2

	($ Millions)	($ Millions)
	  1997-98 	  1998-99
(2)	Beginning Unrestricted Fund Balance	180.2
(3)	Revenues Based on Existing Tax
  Structure	11,089.7	11,754.2
(4)	Tax Changes:
H57 - Nonresident Withholding	8.5	10.0
H59 - Internal Revenue Code Update	(8.5)	(16.8)
S323 - Historic Rehabilitation Tax Credit	(0.1)	(0.1)
H260 - Conservation Tax Credit	(3.2)
S93 - Ports Tax Credit        	   (1.5)
(5)	Court Fee Increases	13.9	15.1
(6)	Insurance Regulatory Charge	3.1	3.1
(7)	Utilities Regulatory Charge	(0.1)	(0.1)
(8)	Secretary of State - Fee Increase	1.7	1.7
(9)	Treasurer's Banking Fees	.1	.1

(10)	Local Sales Tax - Local Government 
Commission	.1	.1
(11)	Revenue - Corporate Filing Charge	.3	.3
(12)	Interest on Bond Proceeds	35.0	-
(13)	Local Government Payments - Clean
  Water Bonds	4.1	4.0
(14)	Disproportionate Share Receipts	83.0	83.0
(15)	Highway Fund Transfer	12.6	13.4
(16)	Revenue Assessments for additional
  Interstate Auditors	2.6	7.9
(17)	State Health Plan Purchasing Alliance
  Board - Transfer Cash Balance	0.6
(18)	Earmarked Refunds for
  Federal Retirees	  (35.5)	  (35.5)

  Total Availability	$11,391.3	$11,835.7

Requested by:  Senators Plyler, Perdue, Odom
HIGHWAY FUND AVAILABILITY
Section 6.1.  The Highway Fund appropriations availability used in developing the 1997-99 Highway Fund budget is shown below:
	1997-98  	1998-99  
Beginning Credit Balance	$   46,835,492	$            -     
Estimated Revenue	1,124,951,752	1,144,625,737

Total Highway Fund Availability	$1,171,787,244	$1,144,625,737

PART VII.  GENERAL PROVISIONS

Requested by:  Senators Odom, Plyler, Perdue
SPECIAL FUNDS, FEDERAL FUNDS, AND DEPARTMENTAL RECEIPTS/AUTHORIZATION FOR EXPENDITURES
Section 7.  There is appropriated out of the cash balances, federal receipts, and departmental receipts available to each department, sufficient amounts to carry on authorized activities included under each department's operations.  All these cash balances, federal receipts, and departmental receipts shall be expended and reported in accordance with provisions of the Executive Budget Act, except as otherwise provided by statute, and shall be expended at the level of service authorized by the General Assembly.  If the receipts, other than gifts and grants that are unanticipated and are for a specific purpose only, collected in a fiscal year by an institution, department, or agency exceed the receipts certified for it in General Fund Codes or Highway Fund Codes, then the Director of the Budget shall decrease the amount he allots to that institution, department, or agency from appropriations from that Fund by the amount of the excess, unless the Director of the Budget finds that the appropriations from the Fund are necessary to maintain the function that generated the receipts at the level anticipated in the certified Budget Codes for that Fund.  Funds that become available from overrealized receipts in General Fund Codes and Highway Fund Codes, other than gifts and grants that are unanticipated and are for a specific purpose only, shall not be used for new permanent employee positions or to raise the salary of existing employees except:
(1)	As provided in G.S. 116-30.1, 116-30.2, 116-30.3, 116-30.4, or 143-27; or
(2)	If the Director of the Budget finds that the new permanent employee positions are necessary to maintain the function that generated the receipts at the level anticipated in the certified budget codes for that Fund.  The Director of the Budget shall notify the President Pro Tempore of the Senate, the Speaker of the House of Representatives, the chairmen of the appropriations committees of the Senate and the House of Representatives, and the Fiscal Research Division of the Legislative Services Office that he intends to make such a finding at least 10 days before he makes the finding.  The notification shall set out the reason the positions are necessary to maintain the function.
The Office of State Budget and Management shall report to the Joint Legislative Commission on Governmental Operations and to the Fiscal Research Division of the Legislative Services Office within 30 days after the end of each quarter the General Fund Codes or Highway Fund Codes that did not result in a corresponding reduced allotment from appropriations from that Fund.
The Director of the Budget shall develop necessary budget controls, regulations, and systems to ensure that these funds and other State funds subject to the Executive Budget Act, are not spent in a manner which would cause a deficit in expenditures.
Pursuant to G.S. 143-34.2, State departments, agencies, institutions, boards, or commissions may make application for, receive, or disburse any form of non-State aid.  All non-State monies received shall be deposited with the State Treasurer unless otherwise provided by State law.  These funds shall be expended in accordance with the terms and conditions of the fund award that are not contrary to the laws of North Carolina.

Requested by:  Senators Odom, Plyler, Perdue
INSURANCE AND FIDELITY BONDS
Section 7.1.  All insurance and all official fidelity and surety bonds authorized for the several departments, institutions, and agencies shall be effected and placed by the Insurance Department, and the cost of placement shall be paid by the affected department, institution, or agency with the approval of the Insurance Commissioner.

Requested by:  Senators Odom, Plyler, Perdue
CONTINGENCY AND EMERGENCY FUND ALLOCATION
Section 7.2.  Of the funds appropriated in this act to the Contingency and Emergency Fund, the sum of nine hundred thousand dollars ($900,000) for the 1997-98 fiscal year and the sum of nine hundred thousand dollars ($900,000) for the 1998-99 fiscal year shall be designated for emergency allocations, which are for the purposes outlined in G.S. 143-23(a1)(3), (4), and (5).  Two hundred twenty-five thousand dollars ($225,000) for the 1997-98 fiscal year and two hundred twenty-five thousand dollars ($225,000) for the 1998-99 fiscal year shall be designated for other allocations from the Contingency and Emergency Fund.

Requested by:  Senators Odom, Plyler, Perdue
AUTHORIZED TRANSFERS
Section 7.3.  The Director of the Budget may transfer to General Fund budget codes from the General Fund Salary Adjustment Reserves appropriation, and may transfer to Highway Fund budget codes from the Highway Fund Salary Adjustment Reserve appropriation amounts required to support approved salary adjustments made necessary by difficulties in recruiting and holding qualified employees in State government.  The funds may be transferred only when salary reserve funds in individual operating budgets are not available.
Any remaining appropriations for legislative salary increases not required for that purpose may be used to supplement the Salary Adjustment Fund.  These funds shall first be used to provide reclassifications of those positions already approved by the Office of State Personnel.

Requested by:   Senators Odom, Plyler, Perdue
EXPENDITURES OF FUNDS IN RESERVES LIMITED
Section 7.4.  All funds appropriated by this act into reserves may be expended only for the purposes for which the reserves were established.

Requested by:  Senators Odom, Plyler, Perdue
STATE MONEY RECIPIENTS/CONFLICT OF INTEREST POLICY
Section 7.5.  Each private, nonprofit entity eligible to receive State funds, either by General Assembly appropriation, or by grant, loan, or other allocation from a State agency, before funds may be disbursed to the entity, shall file with the disbursing agency a notarized copy of that entity's policy addressing conflicts of interest that may arise involving the entity's management employees and the members of its board of directors or other governing body.  The policy shall address situations where any of these individuals may directly or indirectly benefit, except as the entity's employees or members of the board or other governing body, from the entity's disbursing of State funds, and shall include actions to be taken by the entity or the individual, or both, to avoid conflicts of interest and the appearance of impropriety.

Requested by:  Senators Plyler, Perdue, Odom
BUDGETING OF PILOT PROGRAMS
Section 7.6.  (a)	Any program designated by the General Assembly as experimental, model, or pilot shall be shown as a separate budget item and shall be considered as an expansion item until a succeeding General Assembly reapproves it.
Any new program funded in whole or in part through a special appropriations bill shall be designated as an experimental, model, or pilot program.
(b)	The Governor shall submit to the General Assembly with his proposed budget a report of which items in the proposed budget are subject to the provisions of this section.

Requested by:  Senators Plyler, Perdue, Odom
AUTHORIZATION OF PRIVATE LICENSE TAGS ON STATE-OWNED MOTOR VEHICLE
Section 7.7.  (a)	Pursuant to the provisions of G.S. 14-250, for the 1997-99 fiscal biennium, the General Assembly authorizes the use of private license tags on State-owned motor vehicles only for the State Highway Patrol and for the following:
Department	Exemption Category	Number
Motor Vehicles	License and Theft	97
Justice	SBI Agents	277
Correction	Probation/Parole Surveillance
Officers (intensive 
probation)	25
Crime Control and
   Public Safety	ALE Officers	92
Revenue	4
Capitol Area
   Police	2
(b)	The 92 ALE vehicles authorized by this section to use private license tags shall be distributed as follows:
(1)	54 among Agent I officers;
(2)	20 among Agent II officers;
(3)	1 to the Deputy Director;
(4)	12 to the District Offices/Extra Vehicles; and
(5)	5 to the Director, to be distributed at the Director's discretion.
(c)	Except as provided in this section, all State-owned motor vehicles shall bear permanent registration plates issued under G.S. 20-84.

Requested by:   Senators Plyler, Perdue, Odom
MODIFICATIONS TO THE EXECUTIVE BUDGET ACT
Section 7.8.  (a)	G.S. 143-16.3 reads as rewritten:
"§ 143-16.3.  No expenditures for purposes for which the General Assembly has considered but not enacted an appropriation.
Notwithstanding any other provision of law, no funds from any source, except for gifts, grants, special funds, and funds allocated from the Contingency and Emergency Fund in accordance with G.S. 143-12(b), may be expended for any new or expanded purpose, position, or other expenditure for which the General Assembly has considered but not enacted an appropriation of funds for the current fiscal period; provided, however, that in the event the Director of the Budget declares that it is necessary to deviate from this provision, he may do so after prior consultation with the Joint Legislative Commission on Governmental Operations.  For the purpose of this section, the General Assembly has considered a purpose, position, or other expenditure when that purpose is included in a bill, amendment, or petition and when any committee of the Senate or the House of Representatives deliberates on that purpose."
(b) G.S. 143-23 reads as rewritten:
"§ 143-23.  All maintenance funds for itemized purposes; transfers between objects or line items.
(a)	All appropriations now or hereafter made for the maintenance of the various departments, institutions and other spending agencies of the State, are for the (i) purposes or programs and (ii) objects or line items enumerated in the itemized requirements of such departments, institutions and other spending agencies submitted to the General Assembly by the Director of the Budget and the Advisory Budget Commission, as amended by the General Assembly.  The function of the Advisory Budget Commission under this subsection applies only if the Director of the Budget consults with the Commission in preparation of the budget.
(a1)	Notwithstanding the provisions of subsection (a) of this section, a department, institution, or other spending agency may, with approval of the Director of the Budget, spend more than was appropriated for:
(1)	An object or line item within a purpose or program so long as the total amount expended for the purpose or program is no more than was appropriated from all sources for the purpose or program for the fiscal period;
(2)	A purpose or program, without consultation with the Joint Legislative Commission on Governmental Operations, if the overexpenditure of the purpose or program is:
a.	Required by a court, Industrial Commission, or administrative hearing officer's order;
b.	Required to respond to an unanticipated disaster such as a fire, hurricane, or tornado; or
c.	Required to call out the National Guard.
	The Director of the Budget shall report on a quarterly basis to the Joint Legislative Commission on Governmental Operations on any overexpenditures under this subdivision; or
(3)	A purpose or program, after consultation with the Joint Legislative Commission on Governmental Operations in accordance with G.S. 120-76(8), as follows:
a.	For a purpose or program with a certified budget of up to five million dollars ($5,000,000), consultation is required when the overexpenditure exceeds ten percent (10%) of the certified budget;
b.	For a purpose or program with a certified budget of from five million dollars ($5,000,000) up to twenty million dollars ($20,000,000), consultation is required when the overexpenditure exceeds five hundred thousand dollars ($500,000) or seven and one-half percent (7.5%) of the certified budget, whichever is greater;
c.	For a purpose or program with a certified budget of twenty million dollars ($20,000,000) or more, consultation is required when the overexpenditure exceeds one million five hundred thousand dollars ($1,500,000) or five percent (5%) of the certified budget, whichever is greater;
d.	For a purpose or program supported by federal funds or when expenditures are required for the reasons set out in subdivision (2) of this subsection, no consultation is required.
(a2)	Funds appropriated for salaries and wages are also subject to the limitation that they may only be used for:
(1)	Salaries and wages or for premium pay, overtime pay, longevity, unemployment compensation, workers' compensation, temporary wages, moving expenses of employees, payment of accumulated annual leave, certain awards to employees, tort claims, and employer's social security, employer's retirement, hospitalization payments, and food, clothing, and medical care related to the care and custody of individuals in State-supported facilities.
(2)	Contracted personal services if (i) the contract is for temporary services or special project services, (ii) the term of the contract does not extend beyond the fiscal year, (iii) the contract does not impose obligations on the State after the end of the fiscal year; and (iv) the total of all overexpenditures for contracted personal services approved in a program for a fiscal year does not exceed the greater of five hundred thousand dollars ($500,000) or ten percent (10%) of the projected lapsed salary funds in the program for the fiscal year; and
(3)	Uses for which overexpenditures are permitted by subdivision (2) of subsection (a1) of this section but the Director of the Budget shall include such use and the reason for it in his quarterly report to the Joint Legislative Commission on Governmental Operations.
Lapsed salary funds shall not be used for new permanent employee positions or to raise the salary of existing employees.
(a3), (a4) Repealed by Session Laws 1996, Second Extra Session, c. 18, s. 7.4(f).
(b)	Repealed by Session Laws 1985, c. 290, s. 8.
(c)	Transfers or changes as between objects or line items in the budget of the Senate may be made by the President Pro Tempore of the Senate.
(d)	Transfers or changes as between objects or line items in the budget of the House of Representatives may be made by the Speaker of the House of Representatives.
(e)	Transfers or changes as between objects or line items in the budget of the General Assembly other than of the Senate and House of Representatives may be made jointly by the President Pro Tempore of the Senate and the Speaker of the House of Representatives.
(e1)	Transfers or changes as between objects or line items in the budget of the Office of the Governor may be made by the Governor.
(e2)	Transfers or changes as between objects or line items in the Office of the Lieutenant Governor may be made by the Lieutenant Governor.
(f)	As used in this section:
(1)	'Object or line item' means a budgeted expenditure or receipt in the budget enacted by the General Assembly that is designated by (i) a thirteen-digit code in the 1000-object code series or (ii) an eleven-digit code in all other object code series, in accordance with the Budget Code Structure and the State Accounting System Uniform Chart of Accounts set out in the Administrative Policies and Procedures Manual of the Office of the State Controller.
(2)	'Purpose or program' means a group of objects or line items for support of a specific activity outlined in the budget adopted by the General Assembly that is designated by a nine-digit fund code in accordance with the Budget Code Structure and the State Accounting System Uniform Chart of Accounts set out in the Administrative Policies and Procedures Manual of the Office of the State Controller."
(c) G.S. 143-27 reads as rewritten:
"§ 143-27. Appropriations to educational, charitable and correctional institutions are in addition to receipts by them.
All appropriations now or hereafter made to the educational institutions, and to the charitable and correctional institutions, and to such other departments and agencies of the State as receive moneys available for expenditure by them are declared to be in addition to such receipts of said institutions, departments or agencies, and are to be available as and to the extent that such receipts are insufficient to meet the costs anticipated in the budget authorized by the General Assembly, of maintenance of such institutions, departments, and agencies; Provided, however, that if the receipts, other than gifts and grants that are unanticipated and are for a specific purpose only, collected in a fiscal year by an institution, department, or agency exceed the receipts certified for it in General Fund Codes, Highway Fund Codes, or Wildlife Fund Codes, the Director of the Budget shall decrease the amount he allots to that institution, department, or agency from appropriations from that Fund by the amount of the excess, unless the Director of the Budget has consulted with the Joint Legislative Commission on Governmental Operations and unless the Director of the Budget finds that (i)	the appropriations from that Fund are necessary to maintain the function that generated the receipts at the level anticipated in the certified Budget Codes for that Fund and (ii) the funds may be expended in accordance with G.S. 143-23.  Notwithstanding the foregoing provisions of this section, receipts within The University of North Carolina realized in excess of budgeted levels shall be available, up to a maximum of ten percent (10%) above budgeted levels, for each Budget Code, in addition to appropriations, to support the operations generating such receipts, as approved by the Director of the Budget.
The Office of State Budget and Management shall report to the Joint Legislative Commission on Governmental Operations and to the Fiscal Research Division of the Legislative Services Office within 30 days after the end of each quarter on expenditures of receipts in excess of the amounts certified in General Fund Codes, Highway Fund Codes, or Wildlife Fund Codes, that did not result in a corresponding reduced allotment from appropriations from that Fund."

PART VIII.  PUBLIC SCHOOLS

SUBPART A.  GENERAL PROVISIONS

Requested by:  Senators Winner, Lee
CAREER DEVELOPMENT
Section 8.1. (a)	The State Board of Education shall use funds available for the 1997-98 and 1998-99 fiscal years to ensure that individual employees do not receive less on a monthly basis in salary and State-funded bonuses during the 1997-98 fiscal year or during the 1998-99 fiscal year than they received on a monthly basis during the 1994-95 fiscal year, so long as the employees qualify for bonuses under the local differentiated pay plan.  The State Board of Education may also use funds appropriated to State Aid to Local School Administrative Units for the 1997-98 and 1998-99 fiscal years as is necessary to hold individual employees harmless as provided in this subsection.
(b)	Funds appropriated for local school administrative units receiving career development funds for the 1996-97 fiscal year that did not revert on June 30, 1997, shall not be used for expenses other than the costs of holding individual employees harmless as provided in subsection (a) of this section.

Requested by:  Senators Winner, Lee
SUPPLEMENTAL FUNDING IN LOW-WEALTH COUNTIES
Section 8.2. (a)	Funds for Supplemental Funding. – The General Assembly finds that it is appropriate to provide supplemental funds in low-wealth counties to allow those counties to enhance the instructional program and student achievement; therefore, funds are appropriated to Aid to Local School Administrative Units for the 1997-98 fiscal year and the 1998-99 fiscal year to be used for supplemental funds for schools.
(b)	Use of Funds for Supplemental Funding. – Local school administrative units shall use funds received pursuant to this section only to provide instructional positions, instructional support positions, teacher assistant positions, clerical positions, instructional supplies and equipment, staff development, and textbooks;  provided, however, local school administrative units may use these funds for salary supplements for instructional personnel and instructional support personnel.
(c)	Definitions. – As used in this section:
(1)	"Anticipated county property tax revenue availability" means the county adjusted property tax base multiplied by the effective State average tax rate.
(2)	"Anticipated total county revenue availability" means the sum of the:
a.	Anticipated county property tax revenue availability,
b.	Local sales and use taxes received by the county that are levied under Chapter 1096 of the 1967 Session Laws or under Subchapter VIII of Chapter 105 of the General Statutes,
c.	Food stamp exemption reimbursement received by the county under G.S. 105-164.44C,
d.	Homestead exemption reimbursement received by the county under G.S. 105-277.1A,
e.	Inventory tax reimbursement received by the county under G.S. 105-275.1 and G.S. 105-277A,
f.	Intangibles tax distribution and reimbursement received by the county under G.S. 105-213 and G.S. 105-213.1, and
g.	Fines and forfeitures deposited in the county school fund for the most recent year for which data are available.
(3)	"Anticipated total county revenue availability per student" means the anticipated total county revenue availability for the county divided by the average daily membership of the county.
(4)	"Anticipated State average revenue availability per student" means the sum of all anticipated total county revenue availability divided by the average daily membership for the State.
(5)	"Average daily membership" means average daily membership as defined in the North Carolina Public Schools Allotment Policy Manual, adopted by the State Board of Education.  If a county contains only part of a local school administrative unit, the average daily membership of that county includes all students who reside within the county and attend that local school administrative unit.
(6)	" County adjusted property tax base" shall be computed as follows:
a.	Subtract the present-use value of agricultural land, horticultural land, and forestland in the county, as defined in G.S. 105-277.2, from the total assessed real property valuation of the county,
b.	Adjust the resulting amount by multiplying by a weighted average of the three most recent annual sales assessment ratio studies,
c.	Add to the resulting amount the:
1.	Present-use value of agricultural land, horticultural land, and forestland, as defined in G.S. 105-277.2,
2.	Value of property of public service companies, determined in accordance with Article 23 of Chapter 105 of the General Statutes, and
3.	Personal property value for the county.
(7)	" County adjusted property tax base per square mile" means the county adjusted property tax base divided by the number of square miles of land area in the county.
(8)	" County wealth as a percentage of State average wealth" shall be computed as follows:
a.	Compute the percentage that the county per capita income is of the State per capita income and weight the resulting percentage by a factor of five-tenths,
b.	Compute the percentage that the anticipated total county revenue availability per student is of the anticipated State average revenue availability per student and weight the resulting percentage by a factor of four-tenths,
c.	Compute the percentage that the county adjusted property tax base per square mile is of the State adjusted property tax base per square mile and weight the resulting percentage by a factor of one-tenth,
d.	Add the three weighted percentages to derive the county wealth as a percentage of the State average wealth. 
(9)	" Effective county tax rate" means the actual county tax rate multiplied by a weighted average of the three most recent annual sales assessment ratio studies.
(10)	" Effective State average tax rate" means the average of effective county tax rates for all counties.
(10a)	" Local current expense funds" means the most recent county current expense appropriations to public schools, as reported by local boards of education in the audit report filed with the Secretary of the Local Government Commission pursuant to G.S. 115C-447.
(11)	" Per capita income" means the average for the most recent three years for which data are available of the per capita income according to the most recent report of the United States Department of Commerce, Bureau of Economic Analysis, including any reported modifications for prior years as outlined in the most recent report.
(12)	" Sales assessment ratio studies" means sales assessment ratio studies performed by the Department of Revenue under G.S. 105-289(h).
(13)	" State average current expense appropriations per student" means the most recent State total of county current expense appropriations to public schools, as reported by local boards of education in the audit report filed with the Secretary of the Local Government Commission pursuant to G.S. 115C-447.
(14)	" State average adjusted property tax base per square mile" means the sum of the county adjusted property tax bases for all counties divided by the number of square miles of land area in the State.
(14a)	" Supplant" means to decrease local per student current expense appropriations from one fiscal year to the next fiscal year.
(15)	" Weighted average of the three most recent annual sales assessment ratio studies" means the weighted average of the three most recent annual sales assessment ratio studies in the most recent years for which county current expense appropriations and adjusted property tax valuations are available.  If real property in a county has been revalued one year prior to the most recent sales assessment ratio study, a weighted average of the two most recent sales assessment ratios shall be used.  If property has been revalued the year of the most recent sales assessment ratio study, the sales assessment ratio for the year of revaluation shall be used.
(d)	Eligibility for Funds. – Except as provided in subsection (h) of this section, the State Board of Education shall allocate these funds to local school administrative units located in whole or in part in counties in which the county wealth as a percentage of the State average wealth is less than one hundred percent (100%).
(e)  Allocation of Funds. – Except as provided in subsection (g) of this section, the amount received per average daily membership for a county shall be the difference between the State average current expense appropriations per student and the current expense appropriations per student that the county could provide given the county's wealth and an average effort to fund public schools.  (To derive the current expense appropriations per student that the county could be able to provide given the county's wealth and an average effort to fund public schools, multiply the county wealth as a percentage of State average wealth by the State average current expense appropriations per student.)
The funds for the local school administrative units located in whole or in part in the county shall be allocated to each local school administrative unit, located in whole or in part in the county, based on the average daily membership of the county's students in the school units.
If the funds appropriated for supplemental funding are not adequate to fund the formula fully, each local school administrative unit shall receive a pro rata share of the funds appropriated for supplemental funding.
(f)  Formula for Distribution of Supplemental Funding Pursuant to This Section Only. – The formula in this section is solely a basis for distribution of supplemental funding for low-wealth counties and is not intended to reflect any measure of the adequacy of the educational program or funding for public schools.  The formula is also not intended to reflect any commitment by the General Assembly to appropriate any additional supplemental funds for low-wealth counties.
(g)  Minimum Effort Required. – Counties that had effective tax rates in the 1994-95 fiscal year that were above the State average effective tax rate but that had effective rates below the State average in the 1995-96 fiscal year or thereafter shall receive reduced funding under this section.  This reduction in funding shall be determined by subtracting the amount that the county would have received pursuant to Section 17.1(g)(ii) of Chapter 507 of the 1995 Session Laws  from the amount that the county would have received if qualified for full funding and multiplying the difference by ten percent (10%).  This method of calculating reduced funding shall apply one time only.
This method of calculating reduced funding shall not apply in cases in which the effective tax rate fell below the statewide average effective tax rate as a result of a reduction in the actual property tax rate.  In these cases, the minimum effort required shall be calculated in accordance with Section 17.1(g)(ii) of Chapter 507 of the 1995 Session Laws.
If the county documents that it has increased the per student appropriation to the school current expense fund in the current fiscal year, the State Board of Education shall include this additional per pupil appropriation when calculating minimum effort pursuant to Section 17.1(g)(ii) of Chapter 507 of the 1995 Session Laws.
(h)  Nonsupplant requirement. – A county in which a local school administrative unit receives funds under this section shall use the funds to supplement local current expense funds and shall not supplant local current expense funds. For the 1997-99 fiscal biennium, the State Board of Education shall not allocate funds under this section to a county found to have used these funds to supplant local per student current expense funds.  The State Board of Education shall make a finding that a county has used these funds to supplant local current expense funds in the prior year, or the year for which the most recent data are available, if:
(1)	The current expense appropriation per student of the county for the current year is less than ninety-five percent (95%) of the average of the local current expense appropriations per student for the three prior fiscal years; and
(2)	The county cannot show (i) that it has remedied the deficiency in funding, or (ii) that extraordinary circumstances caused the county to supplant local current expense funds with funds allocated under this section.
The State Board of Education shall adopt rules to implement this section.
(i)  Reports. – The State Board of Education shall report to the Joint Legislative Education Oversight Committee prior to May 1, 1998, on its analysis of whether counties supplanted funds.
(j)  Department of Revenue Reports. – The Department of Revenue shall provide to the Department of Public Instruction a preliminary report for the current fiscal year of the assessed value of the property tax base for each county prior to March 1 of each year and a final report prior to May 1 of each year.  The reports shall include for each county the annual sales assessment ratio and the taxable values of (i) total real property, (ii) the portion of total real property represented by the present-use value of agricultural land, horticultural land, and forestland as defined in G.S. 105-277.2, (iii) property of public service companies determined in accordance with Article 23 of Chapter 105 of the General Statutes, and (iv) personal property.

Requested by:  Senators Winner, Lee
SMALL SCHOOL SYSTEM SUPPLEMENTAL FUNDING
Section 8.3. (a)	Funds for small school systems. – Except as provided in subsection (b) of this section, the State Board of Education shall allocate funds appropriated for small school system supplemental funding (i) to each county school administrative unit with an average daily membership of less than 3,150 students and (ii) to each county school administrative unit with an average daily membership of from 3,150 to 4,000 students if the county in which the local school administrative unit is located has a county adjusted property tax base per student that is below the State adjusted property tax base per student and if the total average daily membership of all local school administrative units located within the county is from 3,150 to 4,000 students.  The allocation formula shall:
(1)	Round all fractions of positions to the next whole position.
(2)	Provide five and one-half additional regular classroom teachers in counties in which the average daily membership per square mile is greater than four, and seven additional regular classroom teachers in counties in which the average daily membership per square mile is four or less.
(3)	Provide additional program enhancement teachers adequate to offer the standard course of study.
(4)	Change the duty-free period allocation to one teacher assistant per 400 average daily membership.
(5)	Provide a base for the consolidated funds allotment of at least $235,000, excluding textbooks.
(6)	Allot vocational education funds for grade 6 as well as for grades 7-12.
If funds appropriated for each fiscal year for small school system supplemental funding are not adequate to fund fully the program, the State Board of Education shall reduce the amount allocated to each county school administrative unit on a pro rata basis.  This formula is solely a basis for distribution of supplemental funding for certain county school administrative units and is not intended to reflect any measure of the adequacy of the educational program or funding for public schools.  The formula is also not intended to reflect any commitment by the General Assembly to appropriate any additional supplemental funds for such county administrative units.
(b)	Nonsupplant requirement. – A county in which a local school administrative unit receives funds under this section shall use the funds to supplement local current expense funds and shall not supplant local current expense funds. For the 1997-99 fiscal biennium, the State Board of Education shall not allocate funds under this section to a county found to have used these funds to supplant local per student current expense funds.  The State Board of Education shall make a finding that a county has used these funds to supplant local current expense funds in the prior year, or the year for which the most recent data are available, if:
(1)	The current expense appropriation per student of the county for the current year is less than ninety-five percent (95%) of the average of the local current expense appropriations per student for the three prior fiscal years; and
(2)	The county cannot show (i) that it has remedied the deficiency in funding, or (ii) that extraordinary circumstances caused the county to supplant local current expense funds with funds allocated under this section.
The State Board of Education shall adopt rules to implement this section.
(c)	Phase-out provision. – If a local school administrative unit becomes ineligible for funding under this formula solely because of an increase in population or an increase in the county adjusted property tax base per student of the county in which the local school administrative unit is located, funding for that unit shall be phased-out over a two-year period.  For the first year of ineligibility, the unit shall receive the same amount it received for the prior fiscal year.  For the second year of ineligibility, it shall receive half of that amount.
(d)	Definitions. – As used in this section:
(1)	"Average daily membership" means within two percent (2%) of the average daily membership as defined in the North Carolina Public Schools Allotment Policy Manual, adopted by the State Board of Education.
(2)	" County adjusted property tax base per student" means the total assessed property valuation for each county, adjusted using a weighted average of the three most recent annual sales assessment ratio studies, divided by the total number of students in average daily membership who reside within the county.
(2a)	" Local current expense funds" means the most recent county current expense appropriations to public schools, as reported by local boards of education in the audit report filed with the Secretary of the Local Government Commission pursuant to G.S. 115C-447.
(3)	" Sales assessment ratio studies" means sales assessment ratio studies performed by the Department of Revenue under G.S. 105-289(h).
(4)	" State adjusted property tax base per student" means the sum of all county adjusted property tax bases divided by the total number of students in average daily membership who reside within the State.
(4a)	" Supplant" means to decrease local per student current expense appropriations from one fiscal year to the next fiscal year.
(5)	" Weighted average of the three most recent annual sales assessment ratio studies" means the weighted average of the three most recent annual sales assessment ratio studies in the most recent years for which county current expense appropriations and adjusted property tax valuations are available.  If real property in a county has been revalued one year prior to the most recent sales assessment ratio study, a weighted average of the two most recent sales assessment ratios shall be used.  If property has been revalued the year of the most recent sales assessment ratio study, the sales assessment ratio for the year of revaluation shall be used.
(e)  Reports. – The State Board of Education shall report to the Joint Legislative Education Oversight Committee prior to May 1, 1998, on the results of its analysis of whether counties supplanted funds.

Requested by:  Senators Winner, Lee
LITIGATION RESERVE
Section 8.4. (a) Funds in the State Board of Education's Litigation Reserve that are not expended or encumbered on June 30, 1997, shall not revert on July 1, 1997, but shall remain available for expenditure until June 30, 1999.
(b) The State Board of Education may expend up to five hundred thousand dollars ($500,000) for the 1997-98 fiscal year from unexpended funds for certified employees' salaries to pay expenses related to pending litigation.
(c) Subsection (a) of this section becomes effective June 30, 1997.

Requested by:  Senators Winner, Lee
EXCEPTIONAL CHILDREN FUNDS
Section 8.5. The funds appropriated for exceptional children in this act shall be allocated as follows:
(1)	Each local school administrative unit shall receive for academically gifted children the sum of seven hundred ten dollars and sixty-one cents ($710.61) per child for four percent (4.0%) of the 1997-98 allocated average daily membership in the local school administrative unit, regardless of the number of children identified as academically gifted in the local school administrative unit. The total number of children for which funds shall be allocated pursuant to this subdivision is 49,045 for the 1997-98 school year.
(2)	Each local school administrative unit shall receive for exceptional children other than academically gifted children the sum of two thousand one hundred thirty-one dollars and eighty-seven cents ($2,131.87) per child for the lesser of (i) all children who are identified as exceptional children other than academically gifted children or (ii) twelve and five-tenths percent (12.5%) of the 1997-98 allocated average daily membership in the local school administrative unit. The maximum number of children for which funds shall be allocated pursuant to this subdivision is 142,572 for the 1997-98 school year.
The dollar amounts allocated under this subsection for exceptional children shall also increase in accordance with legislative salary increments for personnel who serve exceptional children.

Requested by:  Senators Winner, Lee
MINIMUM VACATION LEAVE FOR BUS DRIVERS
Section 8.6. Notwithstanding any other provision of law, all regular school bus drivers, who have been employed for at least one academic year and who are not entitled to more than one day of paid vacation leave, are entitled to one day of paid vacation leave in each subsequent school year.  An employee who is terminated or resigns before taking the leave day is not entitled to compensation for the day.

Requested by:  Senators Jenkins, Winner, Lee
TRANSFER OF FUNDS FOR CHILDREN WITH SPECIAL NEEDS TO PROGRAMS FOR ACADEMICALLY OR GIFTED STUDENTS AUTHORIZED.
Section 8.7.  G.S. 115C-105.25(b) reads as rewritten:
"(b)	Subject to the following limitations, local boards of education may transfer and may approve transfers of funds between funding allotment categories:
(1)	In accordance with a school improvement plan accepted under G.S. 115C-105.27, State funds allocated for teacher assistants may be transferred only for personnel (i) to serve students only in kindergarten through third grade, or (ii) to serve students primarily in kindergarten through third grade when the personnel are assigned to an elementary school to serve the whole school. Funds allocated for teacher assistants may be transferred to reduce class size or to reduce the student-teacher ratio in kindergarten through third grade so long as the affected teacher assistant positions are not filled when the plan is amended or approved by the building-level staff entitled to vote on the plan or the affected teacher assistant positions are not expected to be filled on the date the plan is to be implemented. Any State funds appropriated for teacher assistants that were converted to certificated teachers before July 1, 1995, in accordance with Section 1 of Chapter 986 of the 1991 Session Laws, as rewritten by Chapter 103 of the 1993 Session Laws, may continue to be used for certificated teachers.
(2)	In accordance with a school improvement plan accepted under G.S. 115C-105.27, (i) State funds allocated for classroom materials/instructional supplies/equipment may be transferred only for the purchase of textbooks; (ii) State funds allocated for textbooks may be transferred only for the purchase of instructional supplies, instructional equipment, or other classroom materials; and (iii) State funds allocated for noninstructional support personnel may be transferred only for teacher positions.
(3)	No funds shall be transferred into the central office allotment category.
(4)	Funds allocated for driver's education shall not be transferred.
(4a)	Funds allocated for children with special needs may be transferred only for academically or intellectually gifted students so long as the amount transferred is no greater than the amount of non-State funds used for children with special needs, other than federal funds appropriated for children with special needs.  No local school administrative unit shall transfer funds allocated for children with special needs unless the amount the school unit budgets for children with special needs is at least equal to State dollars and federal dollars for handicapped children.
(5)	Funds allocated for classroom teachers may be transferred only for teachers of exceptional children, for teachers of at-risk students, and for authorized purposes under the textbooks allotment category and the classroom materials/instructional supplies/equipment allotment category.
(6)	Funds allocated for vocational education may be transferred only in accordance with any rules that the State Board of Education considers appropriate to ensure compliance with federal regulations.
(7)	Funds allocated for career development shall be used in accordance with Section 17.3 of Chapter 324 of the 1995 Session Laws.
(8)	Funds allocated for academically or intellectually gifted students may be used only (i) for academically or intellectually gifted students; (ii) to implement the plan developed under G.S. 115C-150.7; or (iii) in accordance with an accepted school improvement plan, for any purpose so long as that school demonstrates it is providing appropriate services to academically or intellectually gifted students assigned to that school in accordance with the local plan developed under G.S. 115C-150.7."

Requested by:  Senators Winner, Lee
DELETE REPORT ON GUARANTEED ENERGY SAVINGS CONTRACTS
Section 8.8.  Section 9 of Chapter 775 of the 1993 Session Laws is repealed.

Requested by:  Senators Winner, Lee
SCHOOL PAY DATE FLEXIBILITY PILOT PROGRAM
Section 8.9. The State Board of Education may continue a pilot program to grant no more than four local boards of education additional flexibility in setting the pay dates for their 10-month employees.  Notwithstanding the provisions of G.S. 115C-302(a) and G.S. 115C-316(a), local school administrative units participating in the pilot may pay 10-month employees for a full month of employment when days employed are less than a full month at the beginning or the end of the teachers' contracts.  No local school administrative unit shall be required to participate in the pilot.  A local board participating in the pilot shall bear all of the cost of recouping funds prepaid for work never done and the cost of these funds that cannot be recouped.
The State Board of Education shall report to the Joint Legislative Education Oversight Committee on the pilot program prior to September 15, 1998.

Requested by:  Senators Winner, Lee
SCHOOL RESOURCE OFFICERS IN MIDDLE SCHOOLS
Section 8.10. (a)	Local boards of education may use funds from the Alternative Schools/At-Risk Student allotment to form partnerships with the Communities In Schools Program or to contract with the Communities In Schools Program for services.
(b)	Local boards of education shall not use these State funds in the Alternative Schools/At-Risk Student allotment to supplant local funds.
(c)	The State Board of Education may use up to two hundred thousand dollars ($200,000) of the funds in the Alternative Schools/At-Risk Student allotment to implement G.S. 115C-12(24).

Requested by:  Senators Winner, Lee, Foxx
ADVANCED PLACEMENT TESTS
Section 8.11. (a) Advanced Placement tests are taken by many high school students who are seeking college credit for coursework completed in high school. The Board of Governors of The University of North Carolina is encouraged to develop a standardized system of credit for the Advanced Placement test scores to ensure that college credit granted for Advanced Placement courses is equitable and predictable.
(b) The Board of Governors of The University of North Carolina shall encourage the University system to assist the public school systems of the State to provide education for teachers who are instructors of Advanced Placement courses.
(c) Notwithstanding any other provision of law, the State Board of Community Colleges shall allow a college to earn regular budget FTEs for a college level course taught to high school students even though the course instructor is a local high school teacher under contract, provided the following criteria are met:
(1)	The course does not duplicate or supplant the Advanced Placement courses or the other college level course offerings of the high school.
(2)	The contractual responsibilities of the high school teacher employed as an instructor for the course do not supplant the regular classroom and teaching responsibilities of the teacher.
(3)	The State Board of Community Colleges is satisfied that the substance, quality, and level at which the course is taught merits it being considered a college level course. 
(d) The State Board of Education and the State Board of Community Colleges shall report to the Joint Legislative Education Oversight Committee by March 1, 1998, regarding the cooperative effort being made to encourage high school students to complete college general education courses through the community college system.  The report shall include information about the curricula designed to encourage this effort, the number of students enrolled in college courses, and the fiscal impact of these efforts.

Requested by:  Senators Winner, Lee
DATA ON TEACHER ASSISTANTS' YEARS OF EXPERIENCE, CREDENTIALS, AND PLACEMENT ON LOCALLY ADOPTED SALARY SCHEDULES
Section 8.12. The State Board of Education shall collect data on teacher assistants' years of experience in the public schools and in State and local government and the degrees that they hold.  The State Board shall report the results of its study to the Joint Legislative Education Oversight Committee prior to February 15, 1998.
The State Board of Education shall also collect data on locally adopted salary schedules for teacher assistants and the distribution of teacher assistants on the locally adopted schedules.  The State Board shall report the results of its study to the Joint Legislative Education Oversight Committee prior to February 15, 1998.

Requested by:  Senators Winner, Lee
CLASS-SIZE COMPUTATION FOR K-2
Section 8.13.  Teacher positions provided by the 1993 and 1995 General Assemblies to reduce class size in kindergarten, first grade, and second grade shall be used by local school administrative units (i) to provide class size in kindergarten, first grade, and second grade to be 23 or fewer students or (ii) to hire reading teachers within kindergarten through third grade or otherwise reduce the student-teacher ratio within kindergarten through third grade.
For the purpose of calculating the maximum allowable class size for kindergarten, first grade, and second grade, the ratio of teachers to students shall be 1 to 26.

Requested by:  Senators Winner, Lee
ABC'S PERFORMANCE RECOGNITION FOR PERSONNEL SERVING KINDERGARTEN THROUGH TWELFTH GRADE ONLY
Section 8.14.  G.S. 115C-105.36 reads as rewritten:
"§ 115C-105.36.  Performance recognition.
(a)	The personnel serving students in kindergarten through twelfth grade in schools that achieve a level of expected growth greater than one hundred percent (100%) at a level to be determined by the State Board of Education are eligible for financial awards in amounts set by the State Board. Schools and personnel shall not be required to apply for these awards. For the purpose of this section, 'personnel' includes the principal, assistant principal, instructional personnel, instructional support personnel, and teacher assistants assigned to that school.
(b)	The State Board shall establish a procedure to allocate the funds for these awards to the local school administrative units in which the eligible schools are located. Funds shall become available for expenditure July 1 of each fiscal year. Funds shall remain available until November 30 of the subsequent fiscal year for expenditure for:
(1)	Awards to the personnel serving students in kindergarten through grade 12; or
(2)	The purposes authorized in a plan that has been:
a.	Developed and voted on by the personnel in the same manner that a school improvement plan is approved under G.S. 115C-105.27;
b.	Approved by a majority of the personnel who vote on the plan; and
c.	Submitted to and approved by the local board of education.
The local board shall approve this plan unless the plan involves expenditures of funds that are not for a public purpose or that are otherwise unlawful."

Requested by:  Senators Winner, Lee
SCHOOL LAW REVISION SUBCOMMITTEE EXTENDED
Section 8.15.  (a) The cochairs of the Joint Legislative Education Oversight Committee may appoint a subcommittee to revise the public school laws.
The subcommittee shall consist of equal numbers of members appointed by the Senate chair and the House chair.  Either chair may appoint to the subcommittee members, including public members, who are not also members of the Committee.
Members of the subcommittee who are not members of the Committee may participate fully in all subcommittee business, including all deliberations and votes; however, these members are not members of the Committee for any other purpose.
(b) The subcommittee shall:
(1)	Conduct a comprehensive review of the public school laws;
(2)	Identify laws that are outdated, vague, unnecessary, or otherwise in need of revision; and
(3)	Revise the public laws so they are consistent with the North Carolina Constitution and with the goals of the General Assembly and the State Board of Education in order to improve student performance, increase local flexibility and control, and promote economy and efficiency.

Requested by:  Senators Winner, Lee
AVID PROGRAM
Section 8.16.  Of the funds appropriated to the State Board of Education, the sum of one hundred fifty thousand dollars ($150,000) for the 1997-98 fiscal year and the sum of one hundred fifty thousand dollars ($150,000) for the 1998-99 fiscal year shall be used to implement Advancement Via Individual Determination (AVID) pilot programs in three local school administrative units.  The purpose of the AVID pilot programs shall be to improve the academic performance of underachieving students so that they will become eligible to attend postsecondary education institutions.  Local school administrative units selected as pilot units shall state how they plan to evaluate the success of the program.
The State Board of Education shall allocate the funds to the pilot programs in proportion to the number of students proposed to be served.

Requested by:  Senators Winner, Lee
DISTANCE LEARNING PROGRAM
Section 8.17.  Notwithstanding any other provision of law, funds appropriated to the State Board of Education and to State Aid to Local School Administrative Units for the Distance Learning Program shall be used for distance learning educational purposes, as directed by the State Board of Education.

Requested by:  Senators Winner, Lee
CRIME CONTROL GRANTS FOR THE N.C. CENTER FOR THE PREVENTION OF SCHOOL VIOLENCE
Section 8.18. The Secretary of Crime Control and Public Safety shall continue to make grants for the 1997-99 fiscal biennium for the operating expenses of the North Carolina Center for the Prevention of School Violence.  If grant funds are not available for this purpose, the Board of Governors of The University of North Carolina may use funds within its budget for the expenses of the Center.

Requested by:  Senators Winner, Lee
CHARTER SCHOOL ACCOUNTABILITY REQUIREMENTS
Section 8.19. G.S. 115C-238.29F(f) reads as rewritten:
"(f)	Accountability. – 
(1)	The school is subject to the financial audits, the audit procedures, and the audit requirements adopted by the State Board of Education for charter schools.  These audit requirements may include the requirements of the School Budget and Fiscal Control Act.
(2)	The school shall comply with the reporting requirements established by the State Board of Education in the Uniform Education Reporting System.
(3)	The school shall report at least annually to the chartering entity and the State Board of Education the information required by the chartering entity or the State Board."

Requested by:  Senator Perdue, Winner, Lee
CIVIL PENALTY AND FORFEITURE FUND ESTABLISHED
Section 8.20.  Chapter 115C of the General Statutes is amended by adding a new Article to read:
"ARTICLE 31A.
"Civil Penalty and Forfeiture Fund.
"§ 115C-457.1.  Creation of Fund; administration.
(a)	There is created the Civil Penalty and Forfeiture Fund.  The Fund shall consist of the clear proceeds of all civil penalties and civil forfeitures that are collected by a State agency and are payable to the County School Fund pursuant to Article IX, Section 7 of the Constitution.
(b)	The Fund shall be administered by the Office of State Budget and Management.  The Fund and all interest accruing to the Fund shall be faithfully used exclusively for maintaining free public schools.
"§ 115C-457.2.  Remittance of moneys to the Fund.
The clear proceeds of all civil penalties and civil forfeitures that are collected by a State agency and are payable to the County School Fund pursuant to Article IX, Section 7 of the Constitution shall be remitted to the Office of State Budget and Management by the officer having custody of the funds within 10 days after the close of the calendar month in which the revenues were received or collected. The clear proceeds of such funds include the full amount of all such penalties and forfeitures collected under authority conferred by the State, diminished only by the actual costs of collection, not to exceed ten percent (10%) of the amount collected.
"§ 115C-457.3. Transfer of funds to the State School Technology Fund.
The Office of State Budget and Management shall transfer funds accruing to the Civil Penalty and Forfeiture Fund to the State School Technology Fund.  These funds shall be allocated to local school administrative units on the basis of average daily membership."

Requested by:  Senators Winner, Lee
AVAILABILITY OF FUNDS ALLOCATED FOR STAFF DEVELOPMENT
Section 8.21. G.S. 115C-417 reads as rewritten:
"§ 115C-417.  Availability of funds allocated for staff development.
	Funds allocated by the State Board of Education for staff development at the local level shall become available for expenditure on July 1 of each fiscal year and shall remain available for expenditure until December 31 of the subsequent fiscal year."

Requested by:  Senators Winner, Lee
LATERAL ENTRY PROGRAM
Section 8.22. The State Board of Education shall establish an advisory committee to assist it in studying the lateral entry program, a program which encourages lateral entry into the profession of teaching by skilled individuals from the private sector.  In the course of the study, the State Board shall consider the recruitment, retention, training, and evaluation of persons who enter the teaching profession by lateral entry.  The State Board shall place special emphasis on lateral entry of teachers at the high school level who have significant post-bachelors degree experience in the field in which they desire to teach.
The State Board of Education shall report the results of its study to the Joint Legislative Education Oversight Committee prior to April 15, 1998.

Requested by:  Senators Winner, Lee
FUNDS FOR NATIONAL BOARD FOR PROFESSIONAL TEACHING STANDARDS
Section 8.23.  (a)	Funds appropriated to the Department of Public Instruction in this act shall be used to pay for the National Board for Professional Teaching Standards (NBPTS) participation fee and for up to three days of approved paid leave for teachers participating in the NBPTS program during the 1997-98 school year and the 1998-99 fiscal year for State-paid teachers who (i) have completed three years of teaching in North Carolina schools operated by local boards of education, the Department of Human Resources, the Department of Correction, or The University of North Carolina, or affiliated with The University of North Carolina, prior to application for NBPTS certification, and (ii) who have not previously received State funds for participating in any certification area in the NBPTS program.  Teachers participating in the program shall take paid leave only with the approval of their supervisors.
A teacher for whom the State pays the participation fee (i) who does not complete the process or (ii) who completes the process but does not teach in a North Carolina public school for at least one year after completing the process, shall repay the certification fee to the State.   Repayment is not required if the process is not completed or the teacher fails to teach for one year due to the death or disability of the teacher or other extenuating circumstances as may be recognized by the State Board.
(b)	The State Board shall adopt policies and guidelines to implement this section.

Requested by:  Senators Winner, Lee
OUT-OF-STATE TEACHER CERTIFICATION
Section 8.24.  The State Board of Education shall review the issue of certifying out-of-state teachers to determine whether the current standards are too restrictive to permit qualified teachers who are trained in other states from being certified in North Carolina. The State Board of Education shall report the results of this review to the Joint Legislative Education Oversight Committee prior to April 15, 1998.

Requested by:  Senators Winner, Lee
PUBLIC-PRIVATE PARTNERSHIP TO EXPAND TECHNOLOGY IN PUBLIC SCHOOLS
Section 8.25.  (a)	Of the funds appropriated to the State Board of Education, the sum of five hundred thousand dollars ($500,000) for the 1997-98 fiscal year and the sum of five hundred thousand dollars ($500,000) for the 1998-99 fiscal year shall be used to establish a public-private partnership to encourage, promote, and expand technology in North Carolina Public Schools.
(b)	The purposes of the public-private partnership are to enlist public, private, and volunteer sectors to develop creative means of bringing technology to North Carolina Public School classrooms at minimal cost and expense to the State and its taxpayers:
(1)	Help schools wire classrooms with high-speed data wire that enables them to connect to school networks as well as the Internet.
(2)	Develop a plan to increase the number of computers, computing equipment, and networking equipment in North Carolina Public Schools.
(3)	Develop a plan that will assure every school can connect to the Internet so that this tool is made available equally to all children in North Carolina Public Schools.
(4)	Help develop programs to train teachers and other educators in the use of technology.
(5)	Develop Internet-based learning programs designed to assist teachers in the job of helping young people learn.
(6)	Test and evaluate the benefits of each of the projects; investigate and develop other means of using computer-based technology in classrooms; and assure that this information is available to educators.
(c)	Pursuant to subdivision (2) of subsection (b) of this section, a vocational education computer recycling pilot program shall be established.  The purposes of the pilot program are to:
(1)	Develop and implement high school vocational education programs that train students to test, repair, reconfigure, upgrade, and maintain donated computers.
(2)	Enhance a community's opportunities for economic development by providing vocational education students with educational, job, and hireability skills as well as skills in computer technology.
(3)	Provide upgraded computers to schools, consistent with State-approved local school technology plans at a cost of four hundred dollars ($400.00) to six hundred dollars ($600.00) per unit rather than new computers costing around three thousand dollars ($3,000) each.
(4)	Help communities support their schools by encouraging business and industry to donate computer components to schools or sell them at greatly reduced prices.
(5)	The State Board of Education, after consultation with ExplorNet, shall select seven local administrative units to participate in the computer recycling program.  In selecting the pilot units, the State Board shall consider (i) indicators of the readiness of a unit to participate in the program, (ii) the degree of community support for such a program, and (iii) indicators of the need for the program in the community, such as lack of comparable training or resources in the community.
(6)	The Information Resources Management Commission, in consultation with the State Board of Education, shall review and modify its standards for technical components of local school technology purchases to facilitate the implementation of the programs.
(d)	The State Board of Education shall contract with the nonprofit corporation, ExplorNet, to administer the programs.
(e)  The provisions of Article 3 of Chapter 143 of the General Statutes do not apply to contracts for supplies, materials, equipment, and contractual services to implement these programs.  The Department of Administration may make its services available to the State Board of Education, when requested by the State Board of Education.
(f)  The State Board of Education shall evaluate the educational components of the programs.
The State Board's contract with ExplorNet shall require ExplorNet to evaluate the technical components of the program and to submit the results of its evaluation to the Information Resources Management Commission for review and comment by May 15, 1999.  The Information Resources Management Commission shall submit the evaluation done by ExplorNet and the Commission's comments on it to the State Board of Education by August 15, 1999.
The State Board of Education shall report the results of these evaluations to the Joint Legislative Education Oversight Committee by September 15, 1999.

Requested by:  Senators Winner, Lee
UNIFORM EDUCATION REPORTING SYSTEMS FUNDS
Section 8.26. Funds appropriated for the 1997-99 fiscal biennium for the Uniform Education Reporting System shall be used for the maintenance, enhancement, or purchase of financial personnel or for student information software, in order to support the State Board of Education's responsibilities under G.S. 115C-12(18).

Requested by:  Senators Winner, Lee
LEGISLATORS MAY SERVE ON SCHOOL TECHNOLOGY COMMISSION
Section 8.27. (a) G.S. 115C-102.5 reads as rewritten:
"§ 115C-102.5.  Commission on School Technology created; membership.
(a)	There is created the Commission on School Technology. The Commission shall be located administratively in the Department of Public Instruction but shall exercise all its prescribed statutory powers independently of the Department of Public Instruction.
(b)	The Commission shall consist of the following 18 members:
(1)	The State Superintendent of Public Instruction or a designee;
(2)	One representative of The University of North Carolina, appointed by the President of The University of North Carolina;
(3)	One representative of the North Carolina Community College System, appointed by the President of the North Carolina Community College System;
(4)	The Deputy Controller for the Information Resources Management Commission in the Office of the State Controller;
(5)	Four members appointed by the Governor;
(6)	Six members appointed by the President Pro Tempore of the Senate two of whom shall be members of the Senate. One of these six members shall be appointed by the President of the Senate to serve as cochair; and
(7)	Six members appointed by the Speaker of the House of Representatives two of whom shall be members of the House of Representatives.  One of these six members shall be appointed by the Speaker of the House of Representatives to serve as cochair.
In appointing members pursuant to subdivisions (5), (6), and (7) of this subsection, the appointing persons shall select individuals with technical or applied knowledge or experience in learning and instructional management technologies or individuals with expertise in curriculum or instruction who have successfully used learning and instructional management technologies.
No producers, vendors, or consultants to producers or vendors of learning or instructional management technologies shall serve on the Commission.
Members shall serve for two-year terms. Vacancies in terms of members shall be filled by the appointing officer. Persons appointed to fill vacancies shall qualify in the same manner as persons appointed for full terms.
	(d)	Members of the Commission who are also members of the General Assembly shall be paid subsistence and travel expenses at the rate set forth in G.S. 120-3.1. Members of the Commission who are officials or employees of the State shall receive travel allowances at the rate set forth in G.S. 138-6. All other members of the Commission shall be paid the per diem and allowances set forth in G.S. 138-5.
(e)	The Department of Public Instruction, the Department of Community Colleges, and the Office of the State Controller shall provide requested professional and clerical staff to the Commission. The Commission may also employ professional and clerical staff and may hire outside consultants to assist it in its work. The Commission shall use an outside consultant to perform a requirements analysis for learning and instructional management technologies on a statewide basis that is based on information gathered from each local school administrative unit and that considers the needs of teachers, students, and administrators."
(b)	G.S. 115C-102.6B reads as rewritten:
"§ 115C-102.6B.  Approval of State school technology plan.
(a)	The Commission shall present the State school technology plan it develops to the Joint Legislative Commission on Governmental Operations and the Joint Legislative Education Oversight Committee for their comments prior to January 1, 1995.  At least every two years thereafter, the Commission shall develop any necessary modifications to the State school technology plan and present them to the Joint Legislative Commission on Governmental Operations and the Joint Legislative Education Oversight Committee.
(b)	After presenting the plan or any proposed modifications to the plan to the Joint Legislative Commission on Governmental Operations and the Joint Legislative Education Oversight Committee, the Commission shall submit the plan or any proposed modifications to (i) the Information Resources Management Commission for its approval of the technical components of the plan set out in G.S. 115C-102.6A(1) through (4), and (ii) the State Board of Education for information purposes only.  The State Board shall adopt a plan that includes the components of a plan set out in G.S. 115C-103.6A (1) through (16).
At least one-fourth of the members of any technical committee that reviews the plan for the Information Resources Management Commission shall be people actively involved in primary or secondary education.
(c)	If no changes are made to the plan or the proposed modifications to the plan after the submission to the Information Resources Management Commission and the State Board of Education, the plan or the proposed modifications shall take effect upon approval by the Information Resources Management Commission and the State Board of Education."
(c)	G.S. 120-123(60) is repealed.

Requested by:  Senators Winner, Lee
NORTH CAROLINA STANDARDS AND ACCOUNTABILITY COMMISSION
Section 8.28. The North Carolina Standards and Accountability Commission has completed the initial phase of its work and submitted a report to the State Board of Education.  Therefore, effective August 1, 1997, Article 8A of Chapter 115C of the General Statutes is repealed.  However, the task of integrating the Commission's recommendations into the standards and assessments system of the State Board of Education remains to be completed.
Recognizing the important role of the Commission's work, including the support of the business community as evidenced by the recent Business Summit on Education, there is established the Committee on Standards and Accountability.  This Committee shall advise the State Board of Education regarding integration of the recommendations of the Standards and Accountability Commission into the Board's student performance standards.  The Committee shall be composed of  13 members, nine appointed by the Governor, two appointed by the President Pro Tempore of the Senate, and two appointed by the Speaker of the House of Representatives.  Of the Governor's nine appointments, one shall be for a chair of the Committee.  The chair shall be a person in North Carolina who understands the connection of high and rigorous standards with student preparation for the world of work and other post-high school opportunities.
Funds appropriated to the Standards and Accountability Commission for the 1997-99 fiscal biennium shall be used by the State Board of Education to continue to develop standards, accountability, and assessment systems in light of the recommendations of the Standards and Accountability Commission.

Requested by:  Senators Winner, Lee, Rand
SPECIAL NEEDS CHILDREN FUNDS
Section 8.29. Of the funds appropriated to the State Board of Education, the sum of five hundred thousand dollars ($500,000) for the 1997-98 fiscal year shall be allocated to local educational agencies for children with special needs reassigned to group homes but not included in the head count of children with special needs upon which the original funding for local educational agencies was based or for children with special needs in counties with special populations that frequently fluctuate in numbers such as military personnel.  The State Board of Education shall allocate these funds upon applications made by local educational agencies.

Requested by:   Senator Perdue
TEACHER APPRENTICESHIP PROGRAM
Section 8.30.  The State Board of Education shall use funds appropriated from the Worker Training Trust Fund in Section 14 of this act to design and implement a public school teacher apprenticeship program. Notwithstanding any other provision of law, individuals who participate in the program may be granted a provisional teaching certificate by the State Board of Education for no more than five years and shall be required to obtain certification before contracting for a sixth year of service with any local administrative unit in this State.
The State Board of Education shall collaborate with and may contract with the Governor's Commission on Workforce Preparedness on designing and implementing the program.  

Requested by:  Senators Winner, Lee
SAFE SCHOOLS
Section 8.31.  (a)	Of the funds appropriated to State Aid to Local School Administrative Units, the State Board of Education may use up to five hundred thousand dollars ($500,000) for the 1997-98 fiscal year and up to  five hundred thousand dollars ($500,000) for the 1998-99 fiscal year to provide safety intervention teams to schools to assist those schools in restoring safety and order.  Upon the request of a local board of education, a superintendent, a principal, a school improvement team, or a parent-teacher organization at a school, the State Board of Education is authorized to provide a safety intervention team to a school.  The team may consist of teachers, retired teachers, school administrators, retired school administrators, and others who have demonstrated their ability to restore and maintain order in public schools.  The team shall spend a sufficient amount of time at the school to assess the problems at the school, assist school personnel with resolving those problems, and work with school personnel and others to develop a long-term plan for restoring and maintaining order and discipline at the school.  The team shall also make recommendations to the local board of education and the superintendent on actions the board and the superintendent should consider taking to resolve problems at the school.  The team shall revisit the school as needed to monitor the school's progress in implementing the plan and in restoring and maintaining order and discipline in the school.  If appropriate, the team may make further recommendations to the local board of education and the superintendent on additional actions, including dismissal of teachers or administrators, to resolve problems at the school.  If the school fails to make adequate progress on its implementation of a long-term plan, the team recommends the dismissal of any teacher or administrator, and the local board fails to take action on the dismissal recommendation, then the team may make the dismissal recommendation to the State Board of Education.  Upon receipt of a dismissal recommendation, the State Board shall follow the procedure established in G.S. 115C-325(q)(1) or G.S. 115C-325(q)(2), whichever is applicable, for the dismissal of the teacher or administrator.
(b)	 Chapter 115C of the General Statutes is amended by adding a new Article to read:
"ARTICLE 27A.
"Management and Placement of Disruptive Students.
"§ 115C-397.1.  Management and placement of disruptive students.
If, after a teacher has requested assistance from the principal two or more times due to a student's disruptive behavior, the teacher finds that the student's disruptive behavior continues to interfere with the academic achievement of that student or other students in the class, then the teacher may refer the matter to the school-based committee established at that school as authorized by the State Board of Education in its Procedures Governing Programs and Services for Children with Special Needs.  The teacher may request that additional classroom teachers participate in the committee's proceedings.  For the purposes of this section, the student's parent, guardian, or legal custodian shall participate in the proceedings of the committee concerning the student; the local board of education may impose a civil penalty not to exceed one hundred dollars ($100.00) on a parent, guardian, or legal custodian who fails to participate without good cause.  Furthermore, a student is not required to be screened, evaluated, or identified as a child with special needs under this section.  The committee shall review the matter and shall take one or more of the following actions: (i) advise the teacher on managing the student's behavior more effectively, (ii) recommend to the principal the transfer of the student to another class within the school, (iii) recommend to the principal a multidisciplinary diagnosis and evaluation of the student, (iv) recommend to the principal that the student be assigned to an alternative learning program, or (v) recommend to the principal that the student receive any additional services that the school or the school unit has the resources to provide for the student.  If the principal does not follow the recommendation of the committee, the principal shall provide a written explanation to the committee, the teacher who referred the matter to the committee, and the superintendent, of any actions taken to resolve the matter and of the reason the principal did not follow the recommendation of the committee.
This section shall be in addition to and supplemental to disciplinary action taken in accordance with any other law.  The recommendation of the committee is final and shall not be appealed under G.S. 115C-45(c). Nothing in this section shall authorize a student to refer a disciplinary matter to this committee or to have the matter of the student's behavior referred to this committee before any discipline is imposed on the student."
(c)	(1)	Of the funds appropriated to State Aid to Local School Administrative Units, the sum of three million five hundred thousand dollars ($3,500,000) for the 1997-98 fiscal year and the sum of three million five hundred thousand dollars ($3,500,000) for the 1998-99 fiscal year shall be used to provide additional teachers for middle school children who are academically below grade level.  Middle school children are children in a school that serves grades six, seven, and eight, and no other grades.
   The State Board of Education shall allocate these teacher positions to pilot middle schools on the basis of the number of students in grade six who scored at proficiency Level I on the end-of-grade test in mathematics, on the end-of-grade test in reading, or on both, at the end of their last school year.  The funds must be used in schools that have at least 50 such students at a ratio of one teacher to every 50 students.  No partial positions shall be allocated.
(2)	The purpose of these funds is to improve the academic performance and the behavior of these students during the first school year after elementary school by placing them in classes with a low student-to-teacher ratio for either all of their core academic subjects or for the subject or subjects in which they are below grade level.  In order to accomplish this purpose, local school administrative units shall use (i) the teachers allocated for these students pursuant to the regular teacher allotment and (ii) the teachers allocated for these students under this section only to improve the academic performance and the behavior of these students. Local boards of education shall adopt rules to ensure that each student for whom funds for additional teacher positions are allocated under this section shall be assigned a teacher who is responsible for monitoring the academic progress of the student.
(3)	Of the funds appropriated in this section, the State Board of Education may use up to twenty-five thousand dollars ($25,000) to evaluate the effectiveness of these smaller classes in improving academic performance and discipline in middle schools.
(d)	G.S. 115C-366 is amended by adding the following new subsections to read:
"( a3)	Before the admission of a student to any public school in North Carolina, the local board shall require the student's parent, guardian, custodian, or other person satisfactory to the local board to provide a statement made under oath or affirmation before a qualified official indicating whether the student is, at the time, under suspension or expulsion from attendance at a private or public school in this or any other state or has been convicted of a felony in this or any other state.
(a4)	Notwithstanding any other law, a local board may deny admission to or place reasonable conditions on the admission of a student who has been suspended from a school under G.S. 115C-391 or who has been suspended from a school for conduct that could have led to a suspension from a school within the local school administrative unit where the student is seeking admission until the period of suspension has expired.  Also, a local board may deny admission to or place reasonable conditions on the admission of a student who has been expelled from a school under G.S. 115C-391 or who has been expelled from a school for behavior that indicated the student's continued presence in school constituted a clear threat to the safety of other students or employees or who has been convicted of a felony in this or any other state.  If the local board denies admission to a student who has been expelled or convicted of a felony, the student may request the local board to reconsider that decision in accordance with G.S. 115C-391(d)."
(e)  Article 54 of Chapter 7A of the General Statutes is amended by adding the following new section to read:
"§ 7A-675.1.  Notification of schools when juveniles are alleged or found to be delinquent.
(a)	Notwithstanding G.S. 7A-675, the juvenile court counselor shall deliver verbal and written notification of the following actions to the principal of the school that the juvenile attends:
(1)	A petition is filed under G.S. 7A-560 that alleges delinquency for an offense that would be a felony if committed by an adult;
(2)	The judge transfers jurisdiction over a juvenile to superior court under G.S. 7A-608;
(3)	The judge dismisses under G.S. 7A-637 the petition that alleges delinquency for an offense that would be a felony if committed by an adult;
(4)	The judge issues a dispositional order under Article 52 of Chapter 7A of the General Statutes including, but not limited to, an order of probation that requires school attendance, concerning a juvenile alleged or found delinquent for an offense that would be a felony if committed by an adult; or
(5)	The judge modifies or vacates any order or disposition under G.S. 7A-664 concerning a juvenile alleged or found delinquent for an offense that would be a felony if committed by an adult.
Notification of the school principal in person or by telephone shall be made before the beginning of the next school day.  Delivery of the written notification shall be made as soon as practicable but at least within five days of the action.  Delivery shall be made in person or by certified mail.  Notification that a petition has been filed shall describe the nature of the offense.  Notification of a dispositional order, a modified order, a vacated order, or a transfer to superior court shall describe the judge's action and any applicable disposition requirements.  As used in this subsection, the term 'offense' shall not include any offense under Chapter 20 of the General Statutes.
(b)	If the principal of the school the juvenile attends returns any notification as required by G.S. 115C-404 and if the juvenile court counselor learns that the juvenile is transferring to another school, the juvenile court counselor shall deliver the notification to the principal of the school to which the juvenile is transferring.  Delivery shall be made as soon as practicable and shall be made in person or by certified mail.
(c)	Principals shall handle any notification delivered under this section in accordance with G.S. 115C-404.
(d)	For the purpose of this section, 'school' means any public or private school in the State that is authorized under Chapter 115C of the General Statutes."
(f)  Article 29 of Chapter 115C of the General Statutes is amended by adding a new section to read:
"§ 115C-404.  Use of juvenile court information.
(a)	Written notifications received in accordance with G.S. 7A-675.1 are confidential records, are not public records as defined under G.S. 132-1, and shall not be made part of the student's official record under G.S. 115C-402.  Immediately upon receipt, the principal shall maintain these documents in a safe, locked record storage that is separate from the student's other school records.  The principal shall maintain these documents until the principal receives notification that the judge dismissed the petition under G.S. 7A-637, the judge transferred jurisdiction over the student to superior court under G.S. 7A-608, or the judge granted the student's petition for expunction of the records.  At that time, the principal shall shred, burn, or otherwise destroy the documents to protect the confidentiality of this information. In no case shall the principal make a copy of these documents.
(b)	Documents received under this section may be used only to protect the safety of the student or others and to improve the educational opportunities in the school.  Upon receipt of each document, the principal shall share the document with those individuals who have (i) direct guidance, teaching, or supervisory responsibility for the student, and (ii) a specific need to know in order to protect the safety of the student or others.  Those individuals shall indicate in writing that they have read the document and that they agree to maintain its confidentiality.  Failure to maintain the confidentiality of these documents as required by this section is grounds for dismissal of an employee who is not a career employee and is grounds for dismissal of an employee who is a career employee, in accordance with G.S. 115C-325(e)(1)i.
(c)	If the student graduates, withdraws from school, is suspended for the remainder of the school year, is expelled, or transfers to another school, the principal shall return the documents to the juvenile court counselor and, if applicable, shall provide the counselor with the name and address of the school to which the student is transferring."
(g)  G.S. 15A-505 reads as rewritten:
"§ 15A-505.  Notification of parent and school.
(a)	A law enforcement officer who charges a minor with a criminal offense shall notify the minor's parent or guardian of the charge, as soon as practicable, in person or by telephone.  If the minor is taken into custody, the law enforcement officer or the officer's immediate superior shall notify a parent or guardian in writing that the minor is in custody within 24 hours of the minor's arrest.  If the parent or guardian of the minor cannot be found, then the officer or the officer's immediate superior shall notify the minor's next-of-kin of the minor's arrest as soon as practicable.
(b)	The notification provided for by subsection (a) of this section shall not be required if:
(1)	The minor is emancipated;
(2)	The minor is not taken into custody and has been charged with a motor vehicle moving violation for which three or fewer points are assessed under G.S. 20-16(c), except an offense involving impaired driving, as defined in G.S. 20-4.01(24a); or
(3)	The minor has been charged with a motor vehicle offense that is not a moving violation.
(c)	A law enforcement officer who charges a person with a criminal offense that is a felony, except for a criminal offense under Chapter 20 of the General Statutes, shall notify the principal of any school the person attends of the charge as soon as practicable but at least within five days. The notification may be made in person or by telephone.  If the person is taken into custody, the law enforcement officer or the officer's immediate supervisor shall notify the principal of any school the person attends. This notification shall be in writing and shall be made within five days of the person's arrest.  As used in this subsection, the term 'school' means any public or private school in the State that is authorized under Chapter 115C of the General Statutes."
(h)  G.S. 115C-12 is amended by adding a new subdivision to read:
"(25)	Duty to Provide Technical Assistance on School Safety Plans. – The State Board of Education shall provide technical assistance to local school administrative units on developing, implementing, and evaluating local plans to maintain, improve, or restore order and discipline within their schools."
(i)  The Board of Governors of The University of North Carolina shall develop a plan for ensuring that school administrator and teacher preparation and continuing education programs provide their students with the training and experience  they need to maintain and restore safety and order in schools.
The Board of Governors shall report on the plan, prior to February 15, 1998, to the Joint Legislative Education Oversight Committee.
(j)  The State Board of Education shall review and consider modifications to its school facility guidelines in light of research on the relationship between (i) school design components, especially school size,  and (ii) school climate and order.
The State Board shall also develop recommendations to local boards of education on modifications to the design or organization of existing schools that would improve school climate and order.
The State Board of Education shall report to the Joint Legislative Education Oversight Committee prior to February 15, 1998, on actions taken to implement the provisions of this section.
(k)  Prior to August 15, 1997, the State Board of Education shall review and modify, if necessary, its policies and procedures on data kept and reports made on acts of violence in school and on students suspended or expelled from school, to ensure that data and reports are accurate and consistent on a statewide basis.  The State Board shall report to the Joint Legislative Education Oversight Committee prior to March 15, 1998, on the impact of its efforts to attain accurate and consistent reports.
(l)(1)  There is created the At-Risk Students Task Force under the State Board of Education.  The Task Force shall consist of the Chair of the State Board of Education, the Superintendent of Public Instruction, the Secretary of Human Resources, the State Health Director, and the Director of the Administrative Office of the Courts.  Each officer may designate one representative from that officer's department or office to represent that officer on the Task Force.  These officers also may appoint additional members who represent other State and local public agencies to the Task Force.  The Chair of the State Board of Education, or the Chair's designee, shall serve as the Chair of the Task Force.  The Department of Public Instruction and the Department of Human Resources shall provide staff and clerical support to the Task Force.  The State Board of Education shall fund the Task Force within funds available to it.
(2)	The Task Force shall develop a plan to develop interagency agreements between local school administrative units and other local public agencies, including, among others, health departments, departments of social services, mental health agencies, and courts, in order to provide cooperative services to students who are at risk of school failure, at risk of participation in juvenile crime, or both.
(3)	The Task Force shall report its plan, along with any suggested statutory revisions, to the Joint Legislative Education Oversight Committee by October 15, 1997, at which time the Task Force shall terminate.
(m)  G.S. 143B-152.5 reads as rewritten:
"§ 143B-152.5.  Grants review and selection.
(a)	The Department shall develop and disseminate a request for applications and establish procedures to be followed in developing and submitting applications to establish local S.O.S. programs and administering grants to establish local S.O.S. programs.  This information shall include examples of the design and types of S.O.S. programs that evaluations have shown are likely to be successful in improving the academic performance of the participants or in reducing disruptive or illegal behavior.
(b)	The Secretary of Human Resources shall appoint a State task force to assist the Secretary in reviewing grant applications.  The State task force shall include representatives of the Department of Human Resources, the Department of Public Instruction, local school administrative units, educators, parents, the juvenile justice system, social services, and governmental agencies providing services to children, and other members the Secretary considers appropriate.  In appointing the State task force, the Secretary shall consult with the Superintendent of Public Instruction in an effort to coordinate the membership of this State task force, the State task force appointed by the Secretary pursuant to G.S. 143B-152.14, and the State task force appointed by the Superintendent pursuant to G.S. 115C-238.42.
In reviewing grant applications, the Secretary and the State task force may consider (i)	the severity of the local problems as determined by the needs assessment data, (ii) the likelihood that the locally designed plan will result in high quality after-school services for school-aged children, (iii) evidence of local collaboration and coordination of services, (iv) any innovative or experimental aspects of the plan that will make it a useful model for replication in other neighborhoods and communities, (v) evidence that similarly designed programs have been efficient and effective in improving the academic performance of the participants or in reducing disruptive or illegal behavior, and (vi) any other factors which affect the well-being of school-aged children.
(c)	In determining the amount of funds an applicant receives, the Secretary and the State task force may consider (i) the number of children to be served, (ii) the number and percentage of children to be served who participate in the subsidized lunch program, (iii) the number and percentage of school-aged children with two working parents or one single parent to be served, (iv) the availability of other resources or funds, and (v) the amount needed to implement the proposal.
(d)	The Secretary shall award the grants."
(n)  G.S. 143B-152.7(a) reads as rewritten:
"(a)	The Department of Human Resources shall develop and implement an evaluation system that will assess the efficiency and effectiveness of the S.O.S. Program.  The Department shall design this system to:
(1)	Provide information to the Department and to the General Assembly on how to improve and refine the programs;
(1a)	Develop information for dissemination to potential grant applicants on the design of programs that experience has shown are likely to be successful;
(2)	Enable the Department and the General Assembly to assess the overall quality, efficiency, and impact of the existing programs;
(3)	Enable the Department and the General Assembly to determine whether to modify the S.O.S. Program; and
(4)	Provide a detailed fiscal analysis of how State funds for these programs were used."
(o)  G.S. 115C-12(24) reads as rewritten:
"(24)	Duty to Develop Guidelines for Alternative Learning Programs, Provide Technical Assistance on Implementation of Programs, and Evaluate Programs. – The State Board of Education shall adopt guidelines for assigning students to alternative learning programs. These guidelines shall include (i) a description of the programs and services that are recommended to be provided in alternative learning programs and (ii) a process for ensuring that an assignment is appropriate for the student and that the student's parents are involved in the decision.
		The State Board of Education shall provide technical support to local school administrative units to assist them in developing and implementing plans for alternative learning programs.
		The State Board of Education shall recommend to local boards of education ways to measure the academic achievement of students while they are in the alternative learning programs or in remedial learning programs.
		The State Board shall evaluate the effectiveness of alternative learning programs and, in its discretion, of any other programs funded from the Alternative Schools/At-Risk Student allotment. Local school administrative units shall report to the State Board of Education on how funds in the Alternative Schools/At-Risk Student allotment are spent and shall otherwise cooperate with the State Board of Education in evaluating the alternative learning programs. The State Board of Education shall report annually to the Joint Legislative Education Oversight Committee, beginning in December 1996, on the results of this evaluation."
(p)  The State Board of Education and the Secretary of the Department of Human Resources shall appoint an advisory committee to consider the advisability of and to develop a proposal for creating regional residential schools for students with emotional and behavioral problems so severe that the public schools cannot serve them.  The advisory committee shall clearly define the population and the age limits of the population for whom such a residential school would be appropriate, estimate the number of students in that population, devise a plan for building and operating such schools, and estimate the costs and benefits of such schools.  The advisory committee shall consider whether any existing State facilities would be available and appropriate to house such a school.  The advisory committee shall report the results of its study, including its recommendation on the advisability of creating these schools, to the State Board of Education and the Secretary of the Department of Human Resources prior to January 15, 1998.  The State Board of Education and the Secretary of Human Resources shall report the results of the study to the Joint Legislative Education Oversight Committee prior to February 15, 1998.
(q)  G.S. 115C-391(a) reads as rewritten:
"(a)	Local boards of education shall adopt policies not inconsistent with the provisions of the Constitutions of the United States and North Carolina, governing the conduct of students and establishing procedures to be followed by school officials in suspending or expelling any student, or in disciplining any student if the offensive behavior could result in suspension, expulsion, or the administration of corporal punishment. The policies that shall be adopted for the administration of corporal punishment shall include at a minimum the following conditions:
(1)	Corporal punishment shall not be administered in a classroom with other children present;
(2)	The student body shall be informed beforehand what general types of misconduct could result in corporal punishment;
(3)	Only a teacher, substitute teacher, principal, or assistant principal may administer corporal punishment and may do so only in the presence of a principal, assistant principal, teacher, substitute teacher, teacher assistant, or student teacher, who shall be informed beforehand and in the student's presence of the reason for the punishment; and
(4)	An appropriate school official shall provide the child's parent or guardian with notification that corporal punishment has been administered, and upon request, the official who administered the corporal punishment shall provide the child's parent or guardian a written explanation of the reasons and the name of the second school official who was present.
Each local board shall publish all the policies mandated by this section and make them available to each student and his parent or guardian at the beginning of each school year.
	(a1)  Notwithstanding any policy adopted pursuant to this section, school personnel may use reasonable force, including corporal punishment, to control behavior or to remove a person from the scene in those situations when necessary:
(1)	To quell a disturbance threatening injury to others;
(2)	To obtain possession of weapons or other dangerous objects on the person, or within the control, of a student;
(3)	For self-defense; 
(4)	For the protection of persons or property; or
(5)	To maintain order on school property, in the classroom, or at a school-related activity on or off school property."
(r)  G.S. 115C-391 is amended by adding the following new subsection to read:
"( h)	Notwithstanding any other law, no officer or employee of the State Board of Education or of a local board of education shall be civilly liable for using reasonable force, including corporal punishment, in conformity with State law, State or local rules, or State or local policies regarding the control, discipline, suspension, and expulsion of students.  Furthermore, the burden of proof is on the claimant to show that the amount of force used was not reasonable."

Requested by:  Senators Plyler, Perdue, Odom
SCHOOL-BASED ADMINISTRATOR SALARIES
Section 8.32.  (a)	Funds appropriated to the Reserve for Salary Increases shall be used for the implementation of the salary schedule for school-based administrators as provided in this section.  These funds shall be used for State-paid employees only.
(b)	The salary schedule for school-based administrators shall apply only to principals and assistant principals.  The salary schedule for the 1997-98 fiscal year, commencing July 1, 1997, is as follows:

	Asst.
Step 	Prin.	Prin.I	Prin.II	Prin.III	Prin.IV	Prin.V	Prin.VI	Prin.VII

0	  –  	  –  	  –  	  –  	  –  	  –  	  –  	–
1	  –  	  –  	  –  	  –  	  –  	  –  	  –  	–
2	  –  	  –  	  –  	  –  	  –  	  –  	  –  	–
3	  –  	  –  	  –  	  –  	  –  	  –  	  –  	–
4	$2,602	  –  	  –  	  –  	  –  	  –  	  –  	–
5	2,655	  –  	  –  	  –  	  –  	  –  	  –  	–
6	2,708	  –  	  –  	  –  	  –  	  –  	  –  	–
7	2,762	  –  	  –  	  –  	  –  	  –  	  –  	–
8	2,817	$2,817	  –  	  –  	  –  	  –  	  –  	–
9	2,873	2,873	  –  	  –  	  –  	  –  	  –  	–
10	2,930	2,930	$2,989	  –  	  –  	  –  	  –  	–
11	2,989	2,989	3,049	  –  	  –  	  –  	  –  	–
12	3,049	3,049	3,110	$3,172	  –  	  –  	  –  	–
13	3,110	3,110	3,172	3,235	$3,300	  –  	  –  	–
14	3,172	3,172	3,235	3,300	 3,366	$3,433	  –  	–
15	3,235	3,235	3,300	3,366	 3,433	 3,502	  –  	–
16	3,300	3,300	3,366	3,433	 3,502	 3,572	$3,643 	–
17	3,366	3,366	3,433	3,502	 3,572	 3,643	3,716 	$3,791
18	3,433	3,433	3,502	3,572	 3,643	 3,716	3,791 	3,867
19	3,502	3,502	3,572	3,643	 3,716	 3,791	3,867 	3,944
20	3,572	3,572	3,643	3,716	 3,791	 3,867	3,944 	4,023
21	3,643	3,643	3,716	3,791	 3,867	 3,944	4,023 	4,103
22	3,716	3,716	3,791	3,867	 3,944	 4,023	4,103 	4,185
23	3,791	3,791	3,867	3,944	 4,023	 4,103	4,185 	4,269
24	3,867	3,867	3,944	4,023	 4,103	 4,185	4,269 	4,355
25	3,944	3,944	4,023	4,103	 4,185	 4,269	4,355 	4,442
26	4,023	4,023	4,103	4,185	 4,269	 4,355	4,442 	4,531
27	4,103	4,103	4,185	4,269	 4,355	 4,442	4,531 	4,622
28	4,185	4,185	4,269	4,355	 4,442	 4,531	4,622 	4,714
29	4,269	4,269	4,355	4,442	 4,531	 4,622	4,714 	4,808
30	4,355	4,355	4,442	4,531	 4,622	 4,714	4,808 	4,904
31	4,442	4,442	4,531	4,622	 4,714	 4,808	4,904 	5,002
32 	  –  	4,531	4,622	4,714	 4,808	 4,904	5,002 	5,102
33 	  –  	  – 	4,714	4,808	 4,904	 5,002	5,102 	5,204
34 	  –  	  – 	4,808	4,904	 5,002	 5,102	5,204 	5,308
35 	  –  	  – 	  – 	5,002	 5,102	 5,204	5,308 	5,414
36 	  –  	  – 	  – 	5,102	 5,204	 5,308	5,414 	5,522
37 	  –  	  – 	  – 	  – 	 5,308	 5,414	5,522 	5,632
38 	  –  	  – 	  – 	  – 	   – 	 5,522	5,632 	5,745
39 	  –  	  – 	  – 	  – 	  – 	   – 	5,745 	5,860
40 	  –  	  – 	  – 	  – 	  – 	   – 	5,860 	5,977
41	 –  	  – 	  – 	  – 	 – 	  – 	 – 	 6,097.
(c)	The appropriate classification for placement of principals and assistant principals on the salary schedule shall be determined in accordance with the following schedule:
Number of Teachers
Classification	Supervised
Assistant Principal
Principal I	Less than 11 Teachers
Principal II	11-21 Teachers
Principal III	22-32 Teachers
Principal IV	33-43 Teachers
Principal V	44-54 Teachers
Principal VI	55-65 Teachers
Principal VII	More than 65 Teachers

The number of teachers supervised includes teachers and assistant principals paid from State funds only; it does not include teachers or assistant principals paid from non-State funds or the principal or teacher assistants.
(d)	A principal shall be placed on the step on the salary schedule that reflects total number of years of experience as a certificated employee of the public schools and an additional step for every three years of experience as a principal.
(e)  Principals and assistant principals with certification based on academic preparation at the six-year degree level shall be paid a salary supplement of one hundred twenty-six dollars ($126.00) per month and at the doctoral degree level shall be paid a salary supplement of two hundred fifty-three dollars ($253.00) per month.
(f)  There shall be no State requirement that superintendents in each local school unit shall receive in State-paid salary at least one percent (1%) more than the highest paid principal receives in State salary in that school unit:  Provided, however, the additional State-paid salary a superintendent who was employed by a local school administrative unit for the 1992-93 fiscal year received because of that requirement shall not be reduced because of this subsection for subsequent fiscal years that the superintendent is employed by that local school administrative unit so long as the superintendent is entitled to at least that amount of additional State-paid salary under the rules in effect for the 1992-93 fiscal year.
(g)  Longevity pay for principals and assistant principals shall be as provided for State employees.
(h)(1) If a principal is reassigned to a higher job classification because the principal is transferred to a school within a local school administrative unit with a larger number of State-allotted teachers, the principal shall be placed on the salary schedule as if the principal had served the principal's entire career as a principal at the higher job classification.
(2)	If a principal is reassigned to a lower job classification because the principal is transferred to a school within a local school administrative unit with a smaller number of State-allotted teachers, the principal shall be placed on the salary schedule as if the principal had served the principal's entire career as a principal at the lower job classification.
   This subdivision applies to all transfers on or after the ratification date of this act, except transfers in school systems that have been created, or will be created, by merging two or more school systems.  Transfers in these merged systems are exempt from the provisions of this subdivision for one calendar year following the date of the merger.
(i)  Except as provided in subsection (h) of this section, the salary of a principal or assistant principal shall not be less for the 1997-98 fiscal year than it was for the 1993-94 fiscal year solely as a result of placement on the salary schedule established in this section.
(j)  The State Board may authorize local boards of education to pay persons for one year at the entry-level step of the assistant principal's salary schedule if they (i) are serving as assistant principals, (ii) have completed one year of a masters in school administration program, and (iii) are not certified as assistant principals.

Requested by: Senators Plyler, Perdue, Odom
SCHOOL CENTRAL OFFICE SALARIES
Section 8.33.  (a) The following monthly salary ranges apply to public school superintendents, assistant superintendents, associate superintendents, directors/coordinators, supervisors, and finance officers for the 1997-98 fiscal year, beginning July 1, 1997:
(1)	School Administrator I:	$2,818 - $4,669
(2)	School Administrator II:	$2,991 - $4,956
(3)	School Administrator III:	$3,174 - $5,260
(4)	School Administrator IV:	$3,302 - $5,473
(5)	School Administrator V:	$3,435 - $5,694
(6)	School Administrator VI:	$3,645 - $6,044
(7)	School Administrator VII:	$3,792 - $6,288
The local board of education shall determine the appropriate category and placement for each assistant superintendent, associate superintendent, director/coordinator, supervisor, or finance officer, within the salary ranges and within funds appropriated by the General Assembly for central office administrators and superintendents.  The category in which an employee is placed shall be included in the contract of any employee hired on or after July 1, 1997.
(b)	The following monthly salary ranges apply to public school superintendents for the 1997-98 fiscal year, beginning July 1, 1997:
(1)	Superintendent I (Up to 2,500 ADM):	$4,025 - $6,673
(2)	Superintendent II (2,501 - 5,000 ADM):	$4,272 - $7,081
(3)	Superintendent III (5,001 - 10,000 ADM):	$4,533 - $7,514
(4)	Superintendent IV (10,001 - 25,000 ADM):	$4,811 - $7,974
(5)	Superintendent V (Over 25,000 ADM):	$5,106 - $8,462
The local board of education shall determine the appropriate category and placement for the superintendent based on the average daily membership of the local school administrative unit and within funds appropriated by the General Assembly for central office administrators and superintendents.
Notwithstanding the provisions of this subsection, a local board of education may pay an amount in excess of the applicable range to a superintendent who is entitled to receive the higher amount under Section 8.32 of this act.
(c)	Longevity pay for superintendents, assistant superintendents, associate superintendents, directors/coordinators, supervisors, and finance officers shall be as provided for State employees.
(d)	Superintendents, assistant superintendents, associate superintendents, directors/coordinators, supervisors, and finance officers with certification based on academic preparation at the six-year degree level shall receive a salary supplement of one hundred twenty-six dollars ($126.00) per month in addition to the compensation provided for pursuant to this section.  Superintendents, assistant superintendents, associate superintendents, directors/coordinators, supervisors, and finance officers with certification based on academic preparation at the doctoral degree level shall receive a salary supplement of two hundred fifty-three dollars ($253.00) per month in addition to the compensation provided for under this section.
(e)  The State Board shall not permit local school administrative units to transfer State funds from other funding categories for salaries for public school central office administrators.
(f)  The Director of the Budget shall transfer from the Reserve for Salary Increases created in this act for fiscal year 1997-98, beginning July 1, 1997, funds necessary to provide an average annual salary increase of three percent (3%), including funds for the employer's retirement and social security contributions, commencing July 1, 1997, for all permanent full-time personnel paid from the Central Office Allotment. The State Board of Education shall allocate these funds to local school administrative units.  The local boards of education shall establish guidelines for providing their salary increases to these personnel.

Requested by: Senators Plyler, Perdue, Odom
NONCERTIFIED PUBLIC SCHOOL EMPLOYEES' SALARY INCREASE
Section 8.34.   The Director of the Budget may transfer from the Reserve for Salary Increases created in this act for fiscal year 1997-98, commencing July 1, 1997, funds necessary to provide a salary increase of three percent (3%), including funds for the employer's retirement and social security contributions, commencing July 1, 1997, for all noncertified public school employees whose salaries are supported from the State's General Fund.  Local boards of education shall increase the rates of pay for all such employees who were employed during fiscal year 1996-97 and who continue their employment for fiscal year 1997-98 by at least three percent (3%), commencing July 1, 1997.  These funds shall not be used for any purpose other than for the salary increases and necessary employer contributions provided by this section.
The Director of the Budget may transfer from the salary increase reserve fund created in this act for fiscal year 1997-98, beginning July 1, 1997, funds necessary to provide the salary increases for noncertified public school employees whose salaries are supported from the State's General Fund in accordance with the provisions of this section.

SUBPART B.  EXCELLENT SCHOOLS ACT PROVISIONS

Requested by:  Senators Plyler, Perdue, Odom
TEACHER SALARY SCHEDULES
Section 8.35. (a)	Effective for the 1997-98 school year, the Director of the Budget may transfer from the Reserve for Salary Increases for the 1997-98 fiscal year funds necessary to implement the teacher salary schedule set out in subsection (b) of this section, including funds for the employer's retirement and social security contributions and funds for annual longevity payments at one percent (1%) of base salary for 10 to 14 years of State service, one and one-half percent (1.5%) of base salary for 15 to 19 years of State service, two percent (2%) of base salary for 20 to 24 years of State service, and four and one-half percent (4.5%) of base salary for 25 or more years of State service, commencing with July 1, 1997, for all teachers whose salaries are supported from the State's General Fund.  These funds shall be allocated to individuals according to rules adopted by the State Board of Education and the Superintendent of Public Instruction.  The longevity payment shall be paid in a lump sum once a year.
(b)(1)  For the 1997-98 school year, the following monthly salary schedules shall apply to certified personnel of the public schools who are classified as teachers.  The schedule contains 30 steps with each step corresponding to one year of teaching experience.

1997-98 Monthly Salary Schedule

	Years of	"A"Teachers	" G" 	"A"Teachers	" G"Teachers
Experience	Teachers	with NBPTS	with NBPTS
	Certification	Certification
0	$2,215	$2,353	$2,480	$2,635
1	2,257	2,398	2,527	2,685
2	2,300	2,444	2,576	2,737
3	2,436	2,588	2,728	2,898
4	2,495	2,651	2,794	2,969
5	2,543	2,702	2,848	3,026
6	2,592	2,754	2,903	3,084
7	2,641	2,806	2,957	3,142
8	2,706	2,875	3,030	3,220
9	2,756	2,928	3,086	3,279
10	2,808	2,984	3,144	3,342
11	2,861	3,040	3,204	3,404
12	2,915	3,097	3,264	3,468
13	2,970	3,156	3,326	3,534
14	3,026	3,215	3,389	3,600
15	3,083	3,276	3,452	3,669
16	3,141	3,337	3,517	3,737
17	3,201	3,401	3,585	3,809
18	3,262	3,466	3,653	3,881
19	3,325	3,533	3,724	3,956
20	3,388	3,600	3,794	4,032
21	3,452	3,668	3,866	4,108
22	3,517	3,737	3,939	4,185
23	3,584	3,808	4,014	4,264
24	3,653	3,881	4,091	4,346
25	3,723	3,956	4,169	4,430
26	3,794	4,031	4,249	4,514
27	3,867	4,109	4,331	4,602
28	3,941	4,187	4,413	4,689
29+	4,017	4,268	4,499	4,780
(2)	Certified public school teachers with certification based on academic preparation at the six-year degree level shall receive a salary supplement of one hundred twenty-six dollars ($126.00) per month in addition to the compensation provided for certified personnel of the public schools who are classified as "G"teachers.  Certified public school teachers with certification based on academic preparation at the doctoral degree level shall receive a salary supplement of two hundred fifty-three dollars ($253.00) per month in addition to the compensation provided for certified personnel of the public schools who are classified as "G"teachers.
(c)	Effective for the 1997-98 school year, the first step of the salary schedule for school psychologists shall be equivalent to Step 5, corresponding to five years of experience, on the salary schedule established in this section for certified personnel of the public schools who are classified as "G"teachers.  Certified psychologists shall be placed on the salary schedule at an appropriate step based on their years of experience.  Certified psychologists shall receive longevity payments based on years of State service in the same manner as teachers.
Certified psychologists with certification based on academic preparation at the six-year degree level shall receive a salary supplement of one hundred twenty-six dollars ($126.00) per month in addition to the compensation provided for certified psychologists.  Certified psychologists with certification based on academic preparation at the doctoral degree level shall receive a salary supplement of two hundred fifty-three dollars ($253.00) per month in addition to the compensation provided for certified psychologists.
(d) Effective for the 1997-98 school year, speech pathologists who are certified as speech pathologists at the masters degree level and audiologists who are certified as audiologists at the masters degree level and who are employed in the public schools as speech and language specialists and audiologists shall be paid on the school psychologist salary schedule.
Speech pathologists with certification based on academic preparation at the six-year degree level shall receive a salary supplement of one hundred twenty-six dollars ($126.00) per month in addition to the compensation provided for speech pathologists.  Speech pathologists with certification based on academic preparation at the doctoral degree level shall receive a salary supplement of two hundred fifty-three dollars ($253.00) per month in addition to the compensation provided for speech pathologists.

Requested by:  Senators Winner, Lee
FUNDS TO IMPLEMENT THE ABC'S OF PUBLIC EDUCATION PROGRAM
Section 8.36.  (a)	Of the funds appropriated to State Aid to Local School Administrative Units, the State Board of Education may use up to sixty-seven million five hundred thousand dollars ($67,500,000) for the 1997-98 fiscal year to  provide incentive funding for schools that meet or exceed the projected levels of improvement in student performance, in accordance with the ABC's of Public Education Program.  In accordance with State Board of Education policy, incentive awards in schools that achieve higher than expected improvements may be up to: (i)	one thousand dollars ($1,000) for each teacher and for certified personnel; and (ii) five hundred dollars ($500.00) for each teacher assistant.  In accordance with State Board of Education policy, incentive awards in schools that meet the expected improvements may be up to: (i) five hundred dollars ($500.00) for each teacher and for certified personnel; and (ii) two hundred fifty dollars ($250.00) for each teacher assistant.
(b)	Of the funds appropriated to State Aid to Local School Administrative Units, the State Board of Education may use up to two million seventy-three thousand seven hundred twenty-nine dollars ($2,073,729) for the 1997-98 fiscal year to provide a bonus equal to one percent (1%) of salary to each principal of a school that exceeds expected improvements.
(c)	The State Board of Education may use funds appropriated to State Aid to Local School Administrative Units for assistance teams to low-performing schools.

Requested by:  Senators Winner, Lee
EXTRA PAY FOR MENTOR TEACHERS
Section 8.37.  Of the funds appropriated to State Aid to Local School Administrative Units, the sum of three million five hundred thousand dollars ($3,500,000) for the 1997-98 fiscal year shall be used to provide every newly certified teacher with a qualified and well-trained mentor.  These funds shall be used to compensate each mentor at the rate of (i) one hundred dollars ($100.00) per month for a maximum of 10 months for serving as a mentor during the school year, and (ii) one hundred dollars ($100.00) for serving as a mentor for one day prior to the beginning of the school year.

Requested by:  Senators Winner, Lee
EXTRA PAY FOR NEW TEACHER DEVELOPMENT
Section 8.38.  Of the funds appropriated to State Aid to Local School Administrative Units, the sum of eight hundred thousand dollars ($800,000) for the 1997-98 fiscal year shall be used to provide every newly certified teacher with three extra days of employment for orientation and classroom preparation.  These funds shall be used to compensate each newly certified teacher at the daily pay rate of an entry-level teacher.

Requested by:  Senators Winner, Lee
EXTRA PAY FOR PROFESSIONAL DEVELOPMENT
Section 8.39.  Of the funds appropriated to State Aid to Local School Administrative Units, the sum of six million eight hundred thousand dollars ($6,800,000) for the 1997-98 fiscal year and the sum of six million eight hundred thousand dollars ($6,800,000) for the 1998-99 fiscal year shall be used  for assistance teams to low-performing schools and for professional development relating to the State Board's reading plan under the ABC Plan, mathematics education, and other areas as determined by the State Board of Education.
The General Assembly encourages the State Board to contract with the North Carolina Teacher Academy for teachers participating in assistance teams to low-performing schools.  The State Board shall report to the Joint Legislative Education Oversight Committee prior to April 15, 1998, and prior to April 15, 1999, on any contract with the North Carolina Teacher Academy.

Requested by:  Senators Winner, Lee
PUBLIC SCHOOL CALENDAR CHANGES/EXTRA PAY FOR EXTRA DAYS AND EXTRA DUTIES
Section 8.40. (a)	G.S. 115C-84 is repealed.
(b)	G.S. 115C-84.1 is repealed.
(c)	Part 2 of Article 8 of Chapter 115C of the General Statutes is amended by adding a new section to read:
"§ 115C-84.2.  School calendar.
(a)	School Calendar. – Each local board of education shall adopt a school calendar consisting of 220 days all of which shall fall within the fiscal year.  A school calendar shall include the following:
(1)	A minimum of 180 days and 1,000 hours of instruction covering at least nine calendar months.  The local board shall designate when the 180 instructional days shall occur.  The number of instructional hours in an instructional day may vary according to local board policy and does not have to be uniform among schools in the administrative unit.  Local boards may approve school improvement plans that include days with varying amounts of instructional time.  If school is closed early due to inclement weather, the day and the scheduled amount of instructional hours may count towards the required minimum.  The school calendar should include a plan for making up days and instructional hours missed when schools are not opened due to inclement weather.
(2)	A minimum of 10 annual vacation leave days.
(3)	The same or an equivalent number of legal holidays occurring within the school calendar as those designated by the State Personnel Commission for State employees.
(4)	Ten days, as designated by the local board, for use as teacher workdays, additional instructional days, or other lawful purposes.  A local board may delegate to the individual schools some or all of the 10 days to schedule under subdivision (5) of this subsection.  A local board may schedule different purposes for different personnel on any given day and is not required to schedule the same dates for all personnel.
(5)	The remaining days shall be scheduled by each individual school in any or all of the following methods:  (i) by the school improvement team in consultation with the school's principal, (ii) in the school improvement plan, (iii) by an amendment to the school improvement plan, and (iv) by agreement between the individual teacher and the school's principal.  Days may be scheduled for any of the purposes allowed under subdivision (4) of this subsection.  Days may be scheduled for different purposes for different personnel and there is no requirement to schedule the same dates for all personnel.
Local boards of education shall consult with parents and the employed  public school personnel in the development of the school calendar.
(b)	Limitations. – The following limitations apply when developing the school calendar:
(1)	The total number of teacher workdays shall not exceed 200 days.
(2)	Teachers shall not be required to work during the month of July unless:  (i) the school is a year-round school; or (ii) the teacher is employed for a term in excess of 10 months.
(3)	School shall not be held on Sundays.
(c)	Emergency Conditions. – During any period of emergency in any section of the State where emergency conditions make it necessary, the State Board of Education may order general, and if necessary, extended recesses or adjournment of the public schools.
(d)	Opening and Closing Dates. – Local boards of education shall determine the dates of opening and closing the public schools under subdivision (a)(1) of this section.  A local board may revise the scheduled closing date if necessary in order to comply with the minimum requirements for instructional days or instructional time.  Different opening and closing dates may be fixed for schools in the same administrative unit."
(d)	G.S. 115C-302 is repealed.
(e)  Article 20 of Chapter 115C of the General Statutes is amended by adding a new section to read:
"§ 115C-302.1.  Salary.
(a)	Prompt Payment. – Teachers shall be paid promptly when their salaries are due provided the legal requirements for their employment and service have been met. All teachers employed by any local school administrative unit who are to be paid from local funds shall be paid promptly as provided by law and as State-allotted teachers are paid.
(b)	Salary Payments. – State-allotted teachers shall be paid for a term of 10 months. State-allotted months of employment for vocational education to local boards shall be used for the employment of teachers of vocational and technical education for a term of employment to be determined by the local boards of education.
Each local board of education shall establish a set date on which monthly salary payments to State-allotted teachers shall be made.  This set pay date may differ from the end of the month of service. The daily rate of pay for teachers shall equal one twenty-second of the monthly rate of pay.
Teachers may be prepaid on the monthly pay date for days not yet worked.  A teacher who fails to attend scheduled workdays or who has not worked the number of days for which the teacher has been paid and who resigns, is  dismissed, or whose contract is not renewed shall repay to the local board any salary payments received for days not yet worked.  A teacher who has been prepaid and continues to be employed by a local board but fails to attend scheduled workdays may be subject to dismissal under G.S.  115C-325 or other appropriate discipline.
Any individual teacher who is not employed in a year-round school may be paid in 12 monthly installments if the teacher so requests on or before the first day of the school year. The request shall be filed in the local school administrative unit which employs the teacher. The payment of the annual salary in 12 installments instead of 10 shall not increase or decrease the teacher's annual salary nor in any other way alter the contract made between the teacher and the local school administrative unit.  Teachers employed for a period of less than 10 months shall not receive their salaries in 12 installments.
(c)	Vacation. – Included within the 10-month term shall be annual vacation leave at the same rate provided for State employees, computed at one-twelfth of the annual rate for State employees for each month of employment.  Local boards shall provide at least 10 days of annual vacation leave at a time when students are not scheduled to be in regular attendance. However, instructional personnel who do not require a substitute may use annual vacation leave on days that students are in attendance.  Vocational and technical education teachers who are employed for 11 or 12 months may, with prior approval of the principal, work on annual vacation leave days designated in the school calendar and may use those annual vacation leave days during the eleventh or twelfth month of employment.
On a day that pupils are not required to attend school due to inclement weather, but employees are required to report for a workday, a teacher may elect not to report due to hazardous travel conditions and to take an annual vacation day or to make up the day at a time agreed upon by the teacher and the teacher's immediate supervisor or principal.  On a day that school is closed to employees and pupils due to inclement weather, a teacher shall work on the scheduled makeup day.
All vacation leave taken by the teacher will be upon the authorization of the teacher's immediate supervisor and under policies established by the local board of education. Annual vacation leave shall not be used to extend the term of employment.
Teachers may accumulate annual vacation leave days without any applicable maximum until June 30 of each year. On June 30 of each year, any teacher or other personnel paid on the teacher salary schedule with more than 30 days of accumulated annual vacation leave shall, at the teacher's option, have the excess accumulation converted to either sick leave or pay, so that only 30 days are carried forward to July 1 of the same year.
	Upon separation from service due to resignation, dismissal, reduction in force, or death, an employee shall be paid in a lump sum for accumulated annual leave not to exceed a maximum of 30 days.  Upon separation from service due to service retirement, any teacher or other personnel paid on the teacher salary schedule with more than 30 days of accumulated annual vacation leave may, at the teacher's option, have some or all of the excess accumulation converted to sick leave for creditable service towards retirement.  A retiring teacher's accumulated annual leave, including any excess accumulated annual leave that is not converted to sick leave, shall be paid in a lump sum.  Employees going onto term disability may exhaust annual leave rather than be paid in a lump sum.
Notwithstanding any provisions of this subsection to the contrary, no person shall be entitled to pay for any vacation day not earned by that person.
(d)	Personal Leave. – Teachers earn personal leave at the rate of .20 days for each full month of employment not to exceed two days per year.  Personal leave may be accumulated to a maximum of five days.  Personal leave may be used only upon the authorization of the teacher's immediate supervisor, but if the request is made at least five days in advance, the teacher cannot be required to provide a reason for the request.  Unless approved by the principal, a teacher shall not take personal leave on the first day the teacher is required to report for the school year, on required teacher workdays, or on the day before or the day after holidays or scheduled vacation days.  Teachers may transfer personal leave days between local school administrative units.  The local school administrative unit shall credit a teacher who has separated from service and is reemployed within 60 months from the date of separation with all personal leave accumulated at the time of separation.  Local school administrative units shall not advance personal leave.  Teachers using personal leave receive full salary less the required substitute deduction.
(e)	Teachers in Year-Round Schools. – Compensation for teachers employed in year-round schools shall be the same as teachers paid for a 10-month term, but those days may be scheduled over 12 calendar months. Annual leave, sick leave, workdays, holidays, salary, and longevity for teachers who are employed at year-round schools shall be equivalent to those of other teachers employed for the same number of months, respectively.  Teachers paid for a term of 10 months in year-round schools shall receive their salary in 12 equal installments.
(f)	Overpayment. – Each local board of education shall sustain any loss by reason of an overpayment to any teacher paid from State funds.
(g)	Social Security. – All of the foregoing provisions of this section shall be subject to the requirement that at least fifty dollars ($50.00), or other minimum amount required by federal social security laws, of the compensation of each school employee covered by the Teachers' and State Employees' Retirement System or otherwise eligible for social security coverage shall be paid in each of the four quarters of the calendar year.
(h)	Service in Armed Forces. – The State Board of Education, in fixing the State standard salary schedule of teachers as authorized by law, shall provide that teachers who entered the armed or auxiliary forces of the United States after September 16, 1940, and who left their positions for such service shall be allowed experience increments for the period of such service as though the same had not been interrupted thereby, in the event such persons return to the position of teachers, principals, and superintendents in the public schools of the State after having been honorably discharged from the armed or auxiliary forces of the United States.
(i)	Teachers Paid From Other Funds. – Every local board of education may adopt, as to teachers not paid out of State funds, a salary schedule similar to the State salary schedule, but it likewise shall recognize a difference in salaries based on different duties, training, experience, professional fitness, and continued service in the same school system.  If a local board of education does not adopt a local salary schedule, the State salary schedule shall apply. No teacher shall receive a salary higher than that provided in the salary schedule, unless by action of the board of education a higher salary is allowed for special fitness, special duties, or under extraordinary circumstances.
Whenever a higher salary is allowed, the minutes of the board shall show what salary is allowed and the reason.  A board of education may authorize the superintendent to supplement the salaries of all teachers from local funds, and the minutes of the board shall show what increase is allowed each teacher.
(j)	Longevity Pay. – Longevity pay shall be based on the annual salary on the employee's anniversary date.
(k)	Parental Leave. – A teacher may use annual leave, personal leave, or leave without pay to care for a newborn child or for a child placed with the teacher for adoption or foster care. The leave may be for consecutive workdays during the first 12 months after the date of birth or placement of the child, unless the teacher and local board of education agree otherwise."
(f)  G.S. 115C-272(b)(1) reads as rewritten:
"(1)	Each local board of education shall establish a set date on which monthly salary payments to superintendents shall be made. This set pay date may differ from the end of the calendar month of service. Superintendents shall only be paid for the days employed as of the set pay date. Payment for a full month when days employed are less than a full month is prohibited as this constitutes prepayment. The daily rate of pay shall equal the number of weekdays in the pay period.  Included within their term of employment shall be annual vacation leave at the same rate provided for State employees. Included within the 12 months' employment each local board of education shall designate the same or an equivalent number of legal holidays as those designated by the State Personnel Commission for State employees."
(g)  G.S. 115C-285(b)(1) reads as rewritten:
"(1)	Classified principals and State-allotted supervisors shall be employed for a term of 12 calendar months. Each local board of education shall establish a set date on which monthly salary payments to classified principals and State-allotted supervisors shall be made. This set pay date may differ from the end of the calendar month of service. Classified principals and State-allotted supervisors shall only be paid for the days employed as of the set pay date. Payment for a full month when days employed are less than a full month is prohibited as this constitutes prepayment.  The daily rate of pay shall equal the number of weekdays in the pay period.  They shall earn annual vacation leave at the same rate provided for State employees. On a day that employees are required to report for a workday but pupils are not required to attend school due to inclement weather, an employee may elect not to report due to hazardous travel conditions and to take one of the employee's annual vacation days or to make up the day at the time agreed upon by the employee and the employees's immediate supervisor. They shall be provided by the board the same or an equivalent number of legal holidays as those designated by the State Personnel Commission for State employees."
(h)  G.S. 115C-316(a)(1) reads as rewritten:
"(1)	Employees Other than Superintendents, Supervisors and Classified Principals on an Annual Basis. – Each local board of education shall establish a set date on which monthly salary payments to employees other than superintendents, supervisors, and classified principals employed on an annual basis, shall be made.  This set pay date may differ from the end of the calendar month of service. Employees may be prepaid on the monthly pay date for days not yet worked.  An employee who fails to attend scheduled workdays or who has not worked the number of days for which the employee has been paid  and who resigns or is  dismissed shall repay to the local board any salary payments received for days not yet worked.  An employee who has been prepaid and who continues to be employed by a local board but fails to attend scheduled workdays may be subject to dismissal or other appropriate discipline.  The daily rate of pay shall equal the number of weekdays in the pay period.  Included within their term of employment shall be annual vacation leave at the same rate provided for State employees, computed at one-twelfth (1/12) of the annual rate for state employees for each calendar month of employment.  On a day that employees are required to report for a workday but pupils are not required to attend school due to inclement weather, an employee may elect not to report due to hazardous travel conditions and to take one of the employee's annual vacation days or to make up the day at a time agreed upon by the employee and the employee's immediate supervisor or principal.  On a day that school is closed to employees and pupils due to inclement weather, an employee shall work on the scheduled makeup day.  Included within their term of employment each local board of education shall designate the same or an equivalent number of legal holidays as those designated by the State Personnel Commission for State employees."
(i)  G.S. 115C-316(a)(2) reads as rewritten:
"(2)	School Employees Paid on an Hourly or Other Basis. – Salary payments to employees other than those covered in G.S. 115C-272(b)(1), 115C-285(a)(1) and (2), 115C-302.1(b), and 115C-316(a)(1) shall be made at a time determined by each local board of education. Expenditures for the salary of these employees from State funds shall be within allocations made by the State Board of Education and in accordance with rules and regulations approved by the State Board of Education concerning allocations of State  funds: Provided, that school employees employed for a term of 10 calendar months in year-round schools shall be paid in 12 equal installments: Provided further, that any individual school employee employed for a term of 10 calendar months who is not employed in a year-round school may be paid in 12 monthly installments if the employee so requests on or before the first day of the school year. Such request shall be filed in the administrative unit which employs the employee. The payment of the annual salary in 12 installments instead of 10 shall not increase or decrease said annual salary nor in any other way alter the contract between the employee and the said administrative unit. Employees may be prepaid on the set pay date for days not yet worked.  An employee who fails to attend scheduled workdays or who has not worked the number of days for which the employee has been paid and who resigns or is  dismissed shall repay to the local board any salary payments received for days not yet worked.  An employee who has been prepaid and who continues to be employed by a local board but fails to attend scheduled workdays may be subject to dismissal or other appropriate discipline.  The daily rate of pay shall equal the number of weekdays in the pay period.  Included within the term of employment shall be provided for full-time employees annual vacation leave at the same rate provided for State employees, computed at one-twelfth (1/12) of the annual rate for State employees for each calendar month of employment, to be taken under policies determined by each local board of education. On a day that employees are required to report for a workday but pupils are not required to attend school due to inclement weather, an employee may elect not to report due to hazardous travel conditions and to take one of his annual vacation days or to make up the day at a time agreed upon by the employee and his immediate supervisor or principal.  On a day that school is closed to employees and pupils due to inclement weather, the employee shall work on the scheduled makeup day.  Included within their term of employment, each local board of education shall designate the same or an equivalent number of legal holidays occurring within the period of employment as those designated by the State Personnel Commission for State employees." 
(j)  G.S. 115C-47(5) reads as rewritten:
"(5)	To Fix Time of Opening and Closing Schools. – The time of opening and closing the public schools shall be fixed under G.S. 115C-84.2."
(k)  G.S. 115C-47(11) reads as rewritten:
"(11)	To Determine the School Calendar. – Local boards of education shall determine the school calendar under G.S. 115C-84.2. "
(l)  G.S. 115C-47(21) reads as rewritten:
"(21)	It is the duty of every local board of education to provide for the prompt monthly payment of all salaries due teachers and other school officials and employees, and of all current bills and other necessary operating expenses. All salaries and bills shall be paid as provided by law for disbursing State and local funds.
	The local board shall determine salary schedules of employees pursuant to the provisions of G.S. 115C-273, 115C-285(b), 115C-302.1(i), and 115C-316(b).
	The authority for boards of education to issue salary vouchers to all school employees, whether paid from State or local funds, shall be a monthly payroll prepared on forms approved by the State Board of Education and containing all information required by the State Board of Education. This monthly payroll shall be signed by the principal of each school."
(m)  By October 31, 1997, the State Board of Education shall review and revise its rules, policies, and guidelines to make them consistent with this section.  The State Board may use its authority under G.S. 150B-21.1 regarding the adoption of temporary rules consistent with this section.
(n)  Of the funds appropriated to State Aid to Local School Administrative Units, the sum of ten million one hundred thousand dollars ($10,100,000) for the 1997-98 school year and the sum of eleven million four hundred thousand dollars ($11,400,000) for the 1998-99 fiscal year shall be used as follows:
(1)	For the 1997-98 fiscal year, local boards of education may opt to use these funds to (i) pay teachers for working on, and thereby forfeiting, up to three vacation days, in accordance with G.S. 115C-302.1(c) or (ii) to pay teachers who assist children with remedial work outside of the regular workday or the regular workweek; and
(2)	For the 1998-99 fiscal year, local boards of education shall use these funds to pay teachers for working on, and thereby forfeiting, up to five vacation days, in accordance with G.S. 115C-302.1(c).
(o)  This section becomes effective July 1, 1997. Local boards of education are not required to implement the provisions of G.S. 115C-84.1, as enacted in subsection (a) of this section prior to July 1, 1998.  For  the 1997-98 fiscal year, the provisions of G.S. 115C-302.1(c), as enacted by subsection (a) of this section, that permit teachers to opt to have excess vacation leave converted to pay apply to only three vacation leave days per year and apply only if a local board of education opts to require the teachers to work on these days.  For the 1998-99 fiscal year, the provisions of G.S. 115C-302.1(c), as enacted by subsection (a) of this section, that permit teachers to opt to have excess vacation leave converted to pay apply to up to five vacation leave days that the local board requires the teachers to work per year.  Local school administrative units may begin planning for the implementation of this act for the 1998-99 school year on or after July 1, 1997.

PART IX. COMMUNITY COLLEGES

Requested by:   Senators Lee, Winner
COMMUNITY COLLEGE FUNDING FLEXIBILITY
Section 9.  A local community college may use all State funds allocated to it, except for Literacy Funds and Funds for New and Expanding Industries, for any authorized purpose that is consistent with the college's Institutional Effectiveness Plan.  Each local community college shall submit an Institutional Effectiveness Plan that indicates to the State Board of Community Colleges how the college will use this funding flexibility to meet the demands of the local community and maintain a presence in all previously funded categorical programs.

Requested by:   Senators Lee, Winner
COMMUNITY COLLEGE TUITION AND FEE PAYMENTS
Section 9.1.  The General Assembly finds that the North Carolina Community College System's change from a three quarter academic year to a two semester academic year may make it difficult for students to pay all of their tuition for a semester in a single payment; therefore, the General Assembly urges the community colleges to exercise the authority granted to them under State Board of Community College rules to permit students to make their payments at prescribed intervals instead of in a lump sum.

Requested by:   Senators Lee, Winner
ASSESSMENT OF OCCUPATIONAL EXTENSION FORMULA
Section 9.2.  As the State Board of Community Colleges completes Phase Three of its consultant's study on the budget formula, the State Board shall reexamine whether and the extent to which the faculty-student ratio for occupational extension programs should vary by college size.  The State Board shall also consider the appropriate funding level for occupational extension programs based on analysis of cost.
The State Board shall report the results of its studies to the Joint Legislative Education Oversight Committee prior to April 30, 1998.

Requested by:   Senators Lee, Winner
MODIFICATIONS IN THE FTE FUNDING FORMULA TO REFLECT FLUCTUATIONS IN ENROLLMENT
Section 9.3.  The State Board of Community Colleges shall study alternative methods of protecting colleges from the budgetary impact of fluctuations in enrollment.  The State Board shall report to the General Assembly on its recommended budget stability proposals and on an appropriate transition period prior to April 30, 1998.

Requested by:   Senators Lee, Winner
STUDENT CENSUS DATE
Section 9.4.  (a) The census date for reporting student membership hours for curriculum and occupational extension classes shall be at the ten percent (10%) point of the class.
(b) Subsection (a) of this section does not apply to courses offered on a contact-hour basis.

Requested by:   Senators Lee, Winner
NEW AND EXPANDING INDUSTRY REPORT DATE MODIFIED
Section 9.5.  G.S. 115D-5(i) reads as rewritten:
"(i)	The State Board of Community Colleges shall report to the Joint Legislative Education Oversight Committee on March 1 and October 1 of each year on expenditures for the New and Expanding Industry Program each fiscal year.  The report shall include, for each company or individual that receives funds for New and Expanding Industry:
(1)	The total amount of funds received by the company or individual;
(2)	The amount of funds per trainee received by the company or individual;
(3)	The amount of funds received per trainee by the community college training the trainee;
(4)	The number of trainees trained by company and by community college; and
(5)	The number of years the companies or individuals have been funded.
."

Requested by:   Senator Perdue
NEW AND EXPANDING INDUSTRY GUIDELINES
Section 9.6.  The North Carolina Community College System's New and Expanding Industry Training (NEIT) Program Guidelines, which were adopted by the State Board of Community Colleges on April 18, 1997, apply to all funds appropriated for the Program after June 30, 1997.

Requested by:   Senator Plyler
ESTABLISHMENT OF A NEW MULTICAMPUS COMMUNITY COLLEGE TO SERVE ANSON AND UNION COUNTIES AUTHORIZED
Section 9.7.   (a)	On February 21, 1997, the State Board of Community Colleges recommended the establishment of a multicampus college whose administrative and service delivery area will be Anson County and Union County.  Under the recommendation of the State Board, the structure of the Board of Trustees shall ensure equal representation to both Anson County and Union County and the new Board of Trustees shall select the name of the new college; therefore, Anson and Union Counties shall act pursuant to G.S. 115D-59 to jointly propose and submit to the State Board of Community Colleges such a contract for the establishment of the new institution to serve the multiple-county administrative area of Anson and Union Counties.
(b)	Effective the later of July 1, 1997, and the date the State Board of Community Colleges approves the terms of the contract: (i) the new institution to serve the multiple-county administrative area of Anson and Union Counties is established and (ii) Anson Community College is abolished.
(c)	The State Board of Community Colleges shall provide special oversight during the transition period to the new college structure.

Requested by:   Senators Lee, Winner 
COMMUNITY COLLEGE PROGRAM EFFICIENCY
Section 9.8.  The State Board of Community Colleges shall direct the community colleges to continue to review classes with low enrollment to determine whether some classes should be terminated or consolidated into other programs to increase the efficiency of the Community College System.  The State Board of Community Colleges shall report to the Joint Legislative Education Oversight Committee on the results of this review by November 1, 1998, and November 1, 1999.

Requested by:   Senator Hartsell
HOSPITAL-BASED NURSING PROGRAMS
Section 9.9.  Funds appropriated to the Department of Community Colleges for hospital-based diploma nursing programs shall be made available to both associate degree nursing programs and diploma nursing programs.

Requested by:   Senators Lee, Winner
STATE BOARD OF COMMUNITY COLLEGES – FUNDS TO REWARD EXCELLENCE IN TEACHING
Section 9.10.  The State Board of Community Colleges shall develop policies for the distribution of an average one-half percent (1/2%) salary bonus for teaching faculty members, to be given to those who have demonstrated excellence in teaching.

Requested by:   Senators Lee, Winner
HRD MULTI-ENTRY/MULTI-EXIT CLASSES
Section 9.11.  (a)	The State Board of Community Colleges may allow the Human Resources Development Program to offer multi-entry/multi-exit classes for their students and to count the class hours on a contact-hour basis.
(b)	Nothing in this section allows these classes to generate budget FTE.

PART X. UNIVERSITIES

Requested by:   Senators Lee, Winner
WAKE FOREST AND DUKE MEDICAL SCHOOL ASSISTANCE/FUNDING FORMULA
Section 10.  Funds appropriated in this act to the Board of Governors of The University of North Carolina for continuation of financial assistance to the medical schools of Duke University and Wake Forest University shall be disbursed on certifications of the respective schools of medicine that show the number of North Carolina residents as first-year, second-year, third-year, and fourth-year students in each medical school as of November 1, 1997, and November 1, 1998.  Disbursement to Wake Forest University shall be made in the amount of eight thousand dollars ($8,000) for each medical student who is a North Carolina resident, one thousand dollars ($1,000) of which shall be placed by the school in a fund to be used to provide financial aid to needy North Carolina students who are enrolled in the medical school.  The maximum aid given to any student from this fund in a given year shall not exceed the amount of the difference in tuition and academic fees charged by the school and those charged at the School of Medicine at the University of North Carolina at Chapel Hill.
Disbursement to Duke University shall be made in the amount of five thousand dollars ($5,000) for each medical student who is a North Carolina resident, five hundred dollars ($500.00) of which shall be placed by the school in a fund to be used to provide student financial aid to financially needy North Carolina students who are enrolled in the medical school.  No individual student may be awarded assistance from this fund in excess of two thousand dollars ($2,000) each year.  In addition to this basic disbursement for each year of the biennium, a disbursement of one thousand dollars ($1,000) shall be made for each medical student who is a North Carolina resident in the first-year, second-year, third-year, and fourth-year classes to the extent that enrollment of each of those classes exceeds 30 North Carolina students.
The Board of Governors shall establish the criteria for determining the eligibility for financial aid of needy North Carolina students who are enrolled in the medical schools and shall review the grants or awards to eligible students.  The Board of Governors shall adopt rules for determining which students are residents of North Carolina for the purposes of these programs.  The Board shall also make any regulations as necessary to ensure that these funds are used directly for instruction in the medical programs of the schools and not for religious or other nonpublic purposes.  The Board shall encourage the two schools to orient students toward primary care, consistent with the directives of G.S. 143-613(a).  The two schools shall supply information necessary for the Board to comply with G.S. 143-613(d).

Requested by:   Senators Lee, Winner
AID TO STUDENTS ATTENDING PRIVATE COLLEGES PROCEDURE
Section 10.1.  (a)	Funds appropriated in this act to the Board of Governors of The University of North Carolina for aid to private colleges shall be disbursed in accordance with the provisions of G.S. 116-19, 116-21, and 116-22.  These funds shall provide up to seven hundred fifty dollars ($750.00) per full-time equivalent North Carolina undergraduate student enrolled at a private institution as of October 1 each year.
These funds shall be placed in a separate, identifiable account in each eligible institution's budget or chart of accounts.  All funds in this account shall be provided as scholarship funds for needy North Carolina students during the fiscal year.  Each student awarded a scholarship from this account shall be notified of the source of the funds and of the amount of the award.  Funds not utilized under G.S. 116-19 shall be available for the tuition grant program as defined in subsection (b) of this section.
(b)	In addition to any funds appropriated pursuant to G.S. 116-19 and in addition to all other financial assistance made available to private educational institutions located within the State, or to students attending these institutions, there is granted to each full-time North Carolina undergraduate student attending an approved institution as defined in G.S. 116-22, a sum, not to exceed one thousand four hundred fifty dollars ($1,450) per academic year, which shall be distributed to the student as hereinafter provided.
The tuition grants provided for in this section shall be administered by the State Education Assistance Authority pursuant to rules adopted by the State Education Assistance Authority not inconsistent with this section.  The State Education Assistance Authority shall not approve any grant until it receives proper certification from an approved institution that the student applying for the grant is an eligible student.  Upon receipt of the certification, the State Education Assistance Authority shall remit at such times as it shall prescribe the grant to the approved institution on behalf, and to the credit, of the student.
In the event a student on whose behalf a grant has been paid is not enrolled and carrying a minimum academic load as of the tenth classroom day following the beginning of the school term for which the grant was paid, the institution shall refund the full amount of the grant to the State Education Assistance Authority.  Each approved institution shall be subject to examination by the State Auditor for the purpose of determining whether the institution has properly certified eligibility and enrollment of students and credited grants paid on the behalf of the students.
In the event there are not sufficient funds to provide each eligible student with a full grant:
(1)	The Board of Governors of The University of North Carolina, with the approval of the Office of State Budget and Management, may transfer available funds to meet the needs of the programs provided by subsections (a) and (b) of this section; and
(2)	Each eligible student shall receive a pro rata share of funds then available for the remainder of the academic year within the fiscal period covered by the current appropriation.
Any remaining funds shall revert to the General Fund.
(c)	Expenditures made pursuant to this section may be used only for secular educational purposes at nonprofit institutions of higher learning.  Expenditures made pursuant to this section shall not be used for any student who:
(1)	Is incarcerated in a State or federal correctional facility for committing a Class A, B, B1, or B2 felony; or
(2)	Is  incarcerated in a State or federal correctional facility for committing a Class C through I felony and is not eligible for parole or release within 10 years.
(d)	The State Education Assistance Authority shall document the number of full-time equivalent North Carolina undergraduate students that are enrolled in off-campus programs and the State funds collected by each institution pursuant to G.S. 116-19 for those students.  The State Education Assistance Authority shall also document the number of scholarships and the amount of the scholarships that are awarded under G.S. 116-19 to students enrolled in off-campus programs.  An "off-campus program" is any program offered for degree credit away from the institution's main permanent campus.
The State Education Assistance Authority shall include in its annual report to the Joint Legislative Education Oversight Committee the information it has compiled and its findings regarding this program.

Requested by:   Senators Lee, Winner
AID TO STUDENTS ATTENDING PRIVATE COLLEGES/LEGISLATIVE TUITION GRANT LIMITATIONS
Section 10.2.  (a)	No Legislative Tuition Grant funds shall be expended for a program at an off-campus site of a private institution, as defined in G.S. 116-22(1), established after May 15, 1987, unless (i) the private institution offering the program has previously notified and secured agreement from other private institutions operating degree programs in the county in which the off-campus program is located or operating in the counties adjacent to that county or (ii) the degree program is neither available nor planned in the county with the off-campus site or in the counties adjacent to that county.
An "off-campus program" is any program offered for degree credit away from the institution's main permanent campus.
(b)	Any member of the armed services as defined in G.S. 116-143.3(a), abiding in this State incident to active military duty, who does not qualify as a resident for tuition purposes as defined under G.S. 116-143.1, is eligible for a Legislative Tuition Grant pursuant to this section if the member is enrolled as a full-time student.  The member's Legislative Tuition Grant shall not exceed the cost of tuition less any tuition assistance paid by the member's employer.

Requested by:  Senators Lee, Winner
DISTINGUISHED PROFESSORS ENDOWMENT TRUST FUND
Section 10.3.  G.S. 116-41.18(a) reads as rewritten:
"(a)	Each constituent institution that receives, through private gifts and an allocation by the Board of Governors, funds for the purpose shall, under procedures established by rules of the Board of Governors and the board of trustees of the constituent institution, select a holder of the Distinguished Professorship. Once given, that designation shall be retained by the distinguished professor as long as he remains in the full-time service of the institution as a faculty member, or for more limited lengths of time when authorized by the Board of Governors and the board of trustees at the institution when the Distinguished Professorship is originally established or vacated.  When a distinguished professorship becomes vacant, it shall remain assigned to the institution and another distinguished professor shall be selected under procedures established by rules of the Board of Governors and the board of trustees of the constituent institution."

Requested by:   Senators Lee, Winner
UNC EQUITY FUNDS
Section 10.4.  The funds appropriated to the Board of Governors of The University of North Carolina for equity funds are to address relative inequities revealed through a study of the constituent institutions in the university system.  The General Assembly notes that the study dealt with equity based upon current funding from State appropriations and tuition and did not consider historical equity in funding for physical facilities or funding from non-State sources.  Therefore, in making this appropriation, the General Assembly has not concluded that the funding of any institution, including specifically the historically black universities, is sufficient in light of all considerations.

Requested by:   Senators Lee, Winner
MANUFACTURING EXTENSION PARTNERSHIP
Section 10.5.  Of the funds appropriated to the Board of Governors of The University of North Carolina, the sum of nine hundred thousand dollars ($900,000) for the 1997-98 fiscal year shall be allocated to North Carolina State University to match additional federal funds for the Manufacturing Extension Partnership Program.

Requested by:   Senators Lee, Winner, Rand, Shaw of Cumberland
MILITARY RESIDENCY/UNC TUITION
Section 10.6.  G.S. 116-143.3(b) reads as rewritten:
"(b)	Any member of the armed services qualifying for admission to an institution of higher education as defined in G.S. 116-143.1(a)(3) but not qualifying as a resident for tuition purposes under G.S. 116-143.1 shall be charged the out-of-State tuition rate; provided, that the out-of-State tuition shall be forgiven to the extent that the out-of-State tuition rate exceeds any amounts payable to the institution or the service member by the service member's employer by reason of enrollment pursuant to such admission while the member is abiding in this State incident to active military duty, plus the amount that represents the percentage of the out-of-State tuition rate paid to the institution or the service member by the service member's employer multiplied by the in-State tuition rate and then subtracted from the in-State tuition rate.  Any member of the armed services who does not qualify for any payment by the member's employer shall be classified as a resident for tuition purposes and shall pay the full amount of the in-State tuition rate."

Requested by:   Senators Lee, Winner
UNC OVERHEAD RECEIPT FLEXIBILITY
Section 10.7.  G.S. 116-30.2 reads as rewritten:
"§ 116-30.2.  Appropriations to special responsibility constituent institutions.
All General Fund appropriations made by the General Assembly for continuing operations of a special responsibility constituent institution of The University of North Carolina shall be made in the form of a single sum to each budget code of the institution for each year of the fiscal period for which the appropriations are being made.  Notwithstanding G.S. 143-23(a1), G.S. 143-23(a2), and G.S. 143-23(a3) and G.S. 120-76(8), each special responsibility constituent institution may expend monies from the overhead receipts special fund budget code and the General Fund monies so appropriated to it in the manner deemed by the Chancellor to be calculated to maintain and advance the programs and services of the institutions, consistent with the directives and policies of the Board of Governors.  The preparation, presentation, and review of General Fund budget requests of special responsibility constituent institutions shall be conducted in the same manner as are requests of other constituent institutions.  The quarterly allotment procedure established pursuant to G.S. 143-17 shall apply to the General Fund appropriations made for the current operations of each special responsibility constituent institution.  All General Fund monies so appropriated to each special responsibility constituent institution shall be recorded, reported, and audited in the same manner as are General Fund appropriations to other constituent institutions."

Requested by:   Senators Lee, Winner
UNC ASSISTANCE TO PUBLIC SCHOOLS
Section 10.8.  Funding in this act is provided to the Board of Governors of The University of North Carolina for several initiatives to work cooperatively with the public schools to improve public education in North Carolina.  The Board of Governors shall redirect the funding provided for educational consortia at eight constituent institutions to these initiatives requested for the 1997-99 biennium.  The Board of Governors  shall redirect at least one-third of the consortia appropriations during the 1997-98 fiscal year and the balance for the 1998-99 fiscal year toward these efforts.  The Board of Governors shall also reallocate sufficient funds from other resources to fully fund these initiatives for the 1997-98 fiscal year.
Upon request of a constituent institution with a current consortium program, the Board of Governors may direct continual funding to that program.

Requested by:   Senators Lee, Winner, Hartsell
AREA HEALTH EDUCATION CENTERS FUNDING
Section 10.9.  Of the funds appropriated in this act to the Board of Governors of The University of North Carolina, the sum of two million seven hundred fifty thousand dollars ($2,750,000) for the 1997-98 fiscal year and the sum of two million seven hundred fifty thousand dollars ($2,750,000) for the 1998-99 fiscal year shall be allocated to the Area Health Education Centers programs for continuation of the restructuring of educational programs for health care professionals.  Of these funds, sufficient funds shall be allocated to the Cabarrus Family Medicine Residency Program to provide assistance comparable to other family medicine residency slots for 16 residencies.  The Cabarrus Family Medicine Residency Program shall provide all information required by The University of North Carolina Board of Governors to comply with the reporting requirements of G.S. 143-613.

Requested by:   Senators Lee, Winner
UNC LIBRARIES FUNDING
Section 10.10.  Of the funds appropriated to the Board of Governors of The University of North Carolina in this act, the sum of four million dollars ($4,000,000) shall be allocated each year of the biennium for enhancement of libraries for the constituent institutions.  Of this amount, at least one million two hundred thousand dollars ($1,200,000) each year shall be used for the development of the NC-LIVE project, a cooperative effort of The University of North Carolina, the Department of Community Colleges, and the State Library of North Carolina designed to improve access to information resources across the State and to reduce the duplication of expenditures for library resources.

Requested by:   Senators Lee, Winner
COOPERATIVE EXTENSION SERVICES
Section 10.11.  (a) The Joint Legislative Education Oversight Committee and the Board of Governors of The University of North Carolina shall undertake a joint review and study of the role, funding, personnel resources, programs, and other aspects of the Cooperative Extension Services of The University of North Carolina given the changing nature of the agricultural base of the State.
(b) The study shall consider all of the following:
(1)	The role of cooperative extension services in the environmental aspects of agricultural activities and other activities.
(2)	The reduced or increased needs for various current extension services due to changes in the State's agricultural base.
(3)	The top priority agricultural needs of the State and whether or not current cooperative extension services are aligned with those needs.
(4)	The duplication, if any, of cooperative extension services with services offered by other entities.
(c) The Joint Legislative Education Oversight Committee and the Board of Governors may appoint a subcommittee to work cooperatively on this study.  The Chairs of the Joint Legislative Education Oversight Committee shall designate one member of the Subcommittee to serve as a cochair and the Chair of the Board of Governors shall designate one member of the Subcommittee to serve as a cochair.
(d) The Subcommittee shall meet at such times and places as the Subcommittee cochairs designate.  The facilities of the State Legislative Building and the Legislative Office Building shall be available to the Subcommittee subject to the approval of the Legislative Services Commission.  The facilities of the university system shall also be available to the Subcommittee.
(e) Subject to the approval of the Legislative Services Commission, the staff resources of the Legislative Services Commission shall be available to the Subcommittee without cost except for travel, subsistence, supplies, and materials.  Subject to the approval of the Board of Governors, the staff resources of the Board of Governors shall also be available to the Subcommittee without cost except for travel, subsistence, supplies, and materials which shall be the expense of the Board of Governors.
(f) The Joint Legislative Education Oversight Committee and the Board of Governors shall report their findings to the General Assembly by May 1, 1998.

Requested by:   Senators Lee, Winner, Perdue
REVIEW OF LAND-USE REGULATION
Section 10.12.  Of the funds appropriated in this act to the Board of Governors of The University of North Carolina, the sum of seventy-five thousand dollars ($75,000) shall be allocated for the 1997-98 fiscal year to the University of North Carolina at Chapel Hill for the Center for Urban and Regional Studies to conduct an analysis of the impact of State infrastructure programs, including funding and funding methods, on local governments.  The analysis shall also consider the ability of local governments to develop and implement plans for sustainable development and to fully utilize their planning and regulatory authorities to guide development and balanced growth and how these authorities are impacted by State infrastructure decisions.  The Departments of Transportation, Commerce, and Environment, Health, and Natural Resources and other State agencies shall provide assistance and information as requested and shall cooperate with the Center in conducting this analysis.  The analysis shall be provided by April 30, 1998, to the Office of the Governor, the Chairs of the House of Representatives and Senate Committees on Appropriations, the Environmental Review Commission, and the Joint Legislative Commission on Governmental Operations, with a copy to the Fiscal Research Division of the General Assembly.

Requested by:   Senators Lee, Winner
SCHOLARSHIP FUND BALANCES
Section 10.13.  The remaining balances in the Social Worker Education Loan Fund shall be transferred to the Nurse Scholars Scholarship Fund account to implement the budget reductions in that program.

Requested by:  Senator Perdue
UNIVERSITY FIRE SAFETY COSTS LIMITED
Section 10.14. G.S. 116-44.7 reads as rewritten:
"§ 116-44.7.  Exemption from certain fees and charges.
No water system serving a residence hall or fraternity or sorority housing shall levy or collect any water-meter fee, water-hydrant fee, tap fee, or similar service fee on a residence hall or fraternity or sorority house with respect to supporting a supplemental fire safety protection system in excess of the marginal cost to the water system to support the fire safety protection system."

Requested by:   Senators Lee, Winner
UNIVERSITY OF NORTH CAROLINA SYSTEM – FUNDS TO REWARD EXCELLENCE IN TEACHING
Section 10.15.  The Board of Governors of The University of North Carolina shall develop policies for the distribution of an average one-half percent (1/2%) salary bonus for teaching faculty members, to be given to those who have demonstrated excellence in teaching.

Requested by:   Senators Odom, Perdue, Plyler
UNC OVERHEAD RECEIPTS
Section 10.16.  Of the funds appropriated to the Board of Governors of The University of North Carolina in this act, the sum of seven million seven hundred thousand six hundred fifty-nine dollars ($7,700,659) shall be allocated for the 1998-99 fiscal year to the campuses of the constituent institutions to replace the ten percent (10%) of overhead receipts that currently support General Fund budget code operations.

Requested by:   Senators Odom, Perdue, Plyler
UNC MANAGEMENT FLEXIBILITY
Section 10.17.  G.S. 116-30.3 reads as rewritten:
"§ 116-30.3.  Reversions.
(a)	Of the General Fund current operations appropriations credit balance remaining at the end of each fiscal year in each budget code of a special responsibility constituent institution, except for the budget code of the Area Health Education Centers of the University of North Carolina at Chapel Hill, any amount greater than one percent (1%) of the General Fund appropriation for that fiscal year may be carried forward by the institution to the next fiscal year and may be used for one-time expenditures that will not impose additional financial obligations on the State. Of the General Fund current operations appropriations credit balance remaining in the budget code of the Area Health Education Centers of the University of North Carolina at Chapel Hill, any amount greater than one-half percent (0.5%) of the General Fund appropriation for that fiscal year may be carried forward in that budget code to the next fiscal year and may be used for one-time expenditures that will not impose additional financial obligations on the State. However, the amount carried forward under this section shall not exceed two and one-half percent (2 1/2%) of the General Fund appropriation. The Director of the Budget, under the authority set forth in G.S. 143-25, shall establish the General Fund current operations credit balance remaining in each budget code of each institution.
(b)	An institution shall cease to be a special responsibility constituent institution under the following circumstances:
(1)	An institution, other than the Area Health Education Centers of the University of North Carolina, does not revert at least one percent (1%) of its General Fund current operations credit balance remaining in each budget code of that institution, or
(2)	The Area Health Education Centers of the University of North Carolina at Chapel Hill does not revert at least one-half percent (0.5%) of its General Fund current operations credit balance remaining in its budget code.
However, if the Board of Governors finds that the low reversion rate is due to adverse and unforeseen conditions, the Board may allow the institution to remain a special responsibility constituent institution for one year to come into conformity with this section. The Board may make this exception only one time for any special responsibility constituent institution, and shall report these exceptions to the Joint Legislative Commission on Governmental Operations."

Requested by:   Senators Odom, Perdue, Plyler
ACADEMIC ENHANCEMENT FUNDS CLARIFICATION
Section 10.18.  In Section 16.11 of Chapter 18 of the Session Laws for the 1996 Second Extra Session, the Board of Governors of The University of North Carolina were directed to allocate, for the 1996-97 fiscal year the amount of seventeen million eight hundred thousand dollars ($17,800,000) between the constituent institutions classified as Research University I campuses in direct proportion to the funds to be raised on each campus for the 1996-97 fiscal year from the tuition increases authorized under Section 15.15 of Chapter 507 of the 1995 Session Laws.
There has been no directive as to which budget codes the funds should be credited.  Since these funds are part of the continuation budget, each campus shall have the authority to allocate these funds among the General Fund budget codes on that campus based on campus priorities.

Requested by:   Senators Odom, Perdue, Plyler
JOHN KERNODLE FUND
Section 10.19.  Funds in the amount of one million dollars ($1,000,000) are appropriated in this act to the Board of Governors of The University of North Carolina for the Lineberger Cancer Center at the University of North Carolina at Chapel Hill for cancer research.  These funds are appropriated in memory of Dr. John Kernodle.

PART XI.  DEPARTMENT OF HUMAN RESOURCES

Requested by:   Senator Martin of Guilford
DISPOSITION OF DISPROPORTIONATE SHARE RECEIPT CLARIFICATION
Section 11.  For the 1997-99 fiscal biennium, as it receives funds associated with Disproportionate Share Payments from the State hospitals, the Division of Medical Assistance shall deposit funds appropriated for the Medicaid program in a sum equal to the federal share of the Disproportionate Share Payments as nontax revenue.  Any of these funds that are not appropriated by the General Assembly shall be reserved by the State Controller for future appropriation.

Requested by:   Senator Martin of Guilford
DHR STUDY OF PROVIDER REIMBURSEMENT RATES/REPORT
Section 11.1.  The Department of Human Resources shall study the process of setting provider reimbursement rates for programs within the Department.  This study shall include an analysis of the following:
(1)	The extent to which rates are set in accordance with clear policies that are consistent across program lines;
(2)	Whether there are general principles and assumptions that are or should be included in all rate-setting processes;
(3)	The policies and economic and accounting principles that are utilized for setting rates in each program and a comparison of those policies and principles between the programs; and
(4)	How any differences between programs in setting rates are justified.
The Department shall provide a status report before February 1, 1998, and a final report to the members of the House and Senate Appropriations Subcommittees on Human Resources and the Fiscal Research Division before February 1, 1999.

Requested by:   Senator Martin of Guilford
RECEIPTS OF FEDERAL FUNDS FOR EMERGENCY ASSISTANCE
Section 11.2.  The Department of Human Resources may use up to five million dollars ($5,000,000) of federal Title IV-Emergency Assistance funds, received after June 30, 1997, as reimbursement for retroactive claims filed for defined critical needs.  The remainder of these funds shall be placed in a reserve for appropriation by the General Assembly.  The Department may submit a prioritized list of recommended needs for these funds to the cochairs of the Senate and House Appropriations Subcommittees on Human Resources for consideration.

Requested by:   Senator Perdue
SET STANDARDS FOR HEALTH CARE QUALITY/ACCESS
Section 11.3.  The Secretary of the Department of Human Resources shall set standards to ensure that the citizens of the State have access to quality and affordable health care.

Requested by:   Senator Martin of Guilford
TRANSFER OF CERTAIN FUNDS AUTHORIZED
Section 11.4.  In order to assure maximum utilization of funds in county departments of social services, county or district health agencies, and area mental health, developmental disabilities, and substance abuse services authorities, the Director of the Budget may transfer excess funds appropriated to a specific service, program, or fund, whether specified service in a block grant plan or General Fund appropriation, into another service, program, or fund for local services within the budget of the respective State agency.

Requested by:   Senators Plyler, Perdue, Odom
PROCEDURE FOR AWARD OF HUMAN SERVICES GRANTS
Section 11.5.  Of the funds appropriated in this act to the Department of Human Resources, the sum of four million dollars ($4,000,000) for the 1997-98 fiscal year shall be used for grants for programs that provide services to older adults, adults with disabilities, at-risk children, and youth and families.  The Secretary of the Department of Human Resources shall establish a process for the review, evaluation, and consideration of applications for these grants.
In awarding grants, the Secretary shall consider the merits of the program, the benefit to the State and local communities of the program, and the cost of the program.  Prior to awarding grants, the Secretary shall consult with the Joint Legislative Commission on Governmental Operations.

Requested by:   Senator Martin of Guilford
MEDICAID
Section 11.6.  (a)	Funds appropriated in this act for services provided in accordance with Title XIX of the Social Security Act (Medicaid) are for both the categorically needy and the medically needy.  Funds appropriated for these services shall be expended in accordance with the following schedule of services and payment bases.  All services and payments are subject to the language at the end of this subsection.
Services and payment bases:
(1)	Hospital-Inpatient - Payment for hospital inpatient services will be prescribed in the State Plan as established by the Department of Human Resources.  Administrative days for any period of hospitalization shall be limited to a maximum of three days.
(2)	Hospital-Outpatient - Eighty percent (80%) of allowable costs or a prospective reimbursement plan as established by the Department of Human Resources.
(3)	Nursing Facilities - Payment for nursing facility services will be prescribed in the State Plan as established by the Department of Human Resources.  Nursing facilities providing services to Medicaid recipients who also qualify for Medicare, must be enrolled in the Medicare program as a condition of participation in the Medicaid program.  State facilities are not subject to the requirement to enroll in the Medicare program.
(4)	Intermediate Care Facilities for the Mentally Retarded - As prescribed in the State Plan as established by the Department of Human Resources.
(5)	Drugs - Drug costs as allowed by federal regulations plus a professional services fee per month excluding refills for the same drug or generic equivalent during the same month.  Reimbursement shall be available for up to six prescriptions per recipient, per month, including refills.  Payments for drugs are subject to the provisions of subsection (h) of this section and to the provisions at the end of subsection (a) of this section, or in accordance with the State Plan adopted by the Department of Human Resources consistent with federal reimbursement regulations.  Payment of the professional services fee shall be made in accordance with the State Plan adopted by the Department of Human Resources, consistent with federal reimbursement regulations.  The professional services fee shall be five dollars and sixty cents ($5.60) per prescription.  Adjustments to the professional services fee shall be established by the General Assembly.
(6)	Physicians, Chiropractors, Podiatrists, Optometrists, Dentists, Certified Nurse Midwife Services - Fee schedules as developed by the Department of Human Resources.  Payments for dental services are subject to the provisions of subsection (g) of this section.
(7)	Community Alternative Program, EPSDT Screens - Payment to be made in accordance with rate schedule developed by the Department of Human Resources.
(8)	Home Health and Related Services, Private Duty Nursing, Clinic Services, Prepaid Health Plans, Durable Medical Equipment - Payment to be made according to reimbursement plans developed by the Department of Human Resources.
(9)	Medicare Buy-In - Social Security Administration premium.
(10)	Ambulance Services - Uniform fee schedules as developed by the Department of Human Resources.
(11)	Hearing Aids - Actual cost plus a dispensing fee.
(12)	Rural Health Clinic Services - Provider-based, reasonable cost; nonprovider-based, single-cost reimbursement rate per clinic visit.
(13)	Family Planning - Negotiated rate for local health departments.  For other providers - see specific services, for instance, hospitals, physicians.
(14)	Independent Laboratory and X-Ray Services - Uniform fee schedules as developed by the Department of Human Resources.
(15)	Optical Supplies - One hundred percent (100%) of reasonable wholesale cost of materials.
(16)	Ambulatory Surgical Centers - Payment as prescribed in the reimbursement plan established by the Department of Human Resources.
(17)	Medicare Crossover Claims - An amount up to the actual coinsurance or deductible or both, in accordance with the State Plan, as approved by the Department of Human Resources.
(18)	Physical Therapy and Speech Therapy - Services limited to EPSDT eligible children.  Payments are to be made only to qualified providers at rates negotiated by the Department of Human Resources.
(19)	Personal Care Services - Payment in accordance with the State Plan approved by the Department of Human Resources.
(20)	Case Management Services - Reimbursement in accordance with the availability of funds to be transferred within the Department of Human Resources.
(21)	Hospice - Services may be provided in accordance with the State Plan developed by the Department of Human Resources.
(22)	Other Mental Health Services - Unless otherwise covered by this section, coverage is limited to agencies meeting the requirements of the rules established by the Commission for Mental Health, Developmental Disabilities, and Substance Abuse Services, and reimbursement is made in accordance with a State Plan developed by the Department of Human Resources not to exceed the upper limits established in federal regulations.
(23)	Medically Necessary Prosthetics or Orthotics for EPSDT Eligible Children - Reimbursement in accordance with the State Plan approved by the Department of Human Resources.
(24)	Health Insurance Premiums - Payments to be made in accordance with the State Plan adopted by the Department of Human Resources consistent with federal regulations.
(25)	Medical Care/Other Remedial Care - Services not covered elsewhere in this section include related services in schools; health professional services provided outside the clinic setting to meet maternal and infant health goals; and services to meet federal EPSDT mandates.  Services addressed by this paragraph are limited to those prescribed in the State Plan as established by the Department of Human Resources.  Providers of these services shall be certified as meeting program standards of the Department of Environment, Health, and Natural Resources.
(26)	Pregnancy Related Services - Covered services for pregnant women shall include nutritional counseling, psychosocial counseling, and predelivery and postpartum home visits by maternity care coordinators and public health nurses.
Services and payment bases may be changed with the approval of the Director of the Budget.
Reimbursement is available for up to 24 visits per recipient per year to any one or combination of the following: physicians, clinics, hospital outpatient, optometrists, chiropractors, and podiatrists.  Prenatal services, all EPSDT children, and emergency rooms are exempt from the visit limitations contained in this paragraph.  Exceptions may be authorized by the Department of Human Resources where the life of the patient would be threatened without such additional care.  Any person who is determined by the Department to be exempt from the 24-visit limitation may also be exempt from the six-prescription limitation.
(b)	Allocation of Nonfederal Cost of Medicaid.  The State shall pay eighty-five percent (85%); the county shall pay fifteen percent (15%) of the nonfederal costs of all applicable services listed in this section.
(c)	Copayment for Medicaid Services.  The Department of Human Resources may establish copayment up to the maximum permitted by federal law and regulation.
(d)	Medicaid and Aid to Families With Dependent Children Income Eligibility Standards.  The maximum net family annual income eligibility standards for Medicaid and Aid to Families with Dependent Children, and the Standard of Need for Aid to Families with Dependent Children shall be as follows:

	Categorically Needy	Medically Needy
Family	Standard	AFDC Payment
Size	of Need	  Level*	AA, AB, AD*
1	$ 4,344	$ 2,172	  $ 2,900
2	  5,664	  2,832	3,800
3	  6,528	  3,264	4,400
4	  7,128	  3,564	4,800 5   7,776   3,888 5,200
6	  8,376	  4,188	5,600
7	  8,952	  4,476	6,000
8	  9,256	  4,680	6,300
*Aid to Families With Dependent Children (AFDC); Aid to the Aged (AA); Aid to the Blind (AB); and Aid to the Disabled (AD).

The payment level for Aid to Families With Dependent Children shall be fifty percent (50%) of the standard of need.
These standards may be changed with the approval of the Director of the Budget with the advice of the Advisory Budget Commission.
(e)  All Elderly, Blind, and Disabled Persons who receive Supplemental Security Income are eligible for Medicaid coverage.
(f)  ICF and ICF/MR Work Incentive Allowances.  The Department of Human Resources may provide an incentive allowance to Medicaid-eligible recipients of ICF and ICF/MR facilities who are regularly engaged in work activities as part of their developmental plan and for whom retention of additional income contributes to their achievement of independence.  The State funds required to match the federal funds that are required by these allowances shall be provided from savings within the Medicaid budget or from other unbudgeted funds available to the Department.  The incentive allowances may be as follows:

Monthly Net Wages	Monthly Incentive Allowance
$1.00 to $100.99	Up to $50.00
$101.00 - $200.99	$80.00
$201.00 to $300.99	$130.00
$301.00 and greater	$212.00.
(g)  Dental Coverage Limits.  Dental services shall be provided on a restricted basis in accordance with rules adopted by the Department to implement this subsection.
(h)  Dispensing of Generic Drugs.  Notwithstanding G.S. 90-85.27 through G.S. 90-85.31, under the Medical Assistance Program (Title XIX of the Social Security Act) a prescription order for a drug designated by a trade or brand name shall be considered to be an order for the drug by its established or generic name, except when the prescriber personally indicates, either orally or in the prescriber's own handwriting on the prescription order, "dispense as written" or words of similar meaning.  Generic drugs, when available in the pharmacy, shall be dispensed at a lower cost to the Medical Assistance Program rather than trade or brand name drugs, subject to the prescriber's "dispense as written" order as noted above.
As used in this subsection "brand name" means the proprietary name the manufacturer places upon a drug product or on its container, label, or wrapping at the time of packaging; and "established name" has the same meaning as in section 502(e)(3) of the Federal Food, Drug, and Cosmetic Act as amended, 21 U.S.C. § 352(e)(3).
(i)  Exceptions to Service Limitations, Eligibility Requirements, and Payments.  Service limitations, eligibility requirements, and payments bases in this section may be waived by the Department of Human Resources, with the approval of the Director of the Budget, to allow the Department to carry out pilot programs for prepaid health plans, managed care plans, or community-based services programs in accordance with plans approved by the United States Department of Health and Human Services, or when the Department determines that such a waiver will result in a reduction in the total Medicaid costs for the recipient.
(j)  Volume Purchase Plans and Single Source Procurement.  The Department of Human Resources, Division of Medical Assistance, may, subject to the approval of a change in the State Medicaid Plan, contract for services, medical equipment, supplies, and appliances by implementation of volume purchase plans, single source procurement, or other similar processes in order to improve cost containment.
(k)  Cost Containment Programs.  The Department of Human Resources, Division of Medical Assistance, may undertake cost containment programs including preadmissions to hospitals and prior approval for certain outpatient surgeries before they may be performed in an inpatient setting.
(l)  For all Medicaid eligibility classifications for which the federal poverty level is used as an income limit for eligibility determination, the income limits will be updated each April 1 immediately following publication of federal poverty guidelines.
(m) The Department of Human Resources shall provide Medicaid to 19-, 20-, and 21-year olds in accordance with federal rules and regulations. 
(n)  The Department of Human Resources shall provide coverage to pregnant women and to children according to the following schedule:
(1)	Pregnant women with incomes equal to or less than one hundred eighty-five percent (185%) of the federal poverty guidelines as revised each April 1 shall be covered for Medicaid benefits.
(2)	Infants under the age of 1 with family incomes equal to or less than one hundred eighty-five percent (185%) of the federal poverty guidelines as revised each April 1 shall be covered for Medicaid benefits.
(3)	Children aged 1 through 5 with family incomes equal to or less than one hundred thirty-three percent (133%) of the federal poverty guidelines as revised each April 1 shall be covered for Medicaid benefits. 
(4)	Children aged 6 through 18 with family incomes equal to or less than the federal poverty guidelines as revised each April 1 shall be covered for Medicaid benefits.  
(5)	The Department of Human Resources shall provide Medicaid coverage for adoptive children with special or rehabilitative needs regardless of the adoptive family's income.
Services to pregnant women eligible under this subsection continue throughout the pregnancy but include only those related to pregnancy and to those other conditions determined by the Department as conditions that may complicate pregnancy.  In order to reduce county administrative costs and to expedite the provision of medical services to pregnant women, to infants, and to children described in subdivisions (3) and (4) of this subsection, no resources test shall be applied.
(o)  The Department of Human Resources may use Medicaid funds budgeted from program services to support the cost of administrative activities to the extent that these administrative activities produce a net savings in services requirements.  Administrative initiatives funded by this section shall be first approved by the Office of State Budget and Management.
(p)  The Department of Human Resources shall submit a monthly status report on expenditures for acute care and long-term care services to the Fiscal Research Division and to the Office of State Budget and Management.  This report shall include an analysis of budgeted versus actual expenditures for eligibles by category and for long-term care beds.  In addition, the Department shall revise the program's projected spending for the current fiscal year and the estimated spending for the subsequent fiscal year on a quarterly basis.  Reports for the preceding month shall be forwarded to the Fiscal Research Division and to the Office of State Budget and Management no later than the third Thursday of the month.
(q)  The Division of Medical Assistance, Department of Human Resources, may provide incentives to counties that successfully recover fraudulently spent Medicaid funds by sharing State savings with counties responsible for the recovery of the fraudulently spent funds.
(r)  If first approved by the Office of State Budget and Management, the Division of Medical Assistance, Department of Human Resources, may use funds that are identified to support the cost of development and acquisition of equipment and software through contractual means to improve and enhance information systems that provide management information and claims processing.
(s)  The Division of Medical Assistance, Department of Human Resources, may administer Medicaid estate recovery mandated by the Omnibus Budget Reconciliation Act of 1993, (OBRA 1993), 42 U.S.C. § 1396p(b), and G.S. 108-70.5 using temporary rules pending approval of final rules promulgated pursuant to Chapter 150B of the General Statutes.
(t)  The Department of Human Resources may adopt temporary rules according to the procedures established in G.S. 150B-21.1 when it finds that such rules are necessary to maximize receipt of federal funds, to reduce Medicaid expenditures, and to reduce fraud and abuse.  Prior to the filing of these temporary rules with the Office of Administrative Hearings, the Department shall consult with the Office of State Budget and Management on the possible fiscal impact of the temporary rule and its effect on State appropriations and local governments.

Requested by:   Senator Martin of Guilford
NONMEDICAID REIMBURSEMENT CHANGES
Section 11.7.  Providers of medical services under the various State programs, other than Medicaid, offering medical care to citizens of the State shall be reimbursed at rates no more than those under the North Carolina Medical Assistance Program.  Hospitals that provide psychiatric inpatient care for Thomas S. class members or adults with mental retardation and mental illness may be paid an additional incentive payment not to exceed fifteen percent (15%) of their regular daily per diem reimbursement.
The Department of Human Resources may reimburse hospitals at the full prospective per diem rates without regard to the Medical Assistance Program's annual limits on hospital days.  When the Medical Assistance Program's per diem rates for inpatient services and its interim rates for outpatient services are used to reimburse providers in non-Medicaid medical service programs, retroactive adjustments to claims already paid shall not be required.
Notwithstanding the provisions of paragraph one, the Department of Human Resources may negotiate with providers of medical services under the various Department of Human Resources programs, other than Medicaid, for rates as close as possible to Medicaid rates for the following purposes:  contracts or agreements for medical services and purchases of medical equipment and other medical supplies.  These negotiated rates are allowable only to meet the medical needs of its non-Medicaid eligible patients, residents, and clients who require such services which cannot be provided when limited to the Medicaid rate.
Maximum net family annual income eligibility standards for services in these programs shall be as follows:

Medical Eye	     All
Family Size	Care Adults	Rehabilitation	Other
	1	$  4,860	$  8,364	$ 4,200
	2	   5,940	  10,944	5,300
	3	   6,204	  13,500	6,400
	4	   7,284	  16,092	7,500
	5	   7,824	  18,648	7,900
	6	   8,220	  21,228	8,300
	7	   8,772	  21,708	8,800
	8	   9,312	  22,220	9,300

The eligibility level for children in the Medical Eye Care Program in the Division of Services for the Blind and for adults in the Atypical Antipsychotic Medication Program in the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services shall be one hundred percent (100%) of the federal poverty guidelines, as revised annually by the United States Department of Health and Human Services and in effect on July 1 of each fiscal year.  Additionally, those adults enrolled in the Atypical Antipsychotic Medication Program who become gainfully employed may continue to be eligible to receive State support, in decreasing amounts, for the purchase of atypical antipsychotic medication and related services up to three hundred percent (300%) of the poverty level.
State financial participation in the Atypical Antipsychotic Medication Program for those enrollees who become gainfully employed is as follows:

Income	State Participation	Client Participation
(% of poverty)
0-100% 	100%	0%
101-120% 	95%	5%
121-140%	85%	15%
141-160%	75%	25%
161-180%	65%	35%
181-200%	55%	45%
201-220%	45%	55%
221-240%	35%	65%
241-260%	25%	75%
261-280%	15%	85%
281-300%	5%	95%
301%-over	0%	100%.

The Department of Human Resources shall contract at, or as close as possible to, Medicaid rates for medical services provided to residents of State facilities of the Department.

Requested by:   Senator Martin of Guilford
MEDICAID TRUST FUND
Section 11.8.  Notwithstanding any prohibition which may exist in G.S. 143-23.2, the Department may use up to forty million dollars ($40,000,000) during fiscal year 1997-98 from the fund established pursuant to G.S. 143-23.2 to support Medicaid program expenditures, if available in the fund.

Requested by:   Senator Martin of Guilford
MEDICAID GROWTH REDUCTION
Section 11.9.  (a) The Department of Human Resources shall, in consultation with Medicaid providers where appropriate, develop and implement, as feasible, a plan that is designed to reduce the growth of Medicaid to eight percent (8%) by the year 2001.  However, the Department shall not eliminate categories of eligibles or categories of services to achieve this reduction unless the General Assembly identifies specific categories of eligibles or categories of services that it wants eliminated.
(b)	The Division of Medical Assistance, Department of Human Resources shall report quarterly to the Joint Legislative Commission on Governmental Operations beginning October 1, 1997, on the Department's actions to develop and implement, as feasible, a plan that is designed to reduce Medicaid growth to eight percent (8%) by the year 2001, including the contents of the plan as they are developed, and shall, by April 1, 1998, report to the General Assembly on the Department's plan, what actions the Department intends to take to implement the plan, and any specific reductions proposed for fiscal year 1998-99.

Requested by:   Senator Martin of Guilford
DHR EMPLOYEES/IN-KIND MATCH
Section 11.10.  Notwithstanding the limitations of G.S. 143B-139.4, the Secretary of the Department of Human Resources may assign employees of the Office of Rural Health and Resource Development to serve as in-kind match to nonprofit corporations working to establish health care programs that will improve health care access while controlling costs.

Requested by:   Senator Martin of Guilford
FIRE PROTECTION REVOLVING LOAN FUND
Section 11.11.  Proceeds from the Fire Protection Revolving Loan Fund, established pursuant to G.S. 122A-5.13, may be used to provide staff support to the North Carolina Housing Finance Agency for loan processing and to the Department of Human Resources for review and approval of fire protection plans and inspection of fire protection systems.

Requested by:   Senator Martin of Guilford
MEDICAL DATA PROCESSING FUNDS
Section 11.12.  The sum of one hundred fifty thousand dollars ($150,000) for each of the 1997-98 and 1998-99 fiscal years is transferred from the Insurance Regulatory Fund established pursuant to G.S. 58-6-25 to the Division of Facility Services, Department of Human Resources, to certify statewide data processors pursuant to Article 11A of Chapter 131E of the General Statutes, to purchase data from statewide data processors, and to process and analyze the data.

Requested by:   Senator Martin of Guilford
SENIOR CENTER OUTREACH
Section 11.13.  (a)	Funds appropriated to the Department of Human Resources, Division of Aging, for the 1997-99 fiscal biennium, shall be used by the Division of Aging to enhance senior center programs as follows:
(1)	To test "satellite" services provided by existing senior centers to unserved or underserved areas; or
(2)	To provide start-up funds for new senior centers.
All of these funds shall be allocated by October 1 of each fiscal year.
(b) Prior to funds being allocated pursuant to this section for start-up funds for a new senior center, the county commissioners of the county in which the new center will be located shall:
(1)	Formally endorse the need for a center;
(2)	Formally agree on the sponsoring agency for the center; and
(3)	Make a formal commitment to use local funds to support the ongoing operation of the center.
(c)	State funding shall not exceed ninety percent (90%) of reimbursable costs.

Requested by:   Senators Perdue, Martin of Guilford
SENIOR CENTER FUNDS
Section 11.14.  Of the funds appropriated in this act to the Department of Human Resources, the sum of seven hundred fifty thousand dollars ($750,000) for the 1997-98 fiscal year shall be used to support existing senior centers and to assist in the development of new senior centers.  The Department shall allocate funds equally among senior centers throughout the State as determined by the Division of Aging.  Expenditures of State funds for senior centers shall not exceed ninety percent (90%) of all funds expended for this purpose.

Requested by:   Senator Martin of Guilford
IN-HOME AND CAREGIVER SUPPORT FUNDS
Section 11.15.  Of the funds appropriated in this act to the Department of Human Resources, Division of Aging, the sum of four million dollars ($4,000,000) for the 1997-98 fiscal year and the sum of four million dollars ($4,000,000) for the 1998-99 fiscal year shall be allocated via the Home and Community Care Block Grant for home and community care services for older persons who are not eligible for Medicaid and who are on the waiting list for these services.  These funds shall be used only for direct services.  Service recipients shall pay for services based on their income in accordance with G.S. 143B-181.1(a)(10).

Requested by:  Senator Martin of Guilford
ADULT CARE HOMES REIMBURSEMENT RATE/ADULT CARE HOMES ALLOCATION OF NONFEDERAL COST OF MEDICAID PAYMENTS
Section 11.16. (a) The eligibility of Special Assistance recipients residing in adult care homes on August 1, 1995, shall not be affected by an income reduction in the Special Assistance eligibility criteria resulting from adoption of the Rate Setting Methodology Report and Related Services, providing these recipients are otherwise eligible.  The maximum monthly rate for these residents in adult care home facilities shall be nine hundred seventy-five dollars ($975.00) per month for ambulatory residents and one thousand seventeen dollars ($1,017) per month for semiambulatory residents.
(b)	Effective August 1, 1995, the State shall pay fifty percent (50%) and the county shall pay fifty percent (50%) of the nonfederal costs of Medicaid services paid to adult care home facilities.  As Medicaid personal care requirements increase, the county matching share shall be capped until it equals fifteen percent (15%) of the nonfederal Medicaid personal care requirements.
(c)	Effective July 1, 1997, the maximum monthly rate for residents in adult care home facilities shall be eight hundred ninety-three dollars ($893.00) per month per resident.
(d)	Effective July 1, 1998, the maximum monthly rate for residents in adult care home facilities shall be nine hundred fifteen dollars ($915.00) per month per resident.

Requested by:   Senator Martin of Guilford
ADULT CARE HOMES REPORT
Section 11.17.  Beginning October 1, 1997, the Department of Human Resources shall report annually, on the previous fiscal year's activities, to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division of the Legislative Services Office as to the status of the following:
(1)	Rate-setting and financing of adult care homes, including the use of Medicaid funds for personal care services;
(2)	Quality assurance and enhancement of adult care homes, including case management for residents with special care needs, monitoring of adult care home facilities, and specialized training of direct care staff; and
(3)	The process of the evaluation of the Adult Care Home Financing and Quality Assurance Program.

Requested by:   Senator Martin of Guilford
FOSTER CARE ASSISTANCE PAYMENTS
Section 11.18.  The maximum rates for State participation in the foster care assistance program are established on a graduated scale as follows:
(1)	$315.00 per child per month for children aged birth through 5;
(2)	$365.00 per child per month for children aged 6 through 12; and
(3)	$415.00 per child per month for children aged 13 through 18.
Of these amounts, fifteen dollars ($15.00) is a special needs allowance for the child.

Requested by:   Senator Martin of Guilford
AUTHORIZED ADDITIONAL USE OF HIV FOSTER CARE AND ADOPTIVE FAMILY FUNDS
Section 11.19. (a) In addition to providing board payments to foster and adoptive families of HIV-infected children, as prescribed in Chapter 324 of the 1995 Session Laws, any additional funds remaining that were appropriated in Chapter 324 of the 1995 Session Laws for this purpose shall be used as follows:
(1) 	To provide medical training in avoiding HIV transmission in the home; and
(2) 	To transfer funds to the Department of Environment, Health, and Natural Resources to create three social work positions within the Department of Environment, Health, and Natural Resources, for the eastern part of North Carolina to enable the case managing of families with HIV-infected children so that the children and the parents get access to medical care and so that child protective services issues are addressed rapidly and effectively.  The three positions shall be medically based and located:
a. 	One in the northeast, covering Northampton, Hertford, Halifax, Gates, Chowan, Perquimans, Pasquotank, Camden, Currituck, Bertie, Wilson, Edgecombe, and Nash Counties;
b. 	One in the central east, covering Martin, Pitt, Washington, Tyrrell, Dare, Hyde, Beaufort, Jones, Greene, Craven, and Pamlico Counties; and
c. 	One in the southeast, covering New Hanover, Robeson, Brunswick, Carteret, Onslow, Lenoir, Pender, Duplin, Bladen, and Columbus Counties.
(b) The maximum rates for State participation in HIV foster care and adoptions assistance are established on a graduated scale as follows:
(1)	$800.00 per month per child with indeterminate HIV status;
(2)	$1,000 per month per child confirmed HIV-infected, asymptomatic;
(3)	$1,200 per month per child confirmed HIV-infected, symptomatic; and
(4)	$1,600 per month per child terminally ill with complex care needs.

Requested by:   Senator Martin of Guilford
ADOPTION ASSISTANCE PAYMENTS
Section 11.20.  The maximum rates for State participation in the adoption assistance program are established on a graduated scale as follows:
(1)	$315.00 per child per month for children aged birth through 5;
(2)	$365.00 per child per month for children aged 6 through 12; and
(3)	$415.00 per child per month for children aged 13 through 18.

Requested by:   Senator Martin of Guilford
CHILD PROTECTIVE SERVICES
Section 11.21.  (a)	The funds appropriated in this act to the Department of Human Resources, Division of Social Services, for the 1997-99 fiscal biennium for Child Protective Services shall be allocated to county departments of social services based upon a formula which takes into consideration the number of Child Protective Services cases and the number of Child Protective Services workers necessary to meet recommended standards adopted by the North Carolina Association of County Directors of Social Services.
(b)	Funds allocated under subsection (a) of this section shall be used by county departments of social services for carrying out investigations of reports of child abuse or neglect or for providing protective or preventive services in which the department confirms abuse, neglect, or dependency.

Requested by:   Senator Martin of Guilford
FOOD STAMP ELECTRONIC BENEFITS TRANSFER FUNDS SPECIFICATIONS
Section 11.22.  The Controller's Office, Department of Human Resources, shall manage the development, implementation, and operation of the Food Stamp Electronic Benefits Transfer Program (EBT).

Requested by:   Senator Martin of Guilford
WORK FIRST FRAUD CONTROL PROGRAM/DEBT SETOFF/CLIENT PROTECTION
Section 11.23.  (a)	The Department of Human Resources, immediately, shall implement the Work First Fraud Control Program pursuant to 45 C.F.R. 235.112 as those regulations were in effect on July 1, 1996.
(b)	The Department of Human Resources shall award incentive bonuses to each county for the county's efforts in collecting AFDC and Work First cash assistance overpayments made as a result of intentional false statements, intentional misrepresentation, intentional failure to disclose a material fact, or inadvertent household error.
(1)	For collections relative to AFDC or Work First cash assistance payments made prior to January 1, 1997, the incentive bonus shall equal one-half of the State's distributive share of the total AFDC and Work First cash assistance benefits recouped for the reasons described in this subsection.  The bonus on these recoupments shall be paid at the time of collection.
(2)	For collections relative to Work First cash assistance benefits paid on or after January 1, 1997, the incentive bonus shall equal sixty percent (60%) of the total amount recouped for the reasons described in this subsection.  The amount collected by each county during the State fiscal year shall be totaled, and an amount equal to sixty percent (60%) of total collections by a county shall be added to the county's Work First block grant for the next fiscal year.
(c)	The Department of Human Resources, Division of Social Services, shall develop and implement a statewide automated system to track AFDC and Work First cash assistance fraud claims and collect these claims by any appropriate method, including debt setoff pursuant to Chapter 105A of the General Statutes.
(d)	The Department of Human Resources shall ensure that persons charged with, or suspected of, AFDC or Work First fraud not be subjected to any of the following:
(1)	Coercion;
(2)	Discrimination in targeting persons for civil action or criminal prosecution; or
(3)	Civil investigation or civil action without being (i) properly informed as to those matters that might arise out of the investigation or action that might result in criminal prosecution and (ii) in such a case, being properly advised of their right not to incriminate themselves.

Requested by:   Senator Martin of Guilford
ANNUAL REPORT ON CARING PROGRAM FOR CHILDREN, INC.
Section 11.24.  The Caring Program for Children, Inc., shall report annually by May 1 to the Joint Legislative Commission on Governmental Operations and to the Fiscal Research Division of the Legislative Services Office, beginning with May 1, 1998, on its program for providing health care for children.
This report shall include the number of children served and the cost per child served.

Requested by:   Senator Martin of Guilford
REVIEW OF AUTOMATED COLLECTION AND TRACKING SYSTEM
Section 11.25.  The Information Resource Management Commission shall conduct a quarterly review of the Automated Collection and Tracking System (ACTS) project being developed by the Department of Human Resources.  The review shall include an analysis of the problems encountered and progress achieved, identify critical issues to be resolved, and estimate the final cost and date of completion.  The review shall be submitted through the Office of the State Controller to the Chairs of the House and Senate Appropriations Committees, the Chairs of the House and Senate Human Resources Appropriations Subcommittees, the State Budget Director, and to the Director of the Fiscal Research Division of the Legislative Services Office no later than the last day of each quarter.

Requested by:   Senator Martin of Guilford
MIXED BEVERAGE TAX FOR AREA MENTAL HEALTH PROGRAMS
Section 11.26.  Funds received by the Department of Human Resources from the tax levied on mixed beverages under G.S. 18B-804(b)(8) shall be expended by the Department of Human Resources as prescribed by G.S. 18B-805(h).  These funds shall be allocated to the area mental health programs for substance abuse services. 

Requested by:   Senator Martin of Guilford
PHYSICIAN SERVICES
Section 11.27.  With the approval of the Office of State Budget and Management, the Department of Human Resources may use funds appropriated in this act for across-the-board salary increases and performance pay to offset similar increases in the costs of contracting with private and independent universities for the provision of physician services to clients in facilities operated by the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services.  This offsetting shall be done in the same manner as is currently done with constituent institutions of The University of North Carolina.

Requested by:   Senator Martin of Guilford
CLINICAL SOCIAL WORKER EXEMPTION
Section 11.28.  Section 8 of Chapter 732 of the 1991 Session Laws reads as rewritten:
"Section 8.  This act becomes effective January 1, 1992.  G.S. 90B-10(b)(3)a. is repealed effective January 1, 1999.  The term of the additional Board position for clinical social worker created by this act shall commence upon the expiration of the term of the public member whose term expires first."

Requested by:   Senator Martin of Guilford
LIABILITY INSURANCE
Section 11.29.  The Secretary of the Department of Human Resources, the Secretary of the Department of Environment, Health, and Natural Resources, and the Secretary of the Department of Correction may provide medical liability coverage not to exceed one million dollars ($1,000,000) per incident on behalf of employees of the Departments licensed to practice medicine or dentistry, all licensed physicians who are faculty members of The University of North Carolina who work on contract for the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services for incidents that occur in Division programs, and on behalf of physicians in all residency training programs from The University of North Carolina who are in training at institutions operated by the Department of Human Resources.  This coverage may include commercial insurance or self-insurance and shall cover these individuals for their acts or omissions only while they are engaged in providing medical and dental services pursuant to their State employment or training.
The coverage provided under this section shall not cover any individual for any act or omission that the individual knows or reasonably should know constitutes a violation of the applicable criminal laws of any state or the United States, or that arises out of any sexual, fraudulent, criminal, or malicious act, or out of any act amounting to willful or wanton negligence.
The coverage provided pursuant to this section shall not require any additional appropriations and shall not apply to any individual providing contractual service to the Department of Human Resources, the Department of Environment, Health, and Natural Resources, or the Department of Correction, with the exception that coverage may include physicians in all residency training programs from The University of North Carolina who are in training at institutions operated by the Department of Human Resources and licensed physicians who are faculty members of The University of North Carolina who work for the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services.

Requested by:   Senator Martin of Guilford
PRIVATE AGENCY UNIFORM COST FINDING REQUIREMENT
Section 11.30.  To ensure uniformity in rates charged to area programs and funded with State-allocated resources, the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services of the Department of Human Resources may require a private agency that provides services under contract with two or more area programs, except for hospital services that have an established Medicaid rate, to complete an agencywide uniform cost finding in accordance with G.S. 122C-143.2(a) and G.S. 122C-147.2.  The resulting cost shall be the maximum included for the private agency in the contracting area program's unit cost finding.

Requested by:   Senator Martin of Guilford
CAROLINA ALTERNATIVES
Section 11.31.  The Department of Human Resources shall move forward with planning, readiness assessments, and other necessary activities to be able to expand the Carolina Alternatives Child and Adult Waiver Pilot Program.  Prior to actual implementation of additional covered populations, the Department shall:
(1)	Receive approval from the Health Care Financing Administration;
(2)	Continue the 10-site Carolina Alternatives pilot programs;
(3)	Make a determination that each area authority that is going to participate in the pilot has the capacity to implement the waiver; 
(4)	Obtain certification from the Office of State Budget and Management that expansion of Carolina Alternatives is budget neutral, excluding the payment of claims related to the transition from fee-for-service to Medicaid managed care, and authorization from the Office of State Budget and Management to proceed with the pilot;
(5)	Evaluate capitation rates to determine if they are adequate to provide appropriate services;
(6)	Develop five-year cost estimates for Carolina Alternatives; and
(7)	Submit a progress report to the 1997 General Assembly, Regular Session 1998, and the Fiscal Research Division not later than May 1, 1998.

Requested by:   Senator Martin of Guilford
WILLIE M.
Section 11.32.  (a)	Legislative Findings. – The General Assembly finds:
(1)	That there is a need in North Carolina to provide appropriate treatment and education programs to children under the age of 18 who suffer from emotional, mental, or neurological handicaps accompanied by violent or assaultive behavior;
(2)	That children meeting these criteria have been identified as a Class in the case of Willie M., et al. v. Hunt, et al., formerly Willie M., et al. v. Martin, et al. [Willie M., 3:79 CV 294-MU (Western District); and as defined in G.S. 122C-3(13a) as Eligible Assaultive and Violent Children]; and
(3)	That these children have a need for a variety of services, in addition to those normally provided, that may include, but are not limited to, residential treatment services, educational services, and independent living arrangements.
(b)	Funds appropriated by the General Assembly to the Department of Human Resources for serving members of the Willie M. Class shall be expended only for programs serving members of the Willie M. Class identified in Willie M., et al. v. Hunt, et al., formerly Willie M., et al. v. Martin, et al., [or as Eligible Assaultive and Violent Children] including evaluations of potential Class members.  The Department shall reallocate these funds among services to Willie M. Class members during the year as it deems advisable in order to use the funds efficiently in providing appropriate services to Willie M. Class members.
(c)	Funds for Department of Public Education. – Funds appropriated to the Department of Public Education in this act for members of the Willie M. Class are to establish a supplemental reserve fund to serve only members of the Class identified in Willie M., et al. v. Hunt, et al., formerly Willie M., et al. v. Martin, et al., [or as Eligible Assaultive and Violent Children].  These funds shall be allocated by the State Board of Education to the local education agencies to serve those Class members who were not included in the regular average daily membership and the census of children with special needs, and to provide the additional program costs which exceed the per pupil allocation from the State Public School Fund and other State and federal funds for children with special needs.
(d)	The Department of Human Resources shall continue to implement its prospective unit cost reimbursement system and shall ensure that unit cost rates reflect reasonable costs by conducting cost center service type rate comparisons and cost centerline item budget reviews as may be necessary, and based upon these reviews and comparisons, the Department shall reduce and/or cap rates to programs which are significantly higher than those rates paid to other programs for the same service.
Any exception to this requirement shall be approved by the Director of the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, and shall be reported in the Department's annual joint report to the Governor and the General Assembly and in any periodic report the Department may make to the Joint Legislative Commission on Governmental Operations.
(d1)  The Department of Human Resources shall implement a process to review those cases for whom treatment has been recommended whose annual cost is anticipated to be in excess of one hundred fifty percent (150%) of the average annual per client expenditure of the previous fiscal year and shall take actions to reduce these treatment costs where appropriate.
(e)  The Department of Human Resources and the Department of Public Education shall submit, by May 1 of each fiscal year, a joint report to the Governor and the General Assembly on the progress achieved in serving members of the Willie M. Class.  The report shall include the following unduplicated data for each county:  (i) the number of children nominated for the Willie M. Class;  (ii) the number of children actually identified as members of the Class in each county;  (iii) the number of children served as members of the Class in each county;  (iv) the number of children who remain unserved or for whom additional services are needed in order to be determined to be appropriately served;  (v) the types and locations of treatment and education services provided to Class members;  (vi) the cost of services, by type, to members of the Class and the maximum and minimum rates paid to providers for each service; (vii) the number of cases whose treatment costs were in excess of one hundred fifty percent (150%) of the average annual per client expenditure; (viii) information on the impact of treatment and education services on members of the Class; (ix) an explanation of, and justification for, any waiver of departmental rules that affect the Willie M. program; and (x) the total State funds expended, by program, on Willie M. Class members, other than those funds specifically appropriated for the Willie M. programs and services.
(e1)  From existing funds available to it, the Department of Human Resources shall begin a process to document and assess individual Class members' progress through the continuum of services.  Standardized measures of functioning shall be administered periodically to each member of the Class, and the information generated from these measures shall be used to assess client progress and program effectiveness.
(f)  The Departments of Human Resources and Public Education shall provide periodic reports of expenditures and program effectiveness on behalf of the Willie M. Class to the Fiscal Research Division.  As part of these reports, the Departments shall explain measures they have taken to control and reduce program expenditures.
(g)  In fulfilling the responsibilities vested in it by the Constitution of North Carolina, the General Assembly finds:
(1)	That the General Assembly has evaluated the known needs of the State and has endeavored to satisfy those needs in comparison to their social and economic priorities; and
(2)	That the funds appropriated will enable the development and implementation of placement and services for the Class members in Willie M., et al. v. Hunt, et al., formerly Willie M., et al. v. Martin, et al., [or Eligible Assaultive and Violent Children] within a reasonable period of time considered within the context of the needs of the Class members, the other needs of the State, and the resources available to the State.
(h)  The General Assembly supports the efforts of the responsible officials and agencies of the State to meet the requirements of the court order in Willie M., et al. v. Hunt, et al., formerly Willie M., et al. v. Martin, et al., [Willie M., 3:79 CV 294-MU (Western District)].  To ensure that Willie M. Class members are appropriately served, no State funds shall be expended on placement and services for Willie M. Class members except:
(1)	Funds specifically appropriated by the General Assembly for the placement and services of Willie M. Class members; and
(2)	Funds for placement and services for which Willie M. Class members are otherwise eligible.
This limitation shall not preclude the use of unexpended Willie M. funds from prior fiscal years to cover current or future needs of the Willie M. program subject to approval by the Director of the Budget.  These Willie M. expenditures shall not be subject to the requirements of G.S. 143-18.
(i)  Notwithstanding any other provision of law, if the Department of Human Resources determines that a local program is not providing appropriate services to members of the Class identified in Willie M., et al. v. Hunt, et al., formerly Willie M., et al. v. Martin, et al., [or as Eligible Assaultive and Violent Children] the Department may ensure the provision of these services through contracts with public or private agencies or by direct operation by the Department of these programs.

Requested by:   Senator Martin of Guilford
THOMAS S.
Section 11.33.  (a)	Funds appropriated to the Department of Human Resources in this act for the 1997-98 fiscal year and the 1998-99 fiscal year for members of the Thomas S. Class as identified in Thomas S., et al. v. Britt, formerly Thomas S., et al. v. Flaherty, [Thomas S. et al. v. Bruton, Thomas S., C-C-82-0418M (Western District)] shall be expended only for programs serving Thomas S. Class members or for services for those clients who are:
(1)	Adults with mental retardation, or who have been treated as if they had mental retardation, who were admitted to a State psychiatric hospital on or after March 22, 1984, and who are included on the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services' official list of prospective Class members;
(2)	Adults with mental retardation who have a documented history of State psychiatric hospital admissions regardless of admission date and who, without funding support, have a good probability of being readmitted to a State psychiatric hospital;
(3)	Adults with mental retardation who have never been admitted to a State psychiatric hospital but who have a documented history of behavior determined to be of danger to self or others that results in referrals for inpatient psychiatric treatment and who, without funding support, have a good probability of being admitted to a State psychiatric hospital; or
(4)	Adults who are included on the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services' official list of prospective Class members and have yet to be confirmed as Class members, who currently reside in the community, and who have a good probability of being admitted to a facility licensed as a "home for the aged and disabled".
No more than five percent (5%) of the funds appropriated in this act for the Thomas S. program shall be used for clients meeting subdivisions (2), (3), or (4) of this subsection.
(b)	To ensure that Thomas S. Class members are appropriately served, no State funds shall be expended on placement and services for Thomas S. Class members except:
(1)	Funds specifically appropriated by the General Assembly for the placement and services of Thomas S. Class members; and
(2)	Funds for placement and services for which Thomas S. Class members are otherwise eligible.
(b1) Thomas S. funds may be expended to support services for Thomas S. Class members in adult care homes when the service needs of individual Class members in these homes cannot be met via the established maximum adult care home rate.
(c)	The Department of Human Resources shall continue to implement a prospective unit cost reimbursement system and shall ensure that unit cost rates reflect reasonable costs by conducting cost center service type rate comparisons and cost center line item budget reviews as may be necessary.
(d)	The Department of Human Resources shall submit by April 1 of each fiscal year a report to the General Assembly on the progress achieved in serving members and prospective members of the Thomas S. Class.  The report shall include the following:
(1)	The number of Thomas S. clients confirmed as Class members;
(2)	The number of prospective Class members evaluated;
(3)	The number of prospective Class members awaiting evaluation;
(4)	The number of Class members or prospective Class members added in the preceding 12 months due to their admission to a State psychiatric hospital;
(5)	A description of the types of treatment services provided to Class members; and
(6)	An analysis of the use of funds appropriated for the Class.
(e)  Notwithstanding any other provision of law, if the Department of Human Resources determines that a local program is not providing minimally adequate services to members of the Class identified in Thomas S., et al. v. Britt, formerly Thomas S., et al. v. Flaherty, [Thomas S. et al. v. Bruton, Thomas S. C-C-82-0418M (Western District)] or does not show a willingness to do so, the Department may ensure the provision of these services through contracts with public or private agencies or by direct operation by the Department of these programs.

Requested by:   Senator Martin of Guilford
THOMAS S. LAWSUIT COMPLIANCE
Section 11.34.  The Department of Justice and the Department of Human Resources shall pursue all administrative and legal options necessary to enable the State to resolve the Thomas S. lawsuit in the most expeditious and cost-effective manner possible and to seek elimination of the necessity for oversight by a special master.

Requested by:   Senator Martin of Guilford
THOMAS S./COST CONTAINMENT MEASURES
Section 11.35.  The Department of Human Resources and area mental health programs shall implement cost containment measures to ensure that programs serving Thomas S. Class members are as cost-effective as possible and also meet the requirement to provide minimally adequate treatment.

Requested by:   Senator Martin of Guilford
THOMAS S. FUNDS
Section 11.36.  If Thomas S. funds are not sufficient, then notwithstanding G.S. 143-16.3 and G.S. 143-23, the Director of the Budget may use funds available to the Department in an amount not to exceed seven million six hundred thousand dollars ($7,600,000).

Requested by:   Senator Martin of Guilford
EXTEND ADMINISTRATION OF TRI-COUNTY AREA AUTHORITY
Section 11.37.  Notwithstanding S.L. 1997-7, the Department of Human Resources may continue to administer the services of the Tri-County Area Authority in accordance with G.S. 122C-125.1 on behalf and at the request of the board of county commissioners of one or more of the counties that constitute the Tri-County Area Authority.  The extension granted under this section shall be for a period not to exceed three calendar months commencing July 1, 1997, and shall be for the sole purpose of allowing one or more of the counties that constitute the Tri-County Area Authority to assess the feasibility of combining with another existing area authority.

Requested by:   Senator Martin of Guilford
LIMITATION ON USE OF SPECIAL ALZHEIMER'S UNIT IN WILSON
Section 11.38.  The Special Alzheimer's Unit established in Wilson by funds appropriated in Chapter 507 of the 1995 Session Laws shall serve only those clients who cannot be served by any similar private facility.

Requested by:   Senator Martin of Guilford
ALLOCATION OF MENTAL HEALTH, DEVELOPMENTAL DISABILITIES, AND SUBSTANCE ABUSE EXPANSION FUNDS
Section 11.39.  Of the funds appropriated in this act to the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, Department of Human Resources, for expansion of mental health, developmental disabilities, and substance abuse programs and services, other than crisis services, those funds needed by area authorities for "catch-up" purposes shall be allocated pursuant to the Incentive Method adopted by the Mental Health Study Commission and presented in the Commission's Report to the 1996 General Assembly.

Requested by:   Senator Martin of Guilford
SUBSTANCE ABUSE PROGRAM GRANTS
Section 11.40.  (a) Of the funds appropriated in this act to the Department of Human Resources, the sum of one million two hundred fifty thousand dollars ($1,250,000) for the 1997-98 fiscal year shall be placed in a Reserve for Substance Abuse Treatment Programs.  The Secretary of Human Resources shall conduct a study of the various substance abuse treatment programs in the State, including but not limited to: The Pavilion Foundation in Polk County, Amythest in Charlotte, Charter Pines in Charlotte, Bethel Colony in Lenoir, and Appalachian Hall in Asheville.  The Secretary may use funds from the Reserve to allocate grants-in-aid to those substance abuse programs that the Secretary determines to be working most efficiently and effectively.  The Secretary shall also study whether the State should subsidize the treatment of persons covered under the Teachers' and State Employees' Comprehensive Major Medical Plan in those substance abuse facilities that are working efficiently and effectively, and may allocate up to two hundred fifty thousand dollars ($250,000) of the funds allocated to the Reserve under this subsection for the 1997-98 fiscal year to subsidize the treatment in those facilities determined by the Secretary to be working efficiently and effectively.
(b) The Secretary shall report to the Joint Legislative Commission on Governmental Operations on the findings of his studies and on the grants-in-aid allocated under this section.

Requested by:   Senator Martin of Guilford
EARLY INTERVENTION FUNDING
Section 11.41   Of the funds appropriated in this act to the Department of Human Resources, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, the sum of two million seven hundred thousand dollars ($2,700,000) for the 1997-98 fiscal year and the sum of two million seven hundred thousand dollars ($2,700,000) for the 1998-99 fiscal year shall be allocated based on a plan developed in consultation with the affected divisions within the Department and the North Carolina Interagency Coordinating Council to meet the needs of those children who are on the waiting list for early intervention services.

Requested by:   Senator Martin of Guilford
ANNUAL EVALUATION OF WILDERNESS CAMP, COACH MENTOR TRAINING, AND GOVERNOR'S ONE-ON-ONE PROGRAMS
Section 11.42.  The Department of Human Resources shall conduct an annual evaluation of the Wilderness Camp, Coach Mentor Training, and Governor's One-on-One Programs.  The results of the evaluation shall be submitted to the Joint Legislative Commission on Governmental Operations no later than October 1 of each year covering the program for the prior fiscal year.  In conducting the evaluation, among other things, the focus shall be on directing youth toward long-term positive and productive noncriminal behavior.  The review shall be qualitative and quantitative.

Requested by:   Senator Martin of Guilford
DYS TRAINING SCHOOLS/STUDENT EVALUATIONS
Section 11.43.  The Department of Human Resources shall take immediate steps to ensure that multidisciplinary diagnoses and evaluations, as provided for in G.S. 115C-113, are made on all students in training schools operated by the Division of Youth Services and that the requisite resources and services are provided for all DYS training school students who are identified as children with special needs.  The Department may use funds available to provide evaluations, resources, and services, but shall not reduce current DYS services.  Lapsed salary funds shall not be used to create new permanent positions.

Requested by:   Senator Martin of Guilford
COMMUNITY-BASED ALTERNATIVES PARTICIPATION
Section 11.44.  County governments participating in the Community-Based Alternatives Program shall certify annually to the Division of Youth Services, Department of Human Resources, that Community-Based Alternatives Aid to Counties shall not be used to duplicate or supplant other programs within the county.

Requested by:   Senator Martin of Guilford
S.O.S. AND FAMILY RESOURCE CENTER GRANT PROGRAMS ADMINISTRATIVE COST LIMITS
Section 11.45.  (a)	Of the funds appropriated to the Department of Human Resources in this act, not more than three hundred fifty thousand dollars ($350,000) for the 1997-98 fiscal year and not more than three hundred fifty thousand dollars ($350,000) for the 1998-99 fiscal year may be used to administer the S.O.S. Program, to provide technical assistance to applicants and to local S.O.S. programs, and to evaluate the local S.O.S. programs.  The Department may contract with appropriate public or nonprofit agencies to provide the technical assistance, including training and related services.
(b)	Of the funds appropriated in this act to the Department of Human Resources for the Family Resource Center Grant Program, the Department may use up to two hundred fifty thousand dollars ($250,000) in each fiscal year to administer the Program.

Requested by:   Senator Martin of Guilford
FAMILY SUPPORT/DEAF AND HARD OF HEARING SERVICES CONTRACT
Section 11.46.  Of the funds appropriated in this act to the Division of Services for the Deaf and Hard of Hearing, Department of Human Resources, for family support services, the sum of five hundred three thousand two hundred thirty-eight dollars ($503,238) for the 1997-98 fiscal year and the sum of five hundred three thousand two hundred thirty-eight dollars ($503,238) for the 1998-99 fiscal year shall be used to contract with a private, nonprofit corporation licensed to do business in North Carolina to perform those services, including family support and advocacy services as well as technical assistance to professionals who work with families of hearing-impaired children.

Requested by:   Senators Martin of Guilford, Winner, Lee
IMPLEMENT ABC'S PLAN FOR RESIDENTIAL SCHOOLS
Section 11.47.  (a) The Department of Human Resources shall plan to implement the State Board of Education's ABC's Plan for all of its residential schools where children are in attendance for more than 120 days a year.  The ABC's Plan shall be implemented for the 1998-99 school year, if possible.
(b) The State Board of Education shall assist the Department of Human Resources with the implementation.  The Department of Human Resources and the State Board of Education shall:
(1)	Identify any policy or technical reason this accountability model cannot be adopted in the residential schools.
(2)	Develop accountability standards for each residential school, including baseline data for these standards.  Accountability standards shall also be developed to measure improvements in performance among the nondiploma bound students attending the residential schools.
(3)	Determine the feasibility of implementing these accountability standards in the 1998-99 school year and propose a phase-in approach, if necessary.
(4)	Define the strategies and consequences for State intervention in low-performing residential schools.
(5)	Review the site-based management practices within the State Board of Education which, if implemented in the Department of Human Resources, should result in improved student performance.
The State Board of Education and the Department of Human Resources shall report jointly on their progress toward implementation in an interim report to the Joint Legislative Education Oversight Committee by October 1, 1997, and with a final report to that Committee by April 1, 1998.
(c)	In addition to the implementation of the ABC's Plan in the Department of Human Resources' residential schools, the State Board of Education and the Department of Human Resources shall study and report on the following issues:
(1)	Mandatory accreditation and dual certification of teachers in the residential schools.
(2)	Comparison of the staffing and financial resources available to serve special needs children in local education authorities versus residential schools (excluding the residential cost component).
(3)	Alignment of the Department of Human Resources' curricula with the State Board of Education's high school vocational educational curriculum, including opportunities for the residential schools to participate in the Tech Prep program with the community colleges.
(4)	Strategies for developing select residential schools as resource centers to local educational authorities in serving their special needs children.

Requested by:   Senator Martin of Guilford
DIVISION OF SERVICES FOR BLIND/PERFORMANCE AUDIT
Section 11.48.  The Office of the State Auditor shall conduct a performance audit of the Division of Services for the Blind in the Department of Human Resources, to include the Governor Morehead School.  The performance audit shall address, but not be limited to, the financial management of the Division.  The Office of the State Auditor shall submit the results of the performance audit to the cochairs of the Senate and House Appropriations Subcommittees on Human Resources by January 1, 1998.

Requested by:  Senator Martin of Guilford
SERVICES FOR BLIND/EXTENDED SERVICE PROVIDER POSITIONS
Section 11.49.  Of the funds appropriated in this act to the Department of Human Resources, Division of Services for the Blind, the sum of two hundred fifty thousand dollars ($250,000) in each fiscal year of the 1997-99 biennium shall be used to maintain extended service provider positions at local, nonprofit supported employment programs.

Requested by:   Senator Martin of Guilford
GOVERNOR MOREHEAD SCHOOL/TEXTBOOK FUNDS
Section 11.50.  Of the funds appropriated in this act to the Division of Services for the Blind, the sum of twelve thousand four hundred eight dollars ($12,408) for the 1997-98 fiscal year and the sum of twelve thousand four hundred eight dollars ($12,408) for the 1998-99 fiscal year shall be used to increase funding for textbooks or for adaptive technology, or both, for student education at the Governor Morehead School.  Funds for this purpose shall be part of the Division's continuation budget request.

Requested by:   Senator Martin of Guilford
REIMBURSEMENT AND COMPENSATION OF MEMBERS OF THE NORTH CAROLINA VOCATIONAL REHABILITATION ADVISORY COUNCIL, THE STATEWIDE INDEPENDENT LIVING COUNCIL, AND THE COMMISSION FOR THE BLIND
Section 11.51.  Notwithstanding G.S. 138-5(a)(1), those members of the North Carolina Vocational Rehabilitation Advisory Council, the Statewide Independent Living Council, and the Commission for the Blind who are unemployed or who shall forfeit wages from other employment to attend council or commission meetings or to perform related duties, may receive compensation not to exceed fifty dollars ($50.00) a day for attending these meetings or for performing related duties, as authorized in sections 105 and 705 of P.L. 102-569, the Rehabilitation Act of 1973, 42 U.S.C. § 701, et seq., as amended.  This compensation is instead of the compensation specified in G.S. 138-5(a)(1).  Reimbursement for subsistence and travel expenses is as specified in G.S. 138-5.

Requested by:   Senator Martin of Guilford
CHILD CARE SUBSIDIES
Section 11.52.  (a)	The maximum gross annual income for initial eligibility, adjusted biennially, for subsidized child care services shall be seventy-five percent (75%) of the State median income, adjusted for family size.
(b)	Parents who receive child care subsidy to work, look for work, attend work-related training or education activities, or meet the special developmental needs of their child, shall share in the cost of child care.  No fees shall be charged to the client when child care services are provided to the individuals in the following circumstances:
(1)	When children are receiving child care services in conjunction with protective services as described in 10 NCAC 35E.0106, up to a maximum of 12 months from the time protective services are initiated;
(2)	When child care services are provided as a support to a child receiving Child Welfare Services as described in the North Carolina Division of Social Services Family Services Manual, Volume 1, Chapter II; or
(3)	When a child with no income is living with someone other than the child's biological or adoptive parent or is living with someone who does not have court-ordered financial responsibility.
(c)	Fees shall be established based on a percent of gross family income and adjusted for family size.  Fees shall be determined as follows:
FAMILY SIZE	PERCENT OF GROSS FAMILY INCOME
1-3	9%
4-5	8%
6 or more	7%
Local departments of social services shall apply this new fee schedule to recipients at the next eligibility review on or after the effective date of this section.
(d) Rules for the monthly schedule of payments for the purchase of child care services for low-income children shall be established by the Social Services Commission pursuant to G.S. 143-153(8)(a) in accordance with the following requirements:
(1)	For child care facilities as defined in G.S. 110-86(3) in which fewer than fifty percent (50%) of the enrollees are subsidized by State or federal funds, the State shall continue to pay the same fee paid by private paying parents for a child in the same age group in the same facility.
(2)	"AA"licensed centers which are certified as developmental day centers by the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services receive one hundred ten percent (110%) of the market rate or the rate they charge private paying parents, whichever is lower, for typically developing children.
(3)	The monthly schedule of payments for the purchase of child care services for low-income children from providers who have fifty percent (50%) or more children receiving child care subsidized with State or federal funds include:
a.	Provision of payment rates for child care that are tied to the provider's regulatory status as follows:
1.	Registered homes and "A"licensed centers receive the market rate or the rate they charge their private paying parents, whichever is lower;
2.	"AA"licensed centers receive one hundred ten percent (110%) of the market rate or the rate they charge their private paying parents, whichever is lower; and
3.	Unregistered providers receive fifty percent (50%) of the market rate or the rate they charge their private paying parents, whichever is lower.
b.	Provision of payment rates for child care providers in counties who do not have at least 75 children in each age group for center-based and home-based care as follows:
1.	Payment rates shall be set at the statewide market rate for registered homes and "A"licensed centers.
2.	If it can be demonstrated that the application of the statewide market rate to a county with fewer than 75 children in each age group is lower than the county market rate and would inhibit the ability of the county to purchase child care for low-income children, then the county market rate may be applied.
(e)  Payment rates described in sub-subdivision (3)a. of subsection (d) of this section shall be applied to all licensed child care centers, including Head Start Wrap Around, that have fifty percent (50%) or more of enrolled children receiving child care subsidies, and to registered family child care homes and unregulated providers that enroll subsidized children.
(f)  A market rate shall be calculated for facilities and homes for each county and for each age group or age category of enrollees and shall be representative of fees charged to unsubsidized private paying parents for each age group of enrollees within the county.  The Division of Child Development shall also calculate a statewide market rate for each age category.  The Division of Child Development may also calculate regional market rates for each age group and age category.
(g)  Facilities licensed pursuant to Article 7 of Chapter 110 of the General Statutes may participate in the program that provides for the purchase of care in child care facilities for minor children of needy families.  No separate licensing requirements shall be used to select facilities to participate.  In addition, child care facilities shall be required to meet any additional applicable requirements of federal law or regulations.
Child care homes as defined in G.S. 110-86(4) from which the State purchases child care services shall meet the standards established by the Child Day Care Commission pursuant to G.S. 110-101 and G.S. 110-105.1 and any additional requirements of State law or federal law or regulations.  Child care arrangements exempt from State regulation pursuant to Article 7 of Chapter 110 of the General Statutes shall meet the requirements established by other State law and by the Social Services Commission.
County departments of social services or other local contracting agencies shall not use a provider's failure to comply with requirements in addition to those specified in this subsection as a condition for reducing the provider's subsidized child care rate.

Requested by:   Senator Martin of Guilford
CHILD CARE ALLOCATION FORMULA
Section 11.53.  (a)	To simplify current child care allocation methodology and more equitably distribute State child care funds, the Department of Human Resources shall apply the following allocation formula to all noncategorical federal and State child care funds used to pay the costs of necessary child care for minor children of needy families:
(1)	One-third of budgeted funds shall be distributed according to the county's population in relation to the total population of the State;
(2)	One-third of the budgeted funds shall be distributed according to the number of children under 6 years of age in a county who are living in families whose income is below the State poverty level in relation to the total number of children under 6 years of age in the State in families whose income is below the poverty level; and
(3)	One-third of budgeted funds shall be distributed according to the number of working mothers with children under 6 years of age in a county in relation to the total number of working mothers with children under 6 years of age in the State.
(b)	A county's initial allocation shall not be less than that county's total expenditures for both FSA and non-FSA child care in fiscal year 1995-96.

Requested by:   Senator Martin of Guilford
CHILD CARE FUNDS MATCHING REQUIREMENT
Section 11.54.  No local matching funds may be required by the Department of Human Resources as a condition of any locality's receiving any State child care funds appropriated by this act unless federal law requires such a match.

Requested by:   Senator Martin of Guilford
CHILD DAY CARE REVOLVING LOAN FUND
Section 11.55.  Notwithstanding any law to the contrary, funds budgeted for the Child Day Care Revolving Loan Fund may be transferred to and invested by the financial institution contracted to operate the Fund.  The principal and any income to the Fund may be used to make loans, reduce loan interest to borrowers, serve as collateral for borrowers, pay the contractor's cost of operating the Fund, or to pay the Department's cost of administering the program.

Requested by:   Senator Martin of Guilford
EARLY CHILDHOOD EDUCATION AND DEVELOPMENT INITIATIVES PROGRAM
Section 11.56.  (a)	 The General Assembly finds that it is essential to continue developing comprehensive programs that provide high quality early childhood education and development services locally for children and their families.  The General Assembly intends to expand the Early Childhood Education and Development Initiatives Program (the "Program" ) in a manner which ensures quality assurance and performance-based accountability for the Program.
(b) Notwithstanding any provision of Part 10B of Article 3 of Chapter 143B of the General Statutes or any other provision of law or policy, the Department of Human Resources and the North Carolina Partnership for Children, Inc., jointly shall continue to implement the recommendations contained in the Smart Start Performance Audit prepared pursuant to Section 27A(1)b. of Chapter 324 of the 1995 Session Laws, as modified by Section 24.29 of Chapter 18 of the Session Laws, Second Extra Session 1996.  The North Carolina Partnership for Children, Inc., shall continue to report quarterly to the Joint Legislative Commission on Governmental Operations on its progress toward full implementation of the modified audit recommendations.
(c) The Joint Legislative Commission on Governmental Operations shall, consistent with current law, continue to be the legislative oversight body for the Program.  The President Pro Tempore of the Senate and the Speaker of the House of Representatives may appoint a subcommittee of the Joint Legislative Commission on Governmental Operations to carry out this function.  This subcommittee may conduct all initial reviews of plans, reports, and budgets relating to the Program and shall make recommendations to the Joint Legislative Commission on Governmental Operations.
(d)	Administrative costs shall be equivalent to, on an average statewide basis for all local partnerships, not more than eight percent (8%) of the total statewide allocation to all local partnerships.  What counts as administrative costs shall be as defined in the Smart Start Performance Audit.
(e)  Any local partnership, before receiving State funds, shall be required annually to submit a plan and budget for State funds for appropriate programs to the North Carolina Partnership for Children, Inc., and the Joint Legislative Commission on Governmental Operations.  State funds to implement the programs shall not be allocated to a local partnership until the program plan is approved by the North Carolina Partnership for Children, Inc.
(f)  The North Carolina Partnership for Children, Inc., and all local partnerships shall use competitive bidding practices in contracting for goods and services on all contract amounts of one thousand five hundred dollars ($1,500) and above, and, where practicable, on contracts for amounts of less than one thousand five hundred dollars ($1,500).
(g)  The role of the North Carolina Partnership for Children, Inc., shall continue to be expanded to incorporate all the aspects of the new role determined for the Partnership in the Smart Start Performance Audit recommendations and to provide technical assistance to local partnerships, assess outcome goals for children and families, ensure that statewide goals and legislative guidelines are being met, help establish policies and outcome measures, obtain non-State resources for early childhood and family services, and document and verify the cumulative contributions received by the partnerships.
(h)  The North Carolina Partnership for Children, Inc., and all local partnerships shall, in the aggregate, be required to match no less than fifty percent (50%) of the total amount budgeted for the Program in each fiscal year of the biennium as follows:  contributions of cash equal to at least ten percent (10%) and in-kind donated resources equal to no more than ten percent (10%) for a total match requirement of twenty percent (20%) for each fiscal year.  Only in-kind contributions that are quantifiable, as determined in the Smart Start Performance Audit, shall be applied to the in-kind match requirement.
Failure to obtain a twenty percent (20%) match by May 1 of each fiscal year shall result in a dollar-for-dollar reduction in the appropriation for the Program for the next fiscal year.  The North Carolina Partnership for Children, Inc., shall be responsible for compiling information on the private cash and in-kind contributions into a report that is submitted to the Joint Legislative Commission on Governmental Operations pursuant to G.S. 143B-168.13(5) in a format that allows verification by the Department of Revenue.  The same match requirements shall apply to any expansion funds appropriated by the General Assembly.
(i)  Counties participating in the Program may use the county's allocation of State and federal child care funds to subsidize child care according to the county's Early Childhood Education and Development Initiatives Plan as approved by the North Carolina Partnership for Children, Inc.  The use of federal funds shall be consistent with the appropriate federal regulations.  Child care providers shall, at a minimum, comply with the applicable requirements for State licensure or registration pursuant to Article 7 of Chapter 110 of the General Statutes, with other applicable requirements of State law or rule, including rules adopted for nonregistered child care by the Social Services Commission, and with applicable federal regulations.
(j)  The Department of Human Resources shall continue to implement the performance-based evaluation system.
(k)  The Frank Porter Graham Child Development Center shall continue its evaluation of the Program.  Notwithstanding any policy to the contrary, the Frank Porter Graham Child Development Center may use any method legally available to it to track children who are participating or who have participated in any Early Childhood Education and Development Initiative in order to carry out its ongoing evaluation of the Program.
(l)  G.S. 143B-168.12(a) reads as rewritten:
"(a)	In order to receive State funds, the following conditions shall be met:
(1)	The North Carolina Partnership shall have a Board of Directors consisting of the following 39 members:
a.	The Secretary of Human Resources, ex officio;
b.	The Secretary of Environment, Health, and Natural Resources, ex officio;
c.	The Superintendent of Public Instruction, ex officio;
d.	The President of the Department of Community Colleges, ex officio;
e.	One resident from each of the 1st, 3rd, 5th, 7th, 9th, and 11th Congressional Districts, appointed by the President Pro Tempore of the Senate;
f.	One resident from each of the 2nd, 4th, 6th, 8th, 10th, and 12th Congressional Districts, appointed by the Speaker of the House of Representatives;
g.	Seventeen members, of whom four shall be members of the party other than the Governor's party, appointed by the Governor;
h.	The President Pro Tempore of the Senate, or a designee;
i.	The Speaker of the House of Representatives, or a designee;
j.	The Majority Leader of the Senate, or a designee;
k.	The Majority Leader of the House of Representatives, or a designee;
l.	The Minority Leader of the Senate, or a designee; and
m.	The Minority Leader of the House of Representatives, or a designee.
(2)	The North Carolina Partnership shall agree to adopt procedures for its operations that are comparable to those of Article 33C of Chapter 143 of the General Statutes, the Open Meetings Law, and Chapter 132 of the General Statutes, the Public Records Law, and provide for enforcement by the Department.
(3)	The North Carolina Partnership shall oversee the development and implementation of the local demonstration projects as they are selected.
(4)	The North Carolina Partnership shall develop and implement a comprehensive standard fiscal accountability plan to ensure the fiscal integrity and accountability of State funds appropriated to it and to the local partnerships. The standard fiscal accountability plan shall, at a minimum, include a uniform, standardized system of accounting, internal controls, payroll, fidelity bonding, chart of accounts, and contract management and monitoring. The North Carolina Partnership may contract with outside firms to develop and implement the standard fiscal accountability plan. All local partnerships shall be required to participate in the standard fiscal accountability plan developed and adopted by the North Carolina Partnership pursuant to this subdivision.
(5)	The North Carolina Partnership shall develop and implement a centralized accounting and contract management system which incorporates features of the required standard fiscal accountability plan described in subdivision (4) of subsection (a) of this section.  The following local partnerships shall be required to participate in the centralized accountability system developed by the North Carolina Partnership pursuant to this subdivision:
a.	Local partnerships which have significant deficiencies in their accounting systems, internal controls, and contract management systems, as determined by the North Carolina Partnership based on the annual financial audits of the local partnerships conducted by the Office of the State Auditor; and
b.	Local partnerships which are in the first two years of operation following their selection, except for those created by combination with existing local partnerships.  At the end of this two-year period, local partnerships shall continue to participate in the centralized accounting and contract management system.  With the approval of the North Carolina Partnership, local partnerships may perform accounting and contract management functions at the local level using the standardized and uniform accounting system, internal controls, and contract management systems developed by the North Carolina Partnership.
	Local partnerships which otherwise would not be required to participate in the centralized accounting and contract management system pursuant to this subdivision may voluntarily choose to participate in the system. Participation or nonparticipation shall be for a minimum of two years, unless, in the event of nonparticipation, the North Carolina Partnership determines that any partnership's annual financial audit reveals serious deficiencies in accounting or contract management.
(6)	The North Carolina Partnership shall develop a formula for allocating direct services funds appropriated for this purpose to local partnerships.
(7)	The North Carolina Partnership may adjust its allocations on the basis of local partnerships' performance assessments.  In determining whether to adjust its allocations to local partnerships, the North Carolina Partnership shall consider whether the local partnerships are meeting the outcome goals and objectives of the North Carolina Partnership and the goals and objectives set forth by the local partnerships in their approved annual program plans.
	   The North Carolina Partnership may use additional factors to determine whether to adjust the local partnerships' allocations. These additional factors shall be developed with input from the local partnerships and shall be communicated to the local partnerships when the additional factors are selected. These additional factors may include board involvement, family and community outreach, collaboration among public and private service agencies, and family involvement.
	   On the basis of performance assessments, local partnerships annually shall be rated 'superior', 'satisfactory', or 'needs improvement'.  Local partnerships rated 'superior' may receive, to the extent that funds are available, a ten percent (10%) increase in their annual funding allocation.  Local partnerships rated 'satisfactory' may receive their annual funding allocation.  Local partnerships rated 'needs improvement' may receive ninety percent (90%) of their annual funding allocation.
	   The North Carolina Partnership may contract with outside firms to conduct the performance assessments of local partnerships.
(8)	The North Carolina Partnership shall establish a local partnership advisory committee comprised of 15 members.  Eight of the members shall be chairs of local partnerships' board of directors, and seven shall be staff of local partnerships.  Members shall be chosen by the Chair of the North Carolina Partnership from a pool of candidates nominated by their respective boards of directors. The local partnership advisory committee shall serve in an advisory capacity to the North Carolina Partnership and shall establish a schedule of regular meetings.  Members shall serve two-year terms and shall not serve more than two consecutive terms. Members shall be chosen from local partnerships on a rotating basis.  The advisory committee shall annually elect a chair from among its members.
(9)	The North Carolina Partnership shall report (i) quarterly to the Joint Legislative Commission on Governmental Operations and (ii) to the General Assembly and the Governor on the ongoing progress of all the local partnerships' work, including all details of the use to which the allocations were put, and on the continuing plans of the North Carolina Partnership and of the Department, together with legislative proposals, including proposals to implement the program statewide."
(m)  G.S. 143B-168.13(a) reads as rewritten:
"(a)	The Department shall:
(1)	Develop a statewide process, in cooperation with the North Carolina Partnership, to select the local demonstration projects.  The first 12 local demonstration projects developed and implemented shall be located in the 12 congressional districts, one to a district.  The locations of subsequent selections of local demonstration projects shall represent the various geographic areas of the State.
(2)	Develop and conduct a statewide needs and resource assessment every third year, beginning in the 1997-98 fiscal year.  This needs assessment shall be conducted in cooperation with the North Carolina Partnership and with the local partnerships.  The Department may contract with an independent firm to conduct the needs assessment.  The needs assessment shall be conducted in a way which enables the Department and the North Carolina Partnership to review, and revise as necessary, the total program cost estimate and methodology.  The data and findings of this needs assessment shall form the basis for annual program plans developed by local partnerships and approved by the North Carolina Partnership.  A report of the findings of the needs assessment shall be presented to the General Assembly prior to the beginning of the 1999 Session and every three years after that date.
(2.1)	Develop and maintain an automated, publicly accessible database of all regulated child care programs.
	(4)	Adopt, in cooperation with the North Carolina Partnership, any rules necessary to implement this Part, including rules to ensure that State leave policy is not applied to the North Carolina Partnership and the local partnerships.  In order to allow local partnerships to focus on the development of long-range plans in their initial year of funding, the Department may adopt rules that limit the categories of direct services for young children and their families for which funds are made available during the initial year.
(5)	Repealed by Session Laws 1996, Second Extra Session, c. 18, s. 24.29(c).
(6)	Annually update its funding formula using the most recent data available. These amounts shall serve as the basis for determining 'full funding' amounts for each local partnership."
	(n)	There is allocated from the funds appropriated to the Department of Human Resources, Division of Child Development, in this act, the sum of twenty-two million two hundred fifty-eight thousand six hundred twenty-five dollars ($22,258,625) for the 1997-98 fiscal year and the sum of twenty-five million two hundred ninety-eight thousand eight hundred thirty-eight dollars ($25,298,838) for the 1998-99 fiscal year to be used as follows:
(1)	Of the 35 partnerships existing as of the 1996-97 fiscal year, funds for direct services shall be increased a total of $15,215,912 for the 1997-98 fiscal year and $15,215,912 for the 1998-99 fiscal year.  The North Carolina Partnership for Children, Inc., may use up to $1,500,000 of these funds in the 1997-98 fiscal year as planning funds for the remaining 45 unfunded counties.
(2)	For the 12 new partnerships planned for as of the 1996-97 fiscal year, funds shall be $5,252,713 for the 1997-98 fiscal year and $9,142,926 for the 1998-99 fiscal year to administer and deliver direct services.
(3)	The North Carolina Partnership for Children, Inc., shall receive an additional $700,000 in the 1997-98 fiscal year and an additional $700,000 in the 1998-99 fiscal year for the State-level administration of the Program.
(4)	The Department of Human Resources shall receive $750,000 in nonrecurring funds in the 1997-98 fiscal year to conduct a statewide needs and resources assessment.
(5)	The Department of Human Resources shall receive $100,000 in nonrecurring funds in the 1997-98 fiscal year to complete the automation of a database of all regulated child care programs.
(6)	The Department of Human Resources shall receive $240,000 in the 1997-98 fiscal year and $240,000 in the 1998-99 fiscal year for professional development programs.
(o)  Of the funds appropriated to the Department of Human Resources for the Program for the 1997-99 biennium, the Frank Porter Graham Child Development Center shall receive the sum of eight hundred fifty thousand dollars ($850,000) for the 1997-98 fiscal year and the sum of eight hundred fifty thousand dollars ($850,000) for the 1998-99 fiscal year.

Requested by:   Senator Ballance
MEDICAL RECORDS COPY FEES/SOCIAL SECURITY DISABILITY CLAIMS
Section 11.57.  G.S. 90-411 reads as rewritten:
"§ 90-411.  Record copy fee.
A health care provider may charge a reasonable fee to cover the costs incurred in searching, handling, copying, and mailing medical records to the patient or the patient's designated representative. The maximum fee shall be fifty cents (50)	per page, provided that the health care provider may impose a minimum fee of up to ten dollars ($10.00), inclusive of copying costs. If requested by the patient or the patient's designated representative, nothing herein shall limit a reasonable professional fee charged by a physician for the review and preparation of a narrative summary of the patient's medical record. This section shall only apply with respect to liability claims for personal injury, and claims for social security disability, except that charges for medical records and reports related to claims under Article 1 of Chapter 97 of the General Statutes shall be governed by the fees established by the North Carolina Industrial Commission pursuant to G.S. 97-26.1."

PART XII. DEPARTMENT OF AGRICULTURE

Requested by:   Senator Martin of Pitt
MOUNTAIN STATE FAIR TO BECOME ENTERPRISE FUND
Section 12.  The activities of the Western North Carolina Agricultural Center and the Mountain State Fair shall be combined and operated in an enterprise fund.  Current appropriated support to the Western North Carolina Agricultural Center shall be transferred on a quarterly basis with the anticipation that appropriated support will only be necessary until the combined operation develops sufficient revenue and operating reserves to become totally self-supporting.

Requested by:   Senator Martin of Pitt
TIMBER SALES FOR MAINTENANCE OF STATE FARMS FORESTLAND
Section 12.1.  The Department of Agriculture is authorized to expend up to one hundred thousand dollars ($100,000) each year for forestry management from funds received from the sale of timber that are deposited with the State Treasurer in a capital improvement account pursuant to G.S. 146-30.  The Director of the Budget is authorized to transfer up to one hundred thousand dollars ($100,000) from the capital improvement account to the Reserve for Forestry Management in the Department of Agriculture's operating budget and to prepare succeeding continuation budget documents to include one hundred thousand dollars ($100,000) in the Reserve for Forestry Management.

Requested by:   Senator Martin of Pitt
TRANSFER MARITIME MUSEUM TO CULTURAL RESOURCES
Section 12.2.  The 17.25 positions, support, and equipment in the North Carolina Maritime Museum, Department of Agriculture, shall be transferred to the Department of Cultural Resources.

Requested by:   Senator Martin of Pitt
WESTERN NORTH CAROLINA DEVELOPMENT ASSOCIATION
Section 12.3.  The Western North Carolina Development Association shall:
(1)	By January 15, 1998, and more frequently as requested, report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division the following information:
a.	State fiscal year 1996-97 program activities, objectives, and accomplishments;
b.	State fiscal year 1996-97 itemized expenditures and fund sources;
c.	State fiscal year 1997-98 planned activities, objectives, and accomplishments, including actual results through December 31, 1997; and
d.	State fiscal year 1997-98 estimated itemized expenditures and fund sources, including actual  expenditures and fund sources through December 31, 1997.
(2)	By January 15, 1999, and more frequently as requested, report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division the following information:
a.	State fiscal year 1997-98 program activities, objectives, and accomplishments;
b.	State fiscal year 1997-98 itemized expenditures and fund sources;
c.	State fiscal year 1998-99 planned activities, objectives, and accomplishments, including actual results through December 31, 1998; and
d.	State fiscal year 1998-99 estimated itemized expenditures and fund sources, including actual expenditures and fund sources through December 31, 1998.
(3)	Provide a copy of the Association's annual audited financial statement to the Fiscal Research Division within 30 days of issuance of the statement.

Requested by:   Senator Martin of Pitt, Kerr
INCREASE GRAPE GROWERS FUNDS
Section 12.4.  G.S. 105-113.81A reads as rewritten:
"§ 105-113.81A.  Distribution of part of wine taxes attributable to North Carolina wine.
The Secretary shall on a quarterly basis credit to the Department of Agriculture ninety-four percent (94%) of the net proceeds of the excise tax collected on unfortified wine bottled in North Carolina during the previous quarter and ninety-five percent (95%) of the net proceeds of the excise tax collected on fortified wine bottled in North Carolina during the previous quarter, except that the amount credited to the Department of Agriculture under this section shall not exceed one hundred fifty thousand dollars ($150,000) per fiscal year.  The Department of Agriculture shall allocate the funds received under this section to the North Carolina Grape Growers Council to be used to promote the North Carolina grape and wine industry and to contract for research and development services to improve viticultural and enological practices in North Carolina.  Any funds credited to the Department of Agriculture under this section that are not expended by June 30 of any fiscal year may not revert to the General Fund, but shall remain available to the Department for the uses set forth in this section."

Requested by:   Senator Martin of Pitt
AUTHORIZE THE AGRICULTURAL FINANCE AUTHORITY TO USE THE INTEREST FROM THE RESERVE FOR FARM LOANS FOR ADMINISTRATIVE EXPENSES
Section 12.5.  G.S. 122D-16 reads as rewritten:
"§ 122D-16.  Trust funds. (a)	Notwithstanding any other provisions of law to the contrary, all moneys received pursuant to the authority of this Chapter shall be deemed to be trust funds to be held and applied solely as provided in this Chapter.  Interest earned from these moneys and interest received from loans made from these moneys may be used for any purpose set out in this Chapter and for the costs of administering this Chapter.  The resolution authorizing any obligations or the trust agreement securing any obligations may provide that any of these moneys may be temporarily invested pending the disbursement of the moneys and shall provide that any officer with whom, or any bank or trust company with which, such moneys shall be deposited, shall act as trustee of the moneys and shall hold and apply the moneys for the purposes under this Chapter, subject to any rules adopted pursuant to this Chapter and any provisions in the provision or trust agreement.  
	(b)	All moneys of the Authority may be invested in the following:
(1)	Bonds, notes or treasury bills of the United States;
(2)	Non-convertible debt securities of the following issuers:
a.	The Federal Home Loan Bank Board;
b.	The Federal National Mortgage Association;
c.	The Federal Farm Credit Bank; and
d.	The Student Loan Marketing Association;
(3)	Any other obligations not listed above which are guaranteed as to principal and interest by the United States or any of its agencies;
(4)	Certificates of deposit and other evidences of deposit at state and federal chartered banks and savings and loan associations; provided that any principal amount of such certificate in excess of the amount insured by the federal government or any agency thereof be fully collateralized;
(5)	Obligations of the United States or its agencies under a repurchase agreement for a shorter time than the maturity date of the security itself if the market value of the security itself is more than the amount of funds invested;
(6)	Money market funds whose portfolios consist of any of the foregoing investments;
(7)	A guaranteed investment or similar contract, which provides for the investment of funds at a guaranteed rate of return, with an insurance company or depository financial institution with a claim paying rating of no less than either of the two highest grades given by a nationally recognized rating agency; and
(8)	Any other investment authorized by law for the investment of funds by a unit of local government."

PART XIII.  DEPARTMENT OF ENVIRONMENT, HEALTH, AND NATURAL RESOURCES

Requested by:   Senator Martin of Pitt
ENVIRONMENTAL EDUCATION GRANTS
Section 13.  (a)	Of the funds appropriated in this act to the Department of Environment, Health, and Natural Resources, the sum of two hundred thousand dollars ($200,000) for the 1997-98 fiscal year and the sum of two hundred thousand dollars ($200,000) for the 1998-99 fiscal year shall be used to encourage and support the development of environmental education library collections throughout the State by providing grants to schools, community organizations, and environmental education centers.
(b)	The Department shall report to the Joint Legislative Commission on Governmental Operations, the Environmental Review Commission, and the Fiscal Research Division by January 1, 1998, and again by January 1, 1999, on the grant program.  The report shall include a list of amounts awarded and project descriptions for each grant recipient.

Requested by:   Senator Martin of Pitt
GRASSROOTS SCIENCE PROGRAM
Section 13.1.  Of the funds appropriated in this act to the Department of Environment, Health, and Natural Resources for the Grassroots Science Program, the sum of three million one hundred fifty thousand dollars ($3,150,000) for fiscal year 1997-98 and the sum of six hundred thousand dollars ($600,000) for fiscal year 1998-99 are allocated as grants-in-aid for each fiscal year as follows:
1997-98	1998-99

Iredell County Children's Museum	$56,500	$50,000
Museum of Coastal Carolina	$66,750	$50,000
Rocky Mount Children's Museum	$109,750	$50,000
Imagination Station	$111,000	$50,000
Western North Carolina Nature Center	$130,750	$15,000
The Health Adventure Museum
  of Pack Place Education,
  Arts and Science Center, Inc.	$162,500	$35,000
Cape Fear Museum	$188,500	$50,000
Catawba Science Center	$190,500	$50,000
Sci Works Science Center and
   Environmental Park of 
   Forsyth County	$231,000	$50,000
Natural Science 
   Center of Greensboro	$333,000	$50,000
Schiele Museum of Natural History	$383,750	$50,000
North Carolina Museum of
  Life and Science	$398,750	$50,000
Discovery Place	$787,250	$50,000

                           TOTAL	$3,150,000	$600,000

Requested by:  Senator Martin of Pitt
ANIMAL WASTE COMPLIANCE PROGRAM REPORT
Section 13.2.  (a)	No later than October 15, 1997, and quarterly thereafter, the Department of Environment, Health, and Natural Resources shall submit status reports to the Environmental Review Commission and the Fiscal Research Division.  Each report shall include, but not be limited to:
(1)	The number of permits for animal waste management systems, itemized by type of animal subject to such permits, issued since the last report and a total for that calendar year.
(2)	The number of operations reviews of animal waste management systems that the Division of Soil and Water Conservation has conducted since the last report and a total for that calendar year.
(3)	The number of operations reviews of animal waste management systems conducted by agencies other than the Division of Soil and Water Conservation that have been conducted since the last report and a total for that calendar year.
(4)	The number of reinspections associated with operations reviews conducted by the Division of Soil and Water Conservation since the last report and a total for that calendar year.
(5)	The number of reinspections associated with operations reviews conducted by agencies other than the Division of Soil and Water Conservation since the last report and a total for that calendar year.
(6)	The number of compliance inspections of animal waste management systems that the Division of Water Quality has conducted since the last report and a total for that calendar year.
(7)	The number of follow-up inspections associated with compliance inspections conducted by the Division of Water Quality since the last report and a total for that calendar year.
(8)	The average length of time for each category of reviews and inspections under subdivisions (2) through (7) of this subsection.
(9)	The number of violations found during each category of review and inspection under subdivisions (2) through (7) of this subsection, the status of enforcement actions taken and pending, and the penalties imposed, collected, and in the process of being negotiated for each such violation.
(b)	The information to be included in the reports pursuant to subsection (a) of this section shall be itemized by each regional office of the Department, with totals for the State indicated.

Requested by:  Senator Plyler
DEFER SOME ANIMAL WASTE MANAGEMENT SYSTEM REQUIREMENTS
Section 13.3.  Section 19(c)(4) of Chapter 626 of the 1995 Session Laws reads as rewritten:
"(4)	Notwithstanding G.S. 143-215.10C (a) through (d), a dry litter animal waste management system involving 30,000 or more birds shall continue to operate on a deemed permitted basis by rule under 15A N.C.A.C. 2H.0217 and shall comply with the animal waste management plan testing and record-keeping requirements by January 1, 2000."

Requested by:   Senator Plyler
ODOR CONTROL STUDY FUNDS
Section 13.4.  Of the funds appropriated to the Department of Environment, Health, and Natural Resources for the 1996-97 fiscal year and transferred to the Board of Governors of The University of North Carolina for the North Carolina Agricultural Research Service at North Carolina State University for research into economically feasible odor control technologies and for a detailed economic analysis of odor management alternatives, the sum of six hundred thousand dollars ($600,000) shall not revert to the General Fund on June 30, 1997.   These funds shall remain in the budget of North Carolina State University for expenditure by the North Carolina Agricultural Research Service during the 1997-98 fiscal year.  These funds may be used for capital expenditures to construct current technology swine production facilities for the purpose of research in adapting or developing new odor control technologies.  The use of these funds for capital expenditures shall be authorized without any requirement of matching funds from private sources.

Requested by:   Senator Martin of Pitt
SOUTH MOUNTAINS GAMELANDS FUNDS
Section 13.5.  Of the funds appropriated in this act to the Wildlife Resources Commission, the sum of five million dollars ($5,000,000) for the 1997-98 fiscal year shall be used to assist in the acquisition of gamelands for hunting, fishing, outdoor recreation, and conservation in the South Mountains.  The Wildlife Resources Commission may use and seek additional funds from the Wildlife Endowment Fund established in G.S. 143-250.1, private citizens, private nonprofit conservation organizations, the Clean Water Management Fund established in Article 13A of Chapter 113 of the General Statutes, the Natural Heritage Trust Fund established in Article 5A of Chapter 113 of the General Statutes, and local governments to acquire gamelands in the South Mountains.  The Wildlife Resources Commission shall work with citizens and local governments to develop a management plan for its gamelands in the South Mountains.

Requested by:  Senator Martin of Pitt
SUPERFUND PROGRAM FUNDS
Section 13.6.  (a)	The Department of Environment, Health, and Natural Resources may use available funds, with the approval of the Office of State Budget and Management, in order to provide the ten percent (10%) cost share required for Superfund cleanups on the National Priority List sites and to pay the operating and maintenance costs associated with these cleanups.  These funds may be in addition to those appropriated for this purpose.
(b)	The Department of Environment, Health, and Natural Resources and the Office of State Budget and Management shall report to the Joint Legislative Commission on Governmental Operations the amount and the source of the funds used pursuant to subsection (a) of this section within 30 days of the expenditure of these funds.

Requested by:   Senator Martin of Pitt
FUNDS FOR VOLUNTARY REMEDIAL ACTIONS
Section 13.7.  (a)	During the 1997-99 fiscal biennium, the Secretary of Environment, Health, and Natural Resources may contribute from the Inactive Hazardous Sites Cleanup Fund up to ten percent (10%) of the cost each fiscal year, not to exceed fifty thousand dollars ($50,000) per site, of implementing a voluntary remedial action program at up to three high-priority sites that substantially endanger public health or the environment.
(b)	No later than April 1 of each year of the 1997-99 fiscal biennium, the Department of Environment, Health, and Natural Resources shall report to the General Assembly.  Each report shall contain the location of the sites for which a voluntary remedial action program was implemented under subsection (a) of this section, the rationale for the State contributing to the cost of that remedial action, and the amount of the contribution made from the Inactive Hazardous Sites Cleanup Fund.

Requested by:   Senator Martin of Pitt
POLLUTION PREVENTION AND ENVIRONMENTAL ASSISTANCE TO SMALL BUSINESSES WITH NEED
Section 13.8.  The Division of Pollution Prevention and Environmental Assistance shall, to the extent feasible, give greatest priority to small businesses that can demonstrate financial need when the Division of Pollution Prevention and Environmental Assistance awards grants or otherwise provides technical or financial assistance.

Requested by:   Senator Martin of Pitt
PERMIT INFORMATION CENTER
Section 13.9.  The Department of Environment, Health, and Natural Resources may use any available funds to operate a permit information center within the Department to improve permit applications, guidance materials, applicant and citizen training, and for other related purposes.

Requested by:   Senator Martin of Pitt
AGRICULTURE WASTE RESEARCH REPORTS
Section 13.10.  The Primary Investigator or Researcher receiving funding from the State pursuant to Section 2 of Chapter 18 of the Session Laws of the 1996 Second Extra Session for each of the following research projects and studies shall provide a progress report to the Environmental Review Commission, the Joint Legislative Commission on Governmental Operations, the Scientific Advisory Council on Water Resources and Coastal Fisheries Management, and the Fiscal Research Division on January 1 and July 1 of each year until the project or study is complete:
(1)	Odor control technology.
(2)	Sources of nitrogen through isotope markers.
(3)	Groundwater impacts of lagoons.
(4)	Atmospheric deposition of nitrogen in the Neuse Estuary.
(5)	Alternative animal waste technologies.
Upon completion of the project or study, the Primary Investigator or Researcher shall provide a final report.

Requested by:   Senator Martin of Pitt
TOWN FORK CREEK SOIL CONSERVATION PROJECT
Section 13.11.  (a)	The funds placed in a reserve account in the Department of Environment, Health, and Natural Resources pursuant to Section 26.3(c) of Chapter 507 of the 1995 Session Laws shall not revert until June 30, 1999.  Those funds are reallocated as follows: 
(1)	Five hundred four thousand five hundred sixty dollars ($504,560) to the Stokes County Water and Sewer Authority, Inc., for the Germanton Water Project.
(2)	Nine hundred thirty thousand six hundred eighty dollars ($930,680) to the Stokes County Water and Sewer Authority, Inc., for the Madison Connection Project.
(3)	Eighty thousand dollars ($80,000) to the Stokes County Water and Sewer Authority, Inc., for the Dan River Project.
(4)	Thirty thousand dollars ($30,000) to the Department of Environment, Health, and Natural Resources for the Limestone Creek small watershed project in Duplin County.
(5)	Three hundred forty thousand six hundred forty dollars ($340,640) to the Department of Environment, Health, and Natural Resources for the Deep Creek small watershed project in Yadkin County.
(b) The Department of Environment, Health, and Natural Resources and the Stokes County Water and Sewer Authority, Inc., shall report by October 1 and March 1 of each fiscal year to the Joint Legislative Commission on Governmental Operations, the Fiscal Research Division of the General Assembly, and the Office of State Budget and Management regarding the use of the funds reallocated by this section.  Each report shall include all of the following:
(1)	The estimated cost of each project.
(2)	The date that work on each project began or is expected to begin.
(3)	The date that work on each project was completed or is expected to be completed.
(4)	The actual cost of each project.

Requested by:   Senator Martin of Pitt
CITIZEN WATER QUALITY MONITORING PROGRAM
Section 13.12.  Article 21 of Chapter 143 of the General Statutes is amended by adding a new section to read:
"§ 143-215A.  Citizen Water Quality Monitoring Program.
The Department shall establish the Citizen Water Quality Monitoring Program to provide an avenue for individuals to play a role in and to take personal responsibility for protecting the State's water quality.  The goals of the Citizen Water Quality Monitoring Program are to coordinate monitoring activities among volunteers by river basins; to provide adequate training of volunteers and quality assurance of all data collected; and to incorporate the data collected by volunteers into the State's overall management of water quality."

Requested by:   Senators Odom, Perdue, Plyler
ROANOKE/PAMLICO WATER QUALITY FUNDS
Section 13.13.  Of the funds appropriated to the Department of Environment, Health, and Natural Resources by this act for the 1997-98 fiscal year, the sum of four hundred thousand dollars ($400,000) shall be used to establish a water quality monitoring program for the Roanoke-Pamlico estuary system.  The Department of Environment, Health, and Natural Resources may enter into contracts for the provision of services for the water quality monitoring program.

Requested by:   Senator Martin of Pitt
RESERVE FOR CAPE FEAR RIVER FUNDS
Section 13.14.  (a) Of the funds appropriated to the Department of Environment, Health, and Natural Resources in this act, the sum of one million five hundred thousand dollars ($1,500,000) for the 1997-98 fiscal year shall be placed in a reserve for the Cape Fear River Assembly, Inc., to be used for programs to monitor and improve water quality in the Cape Fear River.
(b)	The Cape Fear River Assembly, Inc., shall report by 1 October 1997 and quarterly thereafter to the Environmental Review Commission and the Joint Legislative Commission on Governmental Operations on the proposed use of any reserve funds prior to encumbering those funds for that use and on the subsequent use of any reserve funds.  After the Cape Fear River Assembly, Inc., reports a proposed use to the Joint Legislative Commission on Governmental Operations and the Office of State Budget and Management approves the distribution of funds, the Department shall distribute the funds from the reserve for that use.

Requested by:   Senator Martin of Pitt
WATER QUALITY PERMIT PROGRAMS/RESERVE FUNDS
Section 13.15.  (a) Of the funds appropriated to the Department of Environment, Health, and Natural Resources by this act for the 1997-98 fiscal year, the sum of one million dollars ($1,000,000) shall be held in reserve within the Department.
(b) Of those funds held in reserve, the sum of one hundred fifty thousand dollars ($150,000) shall be used to replace federal construction grant funds when the federal funds cease for the support of three positions in the Division of Water Quality, Department of Environment, Health, and Natural Resources.
(c) The remaining eight hundred fifty thousand dollars ($850,000) held in reserve is to offset a possible permit receipt shortfall for the water quality programs for unrealized revenue up to two million nine hundred fifty thousand dollars ($2,950,000).
Subject to approval by the Office of State Budget and Management, the Department may use the reserve funds during the 1997-98 fiscal year in accordance with this subsection.  The  eight hundred fifty thousand dollars ($850,000) in reserve may be used to provide the necessary cash flow for the water quality programs during the fiscal year if receipts during the fiscal year are insufficient to cover water quality program expenditures.   The reserve funds shall be used only for the water quality programs administered by the Water Quality Section of the Water Quality Division.
At the end of the 1997-98 fiscal year: 
(1)	If the receipts generated by the water quality permit programs for the 1997-98 fiscal year are less than two million nine hundred fifty thousand dollars ($2,950,000), then the Water Quality Section may retain from the reserve an amount equal to the difference between two million nine hundred fifty thousand dollars ($2,950,000) and actual water quality permit receipts for the 1997-98 fiscal year, not to exceed eight hundred fifty thousand dollars ($850,000).
(2)	If the receipts generated by the water quality permit programs for the 1997-98 fiscal year are two million nine hundred fifty thousand dollars ($2,950,000) or more, then the Water Quality Section shall not retain any funds from the reserve.
(d) All receipts, State funds, and federal funds that are budgeted for the Water Quality Section of the Water Quality Division, Department of Environment, Health, and Natural Resources, shall be used only for the Water Quality Section and the water quality programs administered by that section and shall not be transferred or used for any other purpose.
(e) For purposes of this section, "water quality permits" means all permits issued under Part 1 of Article 21 of Chapter 143 of the General Statutes that are administered by the Water Quality Section of the Water Quality Division, Department of Environment, Health, and Natural Resources. 

Requested by:   Senator Martin of Pitt
FEDERAL FUNDS FOR WATER QUALITY INDIRECT COSTS USED FOR WATER QUALITY
Section 13.16.  Federal funds received by the Department of Environment, Health, and Natural Resources received as federal indirect cost receipts associated with the federal Environmental Protection Agency "106" water quality grant may be credited to and used only by the Water Quality Section of the Water Quality Division for the permit programs and activities administered by that section.

Requested by:   Senators Odom, Perdue, Plyler
REGIONAL WASTEWATER MANAGEMENT
Section 13.17.  (a) Of the funds appropriated to the Department of Environment, Health, and Natural Resources by this act, the sum of one million dollars ($1,000,000) for the 1997-98 fiscal year shall be allocated for costs associated with further development of a regional wastewater collection, treatment, and disposal system that uses an innovative technology to reduce nutrient and organic loadings to surface waters.
	(b)	The Department of Environment, Health, and Natural Resources shall report by April 1, 1998, regarding the use of the funds allocated under this section.  The report shall be made to the Joint Legislative Commission on Governmental Operations and to the Environmental Review Commission.  A written copy of the report shall be provided to the Fiscal Research Division of the General Assembly.

Requested by:   Senators Odom, Plyler, Perdue
CLEAN WATER TRUST FUND/PRIORITIZE BETWEEN SAVINGS RESERVE ACCOUNT AND CLEAN WATER MANAGEMENT TRUST FUND
Section 13.18.  (a)	G.S. 143-15.3B(a) reads as rewritten:
"(a)	The Clean Water Management Trust Fund is established in G.S. 113-145.3.  The State Controller shall reserve to the Clean Water Management Trust Fund six and one-half percent (6.5%) of any unreserved credit balance remaining in the General Fund at the end of each fiscal year or thirty million dollars ($30,000,000), whichever is greater.
As used in this section, the term 'unreserved credit balance' means the credit balance amount, as determined on a cash basis, before funds are reserved by the State Controller to the Savings Reserve Account, the Repairs and Renovations Reserve Account, or the Clean Water Management Trust Fund pursuant to this section, G.S. 143-15.3, and G.S. 143-15.3A."
(b)	G.S. 143-15.3(a) reads as rewritten:
"(a)	There is established a Savings Reserve Account as a restricted reserve in the General Fund. The State Controller shall reserve to the Savings Reserve Account one-fourth of any unreserved credit balance remaining in the General Fund at the end of each fiscal year until the account contains funds equal to five percent (5%) of the amount appropriated the preceding year for the General Fund operating budget, including local government tax-sharing funds. If the balance in the Savings Reserve Account falls below this level during a fiscal year, the State Controller shall reserve to the Savings Reserve Account for the following fiscal years up to one-fourth of any unreserved credit balance remaining in the General Fund at the end of each fiscal year until the account again equals five percent (5%) of the amount appropriated the preceding year for the General Fund operating budget, including local government tax-sharing funds. If there are insufficient funds in the unreserved credit balance for the Savings Reserve Account, the Repairs and Renovations Reserve Account, and the Clean Water Management Trust Fund, then the requirements of this section shall be complied with first, and any remaining funds shall be reserved to the Repairs and Renovations Reserve Account, in accordance with G.S. 143-15.3A, and the Clean Water Management Trust Fund, in accordance with G.S. 143-15.3B.  As used in this section, the term 'unreserved credit balance' means the credit balance amount, as determined on a cash basis, before funds are reserved by the Controller to the Savings Reserve Account or the Repairs and Renovations Reserve Account pursuant to this section and G.S. 143-15.3A."
(c)	This section becomes effective June 30, 1997.

Requested by:   Senator Martin of Pitt
PARTNERSHIP FOR THE SOUNDS
Section 13.19.  (a)	Subject to subsection (c) of this section, the Partnership for the Sounds shall, no later than January 15, 1998, submit a report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division that provides the following information:
(1)	Program activities, objectives, and accomplishments for the 1996-97 fiscal year;
(2)	Itemized expenditures and fund sources for the 1996-97 fiscal year; 
(3)	Planned activities, objectives, and accomplishments for the 1997-98 fiscal year, including actual results through December 31, 1997; and
(4)	Estimated itemized expenditures and fund sources for the 1997-98 fiscal year, including actual expenditures and fund sources through December 31, 1997.
(b)	Subject to subsection (c) of this section, the Partnership for the Sounds shall, no later than January 15, 1999, submit a report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division that provides the following information:
(1)	Program activities, objectives, and accomplishments for the 1997-98 fiscal year;
(2)	Itemized expenditures and fund sources for the 1997-98 fiscal year; 
(3)	Planned activities, objectives, and accomplishments for the 1998-99 fiscal year, including actual results through December 31, 1998; and
(4)	Estimated itemized expenditures and fund sources for the 1998-99 fiscal year, including actual expenditures and fund sources through December 31, 1998.
(c)	The Partnership for the Sounds shall provide additional reports to the Joint Legislative Commission on Governmental Operations or the Fiscal Research Division upon request.
(d)	 The Partnership for the Sounds shall provide a copy of its annual audited financial statement to the Fiscal Research Division within 30 days of issuing the financial statement.

Requested by:   Senator Martin of Pitt
COMMUNICABLE DISEASE CONTROL AID TO COUNTIES FLEXIBILITY
Section 13.20.  (a)	For the 1997-98 and 1998-99 fiscal years, the Department of Environment, Health, and Natural Resources may combine and allocate funds appropriated for Aid to Counties in the Acute Communicable Disease Control Fund, the Tuberculosis Control Fund, and the Sexually Transmitted Disease Control Fund into one Acute Communicable Disease Control Aid to Counties Grant.  Communicable Disease Aid to Counties funding to local health departments and other authorized recipients will be based on a general communicable disease formula to be developed by the Department of Environment, Health, and Natural Resources.
(b)	The Department of Environment, Health, and Natural Resources, in conjunction with local health departments, will maintain a system to monitor and identify Aid to Counties communicable disease expenditures by each communicable disease group.  The Department shall report to the Joint Legislative Commission on Governmental Operations not later than October 1, 1997, and annually thereafter, on Aid to Counties expenditures by county for each communicable disease group and the purpose of the expenditures for the fiscal year.  The report shall also include an evaluation of the effectiveness of combining Aid to Counties funding into one grant fund and the effectiveness of the formula used to allocate funds.

Requested by:   Senator Martin of Pitt
DWI TEST CHANGES
Section 13.21.  (a) For the 1997-98 and 1998-99 fiscal years, any funds collected under G.S. 20-16.5(j) that are designated for the chemical alcohol testing program of the Injury Control Section of the Department of Environment, Health, and Natural Resources and are not needed for that program shall be transferred annually to the Governor's Highway Safety Program for grants to local law enforcement agencies for training and enforcement of the laws on driving while impaired.  The Governor's Highway Safety Program shall expend funds transferred to it under this section within 13 months of receipt of the funds.  Amounts received by the Governor's Highway Safety Program shall not revert until the June 30 following the 13-month period.
(b)	Notwithstanding G.S. 143-23(a1)(3), if the total requirements for the 1997-98 and 1998-99 fiscal years for the statewide chemical alcohol testing program exceed funds appropriated in this act for the program, then the Injury Control Section may use funds in accordance with G.S. 20-16.5(j) to fund the chemical alcohol testing program requirements in excess of the General Fund appropriation, provided that total expenditures for the 1997-98 and 1998-99 fiscal years for the chemical alcohol testing program shall not exceed amounts collected under G.S. 20-16.5(j) and designated for the chemical alcohol and testing program.

Requested by:   Senator Martin of Pitt
STATE TRAINING/ENVIRONMENTAL HEALTH SPECIALISTS
Section 13.22.  The Department of Environment, Health, and Natural Resources shall improve the initial training provided to environmental health specialists serving as agents of the State.  The Department shall utilize modern technology and training techniques for improving the training program.  The Department shall make a progress report on the training program to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division not later than July 1, 1998.

Requested by:   Senator Martin of Pitt
EVALUATE SEPTIC TANKS IN THE NEUSE RIVER BASIN
Section 13.23.  (a)	Of the funds appropriated to the Department of Environment, Health, and Natural Resources in this act, the sum of one hundred fifty thousand dollars ($150,000) for the 1997-98 fiscal year shall be used to evaluate septic tanks in the Neuse River Basin. This evaluation shall include all of the following:
(1)	The number of septic tanks.
(2)	The condition of the septic tanks.
(3)	Any potential groundwater contamination from malfunctioning septic tank systems.
(4)	The impact of hurricane damage and flooding on septic tank systems.
(5)	The cost to repair or replace failing septic tanks.
(6)	Any viable alternatives to septic tanks. 
(b)	No later than April 1, 1998, the Department shall report its findings on septic tanks to the Environmental Review Commission, the Fiscal Research Division, and the Joint Legislative Commission on Governmental Operations.  The Environmental Review Commission shall report its findings and recommendations to the General Assembly on the first day of the 1998 Regular Session of the 1997 General Assembly.

Requested by:   Senators Odom, Perdue, Plyler
MONITOR COASTAL WATER QUALITY
Section 13.24.  (a) Article 8 of Chapter 130A of the General Statutes is amended by adding a new Part to read:
"Part 3A.  Monitor Water Quality of Coastal Fishing Waters.
"§ 130A-233.  Definitions.
The following definitions apply to this Part:
(1)	Coastal fishing waters, as defined in G.S. 113-129(4).
(2)	Inland fishing waters, as defined in G.S. 113-129(9).
"§ 130A-233.1.  Monitoring program for State coastal fishing waters; development and implementation of program.
For the protection of the public health of swimmers and others who use the State's coastal fishing waters for recreational activities, the Department shall develop and implement a program to monitor the State's coastal fishing waters for contaminants.  The monitoring program shall cover all coastal fishing waters up to the point where those waters are classified as inland fishing waters."
(b) Of the funds appropriated by this act to the Department of Environment, Health, and Natural Resources, the sum of three hundred ninety-seven thousand sixty-six dollars ($397,066) for the 1997-98 fiscal year and the sum of three hundred thirty-seven thousand five hundred sixty-six dollars ($337,566) for the 1998-99 fiscal year shall be allocated to the Shellfish Sanitation Branch to develop and implement the monitoring program required by this section.

Requested by:   Senator Martin of Pitt
REISSUE CERTAIN WASTEWATER PERMITS
Section 13.25.  Notwithstanding the provisions of Article 11 of Chapter 130A of the General Statutes to the contrary, the Department of Environment, Health, and Natural Resources or the local health department shall issue an improvement permit and an authorization for wastewater system construction for any wastewater system that was the subject of an improvement permit issued by a local health department between July 1, 1982, and September 30, 1995, that expired prior to the installation of that wastewater system, upon a showing satisfactory to the Department or the local health department, respectively, that all of the following conditions are satisfied:
(1)	The site and soil conditions are unaltered.
(2)	The facility, design wastewater flow, and wastewater characteristics are not increased since the expired permit was issued.
(3)	A wastewater system can be installed that meets the permitting requirements in effect on the date the expired improvement permit was issued.
(4)	The intended use has not changed.
(5)	There is no current technology that can reasonably be expected to improve the performance of the system.
(6)	But for the issuance of an authorization for wastewater system construction under this act, the proposed site cannot be developed for the purpose for which the expired permit was issued.

Requested by:   Senator Martin of Pitt
CHILDHOOD LEAD EXPOSURE CONTROL
Section 13.26. (a) Of the funds appropriated in this act to the Department of Environment, Health, and Natural Resources, the sum of two hundred thirty-seven thousand seventy-nine dollars ($237,079) for the 1997-98 fiscal year and the sum of two hundred ten thousand eight hundred seventy-nine dollars ($210,879) for the 1998-99 fiscal year shall be used to expand the State's Childhood Lead Poisoning Prevention Program.
(b) The allocation of funds under subsection (a) of this section is contingent upon the enactment into law of Senate Bill 806, 1997 General Assembly.

Requested by:   Senators Martin of Pitt, Warren
EXTEND HEART DISEASE AND STROKE PREVENTION TASK FORCE
Section 13.27.  Subsections (l) and (m) of Section 26.9 of Chapter 507 of the 1995 Session Laws read as rewritten:
"(l)	The Task Force shall submit to the Governor and to the General Assembly a preliminary report by January 1, 1996; an  interim report within the first week of the convening of the 1997 General Assembly; a second interim report within the first week of the convening of the 1997 General Assembly, Regular Session 1998; a third interim report within the first week of the convening of the 1999 General Assembly, and a final report by June 30, 1999.  The reports shall address the Plan, actions and resources needed to fully implement the Plan, and progress in achieving implementation of the Plan to reduce the occurrence of and burden from heart disease and stroke in North Carolina.  The reports shall include an accounting of funds expended and anticipated funding needs for full implementation of recommended plans and programs.
(m)	Upon submission of its final report to the Governor and the 1999 General Assembly, the Task Force shall expire."

Requested by:   Senator Martin of Pitt
CANCER CONTROL FUNDS
Section 13.28.  Of the funds appropriated in this act to the Department of Environment, Health, and Natural Resources, the sum of five hundred thousand dollars ($500,000) for the 1997-98 fiscal year shall be allocated for promoting the prevention, early detection, data collection, coordination, and optimal care in the control of cancer.  Purposes for which funds appropriated under this section may be used include a total of six full-time limited positions for the Central Cancer Registry, the Division of Health Promotion, and the Advisory Committee on Cancer Coordination and Control. Funds shall be allocated upon the advice of the Advisory Committee on Cancer Coordination and Control.  The Department shall report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division by February 1, 1998 on the allocation and use of the funds.
These funds are appropriated to honor the memory of Dr. John Kernodle.

Requested by:   Senator Martin of Pitt
OSTEOPOROSIS TASK FORCE
Section 13.29.  (a) Of the funds appropriated in this act to the Department of Environment, Health, and Natural Resources, Division of Adult Health Promotion, the sum of two hundred  thousand dollars ($200,000) for the 1997-98 fiscal year shall be allocated for the Osteoporosis Prevention Task Force created under this section.
(b) The North Carolina Osteoporosis Prevention Task Force is created in the Division of Health Promotion, Department of Environment, Health, and Natural Resources.
(c) The Task Force shall have 25 members.  The Governor shall appoint the Chair, and the Vice-chair shall be elected by the Task Force.  The Director of the Division of Health Promotion in the Department of Environment, Health, and Natural Resources, the Director of the Division of Medical Assistance in the Department of Human Resources, and the Director of the Division of Aging in the Department of Human Resources, or their designees, shall be members of the Task Force.  Appointments to the Task Force shall be made as follows:
(1)	By the President Pro Tempore of the Senate, as follows:
a.	Two members of the Senate;
b.	A representative of a women's health organization;
c.	A local health director;
d.	A certified health educator;
e.	A representative of the North Carolina Association of Area Agencies on Aging; and
f.	A person with osteoporosis.
(2)	By the Speaker of the House of Representatives, as follows:
a.	Two members of the House of Representatives;
b.	A county commissioner;
c.	A licensed dietitian/nutritionist;
d.	A pharmacist;
e.	A registered nurse; and
f.	A person with osteoporosis.
(3)	By the Governor, as follows:
a.	A practicing family physician, rheumatologist, or endocrinologist;
b.	A president or chief executive officer of a business upon recommendation of a North Carolina wellness council which is a member of the Wellness Councils of America;
c.	A news director of a newspaper or television or radio station;
d.	A representative of a North Carolina affiliate of the National Osteoporosis Foundation;
e.	A representative from the North Carolina Cooperative Extension Service;
f.	A representative of the Governor's Council on Physical Fitness and Health; and
g.	Two members at large.
(d)	Each appointing authority shall assure insofar as possible that its appointees to the Task Force reflect the composition of the North Carolina population with regard to ethnic, racial, age, gender, and religious composition.
(e)  The General Assembly and the Governor shall make their appointments to the Task Force not later than 30 days after the adjournment of the 1997 General Assembly, Regular Session 1998.  A vacancy on the Task Force shall be filled by the original appointing authority, using the criteria set out in this section for the original appointment.
(f)  The Task Force shall meet at least quarterly or more frequently at the call of the Chair.
(g)  The Task Force Chair may establish committees for the purpose of making special studies pursuant to its duties and may appoint non-Task Force members to serve on each committee as resource persons.  Resource persons shall be voting members of the committees and shall receive subsistence and travel expenses in accordance with G.S. 138-5 and G.S. 138-6.  Committees may meet with the frequency needed to accomplish the purposes of this section.
(h)  Members of the Task Force shall receive per diem and necessary travel and subsistence expenses in accordance with G.S. 120-3.1, 138-5 and 138-6, as applicable.
(i)  A majority of the Task Force shall constitute a quorum for the transaction of its business.
(j)  The Task Force may use funds allocated to it to establish one full-time limited position and for other expenditures needed to assist the Task Force in carrying out its duties.
(k)  The Osteoporosis Prevention Task Force has the following duties:
(1)	To undertake a statistical and qualitative examination of the incidence of and causes of osteoporosis deaths and risks, including identification of subpopulations at highest risk for developing osteoporosis, and establish a profile of the osteoporosis burden in North Carolina.
(2)	To raise public awareness on the causes and nature of osteoporosis, personal risk factors, value of prevention and early detection, and options for diagnosing and treating the disease.
(3)	To identify priority strategies which are effective in preventing and controlling risks for osteoporosis, and in diagnosing and treating osteoporosis.
(4)	To identify, examine limitations of, and recommend to the Governor and the General Assembly changes to existing laws, regulations, programs, services, and policies to enhance osteoporosis prevention, diagnosis, and treatment for the people of North Carolina.
(5)	To determine and recommend to the Governor and the General Assembly the funding and strategies needed to enact new or to modify existing laws, regulations, programs, services, and policies to enhance osteoporosis prevention, diagnosis, and treatment for the people of North Carolina.
(6)	To develop a statewide comprehensive Osteoporosis Prevention Plan, and strategies for Plan implementation and for promoting the Plan to the general public, State and local elected officials, various public and private organizations and associations, businesses and industries, agencies, potential funding sources, and other community resources.
(7)	To identify strategies to facilitate specific commitments to help implement the Plan from the entities listed in subdivision (6) above.
(8)	To facilitate coordination of and communication among State and local agencies and organizations regarding current or future involvement in achieving the aims of the Osteoporosis Prevention Plan.
(9)	To receive and consider reports and testimony from individuals, local health departments, community-based organizations, voluntary health organizations, and other public and private organizations statewide, to learn more about their contributions to osteoporosis diagnosis, prevention, and treatment, and their ideas for improving osteoporosis prevention, diagnosis, and treatment in North Carolina.
(l)  The Task Force shall submit a progress report to the Joint Legislative Commission on Governmental Operations, the Governor, and the Fiscal Research Division not later than April 1, 1998. The progress report shall address:
a.	Progress being made in fulfilling the duties of the Task Force and in developing the Osteoporosis Prevention Plan,
b.	The anticipated time frame for completion of the Prevention Plan, and
c.	Recommended strategies or actions to reduce the occurrence of and burdens suffered from osteoporosis by citizens of this State.
The Task Force shall submit its final report to the 1999 General Assembly, the Governor, and The Fiscal Research Division not later than October 1, 1999.
(m)  Upon submission of its final report to the Governor and the 1999 General Assembly, the Task Force shall expire.

Requested by:   Senator Martin of Pitt
IMMUNIZATION PROGRAM FUNDING
Section 13.30.  (a)	Of the funds appropriated to the Department of Environment, Health, and Natural Resources for the 1997-99 fiscal biennium for childhood immunization programs for positions, operating support, equipment, and pharmaceuticals, the sum of up to one million dollars ($1,000,000) each fiscal year may be used for projects and activities that are also designed to increase childhood immunization rates in North Carolina.  These projects and activities shall include the following:
(1)	Outreach efforts at the State and local levels to improve service delivery of vaccines.  Outreach efforts may include educational seminars, media advertising, support services to parents to enable children to be transported to clinics, longer operating hours for clinics, and mobile vaccine units; and
(2)	Continued development of an automated immunization registry.
(b)	Funds authorized to be used for immunization efforts under subsection (a) of this section shall not be used to fund additional State positions in the Department of Environment, Health, and Natural Resources.

Requested by:  Senator Martin of Pitt
WIC PROGRAM FUNDS
Section 13.31.  Of the funds appropriated to the Department of Environment, Health, and Natural Resources for the Women, Infants, and Children (WIC) Program, the sum of one million two hundred eighty thousand dollars ($1,280,000) for the 1997-98 fiscal year and the sum of one million two hundred eighty thousand dollars ($1,280,000) for the 1998-99  fiscal year shall, if sufficient federal food funds are available, be used for the WIC Program as follows:
(1)	Not more than $500,000 in each fiscal year shall be used to establish new WIC Programs in Head Start or other private or public nonprofit agencies to serve additional mothers, infants, and children.  The Department shall utilize these funds for local program operations including staff to provide eligibility determination, nutrition education, and health care referrals.  In selecting the new WIC Programs, the Department shall consider accessibility to the target population including location and hours of operation.
(2)	Not more than $250,000 in each fiscal year shall be used to renovate facilities of existing programs where space constraints limit program expansion, and to fund rental costs in areas where accessible donated space is not available.  In selecting the facilities the Department shall consider accessibility to the target population including location and extended hours of operation.  In determining whether to fund rental of space, the Department shall ensure that options for using donated accessible space have been considered.  Not more than $75,000 of funds allocated under this subdivision for each fiscal year shall be used for rental of space.
(3)	Not more than $300,000 in each fiscal year shall be used to purchase physician-prescribed special formulas and nutritional supplements for infants, children, and women.
(4)	Not more than $60,000 in each fiscal year shall be used to provide the required State match to the WIC farmers' market project.
(5)	Not more than $170,000 in each fiscal year shall be used for the purpose of establishing and maintaining a Public Health Nutritionist Internship Program.
If sufficient federal food funds are not available then funds appropriated for the WIC Program under this section shall be used to supplement federal food funds and any balance in funds remaining after the supplemental use shall be used in accordance with subdivisions (1) through (5) of this section.

Requested by:   Senator Martin of Pitt
ADOLESCENT PREGNANCY PREVENTION COALITION OF NC/REPORTING
Section 13.32.  The Adolescent Pregnancy Prevention Coalition of N.C. shall:
(1)	By January 15, 1998, and more frequently as requested, report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division the following information:
a.	State fiscal year 1996-97 program activities, objectives, and accomplishments;
b.	State fiscal year 1996-97 itemized expenditures and fund sources;
c.	State fiscal year 1997-98 planned activities, objectives, and accomplishments including actual results through December 31, 1997; and
d.	State fiscal year 1997-98 estimated itemized expenditures and fund sources including actual  expenditures and fund sources through December 31, 1997.
(2)	By January 15, 1999, and more frequently as requested, report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division the following information:
a.	State fiscal year 1997-98 program activities, objectives, and accomplishments;
b.	State fiscal year 1997-98 itemized expenditures and fund sources;
c.	State fiscal year 1998-99 planned activities, objectives, and accomplishments including actual results through December 31, 1998; and
d.	State fiscal year 1998-99 estimated itemized expenditures and fund sources including actual expenditures and fund sources through December 31, 1998.
(3)	Provide to the Fiscal Research Division a copy of the Coalition's annual audited financial statement within 30 days of issuance of the statement.

Requested by:   Senator Martin of Pitt
NORTH CAROLINA HEALTHY START FOUNDATION/REPORTING
Section 13.33.  The North Carolina Healthy Start Foundation shall:
(1)	By January 15, 1998, and more frequently as requested, report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division the following information:
a.	State fiscal year 1996-97 program activities, objectives, and accomplishments;
b.	State fiscal year 1996-97 itemized expenditures and fund sources;
c.	State fiscal year 1997-98 planned activities, objectives, and accomplishments including actual results through December 31, 1997; and
d.	State fiscal year 1997-98 estimated itemized expenditures and fund sources including actual  expenditures and fund sources through December 31, 1997.
(2)	Provide to the Fiscal Research Division a copy of the Foundation's annual audited financial statement within 30 days of issuance of the statement.

Requested by:   Senator Martin of Pitt
PREVENT BLINDNESS, INC./REPORTING
Section 13.34.  Prevent Blindness, Inc., shall:
(1)	By January 15, 1998, and more frequently as requested, report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division the following information:
a.	State fiscal year 1996-97 program activities, objectives, and accomplishments;
b.	State fiscal year 1996-97 itemized expenditures and fund sources;
c.	State fiscal year 1997-98 planned activities, objectives, and accomplishments including actual results through December 31, 1997; and
d.	State fiscal year 1997-98 estimated itemized expenditures and fund sources including actual  expenditures and fund sources through December 31, 1997.
(2)	By January 15, 1999, and more frequently as requested, report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division the following information:
a.	State fiscal year 1997-98 program activities, objectives, and accomplishments;
b.	State fiscal year 1997-98 itemized expenditures and fund sources;
c.	State fiscal year 1998-99 planned activities, objectives, and accomplishments including actual results through December 31, 1998; and
d.	State fiscal year 1998-99 estimated itemized expenditures and fund sources including actual expenditures and fund sources through December 31, 1998.
(3)	Provide to the Fiscal Research Division a copy of the Prevent Blindness, Inc., annual audited financial statement within 30 days of issuance of the statement.

Requested by:   Senator Martin of Pitt
FEDERAL ABSTINENCE EDUCATION FUNDS
Section 13.35.  If federal funds are received under the Maternal and Child Health Block Grant for abstinence education, pursuant to Sec. 912 of Public Law 104-193 (42 U.S.C. 710), for the 1997-98 or the 1998-99 fiscal year, or both, then those funds shall be transferred to and administered by the State Board of Education, unless the transfer is prohibited by federal law governing the use and administration of Maternal and Child Health Block Grant funds.

PART XIV.  DEPARTMENT OF COMMERCE

Requested by:   Senator Martin of Pitt
WORKER TRAINING TRUST FUND APPROPRIATIONS
Section 14.  (a)	There is appropriated from the Worker Training Trust Fund to the Employment Security Commission of North Carolina the sum of five million eight hundred thirty-nine thousand nine hundred sixty-four dollars ($5,839,964) for the 1997-98 fiscal year and the sum of five million eight hundred thirty-nine thousand nine hundred sixty-four dollars ($5,839,964) for the 1998-99 fiscal year for the operation of local offices.
(b)	Notwithstanding the provisions of G.S. 96-5(f), there is appropriated from the Worker Training Trust Fund to the following agencies the following sums for the 1997-98 and the 1998-99 fiscal years for the following purposes:
(1)	$2,400,000 for the 1997-98 fiscal year and $2,400,000 for the 1998-99 fiscal year to the Department of Commerce, Division of Employment and Training, for the Employment and Training Grant Program;
(2)	$1,000,000 for the 1997-98 fiscal year and $1,000,000 for the 1998-99 fiscal year to the Department of Labor for customized training of the unemployed and the working poor for specific jobs needed by employers through the Department's Bureau for Training Initiatives;
(3)	$1,746,000 for the 1997-98 fiscal year and $1,746,000 for the 1998-99 fiscal year to the Department of Community Colleges to continue the Focused Industrial Training Program;
(4)	$225,000 for the 1997-98 fiscal year and $225,000 for the 1998-99 fiscal year to the Employment Security Commission for the Occupational Information Coordinating Committee to develop and operate an interagency system to track former participants in State education and training programs;
(5)	$400,000 for the 1997-98 fiscal year and $400,000 for the 1998-99 fiscal year to the Department of Community Colleges for a training program in entrepreneurial skills to be operated by North Carolina REAL Enterprises; and
(6)	$50,000 for the 1997-98 fiscal year and $50,000 for the 1998-99 fiscal year to the Office of State Budget and Management to maintain compliance with Chapter 96 of the General Statutes, which directs the Office Of State Budget and Management to employ the Common Follow-Up Management Information System to evaluate the effectiveness of the State's job training, education, and placement programs.
(7)	$100,000 for the 1997-98 fiscal year and $100,000 for the 1998-99 fiscal year to the State Board of Education for the Teacher Apprenticeship Program.

Requested by:   Senator Martin of Pitt
JOB TRAINING STUDY COMMISSION
Section 14.1.  (a)	The General Assembly intends to reorganize the State's workforce development system to improve the delivery of job training programs and services in North Carolina.
(b)	There is created a Legislative Study Commission on Job Training Programs.  The purpose of the Commission is to review State and federally funded job training programs and services currently in existence to determine the feasibility of eliminating or consolidating those which are duplicative, inefficient, or ineffective in carrying out their purposes and activities.
(c)	The Commission shall consist of six members appointed by the Speaker of the House of Representatives, at least three of whom shall be members of the House of Representatives, and six members appointed by the President Pro Tempore of the Senate, at least three of whom shall be members of the Senate.  The Speaker shall designate one Representative as cochair and the President Pro Tempore shall designate one Senator as cochair.  Vacancies on the Commission shall be filled by the same appointing officer who made the initial appointment.  The Commission shall expire upon delivering its final report to the 1997 General Assembly (1998 Regular Session).
The Commission, while in the discharge of official duties, may exercise all powers provided for under the provisions of G.S. 120-19 and G.S. 120-19.1 through G.S. 120-19.4.  The Commission may meet at any time upon the joint call of the cochairs.  The Commission may meet in the Legislative Building or the Legislative Office Building.  The Commission may contract for professional, clerical, or consultant services as provided by G.S. 120-32.02.
The Legislative Services Commission, through the Legislative Administrative Officer, shall assign professional staff to assist the Commission in its work.  The House of Representatives' and the Senate's Supervisors of Clerks shall assign clerical staff to the Commission, and the expenses relating to the clerical employees shall be borne by the Commission.  Members of the Commission shall receive subsistence and travel expenses at the rates set forth in G.S. 120-3.1, 138-5, or 138-6, as appropriate.
(d)	The Commission shall have the following powers and duties:
(1)	To review State and federal laws, rules, and regulations pertaining to job training programs to determine the purpose of each program, the population served, and each program's annual outcomes in terms of type of training received, work search efforts, and job placement;
(2)	To ascertain as far as possible the intention of the United States Congress with respect to continued funding of federally mandated job training programs and any changes in funding formulae;
(3)	To review the amount of State and federal dollars appropriated for each job training program conducted in this State and to review federal requirements for continuous federal funding of the programs;
(4)	To review the number of different State agencies that administer State and federal job training programs, the number of persons employed to implement each job training program, and the amount of State dollars needed annually to implement the program;
(5)	To determine whether federally funded job training programs in this State may lawfully be abolished or reduced in size by the General Assembly, and the impact of such reduction or elimination;
(6)	To conduct public hearings to receive citizen, State agency, and local government comment and experience with the job training programs;
(7)	To conduct other studies or activities to aid the Commission in carrying out its purpose and duties, including reviewing reorganization and consolidation efforts in other states; and
(8)	To ensure program evaluation and accountability for all workforce development programs and to create a comprehensive statewide focus on workforce development.
(e)  The Commission shall report to the 1997 General Assembly (1998 Regular Session), the Joint Legislative Commission on Governmental Operations, and the Joint Legislative Education Oversight Committee not later than May 1, 1998.  The report shall identify each job training program operating in the State and recommend whether each program should be expanded, continued without change, abolished, consolidated with another program, or otherwise modified, including implementation components.
(f)  All State departments and agencies and local governments and their subdivisions shall furnish the Commission with any information in their possession or available to them.
(g)  Notwithstanding G.S. 96-5(f), there is appropriated from the Worker Training Trust Fund to the General Assembly the sum of fifty thousand dollars ($50,000) for the 1997-98 fiscal year to implement this section.

Requested by:   Senator Martin of Pitt
NC REAL ENTERPRISES REPORTING
Section 14.2.  NC REAL Enterprises shall do the following:
(1)	By January 15, 1998, and more frequently as requested, report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division the following information:
a.	State fiscal year 1996-97 program activities, objectives, and accomplishments;
b.	State fiscal year 1996-97 itemized expenditures and fund sources;
c.	State fiscal year 1997-98 planned activities, objectives, and accomplishments including actual results through December 31, 1997; and
d.	State fiscal year 1997-98 estimated itemized expenditures and fund sources including actual  expenditures and fund sources through December 31, 1997;
(2)	By January 15, 1999, and more frequently as requested, report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division the following information:
a.	State fiscal year 1997-98 program activities, objectives, and accomplishments;
b.	State fiscal year 1997-98 itemized expenditures and fund sources;
c.	State fiscal year 1998-99 planned activities, objectives, and accomplishments including actual results through December 31, 1998; and
d.	State fiscal year 1998-99 estimated itemized expenditures and fund sources including actual expenditures and fund sources through December 31, 1998; and
(3)	Provide to the Fiscal Research Division a copy of the organization's annual audited financial statement within 30 days of issuance of the statement.

Requested by:   Senator Martin of Pitt
SPECIAL EMPLOYMENT SECURITY ADMINISTRATION FUND
Section 14.3.  (a)	Notwithstanding G.S. 96-5(c), there is appropriated from the Special Employment Security Administration Fund to the Employment Security Commission of North Carolina, the sum of two million dollars ($2,000,000) for the 1997-98 fiscal year and the sum of two million dollars ($2,000,000) for the 1998-99 fiscal year for administration of the Employment Services and Unemployment Insurance Programs.
(b)	Supplemental federal funds or other additional funds received by the Employment Security Commission for similar purposes shall be expended prior to the expenditure of funds appropriated by this section.

Requested by:   Senator Martin of Pitt
INDUSTRIAL RECRUITMENT COMPETITIVE FUND
Section 14.4.  (a) Funds appropriated in this act to the Department of Commerce for the Industrial Recruitment Competitive Fund shall be used to continue the Fund.  The purpose of the Fund is to provide financial assistance to those businesses or industries deemed by the Governor to be vital to a healthy and growing State economy and that are making significant efforts to establish or expand in North Carolina.  Monies allocated from the Fund shall be used for the following purposes:
(1)	Installation or purchase of equipment;
(2)	Structural repairs, improvements, or renovations of existing buildings to be used for expansion; and
(3)	Construction of or improvements to new or existing water, sewer, gas or electric utility distribution lines, or equipment for existing buildings.
Monies may also be used for construction of or improvements to new or existing water, sewer, gas or electric utility distribution lines, or equipment to serve new or proposed industrial buildings used for manufacturing and industrial operations.  The Governor shall adopt guidelines and procedures for the commitment of monies from the Fund.
(b)	The Department of Commerce shall report on or before October 1, 1997, and quarterly thereafter to the Joint Legislative Commission on Governmental Operations on the commitment, allocation, and use of funds allocated from the Industrial Recruitment Competitive Fund.

Requested by:   Senator Martin of Pitt
COUNCIL OF GOVERNMENT FUNDS
Section 14.5.  (a)	Of the funds appropriated in this act to the Department of Commerce, six hundred eighty-four thousand two hundred seventy dollars ($684,270) for the 1997-98 fiscal year and six hundred eighty-four thousand two hundred seventy dollars ($684,270) for the 1998-99 fiscal year shall only be used as provided by this section.  Each regional council of government or lead regional organization is allocated up to thirty-eight thousand fifteen dollars ($38,015) for each fiscal year, with the actual amount calculated as provided in subsection (b) of this section.
(b)	The funds shall be allocated as follows:  A share of the maximum thirty-eight thousand fifteen dollars ($38,015) each fiscal year shall be allocated to each county and smaller city based on the most recent annual estimate of the Office of State Planning of the population of that county (less the population of any larger city within that county) or smaller city, divided by the sum of the total population of the region (less the population of larger cities within that region) and the total population of the region living in smaller cities.  Those funds shall be paid to the regional council of government for the region in which that city or county is located upon receipt by the Department of Commerce of a resolution of the governing board of the county or city requesting release of the funds.  If any city or county does not so request payment of funds by June 30 of a State fiscal year, that share of the allocation for that fiscal year shall revert to the General Fund.
(c)	A regional council of government may use funds appropriated by this section only to assist local governments in grant applications, economic development, community development, support of local industrial development activities, and other activities as deemed appropriate by the member governments.
(d)	Funds appropriated by this section shall not be used for payment of dues or assessments by the member governments and shall not supplant funds appropriated by the member governments.
(e)  As used in this section, "Larger City" means an incorporated city with a population of 50,000 or over.  "Smaller City" means any other incorporated city.

Requested by:   Senator Martin of Pitt
PETROLEUM OVERCHARGE ATTORNEYS' FEES
Section 14.6.  (a) Unless prohibited by federal law, rule, or regulation or preexisting settlement agreement, no later than October 1, 1989, the North Carolina Attorney General shall direct the withdrawal of all funds received in the cases of United States v. Exxon and Stripper Well that are held in accounts or reserves located out-of-state for payment of attorneys' fees and reasonable expenses incurred in connection with oil overcharge litigation authorized by the Attorney General.  The Attorney General shall deposit these funds, and all funds to be received from Petroleum Overcharge Funds in the future for attorneys' fees and reasonable expenses, into the Special Reserve for Oil Overcharge Funds.
(b)	All attorneys' fees and reasonable expenses incurred in connection with oil overcharge litigation shall be paid by the State Treasurer from Petroleum Overcharge Funds that have been received by this State and deposited into the Special Reserve for Oil Overcharge Funds.
(c)	Notwithstanding any other provision of law, the Attorney General may authorize the payment of attorneys' fees and reasonable expenses from the Special Reserve for Oil Overcharge Funds without further action of the General Assembly, and funds are hereby appropriated from the Special Reserve for Oil Overcharge Funds for the 1997-98 fiscal year and for the 1998-99 fiscal year for that purpose.

Requested by:   Senator Martin of Pitt
PETROLEUM OVERCHARGE FUNDS ALLOCATION
Section 14.7.  (a)	The funds and interest thereon received from the case of the United States v. Exxon are deposited in the Special Reserve for Oil Overcharge Funds.  There is appropriated from the Special Reserve to the Department of Commerce the sum of one million two hundred thousand dollars ($1,200,000) for the 1997-98 fiscal year and the sum of one million two hundred thousand dollars ($1,200,000) for the 1998-99 fiscal year to be used for projects under the State Energy Efficiency Programs.
(b)	There is appropriated from funds and interest thereon received from the United States Department of Energy's Stripper Well Litigation (MDL378) that remain in the Special Reserve for Oil Overcharge Funds to the Department of Commerce the sum of one million dollars ($1,000,000) for the 1997-98 fiscal year and the sum of one million eight hundred thousand dollars ($1,800,000) for the 1998-99 fiscal year to be allocated for the Residential Energy Conservation Assistance Programs (RECAP).
(c)	Any funds remaining in the Special Reserve for Oil Overcharge Funds after the allocations made pursuant to subsections (a) and (b) of this section may be expended only as authorized by the General Assembly.  All interest or income accruing from all deposits or investments of cash balances shall be credited to the Special Reserve Oil Overcharge Funds.
(d)	The funds and interest thereon received from the Diamond Shamrock Settlement that remain in a reserve in the Office of State Budget and Management for the Department of Commerce to administer the petroleum overcharge funds pursuant to Section 112 of Chapter 830 of the 1987 Session Laws shall continue to be available to the Department of Commerce on an as-needed basis.
(e)  The Department of Commerce shall submit comprehensive annual reports to the General Assembly by May 15, 1998, and January 31, 1999, which detail the use of all Petroleum Overcharge Funds.  Any State department or agency that has received Petroleum Overcharge Funds shall provide all information requested by the Department of Commerce for the purpose of preparing these reports.

Requested by:   Senator Martin of Pitt
INDUSTRIAL DEVELOPMENT FUND/LOCAL MATCH
Section 14.8.  Local governments requesting financial assistance from the Industrial Development Fund that wish to request to be exempted from the local matching requirements placed on the receipt of this assistance shall demonstrate to the satisfaction of the Department of Commerce that it would be an economic hardship for the local government to match State assistance from the Fund with local funds.  The Department shall develop guidelines for determining hardship.

Requested by:   Senators Martin of Pitt, Plyler, Perdue, Odom
INDUSTRIAL DEVELOPMENT FUND
Section 14.9.  (a) Of the three million dollars ($3,000,000) appropriated in this act to the Department of Commerce, Industrial Development Fund, for the 1997-98 fiscal year, the sum of two million dollars ($2,000,000) shall be deposited to and used for the Utility Account established under G.S. 143B-437A(b1), and the sum of one million dollars ($1,000,000) shall be allocated to Martin County as a grant-in-aid for a water and sewer project.
(b)	In addition to the reporting requirements of G.S. 143B-437A, the Department of Commerce shall report annually to the General Assembly concerning the payments made from the Utility Account and the impact of the payments on job creation in the State. The Department of Commerce shall also report quarterly to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division on the use of the moneys in the Utility Account including information regarding to whom payments were made, in what amounts, and for what purposes.

Requested by:   Senator Martin of Pitt
REGIONAL COMMISSION REPORTS
Section 14.10.  (a)	Each regional development commission receiving a grant-in-aid from the Department of Commerce shall:
(1)	By January 15, 1998, and more frequently as requested, report to the Joint Legislative Commission on Governmental Operations, the Fiscal Research Division, and the Department of Commerce the following information:
a.	State fiscal year 1996-97 program activities, objectives, and accomplishments;
b.	State fiscal year 1996-97 itemized expenditures and fund sources;
c.	State fiscal year 1997-98 planned activities, objectives, and accomplishments as specified in subsection (b)(1) through (b)(6) of this section including actual results through December 31, 1997;
d.	State fiscal year 1997-98 estimated itemized expenditures and fund sources including actual  expenditures and fund sources through December 31, 1997.
(2)	By January 15, 1999, and more frequently as requested, report to the Joint Legislative Commission on Governmental Operations, the Fiscal Research Division, and the Department of Commerce the following information:
a.	State fiscal year 1997-98 program activities, objectives, and accomplishments;
b.	State fiscal year 1997-98 itemized expenditures and fund sources;
c.	State fiscal year 1998-99 planned activities, objectives, and accomplishments as specified in subsection (b)(1) through (b)(6) of this section including actual results through December 31, 1998;
d.	State fiscal year 1998-99 estimated itemized expenditures and fund sources including actual expenditures and fund sources through December 31, 1998.
(3)	Provide to the Fiscal Research Division and the Department of Commerce a copy of its annual audited financial statement within 30 days of issuance of the statement.
(b)	Each regional economic development commission receiving a grant-in-aid from the Department of Commerce in each fiscal year of the 1997-99 biennium shall by the 25th day of the month following the end of a fiscal quarter, report to the Department of Commerce the following information for the most recent completed fiscal quarter:
(1)	The number of and description of marketing outreach events including trade shows, recruitment missions, and related activities;
(2)	The number of inquiries, leads, and prospects generated;
(3)	The amount of investment and number of jobs created by the direct efforts of a commission;
(4)	The amount of investment and number of jobs created by the indirect efforts of a commission;
(5)	The number and listing of available sites and buildings within the region served by a commission;
(6)	A listing of major accomplishments.

Requested by:   Senator Martin of Pitt
REGIONAL ECONOMIC DEVELOPMENT COMMISSION ALLOCATIONS
Section 14.11.  (a)	Funds appropriated in this act to the Department of Commerce for regional economic development commissions shall be allocated to the following commissions in accordance with subsection (b) of this section: Western North Carolina Regional Economic Development Commission, Research Triangle Regional Commission, Southeastern North Carolina Regional Economic Development Commission, Piedmont Triad Partnership, Northeastern North Carolina Regional Economic Development Commission, Global TransPark Development Commission, and Carolinas Partnership, Inc.
(b)	Funds appropriated pursuant to subsection (a) of this section shall be allocated to each regional economic development commission as follows:
(1)	First, the Department shall establish each commission's allocation by determining the sum of allocations to each county that is a member of that commission.  Each county's allocation shall be determined by dividing the county's enterprise factor by the sum of the enterprise factors for eligible counties and multiplying the resulting percentage by the amount of the appropriation.  As used in this subdivision, the term "enterprise factor" means a county's enterprise factor as calculated under G.S. 105-129.3;
(2)	Next, the Department shall subtract from funds allocated to the Global TransPark Development Zone the sum of two hundred seventy-six thousand nine hundred twenty-three dollars ($276,923) in each fiscal year, which sum represents the interest earnings in each fiscal year on the estimated balance of seven million five hundred thousand dollars ($7,500,000) appropriated to the Global TransPark Development Zone in Section 6 of Chapter 561 of the 1993 Session Laws; and
(3)	Next, the Department shall redistribute the sum of two hundred seventy-six thousand nine hundred twenty-three dollars ($276,923) in each fiscal year to the seven regional economic development commissions named in subsection (a) of this section.  Each commission's share of this redistribution shall be determined according to the enterprise factor formula set out in subdivision (1) of this subsection.  This redistribution shall be in addition to each commission's allocation determined under subdivision (1) of this subsection.

Requested by:   Senator Martin of Pitt
TOURISM PROMOTION FUNDS
Section 14.12.  Funds appropriated in this act to the Department of Commerce for tourism promotion grants shall be allocated according to per capita income, unemployment, and population growth in an effort to direct funds to counties most in need in terms of lowest per capita income, highest unemployment, and slowest population growth, in the following manner:
(1)	Counties 1 through 20 are each eligible to receive a maximum grant of $7,500 for each fiscal year, provided these funds are matched on the basis of one non-State dollar for every four State dollars.
(2)	Counties 21 through 50 are each eligible to receive a maximum grant of $3,500 for two of the next three fiscal years, provided these funds are matched on the basis of one non-State dollar for every three State dollars.
(3)	Counties 51 through 100 are each eligible to receive a maximum grant of $3,500 for alternating fiscal years, beginning with the 1991-92 fiscal year, provided these funds are matched on the basis of four non-State dollars for every State dollar.

Requested by:   Senator Martin of Pitt
RURAL TOURISM DEVELOPMENT FUNDS
Section 14.13.  Of the funds appropriated in this act to the Department of Commerce for the 1997-98 fiscal year, the sum of three hundred thousand dollars ($300,000) shall be used for the Rural Tourism Development Grant Program.  The Department shall establish and implement this Program to provide grants to local governments and nonprofit organizations to encourage the development of new tourism projects and activities in rural areas of the State.  The Department shall develop procedures for the administration and distribution of funds allocated to the Rural Tourism Development Program under the following guidelines:
(1)	Eligible organizations shall make application under procedures established by the Department;
(2)	Eligible organizations shall be nonprofit tourism-related organizations located in the State's rural regions;
(3)	Priority shall be given to eligible organizations that have significant involvement of travel and tourism-related businesses;
(4)	Priority shall be given to eligible organizations serving economically distressed rural counties;
(5)	Priority shall be given to eligible organizations that match funds; and
(6)	Funds shall not be used for renting or purchasing land or buildings, or for financing debt.
No recipient or new tourism project shall receive a total of more than fifty thousand dollars ($50,000) of these grant funds for the 1997-98 fiscal year.

Requested by:   Senator Martin of Pitt
WANCHESE SEAFOOD INDUSTRIAL PARK FUNDS
Section 14.14.  Of the funds appropriated in this act to the Department of Commerce for the Wanchese Seafood Industrial Park, the sum of one hundred twenty-two thousand five hundred ninety-four dollars ($122,594) for the 1997-98 fiscal year and the sum of one hundred twenty-two thousand five hundred ninety-four dollars ($122,594) for the 1998-99 fiscal year may be expended by the North Carolina Seafood Industrial Park Authority for operations, maintenance, repair, and capital improvements in accordance with Article 23C of Chapter 113 of the General Statutes, in addition to funds available to the Authority for these purposes.

Requested by:   Senator Martin of Pitt
FUNDS FOR ECONOMIC DEVELOPMENT
Section 14.15.  (a)	Of the funds appropriated in this act to the Department of Commerce, the sum of one million seven hundred fifty-five thousand dollars ($1,755,000) for the 1997-98 fiscal year shall be allocated as follows:
(1)	$300,000 to the Land Loss Prevention Project, Inc., to provide free legal representation to low-income, financially distressed small farmers.  The Land Loss Prevention Project, Inc., shall not use these funds to represent farmers who have income and assets that would make them financially ineligible for legal services pursuant to Title 45, Part 1611 of the Code of Federal Regulations;
(2)	$250,000 to the North Carolina Coalition of Farm and Rural Families, Inc., for its Small Farm Economic Development Project.  These funds shall be used to foster economic development within the State's rural farm communities by offering marketing and technical assistance to small and limited resource farmers;
(3)	$830,000 to the North Carolina Institute for Minority Economic Development, Inc., to foster minority economic development within the State through policy analysis, information and technical assistance, resource expansion, and support of community-based demonstration initiatives; and
(4)	$375,000 to the North Carolina Minority Support Center (formerly known as the Minority Credit Union Support Center) for technical assistance to community-based minority credit unions.  
(b) Each of the nonprofit organizations receiving funds under this section shall:
(1)	By January 15, 1998, and more frequently as requested, report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division the following information:
a.	State fiscal year 1996-97 program activities, objectives, and accomplishments;
b.	State fiscal year 1996-97 itemized expenditures and fund sources;
c.	State fiscal year 1997-98 planned activities, objectives, and accomplishments including actual results through December 31, 1997; and
d.	State fiscal year 1997-98 estimated itemized expenditures and fund sources including actual  expenditures and fund sources through December 31, 1997.
(2)	Provide to the Fiscal Research Division a copy of the organization's annual audited financial statement within 30 days of issuance of the statement.

Requested by:   Senator Martin of Pitt
TECHNOLOGICAL DEVELOPMENT AUTHORITY REPORT
Section 14.16.  The Technological Development Authority, Inc., shall do the following:
(1)	By January 15, 1998, and more frequently as requested, report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division the following information:
a.	State fiscal year 1996-97 program activities, objectives, and accomplishments;
b.	State fiscal year 1996-97 itemized expenditures and fund sources;
c.	State fiscal year 1997-98 planned activities, objectives, and accomplishments including actual results through December 31, 1997; and
d.	State fiscal year 1997-98 estimated itemized expenditures and fund sources including actual  expenditures and fund sources through December 31, 1997;
(2)	By January 15, 1999, and more frequently as requested, report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division the following information:
a.	State fiscal year 1997-98 program activities, objectives, and accomplishments;
b.	State fiscal year 1997-98 itemized expenditures and fund sources;
c.	State fiscal year 1998-99 planned activities, objectives, and accomplishments including actual results through December 31, 1998; and
d.	State fiscal year 1998-99 estimated itemized expenditures and fund sources including actual expenditures and fund sources through December 31, 1998; and
(3)	Provide to the Fiscal Research Division a copy of the organization's annual audited financial statement within 30 days of issuance of the statement.

Requested by:   Senator Martin of Pitt
WORLD TRADE CENTER FUNDS
Section 14.17.  Of the funds appropriated in this act to the Department of Commerce, the sum of three hundred thousand dollars ($300,000) for the 1997-98 fiscal year shall be allocated to the World Trade Center North Carolina (WTCNC) to support international trade education programs for small- and medium-sized businesses.  The World Trade Center North Carolina shall:
(1)	By January 15, 1998, and more frequently as requested, report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division the following information:
a.	State fiscal year 1996-97 program activities, objectives, and accomplishments;
b.	State fiscal year 1996-97 itemized expenditures and fund sources;
c.	State fiscal year 1997-98 planned activities, objectives, and accomplishments including actual results through December 31, 1997;
d.	State fiscal year 1997-98 estimated itemized expenditures and fund sources including actual expenditures and fund sources through December 31, 1997.
(2)	Provide to the Fiscal Research Division a copy of the Center's annual audited financial statement within 30 days of issuance of the statement.

Requested by:   Senator Martin of Pitt
CENTER FOR COMMUNITY SELF-HELP FUNDS
Section 14.18.  (a)	Of the funds appropriated in this act to the Department of Commerce, the sum of five million dollars ($5,000,000) for the 1997-98 fiscal year shall be allocated to the Center for Community Self-Help to further a statewide program of lending for home ownership throughout North Carolina.  These funds will be leveraged on a ten-to-one basis, generating at least ten dollars ($10.00) of nontraditional home loans for every one dollar ($1.00) of State funds.  Payments of principal shall be available for further loans or loan guarantees.
(b)	The Center for Community Self-Help shall submit, within 180 days after the close of its fiscal year, audited financial statements to the State Auditor.  All records pertaining to the use of State funds shall be made available to the State Auditor upon request.  The Center for Community Self-Help shall make quarterly reports on the use of State funds to the State Auditor, in form and format prescribed by the State Auditor or his designee.  The Center for Community Self-Help shall make a written report by May 1 of each year for the next three years to the General Assembly on the use of the funds allocated under this section.
(c)	The Center for Community Self-Help shall report to the Joint Legislative Commission on Governmental Operations, the House Appropriations Subcommittee on Natural and Economic Resources, the Senate Appropriations Committee on Natural and Economic Resources, and the Department of Commerce on a quarterly basis for the next three years.
(d)	The Office of the State Auditor may conduct an annual end-of-year audit of the revolving fund for economic development lending created by this appropriation for each year of the life of the revolving fund.
(e)  If the Center for Community Self-Help dissolves, the corporation shall transfer the remaining assets of the revolving fund to the State and shall refrain from disposing of the revolving fund assets without approval of the State Treasurer.
(f)  The Department of Commerce shall disburse this appropriation within 15 working days of the receipt of a request for the funds from the Center for Community Self-Help.  The request shall include a commitment of the leveraged funds by the Center for Community Self-Help or its affiliates.

Requested by:   Senator Martin of Pitt
MCNC
Section 14.19.  (a)	MCNC shall report on all of its programs including contractual services for the Supercomputer and the Research and Education Network.  The reports shall:
(1)	By January 15, 1998, and more frequently as requested, report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division the following information:
a.	State fiscal year 1996-97 program activities, objectives, and accomplishments;
b.	State fiscal year 1996-97 itemized expenditures and fund sources;
c.	State fiscal year 1997-98 planned activities, objectives, and accomplishments including actual results through December 31, 1997;
d.	State fiscal year 1997-98 estimated itemized expenditures and fund sources including actual expenditures and fund sources through December 31, 1997.
e.	The users, major projects and benefits resulting from the activities of the Supercomputer and the Research and Education Network.
f.	The organization's progress toward achieving self-sufficiency by July 1, 1999.
(2)	By January 15, 1999, and more frequently as requested, report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division the following information:
a.	State fiscal year 1997-98 program activities, objectives, and accomplishments;
b.	State fiscal year 1997-98 itemized expenditures and fund sources;
c.	State fiscal year 1998-99 planned activities, objectives, and accomplishments including actual results through December 31, 1998;
d.	State fiscal year 1998-99 estimated itemized expenditures and fund sources including actual expenditures and fund sources through December 31, 1998.
e.	The users, major projects and benefits resulting from the activities of the Supercomputer and the Research and Education Network.
f.	The organization's progress toward achieving self-sufficiency by July 1, 1999.
(3)	Provide to the Fiscal Research Division a copy of MCNC's annual audited financial statement within 30 days of issuance of the statement.
(b)	The funds appropriated in this act to MCNC shall be used as follows:
	FY 1997-98	FY 1998-99
Electronic and Information
Technologies Programs	$4,500,000	$2,500,000
(c)	Of the funds appropriated for the Electronic and Information Technologies Programs, four million five hundred thousand dollars ($4,500,000) for the 1997-98 fiscal year and two million five hundred thousand dollars ($2,500,000) for the 1998-99 fiscal year is contingent upon a dollar-for-dollar match in non-State funds.

Requested by:   Senator Martin of Pitt
BIOTECHNOLOGY CENTER
Section 14.20.  (a)	The North Carolina Biotechnology Center shall recapture funds spent in support of successful research and development efforts in the for-profit private sector.
(b)	The North Carolina Biotechnology Center shall provide funding for biotechnology, biomedical, and related bioscience applications under its Business and Science Technology Programs.
(c)	The North Carolina Biotechnology Center shall:
(1)	By January 15, 1998, and more frequently as requested, report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division the following information:
a.	State fiscal year 1996-97 program activities, objectives, and accomplishments;
b.	State fiscal year 1996-97 itemized expenditures and fund sources;
c.	state fiscal year 1997-98 planned activities, objectives, and accomplishments including actual results through December 31, 1997; and
d.	State fiscal year 1997-98 estimated itemized expenditures and fund sources including actual expenditures and fund sources through December 31, 1997.
(2)	By January 15, 1999, and more frequently as requested, report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division the following information:
a.	State fiscal year 1997-98 program activities, objectives, and accomplishments;
b.	State fiscal year 1997-98 itemized expenditures and fund sources;
c.	State fiscal year 1998-99 planned activities, objectives, and accomplishments including actual results through December 31, 1998; and
d.	State fiscal year 1998-99 estimated itemized expenditures and fund sources including actual expenditures and fund sources through December 31, 1998.
(3)	Provide to the Fiscal Research Division a copy of the Center's annual audited financial statement within 30 days of issuance of the statement.
	(d)	The North Carolina Biotechnology Center shall provide a report containing detailed budget, personnel, and salary information to the Office of State Budget and Management and to the Fiscal Research Division in the same manner as State departments and agencies in preparation for biennium budget requests.

Requested by:   Senator Martin of Pitt
BIOTECHNOLOGY FUNDS FOR MINORITY UNIVERSITIES
Section 14.21.  Of the funds appropriated in this act from the General Fund to the North Carolina Biotechnology Center for the 1997-98 and the 1998-99 fiscal years, the sum of one million dollars ($1,000,000) in each fiscal year shall be used to continue the special biotechnology program initiative for North Carolina's Public Historically Black Universities and Pembroke State University.  This program initiative is a means to get more funds to these institutions of higher education in the short run to help them develop their biotechnology programs and a means to develop a mechanism to improve these institutions' capacity over the long term.  The Center's special initiative shall, at a minimum, provide for:
(1)	A range of program activities, including grants, designed to enhance the existing strengths and capabilities of Pembroke State University, and the Public Historically Black Universities;
(2)	A Facilities and Infrastructure Review Committee to advise the Center on major program elements and priority projects that would be most helpful to these institutions; and 
(3)	A Program Advisory Panel with representation from these institutions to advise and make recommendations to the Center's President and Board of Directors on funding proposals under this initiative.
The Center shall report on its biotechnology program grants to universities to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division on or before March 1 of each fiscal year, and more frequently as requested by the Commission.  These reports shall include the current number of enrollments and the capacity of enrollments in the biotechnology program in each of the universities, the number of faculty in the biotechnology program in each of the universities, whether and to what extent the enrollments, capacity, and number of faculty have changed in the last three academic years in the biotechnology program in each of the universities, how the funds allocated by this section are being used in each of the universities, and any other information that indicates whether these grants are accomplishing their purpose.

Requested by:   Senators Martin of Pitt, Plyler, Perdue, Odom
RURAL ECONOMIC DEVELOPMENT CENTER
Section 14.22.  (a) Of the funds appropriated in this act to the Rural Economic Development Center, Inc., the sum of one million two hundred seventy thousand dollars ($1,270,000) for the 1997-98 fiscal year and the sum of one million two hundred seventy thousand dollars ($1,270,000) for the 1998-99 fiscal year shall be allocated as follows:
1997-98 FY	1998-99 FY
Research and Demonstration Grants	$475,864	$475,864
Technical Assistance and Center
  Administration of Research
  and Demonstration Grants	444,136	444,136
Center Administration, Oversight,
  and Other Programs	350,000	350,000
(b) The Rural Economic Development Center, Inc., shall provide a report containing detailed budget, personnel, and salary information to the Office of State Budget and Management in the same manner as State departments and agencies in preparation for biennium budget requests.
(c) Not more than fifty percent (50%) of the interest earned on State funds appropriated to the Rural Economic Development Center, Inc., may be used by the Center for administrative purposes, including salaries and fringe benefits.
(d) For purposes of this section, the term "community development corporation" means a nonprofit corporation:
(1)	Chartered pursuant to Chapter 55A of the General Statutes;
(2)	Tax-exempt pursuant to section 501(c)(3) of the Internal Revenue Code of 1986;
(3)	Whose primary mission is to develop and improve low-income communities and neighborhoods through economic and related development;
(4)	Whose activities and decisions are initiated, managed, and controlled by the constituents of those local communities; and
(5)	Whose primary function is to act as deal-maker and packager of projects and activities that will increase their constituencies' opportunities to become owners, managers, and producers of small businesses, affordable housing, and jobs designed to produce positive cash flow and curb blight in the targeted community.
(e) Of the funds appropriated in this act to the Rural Economic Development Center, Inc., the sum of five million dollars ($5,000,000) for the 1997-98 fiscal year and the sum of two million four hundred thousand dollars ($2,400,000) for the 1998-99 fiscal year shall be allocated as follows:
(1)	$1,400,000 in fiscal year 1997-98 and $1,200,000 in fiscal year 1998-99 for community development grants to support development projects and activities within the State's minority communities.  Any community development corporation as defined in this section is eligible to apply for funds.  The Rural Economic Development Center, Inc., shall establish performance-based criteria for determining which community development corporation will receive a grant and the grant amount.  Funding shall also be allocated to the North Carolina Association of Community Development Corporations, Inc.  The Rural Economic Development Center, Inc., shall allocate these funds as follows:
a.	$900,000 in each fiscal year for direct grants to the local community development corporations that have previously received State funds for this purpose to support operations and project activities;
b.	$250,000 in each fiscal year for direct grants to local community development corporations that have not previously received State funds;
c.	$200,000 in fiscal year 1997-98 to the North Carolina Association of Community Development Corporations, Inc., to provide training, technical assistance, resource development, and support for local community development corporations statewide; and
d.	$50,000 in each fiscal year to the Rural Economic Development Center, Inc., to be used to cover expenses in administering this section.
(2)	$250,000 in each fiscal year to the Microenterprise Loan Program to support the loan fund and operations of the Program; and
(3)	$3,350,000 for the 1997-98 fiscal year and $950,000 for the 1998-99 fiscal year shall be used for a program to provide supplemental funding for matching requirements for economic development in economically depressed areas.  The Center shall use these funds to make grants to local governments and nonprofit corporations to provide funds necessary to match federal grants or other grants for necessary economic development projects and activities in economically depressed areas.  The grant recipients shall be selected on the basis of need.
(f) The Rural Economic Development Center, Inc., shall:
(1)	By January 15, 1998, and more frequently as requested, report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division the following information:
a.	State fiscal year 1996-97 program activities, objectives, and accomplishments;
b.	State fiscal year 1996-97 itemized expenditures and fund sources;
c.	State fiscal year 1997-98 planned activities, objectives, and accomplishments including actual results through December 31, 1997; and
d.	State fiscal year 1997-98 estimated itemized expenditures and fund sources including actual  expenditures and fund sources through December 31, 1997.
(2)	By January 15, 1999, and more frequently as requested, report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division the following information:
a.	State fiscal year 1997-98 program activities, objectives, and accomplishments;
b.	State fiscal year 1997-98 itemized expenditures and fund sources;
c.	State fiscal year 1998-99 planned activities, objectives, and accomplishments including actual results through December 31, 1998; and
d.	State fiscal year 1998-99 estimated itemized expenditures and fund sources including actual expenditures and fund sources through December 31, 1998.
(3)	Provide to the Fiscal Research Division a copy of each grant recipient's annual audited financial statement within 30 days of issuance of the statement.

Requested by:   Senator Martin of Pitt
COMMUNITY DEVELOPMENT INITIATIVE
Section 14.23.  Of the funds appropriated in this act to the Rural Economic Development Center, Inc., the sum of two million dollars ($2,000,000) for fiscal year 1997-98 and the sum of two million dollars ($2,000,000) for fiscal year 1998-99 shall be used to support the grant and loan fund and operations of the North Carolina Community Development Initiative, Inc.  The Initiative shall provide operating and project activity grants to mature community development corporations that have demonstrated project and organizational capacity.
The North Carolina Community Development Initiative, Inc., shall:
(1)	By January 15, 1998, and more frequently as requested, report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division the following information:
a.	State fiscal year 1996-97 program activities, objectives, and accomplishments;
b.	State fiscal year 1996-97 itemized expenditures and fund sources;
c.	State fiscal year 1997-98 planned activities, objectives, and accomplishments including actual results through December 31, 1997;
d.	State fiscal year 1997-98 estimated itemized expenditures and fund sources including actual  expenditures and fund sources through December 31, 1997.
(2)	By January 15, 1999, and more frequently as requested, report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division the following information:
a.	State fiscal year 1997-98 program activities, objectives, and accomplishments;
b.	State fiscal year 1997-98 itemized expenditures and fund sources;
c.	State fiscal year 1998-99 planned activities, objectives, and accomplishments including actual results through December 31, 1998;
d.	State fiscal year 1998-99 estimated itemized expenditures and fund sources including actual expenditures and fund sources through December 31, 1998.
(3)	Provide to the Fiscal Research Division a copy of the Initiative's annual audited financial statement within 30 days of issuance of the statement.

Requested by:   Senator Martin of Pitt
OPPORTUNITIES INDUSTRIALIZATION CENTER FUNDS
Section 14.24.  (a) Of the funds appropriated in this act to the Rural Economic Development Center, Inc., the sum of two hundred fifty thousand dollars ($250,000) for the 1997-98 fiscal year and the sum of two hundred fifty thousand dollars ($250,000) for the 1998-99 fiscal year shall be allocated as follows:
(1)	$50,000 in each fiscal year to the Opportunities Industrialization Center of Wilson, Inc., for its ongoing job training programs;
(2)	$50,000 in each fiscal year to Opportunities Industrialization Center, Inc., in Rocky Mount, for its ongoing job training programs;
(3)	$50,000 in each fiscal year to Pitt-Greenville Opportunities Industrialization Center, Inc., for its ongoing job training programs;
(4)	$50,000 in each fiscal year to the Opportunities Industrialization Center of Lenoir, Green, and Jones Counties; and
(5)	$50,000 in each fiscal year to the Opportunities Industrialization Center of Elizabeth City, Inc.
(b) The Rural Economic Development Center, Inc., shall:
(1)	By January 15, 1998, and more frequently as requested, report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division the following information:
a.	State fiscal year 1996-97 program activities, objectives, and accomplishments;
b.	State fiscal year 1996-97 itemized expenditures and fund sources;
c.	State fiscal year 1997-98 planned activities, objectives, and accomplishments including actual results through December 31, 1997;
d.	State fiscal year 1997-98 estimated itemized expenditures and fund sources including actual  expenditures and fund sources through December 31, 1997.
(2)	By January 15, 1999, and more frequently as requested, report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division the following information:
a.	State fiscal year 1997-98 program activities, objectives, and accomplishments;
b.	State fiscal year 1997-98 itemized expenditures and fund sources;
c.	State fiscal year 1998-99 planned activities, objectives, and accomplishments including actual results through December 31, 1998;
d.	State fiscal year 1998-99 estimated itemized expenditures and fund sources including actual expenditures and fund sources through December 31, 1998.
(3)	Provide to the Fiscal Research Division a copy of the annual audited financial statements of the Opportunities Industrialization Centers funded by this act within 30 days of issuance of the statement.

Requested by:   Senators Conder, Plyler
RECREATION DISTRICT ABC PERMITS
Section 14.25.  G.S. 18B-1006(j) reads as rewritten:
"(j)	Recreation Districts. – Notwithstanding the provisions of Article 6 of this Chapter, the Commission may issue permits for the sale of malt beverages, unfortified wine, fortified wine, and mixed beverages to qualified businesses in a recreation district. 
A 'recreation district' is:
(1)	An area that is located in a county that has not approved the issuance of permits, has at least two cities that have approved the sale of malt beverages, wine, and the operation of an ABC store, and contains a facility of at least 450 acres where five or more public auto racing events are held each year; or
(2)	An area that is located in a county that borders a county which has held elections pursuant to G.S. 18B-600(f) and borders on another state and which (i) contains a facility of at least 225 acres where four or more public auto racing events are held each year or (ii) contains a facility of at least 140 acres where 80 or more motor sports events are held each year.
The recreation district includes the area within a half-mile radius of the racing facility."

Requested by:   Senator Lee
GUEST ROOM CABINETS FOR CERTAIN PRIVATE CLUBS
Section 14.26.  G.S. 18B-1001(13) reads as rewritten:
"(13)	Guest Room Cabinet Permit. – A guest room cabinet permit authorizes a hotel having a mixed beverages permit or a private club having a mixed beverages permit and management contracts for the rental of living units to sell to its room guests, from securely locked cabinets, malt beverages, unfortified wine, fortified wine, and spirituous liquor. A permittee shall designate and maintain at least ten percent (10%) of the permittee's guest rooms as rooms that do not have a guest room cabinet. A permittee may dispense alcoholic beverages from a guest room cabinet only in accordance with written policies and procedures filed with and approved by the Commission. A permittee shall provide a reasonable number of vending machines, coolers, or similar machines on premises for the sale of soft drinks to hotel guests.
A guest room cabinet permit may be issued for any of the following:
a.	A hotel located in a county subject to G.S. 18B-600(f).
b.	A hotel located in a county that has a population in excess of 150,000 by the last federal census.
c.	A qualifying private club located in a county defined in G.S. 18B-101(13a)b.2."

PART XV.  JUDICIAL DEPARTMENT

Requested by:   Senator Gulley
TRANSFER OF EQUIPMENT AND SUPPLY FUNDS
Section 15.  Funds appropriated to the Judicial Department in the 1997-99 biennium for equipment and supplies shall be certified in a reserve account.  The Administrative Office of the Courts shall have the authority to transfer these funds to the appropriate programs and between programs as the equipment priorities and supply consumptions occur during the operating year.  These funds shall not be expended for any other purpose.  The Administrative Office of the Courts shall make quarterly reports on transfers made pursuant to this section to the Joint Legislative Commission on Governmental Operations and the Chairs of the Senate and House Appropriations Subcommittees on Justice and Public Safety.

Requested by:   Senators Gulley, Ballance
N.C. STATE BAR FUNDS
Section 15.1. (a)	Of the funds appropriated in the continuation budget as a grant-in-aid to the North Carolina State Bar for the 1997-99 fiscal biennium, the North Carolina State Bar may in its discretion use up to the sum of two hundred fifty thousand dollars ($250,000) for the 1997-98 fiscal year and up to the sum of two hundred fifty thousand dollars ($250,000) for the 1998-99 fiscal year to contract with the Center for Death Penalty Litigation to provide training, consultation, brief banking, and other assistance to attorneys representing indigent capital defendants.
(b)	Of the nonrecurring funds appropriated in the expansion budget as a grant-in-aid to the North Carolina State Bar for the 1997-98 fiscal year, the North Carolina State Bar may in its discretion use up to the sum of two hundred fifty thousand dollars ($250,000) to contract with the Center for Death Penalty Litigation to provide training, consultation, brief banking, and other assistance to attorneys representing indigent capital defendants.

Requested by:   Senator Gulley
INDIGENT PERSONS' ATTORNEY FEE FUND
Section 15.2.  (a)	Effective July 1, 1997, the Administrative Office of the Courts shall each year of the 1997-99 biennium reserve funds for adult, juvenile, and guardian ad litem cases from the Indigent Persons' Attorney Fee Fund.  These funds shall be allotted to each judicial district in which the superior and district courts are coterminous, and otherwise by county, according to the caseload of indigent persons who were not represented by the public defender in the districts or counties during 1996-97 and 1997-98, respectively.  The remaining available funds in the Indigent Persons' Attorney Fee Fund shall be budgeted for capital cases and for transcripts, professional examinations, expert witness fees, and other supporting services.
The Administrative Office of the Courts shall notify all senior resident superior court judges, all chief district court judges, and the clerk of superior court within the district or county immediately after the allotment is made and shall provide a monthly report on the status of the allotment for the district or county.
The senior resident superior court judge and the chief district court judge of each district or county shall ask all judges holding court within the district or county:  (i) to take into consideration the amount of money allotted at the beginning of the fiscal year and the amount of money remaining in the allotment when they award counsel fees to attorneys of indigent persons, and (ii) to make an effort to award fees equally and justly for legal services provided.  The clerk of superior court for each county shall ensure that all judges holding court within the county receive this request from the senior resident superior court judge and the chief district court judge.
(b)	If the funds allotted pursuant to subsection (a) of this section are depleted in a district or county prior to the end of the fiscal year, the Administrative Office of the Courts shall allot any available funds from the reserve fund specified in subsection (a) or from unanticipated receipts.  However, if necessary and appropriate due to unusual and unanticipated circumstances occurring in the current year, the Administrative Office of the Courts may allocate available funds to a district or county in a manner calculated to result in the reasonably fair distribution of remaining funds.
(c)	If funds allocated in subsections (a) and (b) of this section are depleted in a district or county prior to the end of the fiscal year, the Administrative Office of the Courts shall allot available funds from the Public Defender program.
(d)	If the funds allotted pursuant to subsections (a), (b), and (c) of this section are depleted in a district or county prior to the end of the fiscal year, the Administrative Office of the Courts is authorized to transfer funds between districts or counties only if the Administrative Office of the Courts determines that the funds transferred will not be needed to meet the obligations incurred by the Indigent Persons' Attorney Fee Fund for the county or district from which the funds are transferred for the fiscal year.

Requested by:  Senator Gulley
REPORT ON DISPUTE SETTLEMENT CENTERS
Section 15.3. (a)	All local dispute settlement centers currently receiving State funds shall report annually to the Judicial Department on the program's funding and activities, including:
(1)	Types of dispute settlement services provided;
(2)	Clients receiving each type of dispute settlement service;
(3)	Number and type of referrals received, cases actually mediated, cases resolved in mediation, and total clients served in the cases mediated;
(4)	Total program funding and funding sources;
(5)	Itemization of the use of funds, including operating expenses and personnel;
(6)	Itemization of the use of State funds appropriated to the center;
(7)	Level of volunteer activity; and
(8)	Identification of future service demands and budget requirements.
The Judicial Department shall compile and summarize the information provided pursuant to this subsection and shall provide the information to the Chairs of the House and Senate Appropriations Committees and the Chairs of the House and Senate Appropriations Subcommittees on Justice and Public Safety by February 1 of each year.
(b)	A local dispute settlement center requesting State funds for the first time shall provide the General Assembly with the information enumerated in subsection (a) of this section, or projections where historical data are not available, as well as a detailed statement justifying the need for State funding.
(c)	Each local dispute settlement center receiving State funds for the first time shall document in the information provided pursuant to G.S. 7A-346.1 that, after the second year of receiving State funds, at least ten percent (10%) of total funding comes from non-State sources.
(d)	Each local dispute settlement center receiving State funds for the third, fourth, or fifth year shall document that at least twenty percent (20%) of total funding comes from non-State sources.
(e)  Each local dispute settlement center receiving State funds for six or more years shall document that at least fifty percent (50%) of total funding comes from non-State sources.
(f)  Each local dispute settlement center currently receiving State funds that has achieved a funding level from non-State sources greater than that provided for that center by subsection (c), (d), or (e) of this section shall make a good faith effort to maintain that level of funding.
(g)  The percentage that State funds comprise of the total funding of each dispute settlement center shall be determined at the conclusion of each fiscal year with the information provided pursuant to G.S. 7A-346.1 and is intended as a funding ratio and not a matching funds requirement.  Local dispute settlement centers may include the market value of donated  office space, utilities, and professional legal and accounting services in determining total funding.
(h)  A local dispute settlement center having difficulty meeting the funding ratio provided for that center by subsection (c), (d), or (e) of this section may request a waiver or special consideration through the Administrative Office of the Courts for consideration by the Senate and House Appropriations Subcommittees on Justice and Public Safety.
(i)  The provisions of G.S. 143-31.4 do not apply to local dispute settlement centers receiving State funds.

Requested by:   Senator Gulley
COMMUNITY PENALTIES PROGRAM
Section 15.4.  (a)	Of the funds appropriated from the General Fund to the Judicial Department for the 1997-99 biennium to conduct the Community Penalties Program, the sum of four million four hundred five thousand three hundred eighty-two dollars ($4,405,382) for the 1997-98 fiscal year and the sum of four million four hundred five thousand three hundred eighty-two dollars ($4,405,382) for the 1998-99 fiscal year may be allocated by the Judicial Department in each year of the biennium in any amount among existing community penalties programs, including any State-operated programs, or may be used to establish new community penalties programs.
	 	(b)	The Judicial Department shall report annually to the Senate and House Appropriations Subcommittees on Justice and Public Safety and to the Fiscal Research Division on the administrative expenditures of the community penalties programs.  The Judicial Department shall report quarterly to the Joint Legislative Commission on Governmental Operations on any elimination or reduction of funding for community penalties programs funded in the 1996-97 fiscal year or any program receiving initial funding during the 1997-99 biennium.

Requested by:   Senators Gulley, Ballance
DRUG TREATMENT COURT FUNDS
Section 15.5. (a)	Funds appropriated to the Judicial Department for the 1997-98 fiscal year for the North Carolina Drug Treatment Court Program shall be used primarily for substance abuse treatment and related program needs, but the sum of fifty-two thousand five hundred fifty-one dollars ($52,551) may be used to fund one program administrator position.
(b)	Of the funds appropriated to the Judicial Department in the 1996-97 fiscal year for the North Carolina Drug Treatment Court Program, the sum of one hundred thousand dollars ($100,000) shall not revert at the end of the fiscal year, but shall remain in the Department during the 1997-98 fiscal year to be used for nonrecurring program items.
(c)	Subsection (b) of this section becomes effective June 30, 1997.

Requested by:   Senators Gulley, Ballance
MAKE SENTENCING COMMISSION PERMANENT
Section 15.6.  (a)	Section 8 of Chapter 1076 of the 1989 Session Laws, as amended by Chapters 812 and 816 of the 1991 Session Laws, Chapters 253, 321, and 591 of the 1993 Session Laws, and Chapter 236 of the 1995 Session Laws, reads as rewritten:
"Sec. 8.  This act is effective upon ratification."
(b)	G.S. 164-38 reads as rewritten:
"§ 164-38. Terms of members; compensation; expenses.
The terms of existing members shall expire on June 30, 1997, unless they resign or are removed. New members shall be appointed or the existing members reappointed by the appointing authorities to serve terms of two years, unless they resign or are removed. Members serving by virtue of elective or appointive office or as designees of such officeholders may serve only so long as the officeholders hold those respective offices. Members appointed by the Speaker of the House and the President Pro Tempore of the Senate may be removed by the appointing authority without cause. Vacancies occurring before the expiration of a term shall be filled in the manner provided for the members first appointed. A member of the Commission may be removed only for disability, neglect of duty, incompetence, or malfeasance in office. Before removal, the member is entitled to a hearing. Effective with respect to members designated on or after July 1, 1992, a person making a designation pursuant to G.S. 164-37 may not make another designation, except that the person's successor in elective or appointive office may make a new designation.
The Commission members shall receive no salary for serving. All Commission members shall receive necessary subsistence and travel expenses in accordance with the provisions of G.S. 120-3.1, 138-5, and 138-6 as applicable."
(c)	G.S. 164-36 reads as rewritten:
"§ 164-36.  Powers and duties.
Sentences established for violations of the State's criminal laws should be based on the established purposes of our criminal justice and corrections systems.  The Commission shall evaluate sentencing laws and policies in relationship to both the stated purposes of the criminal justice and corrections systems and the availability of sentencing options.  The Commission shall make recommendations to the General Assembly for the modification of sentencing laws and policies, and for the addition, deletion, or expansion of sentencing options as necessary to achieve policy goals.  The Commission shall make a report of its recommendations, including any recommended legislation, to the General Assembly annually."

Requested by:   Senator Gulley
VICTIM'S RIGHTS AMENDMENT/VICTIM WITNESS ASSISTANTS
Section 15.7. The victim witness assistants funded in this act are intended to support the implementation of the Victims' Rights Amendment to the North Carolina Constitution and to address the current workload.  These positions shall be allocated on the basis of workload and population.  The Judicial Department shall report to the Joint Legislative Commission on Governmental Operations on the allocation of these positions by November 1, 1997.

Requested by:   Senator Gulley
COMPUTER TRAINING
Section 15.8. Prior to the allocation of laptop computers funded in this act for superior court and district court judges, each judge requesting a laptop computer shall complete a training course provided by the Administrative Office of the Courts in the use of a laptop computer and the appropriate software.

Requested by:   Senator Gulley
CRIMINAL CASE MANAGEMENT FUNDS
Section 15.9. (a) The criminal case docket management programs funded in this act shall be distributed in a manner that ensures representation in all areas of the State.
(b) The Administrative Office of the Courts shall report by April 1, 1998, to the Chairs of the Senate and House Appropriations Committees and the Chairs of the Senate and House Appropriations Subcommittees on Justice and Public Safety on the criminal case management programs established in 10 judicial districts.  The report shall assess the success of these 10 programs in reducing the backlog of court cases and resolving new court cases more quickly and shall include recommendations for the location of additional criminal case management programs in the 1998-99 fiscal year.

Requested by:   Senator Gulley
RESERVE FOR TECHNOLOGY
Section 15.10.  The Administrative Office of the Courts shall establish a task force consisting of representatives of clerks of superior court, district attorneys, superior and district court judges, and magistrates to formulate a plan for the most efficient and effective use of funds appropriated to the Reserve for Technology.  The plan shall address those items requested in the Administrative Office of the Courts' expansion budget, including:
(1)	Automated forms in courtrooms, clerks' offices, and district attorneys' offices;
(2)	District attorney and public defender case management systems;
(3)	New personal computers for district attorneys, public defenders, and clerks of court;
(4)	Technology support personnel; and
(5)	Magistrate criminal information system.
	If the task force determines that the funding amounts for these projects should be adjusted or that other projects not enumerated above should receive funding from the Reserve for Technology, it shall make those recommendations to the Administrative Office of the Courts.
Prior to the expenditure of funds appropriated to the Reserve for Technology, the Administrative Office of the Courts shall report the findings of the task force by November 1, 1997, to the Joint Legislative Commission on Governmental Operations, the Chairs of the Senate and House Appropriations Committees, and the Chairs of the Senate and House Appropriations Subcommittees on Justice and Public Safety. 

Requested by:   Senator Gulley
DRUG COURT STUDY
Section 15.11.  Prior to the expenditure of funds appropriated in this act for an additional drug court program, the Administrative Office of the Courts shall study the feasibility of establishing that court as a regional drug court that could serve several districts on a rotating basis.  If the Administrative Office of the Courts determines that such an arrangement is not feasible, the funds shall be allocated to a district experiencing a backlog of drug cases.
The Administrative Office of the Courts shall report its findings to the Joint Legislative Commission on Governmental Operations by September 1, 1997.

Requested by:   Senator Gulley
ADDITIONAL ASSISTANT DISTRICT ATTORNEYS/REESTABLISH ASSISTANT DISTRICT ATTORNEY POSITIONS IN DISTRICTS 19B AND 20
Section 15.12. (a) G.S. 7A-60(a1) reads as rewritten:
"(a1)	The counties of the State are organized into prosecutorial districts, and each district has the counties and the number of full-time assistant district attorneys set forth in the following table:

No. of Full-Time
Prosecutorial	Asst. District
District	Counties	Attorneys
1	Camden, Chowan, Currituck,	9
Dare, Gates, Pasquotank,
Perquimans
2	Beaufort, Hyde, Martin,	5
Tyrrell, Washington
3A	Pitt	9
3B	Carteret, Craven, Pamlico	9
4	Duplin, Jones, Onslow,	13
Sampson
5	New Hanover, Pender	12
6A	Halifax	4
6B	Bertie, Hertford,	4
	Northampton
	7	Edgecombe, Nash, Wilson	15
8	Greene, Lenoir, Wayne	11
9	Franklin, Granville,	9
Vance, Warren
9A	Person, Caswell	3
	10	Wake	28
11	Harnett, Johnston, Lee	14
12	Cumberland	16
13	Bladen, Brunswick, Columbus	9
14	Durham	12
15A	Alamance	7
15B	Orange, Chatham	7
16A	Scotland, Hoke	4
16B	Robeson	8
17A	Rockingham	5
17B	Stokes, Surry	5
18	Guilford	27
19A	Cabarrus	 	5
19B	Montgomery, Moore, Randolph	11
19C	Rowan	5
20	Anson, Richmond,	13
Stanly, Union
21	Forsyth	14
22	Alexander, Davidson, Davie,	16
Iredell
23	Alleghany, Ashe, Wilkes,	5
Yadkin
24	Avery, Madison, Mitchell,	4
Watauga, Yancey
25	Burke, Caldwell, Catawba	13
26	Mecklenburg	32
	27A	Gaston	11
27B	Cleveland,	7
Lincoln
28	Buncombe	9
29	Henderson, McDowell, Polk,	10
Rutherford, Transylvania
30	Cherokee, Clay, Graham,	7
Haywood, Jackson, Macon,
Swain."
(b) Subsections (c) and (d) of Section 5 of Chapter 589 of the 1995 Session Laws are repealed.
(c) Subsection (a) of this section becomes effective October 1, 1997.

Requested by:   Senator Gulley
ADDITIONAL DISTRICT COURT JUDGES
Section 15.13. (a)	G.S. 7A-133(a) reads as rewritten:
"(a)	Each district court district shall have the numbers of judges as set forth in the following table:

District	Judges	County 

	1	4	Camden
	Chowan
Currituck
Dare
Gates
Pasquotank
Perquimans
2	3	Martin
Beaufort
Tyrrell 
Hyde
Washington
3A	3	Pitt
3B	5	Craven
Pamlico
Carteret
4	7	Sampson
Duplin
Jones
Onslow
5	6	New Hanover
Pender
6A	2	Halifax
6B	3	Northampton
Bertie
Hertford
7	6 	Nash
	Edgecombe
Wilson
8	5	Wayne
Greene
Lenoir
9	4	Granville
(part of Vance
see subsection (b))
Franklin
9A	2	Person
Caswell
9B	1	Warren
(part of Vance
see subsection (b))
10	13	Wake
11	7	Harnett
Johnston
Lee
12	6	Cumberland
13	5	Bladen
Brunswick
Columbus
	14	5	Durham
15A	3	Alamance
15B	4	Orange
Chatham
16A	2	Scotland
Hoke
16B	5	Robeson
17A	2	Rockingham
17B	3	Stokes
Surry
18	10	Guilford
19A	3	Cabarrus
19B	5	Montgomery
Moore
Randolph
19C	4	Rowan
20	6	Stanly
Union
Anson
Richmond
21	7	Forsyth
22	8	Alexander
Davidson
Davie
Iredell
23	3	Alleghany
Ashe
Wilkes
Yadkin
24	3	Avery
Madison
Mitchell
Watauga
Yancey
25	7	Burke
Caldwell
Catawba
26	14 	Mecklenburg
27A	5	Gaston
27B	4	Cleveland
Lincoln
28	5	Buncombe
29	5	Henderson
McDowell
Polk
Rutherford
Transylvania
30	4	Cherokee
Clay 2
Graham 3
Haywood
Jackson
Macon
Swain."
(b)	The Governor shall appoint additional district court judges for District Court Districts 3B, 4, 10, 11, 13, 15B, 19C, and 22 as authorized by subsection (a) of this section.  Those judges' successors shall be elected in the 2000 election for four-year terms commencing on the first Monday in December 2000.
(c)	Subsection (a) of this section becomes effective October 1, 1997, as to any district where no county is subject to Section 5 of the Voting Rights Act of 1965.  As to any district where any county is subject to Section 5 of the Voting Rights Act of 1965, subsection (a) of this section becomes effective October 1, 1997, or 15 days after the date upon which that subsection is approved under Section 5 of the Voting Rights Act.

Requested by:   Senator Gulley
AUTHORIZE ADDITIONAL MAGISTRATES
Section 15.14. G.S. 7A-133(c) reads as rewritten:
	"(c)	Each county shall have the numbers of magistrates and additional seats of district court, as set forth in the following table:

Additional
Magistrates	Seats of
County	Min.-Max.	Court         

Camden	1	2
Chowan	2	3
Currituck	1	3
Dare	3	8
Gates	2	3
Pasquotank	3	5
Perquimans	2	3
Martin	5	8
Beaufort	4	8
Tyrrell	1	3
Hyde	2	4
Washington	3	4
Pitt	10	12	Farmville
Ayden
Craven	7	10	Havelock
Pamlico	2	3
Carteret	5	8
Sampson	6	8
Duplin	9	11
Jones	2	3
Onslow	8	14
New Hanover	6	11
Pender	4	6
Halifax	9	14	Roanoke
Rapids,
Scotland Neck
Northampton	5	7
Bertie	4	6
Hertford	5	6
Nash	7	10	Rocky Mount
Edgecombe	4	7	Rocky Mount
Wilson	4	7
Wayne	5	12	Mount Olive
Greene	2	4
Lenoir	4	10	La Grange
Granville	3	7
Vance	3	6
Warren	3	4
Franklin	3	7
Person	3	4
Caswell	2	5
Wake	12	20	Apex,
Wendell,
Fuquay-
Varina,
Wake Forest
Harnett	7	11	Dunn
Johnston	10	12	Benson,
Clayton,
Selma
Lee	4	6
Cumberland	10	17
Bladen	4	6
Brunswick	4	7
Columbus	6	8	Tabor City
Durham	8	13
Alamance	7	10	Burlington
Orange	4	11	Chapel Hill
Chatham	3	8	Siler City
Scotland	3	5
Hoke	4	5
Robeson	8	16	Fairmont,
Maxton,
Pembroke,
Red Springs,
Rowland,
St. Pauls
Rockingham	4	9	Reidsville,
Eden,
Madison
Stokes	2	5
Surry	5	9	Mt. Airy
Guilford	20	26	High Point
Cabarrus	5	9	Kannapolis
Montgomery	2	4
Randolph	5	10	Liberty
Rowan	5	10
Stanly	5	6
Union	4	6
Anson	4	5
Richmond	5	6	Hamlet
Moore	5	8	Southern
Pines
Forsyth	3	15	Kernersville
Alexander	2	3
Davidson	7	10	Thomasville
Davie	2	3
Iredell	4	9	Mooresville
Alleghany	1	2
Ashe	3	4
Wilkes	4	6
Yadkin	3	5
Avery	3	4
Madison	4	5
Mitchell	3	4
Watauga	4	6
Yancey	2	4
Burke	4	7
Caldwell	4	7
Catawba	6	10	Hickory
Mecklenburg	15	26
Gaston	11	20
Cleveland	5	8
Lincoln	4	7
Buncombe	6	15
Henderson	4	7
McDowell	3	5
Polk	3	4
Rutherford	6	8
Transylvania	2	4
Cherokee	3	4
Clay	1	2
Graham	2	3
Haywood	5	7	Canton
Jackson	3	4
Macon	3	4
Swain	2	3."

Requested by:   Senators Gulley, Ballance
ASSISTANT PUBLIC DEFENDERS
Section 15.15.  From funds appropriated to the Indigent Persons' Attorney Fee Fund for the 1997-99 biennium, the Administrative Office of the Courts may use up to four hundred one thousand four hundred sixty-four dollars ($401,464) in the 1997-98 fiscal year, and up to five hundred twenty-four thousand three hundred eighty-four dollars ($524,384) in the 1998-99 fiscal year for salaries, benefits, and related expenses to establish up to eight new assistant public defenders.

Requested by:   Senator Perdue
JUVENILE RECORDS FOR RECIDIVISM
Section 15.16.  (a) Article 54 of Chapter 7A of the General Statutes is amended by adding a new section to read:
"§ 7A-675.1.  Records to determine recidivism rates.
(a)	The Administrative Office of the Courts shall maintain a record of every juvenile who is adjudicated delinquent for an offense that would be a Class A, B1, B2, C, D, or E felony if committed by an adult for the purpose of computing statistics on the number of juveniles adjudicated delinquent for those offenses who subsequently are adjudicated delinquent or convicted.  The record shall include the dispositional order and any subsequent orders of the court for each adjudication.
(b)	The Chief Court Counselor of each judicial district shall forward the information and records required by this section to the Administrative Office of the Courts as soon as practicable but at least within 30 days of the adjudication.
(c)	The record required pursuant to this section shall be withheld from public inspection and may be examined only by order of the court."
(b)	The Administrative Office of the Courts shall use funds available to the Office to implement this section.

Requested by:   Senators Plyler, Perdue, Odom
IRMC REVIEW OF INFORMATION TECHNOLOGY PLANS OF THE ADMINISTRATIVE OFFICE OF THE COURTS
Section 15.17. (a) G.S. 143B-426.21(b) reads as rewritten:
"(b)	Powers and Duties. – The Commission has the following powers and duties:
(1)	To develop, approve, and publish a statewide information technology strategy covering the current and following biennium that shall be updated annually and shall be submitted to the General Assembly on the first day of each regular session.
(2)	To develop, approve, and sponsor statewide technology initiatives and to report on those initiatives in the annual update of the statewide information technology strategy.
(3)	To review and approve biennially the information technology plans of the executive agencies and to review and comment biennially on the information technology plans of the Administrative Office of the Courts. This review shall include plans for the procurement and use of personal computers and workstations.
(4)	To recommend to the Governor and the Office of State Budget and Management the relative priorities across executive agency information technology plans.
(5)	To establish a quality assurance policy for all agency information technology projects, information systems training programs, and information systems documentation.
(6)	To establish and enforce a quality review and expenditure review procedure for major agency information technology projects.
(7)	To review and approve expenditures from appropriations made to the Office of State Budget and Management for the purpose of creating a Computer Reserve Fund.
(8)	To develop and promote a policy and procedures for the fair and competitive procurement of information technology consistent with the rules of the Department of Administration and consistent with published industry standards for open systems that provide agencies with a vendor-neutral operating environment where different information technology hardware, software, and networks operate together easily and reliably."
(b) The Information Resources Management Commission  shall review the information technology plans of the Administrative Office of the Courts and report its findings to the Joint Legislative Commission on Governmental Operations by November 1, 1997.

Requested by:   Senators Odom, Plyler, Perdue
LRC STUDY OF THE ALLOCATION OF JUDICIAL RESOURCES
Section 15.18.  The Legislative Research Commission shall study the allocation of judicial resources, including but not limited to superior court judges, district court judges, assistant district attorneys, deputy clerks of court, assistant clerks of court, magistrates, and support staff.  This study shall include a review of the existing workload and staffing formulas for judicial personnel. The Legislative Research Commission shall report the results of this study to the 1998 Regular Session of the 1997 General Assembly.

PART XVI.  DEPARTMENT OF CORRECTION

Requested by: Senator Gulley
REIMBURSE COUNTIES FOR HOUSING AND EXTRAORDINARY MEDICAL COSTS FOR INMATES, PAROLEES, AND POST-RELEASE SUPERVISEES AWAITING TRANSFER TO STATE PRISON SYSTEM
Section 16.  (a)	G.S. 148-29 reads as rewritten:
"§ 148-29.  Transportation of convicts to prison; reimbursement to counties; sheriff's expense affidavit.
(a)	The sheriff having in charge any prisoner to be taken to the State prison system shall send the prisoner to the custody of the Department of Correction within five days after sentencing and the disposal of all pending charges against the prisoner, if no appeal has been taken. Beginning on the sixth day after sentencing and disposal of all pending charges against the prisoner and continuing through the day the prisoner is received by the Division of Prisons, the Department of Correction shall pay the county:
(1)	A standard sum set by the General Assembly in its appropriations acts for the cost of providing food, clothing, personal items, supervision, and necessary ordinary medical services to the prisoner awaiting transfer to the State prison system; and
(2)	Extraordinary medical costs, as defined in G.S. 148-32.1(a), incurred by prisoners awaiting transfer to the State prison system.
(b)	 The sheriff having in charge any parolee or post-release supervisee to be taken to the State prison system shall send the prisoner to the custody of the Department of Correction within five days after preliminary hearing held under G.S. 15A-1368.6(b) or G.S. 15A-1376(b).  Beginning on the sixth day after the hearing and continuing through the day the prisoner is received by the Division of Prisons, the Department of Correction shall pay the county:
(1)	A standard sum set by the General Assembly in its appropriations acts for the cost of providing food, clothing, personal items, supervision, and necessary ordinary medical services to the parolee or post-release supervisee awaiting transfer to the State prison system; and
(2)	Extraordinary medical costs, as defined in G.S. 148-32.1(a), incurred by parolees or post-release supervisees awaiting transfer to the State prison system.
(c)	The sheriff shall file with the board of commissioners of his county a copy of his affidavit as to necessary guard, together with a copy of his itemized account of expenses, both certified to by him as true copies of those on file in his office."
(b)	The Department of Correction may use funds appropriated to the Department for the 1997-99 biennium to pay the sum of forty dollars ($40.00) per day as reimbursement to counties for the cost of housing convicted inmates and parolees and post-release supervisees awaiting transfer to the State prison system, as provided in G.S. 148-29.  The Department shall report quarterly to the Joint Legislative Commission on Governmental Operations, the Joint Legislative Corrections Oversight Committee, the Chairs of the Senate and House Appropriations Committees, and the Chairs of the Senate and House Appropriations Subcommittees on Justice and Public Safety  on the expenditure of funds to reimburse counties for prisoners awaiting transfer and on its progress in reducing the jail backlog.
Prior to the expenditure of more than the sum of six million five hundred thousand dollars ($6,500,000) for the 1997-98 fiscal year or more than the sum of four million dollars ($4,000,000) for the 1998-99 fiscal year to reimburse counties for prisoners awaiting transfer, the Department of Correction and the Office of State Budget and Management shall report to the Joint Legislative Commission on Governmental Operations on the necessity of that expenditure.

Requested by:   Senator Gulley
INMATE HOUSING FUNDS
Section 16.1.  The Department of Correction may use funds appropriated to the Department for the 1997-98 fiscal year to contract for prison beds to house inmates in out-of-state prisons or in local jails.  The Department shall report quarterly to the Joint Legislative Commission on Governmental Operations, the Joint Legislative Corrections Oversight Committee, the Chairs of the Senate and House Appropriations Committees, and the Chairs of the Senate and House Appropriations Subcommittees on Justice and Public Safety on these contracts.  The report shall include the amount expended monthly for each contract, the source of funding used to pay for the contracts, the status of each contract, and the projected dates for returning the inmates housed out-of-state or in local jails to the State prison system.
Prior to the expenditure of more than the sum of six million dollars ($6,000,000) to fund contracts for out-of-state and local jail beds, the Department of Correction and the Office of State Budget and Management shall report to the Joint Legislative Commission on Governmental Operations on the necessity of that expenditure.

Requested by:   Senator Gulley
EXEMPTION FROM LICENSURE AND CERTIFICATE OF NEED
Section 16.2.  (a)	Inpatient chemical dependency or substance abuse facilities that provide services exclusively to inmates of the Department of Correction shall be exempt from licensure by the Department of Human Resources under Chapter 122C of the General Statutes.  If an inpatient chemical dependency or substance abuse facility provides services both to inmates of the Department of Correction and to members of the general public, the portion of the facility that serves inmates shall be exempt from licensure.
(b)	Any person who contracts to provide inpatient chemical dependency or substance abuse services to inmates of the Department of Correction may construct and operate a new chemical dependency or substance abuse facility for that purpose without first obtaining a certificate of need from the Department of Human Resources pursuant to Article 9 of Chapter 131E of the General Statutes.  However, a new facility or addition developed for that purpose without a certificate of need shall not be licensed pursuant to Chapter 122C of the General Statutes and shall not admit anyone other than inmates unless the owner or operator first obtains a certificate of need.
(c)	This section applies to existing facilities, as well as future facilities contracting with the Department of Correction.

Requested by:   Senator Gulley
LIMIT USE OF OPERATIONAL FUNDS
Section 16.3.  Funds appropriated in this act to the Department of Correction for operational costs for additional facilities shall be used for personnel and operating expenses set forth in the budget approved by the General Assembly in this act.  These funds shall not be expended for any other purpose, except as provided for in this act, and shall not be expended for additional prison personnel positions until the new facilities are within 90 days of projected completion, except for certain management, security, and support positions necessary to prepare the facility for opening, as authorized in the budget approved by the General Assembly.

Requested by:   Senator Gulley
USE OF FACILITIES CLOSED UNDER GPAC
Section 16.4.  In conjunction with the closing of small expensive prison units recommended for consolidation by the Government Performance Audit Committee, the Department of Correction shall consult with the county or municipality in which the unit is located or any private for-profit or nonprofit firm about the possibility of converting that unit to other use.  Consistent with existing law, the Department may provide for the lease of any of these units to counties, municipalities, or private firms wishing to convert them to other use.  The Department of Correction may also consider converting some of the units recommended for closing from medium security to minimum security, where that conversion would be cost-effective.
The Department of Correction shall report quarterly to the Joint Legislative Corrections Oversight Committee on the conversion of these units to other use.

Requested by:   Senator Gulley
FEDERAL GRANT REPORTING
Section 16.5.  The Department of Correction, the Department of Justice, the Department of Crime Control and Public Safety, and the Judicial Department shall report by December 1 and May 1 of each year to the Joint Legislative Commission on Governmental Operations, the Chairs of the Senate and House Appropriations Committees, and the Chairs of the Senate and House Appropriations Subcommittees on Justice and Public Safety on federal grant funds received or pre-approved for receipt by those departments.  The report shall include information on the amount of grant funds received or preapproved for receipt by each department, the use of the funds, and the State match expended to receive the funds.

Requested by:   Senator Gulley
HARRIET'S HOUSE FUNDS/FUNDS SHALL NOT REVERT
Section 16.6.  (a)	Funds appropriated in this act to the Department of Correction to support the programs of Harriet's House may be used for program operating costs, the purchase of equipment, and the rental of real property.  Harriet's House shall report by December 1 and May 1 of each year to the Joint Legislative Commission on Governmental Operations on the expenditure of State appropriations and on the effectiveness of the program including information on the number of clients served and the number of clients who successfully complete the Harriet's House program.
(b)	The balance of the two hundred thousand dollars ($200,000) appropriated in Chapter 507 of the 1995 Session Laws to the Department of Correction for the 1996-97 fiscal year to support the programs at Harriet's House shall not revert at the end of the fiscal year but shall remain available to the Department during the 1997-98 fiscal year to be used for program operating costs, the purchase of equipment, and the rental of real property.
(c)	This section becomes effective June 30, 1997.

Requested by:   Senators Gulley, Odom, Ballance
REPORT ON SUMMIT HOUSE
Section 16.7.  (a) Summit House shall report by December 1 and May 1 of each year to the Joint Legislative Commission on Governmental Operations on the expenditure of State appropriations and on the effectiveness of the program, including information on the number of clients served, the number of clients who have their probation revoked, and the number of clients who successfully complete the program while housed at Summit House.
(b)	Summit House shall report by December 1, 1998, to the Joint Legislative Commission on Governmental Operations on (i) possible expansion of the programs in Mecklenburg and Guilford Counties; (ii) on possible expansion to other areas of the State; and (iii) the status of the Wake County program.  This report shall include the estimated size of the population to be served, estimated costs, and anticipated obstacles to establishment of a residential program.
(c)	The balance of the one million one hundred three thousand seven hundred fifty-eight dollars ($1,103,758), appropriated in Chapter 507 of the 1995 Session Laws and Chapter 18 of the Session Laws of the 1996 Second Extra Session to the Department of Correction for the 1996-97 fiscal year for support and expansion of the programs at Summit House in Greensboro and Mecklenburg and Wake Counties, shall not revert at the end of the fiscal year but shall remain in the Department during the 1997-98 fiscal year for that purpose.
(d)	This section becomes effective June 30, 1997.

Requested by:   Senator Gulley
MODIFICATION OF FUNDING FORMULA FOR THE NORTH CAROLINA STATE-COUNTY CRIMINAL JUSTICE PARTNERSHIP ACT
Section 16.8.  Notwithstanding the funding formula set forth in G.S. 143B-273.15, grants made through the North Carolina State-County Criminal Justice Partnership Act for the 1997-98 fiscal year shall be distributed to the counties as specified in G.S. 143B-273.15(2) only, and not as discretionary funds.  The Department may also use funds from the State-County Criminal Justice Partnership Account in order to maintain the counties' allocations of nine million six hundred thousand dollars ($9,600,000) as provided in previous fiscal years.  Appropriations not claimed or expended by the counties during the 1997-99 biennium shall be distributed as specified in G.S. 143B-273.15(1).

Requested by:   Senator Gulley
POST-RELEASE SUPERVISION AND PAROLE COMMISSION/REPORT ON STAFFING REORGANIZATION AND REDUCTION
Section 16.9. The Post-Release Supervision and Parole Commission shall report to the Joint Legislative Commission on Governmental Operations and the Joint Legislative Corrections Oversight Committee by March 1, 1998, on a staffing reorganization and reduction plan.  The report shall address the impact on Commission staffing of the declining parole workload, the automation of Commission functions, and the anticipated role of the Commission in Post-Release Supervision.   The report shall include a transition plan for implementing staff reductions over the next five years, including a minimum of a ten percent (10%) reduction in the 1998-99 fiscal year over the 1997-98 fiscal year.

Requested by:   Senator Gulley
FEDERAL MATCHING FUNDS
Section 16.10.  Appropriations made for the 1997-99 biennium to the Office of State Construction of the Department of Administration for the planning and construction of new prison beds are to match federal funds available for prison construction.  Appropriations not needed or used to match federal funds may be made available for construction of new prison beds, segregation units, support buildings and systems, and other needed facilities.

Requested by:   Senator Gulley
USE OF FEDERAL PRISON CONSTRUCTION GRANT FUNDS
Section 16.11.  The Department of Correction shall use federal grant funds received from the U.S. Justice Department as part of the Violent Offender Incarceration Program and the Truth-In-Sentencing Incentive Grant Program for the further planning and design and construction of the following State prison facilities, provided that the project meets the criteria of the federal grant program:

Facility	Location	Number of Beds	Custody
Central Prison 	Wake	196	Close
Diagnostic Center
Warren Correctional	Warren 	168	Med/Close
Institution
Improvements to	Wake	208	Med/Close
NCCIW
Scotland Facility	Scotland	712	Close
Alexander Facility	Alexander	520	Close
Metro Facility	Charlotte	520	Close
Area

No more than the sum of seventeen million five hundred thousand dollars ($17,500,000) in federal funds may be allocated to the Central Prison Diagnostic Center Project, the proposed revised Phase I of the Central Prison Master Plan, or the planning and design of the Warren, NCCIW, or Metro projects until federal funds have been allocated to complete the working drawings phase of planning and design for the Alexander and Scotland Close Custody Prison Facilities.
The Department of Correction shall report quarterly to the Joint Legislative Commission on Governmental Operations and the Joint Legislative Corrections Oversight Committee on the allocation of any federal funds received and of anticipated future federal grant funds.

Requested by:   Senators Gulley, Ballance
SUBSTANCE ABUSE FUNDS
Section 16.12. (a)	Of the funds appropriated in the continuation budget to the Department of Correction for the 1997-99 biennium for private prison substance abuse beds, the Department shall allocate for the 1997-98 fiscal year up to the sum of one million two hundred thousand dollars ($1,200,000) to a Reserve for Substance Abuse and Impact Program Aftercare for community corrections programs that emphasize offender aftercare, with emphasis on substance abuse aftercare programs.  These programs shall include the aftercare program for the DART/DWI program at Cherry Hospital, the IMPACT aftercare program, and other aftercare programs for parolees, probationers, and post-release supervisees.  The Department shall allocate at least the sum of five hundred thousand dollars ($500,000) to the DART/DWI aftercare program and at least the sum of sixty thousand dollars ($60,000) for an evaluation of the Department's substance abuse programs.  The evaluation study shall review and update findings from the study of Department of Correction substance abuse programs funded by the General Assembly in Section 19.1 of Chapter 507 of the 1995 Session Laws, expand the study to include aftercare programs funded in this section, and develop proposed performance measures for the Department's substance abuse programs.
(b) Prior to the expenditure of more than the sum of six hundred thousand dollars ($600,000) of the funds allocated to the Reserve for Substance Abuse and Impact Program Aftercare, the Secretary of Correction shall report to the Joint Legislative Corrections Oversight Committee, the Chairs of the Senate and House Appropriations Committees, and the Chairs of the Senate and House Appropriations Subcommittees on Justice and Public Safety on the allocation of funding to date for community corrections programs, the justification for those allocations, and the proposed allocation of the remaining funds in the Reserve.  The Secretary shall also report to the Joint Legislative Corrections Oversight Committee, the Chairs of the Senate and House Appropriations Committees, and the Chairs of the Senate and House Appropriations Subcommittees on Justice and Public Safety by March 15, 1998, on the cost and benefits of those programs funded and the results of the substance abuse evaluation study.  Both of these reports shall also address the Department's progress in contracting for additional private treatment beds.

Requested by:   Senator Gulley

REPORT ON DART/DWI PROGRAM AT CHERRY HOSPITAL
Section 16.13. The Department of Correction shall report by December 1, 1997, and by May 1, 1998, to the Joint Legislative Corrections Oversight Committee, the Chairs of the Senate and House Appropriations Committees, and the Chairs of the Appropriations Subcommittees on Justice and Public Safety on the residential DWI/Substance Abuse Treatment Program for probationers and parolees at the DART facility at Cherry Hospital.  The report shall include monthly statistical summaries of population versus capacity and comparisons of the percentage of offenders entering the program versus those completing the program, for both probationers and parolees.  The report shall also include a budget report showing expenditures by purpose.  If the program is not operating at capacity by the end of each reporting period, the Department of Correction shall explain the reasons for underutilization and its proposed strategies for addressing the problem of underutilization.  Any new initiatives that would revise or expand the treatment model at the facility, along with the accompanying costs, shall also be included in each report.

Requested by:   Senator Gulley
ADDITIONAL PRISON BEDS/INCREASE THE CRIMINAL PENALTY FOR THE SALE OF CERTAIN CONTROLLED SUBSTANCES/INCREASE THE CRIMINAL PENALTY FOR CERTAIN EMBEZZLEMENT OFFENSES/RECLASSIFY OFFENSE OF ACCESSORY AFTER THE FACT/INCREASE PENALTY FOR VOLUNTARY MANSLAUGHTER FROM A CLASS E FELONY TO A CLASS D FELONY/REQUIRE ACTIVE TIME FOR HABITUAL IMPAIRED DRIVING CONVICTIONS/INCREASE THE PENALTY FOR CERTAIN OFFENSES COMMITTED WHILE A PERSON IS INCARCERATED/ADD TO THE LIST OF AGGRAVATING FACTORS THAT CERTAIN PEOPLE WERE SERIOUSLY INJURED AS A RESULT OF THE OFFENSE/INCREASE THE PENALTY FOR THE ESTABLISHMENT OF PYRAMID DISTRIBUTION PLANS/ESTABLISH THE OFFENSES OF TRESPASS ON PINE STRAW PRODUCTION LAND AND LARCENY OF PINE STRAW/INCREASE THE PENALTY FROM A MISDEMEANOR TO A CLASS H FELONY FOR THE OFFENSES OF FALSELY REPORTING THAT A BOMB OR OTHER DESTRUCTIVE DEVICE MAY EXPLODE AND PERPETRATING A HOAX BY USING A FALSE DESTRUCTIVE DEVICE/ADD TO THE LIST OF AGGRAVATING FACTORS THAT THE OFFENSE WAS COMMITTED IN ASSOCIATION WITH A CRIMINAL STREET GANG/FELONY TO CONCEAL MERCHANDISE BY USING A LEAD-LINED OR ALUMINUM-LINED BAG OR OTHER DEVICE THAT WILL PREVENT THE ACTIVATION OF AN ANTISHOPLIFTING CONTROL DEVICE
Section 16.14.  (a)	Of the funds appropriated to the Department of Correction in this act for the 1998-99 fiscal year, the sum of five hundred thousand dollars ($500,000) shall be placed in a reserve to fund additional prison beds and other associated costs to implement the provisions of this section.
	(b)	G.S. 90-95(b) reads as rewritten:
"(b)	Except as provided in subsections (h) and (i) of this section, any person who violates G.S. 90-95(a)(1) with respect to:
(1)	A controlled substance classified in Schedule I or II shall be punished as a Class H felon, except that the sale of a controlled substance classified in Schedule I or II shall be punished as a Class G felon;
(2)	A controlled substance classified in Schedule III, IV, V, or VI shall be punished as a Class I felon, except that the sale of a controlled substance classified in Schedule III, IV, V, or VI shall be punished as a Class H felon. The transfer of less than 5 grams of marijuana for no remuneration shall not constitute a delivery in violation of G.S. 90-95(a)(1)."
(c)	G.S. 14-74 reads as rewritten:
"§ 14-74.  Larceny by servants and other employees.
If any servant or other employee, to whom any money, goods or other chattels, or any of the articles, securities or choses in action mentioned in the following section [G.S. 14-75], by his master shall be delivered safely to be kept to the use of his master, shall withdraw himself from his master and go away with such money, goods or other chattels, or any of the articles, securities or choses in action mentioned as aforesaid, or any part thereof, with intent to steal the same and defraud his master thereof, contrary to the trust and confidence in him reposed by his said master; or if any servant, being in the service of his master, without the assent of his master, shall  embezzle such money, goods or other chattels, or any of the articles,  securities or choses in action mentioned as aforesaid, or any part thereof, or otherwise convert the same to his own use, with like purpose to steal them, or to defraud his master thereof, the servant so offending shall be guilty of a felony: Provided, that nothing contained in this section shall extend to apprentices or servants within the age of 16 years.  If the value of the money, goods, or other chattels, or any of the articles, securities, or choses in action mentioned in G.S. 14-75, is one hundred thousand dollars ($100,000) or more, the person is guilty of a Class C felony.  If the value of the money, goods, or other chattels, or any of the articles, securities, or choses in action mentioned in G.S. 14-75, is less than one hundred thousand dollars ($100,000), the person is guilty of a Class H felony."
(d)	G.S. 14-90 reads as rewritten:
"§ 14-90.  Embezzlement of property received by virtue of office or employment.
If any person exercising a public trust or holding a public office, or any guardian, administrator, executor, trustee, or any receiver, or any other fiduciary, or any officer or agent of a corporation, or any agent, consignee, clerk, bailee or servant, except persons under the age of 16 years, of any person, shall embezzle or fraudulently or knowingly and willfully misapply or convert to his own use, or shall take, make away with or secrete, with intent to embezzle or fraudulently or knowingly and willfully misapply or convert to his own use any money, goods or other chattels, bank note, check or order for the payment of money issued by or drawn on any bank or other corporation, or any treasury warrant, treasury note, bond or obligation for the payment of money issued by the United States or by any state, or any other valuable security whatsoever belonging to any other person or corporation, unincorporated association or organization which shall have come into his possession or under his care, he shall be guilty of a felony.  If the value of the property is one hundred thousand dollars ($100,000) or more, the person is guilty of a Class C felony.  If the value of the property is less than one hundred thousand dollars ($100,000), the person is guilty of a Class H felony."
(e)  G.S. 14-91 reads as rewritten:
"§ 14-91.  Embezzlement of State property by public officers and employees.
If any officer, agent, or employee of the State, or other person having or holding in trust for the same any bonds issued by the State, or any security, or other property and effects of the same, shall embezzle or knowingly and willfully misapply or convert the same to his own use, or otherwise willfully or corruptly abuse such trust, such offender and all persons knowingly and willfully aiding and abetting or otherwise assisting therein shall be guilty of a felony.  If the value of the property is one hundred thousand dollars ($100,000) or more, a violation of this section is a Class C felony.  If the value of the property is less than one hundred thousand dollars ($100,000), a violation of this section is a Class F felony."
(f)  G.S. 14-92 reads as rewritten:
"§ 14-92.  Embezzlement of funds by public officers and trustees.
If an officer, agent, or employee of an entity listed below, or a person having or holding money or property in trust for one of the listed entities, shall embezzle or otherwise willfully and corruptly use or misapply the same for any purpose other than that for which such moneys or property is held, such person shall be guilty of a felony.  If the value of the money or property is one hundred thousand dollars ($100,000) or more, the person is guilty of a Class C felony.  If the value of the money or property is less than one hundred thousand dollars ($100,000), the person is guilty of a Class F felony.  If any clerk of the superior court or any sheriff, treasurer, register of deeds or other public officer of any county, unit or agency of local government, or local board of education shall embezzle or wrongfully convert to his own use, or corruptly use, or shall misapply for any purpose other than that for which the same are held, or shall fail to pay over and deliver to the proper persons entitled to receive the same when lawfully required so to do, any moneys, funds, securities or other property which such officer shall have received by virtue or color of his office in trust for any person or corporation, such officer shall be guilty of a felony.  If the value of the money, funds, securities, or other property is one hundred thousand dollars ($100,000) or more, the person is guilty of a Class C felony.  If the value of the money, funds, securities, or other property is less than one hundred thousand dollars ($100,000), the person is guilty of a Class F felony.  The provisions of this section shall apply to all persons who shall go out of office and fail or neglect to account to or deliver over to their successors in office or other persons lawfully entitled to receive the same all such moneys, funds and securities or property aforesaid.  The following entities are protected by this section: a county, a city or other unit or agency of local government, a local board of education, and a penal, charitable, religious, or educational institution."
(g)  G.S. 14-93 reads as rewritten:
"§ 14-93.  Embezzlement by treasurers of charitable and religious organizations.
If any treasurer or other financial officer of any benevolent or religious institution, society or congregation shall lend any of the moneys coming into his hands to any other person or association without the consent of the institution, association or congregation to whom such moneys belong; or, if he shall fail to account for such moneys when called on, he shall be guilty of a felony.  If the violation of this section involves money with a value of one hundred thousand dollars ($100,000) or more, the person is guilty of a Class C felony.  If the violation of this section involves money with a value of less than one hundred thousand dollars ($100,000) or less, a violation of this section is a Class H felony."
(h)  G.S. 14-94 reads as rewritten:
"§ 14-94.  Embezzlement by officers of railroad companies.
If any president, secretary, treasurer, director, engineer, agent or other officer of any railroad company shall embezzle any moneys, bonds or other valuable funds or securities, with which such president, secretary, treasurer, director, engineer, agent or other officer shall be charged by virtue of his office or agency, or shall in any way, directly or indirectly, apply or appropriate the same for the use or benefit of himself or any other person, state or corporation, other than the company of which he is president, secretary, treasurer, director, engineer, agent or other officer, for every such offense the person so offending shall be guilty of a felony, and on conviction in the superior or criminal court of any county through which the railroad of such company shall pass, shall be punished as a felon.  If the value of the money, bonds, or other valuable funds or securities is one hundred thousand dollars ($100,000) or more, a violation of this section is a Class C felony.  If the value of the money, bonds, or other valuable funds or securities has value of less than one hundred thousand dollars ($100,000), a violation of this section is a Class H felony."
(i)  G.S. 14-97 reads as rewritten:
"§ 14-97.  Appropriation of partnership funds by partner to personal use.
Any person engaged in a partnership business in the State of North Carolina who shall, without the knowledge and consent of his copartner or copartners, take funds belonging to the partnership business and appropriate the same to his own personal use with the fraudulent intent of depriving his copartners of the use thereof, shall be guilty of a felony.  Appropriation of partnership funds with a value of one hundred thousand dollars ($100,000) or more by a partner is a Class C felony.  Appropriation of partnership funds with the value of less than one hundred thousand dollars ($100,000) by a partner is a Class H felony."
(j)  G.S. 14-98 reads as rewritten:
"§ 14-98.  Embezzlement by surviving partner.
If any surviving partner shall willfully and intentionally convert any of the property, money or effects belonging to the partnership to his own use, and refuse to account for the same on settlement, he shall be guilty of a felony.  If the property, money, or effects has a value of one hundred thousand dollars ($100,000) or more, a violation of this section is a Class C felony.  If the property, money, or effects has a value of less than one hundred thousand dollars ($100,000), a violation of this section is a Class H felony."
(k)  G.S. 14-99 reads as rewritten:
"§ 14-99.  Embezzlement of taxes by officers.
If any officer appropriates to his own use the State, county, school, city or town taxes, he shall be guilty of embezzlement, and shall be punished as a felon.  If the value of the taxes is one hundred thousand dollars ($100,000) or more, a violation of this section is a Class C felony.  If the value of the taxes is less than one hundred thousand dollars ($100,000), a violation of this section is a Class F felony."
(l)  G.S. 14-100(a) reads as rewritten:
"(a)	If any person shall knowingly and designedly by means of any kind of false pretense whatsoever, whether the false pretense is of a past or subsisting fact or of a future fulfillment or event, obtain or attempt to obtain from any person within this State any money, goods, property, services, chose in action, or other thing of value with intent to cheat or defraud any person of such money, goods, property, services, chose in action or other thing of value, such person shall be guilty of a felony:  Provided, that if, on the trial of anyone indicted for such crime, it shall be proved that he obtained the property in such manner as to amount to larceny or embezzlement, the jury shall have submitted to them such other felony proved; and no person tried for such felony shall be liable to be afterwards prosecuted for larceny or embezzlement upon the same facts: Provided, further, that it shall be sufficient in any indictment for obtaining or attempting to obtain any such money, goods, property, services, chose in action, or other thing of value by false pretenses to allege that the party accused did the act with intent to defraud, without alleging an intent to defraud any particular person, and without alleging any ownership of the money, goods, property, services, chose in action or other thing of value; and upon the trial of any such indictment, it shall not be necessary to prove either an intent to defraud any particular person or that the person to whom the false pretense was made was the person defrauded, but it shall be sufficient to allege and prove that the party accused made the false pretense charged with an intent to defraud.  If the value of the money, goods, property, services, chose in action, or other thing of value is one hundred thousand dollars ($100,000) or more, a violation of this section is a Class C felony.  If the value of the money, goods, property, services, chose in action, or other thing of value is less than one hundred thousand dollars ($100,000), a violation of this section is a Class H felony."
(m)  G.S. 53-129 reads as rewritten:
"§ 53-129.  Misapplication, embezzlement of funds, etc.
Whoever being an officer, employee, agent or director of a bank, with intent to defraud or injure the bank, or any person or corporation, or to deceive an officer of the bank or an agent appointed to examine the affairs of such bank, embezzles, abstracts, or misapplies any of the money, funds, credit or property of such bank, whether owned by it or held in trust, or who, with such intent, willfully and fraudulently issues or puts forth a certificate of deposit, draws an order or bill of exchange, makes an acceptance, assigns a note, bond, draft, bill of exchange, mortgage, judgment, decree or fictitiously borrows or solicits, obtains or receives money for a bank not in good faith, intended to become the property of such bank; or whoever being an officer, employee, agent, or director of a bank, makes or permits the making of a false statement or certificate, as to a deposit, trust fund or contract, or makes or permits to be made a false entry in a book, report, statement or record of such bank, or conceals or permits to be concealed by any means or manner, the true and correct entries of said bank, or its true and correct transactions, who knowingly loans, or permits to be loaned, the funds or credit of any bank to any insolvent company or corporation, or corporation which has ceased to exist, or which never had any existence, or upon collateral consisting of stocks or bonds of such company or corporation, or who makes or publishes or knowingly permits to be made or published a false report, statement or certificate as to the true financial condition of such bank, shall be guilty of a felony.  If an offense committed under this section involves money, funds, credit or property with a value of one hundred thousand dollars ($100,000) or more, it is a Class C felony.  If an offense committed under this section involves money, funds, credit or property with a value of less than one hundred thousand dollars ($100,000), it is a Class H felony.  Any other offense committed under this section is a Class H felony."
(n)  G.S. 58-2-162 reads as rewritten:
"§ 58-2-162.  Embezzlement by insurance agents, brokers, or administrators.
If any insurance agent, broker, or administrator embezzles or fraudulently converts to his own use, or, with intent to use or embezzle, takes, secretes, or otherwise disposes of, or fraudulently withholds, appropriates, lends, invests, or otherwise uses or applies any money, negotiable instrument, or other consideration received by him in his performance as an agent, broker, or administrator, he shall be guilty of a felony.  If the value of the money, negotiable instrument, or other consideration is one hundred thousand dollars ($100,000) or more, violation of this section is a Class C felony.  If the value of the money, negotiable instrument, or other consideration is less than one hundred thousand dollars ($100,000), violation of this section is a Class H felony."
(o)  G.S. 90-210.70(a) reads as rewritten:
"(a)	Anyone who embezzles or who fraudulently, or knowingly and willfully misapplies, or in any manner converts preneed funeral funds to his own use, or for the use of any partnership, corporation, association, or entity for any purpose other than as authorized by this Article; or anyone who takes, makes away with or secretes, with intent to embezzle or fraudulently or knowingly and willfully misapply or in any manner convert preneed funeral funds for his own use or the use of any other person for any purpose other than as authorized by this Article shall be guilty of a felony.  If the value of the preneed funeral funds is one hundred thousand dollars ($100,000) or more, violation of this section is a Class C felony.  If the value of the preneed funeral funds is less than one hundred thousand dollars ($100,000), violation of this section is a Class H felony.  Each such embezzlement, conversion, or misapplication shall constitute a separate offense and may be prosecuted individually. Upon conviction, all licenses issued under this Article shall be revoked."
(p)  G.S. 14-7 reads as rewritten:
"§ 14-7.  Accessories after the fact; trial and punishment.
If any person shall become an accessory after the fact to any felony, whether the same be a felony at common law or by virtue of any statute made, or to be made, such person shall be guilty of a crime, and may be indicted and convicted together with the principal felon, or after the conviction of the principal felon, or may be indicted and convicted for such crime whether the principal felon shall or shall not have been previously convicted, or shall or shall not be amenable to justice.  Unless a different classification is expressly stated, that person shall be punished for an offense that is two classes lower than the felony the principal felon committed, except that an accessory after the fact to a Class A or Class B1 felony is a Class C felony, an accessory after the fact to a Class B2 felony is a Class D felony, an accessory after the fact to a Class H felony is a Class 1 misdemeanor, and an accessory after the fact to a Class I felony is a Class 2 misdemeanor.  The offense of such person may be inquired of, tried, determined and punished by any court which shall have jurisdiction of the principal felon, in the same manner as if the act, by reason whereof such person shall have become an accessory, had been committed at the same place as the principal felony, although such act may have been committed without the limits of the State; and in case the principal felony shall have been committed within the body of any county, and the act by reason whereof any person shall have become accessory shall have been committed within the body of any other county, the offense of such person guilty of a felony as aforesaid may be inquired of, tried, determined, and punished in either of said counties: Provided, that no person who shall be once duly tried for such felony shall be again indicted or tried for the same offense."
(q)  G.S. 14-18 reads as rewritten:
"§ 14-18.  Punishment for manslaughter.
Voluntary manslaughter shall be punishable as a Class D felony, and involuntary manslaughter shall be punishable as a Class F felony."
(r)  G.S. 20-138.5(b) reads as rewritten:
"(b)	A person convicted of violating this section shall be punished as a Class G felon. Notwithstanding the dispositions authorized in G.S. 15A-1340.17 for Class G felonies, the court shall impose an active term of imprisonment.  The term of imprisonment shall be consistent with the durations specified for that class of offense and prior record level.  Sentences imposed under this subsection shall run consecutively with and shall commence at the expiration of any sentence being served."
(s)  G.S. 14-255 reads as rewritten:
"§ 14-255.  Escape of working prisoners from custody.
If any prisoner removed from the local confinement facility or satellite jail/work release unit of a county pursuant to G.S. 162-58 shall escape from the person having him in custody or the person supervising him, he shall be guilty of a Class 1 misdemeanor."
(t)  G.S. 14-256 reads as rewritten:
"§ 14-256.  Prison breach and escape from county or municipal confinement facilities or officers.
If any person shall break any prison, jail or lockup maintained by any county or municipality in North Carolina, being lawfully confined therein, or shall escape from the lawful custody of any superintendent, guard or officer of such prison, jail or lockup, he shall be guilty of a Class 1 misdemeanor, except that the person is guilty of a Class H felony if:
(1)	He has been convicted of a felony and has been committed to the facility pending transfer to the State prison system; or
(2)	He is serving a sentence imposed upon conviction of a felony."
(u)  G.S. 148-45 reads as rewritten:
"§ 148-45.  Escaping or attempting escape from State prison system; failure of conditionally and temporarily released prisoners and certain youthful offenders to return to custody of Department of Correction.
(a)	Any person in the custody of the Department of Correction in any of the classifications hereinafter set forth who shall escape from the State prison system, shall for the first such offense, except as provided in subsection (g) of this section, be guilty of a Class 1 misdemeanor:
(1)	A prisoner serving a sentence imposed upon conviction of a misdemeanor;
(2)	A person who has been charged with a misdemeanor and who has been committed to the custody of the Department of Correction under the provisions of G.S. 162-39;
(3)	Repealed by Session Laws 1985, c. 226, s. 4.
(4)	A person who shall have been convicted of a misdemeanor and who shall have been committed to the Department of Correction for presentence diagnostic study under the provisions of G.S. 15A-1332(c).
(b)	Any person in the custody of the Department of Correction, in any of the classifications hereinafter set forth, who shall escape from the State prison system, shall, except as provided in subsection (g) of this section, be punished as a Class H felon.
(1)	A prisoner serving a sentence imposed upon conviction of a felony;
(2)	A person who has been charged with a felony and who has been committed to the custody of the Department of Correction under the provisions of G.S. 162-39;
(3)	Repealed by Session Laws 1985, c. 226, s. 5.
(4)	A person who shall have been convicted of a felony and who shall have been committed to the Department of Correction for presentence diagnostic study under the provisions of G.S. 15A-1332(c); or
(5)	Any person previously convicted of escaping or attempting to escape from the State prison system.
(c)	Repealed by Session Laws 1979, c. 760, s. 5.
(d)	Any person who aids or assists other persons to escape or attempt to escape from the State prison system shall be guilty of a Class 1 misdemeanor.
(e)	Repealed by Session Laws 1983, c. 465, s. 5.
(f)	Any person convicted of an escape or attempt to escape classified as a felony by this section shall be immediately classified and treated as a convicted felon even if such person has time remaining to be served in the State prison system on a sentence or sentences imposed upon conviction of a misdemeanor or misdemeanors.
(g)	(1)	Any person convicted and in the custody of the North Carolina Department of Correction and ordered or otherwise assigned to work under the work-release program, G.S. 148-33.1, or any convicted person in the custody of the North Carolina Department of Correction and temporarily allowed to leave a place of confinement by the Secretary of Correction or his designee or other authority of law, who shall fail to return to the custody of the North Carolina Department of Correction, shall be guilty of the crime of escape and subject to the applicable provisions of this section and shall be deemed an escapee.  For the purpose of this subsection, escape is defined to include, but is not restricted to, willful failure to return to an appointed place and at an appointed time as ordered.
(2)	If a person, who would otherwise be guilty of a first violation of G.S. 148-45(g)(1), voluntarily returns to his place of confinement within 24 hours of the time at which he was ordered to return, such person shall not be charged with an escape as provided in this section but shall be subject to such administrative action as may be deemed appropriate for an escapee by the Department of Correction; said escapee shall not be allowed to be placed on work release for a four-month period or for the balance of his term if less than four months; provided, however, that if such person commits a subsequent violation of this section then such person shall be charged with that offense and, if convicted, punished under the provisions of this section."
(v)  G.S. 90-95(e) reads as rewritten:
"(e)	The prescribed punishment and degree of any offense under this Article shall be subject to the following conditions, but the punishment for an offense may be increased only by the maximum authorized under any one of the applicable conditions:
(1),	(2) Repealed by Session Laws 1979, c. 760, s. 5.
(3)	If any person commits a Class 1 misdemeanor under this Article and if he has previously been convicted for one or more offenses under any law of North Carolina or any law of the United States or any other state, which offenses are punishable under any provision of this Article, he shall be punished as a Class I felon. The prior conviction used to raise the current offense to a Class I felony shall not be used to calculate the prior record level;
(4)	If any person commits a Class 2 misdemeanor, and if he has previously been convicted for one or more offenses under any law of North Carolina or any law of the United States or any other state, which offenses are punishable under any provision of this Article, he shall be guilty of a Class 1 misdemeanor. The prior conviction used to raise the current offense to a Class 1 misdemeanor shall not be used to calculate the prior conviction level;
(5)	Any person 18 years of age or over who violates G.S. 90-95(a)(1) by selling or delivering a controlled substance to a person under 16 years of age or a pregnant female shall be punished as a Class D felon. Mistake of age is not a defense to a prosecution under this section. It shall not be a defense that the defendant did not know that the recipient was pregnant;
(6)	For the purpose of increasing punishment under G.S. 90-95(e)(3) and (e)(4), previous convictions for offenses shall be counted by the number of separate trials at which final convictions were obtained and not by the number of charges at a single trial;
(7)	If any person commits an offense under this Article for which the prescribed punishment requires that any sentence of imprisonment be suspended, and if he has previously been convicted for one or more offenses under any law of North Carolina or any law of the United States or any other state, which offenses are punishable under any provision of this Article, he shall be guilty of a Class 2 misdemeanor;
(8)	Any person 21 years of age or older who commits an offense under G.S. 90-95(a)(1) on property used for an elementary or secondary school or within 300 feet of the boundary of real property used for an elementary or secondary school shall be punished as a Class E felon. For purposes of this subdivision, the transfer of less than five grams of marijuana for no remuneration shall not constitute a delivery in violation of G.S. 90-95(a)(1).
(9)	Any person who violates G.S. 90-95(a)(3) on the premises of a penal institution or local confinement facility shall be guilty of a Class H felony."
(w)  G.S. 148-46.1 reads as rewritten:
"§ 148-46.1.  Inflicting or assisting in infliction of self injury to prisoner resulting in incapacity to perform assigned duties.
Any person serving a sentence or sentences within the State prison system who, during the term of such imprisonment, willfully and intentionally inflicts upon himself any injury resulting in a permanent or temporary incapacity to perform work or duties assigned to him by the State Department of Correction, or any prisoner who aids or abets any other prisoner in the commission of such offense, shall be punished as a Class H felon."
(x)  G.S. 15A-1340.16(d) reads as rewritten:
"(d)	Aggravating Factors. – The following are aggravating factors:
(1)	The defendant induced others to participate in the commission of the offense or occupied a position of leadership or dominance of other participants.
(2)	The defendant joined with more than one other person in committing the offense and was not charged with committing a conspiracy.
(3)	The offense was committed for the purpose of avoiding or preventing a lawful arrest or effecting an escape from custody.
(4)	The defendant was hired or paid to commit the offense.
(5)	The offense was committed to disrupt or hinder the lawful exercise of any governmental function or the enforcement of laws.
(6)	The offense was committed against or proximately caused serious injury to a present or former law enforcement officer, employee of the Department of Correction, jailer, fireman, emergency medical technician, ambulance attendant, justice or judge, clerk or assistant or deputy clerk of court, magistrate, prosecutor, juror, or witness against the defendant, while engaged in the performance of that person's official duties or because of the exercise of that person's official duties.
(7)	The offense was especially heinous, atrocious, or cruel.
(8)	The defendant knowingly created a great risk of death to more than one person by means of a weapon or device which would normally be hazardous to the lives of more than one person.
(9)	The defendant held public office at the time of the offense and the offense related to the conduct of the office.
(10)	The defendant was armed with or used a deadly weapon at the time of the crime.
(11)	The victim was very young, or very old, or mentally or physically infirm, or handicapped.
(12)	The defendant committed the offense while on pretrial release on another charge.
(13)	The defendant involved a person under the age of 16 in the commission of the crime.
(14)	The offense involved an attempted or actual taking of property of great monetary value or damage causing great monetary loss, or the offense involved an unusually large quantity of contraband.
(15)	The defendant took advantage of a position of trust or confidence to commit the offense.
(16)	The offense involved the sale or delivery of a controlled substance to a minor.
(17)	The offense for which the defendant stands convicted was committed against a victim because of the victim's race, color, religion, nationality, or country of origin.
(18)	The defendant does not support the defendant's family.
(18a)	The defendant has previously been adjudicated delinquent for an offense that would be a Class A, B1, B2, C, D, or E felony if committed by an adult.
(19)	The serious injury inflicted upon the victim is permanent and debilitating.
(20)	Any other aggravating factor reasonably related to the purposes of sentencing.
Evidence necessary to prove an element of the offense shall not be used to prove any factor in aggravation, and the same item of evidence shall not be used to prove more than one factor in aggravation. Evidence necessary to establish that an enhanced sentence is required under G.S. 14-2.2 may not be used to prove any factor in aggravation.
The judge shall not consider as an aggravating factor the fact that the defendant exercised the right to a jury trial."
(y)  G.S. 14-291.2 reads as rewritten:
"§ 14-291.2.  Pyramid and chain schemes prohibited.
(a)	No person shall establish, operate, participate in, or otherwise promote any pyramid distribution plan, program, device or scheme whereby a participant pays a valuable consideration for the opportunity or chance to receive a fee or compensation upon the introduction of other participants into the program, whether or not such opportunity or chance is received in conjunction with the purchase of merchandise.  A person who establishes or operates a pyramid distribution plan is guilty of a Class H felony.  A person who participates in or otherwise promotes a pyramid distribution plan is deemed to participate in a lottery and is guilty of a Class 2 misdemeanor.
(b)	'Pyramid distribution plan' means any program utilizing a pyramid or chain process by which a participant gives a valuable consideration for the opportunity to receive compensation or things of value in return for inducing other persons to become participants in the program; and
'Compensation' does not mean payment based on sales of goods or services to persons who are not participants in the scheme, and who are not purchasing in order to participate in the scheme.
(c)	Any judge of the superior court shall have jurisdiction, upon petition by the Attorney General of North Carolina or district attorney of the superior court, to enjoin, as an unfair or deceptive trade practice, the continuation of the scheme described in subsection (a); in such proceeding the court may assess civil penalties and attorneys' fees to the Attorney General or the District Attorney pursuant to G.S. 75-15.2 and 75-16.1; and the court may appoint a receiver to secure and distribute assets obtained by any defendant through participation in any such scheme.
(d)	Any contract hereafter created for which a part of the consideration consisted of the opportunity or chance to participate in a program described in subsection (a) is hereby declared to be contrary to public policy and therefore void and unenforceable."
(z)  The title of  Article 22A of Chapter 14 of the General Statutes reads as rewritten:
"ARTICLE 22A.
Trespassing upon 'Posted' Property to Hunt,
Fish, Trap, or Remove Pine Needles/Straw."
(aa)  G.S. 14-159.6 reads as rewritten:
"§ 14-159.6.  Trespass for purposes of hunting, etc., without written consent a misdemeanor.
(a)	Any person who willfully goes on the land, waters, ponds, or a legally established waterfowl blind of another upon which notices, signs or posters prohibiting hunting, fishing or trapping have been placed in accordance with the provisions of G.S. 14-159.7, or upon which 'posted' notices have been placed in accordance with the provisions of G.S. 14-159.7, to hunt, fish or trap without the written consent of the owner or his agent shall be guilty of a Class 2 misdemeanor.  Provided, further, that no arrests under authority of this subsection shall be made without the consent of the owner or owners of said land, or their duly authorized agents in the following counties: Halifax and Warren.
(b)	Any person who willfully goes on the land of another upon which notices, signs, or posters prohibiting raking or removing pine needles or pine straw have been placed in accordance with the provisions of G.S. 14-159.7, or upon which 'posted' notices have been placed in accordance with the provisions of G.S. 14-159.7, to rake or remove pine needles or pine straw without the written consent of the owner or his agent shall be guilty of a Class 2 misdemeanor."
(bb)  Article 16 of Chapter 14 of the General Statutes is amended by adding a new section to read:
"§ 14-79.1.  Larceny of pine needles or pine straw.
If any person shall take and carry away, or shall aid in taking or carrying away, any pine needles or pine straw being produced on the land of another person upon which land notices, signs, or posters prohibiting the raking or removal of pine needles or pine straw have been placed in accordance with the provisions of G.S. 14-159.7, or upon which posted notices have been placed in accordance with the provisions of G.S. 14-159.7, with the intent to steal the pine needles or pine straw, that person shall be guilty of a Class H felony."
(cc)  Chapter 601 of the 1995 Session Laws is repealed.
	(dd)  G.S. 14-69.1 reads as rewritten:  
"§ 14-69.1.  Making a false report concerning destructive device.
(a)	If any person shall, by any means of communication to any person or group of persons, make a report, knowing or having reason to know the same to be false, that there is located in any building, house or other structure whatsoever or any vehicle, aircraft, vessel or boat any device designed to destroy or damage the building, house or structure or vehicle, aircraft, vessel or boat by explosion, blasting or burning, he shall be guilty of a Class H felony.
	."
(ee)  G.S. 14-69.2 reads as rewritten:  
"§ 14-69.2.  Perpetrating hoax by use of false bomb or other device.
(a)	If any person, with intent to perpetrate a hoax, shall secrete, place or display any device, machine, instrument or artifact, so as to cause any person reasonably to believe the same to be a bomb or other device capable of causing injury to persons or property, he shall be guilty of a Class H felony.
	."
(ff)  G.S. 15A-1340.16(d) reads as rewritten:
"(d)	Aggravating Factors. – The following are aggravating factors:
(1)	The defendant induced others to participate in the commission of the offense or occupied a position of leadership or dominance of other participants.
(2)	The defendant joined with more than one other person in committing the offense and was not charged with committing a conspiracy.
(2a)	The offense was committed for the benefit of, or at the direction of, any criminal street gang, with the specific intent to promote, further, or assist in any criminal conduct by gang members, and the defendant was not charged with committing a conspiracy.  A 'criminal street gang' means any ongoing organization, association, or group of three or more persons, whether formal or informal, having as one of its primary activities the commission of felony or violent misdemeanor offenses, or delinquent acts that would be felonies or violent misdemeanors if committed by an adult, and having a common name or common identifying sign, colors, or symbols.
(3)	The offense was committed for the purpose of avoiding or preventing a lawful arrest or effecting an escape from custody.
(4)	The defendant was hired or paid to commit the offense.
(5)	The offense was committed to disrupt or hinder the lawful exercise of any governmental function or the enforcement of laws.
(6)	The offense was committed against a present or former law enforcement officer, employee of the Department of Correction, jailer, fireman, emergency medical technician, ambulance attendant, justice or judge, clerk or assistant or deputy clerk of court, magistrate, prosecutor, juror, or witness against the defendant, while engaged in the performance of that person's official duties or because of the exercise of that person's official duties.
(7)	The offense was especially heinous, atrocious, or cruel.
(8)	The defendant knowingly created a great risk of death to more than one person by means of a weapon or device which would normally be hazardous to the lives of more than one person.
(9)	The defendant held public office at the time of the offense and the offense related to the conduct of the office.
(10)	The defendant was armed with or used a deadly weapon at the time of the crime.
(11)	The victim was very young, or very old, or mentally or physically infirm, or handicapped.
(12)	The defendant committed the offense while on pretrial release on another charge.
(13)	The defendant involved a person under the age of 16 in the commission of the crime.
(14)	The offense involved an attempted or actual taking of property of great monetary value or damage causing great monetary loss, or the offense involved an unusually large quantity of contraband.
(15)	The defendant took advantage of a position of trust or confidence to commit the offense.
(16)	The offense involved the sale or delivery of a controlled substance to a minor.
(17)	The offense for which the defendant stands convicted was committed against a victim because of the victim's race, color, religion, nationality, or country of origin.
(18)	The defendant does not support the defendant's family.
(18a)	The defendant has previously been adjudicated delinquent for an offense that would be a Class A, B1, B2, C, D, or E felony if committed by an adult.
(19)	The serious injury inflicted upon the victim is permanent and debilitating.
(20)	Any other aggravating factor reasonably related to the purposes of sentencing.
Evidence necessary to prove an element of the offense shall not be used to prove any factor in aggravation, and the same item of evidence shall not be used to prove more than one factor in aggravation. Evidence necessary to establish that an enhanced sentence is required under G.S. 14-2.2 may not be used to prove any factor in aggravation.
The judge shall not consider as an aggravating factor the fact that the defendant exercised the right to a jury trial."
(gg)  G.S. 14-72.1 is amended by adding a new subsection to read: 
"( d1)	Notwithstanding subsection (e) of this section, any person who violates subsection (a) of this section by using a lead-lined  or aluminum-lined bag, a lead-lined or aluminum-lined article of clothing, or a similar device to prevent the activation of any antishoplifting or inventory control device is guilty of a Class H felony."
(hh)  This section becomes effective December 1, 1997, and applies to offenses committed on or after that date.

PART XVII.  DEPARTMENT OF JUSTICE

Requested by:   Senator Gulley
DEPARTMENT OF JUSTICE SALARY FUNDS
Section 17.  Of the funds appropriated in this act to the Department of Justice, the sum of ninety-three thousand four hundred fifty-three dollars ($93,453) for the 1997-98 fiscal year and the sum of ninety-three thousand four hundred fifty-three dollars ($93,453) for the 1998-99 fiscal year may be used for one-time salary adjustments for attorneys who are eligible for the adjustments based upon outstanding job performance for the preceding year.

Requested by:   Senator Gulley
SBI FUNDS/SPENDING PRIORITIES
Section 17.1.  Of the funds appropriated in this act to the Department of Justice, State Bureau of Investigation, for the 1997-99 biennium for overtime payments, the first priority for use of the funds by the Department shall be:
(1)	To make overtime payments to SBI agents in the Field Investigations Division; and
(2)	To make overtime payments to supervisory personnel receiving overtime payments as of June 30, 1997, up to a maximum of five thousand two hundred dollars ($5,200) annually per individual.

Requested by:   Senator Gulley
SBI USE OF COURT-ORDERED REIMBURSEMENT FUNDS
Section 17.2.  The State Bureau of Investigation (SBI) may use funds available from court-ordered reimbursement in undercover drug operations.

Requested by:   Senator Gulley
PRIVATE PROTECTIVE SERVICES AND ALARM SYSTEMS LICENSING BOARDS PAY FOR USE OF STATE FACILITIES AND SERVICES
Section 17.3.  The Private Protective Services and Alarm Systems Licensing Boards shall pay the appropriate State agency for the use of physical facilities and services provided to those boards by the State.

Requested by:   Senator Gulley
LIMITS ON COMPUTER SYSTEM UPGRADE
Section 17.4.  Any proposed increase in mainframe computer capacity or system upgrade for the Judicial Department, the Department of Correction, the Department of Justice, or the Department of Crime Control and Public Safety, to be funded from the Continuation Budget, shall be reported to the Joint Legislative Commission on Governmental Operations, to the Senate and House of Representatives Chairs of the Appropriations Committees, and to the Senate and House Chairs of the Appropriations Subcommittees on Justice and Public Safety before the department enters into any contractual agreement.  This report is to be made jointly by the Information Resource Management Commission, the Office of State Budget and Management, and the requesting department.

Requested by:   Senator Gulley
CERTAIN LITIGATION EXPENSES TO BE PAID BY CLIENTS
Section 17.5.  Client departments, agencies, and boards shall reimburse the Department of Justice for reasonable court fees, attorney travel and subsistence costs, and other costs directly related to litigation in which the Department of Justice is representing the department, agency, or board.

Requested by:   Senator Gulley
REIMBURSEMENT FOR UNC BOARD OF GOVERNORS LEGAL REPRESENTATION
Section 17.6.  The Department of Justice shall be reimbursed by the Board of Governors of The University of North Carolina for two Attorney III positions to provide legal representation to The University of North Carolina System.

Requested by:   Senator Gulley
USE OF SEIZED AND FORFEITED PROPERTY TRANSFERRED TO STATE LAW ENFORCEMENT AGENCIES BY THE FEDERAL GOVERNMENT
Section 17.7. (a)	Assets transferred to the Department of Justice during the 1997-99 biennium pursuant to 19 U.S.C. § 1616a shall be credited to the budget of the Department and shall result in an increase of law enforcement resources for the Department.  Assets transferred to the Department of Crime Control and Public Safety during the 1997-99 biennium pursuant to 19 U.S.C. § 1616a shall be credited to the budget of the Department and shall result in an increase of law enforcement resources for the Department.  The Departments of Justice and Crime Control and Public Safety shall report to the Joint Legislative Commission on Governmental Operations upon receipt of the assets and, before using the assets, shall report on the intended use of the assets and the departmental priorities on which the assets may be expended.
	The General Assembly finds that the use of assets transferred pursuant to 19 U.S.C. § 1616a for new personnel positions, new projects, the acquisition of real property, repair of buildings where the repair includes structural change, and construction of or additions to buildings may result in additional expenses for the State in future fiscal periods.  Therefore, the Department of Justice and the Department of Crime Control and Public Safety are prohibited from using these assets for such purposes without the prior approval of the General Assembly, except during the 1997-98 fiscal year, the Department of Justice may:
(1)	Use an amount not to exceed the sum of twenty-five thousand dollars ($25,000) of the funds to extend the lease of space in the Town of Salemburg for SBI training; and
(2)	Use an amount not to exceed fifty thousand dollars ($50,000) of the funds to lease space for its technical operations unit, storage of its equipment and vehicles, and command post vehicle.
(b)	Nothing in this section prohibits North Carolina law enforcement agencies from receiving funds from the United States Department of Justice pursuant to 19 U.S.C. § 1616a.

Requested by:   Senator Gulley
DEPARTMENT OF JUSTICE RECORD CHECKS FUNDS AND REPORTS
Section 17.8. (a) The Department of Justice may use, for each year of the 1997-99 biennium, the sum of up to two hundred ten thousand five hundred sixty-three dollars ($210,563) to add up to five positions in the State Bureau of Investigation to facilitate record checks for concealed weapons permits.  The Office of State Budget and Management may adjust the allotment of appropriations to the Department of Justice until receipts are realized.  The Department of Justice may fund one and one-half positions per 10,000 record checks for concealed weapons permits.  If the total number of annual criminal record checks performed by the State Bureau of Investigation falls below the level of 5,000 checks, the number of positions shall be reduced to one. 
(b)	The Department of Justice shall report by January 15 each year to the Joint Legislative Commission on Governmental Operations, the Chairs of the Senate and House Appropriations Committees, and the Chairs of the Senate and House Appropriations Subcommittees on Justice and Public Safety on the receipts, costs for, and number of criminal record checks performed in connection with applications for concealed weapons permits.  The report by the Department of Justice shall also include information on the number of applications received and approved for firearms safety courses.

Requested by:   Senator Gulley
SALARY EQUITY FOR SBI LAW ENFORCEMENT
Section 17.9. Of the funds appropriated in this act to the Department of Justice for the State Bureau of Investigation, the sum of eight hundred eight thousand six hundred forty-five dollars ($808,645) for the 1997-98 fiscal year and the sum of eight hundred eight thousand six hundred forty-five dollars ($808,645) for the 1998-99 fiscal year shall be used to adjust the salaries of law enforcement positions in the State Bureau of Investigation.  Within each salary grade, each position shall receive at least a three percent (3%) increase and no more than a ten percent (10%) increase in salary.  Salary increases shall be based upon criteria determined by the Department and established for the purpose of achieving equity among personnel within each position classification or level. 

Requested by:   Senator Gulley
EXTEND EXPIRATION DATE OF THE PROVISION AUTHORIZING ADDITIONAL FICTITIOUS LICENSES AND REGISTRATION PLATES ON PUBLICLY OWNED MOTOR VEHICLES
Section 17.10.  (a) Subsection (c) of Section 23 of Chapter 18 of the Session Laws of the 1996 Second Extra Session reads as rewritten:
"(c)	Subsection (a) of this section expires June 30, 1998."
(b) This section becomes effective June 29, 1997. 

PART XVIII.  DEPARTMENT OF CRIME CONTROL AND PUBLIC SAFETY

Requested by:   Senator Gulley
LEGISLATIVE REVIEW OF DRUG LAW ENFORCEMENT AND OTHER GRANTS
Section 18.   (a)	Section 1303(4) of the Omnibus Crime Control and Safe Streets Act of 1968 provides that the State application for Drug Law Enforcement Grants is subject to review by the State legislature or its designated body. Therefore, the Governor's Crime Commission of the Department of Crime Control and Public Safety shall report on the State application for grants under the State and Local Law Enforcement Assistance Act of 1986, Part M of the Omnibus Crime Control and Safe Streets Act of 1968 as enacted by Subtitle K of P.L. 99-570, the Anti-Drug Abuse Act of 1986, to the Senate and House Appropriations Subcommittees on Justice and Public Safety when the General Assembly is in session.  When the General Assembly is not in session, the Governor's Crime Commission shall report on the State application to the Joint Legislative Commission on Governmental Operations.
(b)	Unless a State statute provides a different forum for review, when a federal law or regulation provides that an individual State application for a grant shall be reviewed by the State legislature or its designated body and at the time of the review the General Assembly is not in session, that application shall be reviewed by the Joint Legislative Commission on Governmental Operations.

Requested by:   Senator Gulley
VICTIMS ASSISTANCE NETWORK FUNDS
Section 18.1. Of the funds appropriated in this act to the Department of Crime Control and Public Safety, the sum of one hundred fifty thousand dollars ($150,000) for the 1997-98 fiscal year and the sum of one hundred fifty thousand dollars ($150,000) for the 1998-99 fiscal year shall be used to support the Victims Assistance Network.  These funds shall be used by the Victims Assistance Network to perform the following functions under the direction of and as required by the Department of Crime Control and Public Safety:
(1)	Conduct surveys and gather data on crime victims and their needs;
(2)	Act as a clearinghouse for crime victims services;
(3)	Provide an automated crime victims bulletin board for subscribers;
(4)	Coordinate and support the activities of other crime victims advocacy groups;
(5)	Identify training needs of crime victims services providers and criminal justice personnel and coordinate training efforts for those persons; and
(6)	Provide other services as identified by the Governor's Crime Commission or the Department of Crime Control and Public Safety.

Requested by:   Senator Gulley
REPORT ON COMMUNITY SERVICE WORKERS
Section 18.2.  The Department of Crime Control and Public Safety shall report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division by March 1 and September 1 of each fiscal year of the 1997-99 biennium on the number of community service workers who were available during each month of the time period preceding that report to perform repairs and maintenance of the parks and when and where they were available.

Requested by:   Senator Gulley
REPORT ON CRIME VICTIMS COMPENSATION FUND
Section 18.3.  The Department of Crime Control and Public Safety shall report to the Chairs of the Senate and House Appropriations Committees, the Chairs of the Senate and House Appropriations Subcommittees on Justice and Public Safety, and the Fiscal Research Division of the General Assembly by December 31 each year on the North Carolina Crime Victims Compensation Fund.  The report shall include a statement regarding:
(1)	The administrative expenses of the Fund for the prior fiscal year and the current fiscal year on the date of the report;
(2)	The current unencumbered balance of the Fund;
(3)	The amount of funds carried over from the prior fiscal year;
(4)	The amount of funds received in the prior fiscal year from the Department of Correction and from the compensation fund established pursuant to the Victims Crime Act of 1984, 42 U.S.C. § 10601, et seq.;
(5)	The amount of funds expected to be received in the current fiscal year, as well as the amount actually received in the current fiscal year on the date of the report, from the Department of Correction and from the compensation fund established pursuant to the Victims Crime Act of 1984, 42 U.S.C. § 10601, et seq.; and
(6)	The total amount of funds paid to victims in the prior fiscal year and in the current fiscal year on the date of the report.

PART XIX. GENERAL ASSEMBLY

Requested by:   Senators Plyler, Perdue, Odom
ANALYSIS OF STATE BUDGET DURING THE INTERIM
Section 19. (a) The President Pro Tempore of the Senate shall authorize the standing Appropriations Committees and standing Appropriations Subcommittees of the Senate and the Speaker of the House of Representatives shall authorize the standing Appropriations Committees and standing Appropriations Subcommittees of the House of Representatives to meet separately or jointly during the interim between the Regular 1997 and 1998 Sessions of the General Assembly to review matters related to the State budget, the organization of State government, and any other matter as they deem appropriate.  The review shall include, but not be limited to, an analysis of the budget of each agency to determine:
(1)	The cost savings that could be realized from improvements in administrative structure, practices, and procedures in State agencies;
(2)	Ways to increase efficiency in budgeting and use of resources; and
(3)	Instances in which functions of agencies are duplicative, overlapping, obsolete, incomplete in scope or coverage, or fail to accomplish legislative objectives, and should be abolished, transferred, or modified to accomplish cost savings.
(b) The President Pro Tempore of the Senate shall appoint an oversight committee comprised of the Senate Appropriations Committee Chairs and one member of each Senate Appropriations Subcommittee and the Speaker of the House of Representatives shall appoint an oversight committee comprised of the House Appropriations Committee Chairs and one member of each House Appropriations Subcommittee to meet separately or jointly to oversee the work of the Appropriations Committees and Subcommittees during the interim.

Requested by:   Senator Perdue
HEALTH CARE OVERSIGHT COMMITTEE
Section 19.1. (a) Of the funds appropriated in this act to the General Assembly, the sum of fifty thousand dollars ($50,000) for the 1997-98 fiscal year and the sum of fifty thousand dollars ($50,000) for the 1998-99 fiscal year shall be allocated by the Legislative Services Commission for the Joint Legislative Health Care Oversight Committee established under subsection (b) of this section.
(b)	Chapter 120 of the General Statutes is amended by adding the following new Article to read:
"ARTICLE 12K.
"Joint Legislative Health Care Oversight Committee.
"§ 120-70.96.  Creation and membership of Joint Legislative Health Care Oversight Committee.
There is established the Joint Legislative Health Care Oversight Committee.  The Committee consists of 14 members as follows:
(1)	Seven members of the Senate appointed by the President Pro Tempore of the Senate, at least three of whom are members of the minority party; and
(2)	Seven members of the House of Representatives appointed by the Speaker of the House of Representatives, at least three of whom are members of the minority party.
Terms on the Committee are for two years and begin on the convening of the General Assembly in each odd-numbered year, except the terms of the initial members, which begin on appointment.  Members may complete a term of service on the Committee even if they do not seek reelection or are not reelected to the General Assembly, but resignation or removal from service in the General Assembly constitutes resignation or removal from service on the Committee.
A member continues to serve until the member's successor is appointed.  A vacancy shall be filled within 30 days by the officer who made the original appointment.
"§ 120-70.97.  Purpose and powers of Committee.
(a)	The Joint Legislative Health Care Oversight Committee shall review, on a continuing basis, the provision of health care and health care coverage to the citizens of this State, in order to make ongoing recommendations to the General Assembly on ways to improve health care for North Carolinians.  To this end, the Committee shall study the delivery, availability, and cost of health care in North Carolina.  The Committee may also study other matters related to health care and health care coverage in this State.
(b)	The Committee may make interim reports to the General Assembly on matters for which it may report to a regular session of the General Assembly.  A report to the General Assembly may contain any legislation needed to implement a recommendation of the Committee.
"§ 120-70.98.  Organization of Committee.
(a)	The President Pro Tempore of the Senate and the Speaker of the House of Representatives shall each designate a cochair of the Joint Legislative Health Care Oversight Committee. The Committee shall meet at least once a quarter and may meet at other times upon the joint call of the cochairs.
(b)	A quorum of the Committee is eight members. No action may be taken except by a majority vote at a meeting at which a quorum is present. While in the discharge of its official duties, the Committee has the powers of a joint committee under G.S. 120-19 and G.S. 120-19.1 through G.S. 120-19.4.
(c)	Members of the Committee receive subsistence and travel expenses as provided in G.S. 120-3.1. The Committee may contract for consultants or hire employees in accordance with G.S. 120-32.02. The Legislative Services Commission, through the Legislative Services Officer, shall assign professional staff to assist the Committee in its work. Upon the direction of the Legislative Services Commission, the Supervisors of Clerks of the Senate and of the House of Representatives shall assign clerical staff to the Committee. The expenses for clerical employees shall be borne by the Committee."

PART XX.  OFFICE OF THE GOVERNOR

Requested by:   Senator Martin of Pitt
HOME PROGRAM MATCHING FUNDS
Section 20.  (a)	Funds appropriated in this act to the Housing Finance Agency for the federal HOME Program shall be used to match federal funds appropriated for the HOME Program.  In allocating State funds appropriated to match federal HOME Program funds, the Agency shall give priority to HOME Program projects, as follows:
(1)	First priority to projects that are located in counties designated as severely distressed counties under G.S. 105-130.40(c) or G.S. 105-151.17(c); and
(2)	Second priority to projects that benefit persons and families whose incomes are fifty percent (50%) or less of the median family income for the local area, with adjustments for family size, according to the latest figures available from the U.S. Department of Housing and Urban Development.
The Housing Finance Agency shall report to the Joint Legislative Commission on Governmental Operations by April 1 of each year concerning the status of the HOME Program and shall include in the report information on priorities met, types of activities funded, and types of activities not funded.
(b)	If the United States Congress changes the HOME Program such that matching funds are not required for a given program year, then the Agency shall not spend the matching funds appropriated under this act for that program year.
(c)	Funds appropriated in this act to match federal HOME Program funds shall not revert to the General Fund on June 30, 1998, or on June 30, 1999.

Requested by:   Senators Odom, Perdue, Plyler, Conder, Jordan
FIRE PROTECTION GRANT FUNDS
Section 20.1. (a)	Chapter 58 of the General Statutes is amended by adding a new Article to read:
"ARTICLE 85A.
"State Fire Protection Grant Fund.
"§ 58-85A-1.  Creation of Fund; allocation to local fire districts and political subdivisions of the State.
(a)	There is created in the Office of State Budget and Management the State Fire Protection Grant Fund.  The purpose of the Fund is to compensate local fire districts and political subdivisions of the State for providing local fire protection to State-owned buildings and their contents.
(b)	The Office of State Budget and Management shall develop and implement an equitable and uniform statewide method for distributing any funds to the State's local fire districts and political subdivisions.
Upon the request of the Director of the Budget, the Department of Insurance shall provide the Office of State Budget and Management all information necessary to develop and implement the formula.
(c)	It is the intent of the General Assembly to appropriate annually to the State Fire Protection Grant Fund at least three million eighty thousand dollars ($3,080,000) from the General Fund, one hundred fifty thousand dollars ($150,000) from the Highway Fund, and nine hundred seventy thousand dollars ($970,000) from University of North Carolina receipts to the State Fire Protection Fund.  Funds received from the General Fund shall be allocated only for providing local fire protection for State-owned property supported by the General Fund; funds received from the Highway Fund shall be allocated only for providing local fire protection for State-owned property supported by the Highway Fund; and funds received from University of North Carolina receipts shall be allocated only for providing local fire protection for State-owned property supported by University of North Carolina receipts."
(b) G.S. 143-3.7 is repealed.
(c) Of the funds appropriated from the General Fund to the Office of State Budget and Management, the sum of three million eighty thousand dollars ($3,080,000) for the 1997-98 fiscal year and the sum of three million eighty thousand dollars ($3,080,000) for the 1998-99 fiscal year shall be used for the State Fire Protection Grant Fund.
(d)	Of the funds appropriated from the Highway Fund to the Office of State Budget and Management, the sum of one hundred fifty thousand dollars ($150,000) for the 1997-98 fiscal year and the sum of one hundred fifty thousand dollars ($150,000) for the 1998-99 fiscal year shall be used for the State Fire Protection Grant Fund.
(e) Of the funds available to The University of North Carolina from federal receipts, the sum of nine hundred seventy thousand dollars ($970,000) for the 1997-98 fiscal year and the sum of nine hundred seventy thousand dollars ($970,000) for the 1998-99 fiscal year shall be transferred to the State Fire Protection Grant Fund for the State Fire Protection Grant Fund.

PART XXI.  DEPARTMENT OF SECRETARY OF STATE

Requested by:   Senator Warren
INFORMATION RESOURCES MANAGEMENT COMMISSION
Section 21.  (a)	Effective July 1, 1997, G.S. 143B-426.21(a) reads as rewritten:
"(a)	Creation; Membership. – The Information Resource Management Commission is created in the Office of the State Controller. The Commission consists of the following members:
(1)	Four members of the Council of State, appointed by the Governor.
(1a)	The Secretary of State.
(2)	The Secretary of Administration.
(3)	The State Budget Officer.
(4)	Two members of the Governor's cabinet, appointed by the Governor.
(5)	One citizen of the State of North Carolina with a background in and familiarity with information systems or telecommunications, appointed by the General Assembly upon the recommendation of the President Pro Tempore of the Senate in accordance with G.S. 120-121.
(6)	One citizen of the State of North Carolina with a background in and familiarity with information systems or telecommunications, appointed by the General Assembly upon the recommendation of the Speaker of the House of Representatives in accordance with G.S. 120-121.
(7)	The Chair of the Governor's Committee on Data Processing and Information Systems.
(8)	The Chair of the State Information Processing Services Advisory Board.
(9)	The Chair of the Criminal Justice Information Network Governing Board.
Members of the Commission shall not be employed by or serve on the board of directors or other corporate governing body of any information systems, computer hardware, computer software, or telecommunications vendor of goods and services to the State of North Carolina.
The two initial cabinet members appointed by the Governor and the two initial citizen members appointed by the General Assembly shall each serve a term beginning September 1, 1992, and expiring on June 30, 1995. Thereafter, their successors shall be appointed for four-year terms, commencing July 1. Members of the Governor's cabinet shall be disqualified from completing a term of service of the Commission if they are no longer cabinet members.
The appointees by the Governor from the Council of State shall each serve a term beginning on September 1, 1992, and expiring on June 30, 1993. Thereafter, their successors shall be appointed for four-year terms, commencing July 1. Members of the Council of State shall be disqualified from completing a term of service on the Commission if they are no longer members of the Council of State.
Vacancies in the two legislative appointments shall be filled as provided in G.S. 120-122.
The Commission chair shall be elected in the first meeting of each calendar year from among the appointees of the Governor from the Council of State and shall serve a term of one year. The Secretary of Administration shall be secretary to the Commission.
No member of the Information Resource Management Commission shall vote on an action affecting solely his or her own State agency."
(b)	This section expires June 30, 2001.

PART XXII.  DEPARTMENT OF STATE AUDITOR

Requested by:   Senators Plyler, Perdue, Odom
ADVICE OF GOVERNMENTAL OPERATIONS ON PRIORITIZING REQUESTS FOR ASSISTANCE
Section 22.  G.S. 147-64.5(b) reads as rewritten:
"(b)	Requests for Auditor Assistance. – Committees of the General Assembly, the Governor, and other State officials may make written requests that the Auditor undertake, to the extent deemed practicable and within the resources provided, a specific audit or investigation; provide technical assistance and advice; and provide recommendations on management systems, finance, accounting, auditing, and other areas of management interest.  The Auditor may request the advice of the Joint Legislative Commission on Governmental Operations in  prioritizing these requests and in determining whether the requests are practicable and can be undertaken within the resources provided."

Requested by:   Senators Plyler, Perdue, Odom
PERFORMANCE AUDIT OF SIPS
Section 22.1.  The State Auditor shall conduct a performance audit of State Information Processing Services (SIPS).  In conducting the audit, the State Auditor shall consider the growth in the number of SIPS employees, the distribution of work within SIPS, increases in employees' salaries, use of SIPS receipts, and all other indicators of cost of services in relation to service delivery. The State Auditor shall report the results of this audit to the Joint Legislative Commission on Governmental Operations prior to April 15, 1998.

PART XXIII.  DEPARTMENT OF INSURANCE

Requested by:   Senator Warren
CONSTRUCTION CODE RECEIPTS
Section 23.  Departmental receipts realized by the Department of Insurance in excess of amounts approved for expenditure by the General Assembly, as adjusted by the Office of State Budget and Management to reflect the distribution of statewide reserves, shall revert to the General Fund at the end of each fiscal year.  This section shall not apply to receipts realized by the Department from the sale of copies of the State construction code if the receipts are used for the purchase of copies of the code for sale to the public, except that unspent construction code receipts shall revert to the General Fund at the end of each fiscal year.

Requested by:   Senator Warren
EXPAND USE OF INSURANCE REGULATORY FUND
Section 23.1.  G.S. 58-6-25(d) reads as rewritten:
"(d)	Use of Proceeds. – The Insurance Regulatory Fund is created in the State treasury, under the control of the Office of State Budget and Management. The proceeds of the charge levied in this section and all fees collected under Articles 69 through 71 of this Chapter and under Articles 9 and 9C of Chapter 143 of the General Statutes shall be credited to the Fund. The Fund shall be placed in an interest-bearing account and any interest or other income derived from the Fund shall be credited to the Fund. Moneys in the Fund may be spent only pursuant to appropriation by the General Assembly and in accordance with the line item budget enacted by the General Assembly. The Fund is subject to the provisions of the Executive Budget Act, except that no unexpended surplus of the Fund shall revert to the General Fund. All money credited to the Fund shall be used to reimburse the General Fund for the following:
(1)	Money appropriated to the Department of Insurance to pay its expenses incurred in regulating the insurance industry and other industries in this State.
(2)	Money appropriated to State agencies to pay the expenses incurred in regulating the insurance industry, in certifying statewide data processors under Article 11A of Chapter 131E of the General Statutes, and in purchasing reports of patient data from statewide data processors certified under that Article.
(3)	Money appropriated to the Department of Revenue to pay the expenses incurred in collecting and administering the taxes on insurance companies levied in Article 8B of Chapter 105 of the General Statutes."

PART XXIV.  DEPARTMENT OF ADMINISTRATION

Requested by:   Senators Perdue, Plyler, Odom
COMBINE PROGRAMS TO HELP WOMEN AND CHILDREN
Section 24. The Office of State Budget and Management shall study the feasibility of consolidating the budgets and services and the administration of federal and State grants for domestic violence programs and rape crisis programs in the State, including those programs currently administered by the Council for Women, Department of Administration, the Governor's Crime Commission, Department of Crime Control and Public Safety, and the Division of Social Services, Department of Human Resources.  This study shall include an analysis of the feasibility of combining budgets and services of the NC Council for Women (Fund 1731), the Domestic Violence Program (Fund 1781), the Domestic Violence Center (Fund 1782), the Displaced Homemakers Program (Fund 1732), and the Rape Crisis Program (Fund 1734) and an analysis of ways to promote more efficient and effective coordination of resources and services at the State and local levels. The Office of State Budget and Management shall report the findings and recommendations of the study to the House and Senate Appropriations Subcommittees on General Government and the Fiscal Research Division by March 31, 1998.  

Requested by:   Senator Warren
PROCUREMENT CARD PILOT PROGRAM
Section 24.1.  (a)	Except as provided by this section, no State agency, community college, constituent institution of The University of North Carolina, or local school administrative unit shall use procurement cards for the purchase of equipment or supplies prior to July 1, 1998.
(b)	The Secretary of Administration shall designate not more than 15 governmental entities to participate in a pilot program on the purchase of supplies and equipment by procurement card.  Those designated shall represent a cross-section of governmental entities and shall include at least one State agency, one community college, two constituent institutions of The University of North Carolina, and one local school administrative unit.
(c) The Division of Purchase and Contract and the State Controller shall report to the Joint Legislative Commission on Governmental Operations on March 1, 1998, on this pilot program.  The report shall include estimates from the pilot program of how many purchasing and accounts payable personnel hours could be saved or redirected or both as a result of the procurement card, and the impact of the procurement card on accounting and budgeting records and on purchasing history records.  The report shall also include a discussion of the effect of the procurement card on the State's ability to track both out-of-state sales taxes and North Carolina State and local sales tax payments by county. Finally, the report shall include a discussion of any other costs and benefits of the procurement card.
(d)	This section does not affect contracts for procurement cards entered into prior to March 31, 1997.

Requested by:   Senator Warren
STATE HEALTH PLAN PURCHASING ALLIANCE BOARD OPERATING FUNDS REVERT
Section 24.2.  (a) G.S. 143-635(c) reads as rewritten:
"(c)	Moneys appropriated by the General Assembly for operations of the State Health Plan Purchasing Alliance Board shall not be part of the State Health Plan Purchasing Alliance Fund."
(b) The sum of six hundred forty-eight thousand seven hundred eighteen dollars ($648,718) for the 1996-97 fiscal year shall be transferred from the State Health Plan Purchasing Alliance Fund to the General Fund.
(c) All monies for operations of the State Health Plan Purchasing Alliance Board unexpended at the end of the 1996-97 fiscal year shall revert to the General Fund.
(d) This section becomes effective June 30, 1997.

Requested by:   Senator Warren
GOVERNOR'S ADVOCACY COUNCIL FOR PERSONS WITH DISABILITIES
Section 24.3.  The Department of Human Resources shall continue to provide the current office space for the four regional offices of the Governor's Advocacy Council for Persons with Disabilities or office space that is comparable to that now used by the Council.

Requested by:   Senator Warren
FEES FOR USE OF STATE-OWNED OFFICE SPACE
Section 24.4.  G.S. 143-342.1 reads as rewritten:
"§ 143-342.1.  State-owned office space; fees for use by self-supporting agencies.
The Department shall determine equitable fees for the use of State owned and operated office space, and it shall assess the Department of State Treasurer, the Department of Insurance, and all self-supporting agencies using any of this office space for payment of these fees. For the purposes of this section, self-supporting agencies are those agencies designated by the Director of the Budget as being primarily funded from sources other than State appropriations. Fees assessed under this section shall be paid to the General Fund."

Requested by:   Senator Warren
PARKING REVENUES
Section 24.5.  The Secretary of Administration may use funds from parking revenues that are in excess of parking system expense requirements to fund the fifteen dollar ($15.00) per month subsidies for vanpools and transit passes.

PART XXV.  OFFICE OF STATE CONTROLLER

Requested by:   Senator Warren
NORTH CAROLINA INFORMATION HIGHWAY
Section 25.  (a)	The funds appropriated in this act to the Office of State Controller for the operation of the North Carolina Information Highway shall be used only for costs incurred by the Office of State Controller related to the operations and support of the North Carolina Information Highway.  No funds appropriated in this act shall be expended to pay Minimum Monthly usage charges for North Carolina Information Highway Services.
(b)	Of the funds appropriated to the Office of State Controller for the North Carolina Information Highway (NCIH), an amount not to exceed five hundred thousand dollars ($500,000) for fiscal year 1997-98 shall be used to support long distance capacity and provide for the establishment of regional hubs in each of the seven Local Access Transport Areas (LATAs) in North Carolina.  The remaining funds shall be used to help defray the costs of existing NCIH sites except those located at university sites other than East Carolina University academic affairs campus.  Any savings accrued shall be placed in reserve in the Office of State Controller for consideration by the 1997 General Assembly at its session in 1998.
(c)	In the interim, the Office of State Controller is encouraged to consider new technologies and capabilities as a means of providing NCIH users access to information and resources.  The Office of State Controller shall report to the General Assembly in 1998 before the reconvening of the Regular Session on its findings.
(d)	The State Controller shall report quarterly to the Joint Legislative Commission on Governmental Operations regarding the costs incurred by the Office of State Controller related to the operations and support of the North Carolina Information Highway and the savings placed in reserve in the Office of State Controller.

Requested by:   Senators Rand, Plyler, Perdue, Odom
FUNDS FOR YEAR 2000 CONVERSION OF THE STATE'S COMPUTER SYSTEM
Section 25.1. (a) The Office of State Controller shall include in its charges for data processing services costs of converting computer applications to operate properly at the turn of the century.  The State Controller shall develop procedures for managing the year 2000 conversion.
(b)	The State Controller shall analyze the needs of State agencies for funds to convert their systems. In the course of the analysis, the State Controller shall consider an agency's need for each system it wishes to covert and the most cost-effective manner in which to manage conversion.  The State Controller shall certify to the Office of State Budget and Management the cost of each State agency for the year 2000 conversion.
(c)	The Director of the Budget may use up to twenty million dollars ($20,000,000 of projected 1997-98 General Fund reversions to cover the cost of the year 2000 conversion in General Fund agencies during the 1997-98 fiscal year.
(d)	Beginning October 1, 1997, and quarterly thereafter, the Office of State Controller shall report to the Joint Legislative Commission on Governmental Operations on the status of the conversion and cost projections.

PART XXVI.  DEPARTMENT OF REVENUE

Requested by:   Senator Warren
STUDY REVENUE'S STAFF REQUIREMENTS
Section 26.  The Office of State Budget and Management, Management and Productivity Unit, shall continue work on the assessment of the Department of Revenue's staff requirements initiated pursuant to Section 15.6 of Chapter 18 of the Session Laws, Second Extra Session 1996.  In the final phase of the study, the Office of State Budget and Management shall review workload requirements and make specific recommendations about staffing for the Department.  The Office of State Budget and Management shall make a final report to the House and Senate Appropriations Subcommittees on General Government and the Fiscal Research Division of the General Assembly by March 31, 1998, on the results.  Prior to March 31, 1998, the Department of Revenue shall report to the Joint Legislative Commission on Governmental Operations before creating any new personnel positions.

Requested by:   Senator Warren
EXTEND AND MODIFY PORTS TAX CREDIT
Section 26.1.  (a)	Section 4 of Chapter 977 of the 1991 Session Laws, as amended by Section 3 of Chapter 495 of the 1995 Session Laws, reads as rewritten:
"Sec. 4.  This act is effective for taxable years beginning on or after March 1, 1992, and ending on or before February 28, 2001."
(b)	Section 4 of Chapter 681 of the 1993 Session Laws, as amended by Section 17 of Chapter 17 of the 1995 Session Laws and by Section 4 of Chapter 495 of the 1995 Session Laws, reads as rewritten:
"Sec. 4.  This act is effective for taxable years beginning on or after January 1, 1994, and ending on or before February 28, 2001."
(c)	G.S. 105-130.41(b) reads as rewritten:
"(b)	Limitations. – This credit may not exceed fifty percent (50%) of the amount of tax imposed by this Division for the taxable year reduced by the sum of all credits allowable, except tax payments made by or on behalf of the corporation. Any unused portion of the credit may be carried forward for the succeeding five years. The maximum cumulative credit that may be claimed by a corporation under this section is two million dollars ($2,000,000)."
(d)	G.S. 105-151.22(b) reads as rewritten:
"(b)	Limitations. – This credit may not exceed fifty percent (50%) of the amount of tax imposed by this Division for the taxable year reduced by the sum of all credits allowable, except tax payments made by or on behalf of the taxpayer. Any unused portion of the credit may be carried forward for the succeeding five years. The maximum cumulative credit that may be claimed by a taxpayer under this section is two million dollars ($2,000,000)."
(e)  Subsections (c) and (d) of this section are effective for taxable years beginning on or after January 1, 1998.  The remainder of this section is effective for taxable years beginning on or after January 1, 1997.

Requested by:   Senators Plyler, Perdue, Odom
ALLOW CORPORATE ANNUAL REPORTS TO BE FILED WITH DEPARTMENT OF REVENUE AND TO EXTEND TIME FOR REINSTATEMENT AFTER ADMINISTRATIVE DISSOLUTION
Section 26.2. (a)	G.S. 55-14-22(a) reads as rewritten:
"(a)	A corporation administratively dissolved under G.S. 55-14-21 may apply to the Secretary of State for reinstatement not later than five years after the effective date of dissolution. The application must:
(1)	Recite the name of the corporation and the effective date of its administrative dissolution; and
(2)	State that the ground or grounds for dissolution either did not exist or have been eliminated.
(3)	Reserved.
(4)	Repealed by Session Laws 1995, c. 539, s. 6."
(b)	G.S. 55A-14-22(a) reads as rewritten:
"(a)	A corporation administratively dissolved under G.S. 55A-14-21 may apply to the Secretary of State for reinstatement not later than five years after the effective date of dissolution. The application shall:
(1)	Recite the name of the corporation and the effective date of its administrative dissolution; and
(2)	State that the ground or grounds for dissolution either did not exist or have been eliminated."
(c)	G.S. 57C-6-03(c) reads as rewritten:
"(c)	A limited liability company administratively dissolved under this section may apply to the Secretary of State for reinstatement not later than five years after the effective date of the administrative dissolution. The procedures for reinstatement and for the appeal of any denial of the limited liability company's application for reinstatement shall be the same procedures applicable to business corporations under G.S. 55-14-22, 55-14-23, and 55-14-24."
(d) G.S. 55-16-22 reads as rewritten: 
"§ 55-16-22.  Annual report.
(a)	Except as provided in subsections (a1) and (a2) of this section, each domestic corporation and each foreign corporation authorized to transact business in this State shall deliver an annual report to the Secretary of Revenue.
(a1)	Each insurance company subject to the provisions of Chapter 58 of the General Statutes shall deliver an annual report to the Secretary of State.
(a2)	A domestic corporation governed by Chapter 55B of the General Statutes is exempt from this section.
(a3)	The annual report required by this section shall be in a form jointly prescribed by the Secretary of Revenue and the Secretary of State.  The Secretary of Revenue shall provide the form needed to file an annual report.  The annual report shall set forth all of the following:
(1)	The name of the corporation and the state or country under whose law it is incorporated.
(2)	The street address, and the mailing address if different from the street address, of the registered office, the county in which its registered office is located, and the name of its registered agent at that office in this State, and a statement of any change of such registered office or registered agent, or both.
(3)	The address and telephone number of its principal office.
(4)	The names, titles, and business addresses of its principal officers.
	(5) 	A brief description of the nature of its business.
If the information contained in the most recently filed annual report has not changed, a certification to that effect may be made instead of setting forth the information required by subdivisions (2) through (5) of this subsection.
(b)	Information in the annual report must be current as of the date the annual report is executed on behalf of the corporation.
(c)	An annual report required to be delivered to the Secretary of Revenue is due by the due date for filing the corporation's income and franchise tax returns.  An extension of time to file a return is an extension of time to file an annual report.  An annual report required to be delivered to the Secretary of State is due by the fifteenth day of the third month following the close of the corporation's fiscal year.
(d)	If an annual report does not contain the information required by this section, the Secretary of State shall promptly notify the reporting domestic or foreign corporation in writing and return the report to it for correction.  If the report is corrected to contain the information required by this section and delivered to the Secretary of State within 30 days after the effective date of notice, it is deemed to be timely filed.  
(e)	Amendments to any previously filed annual report may be filed with the Secretary of State at any time for the purpose of correcting, updating, or augmenting the information contained in the annual report.  
(f)	Expired.
(g)	When a statement of change of registered office or registered agent is filed in the annual report, the change shall become effective when the statement is received by the Secretary of State.
(h)	If the Secretary of State does not receive an annual report within 120 days of the date the return is due, the Secretary of State may presume that the annual report is delinquent.  This presumption may be rebutted by receipt of the annual report from the Secretary of Revenue or by evidence of delivery presented by the filing corporation."
(e)  G.S. 55-1-21(a) reads as rewritten:
"(a)	The Secretary of State may promulgate and furnish on request forms for the following:
(1)	An application for a certificate of existence.
(2)	A foreign corporation's application for a certificate of authority to transact business in this State.
(3)	A foreign corporation's application for a certificate of withdrawal.
	If the Secretary of State so requires, use of these forms is mandatory."
(f)  G.S. 55-1-28(b)(4) reads as rewritten:
"(4)	That its most recent annual report required by G.S. 55-16-22 has either been delivered to the Secretary of State or is not delinquent;".
(g)  G.S. 55-14-20(2) reads as rewritten:
"(2)	The corporation is delinquent in delivering its annual report;".
(h)  G.S. 55-15-30(a)(1) reads as rewritten:
"(1)	The foreign corporation is delinquent in delivering its annual report;".
(i)  G.S. 55-16-01(e)(7) reads as rewritten:
"(7)	Its most recent annual report delivered as required by G.S. 55-16-22."
(j)  G.S. 57C-2-23 reads as rewritten:
"§ 57C-2-23.  Annual report for Secretary of State.
(a)	Each domestic limited liability company and each foreign limited liability company authorized to transact business in this State, shall deliver to the Secretary of State for filing an annual report, in a form jointly prescribed by the Secretary of Revenue and Secretary of State, that sets forth all of the following:
(1)	The name of the limited liability or foreign limited liability company and the state or country under whose law it is organized.
(2)	The street address, and the mailing address if different from the street address, of the registered office, the county in which the registered office is located, and the name of its registered agent at that office in this State, and a statement of any change of the registered office or registered agent, or both.
(3)	The address and telephone number of its principal office.
(4)	The names and business addresses of its managers.
(5)	A brief description of the nature of its business.
If the information contained in the most recently filed annual report has not changed, a certification to that effect may be made instead of setting forth the information required by subdivisions (2) through (5) of this subsection.  The Secretary of State shall make available the form required to file an annual report.
(b)	Information in the annual report must be current as of the date the annual report is executed on behalf of the limited liability company or the foreign limited liability company.
(c)	The annual report shall be delivered to the Secretary of State by the fifteenth day of the fourth month following the close of the limited liability company's fiscal year.
(d)	If an annual report does not contain the information required by this section, the Secretary of State shall promptly notify the reporting domestic or foreign limited liability company in writing and return the report to it for correction.  If the report is corrected to contain the information required by this section and delivered to the Secretary of State within 30 days after the effective date of notice, it is deemed to be timely filed.
(e)	Amendments to any previously filed annual report may be filed with the Secretary of State at any time for the purpose of correcting, updating, or augmenting the information contained in the annual report."
(k)  G.S. 57C-3-25(a) reads as rewritten:
"(a)	Any person dealing with a limited liability company or a foreign limited liability company may rely conclusively upon its most recent annual report and any amendments to it on file with the Secretary of State as to the identity of its managers, except to the extent the person has actual knowledge that a person identified therein as a manager is not a manager."
(l)  G.S. 105-259 reads as rewritten:
"§ 105-259.  Secrecy required of officials; penalty for violation.
(a)	Definitions. – The following definitions apply in this section:
(1)	Employee or officer. – The term includes a former employee, a former officer, and a current or former member of a State board or commission.
(2)	Tax information. – Any information from any source concerning the liability of a taxpayer for a tax, as defined in G.S. 105-228.90. The term includes the following:
a.	Information contained on a tax return, a tax report, or an application for a license for which a tax is imposed.
b.	Information obtained through an audit of a taxpayer or by correspondence with a taxpayer.
c.	Information on whether a taxpayer has filed a tax return or a tax report.
d.	A list or other compilation of the names, addresses, social security numbers, or similar information concerning taxpayers.
	The term does not include (i) statistics classified so that information about specific taxpayers cannot be identified, (ii) an annual report required to be filed under G.S. 55-16-22 or (iii) information submitted to the Business License Information Office of the Department of Secretary of State on a master application form for various business licenses.
(b)	Disclosure Prohibited. – An officer, an employee, or an agent of the State who has access to tax information in the course of service to or employment by the State may not disclose the information to any other person unless the disclosure is made for one of the following purposes:
(1)	To comply with a court order or a law.
(2)	Review by the Attorney General or a representative of the Attorney General.
(3)	Review by a tax official of another state or the Internal Revenue Commissioner of the United States to aid the state or the Commissioner in collecting a tax imposed by this State, the other state, or the United States if the laws of the other state or the United States allow the state or the United States to provide similar tax information to a representative of this State.
(4)	To provide a governmental agency or an officer of an organized association of taxpayers with a list of taxpayers who have paid a privilege license tax under Article 2 of this Chapter.
(5)	To furnish to the chair of a board of county commissioners information on the county sales and use tax.
(6)	To sort, process, or deliver tax information on behalf of the Department of Revenue.
(6a)	To furnish the chair of a board of county commissioners a list of claimants that have received a refund of the county sales or use tax to the extent authorized in G.S. 105- 164.14(f).
(7)	To exchange information with the Division of Motor Vehicles of the Department of Transportation when the information is needed to fulfill a duty imposed on the Department of Revenue or the Division of Motor Vehicles.
(8)	To furnish to the Department of State Treasurer, upon request, the name, address, and account and identification numbers of a taxpayer who may be entitled to property held in the Escheat Fund.
(9)	To furnish to the Employment Security Commission the name, address, and account and identification numbers of a taxpayer when the information is requested by the Commission in order to fulfill a duty imposed under Article 2 of Chapter 96 of the General Statutes.
(10)	Review by the State Auditor to the extent authorized in G.S. 147-64.7.
(11)	To give a spouse who elects to file a joint tax return a copy of the return or information contained on the return.
(11a)	To provide a copy of a return to the taxpayer who filed the return.
(11b)	In the case of a return filed by a corporation, a partnership, a trust, or an estate, to provide a copy of the return or information on the return to a person who has a material interest in the return if, under the circumstances, section 6103(e)(1) of the Code would require disclosure to that person of any corresponding federal return or information.
(11c)	In the case of a return of an individual who is legally incompetent or deceased, to provide a copy of the return to the legal representative of the estate of the incompetent individual or decedent.
(12)	To contract with a financial institution for the receipt of withheld income tax payments under G.S. 105-163.6 or for the transmittal of payments by electronic funds transfer.
(13)	To furnish the Fiscal Research Division of the General Assembly, upon request, a sample, suitable in character, composition, and size for statistical analyses, of tax returns or other tax information from which taxpayers' names and identification numbers have been removed.
(14)	To exchange information concerning a tax imposed by Subchapter V of this Chapter with the Standards Division of the Department of Agriculture when the information is needed to administer the Gasoline and Oil Inspection Act, Article 3 of Chapter 119 of the General Statutes.
(15)	To exchange information concerning a tax imposed by Articles 2A, 2B, 2C, or 2D of this Chapter with one of the following agencies when the information is needed to fulfill a duty imposed on the agency:
a.	The North Carolina Alcoholic Beverage Control Commission.
b.	The Division of Alcohol Law Enforcement of the Department of Crime Control and Public Safety.
c.	The Bureau of Alcohol, Tobacco, and Firearms of the United States Treasury Department.
(16)	To furnish to the Department of Secretary of State the name, address, tax year end, and account and identification numbers of a corporation liable for corporate income or franchise taxes or of a limited liability company liable for a corporate or a partnership tax return to enable the Secretary of State to notify the corporation or the limited liability company of the annual report filing requirement or that its articles of incorporation or articles of organization or its certificate of authority has been suspended.
(17)	To inform the Business License Information Office of the Department of Secretary of State of the status of an application for a license for which a tax is imposed and of any information needed to process the application.
(18)	To furnish to the Office of the State Controller the name, address, and account and identification numbers of a taxpayer upon request to enable the State Controller to verify statewide vendor files or track debtors of the State.
(19)	To furnish to the North Carolina Industrial Commission information concerning workers' compensation reported to the Secretary under G.S. 105-163.7.
(c)	Punishment. – A person who violates this section is guilty of a Class 1 misdemeanor. If the person committing the violation is an officer or employee, that person shall be dismissed from public office or public employment and may not hold any public office or public employment in this State for five years after the violation."
(m)  Subsections (a), (b), (c) and (l) of this section become effective July 1, 1997.  The remainder of this section becomes effective January 1, 1998, and applies to tax years ending on or after December 31, 1997, in the case of corporations required to file annual reports with the Secretary of Revenue and to fiscal years ending on or after December 31, 1997, in the case of corporations and limited liability companies required to file annual reports with the Secretary of State.
Annual reports delivered to either the Secretary of State or the Secretary of Revenue after December 31, 1997, but before January 1999, shall nevertheless be deemed filed with the correct State agency.  The Secretary of State shall notify the Secretary of Revenue of reports erroneously filed with the Secretary of State, and the Secretary of Revenue shall notify the Secretary of State of reports erroneously filed with the Secretary of Revenue.

PART XXVII. DEPARTMENT OF CULTURAL RESOURCES

Requested by:   Senator Warren
DEPARTMENT OF CULTURAL RESOURCES RETAIN HISTORICAL PUBLICATIONS RECEIPTS
Section 27.   The Historical Publications Section, Division of Archives and History, Department of Cultural Resources, may retain the receipts, including over-realized receipts, from the sale of its publications during each year of the 1997-99 biennium. The receipts from the sale of those publications retained by the Historical Publications Section shall not revert, but shall be used to reprint the publications.

Requested by:   Senator Warren
MODIFY THE AREAS OF RESPONSIBILITY OF THE ROANOKE ISLAND COMMISSION
Section 27.1.  G.S. 143B-131.2(b)(1) reads as rewritten:
"(1)	To advise the Secretary of Transportation and adopt rules on matters pertaining to, affecting, and encouraging restoration, preservation, and enhancement of the appearance, maintenance, and aesthetic quality of U.S. Highway 64/264 and the U.S. 64/264 Bypass and N.C. 400 travel corridors on Roanoke Island and the grounds on Roanoke Island Festival Park."

Requested by:   Senator Warren
TRANSFER FIRST FLIGHT CENTENNIAL COMMISSION TO DOT
Section 27.2.  (a) The First Flight Centennial Commission, described in Article 67 of Chapter 143 of the General Statutes, is transferred from the Department of Cultural Resources to the Department of Transportation, Division of Aviation.  This transfer shall have all of the elements of a Type II transfer, as that term is defined in G.S. 143-6(b).
(b)	G.S. 143-640 reads as rewritten:
"(a)	Establishment. – There is established the First Flight Centennial Commission. The Commission shall be located within the Department of Transportation for organizational, budgetary, and administrative purposes."
(c)	G.S. 143-640(c) reads as rewritten:
"(c)	Membership. – The Commission shall consist of 27 members, as follows:
(1)	Four persons appointed by the Governor.
(2)	Four persons appointed by the President Pro Tempore of the Senate.
(3)	Four persons appointed by the Speaker of the House of Representatives.
(4)	The following persons or their designees, ex officio:
a.	The Governor.
b.	The President Pro Tempore of the Senate.
c.	The Speaker of the House of Representatives.
d.	The United States Senators from this State.
e.	The member of the United States House of Representatives for the Third Congressional District.
f.	The Governor of the State of Ohio.
g.	The Secretary of the Department of Cultural Resources.
h.	The Superintendent of the Cape Hatteras National Seashore of the United States National Park Service.
i.	The chair of the Centennial of Flight Commemoration Commission.
j.	The President of the First Flight Society.
k.	The chair of the Dare County Board of Commissioners.
l.	The Mayor of the Town of Kill Devil Hills.
m.	The chair of the Dare County Tourism Board.
n.	The Secretary of the Department of Transportation.
The members appointed to the First Flight Centennial Commission shall be chosen from among individuals who have the ability and commitment to promote and fulfill the purposes of the Commission, including individuals who have demonstrated expertise in the fields of aeronautics, aerospace science, or history, who have contributed to the development of the fields of aeronautics or aerospace science, or who have demonstrated a commitment to serving the public."
(d)	G.S. 143-641(c) reads as rewritten:
"(c)	Contract Authority. – The Commission may procure supplies, services, and property as appropriate, and may enter into contracts, leases, or other legal agreements to carry out the purposes of this Article. All contracts, leases, or legal agreements entered into by the Commission shall terminate on the date of termination of the Commission. Termination shall not affect any disputes or causes of action of the Commission that arise before the date of termination, and the Department of Transportation may prosecute or defend any causes of action arising before the date of termination. All property acquired by the Commission that remains in the possession of the Commission on the date of termination shall become the property of the Department of Transportation."
(e)  G.S. 143-642(b) reads as rewritten:
"(b)	Office Space. – The Department of Transportation shall provide office space in Raleigh for use as offices by the First Flight Centennial Commission, and the Department of Transportation shall receive no reimbursement from the Commission for the use of the property during the life of the Commission."

Requested by:   Senator Warren
MUSEUM OF HISTORY RESTAURANT
Section 27.3.  Within the funds available, the Secretary of Cultural Resources may contract with any person, firm, or corporation to provide restaurant services in the North Carolina Museum of History, as provided in subdivisions (16) and (17) of G.S. 121-4.

Requested by:   Senator Warren
FUNDS FOR MUSEUM OF THE ALBEMARLE
Section 27.4.  The Office of State Budget and Management is authorized to transfer the sum of forty-seven thousand eight hundred eighty-seven dollars ($47,887) from Fund 1110 (Code 536930) to Fund 1500 (Code 534160) to replace funds that were reallocated in the 1996-97 fiscal year to support Newbold-White House.

Requested by:   Senators Plyler, Perdue, Odom
PROCEDURE FOR AWARD OF CULTURAL RESOURCES GRANTS
Section 27.5.  Of the funds appropriated to the Department of Cultural Resources, the sum of eight million dollars ($8,000,000) for the 1997-98 fiscal year shall be used for grants to nonprofit organizations or local governmental entities throughout the State for cultural, historical, or artistic organizations, for cultural, historical, or artistic projects, and for museums.  The Secretary of the Department of Cultural Resources shall establish a process for the review, evaluation, and consideration of applications for these grants.
In awarding grants, the Secretary shall consider the merits of the project, the cultural, historical, or artistic significance of the project, the benefit to the State and local communities of the project, and the cost of the project.  Prior to awarding grants, the Secretary shall consult with the Joint Legislative Commission on Governmental Operations.  These grants are not subject to review by the Historical Commission.

PART XXVIII. STATE BOARD OF ELECTIONS

Requested by:   Senator Warren
STATEWIDE DATA ELECTIONS MANAGEMENT SYSTEM
Section 28. (a)	The State Board of Elections shall adopt rules for a statewide data elections management system. Those rules shall include data format standards, data communication standards, and data content standards. The State Board of Elections shall adopt those rules, including the standards, no later than November 1, 1997. Counties shall adhere to the rules and standards no later than August 31, 1998. 
(b)	Of the funds appropriated in this act to the State Board of Elections for a statewide data elections management system, the sum of one hundred fifty thousand dollars ($150,000) may be used by the State Board of Elections to hire a project manager, to research and determine the needs of the local boards of election in each county, and to develop a needs assessment report.
(c)	The remainder of the funds appropriated in Section 13.2 of Chapter 597 of the 1995 Session Laws shall be used to develop, implement, and operate a statewide data elections management system, which will include voter registration, campaign reporting, and election night returns.  These funds shall be used only after the State Board of Elections and the Information Resource Management Commission have jointly approved and submitted a written, detailed implementation plan for statewide data elections management to the Joint Legislative Commission on Governmental Operations. That implementation plan shall include:
(1)	A description of the system being implemented;
(2)	A description of the system's capabilities, including user-friendliness;
(3)	An itemized estimate of the costs of the system, with a justification for each item, including a plan for implementing the system within the funds appropriated;
(4)	A list of the counties to be brought into the system during the fiscal year; and
(5)	A proposed project management plan. 
After their initial joint report, the State Board of Elections and the Information Resource Management Commission shall make written quarterly joint reports to the Joint Legislative Commission on Governmental Operations, describing the status of the project, listing the counties that have been brought into the system and that are planned to be brought into the system, and the costs.
(d)	To the extent that this section conflicts with G.S. 163-82.11 through G.S. 163-82.13, with Section 16 of Chapter 769 of the 1993 Session Laws, or with Section 13.2 of Chapter 507 of the 1995 Session Laws, this section prevails to the extent of the conflict. Except to the extent of the conflict, Section 16 of Chapter 769 of the 1993 Session Laws remains in effect.

PART XXIX.  DEPARTMENT OF TRANSPORTATION

Requested by:   Senator Jordan
GLOBAL TRANSPARK AUTHORITY TO REIMBURSE HIGHWAY FUND FROM FEDERAL SOURCES
Section 29.  When funds are provided from the Highway Fund to the Global TransPark Authority for environmental impact statements or assessments and the Global TransPark Authority applies for and receives reimbursement for those expenses from federal sources up to one million eight hundred thousand dollars ($1,800,000), the federal reimbursements shall be paid over by the Global TransPark Authority into the Highway Fund within 30 days of receipt.  These funds shall be allocated to State-funded maintenance appropriations in the manner approved by the Board of Transportation.

Requested by:   Senator Jordan
AIRCRAFT AND FERRY ACQUISITIONS
Section 29.1.  G.S. 143B-350 is amended by adding a new subsection to read:
"( i)	Before approving the purchase of an aircraft from the Equipment Fund or a ferry in a Transportation Improvement Program, the Board of Transportation shall prepare an estimate of the operational costs and capital costs associated with the addition of the aircraft or ferry and shall report those additional costs to the General Assembly pursuant to G.S. 136-12(b), and to the Joint Legislative Commission on Governmental Operations."

Requested by:   Senator Jordan
DEPARTMENT OF TRANSPORTATION TO PAY DEPARTMENT OF CORRECTION ONLY FOR ACTUAL MEDIUM CUSTODY INMATE LABOR
Section 29.2.  The Department of Transportation shall pay the Department of Correction only for the actual labor performed by medium custody inmates.

Requested by:   Senator Jordan
HIGHWAY FUND ALLOCATIONS BY CONTROLLER
Section 29.3.  Article 1 of Chapter 136 of the General Statutes is amended by adding a new section to read:
"§ 136-16.10.  Allocations by Department Controller to eliminate overdrafts.
The Controller of the Department of Transportation shall allocate at the beginning of each fiscal year from the various appropriations made to the Department of Transportation for State Construction, State Funds to Match Federal Highway Aid, State Maintenance, and Ferry Operations, sufficient funds to eliminate all overdrafts on State maintenance and construction projects, and these allocations shall not be diverted to other purposes."

Requested by:   Senator Jordan
SMALL URBAN CONSTRUCTION PROGRAM DISCRETIONARY FUNDS
Section 29.4.  Of the funds appropriated in this act to the Department of Transportation: 
(1)	$14,000,000 shall be allocated in each fiscal year for small urban construction projects.  These funds shall be allocated equally in each fiscal year of the biennium among the 14 Highway Divisions for the small urban construction program for small urban construction projects that are located within the area covered by a one-mile radius of the municipal corporate limits.  
(2)	$10,000,000 shall be used statewide for rural or small urban highway improvements, industrial access roads, and spot safety projects as approved by the Secretary of the Department of Transportation.
None of these funds used for rural secondary road construction are subject to the county allocation formula as provided in G.S. 136-44.5.
The Department of Transportation shall report to the members of the General Assembly on projects funded pursuant to this section in each member's district prior to the Board of Transportation's action.  The Department shall make a quarterly comprehensive report on the use of these funds to the Joint Legislative Transportation Oversight Committee and the Fiscal Research Division.

Requested by: Senator Jordan
USE OF ANNUAL UNRESERVED HIGHWAY FUND CREDIT BALANCE
Section 29.5.  G.S. 136-44.2 reads as rewritten:
"§ 136-44.2.  Budget and appropriations.
The Director of the Budget shall include in the 'Current Operations Appropriations Bill' an enumeration of the purposes or objects of the proposed expenditures for each of the construction and maintenance programs for that budget period for the State primary, secondary, urban, and State parks road systems.  The State primary system shall include all portions of the State highway system located outside municipal corporate limits which are designated by N.C., U.S. or Interstate numbers.  The State secondary system shall include all of the State highway system located outside municipal corporate limits that is not a part of the State primary system.  The State urban system shall include all portions of the State highway system located within municipal corporate limits.  The State parks system shall include all State parks roads and parking lots which are not also part of the State highway system.
All construction and maintenance programs for which appropriations are requested shall be enumerated separately in the budget.  Programs that are entirely State funded shall be listed separately from those programs involving the use of federal-aid funds.  Proposed appropriations of State matching funds for each of the federal-aid construction programs shall be enumerated separately as well as the federal-aid funds anticipated for each program in order that the total construction requirements for each program may be provided for in the budget. Also, proposed State matching funds for the highway planning and research program shall be included separately along with the anticipated federal-aid funds for that purpose.
Other program categories for which appropriations are requested, such as, but not limited to, maintenance, channelization and traffic control, bridge maintenance, public service and access road construction, and ferry operations shall be enumerated in the budget.
The Department of Transportation shall have all powers necessary to comply fully with provisions of present and future federal-aid acts.  No federally eligible construction project may be funded entirely with State funds unless the Department of Transportation has first consulted with the Joint Legislative Commission on Governmental Operations.  For purposes of this section, 'federally eligible construction project' means any construction project except secondary road projects developed pursuant to G.S. 136-44.7 and 136-44.8 eligible for federal funds under any federal-aid act, whether or not federal funds are actually available.
The 'Current Operations Appropriations Bill' shall also contain the proposed appropriations of State funds for use in each county for maintenance and construction of secondary roads, to be allocated in accordance with G.S. 136-44.5 and 136-44.6. State funds appropriated for secondary roads shall not be transferred nor used except for the construction and maintenance of secondary roads in the county for which they are allocated pursuant to G.S. 136-44.5 and 136-44.6.
If the unreserved credit balance in the Highway Fund on the last day of a fiscal year is greater than the amount estimated for that date in the Current Operations Appropriations Act for the following fiscal year, the excess shall be used in accordance with this paragraph.  The Director of the Budget may allocate part or all of the excess among reserves for access and public roads, for unforeseen events requiring prompt action, or for other urgent needs.  The amount not allocated to any of these reserves by the Director of the Budget shall be credited to a reserve for maintenance.  The Board of Transportation shall report monthly to the Joint Legislative Transportation Oversight Committee and the Fiscal Research Division on the use of funds in the maintenance reserve.
The Department of Transportation may provide for costs incurred or accrued for traffic control measures to be taken by the Department at major events which involve a high degree of traffic concentration on State highways, and which cannot be funded from regular budgeted items.  This authorization applies only to events which are expected to generate 30,000 vehicles or more per day.  The Department of Transportation shall provide for this funding by allocating and reserving up to one hundred thousand dollars ($100,000) before any other allocations from the appropriations for State maintenance for primary, secondary, and urban road systems are made, based upon the same proportion as is  appropriated to each system."

Requested by:   Senator Jordan
DRIVERS EDUCATION FUNDING
Section 29.6.  From funds appropriated by this act to the Department of Transportation, the Department shall pay for the increased costs for drivers education due to the projected increase in average daily membership in the ninth grade drivers education program.
In allocating funds for driver training, the State Board of Education shall consider the needs of small and low-wealth local school administrative units.

Requested by:   Senator Jordan
BRANCH AGENT REIMBURSEMENT RATE
Section 29.7.  (a)	G.S. 20-63(h) reads as rewritten:
"(h)	Commission Contracts for Issuance of Plates and Certificates. – All registration plates, registration certificates and certificates of title issued by the Division, outside of those issued from the Raleigh offices of the said Division and those issued and handled through the United States mail, shall be issued insofar as practicable and possible through commission contracts entered into by the Division for the issuance of such plates and certificates in localities throughout North Carolina with persons, firms, corporations or governmental subdivisions of the State of North Carolina and the Division shall make a reasonable effort in every locality, except as hereinbefore noted, to enter into a commission contract for the issuance of such plates and certificates and a record of these efforts shall be maintained in the Division.  In the event the Division is unsuccessful in making commission contracts as hereinbefore set out it shall then issue said plates and certificates through the regular employees of the Division.  Whenever registration plates, registration certificates and certificates of title are issued by the Division through commission contract arrangements, the Division shall provide proper supervision of such distribution.  Commission contracts entered under this subsection shall provide for the payment of compensation for all transactions as set forth below.  Nothing contained in this subsection will allow or permit the operation of fewer outlets in any county in this State than are now being operated.
A transaction is any of the following activities:
(1)	Issuance of a registration plate, a registration card, a registration renewal sticker, or a certificate of title.
(2)	Issuance of a handicapped placard or handicapped identification card.
(3)	Acceptance of an application for a personalized registration plate.
(4)	Acceptance of a surrendered registration plate, registration card, or registration renewal sticker, or acceptance of an affidavit stating why a person cannot surrender a registration plate, registration card, or registration renewal sticker.
(5)	Cancellation of a title because the vehicle has been junked.
(6)	Acceptance of an application for, or issuance of, a refund for a fee or a tax, other than the highway use tax.
(7)	Receipt of the civil penalty imposed by G.S. 20-309 for a lapse in financial responsibility or receipt of the restoration fee imposed by that statute.
(8)	Acceptance of a notice of failure to maintain financial responsibility for a motor vehicle.
(9)	Collection of the highway use tax.
Performance at the same time of any combination of the items that are listed within each subdivision or are listed within subdivisions (1)	through (8) of this section is a single transaction for which a dollar and thirty-five cent ($1.35) compensation shall be paid.  Performance of the item listed in subdivision (9) of this subsection in combination with any other items listed in this subsection is a separate transaction for which a one dollar and twenty cent ($1.20) compensation shall be paid."
(b)	The Department of Transportation shall develop  performance measures for commission agent contracts, entered into pursuant to G.S. 20-63(h), as a basis for judging compliance with those contracts.  The Department shall report on the performance measures to the Joint Legislative Transportation Oversight Committee and the Fiscal Research Division by December 1, 1997.  No performance measures shall be implemented prior that review.
(c)	Subsection (a) of this section becomes effective July 1, 1997.

Requested by:   Senator Jordan
INTERNATIONAL REGISTRATION PLAN BUDGET CODE MERGED INTO VEHICLE REGISTRATION BUDGET CODE
Section 29.8.  Within Budget Code 84260 (Division of Motor Vehicles), fund 0560 (International Registration Plan Section) shall be merged into fund 0520 (Vehicle Registration).

Requested by:   Senator Jordan
PRIVATIZATION OF THE SCHOOL BUS DRIVER TRAINING PROGRAM
Section 29.9. The Department of Transportation shall prepare a plan for the privatization of school bus driver training.  This plan shall include, but not be limited to the following:
(1)	A full description of the school bus driver training activities carried out by the Department.
(2)	An accounting of all costs, both personnel and nonpersonnel costs, to the Department related to school bus driver training.
(3)	A list of all Department positions performing functions related to school bus driver training and the portion of time that each position devotes to these functions.
(4)	A draft request for proposals for private contracts to provide all school bus driver training services.
(5)	An estimate of the cost of private contracts to provide all school bus driver training services and an explanation of how that estimate was developed.
(6)	A detailed estimate of the projected cost to the Department to administer contracts for school bus driver training.
(7)	A schedule for issuing a contract for school bus driver training and a schedule for the elimination of Department positions and expenditures related to that training.
Copies of the plan shall be provided to the Chairs of the Joint Legislative Transportation Oversight Committee and the Fiscal Research Division by March 1, 1998. 

Requested by:   Senator Jordan
HIGHWAY FUND LIMITATIONS ON OVEREXPENDITURES
Section 29.10.  (a)	Overexpenditures from Section 3 of this act may be made by authorization of the Director of the Budget,
Titles:
State Construction Primary Construction 
State Construction Urban Construction
Spot Safety Construction
State Construction Access and Public Service Roads
State Funds to Match Federal Highway Aid
State Maintenance
Ferry Operations,
provided that there are corresponding underexpenditures from these same Titles.  Overexpenditures or underexpenditures in any Titles shall not vary by more than ten percent (10%) without prior consultation with the Advisory Budget Commission.  Written reports covering overexpenditures or underexpenditures of more than ten percent (10%) shall be made to the Joint Legislative Transportation Oversight Committee.  The reports shall be delivered to the Director of the Fiscal Research Division not less than 96 hours prior to the beginning of the Commission's full meeting.
(b)	Overexpenditures from Section 3 of this act,
Titles:
State Construction Primary Construction
State Construction Urban Construction
Spot Safety Construction
State Construction Access and Public Service Roads
State Funds to Match Federal Highway Aid
State Maintenance
Ferry Operations,
for the purpose of providing additional positions shall be approved by the Director of the Budget and shall be reported on a quarterly basis to the Joint Legislative Transportation Oversight Committee and to the Fiscal Research Division.

Requested by:   Senator Jordan
DEPARTMENT OF TRANSPORTATION EXEMPTION FROM GENERAL STATUTES FOR EXPERIMENTAL PROJECT–CONGESTION MANAGEMENT
Section 29.11.  The Department of Transportation may enter into a design-build-warrant contract to develop, with Federal Highway Administration participation under The 1991 Intermodal Surface Transportation Efficiency Act, Title VI, Part B, Sections 6051-6059, a "Congestion Avoidance and Reduction for Autos and Trucks (CARAT)" system of traffic management for the greater Charlotte-Mecklenburg urban areas.  Notwithstanding any other provision of law, contractors, contractors' employees, and Department of Transportation employees involved in this project only do not have to be licensed by occupational licensing boards as "license" and "occupational licensing board" are defined in G.S. 93B-1; and for the purpose of entering into contracts, the Department of Transportation is exempted from the provisions of the following General Statutes: G.S. 136-28.1, 143-52, 143-53, 143-58, 143-128, and 143-129.  These statutory exemptions are limited and available only to the extent necessary to comply with federal rules, regulations, and policies for completion of this project.
The Department of Transportation shall report quarterly to the Joint Legislative Transportation Oversight Committee on its efforts to enter into a design-build-warrant contract and to award and construct the project.  The report shall include, but not be limited to, the number of types of firms bidding on the project, special qualifications of the firms bidding, and the effect statutory exemptions might have had on the award and construction of the project and the receipt of federal discretionary funding for the project.

Requested by:   Senator Jordan
RESURFACED ROADS MAY BE WIDENED
Section 29.12. Chapter 136 of the General Statutes is amended by adding a new section to read:
"§ 136-44.16.  Resurfaced roads may be widened.
Of the contract maintenance resurfacing program funds appropriated by the General Assembly to the Department of Transportation, an amount not to exceed fifteen percent (15%) of the Board of Transportation's allocation of these funds may be used for widening existing narrow pavements that are scheduled for resurfacing."

Requested by:   Senator Jordan
CASH FLOW HIGHWAY FUND AND HIGHWAY TRUST FUND APPROPRIATIONS
Section 29.13.  The General Assembly authorizes and certifies anticipated revenues of the Highway Fund as follows:
FY 1999-2000	$1,182.2 million
FY 2000-2001	$1,211.2 million
FY 2001-2002	$1,241.2 million
FY 2002-2003	$1,271.9 million
The General Assembly authorizes and certifies anticipated revenues of the Highway Trust Fund as follows:
FY 1999-2000	$861.7 million
FY 2000-2001	$891.0 million
FY 2001-2002	$921.6 million
FY 2002-2003	$953.3 million

Requested by:   Senator Jordan
F.E.M.A. RECEIVABLES
Section 29.14.  The Department of Transportation shall report to the Joint Legislative Transportation Oversight Committee and the Fiscal Research Division by March 1, 1998, on the status of Federal Emergency Management Agency receivables for past natural disasters and the efforts by the State to collect those funds from the federal government.

Requested by:   Senator Jordan
FEASIBILITY STUDY OF DRIVERS EDUCATION TESTING
Section 29.15.  The Department of Transportation and the Department of Public Instruction shall conduct a study of the feasibility of having drivers education instructors, rather than Division of Motor Vehicles examiners, administer the required written and road tests before a student is issued his or her first drivers permit or license.
The Department of Transportation shall report to the Joint Legislative Transportation Oversight Committee and the Fiscal Research Division by March 1, 1998, on the results of this feasibility study along with any enabling legislation necessary to implement any recommended changes.

Requested by:   Senator Jordan
GLOBAL TRANSPARK AUTHORITY BUSINESS PLAN FOR DISADVANTAGED BUSINESS PARTICIPATION
Section 29.16.  The Global TransPark Authority shall develop a business plan for meeting its ten percent (10%) goal for disadvantaged business participation in contracting.  The Global TransPark Authority shall submit a copy of that business plan to the Joint Legislative Transportation Oversight Committee and the Fiscal Research Division by March 1, 1998.

Requested by:   Senator Jordan
USE OF PUBLIC TRANSPORTATION AND PASSENGER RAIL FUNDING
Section 29.17.  The Department of Transportation shall prepare a plan for the use of the expansion funds provided in this act for the improvement of public transportation and passenger rail service.  This plan shall set out the specific purposes for which the funds will be used and shall set specific, quantitative goals to be met through the use of the additional funds.
The goals shall address the following:
(1)	Travel time, cost recovery, and business ridership of passenger rail service between Raleigh and Charlotte;
(2)	Extension of passenger rail service to Asheville;
(3)	Assessment of the feasibility and costs of extending passenger rail service in Eastern North Carolina;
(4)	Increases in the number of routes served by rural, urban, and regional public transportation systems;
(5)	Increases in ridership for rural, urban, and regional public transportation systems;
(6)	Public transportation service to Work First clients; and
(7)	Cost savings achieved by rural, urban, and regional public transportation systems through the use of new technologies.
The Department of Transportation shall present this plan to the Joint Legislative Transportation Oversight Committee by October 1, 1997, and shall make a report to the 1999 session of the General Assembly indicating the Department's performance in meeting the goals set forth in the plan.

Requested by:   Senator Jordan
FEDERAL FUNDS FOR PUBLIC TRANSPORTATION IMPROVEMENTS
Section 29.18.  To the extent allowable by federal law, the Department of Transportation shall use ten million dollars ($10,000,000) of federal highway funds for improvements to public transportation.

Requested by:   Senator Jordan
BIENNIAL REPORT ON MAINTENANCE REQUIREMENTS
Section 29.19.  G.S. 136-44.3 reads as rewritten:
"§ 136-44.3. Maintenance program.
In each even-numbered year, the Department of Transportation shall survey the condition of the State highway system and shall prepare a report of the findings of the survey.  The report shall provide both quantitative and qualitative descriptions of the condition of the system and shall provide estimates of the following:
(1)	The annual cost of routine maintenance of the State highway system;
(2)	The cost of eliminating any maintenance backlog by categories of maintenance requirements;
(3)	The annual cost to resurface the State highway system based upon a 12-year repaving cycle for the primary system and a 15-year cycle for other highways; and
(4)	The cost of eliminating any resurfacing backlog, by type of system.
On the basis of the report, the Department of Transportation shall develop a statewide annual maintenance program for the State highway system, which shall be subject to the approval of the Board of Transportation and shall take into consideration the general maintenance needs, special maintenance needs, vehicular traffic, and other factors deemed pertinent.
Each division engineer, at the end of the fiscal year, shall certify the maintenance of highways in his division in accordance with the annual work program, along with an explanation for any deviations.
The report on the condition of the State highway system and the annual maintenance program shall be presented to the Joint Legislative Transportation Oversight Committee by November 30 of each even-numbered year, and copies shall be made available to any member of the General Assembly upon request."

Requested by:   Senator Jordan
GRADUATED DRIVERS LICENSE PROGRAM
Section 29.20.  Section 11 of S.L. 1997-16 reads as rewritten:
"Section 11.  This act becomes effective December 1, 1997.  Sections 1 through 7 of this act do not apply to any person who holds a valid North Carolina limited learner's permit issued before the effective date of this act, who holds a valid North Carolina learner's permit issued before the effective date of this act, or who is a provisional licensee and holds a valid North Carolina drivers license issued before the effective date of this act."

Requested by:   Senators Odom, Perdue, Plyler
OREGON INLET STABILIZATION PROJECT
Section 29.21. (a)	The General Assembly finds that:
(1)	Whereas, an emergency situation exists at Oregon Inlet due to the steady and uncontrolled natural closing of the inlet from its north side which cannot be halted by dredging and which prevents the maintenance of a stable channel through the inlet to meet in a satisfactory manner the navigation needs of the State of North Carolina and its citizens; and
(2)	Whereas, the stability of Oregon Inlet at its current water flow capacity is necessary to provide a source of ocean water into the sounds of North Carolina and to discharge waters from the sounds and to prevent unacceptable changes in the ecology and economy of eastern North Carolina; and
(3)	Whereas, the closing of Oregon Inlet would result in adverse and irreversible impacts on the fisheries habitat in the sounds of northeastern North Carolina through the disruption of the only source of ocean and sound water interchange for a sound distance of over 100 miles between the Virginia-North Carolina boundary and Hatteras Inlet; and
(4)	Whereas, the loss of the inlet through the Outer Banks would cause a change in the salinity of the sounds and jeopardize extremely valuable coastal fisheries resources such as the shrimp fishery and have numerous other adverse impacts on the fisheries resources of the sounds in northeastern North Carolina; and
(5)	Whereas, the navigation channel through Oregon Inlet provides a vital link between the ocean fisheries and the fishing fleets docked in northeastern North Carolina that has not been maintained on a consistent or satisfactory basis for many years with substantial resulting harm to the economy of northeastern North Carolina; and
(6)	Whereas, the Cape Hatteras National Seashore was created and established by the donation of a substantial portion of the lands by the State of North Carolina to the United States of America in a deed dated 7 August 1958, including the lands on the north side of Oregon Inlet; and
(7)	Whereas, the Cape Hatteras National Seashore is a national treasure which has been made accessible to its millions of visitors annually only as a consequence of the construction and maintenance of the Bonner Bridge over Oregon Inlet and North Carolina Highway 12 by the State of North Carolina; and
(8)	Whereas, the loss of the hydraulic capacity of Oregon Inlet to release storm waters during hurricanes and northeasters would result over time in the creation by the forces of nature of one or more inlets through the Outer Banks in the area north of Hatteras Inlet; and
(9)	Whereas, each new inlet would cut through North Carolina Highway 158 and the towns north of Oregon Inlet with devastating impacts and/or North Carolina Highway 12, the sole source of vehicular access to the Cape Hatteras National Seashore and the villages of Rodanthe, Waves, Salvo, Avon, Buxton, Frisco, and Hatteras; would greatly increase the costs of maintaining motor vehicle access to the National Seashore and the villages; would greatly increase the public health dangers to the visitors to the National Seashore and the residents of the villages by limited access to medical care; and would have a devastating impact on the economy of those villages; and
(10)	Whereas, the visitors to the Cape Hatteras National Seashore provide an important and critical stimulus to the economy of Dare County and other parts of northeastern North Carolina which economic benefits will be so substantially reduced should Highway 12 be closed that the region will suffer irreversible economic harm; and
(11)	Whereas, the North Carolina Department of Transportation must start construction of a replacement for the Bonner Bridge across Oregon Inlet in the near future to maintain a continuous corridor for vehicular access to the National Seashore and the villages; and
(12)	Whereas, the new bridge across Oregon Inlet is to be built at a cost estimated to be more than one hundred million dollars ($100,000,000) and is to be designed to span the inlet in its present location for 50 years; and
(13)	Whereas, the State of North Carolina's several interests will be served by the stabilization of Oregon Inlet in its present location by the construction of a stabilization project on the north side of the inlet; and
(14)	Whereas, the State of North Carolina made an express reservation in the deed by which it conveyed the lands on the north side of Oregon Inlet to the United States in 1958 which allowed the State of North Carolina to condemn those lands as the State of North Carolina deemed necessary to lay out and establish the highways built over those lands, and the parties to that deed intended by the reservation that the State of North Carolina could condemn lands needed to protect the highways against erosion or other natural threats to maintaining a vehicle transportation link between the villages and the mainland; and
(15)	Whereas, the General Assembly finds that certain of those lands conveyed to and owned by the United States as a result of the 1958 deed issued by the State of North Carolina are needed to construct the inlet stabilization structure on the north side of Oregon Inlet; and
(16)	Whereas, the United States Department of Interior, as the owner of the lands needed to build a structure to stabilize the north shore of the inlet and prevent its eventual closing, refuses to make the lands available for this purpose to either State or federal agencies; Now, therefore,
This section may be referred to as the "Oregon Inlet Stabilization Act of 1997".
(b)	The North Carolina Department of Transportation may, on behalf of the State of North Carolina, institute condemnation proceedings, pursuant to Chapter 136 of the General Statutes, for any lands conveyed by or as a result of the 7 August 1958 deed, conveying lands pursuant to the authority of Chapter 257 of the Public Laws of North Carolina 1939 from the State of North Carolina to the United States of America, that the Department of Transportation determines necessary for the construction and subsequent maintenance of inlet stabilization structures now existing or to be built, to stabilize and protect Oregon Inlet and its navigation channel to the depth required for continuous use by the commercial fishing fleets of North Carolina and other vessels requiring similar water depths.  The North Carolina Department of Transportation may, further, condemn and acquire from the United States any additional lands adjoining the lands owned by the United States of America at or near Oregon Inlet which are created by avulsion or accretion after the effective date of this act to the extent that those lands, owned by the United States of America, are required for the construction or maintenance of the inlet stabilization structures now existing or to be built at Oregon Inlet.
(c)	The North Carolina Department of Transportation shall design and construct a terminal groin on the north side of Oregon Inlet to protect Oregon Inlet against closing, to maintain at least the current level of water exchange between the Atlantic Ocean and the sounds, and to maintain the inlet's navigational channel to the depth required for continuous use by the commercial fishing fleets of North Carolina and other vessels requiring similar water depths.  The Department of Administration and the Department of Environment, Health, and Natural Resources shall lend their assistance to the Department of Transportation in the design, construction, and permitting of the north terminal groin deemed appropriate and necessary to stabilize Oregon Inlet in its present location and its navigational channel to the depth required for continuous use by the commercial fishing fleets of North Carolina and other vessels requiring similar water depths.
(d)	The agencies assigned to the North Carolina Department of Environment, Health, and Natural Resources, including the Coastal Resources Commission, shall issue permits to construct the inlet stabilization structures, including a terminal groin on the north side of Oregon Inlet, and may condition those permits so as to protect coastal resources, but shall not condition or limit the authority to build the structures in a manner which interferes with the construction or maintenance of its channel to the depth required for continuous use by the commercial fishing fleets of North Carolina and other vessels requiring similar water depths.  Notwithstanding any contrary provisions in the Coastal Area Management Act, the Dredge and Fill statute, the North Carolina Environmental Policy Act, the Administrative Procedure Act, G.S. 1-269, or any other provision of the General Statutes, no administrative agency or court of this State shall hear, consider, or determine any challenge, whether brought as a contested case or cause of action in the courts, to any action or decision leading to the issuance of a permit and to the permit issued pursuant to the Coastal Area Management Act in Article 7 of Chapter 113A and the Dredge and Fill statute in G.S. 113-229 except for a challenge brought by the North Carolina Department of Transportation to the reasonableness of the conditions imposed in any permits by the Coastal Resources Commission or its designee.
(e)  The North Carolina Department of Transportation may contract with, or otherwise enter into appropriate arrangements, with the United States Corps of Engineers or with private entities, for assistance in the design, permitting, and construction of a terminal groin on the north side of Oregon Inlet.
(f)  The Governor and any State agency charged with duties under this section may call upon any of the public institutions of higher education of this State for assistance in the implementation of this section, including without limitation, any of the units of The University of North Carolina.
(g)  From funds appropriated to the Department of Transportation in this act, up to four hundred thousand dollars ($400,000) may be used for the implementation of this section.

PART XXX. SALARIES AND BENEFITS

Requested by:   Senators Plyler, Perdue, Odom
GOVERNOR AND COUNCIL OF STATE/SALARY INCREASES
Section 30.  (a) Effective July 1, 1997, G.S. 147-11(a) reads as rewritten:
"(a)	The salary of the Governor shall be one hundred six thousand one hundred two dollars ($106,102) annually, payable monthly."
(b)	The annual salaries for the members of the Council of State, payable monthly, for the 1997-98 and 1998-99 fiscal years, beginning July 1, 1997, are:

Council of State	Annual Salary  

Lieutenant Governor	$93,642 
Attorney General	93,642 
Secretary of State	93,642 
State Treasurer	93,642 
State Auditor	93,642 
Superintendent of Public Instruction	93,642 
Agriculture Commissioner	93,642 
Insurance Commissioner	93,642 
Labor Commissioner	93,642.

Requested by:  Senators Plyler, Perdue, Odom
NONELECTED DEPARTMENT HEADS/SALARY INCREASES
Section 30.1.  In accordance with G.S. 143B-9, the maximum annual salaries, payable monthly, for the nonelected heads of the principal State departments for the 1997-98 and 1998-99 fiscal years, beginning July 1, 1997, are:

Nonelected Department Heads	Annual Salary   

Secretary of Administration	$91,490 
Secretary of Correction	91,490 
Secretary of Cultural Resources	91,490 
Secretary of Commerce	91,490 
Secretary of Environment, Health,
  and Natural Resources	91,490 
Secretary of Human Resources	91,490 
Secretary of Revenue	91,490 
Secretary of Transportation	91,490 
Secretary of Crime Control and Public Safety	91,490. 

Requested by:  Senators Plyler, Perdue, Odom
CERTAIN EXECUTIVE BRANCH OFFICIALS/SALARY INCREASES
Section 30.2.  The annual salaries, payable monthly, for the 1997-98 and 1998-99 fiscal years, beginning July 1, 1997, for the following executive branch officials are:

Executive Branch Officials	Annual Salary

Chairman, Alcoholic Beverage Control
  Commission	$83,271 
State Controller	116,537 
Commissioner of Motor Vehicles	83,271 
Commissioner of Banks	85,326 
State Personnel Director	91,490 
Chairman, Parole Commission	76,037 
Members of the Parole Commission	70,200 
Executive Director, Agency for Public
  Telecommunications	70,200 
General Manager, Ports Railway Commission	63,389 
Director, Museum of Art	85,326 
Executive Director, Wildlife Resources Commission	71,871 
Executive Director, North Carolina Housing
  Finance Agency	103,057 
Executive Director, North Carolina Agricultural
Finance Authority	81,052 
Director, Office of Administrative Hearings	82,341 

Requested by:  Senators Plyler, Perdue, Odom, Rand
DEPARTMENT OF HUMAN RESOURCES SECRETARY SALARY FLEXIBILITY
Section. 30.3.  (a)	G.S. 143B-9 reads as rewritten:
"§ 143B-9.  Appointment of officers and employees.
The head of each principal State department, except those departments headed by popularly elected officers, shall be appointed by the Governor and serve at his pleasure.
The salary of the head of each of the principal State departments and of elected officials shall be set by the General Assembly; provided, however, if the Secretary of the Department of Human Resources is a licensed physician, the Governor may, after consultation with the Advisory Budget Commission, set the salary of the Secretary at a level comparable to that of physicians employed by the Department of Human Resources.
The head of a principal State department shall appoint a chief deputy or chief assistant, and such chief deputy or chief assistant shall not be subject to the State Personnel Act. The salary of such chief deputy or chief assistant shall, upon the recommendation of the  Governor, be set by the General Assembly. Unless otherwise provided for in the Executive Organization Act of 1973, and subject to the provisions of the Personnel Act, the head of each principal State department shall designate the administrative head of each transferred agency and all employees of each division, section, or other unit of the principal State department."
(b)	This section is effective when it becomes law.

Requested by:  Senators Plyler, Perdue, Odom, Rand
SALARIES OF MEMBERS AND CHAIR OF THE INDUSTRIAL COMMISSION
Section 30.4.   G.S. 97-78(a) reads as rewritten:
"(a)	The salary of each commissioner shall be the same as that fixed from time to time for district attorneys except that the commissioner designated as chair shall receive one thousand five hundred dollars ($1,500) additional per annum."

Requested by:  Senators Plyler, Perdue, Odom, Martin of Pitt, Conder, Horton
DEPARTMENT OF ENVIRONMENT, HEALTH, AND NATURAL RESOURCES LAW ENFORCEMENT SALARIES EQUALIZED
Section 30.5.   The Department of Environment, Health, and Natural Resources shall adjust the average salary of law enforcement officers in the Division of Parks and Recreation from twenty-five thousand eight hundred nine dollars ($25,809) to  thirty thousand ninety-seven dollars ($30,097), the average salary of law enforcement officers in the Division of Marine Fisheries and Wildlife Resources Commission.

Requested by:  Senators Plyler, Perdue, Odom
TEMPORARY SALES TAX TRANSFER FOR WILDLIFE RESOURCES COMMISSION SALARY INCREASES
Section 30.6.  For the 1997-98 and 1998-99 fiscal years, the Secretary of Revenue shall transfer at the end of each quarter from the State sales and use tax net collections received by the Department of Revenue under Article 5 of Chapter 105 of the General Statutes to the State Treasurer for the Wildlife Resources Fund to fund the cost of any legislative salary increase for employees of the Wildlife Resources Commission.

Requested by:  Senators Plyler, Perdue, Odom
JUDICIAL BRANCH OFFICIALS/SALARY INCREASES
Section 30.7.  (a)	The annual salaries, payable monthly, for specified judicial branch officials for the 1997-98 and 1998-99 fiscal years, beginning July 1, 1997, are:

Judicial Branch Officials	Annual Salary

Chief Justice, Supreme Court	$106,102 
Associate Justice, Supreme Court	103,330 
Chief Judge, Court of Appeals	100,746 
Judge, Court of Appeals	99,024 
Judge, Senior Regular Resident Superior Court	96,334 
Judge, Superior Court	93,642 
Chief Judge, District Court	85,032 
Judge, District Court	82,341 
District Attorney	86,754 
Administrative Officer of the Courts	96,334 
Assistant Administrative Officer of the Courts	80,898 
Public Defender	86,754 

(b)	The district attorney or public defender of a judicial district, with the approval of the Administrative Officer of the Courts, shall set the salaries of assistant district attorneys or assistant public defenders, respectively, in that district such that the average salaries of assistant district attorneys or assistant public defenders in that district do not exceed fifty-three thousand three hundred sixty-five dollars ($53,365) and the minimum salary of any assistant district attorney or assistant public defender is at least twenty-seven thousand two hundred forty-five dollars ($27,245), effective July 1, 1997.
(c)	The salaries in effect for the 1996-97 fiscal year on June 30, 1997, for permanent, full-time employees of the Judicial Department, except for those whose salaries are itemized in this Part, shall be increased by three percent (3%), commencing July 1, 1997.
(d)	The salaries in effect on June 30, 1997, for all permanent, part-time employees of the Judicial Department shall be increased on and after July 1, 1997, by pro rata amounts of the three percent (3%).

Requested by:  Senators Plyler, Perdue, Odom
CLERKS OF SUPERIOR COURT/SALARY INCREASES
Section 30.8.  Effective July 1, 1997, G.S. 7A-101(a) reads as rewritten:
"(a)	The clerk of superior court is a full-time employee of the State and shall receive an annual salary, payable in equal monthly installments, based on the population of the county as determined in subsection (a1) of this section, according to the following schedule:
  Population	Annual Salary  
  Less than 100,000	$62,073
  100,000 to 149,999	 69,726
  150,000 to 249,999	 77,379
  250,000 and above	 85,032.
The salary schedule in this subsection is intended to represent the following percentage of the salary of a chief district court judge:
  Less than 100,000	73%
  100,000 to 149,999	82%
  150,000 to 249,999	91%
  250,000 and above	100%.
When a county changes from one population group to another, the salary of the clerk shall be changed, on July 1 of the fiscal year for which the change is reported, to the salary appropriate for the new population group, except that the salary of an incumbent clerk shall not be decreased by any change in population group during his continuance in office."

Requested by:  Senators Plyler, Perdue, Odom
GENERAL ASSEMBLY PRINCIPAL CLERKS/SALARY INCREASES
Section 30.9.  Effective July 1, 1997, G.S. 120-37(c) reads as rewritten:
"(c)	The principal clerks shall be full-time officers.  Each principal clerk shall be entitled to other benefits available to permanent legislative employees and shall be paid an annual salary of fifty-nine thousand two hundred eighty-six dollars ($59,286) payable monthly.  The Legislative Services Commission shall review the salary of the principal clerks prior to submission of the proposed operating budget of the General Assembly to the Governor and Advisory Budget Commission and shall make appropriate recommendations for changes in those salaries.  Any changes enacted by the General Assembly shall be by amendment to this paragraph."

Requested by:  Senators Plyler, Perdue, Odom
SERGEANT-AT-ARMS AND READING CLERKS
Section 30.10.  Effective July 1, 1997, G.S. 120-37(b) reads as rewritten:
"(b)	The sergeant-at-arms and the reading clerk in each house shall be paid a salary of two hundred fifty-five dollars ($255.00) per week plus subsistence at the same daily rate provided for members of the General Assembly, plus mileage at the rate provided for members of the General Assembly for one round trip only from their homes to Raleigh and return.  The sergeants-at-arms shall serve during sessions of the General Assembly and at such time prior to the convening of, and subsequent to adjournment or recess of, sessions as may be authorized by the Legislative Services Commission.  The reading clerks shall serve during sessions only."

Requested by:  Senators Plyler, Perdue, Odom
LEGISLATIVE EMPLOYEES/SALARY INCREASES
Section 30.11.  The Legislative Administrative Officer shall increase the salaries of nonelected employees of the General Assembly in effect for fiscal year 1997-98 by three percent (3%).  Nothing in this act limits any of the provisions of G.S. 120-32.

Requested by:  Senators Plyler, Perdue, Odom
COMMUNITY COLLEGES PERSONNEL/SALARY INCREASES
Section 30.12.  The Director of the Budget shall transfer from the Reserve for Salary Increases created in this act for fiscal year 1997-98 funds to the Department of Community Colleges necessary to provide an average annual salary increase of three percent (3%), including funds for the employer's retirement and social security contributions, commencing July 1, 1997, for all permanent full-time community college institutional personnel supported by State funds.  The State Board of Community Colleges shall establish guidelines for providing their salary increases to community college institutional personnel to include consideration of increases based on performance.  Salary funds shall be used to provide an average annual salary increase of three percent (3%) to all full-time employees and part-time employees on a pro rata basis.

Requested by:   Senators Plyler, Perdue, Odom
UNIVERSITY OF NORTH CAROLINA SYSTEM - EPA SALARY INCREASES
Section 30.13.  (a) The Director of the Budget shall transfer to the Board of Governors of The University of North Carolina sufficient funds from the Reserve for Salary Increases created in this act for fiscal year 1997-98 to provide an annual average salary increase of three percent (3%), including funds for the employer's retirement and social security contributions, commencing July 1, 1997, for all employees of The University of North Carolina, as well as employees other than teachers of the North Carolina School of Science and Mathematics, supported by State funds and whose salaries are exempt from the State Personnel Act (EPA).  These funds shall be allocated to individuals according to the rules adopted by the Board of Governors, or the Board of Trustees of the North Carolina School of Science and Mathematics, as appropriate, and shall not be used for any purpose other than for salary increases and necessary employer contributions provided by this section.  The Board of Governors shall include consideration of increases based on performance in its adoption of rules for the allocation of funds for salary increases.
(b) The Director of the Budget shall transfer to the Board of Governors of The University of North Carolina sufficient funds from the Reserve for Salary Increases created in this act for fiscal year 1997-98 to provide an annual average salary increase comparable to that provided in this act for public school teachers, including funds for the employer's retirement and social security contributions, commencing July 1, 1997, for all teaching employees of the North Carolina School of Science and Mathematics, supported by State funds and whose salaries are exempt from the State Personnel Act (EPA).  These funds shall be allocated to individuals according to the rules adopted by the Board of Trustees of the North Carolina School of Science and Mathematics and shall not be used for any purpose other than for salary increases and necessary employer contributions provided by this section.

Requested by:  Senators Plyler, Perdue, Odom
MOST STATE EMPLOYEES/SALARY INCREASES
Section 30.14.  (a)	The salaries in effect June 30, 1997, of all permanent full-time State employees whose salaries are set in accordance with the State Personnel Act, and who are paid from the General Fund or the Highway Fund shall be increased, on or after July 1, 1997, unless otherwise provided by this act, by three percent (3%).
(b)	Except as otherwise provided in this act, salaries in effect June 30, 1997, for permanent full-time State officials and persons in exempt positions that are recommended by the Governor or the Governor and the Advisory Budget Commission and set by the General Assembly shall be increased by three percent (3%), commencing July 1, 1997.
(c)	The salaries in effect June 30, 1997, for all permanent part-time State employees shall be increased on and after July 1, 1997, by pro rata amounts of the salary increases provided for permanent full-time employees covered under subsection (a) of this section.
(d)	The Director of the Budget may allocate out of special operating funds or from other sources of the employing agency, except tax revenues, sufficient funds to allow a salary increase on and after July 1, 1997, in accordance with subsections (a), (b), or (c) of this section, including funds for the employer's retirement and social security contributions, of the permanent full-time and part-time employees of the agency.
(e)  Within regular Executive Budget Act procedures as limited by this act, all State agencies and departments may increase on an equitable basis the rate of pay of temporary and permanent hourly State employees, subject to availability of funds in the particular agency or department, by pro rata amounts the salary increase provided for permanent full-time employees covered by the provisions of subsection (a) of this section, commencing July 1, 1997.
(f)  Except as provided by subsection (a) of this section, no person may receive a salary increase under G.S. 126-7 during the 1997-98 fiscal year, and no State employee or officer shall receive a merit increment during the 1997-98 fiscal year except as otherwise provided by this act.
(g)  The provisions of this section shall not apply to State employees whose salaries are determined by G.S. 7A-102 or G.S. 7A-171.1.  Those employees who would not receive a salary  increase under G.S. 7A-102 or G.S. 7A-171.1, because they are at the top of their salary range, shall receive a bonus in the amount of three percent (3%).

Requested by:  Senators Plyler, Perdue, Odom
ALL STATE-SUPPORTED PERSONNEL
Section 30.15.  (a)	Salaries and related benefits for positions that are funded partially from the General Fund or Highway Fund and partially from sources other than the General Fund or Highway Fund shall be increased from the General Fund or Highway Fund appropriation only to the extent of the proportionate part of the salaries paid from the General Fund or Highway Fund.
(b)	The granting of the salary increases under this act does not affect the status of eligibility for salary increments for which employees may be eligible unless otherwise required by this act.
(c)	The salary increases provided in this Part are to be effective July 1, 1997, do not apply to persons separated from State service due to resignation, dismissal, reduction in force, death, or retirement, whose last workday is prior to July 1, 1997, or to employees involved in final written disciplinary procedures.  The employee shall receive the increase on a current basis when the final written disciplinary procedure is resolved.
Payroll checks issued to employees after July 1, 1997, which represent payment of services provided prior to July 1, 1997, shall not be eligible for salary increases provided for in this act.  This subsection shall apply to all employees, subject to or exempt from the State Personnel Act, paid from State funds, including public schools, community colleges, and The University of North Carolina.
(d)	The Director of the Budget shall transfer from the Reserve for Salary Increases in this act for fiscal year 1997-98 all funds necessary for the salary increases provided by this act, including funds for the employer's retirement and social security contributions.
(e)  Nothing in this act authorizes the transfer of funds between the General Fund and the Highway Fund for salary increases.

Requested by:  Senators Plyler, Perdue, Odom
SALARY ADJUSTMENT FUND
Section 30.16.  Any remaining appropriations for legislative salary increases not required for that purpose may be used to supplement the Salary Adjustment Fund.  These funds shall first be used to provide reclassifications of those positions already approved by the Office of State Personnel. The Office of State Budget and Management shall report to the Joint Legislative Commission on Governmental Operations prior to the allocation of these funds.

Requested by:   Senators Plyler, Perdue, Odom, Jenkins
1997 RETIREMENT BENEFITS ACT
Section 30.17. (a) G.S. 135-5(b16) reads as rewritten:
"(b16)	Service Retirement Allowance of Members Retiring on or After July 1, 1995, but Before July 1, 1997. – Upon retirement from service in accordance with subsection (a) or (a1) above, on or after July 1, 1995, but before July 1, 1997,  a member shall receive the following service retirement allowance:
(1)	A member who is a law enforcement officer or an eligible former law enforcement officer shall receive a service retirement allowance computed as follows:
a.	If the member's service retirement date occurs on or after his 55th birthday, and completion of five years of creditable service as a law enforcement officer, or after the completion of 30 years of creditable service, the allowance shall be equal to one and seventy-five hundredths percent (1.75%) of his average final compensation, multiplied by the number of years of his creditable service.
b.	If the member's service retirement date occurs on or after his 50th birthday and before his 55th birthday with 15 or more years of creditable service as a law enforcement officer and prior to the completion of 30 years of creditable service, his retirement allowance shall be equal to the greater of:
1.	The service retirement allowance payable under G.S. 135-5(b16)(1)a. reduced by one-third of one percent (1/3 of 1%) thereof for each month by which his retirement date precedes the first day of the month coincident with or next following the month the member would have attained his 55th birthday; or
2.	The service retirement allowance as computed under G.S. 135-5(b16)(1)a. reduced by five percent (5%) times the difference between 30 years and his creditable service at retirement.
(2)	A member who is not a law enforcement officer or an eligible former law enforcement officer shall receive a service retirement allowance computed as follows:
a.	If the member's service retirement date occurs on or after his 65th birthday upon the completion of five years of creditable service or after the completion of 30 years of creditable service or on or after his 60th birthday upon the completion of 25 years of creditable service, the allowance shall be equal to one and seventy-five hundredths percent (1.75%) of his average final compensation, multiplied by the number of years of creditable service.
b.	If the member's service retirement date occurs after his 60th and before his 65th birthday and prior to his completion of 25 years or more of creditable service, his retirement allowance shall be computed as in G.S. 135-5(b16)(2)a. but shall be reduced by one-quarter of one percent (1/4 of 1%) thereof for each month by which his retirement date precedes the first day of the month coincident with or next following his 65th birthday.
c.	If the member's early service retirement date occurs on or after his 50th birthday and before his 60th birthday and after completion of 20 years of creditable service but prior to the completion of 30 years of creditable service, his early service retirement allowance shall be equal to the greater of:
1.	The service retirement allowance as computed under G.S. 135-5(b16)(2)a. but reduced by the sum of five-twelfths of one percent (5/12 of 1%) thereof for each month by which his retirement date precedes the first day of the month coincident with or next following the month the member would have attained his 60th birthday, plus one-quarter of one percent (1/4 of 1%) thereof for each month by which his 60th birthday precedes the first day of the month coincident with or next following his 65th birthday; or
2.	The service retirement allowance as computed under G.S. 135-5(b16)(2)a. reduced by five percent (5%) times the difference between 30 years and his creditable service at retirement; or
3.	If the member's creditable service commenced prior to July 1, 1994, the service retirement allowance equal to the actuarial equivalent of the allowance payable at the age of 60 years as computed in G.S. 135-5(b16)(2)b.
d.	Notwithstanding the foregoing provisions, any member whose creditable service commenced prior to July 1, 1963, shall not receive less than the benefit provided by G.S. 135-5(b)."
(b)	G.S. 135-5 is amended by adding a new subsection to read:
"( b17)	Service Retirement Allowance of Members Retiring on or After July 1, 1997. – Upon retirement from service in accordance with subsection (a) or (a1) above, on or after July 1, 1997,  a member shall receive the following service retirement allowance:
(1)	A member who is a law enforcement officer or an eligible former law enforcement officer shall receive a service retirement allowance computed as follows:
a.	If the member's service retirement date occurs on or after his 55th birthday, and completion of five years of creditable service as a law enforcement officer, or after the completion of 30 years of creditable service, the allowance shall be equal to one and eighty-one hundredths percent (1.81%) of his average final compensation, multiplied by the number of years of his creditable service.
b.	If the member's service retirement date occurs on or after his 50th birthday and before his 55th birthday with 15 or more years of creditable service as a law enforcement officer and prior to the completion of 30 years of creditable service, his retirement allowance shall be equal to the greater of:
1.	The service retirement allowance payable under G.S. 135-5(b17)(1)a. reduced by one-third of one percent (1/3 of 1%) thereof for each month by which his retirement date precedes the first day of the month coincident with or next following the month the member would have attained his 55th birthday; or
2.	The service retirement allowance as computed under G.S. 135-5(b17)(1)a. reduced by five percent (5%) times the difference between 30 years and his creditable service at retirement.
(2)	A member who is not a law enforcement officer or an eligible former law enforcement officer shall receive a service retirement allowance computed as follows:
a.	If the member's service retirement date occurs on or after his 65th birthday upon the completion of five years of membership service or after the completion of 30 years of creditable service or on or after his 60th birthday upon the completion of 25 years of creditable service, the allowance shall be equal to one and eighty-one hundredths percent (1.81%) of his average final compensation, multiplied by the number of years of creditable service.
b.	If the member's service retirement date occurs after his 60th and before his 65th birthday and prior to his completion of 25 years or more of creditable service, his retirement allowance shall be computed as in G.S. 135-5(b17)(2)a. but shall be reduced by one-quarter of one percent (1/4 of 1%) thereof for each month by which his retirement date precedes the first day of the month coincident with or next following his 65th birthday.
c.	If the member's early service retirement date occurs on or after his 50th birthday and before his 60th birthday and after completion of 20 years of creditable service but prior to the completion of 30 years of creditable service, his early service retirement allowance shall be equal to the greater of:
1.	The service retirement allowance as computed under G.S. 135-5(b17)(2)a. but reduced by the sum of five-twelfths of one percent (5/12 of 1%) thereof for each month by which his retirement date precedes the first day of the month coincident with or next following the month the member would have attained his 60th birthday, plus one-quarter of one percent (1/4 of 1%) thereof for each month by which his 60th birthday precedes the first day of the month coincident with or next following his 65th birthday; or
2.	The service retirement allowance as computed under G.S. 135-5(b17)(2)a. reduced by five percent (5%) times the difference between 30 years and his creditable service at retirement; or
3.	If the member's creditable service commenced prior to July 1, 1994, the service retirement allowance equal to the actuarial equivalent of the allowance payable at the age of 60 years as computed in G.S. 135-5(b17)(2)b.
d.	Notwithstanding the foregoing provisions, any member whose creditable service commenced prior to July 1, 1963, shall not receive less than the benefit provided by G.S. 135-5(b)."
(c)	G.S. 135-5(m) reads as rewritten:
"(m)	Survivor's Alternate Benefit. – Upon the death of a member in service, the principal beneficiary designated to receive a return of accumulated contributions shall have the right to elect to receive in lieu thereof the reduced retirement allowance provided by Option 2 of subsection (g) above computed by assuming that the member had retired on the first day of the month following the date of his death, provided that the following conditions apply:
(1)	a.	The member had attained such age and/or creditable service to be eligible to commence retirement with an early or service retirement allowance, or
b.	The member had obtained 20 years of creditable service in which case the retirement allowance shall be computed in accordance with G.S. 135-5(b17)(1)b. or G.S. 135-5(b17)(2)c., notwithstanding the requirement of obtaining age 50.
(2)	The member had designated as the principal beneficiary to receive a return of his accumulated contributions one and only one person who was living at the time of his death.
(3)	The member had not instructed the Board of Trustees in writing that he did not wish the provisions of this subsection to apply.
For the purpose of this benefit, a member is considered to be in service at the date of his death if his death occurs within 180 days from the last day of his actual service. The last day of actual service shall be determined as provided in subsection (l)	of this section. Upon the death of a member in service, the surviving spouse may make all purchases for creditable service as provided for under this Chapter for which the member had made application in writing prior to the date of death, provided that the date of death occurred prior to or within 60 days after notification of the cost to make the purchase. The term "in service" as used in this subsection includes a member in receipt of a benefit under the Disability Income Plan as provided in Article 6 of this Chapter."
(d)	G.S. 135-5 is amended by adding two new subsections to read:
"( ccc)	From and after July 1, 1997, the retirement allowance to or on account of beneficiaries whose retirement commenced on or before July 1, 1996, shall be increased by three percent (3%) of the allowance payable on June 1, 1997, in accordance with G.S. 135-5(o).  Furthermore, from and after July 1, 1997, the retirement allowance to or on account of beneficiaries whose retirement commenced after July 1, 1996, but before June 30, 1997, shall be increased by a prorated amount of three percent (3%) of the allowance payable as determined by the Board of Trustees based upon the number of months that a retirement allowance was paid between July 1, 1996, and June 30, 1997.
(ddd)	Increase in Allowance as to Persons on Retirement Rolls as of June 1, 1997. – From and after July 1, 1997, the retirement allowance to or on account of beneficiaries on the retirement rolls as of June 1, 1997, shall be increased by three and four-tenths percent (3.4%) of the allowance payable on June 1, 1997. This allowance shall be calculated on the allowance payable and in effect on June 30, 1997, so as not to be compounded on any other increase granted by act of the 1997 General Assembly."
(e)  G.S. 135-65 is amended by adding a new subsection to read:
"( r)	From and after July 1, 1997, the retirement allowance to or on account of beneficiaries whose retirement commenced on or before July 1, 1996, shall be increased by three percent (3%) of the allowance payable on June 1, 1997. Furthermore, from and after July 1, 1997, the retirement allowance to or on account of beneficiaries whose retirement commenced after July 1, 1996, but before June 30, 1997, shall be increased by a prorated amount of three percent (3%) of the allowance payable as determined by the Board of Trustees based upon the number of months that a retirement allowance was paid between July 1, 1996, and June 30, 1997."
(f)  G.S. 128-27(b15) reads as rewritten:
"(b15)	Service Retirement Allowance of Members Retiring on or after July 1, 1995, but before July 1, 1997. – Upon retirement from service in accordance with subsection (a) or (a1) above, on or after July 1, 1995, but before July 1, 1997, a member shall receive the following service retirement allowance:
(1)	A member who is a law enforcement officer or an eligible former law enforcement officer shall receive a service retirement allowance computed as follows:
a.	If the member's service retirement date occurs on or after his 55th birthday, and completion of five years of creditable service as a law enforcement officer, or after the completion of 30 years of creditable service, the allowance shall be equal to one and seventy-two hundredths percent (1.72%) of his average final compensation, multiplied by the number of years of his creditable service.
b.	If the member's service retirement date occurs on or after his 50th birthday and before his 55th birthday with 15 or more years of creditable service as a law enforcement officer and prior to the completion of 30 years of creditable service, his retirement allowance shall be equal to the greater of:
1.	The service retirement allowance payable under G.S. 128-27(b15)(1)a. reduced by one-third of one percent (1/3 of 1%) thereof for each month by which his retirement date precedes the first day of the month coincident with or next following the month the member would have attained his 55th birthday; or
2.	The service retirement allowance as computed under G.S. 128-27(b15)(1)a. reduced by five percent (5%) times the difference between 30 years and his creditable service at retirement.
(2)	A member who is not a law enforcement officer or an eligible former law enforcement officer shall receive a service retirement allowance computed as follows:
a.	If the member's service retirement date occurs on or after his 65th birthday upon the completion of five years of creditable service or after the completion of 30 years of creditable service or on or after his 60th birthday upon the completion of 25 years of creditable service, the allowance shall be equal to one and seventy-two hundredths percent (1.72%) of his average final compensation, multiplied by the number of years of creditable service.
b.	If the member's service retirement date occurs after his 60th and before his 65th birthday and prior to his completion of 25 years or more of creditable service, his retirement allowance shall be computed as in G.S. 128-27(b15)(2)a. but shall be reduced by one-quarter of one percent (1/4 of 1%) thereof for each month by which his retirement date precedes the first day of the month coincident with or next following his 65th birthday.
c.	If the member's early service retirement date occurs on or after his 50th birthday and before his 60th birthday and after completion of 20 years of creditable service but prior to the completion of 30 years of creditable service, his early service retirement allowance shall be equal to the greater of:
1.	The service retirement allowance as computed under G.S. 128-27(b15)(2)a. but reduced by the sum of five-twelfths of one percent (5/12 of 1%) thereof for each month by which his retirement date precedes the first day of the month coincident with or next following the month the member would have attained his 60th birthday, plus one-quarter of one percent (1/4 of 1%) thereof for each month by which his 60th birthday precedes the first day of the month coincident with or next following his 65th birthday; or
2.	The service retirement allowance as computed under G.S. 128-27(b15)(2)a. reduced by five percent (5%) times the difference between 30 years and his creditable service at retirement; or
3.	If the member's creditable service commenced prior to July 1, 1995, the service retirement allowance equal to the actuarial equivalent of the allowance payable at the age of 60 years as computed in G.S. 128-27(b15)(2)b.
d.	Notwithstanding the foregoing provisions, any member whose creditable service commenced prior to July 1, 1965, shall not receive less than the benefit provided by G.S. 128-27(b)."
(g)  G.S. 128-27 is amended by adding a new subsection to read:
"( b16)	Service Retirement Allowance of Members Retiring on or After July 1, 1997. – Upon retirement from service in accordance with subsection (a) or (a1) above, on or after July 1, 1997, a member shall receive the following service retirement allowance:
(1)	A member who is a law enforcement officer or an eligible former law enforcement officer shall receive a service retirement allowance computed as follows:
a.	If the member's service retirement date occurs on or after his 55th birthday, and completion of five years of creditable service as a law enforcement officer, or after the completion of 30 years of creditable service, the allowance shall be equal to one and seventy-six hundredths percent (1.76%) of his average final compensation, multiplied by the number of years of his creditable service.
b.	If the member's service retirement date occurs on or after his 50th birthday and before his 55th birthday with 15 or more years of creditable service as a law enforcement officer and prior to the completion of 30 years of creditable service, his retirement allowance shall be equal to the greater of:
1.	The service retirement allowance payable under G.S. 128-27(b16)(1)a. reduced by one-third of one percent (1/3 of 1%) thereof for each month by which his retirement date precedes the first day of the month coincident with or next following the month the member would have attained his 55th birthday; or
2.	The service retirement allowance as computed under G.S. 128-27(b16)(1)a. reduced by five percent (5%) times the difference between 30 years and his creditable service at retirement.
(2)	A member who is not a law enforcement officer or an eligible former law enforcement officer shall receive a service retirement allowance computed as follows:
a.	If the member's service retirement date occurs on or after his 65th birthday upon the completion of five years of creditable service or after the completion of 30 years of creditable service or on or after his 60th birthday upon the completion of 25 years of creditable service, the allowance shall be equal to one and seventy-six hundredths percent (1.76%) of his average final compensation, multiplied by the number of years of creditable service.
b.	If the member's service retirement date occurs after his 60th birthday and before his 65th birthday and prior to his completion of 25 years or more of creditable service, his retirement allowance shall be computed as in G.S. 128-27(b16)(2)a. but shall be reduced by one-quarter of one percent (1/4 of 1%) thereof for each month by which his retirement date precedes the first day of the month coincident with or next following his 65th birthday.
c.	If the member's early service retirement date occurs on or after his 50th birthday and before his 60th birthday and after completion of 20 years of creditable service but prior to the completion of 30 years of creditable service, his early service retirement allowance shall be equal to the greater of:
1.	The service retirement allowance as computed under G.S. 128-27(b16)(2)a. but reduced by the sum of five-twelfths of one percent (5/12 of 1%) thereof for each month by which his retirement date precedes the first day of the month coincident with or next following the month the member would have attained his 60th birthday, plus one-quarter of one percent (1/4 of 1%) thereof for each month by which his 60th birthday precedes the first day of the month coincident with or next following his 65th birthday; or
2.	The service retirement allowance as computed under G.S. 128-27(b16)(2)a. reduced by five percent (5%) times the difference between 30 years and his creditable service at retirement; or
3.	If the member's creditable service commenced prior to July 1, 1995, the service retirement allowance equal to the actuarial equivalent of the allowance payable at the age of 60 years as computed in G.S. 128-27(b16)(2)b.
d.	Notwithstanding the foregoing provisions, any member whose creditable service commenced prior to July 1, 1965, shall not receive less than the benefit provided by G.S. 128-27(b)."
(h)  G.S. 128-27 is amended by adding two new subsections to read:
"( ss)	From and after July 1, 1997, the retirement allowance to or on account of beneficiaries whose retirement commenced on or before July 1, 1996, shall be increased by three percent (3%) of the allowance payable on June 1, 1997, in accordance with G.S. 128-27(k). Furthermore, from and after July 1, 1997, the retirement allowance to or on account of beneficiaries whose retirement commenced after July 1, 1996, but before June 30, 1997, shall be increased by a prorated amount of three percent (3%) of the allowance payable as determined by the Board of Trustees based upon the number of months that a retirement allowance was paid between July 1, 1996, and June 30, 1997.
(tt)	Increase in Allowance as to Persons on Retirement Rolls as of June 1, 1997. – From and after July 1, 1997, the retirement allowance to or on account of beneficiaries on the retirement rolls as of June 1, 1997, shall be increased by two and three-tenths percent (2.3 %) of the allowance payable on June 1, 1997. This allowance shall be calculated on the allowance payable and in effect on June 30, 1997, so as not to be compounded on any other increase payable under subsection (k) of this section or otherwise granted by act of the 1997 General Assembly."
(i)  G.S 128-27(m) reads as rewritten:
"(m)	Survivor's Alternate Benefit. – Upon the death of a member in service, the principal beneficiary designated to receive a return of accumulated contributions shall have the right to elect to receive in lieu thereof the reduced retirement allowance provided by Option two of subsection (g) above computed by assuming that the member had retired on the first day of the month following the date of his death, provided that all three of the following conditions apply:
(1)	a.	The member had attained such age and/or creditable service to be eligible to commence retirement with an early or service retirement allowance, or
b.	The member had obtained 20 years of creditable service in which case the retirement allowance shall be computed in accordance with G.S. 128-27(b16)(1)b. or G.S. 128-27(b16)(2)c., notwithstanding the requirement of obtaining age 50.
(2)	The member had designated as the principal beneficiary to receive a return of his accumulated contributions one and only one person who is living at the time of his death.
(3)	The member had not instructed the Board of Trustees in writing that he did not wish the provisions of this subsection apply.
For the purpose of this benefit, a member is considered to be in service at the date of his death if his death occurs within 180 days from the last day of his actual service. The last day of actual service shall be determined as provided in subsection (l)	of this section. Upon the death of a member in service, the surviving spouse may make all purchases for creditable service as provided for under this Chapter for which the member had made application in writing prior to the date of death, provided that the date of death occurred prior to or within 60 days after notification of the cost to make the purchase."

Requested by:   Senators Plyler, Perdue, Odom, Lee
SALARY-RELATED CONTRIBUTIONS/EMPLOYERS
Section 30.18. (a)	Required employer salary-related contributions for employees whose salaries are paid from department, office, institution, or agency receipts shall be paid from the same source as the source of the employees' salary.  If an employee's salary is paid in part from the General Fund or Highway Fund and in part from department, office, institution, or agency receipts, required employer salary-related contributions may be paid from the General Fund or Highway Fund only to the extent of the proportionate part paid from the General Fund or Highway Fund in support of the salary of the employee, and the remainder of the employer's requirements shall be paid from the source that supplies the remainder of the employee's salary.  The requirements of this section as to source of payment are also applicable to payments on behalf of the employee for hospital-medical benefits, longevity pay, unemployment compensation, accumulated leave, workers' compensation, severance pay, separation allowances, and applicable disability income and disability salary continuation benefits.
(b)	Effective July 1, 1997, the State's employer contribution rates budgeted for retirement and related benefits as a percentage of covered salaries for the 1997-98 fiscal year and the 1998-99 fiscal year are (i) ten and eighty-three hundredths percent (10.83%) - Teachers and State Employees; (ii) fifteen and eighty-three hundredths percent (15.83%) - State Law Enforcement Officers; (iii) nine and forty hundredths percent (9.40%) - University Employees' Optional Retirement Program; (iv) twenty-two and sixty-five hundredths percent (22.65%) - Consolidated Judicial Retirement System; and (v) twenty-four and fifty-eight hundredths percent (24.58%) - Legislative Retirement System.  Each of the foregoing contribution rates includes two percent (2%) for hospital and medical benefits.  The rate for State Law Enforcement Officers includes five percent (5%) for the Supplemental Retirement Income Plan.  The rates for Teachers and State Employees, State Law Enforcement Officers, and for the University Employees' Optional Retirement Program include fifty-two hundredths percent (0.52%) for the Disability Income Plan.
(c)	The maximum annual employer contributions, payable monthly, by the State for each covered employee or retiree for the 1997-98 fiscal year and for the 1998-99 fiscal year to the Teachers' and State Employees' Comprehensive Major Medical Plan are:  (i)	Medicare-eligible employees and retirees - one thousand three hundred twenty-one dollars ($1,321); and (ii) Non-Medicare-eligible employees and retirees - one thousand seven hundred thirty-six dollars ($1,736).

Requested by:   Senators Plyler, Perdue, Odom, Martin of Pitt
INCREASE THE MONTHLY BENEFITS FROM THE NORTH CAROLINA FIREMEN'S AND RESCUE SQUAD WORKERS' PENSION FUND
Section 30.19. (a) G.S. 58-86-55 reads as rewritten:
"§ 58-86-55.  Monthly pensions upon retirement.
Any member who has served 20 years as an 'eligible fireman' or 'eligible rescue squad worker' in the State of North Carolina, as provided in G.S. 58-86-25 and G.S. 58-86-30, and who has attained the age of 55 years is entitled to be paid a monthly pension from this fund.  The monthly pension shall be in the amount of one hundred forty-one dollars ($141.00) per month.  Any retired fireman receiving a pension shall, effective July 1, 1997, receive a pension of one hundred forty-one dollars ($141.00) per month.
Members shall pay ten dollars ($10.00) per month as required by G.S. 58-86-35 and G.S. 58-86-40 for a period of no longer than 20 years. No 'eligible rescue squad member' shall receive a pension prior to July 1, 1983.  No member shall be entitled to a pension hereunder until the member's official duties as a fireman or rescue squad worker for which the member is paid compensation shall have been terminated and the member shall have retired as such according to standards or rules fixed by the board of trustees.
A member who is totally and permanently disabled while in the discharge of the member's official duties as a result of bodily injuries sustained or as a result of extreme exercise or extreme activity experienced in the course and scope of those official duties and who leaves the fire or rescue squad service because of this disability shall be entitled to be paid from the fund a monthly benefit in an amount of one hundred forty-one dollars ($141.00) per month beginning the first month after the member's fifty-fifth birthday.  All applications for disability are subject to the approval of the board who may appoint physicians to examine and evaluate the disabled member prior to approval of the application, and annually thereafter.  Any disabled member shall not be required to make the monthly payment of ten dollars ($10.00) as required by G.S. 58-86-35 and G.S. 58-86-40.
A member who is totally and permanently disabled for any cause, other than line of duty, who leaves the fire or rescue squad service because of this disability and who has at least 10 years of service with the pension fund, may be permitted to continue making a monthly contribution of ten dollars ($10.00) to the fund until the member has made contributions for a total of 240 months.  The member shall upon attaining the age of 55 years be entitled to receive a pension as provided by this section.  All applications for disability are subject to the approval of the board who may appoint physicians to examine and evaluate the disabled member prior to approval of the application and annually thereafter.
A member who, because his residence is annexed by a city under Part 2 or Part 3 of Article 4 of Chapter 160A of the General Statutes, or whose department is closed because of an annexation by a city under Part 2 or Part 3 of Article 4 of Chapter 160A of the General Statutes, and because of such annexation is unable to perform as a fireman of any status, and if the member has at least 10 years of service with the pension fund, may be permitted to continue making a monthly contribution of ten dollars ($10.00) to the fund until the member has made contributions for a total of 240 months.  The member upon attaining the age of 55 years and completion of such contributions shall be entitled to receive a pension as provided by this section.  Any application to make monthly contributions under this section shall be subject to a finding of eligibility by the Board of Trustees upon application of the member.
The pensions provided shall be in addition to all other pensions or benefits under any other statutes of the State of North Carolina or the United States, notwithstanding any exclusionary provisions of other pensions or retirement systems provided by law."
(b) It is the intent of the General Assembly to provide cost-of-living increases to members and retirees of the Firemen's and Rescue Squad Workers' Pension Fund at a rate equal to any cost-of-living increases provided to beneficiaries of the Teachers' and State Employees' Retirement System, to the extent that funds are available.

Requested by:   Senators Perdue, Plyler, Odom
RETIREMENT SYSTEM ADMINISTRATIVE EXPENSES TO COMPLY WITH SUPREME COURT DECISIONS
Section 30.20.  The Board of Trustees of the Teachers' and State Employees' Retirement System may expend an aggregate total of not more than five hundred thousand dollars ($500,000) for fiscal year 1997-98 and an aggregate total of not more than two hundred thousand dollars ($200,000) for fiscal year 1998-99 from assets of the Teachers' and State Employees' Retirement System and the Local Governmental Employees Retirement System to meet administrative expenses to comply with Supreme Court decisions.

Requested by:   Senators Perdue, Plyler, Odom, Wellons
EXTEND SUNSET ON FICA SAVINGS USE
Section 30.21.  (a)	Section 14(i) of Chapter 1044 of the 1991 Session Laws, as amended by Section 42 of Chapter 561 of the 1993 Session Laws and Section 7.28A of Chapter 769 of the 1993 Session Laws, reads as rewritten:
"(i)	Subsections (a) through (d) of this section are effective January 1, 1990.  Subsections (e) through (h) of this section are effective January 1, 1991.  Subsections (a) through (h) of this section shall expire December 31, 1999."
(b)	This section is effective when it becomes law.

PART XXXI. GENERAL CAPITAL APPROPRIATIONS/PROVISIONS

INTRODUCTION
Section 31.  The appropriations made by the 1997 General Assembly for capital improvements are for constructing, repairing, or renovating State buildings, utilities, and other capital facilities, for acquiring sites for them where necessary, and acquiring buildings and land for State government purposes.

CAPITAL APPROPRIATIONS/GENERAL FUND

Section 31.1.  Appropriations are made from the General Fund of the State for the 1997-99 biennium for use by the State departments, institutions, and agencies to provide for capital improvement projects according to the following schedule:

Capital Improvements - General Fund
	1997-98

University Board of Governors (Total)	$ 59,518,175
1.	UNC - Chapel Hill -
a.	Addition to the Institute of Government
Knapp Building	4,000,000
b.	Addition to Beard Hall - School
of Pharmacy	8,824,600
c.	North Carolina Botanical Garden - Planning	350,000
d.	Expansion of the Carolina Living
and Learning Center	1,274,275

2.	N.C. State University -
a.	Completion of Eastern 4-H Environmental
Education Center	5,545,300
b.	Expansion of CMAST Building	2,363,000
c.	Finalize Construction Drawings
for the J.C. Raulston Arboretum	87,000

3.	UNC - Greensboro -
Additional Funding for the Science
Lab and Classroom Building	8,000,000

4.	East Carolina University -
Complete Expansion of Dowdy-Ficklen
Stadium	7,000,000

5.	UNC - Charlotte -
Construction of Building and Relocation of
Equipment for Polymer's Extension Program	1,450,000

6.	UNC - Pembroke -
Construction of Residence Hall	5,979,500

7.	UNC - Asheville -
Kellogg Center	500,000

8.	Elizabeth City State University -
Completion of Fine Arts Building	3,000,000

9.	A & T State University -
Additional Funding for General
Classroom and Lab Building	4,000,000

10.	UNC - Public Television
Replace and Upgrade Columbia
Transmitter, Tower and Ancillary
Equipment	7,144,500

Department of Community Colleges (Total)	$ 500,000

1.	Center for Applied Textile Technology -	500,000
a.	Maintenance and Storage Facility	 62,800
b.	Planning, Design and Site Development
for Lab and Administration Building	437,200

Department of Cultural Resources (Total)	$5,000,000

1.	Maritime Museum - Land Acquisition	1,500,000
2.	Museum of Cape Fear - Continued Development	1,100,000
3.	Museum of Albemarle - Planning, Site Development	1,000,000
4.	Roanoke Island Commission - Exhibits	1,400,000

Department of Environment, Health, and Natural Resources (Total)	$25,543,000

1.	Water Resources Development Projects	6,343,000
2.	Museum of Natural Science - Exhibits	7,600,000
3.	N.C. Aquariums - Expand one Aquarium	11,500,000
4.	Wayne County Forestry Headquarters - An
Addition to Equipment Building	100,000

Department of Agriculture (Total)	$5,800,000

1.	State Fair Multipurpose Events Building - 
Planning and Site Development	1,000,000
2.	Piedmont-Triad Farmers Market
Planning Wholesale/Retail Building	300,000
3.	Eastern Agricultural Center - 
Continued Development	3,500,000
4.	Southeastern Farmers' Market and
Agricultural Center - Continued Development	1,000,000

Department of Human Resources (Total)	$500,000

Eastern School for the Deaf & Hard of Hearing
- Planning for Dorm	500,000

Department of Correction (Total)	$700,000

1.	Alexander County - Planning for Single Cell Facility	300,000
2.	Carteret County - Multipurpose Modular Building	400,000

Department of Crime Control and Public Safety (Total)	$1,260,300

1.	Charlotte National Guard Armory -
State Share of Construction Costs	1,260,300
2.	State Highway Patrol - Removal and
Replacement of Underground Fuel Storage
Tanks - Highway Fund	 $650,000	      -    

Total Capital Improvements	$98,821,475

Requested by:  Senators Odom, Plyler, Perdue
EXPENDITURE OF FUNDS FROM RESERVE FOR REPAIRS AND RENOVATIONS
Section 31.3. (a)	Of the funds in the Reserve for Repairs and Renovations for the 1997-98 fiscal year, forty-six percent (46%) shall be allocated to the Board of Governors of The University of North Carolina for repairs and renovations pursuant to G.S. 143-15.3A, in accordance with guidelines developed in The University of North Carolina Funding Allocation Model for Reserve for Repairs and Renovations, as approved by the Board of Governors of The University of North Carolina, and fifty-four percent (54%) shall be allocated to the Office of State Budget and Management for repairs and renovations pursuant to G.S. 143-15.3A.
Notwithstanding G.S. 143-15.3A, the Board of Governors may allocate funds for the repair and renovation of facilities not supported from the General Fund if the Board determines that sufficient funds are not available from other sources and that conditions warrant General Fund assistance.  Any such finding shall be included in the Board's submission to the Joint Legislative Commission on Governmental Operations on the proposed allocation of funds.
	The Board of Governors and the Office of State Budget and Management shall submit to the Joint Legislative Commission on Governmental Operations and to the Fiscal Research Division of the Legislative Services Office, for their review, the proposed allocation of these funds.  Subsequent changes in the proposed allocations shall be reported prior to expenditure to the Joint Legislative Commission on Governmental Operations and to the Fiscal Research Division of the Legislative Services Office.
(b) Of the funds allocated to the Board of Governors of The University of North Carolina for repairs and renovations in subsection (a) of this section, allocations for the projects listed below shall be made as follows:

1. UNC-CH -  Renovations of Knapp Building	$4,532,100
2. NCSU - Nelson Hall Renovations	6,914,900.

The allocations for these two projects shall be made prior to the application of the Repairs and Renovations formula to the balance of the fund for all campuses.
(c) Of the funds allocated to the Office of State Budget and Management for repairs and renovations in subsection (a) of this section, allocations for the listed projects shall be made as follows:

1. Agriculture - Rollins Lab Renovations	537,000
2. Commerce -State Port at Wilmington	3,000,000
State Port at Morehead City	3,000,000
3. Human Resources - Western Carolina Center
Renovate Main Kitchen & Dining Area	575,000
Perimeter Road resurfacing	393,900
Replace cooking equipment - gym	62,000
Swimming pool pipe replacement	48,800
Replace asbestos floor tile - gym	89,500
Renovate Spruce & Pine Cottages	1,100,000
Renovate Poplar & Ash Cottages	1,100,000
Reroofing projects	   245,000	3,614,200
4. Cultural Resources - North Carolina Museum
of History Interior Finishes and
Engineering	1,191,055

Requested by:   Senator Warren
HISTORIC SITES REPAIRS AND RENOVATIONS FUNDS
Section 31.4. (a) Funds allocated in Section 31.3 of this act to the Office of State Budget and Management for the Repairs and Renovations Fund may be used to make needed repairs and renovations at the State Historic Sites.
(b) There is established the Historic Sites Repairs and Renovations Review Committee.  The Committee shall consist of the following members:  The three cochairs of the Senate Appropriations and Base Budget Committee and the four cochairs of the House of Representatives Appropriations Committee.  The Office of State Budget and Management shall submit its proposal for the use of funds from the Repairs and Renovations Fund for Historic Sites to the Committee before submitting the proposal to the Joint Legislative Commission on Governmental Operations in accordance with Section 31.3 of this act.

Requested by:   Senators Martin of Pitt, Perdue, Plyler
WATER RESOURCES DEVELOPMENT PROJECTS FUNDS
Section 31.5.  (a)	The Department of Environment, Health, and Natural Resources shall allocate the funds appropriated in Section 31.1 of this act for water resources development projects to the following projects whose estimated costs are as indicated:

Name of Project

1.	B. Everett Jordan Water Supply Repayment	$   90,000

2.	Wilmington Harbor Maintenance Dredging	455,000

3.	Wilmington Harbor Channel Widening	1,570,000

4.	Manteo Shallowbag Bay Maintenance Dredging	150,000

5.	Aquatic Plant Control Statewide and Lake Gaston	150,000

6.	Wilmington Harbor Long-Term Disposal	285,000

7.	Carolina Beach Renourishment	765,000

8.	Wrightsville Beach Renourishment	335,000

9.	Wanchese Marsh Creation and Protection	200,000

10.	North and Manteo Channel Maintenance Dredging	1,100,000

11.	State - Local Water Projects

a.	McLendons Creek Stream Restoration (Moore Co.)	30,000
b.	Allens Creek Water Management (Haywood Co.)	25,000
c.	Big Elkin Creek Stream Restoration (Surry Co.)	8,000
d.	Beech Mountain Stream Restoration Projects (Watauga Co.)	30,000
e.	Tuckasegee River Access (Swain Co.)	60,000
f.	Brevard High School Wetland Boardwalk (Transylvania Co.)	8,000
g.	Tranters Creek - Flat Swamp Drainage (Martin Co.)	36,300
h.	River Bend Canals Maintenance Dredging (Craven Co.)	292,000
i.	Haw River Access (Alamance Co.)	17,400
j.	Graham - Mebane Lake Pier and Picnic Facility (Alamance Co.) 20,000
k.	French Broad River Park (Buncombe Co.)	30,000
l.	Mill Creek Wetland and Trail Construction (Forsyth Co.)	13,300
m.	Kitty Hawk Beach Access (Dare Co.)	80,500
n.	Wetland Water Management (Dare Co.)	10,000
o.	Lovill's Creek Greenway (Surry Co.)	89,000
p.	Elm Street Drainage (Moore Co.)	20,000
q.	Scott Branch Drainage (Stokes Co.)	30,000
r.	Contentnea Creek Drainage, Phase IV (Wilson Co.)	29,100

	Subtotals  $828,100

12.	Dare County Beaches Feasibility Study	225,000

13.	Harker's Island Navigation Study	40,000

14.	Planning Assistance to Communities	150,000

TOTAL	$6,343,000

(b)	Where the actual costs are different from the estimated costs under subsection (a) of this section, the Department may adjust the allocations among projects as needed.  If any projects listed in subsection (a) of this section are delayed and the budgeted State funds cannot be used during the 1997-98 fiscal year, or if the projects listed in subsection (a) of this section are accomplished at a lower cost, the Department may use the resulting fund availability to fund any of the following:
(1)	Corps of Engineers project feasibility studies.
(2)	Corps of Engineers projects whose schedules have advanced and require State matching funds in fiscal year 1997-98.
(3)	State-local Water Resources Development Projects.
Funds not expended or encumbered for these purposes shall revert to the General Fund at the end of the 1998-99 fiscal year.
(c)	The Department shall make quarterly reports on the use of these funds to the Joint Legislative Commission on Governmental Operations, the Fiscal Research Division, and the Office of State Budget and Management.  Each report shall include all of the following:
(1)	All projects listed in this section.
(2)	The estimated cost of each project.
(3)	The date that work on each project began or is expected to begin.
(4)	The date that work on each project was completed or is expected to be completed.
(5)	The actual cost of each project.
The quarterly reports shall also show those projects advanced in schedule, those projects delayed in schedule, and an estimate of the amount of funds expected to revert to the General Fund.

Requested by:   Senators Perdue, Plyler, and Odom
HIGHWAY PATROL–UNDERGROUND FUEL TANK REMOVAL AND REMEDIATION FUNDS
Section 31.6.  Notwithstanding any other provision of law, of the unreserved credit balance in the Highway Fund available on July 1, 1997, six hundred fifty thousand dollars ($650,000) shall be used for the removal and replacement of underground fuel storage tanks located at various State Highway Patrol installations across the state.

Requested by:  Senators Plyler, Perdue, Odom
PROCEDURES FOR DISBURSEMENT
Section 31.7.  The appropriations made by the 1997 General Assembly for capital improvements shall be disbursed for the purposes provided by this act.  Expenditure of funds shall not be made by any State department, institution, or agency, until an allotment has been approved by the Governor as Director of the Budget.  The allotment shall be approved only after full compliance with the Executive Budget Act, Article 1 of Chapter 143 of the General Statutes.  Prior to the award of construction contracts for projects to be financed in whole or in part with self-liquidating appropriations, the Director of the Budget shall approve the elements of the method of financing of those projects including the source of funds, interest rate, and liquidation period.  Provided, however, that if the Director of the Budget approves the method of financing a project, the Director shall report that action to the Joint Legislative Commission on Governmental Operations at its next meeting.
Where direct capital improvement appropriations include the purpose of furnishing fixed and movable equipment for any project, those funds for equipment shall not be subject to transfer into construction accounts except as authorized by the Director of the Budget.  The expenditure of funds for fixed and movable equipment and furnishings shall be reviewed and approved by the Director of the Budget prior to commitment of funds.
Capital improvement projects authorized by the 1997 General Assembly shall be completed, including fixed and movable equipment and furnishings, within the limits of the amounts of the direct or self-liquidating appropriations provided, except as otherwise provided in this act.  Capital improvement projects authorized by the 1997 General Assembly for the design phase only shall be designed within the scope of the project as defined by the approved cost estimate filed with the Director of the Budget, including costs associated with site preparation, demolition, and movable and fixed equipment.

Requested by:  Senators Plyler, Perdue, Odom
RESERVE FOR ADVANCE PLANNING
Section 31.8.  The Office of State Budget and Management shall report to the Joint Legislative Commission on Governmental Operations and to the Fiscal Research Division on how it intends to spend funds from the Reserve for Advance Planning at least 45 days before it spends the funds.
	The Office of State Budget and Management shall also report the results of any project on which it uses funds from the Reserve for Advance Planning to the Joint Legislative Commission on Governmental Operations and to the Fiscal Research Division.

Requested by:   Senators Plyler, Perdue, Odom
ENCUMBERED APPROPRIATIONS AND PROJECT RESERVE FUND
Section 31.9.  When each capital improvement project appropriated by the 1997 General Assembly, other than those projects under the Board of Governors of The University of North Carolina, is placed under a construction contract, direct appropriations shall be encumbered to include all costs for construction, design, investigation, administration, movable equipment, and a reasonable contingency.  Unencumbered direct appropriations remaining in the project budget shall be placed in a project reserve fund credited to the Office of State Budget and Management.  Funds in the project reserve may be used for emergency repair and renovation projects at State facilities with the approval of the Director of the Budget.  The project reserve fund may be used, at the discretion of the Director of the Budget, to allow for award of contracts where bids exceed appropriated funds, if those projects supplemented were designed within the scope intended by the applicable appropriation or any authorized change in it, and if, in the opinion of the Director of the Budget, all means to award contracts within the appropriation were reasonably attempted.  At the discretion of the Director of the Budget, any balances in the project reserve fund shall revert to the original source.

Requested by:  Senators Plyler, Perdue, Odom
PROJECT COST INCREASE
Section 31.10.  Upon the request of the administration of a State agency, department, or institution, the Director of the Budget may, when in the Director's opinion it is in the best interest of the State to do so, increase the cost of a capital improvement project.  Provided, however, that if the Director of the Budget increases the cost of a project, the Director shall report that action to the Joint Legislative Commission on Governmental Operations at its next meeting.  The increase may be funded from gifts, federal or private grants, special fund receipts, excess patient receipts above those budgeted at University of North Carolina Hospitals at Chapel Hill, or direct capital improvement appropriations to that department or institution.

Requested by:  Senators Plyler, Perdue, Odom
NEW PROJECT AUTHORIZATION
Section 31.11.  Upon the request of the administration of any State agency, department, or institution, the Governor may authorize the construction of a capital improvement project not specifically authorized by the General Assembly if such project is to be funded by gifts, federal or private grants, special fund receipts, excess patient receipts above those budgeted at University of North Carolina Hospitals at Chapel Hill, or self-liquidating indebtedness.  Provided, however, that if the Director of the Budget authorizes the construction of such a capital improvement project, the Director shall report that action to the Joint Legislative Commission on Governmental Operations at its next meeting.

Requested by:   Senators Plyler, Perdue, Odom
ADVANCE PLANNING OF CAPITAL IMPROVEMENT PROJECTS
Section 31.12.  Funds that become available by gifts, excess patient receipts above those budgeted at University of North Carolina Hospitals at Chapel Hill, federal or private grants, receipts becoming a part of special funds by act of the General Assembly or any other funds available to a State department or institution may be utilized for advance planning through the working drawing phase of capital improvement projects, upon approval of the Director of the Budget.  The Director of the Budget may make allocations from the Advance Planning Fund for advance planning through the working drawing phase of capital improvement projects, except that this revolving fund shall not be utilized by the Board of Governors of The University of North Carolina or the State Board of Community Colleges.

Requested by:    Senators Plyler, Perdue, Odom
APPROPRIATIONS LIMITS/REVERSION OR LAPSE
Section 31.13.  Except as permitted in previous sections of this act, the appropriations for capital improvements made by the 1997 General Assembly may be expended only for specific projects set out by the 1997 General Assembly and for no other purpose.  Construction of all capital improvement projects enumerated by the 1997 General Assembly shall be commenced, or self-liquidating indebtedness with respect to them shall be incurred, within 12 months following the first day of the fiscal year in which the funds are available.  If construction contracts on those projects have not been awarded or self-liquidating indebtedness has not been incurred within that period, the direct appropriation for those projects shall revert to the original source, and the self-liquidating appropriation shall lapse; except that direct appropriations may be placed in a reserve fund as authorized in this act.  This deadline with respect to both direct and self-liquidating appropriations may be extended with the approval of the Director of the Budget up to an additional 12 months if circumstances and conditions warrant such extension.

PART XXXII.  MISCELLANEOUS PROVISIONS

Requested by:  Senators Plyler, Perdue, Odom
EXECUTIVE BUDGET ACT APPLIES
Section 32.  The provisions of the Executive Budget Act, Chapter 143, Article 1 of the General Statutes, are reenacted and shall remain in full force and effect and are incorporated in this act by reference.

Requested by:  Senators Plyler, Perdue, Odom
COMMITTEE REPORT
Section 32.1. (a)	The Senate Appropriations Committee Report on the Continuation, Expansion, and Capital Budget, dated April 23, 1997, which was distributed in the Senate and used to explain this act, shall indicate action by the General Assembly on this act and shall therefore be used to construe this act, as provided in G.S. 143-15 of the Executive Budget Act, and for these purposes shall be considered a part of this act and as such shall be printed as a part of the Session Laws.
(b)	The budget enacted by the General Assembly for the maintenance of the various departments, institutions, and other spending agencies of the State for the 1997-99 fiscal biennium is a line item budget, in accordance with the Budget Code Structure and the State Accounting System Uniform Chart of Accounts set out in the Administrative Policies and Procedures Manual of the Office of the State Controller.  This budget includes the appropriations made from all sources including the General Fund, Highway Fund, special funds, cash balances, federal receipts, and departmental receipts.
The General Assembly amended the itemized budget requests submitted to the General Assembly by the Director of the Budget and the Advisory Budget Commission, in accordance with the steps that follow and the line item detail in the budget enacted by the General Assembly may be derived accordingly:
(1)	The negative reserve set out in the submitted budget was deleted and the totals were increased accordingly.
(2)	The base budget was adjusted in accordance with the base budget cuts and additions that were set out in the Senate Appropriations Committee Report on the Continuation, Expansion, and Capital Budget, dated April 23, 1997, together with any accompanying correction sheets.
(3)	Transfers of funds supporting programs were made in accordance with the Senate Appropriations Committee Report on the Continuation, Expansion, and Capital Budget, dated April 23, 1997, together with any accompanying correction sheets.
The budget enacted by the General Assembly shall also be interpreted in accordance with the special provisions in this act and in accordance with other appropriate legislation.
In the event that there is a conflict between the line item budget certified by the Director of the Budget and the budget enacted by the General Assembly, the budget enacted by the General Assembly shall prevail.

Requested by:   Senators Plyler, Perdue, Odom
MOST TEXT APPLIES ONLY TO 1997-99
Section 32.2.  Except for statutory changes or other provisions that clearly indicate an intention to have effects beyond the 1997-99 fiscal biennium, the textual provisions of this act apply only to funds appropriated for, and activities occurring during, the 1997-99 fiscal biennium.

Requested by:  Senators Plyler, Perdue, Odom
EFFECT OF HEADINGS
Section 32.3.  The headings to the parts and sections of this act are a convenience to the reader and are for reference only.  The headings do not expand, limit, or define the text of this act.

Requested by:  Senators Plyler, Perdue, Odom 
SEVERABILITY CLAUSE
Section 32.4.  If any section or provision of this act is declared unconstitutional or invalid by the courts, it does not affect the validity of this act as a whole or any part other than the part so declared to be unconstitutional or invalid.

Requested by:   Senators Plyler, Perdue, Odom
EFFECTIVE DATE
Section 32.5.  Except as otherwise provided, this act becomes effective July 1, 1997.