GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1997

S	4 

SENATE BILL 352
Appropriations Committee Substitute Adopted 4/22/97
Third Edition Engrossed 4/23/97
House Committee Substitute Favorable 6/2/97

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 	22
Section 2. 	22
PART II-A.  CAPITAL APPROPRIATIONS/GENERAL FUND 	25
Section 2A. 	25
PART III.  CURRENT OPERATIONS AND EXPANSION/HIGHWAY FUND 	26
Section 3. 	26
PART IV.  HIGHWAY TRUST FUND 	27
Section 4. 	27
PART V. BLOCK GRANT FUNDS 	27
DHR BLOCK GRANT PROVISIONS 	27
Section 5. 	27
NER BLOCK GRANT FUNDS 	34
Section 5.1. 	34
PART VI.  GENERAL FUND AND HIGHWAY FUND AVAILABILITY STATEMENTS 	36
GENERAL FUND AVAILABILITY STATEMENTS 	36
Section 6. 	37
HIGHWAY FUND AVAILABILITY 	38
Section 6.1. 	38
PART VII.  GENERAL PROVISIONS 	38
GENERAL FUND CREDIT BALANCE/PRIORITY USES 	38
Section 7.8. 	38
INTANGIBLES TAX REMEDY 	41
Section 7.9. 	41
EXECUTIVE BUDGET ACT EXCEPTION 	41
Section 7.10. 	41
TRANSFERS FOR OVEREXPENDITURES OF A PURPOSE OR PROGRAM 	41
Section 7.11. 	41
NORTH CAROLINA RAILROAD ACQUISITION 	42
Section 7.12. 	42
DISASTER RELIEF FUNDS/REPORTING REQUIREMENTS 	43
Section 7.13. 	43
ANALYSIS OF STATE ADMINISTRATIVE SPAN OF GOVERNMENT CONTROL 	43
Section 7.14. 	43
INTANGIBLES TAX REMEDY 	44
Section 7.15. 	44
AUTHORIZATION OF PRIVATE LICENSE TAGS ON STATE-OWNED MOTOR VEHICLES  45
Section 7.16. 	45
NO STATE AGENCY CONTRACT LOBBYING 	45
Section 7.17. 	45
PART VIII.  PUBLIC SCHOOLS 	45
CAREER DEVELOPMENT 	45
Section 8.1. 	45
SUPPLEMENTAL FUNDING IN LOW-WEALTH COUNTIES 	46
Section 8.2. 	46
SMALL SCHOOL SYSTEM SUPPLEMENTAL FUNDING 	49
Section 8.3. 	49
LITIGATION RESERVE 	51
Section 8.4. 	51
EXCEPTIONAL CHILDREN FUNDS 	51
Section 8.5. 	51
MINIMUM VACATION LEAVE FOR BUS DRIVERS 	52
Section 8.6. 	52
LOSS OF BUDGET FLEXIBILITY UNDER CERTAIN CIRCUMSTANCES/PROHIBITION ON USE OF STATE FUNDS TO BUY OUT SUPERINTENDENTS' CONTRACTS  52
Section 8.7. 	52
DELETE REPORT ON GUARANTEED ENERGY SAVINGS CONTRACTS 	54
Section 8.8. 	54
SCHOOL PAY DATE FLEXIBILITY PILOT PROGRAM 	54
Section 8.9. 	54
ALTERNATIVE SCHOOLS/AT-RISK STUDENTS 	54
Section 8.10. 	54
ADVANCED PLACEMENT TESTS 	55
Section 8.11. 	55
DATA ON TEACHER ASSISTANTS' YEARS OF EXPERIENCE, CREDENTIALS, AND PLACEMENT ON LOCALLY ADOPTED SALARY SCHEDULES/REVIEW OF TEACHER ASSISTANT EDUCATION PROGRAMS AND STANDARDS  55
Section 8.12. 	55
CLASS-SIZE COMPUTATION FOR K-2 	56
Section 8.13. 	56
ABC'S PERFORMANCE RECOGNITION FOR PERSONNEL SERVING PREKINDERGARTEN THROUGH TWELFTH GRADE  56
Section 8.14. 	56
SCHOOL LAW REVISION SUBCOMMITTEE EXTENDED 	57
Section 8.15. 	57
DISTANCE LEARNING PROGRAM 	57
Section 8.17. 	57
CRIME CONTROL GRANTS FOR THE N.C. CENTER FOR THE PREVENTION OF SCHOOL VIOLENCE  57
Section 8.18. 	57
CHARTER SCHOOL ACCOUNTABILITY REQUIREMENTS 	57
Section 8.19. 	57
AVAILABILITY OF FUNDS ALLOCATED FOR STAFF DEVELOPMENT 	58
Section 8.21. 	58
TEACHER CERTIFICATION 	58
Section 8.22. 	58
FUNDS FOR NATIONAL BOARD FOR PROFESSIONAL TEACHING STANDARDS 	58
Section 8.23. 	58
PUBLIC-PRIVATE PARTNERSHIP TO EXPAND TECHNOLOGY IN PUBLIC SCHOOLS  59
Section 8.25. 	59
UNIFORM EDUCATION REPORTING SYSTEMS FUNDS/BUILDING LEVEL REPORTS ON SCHOOL FUNDING  60
Section 8.26. 	60
LEGISLATORS MAY SERVE ON SCHOOL TECHNOLOGY COMMISSION 	61
Section 8.27. 	61
RIGOROUS ACADEMIC CONTENT STANDARDS 	62
Section 8.28. 	62
SAFE SCHOOLS 	63
Section 8.31. 	63
SCHOOL CENTRAL OFFICE SALARIES 	73
Section 8.33. 	73
NONCERTIFIED PUBLIC SCHOOL EMPLOYEES' SALARY INCREASE 	74
Section 8.34. 	74
TEACHER SALARY SCHEDULES 	74
Section 8.35. 	74
SCHOOL-BASED ADMINISTRATOR SALARIES 	77
Section 8.35A. 	77
FUNDS TO IMPLEMENT THE ABC'S OF PUBLIC EDUCATION PROGRAM 	81
Section 8.36. 	81
EXTRA PAY FOR MENTOR TEACHERS 	82
Section 8.37. 	82
EXTRA PAY FOR NEW TEACHER DEVELOPMENT 	82
Section 8.38. 	82
EXTRA PAY FOR PROFESSIONAL DEVELOPMENT 	82
Section 8.39. 	82
ADDITIONAL PAY FOR TEACHERS WITH ADDITIONAL
RESPONSIBILITIES 	82
Section 8.39A. 	82
PUBLIC SCHOOL CALENDAR CHANGES/EXTRA PAY FOR EXTRA DAYS AND EXTRA DUTIES  83
Section 8.40. 	83
GLOBAL CURRICULUM PROGRAM 	89
Section 8.41. 	89
PILOT PROGRAM FOR COMPUTER NETWORK ADMINISTRATION 	89
Section 8.42. 	89
FUNDS TO GRADE STANDARDIZED TESTS 	90
Section 8.43. 	90
PROTOTYPE SCHOOL DESIGN CLEARINGHOUSE 	90
Section 8.44. 	90
INCENTIVES AND SALARY STUDIES 	90
Section 8.45. 	90
STUDY OF TEACHER SUPPLY AND DEMAND 	91
Section 8.46. 	91
ALLOCATION OF INVESTMENT EARNINGS ON SCHOOL BONDS TO SMALL COUNTY SCHOOL SYSTEMS  91
Section 8.47. 	91
PART IX.  COMMUNITY COLLEGES 	92
COMMUNITY COLLEGE FUNDING FLEXIBILITY 	92
Section 9. 	92
COMMUNITY COLLEGE TUITION AND FEE PAYMENTS 	92
Section 9.1. 	92
ASSESSMENT OF OCCUPATIONAL EXTENSION FORMULA 	92
Section  9.2. 	92
MODIFICATIONS IN THE FTE FUNDING FORMULA TO REFLECT FLUCTUATIONS IN ENROLLMENT  93
Section  9.3. 	93
STUDENT CENSUS DATE 	93
Section  9.4. 	93
NEW AND EXPANDING INDUSTRY REPORT DATE MODIFIED 	93
Section 9.5. 	93
NEW AND EXPANDING INDUSTRY GUIDELINES 	93
Section  9.6. 	93
COMMUNITY COLLEGE PROGRAM EFFICIENCY 	93
Section 9.8. 	94
HOSPITAL-BASED NURSING PROGRAMS 	94
Section 9.9. 	94
HRD MULTIENTRY/MULTIEXIT CLASSES 	94
Section 9.11. 	94
OPERATIONS AND MAINTENANCE OF PLANT FUNDS 	94
Section 9.12. 	94
HOSIERY TECHNOLOGY CENTER FUNDS 	94
Section 9.13. 	94
UNION COUNTY TO SELECT COMMUNITY COLLEGE 	94
Section 9.14. 	94
PART X. UNIVERSITIES 	94
FUNDING FOR OFF-CAMPUS AND DISTANCE LEARNING DEGREE-CREDIT EXTENSION INSTRUCTION  95
Section 10. 	95
MILITARY RESIDENCY/UNC TUITION 	95
Section 10A. 	95
WAKE FOREST AND DUKE MEDICAL SCHOOL ASSISTANCE/FUNDING FORMULA 	95
Section 10B. 	95
AID TO STUDENTS ATTENDING PRIVATE COLLEGES PROCEDURE 	96
Section 10.1. 	96
AID TO STUDENTS ATTENDING PRIVATE COLLEGES/LEGISLATIVE TUITION GRANT LIMITATIONS  98
Section 10.2. 	98
DISTINGUISHED PROFESSORS ENDOWMENT TRUST FUND 	98
Section 10.3. 	98
UNC OVERHEAD RECEIPT FLEXIBILITY 	98
Section 10.7. 	98
UNC ASSISTANCE TO PUBLIC SCHOOLS 	99
Section 10.8. 	99
UNC LIBRARIES FUNDING 	99
Section 10.8A. 	99
AREA HEALTH EDUCATION CENTERS FUNDING 	99
Section 10.9. 	99
MANUFACTURING EXTENSION PARTNERSHIP 	99
Section 10.9A. 	99
COOPERATIVE EXTENSION SERVICES 	99
Section 10.11. 	100
SCHOLARSHIP FUND BALANCES 	100
Section 10.13. 	100
UNIVERSITY FIRE SAFETY COSTS LIMITED 	100
Section 10.14. 	100
ACADEMIC ENHANCEMENT FUNDS CLARIFICATION 	100
Section 10.18. 	101
ASU CENTENNIAL CELEBRATION 	101
Section 10.20. 	101
UNC CAPITAL FACILITIES STUDY 	101
Section 10.21. 	101
AGRICULTURAL ENHANCEMENT 	101
Section 10.22. 	101
PART XI.  DEPARTMENT OF HUMAN RESOURCES 	102
REORGANIZATION OF THE DEPARTMENT OF HUMAN RESOURCES 	102
Section 11. 	102
LEGISLATIVE OVERSIGHT COMMITTEE ON DHR REORGANIZATION 	103
Section 11.1. 	103
IMPLEMENT ABC'S PLAN FOR RESIDENTIAL SCHOOLS 	104
Section 11.2. 	104
DHR STUDY OF PROVIDER REIMBURSEMENT RATES/REPORT 	105
Section 11.3. 	105
DHR EMPLOYEES/IN-KIND MATCH 	105
Section 11.4. 	105
TRANSFER OF CERTAIN FUNDS AUTHORIZED 	105
Section 11.5. 	105
MEDICAL RECORDS COPY FEES/SOCIAL SECURITY DISABILITY
CLAIMS 	105
Section 11.6. 	105
NONMEDICAID REIMBURSEMENT CHANGES 	106
Section 11.7. 	106
MEDICAL DATA PROCESSING FUNDS 	107
Section 11.8. 	107
FIRE PROTECTION REVOLVING LOAN FUND 	107
Section 11.9. 	107
DISPOSITION OF DISPROPORTIONATE SHARE RECEIPT
CLARIFICATION 	107
Section 11.10. 	108
MEDICAID 	108
Section 11.11. 	108
MEDICAID TRUST FUND TRANSFER/SHORTFALL 	113
Section 11.12. 	113
MEDICAID GROWTH REDUCTION 	113
Section 11.13. 	113
ADULT DAY HEALTH CARE MEDICAID WAIVER 	114
Section 11.14. 	114
FOSTER CARE ASSISTANCE PAYMENTS 	114
Section 11.15. 	114
AUTHORIZED ADDITIONAL USE OF HIV FOSTER CARE AND ADOPTIVE FAMILY FUNDS  114
Section 11.16. 	114
ADOPTION ASSISTANCE PAYMENTS 	115
Section 11.17. 	115
CHILD PROTECTIVE SERVICES 	115
Section 11.18. 	115
CHILD CARING INSTITUTION FUND 	115
Section 11.19. 	115
CHILD WELFARE SYSTEM IMPROVEMENTS 	116
Section 11.20. 	116
REVIEW OF AUTOMATED COLLECTION AND TRACKING SYSTEM 	117
Section 11.21. 	117
LIMITATIONS ON STATE ABORTION FUND 	118
Section 11.22. 	118
FOOD STAMP ELECTRONIC BENEFITS TRANSFER FUNDS SPECIFICATIONS 	118
Section 11.23. 	118
WORK FIRST FRAUD CONTROL PROGRAM/DEBT SETOFF/CLIENT PROTECTION 	118
Section 11.24. 	118
ANNUAL REPORT ON CARING PROGRAM FOR CHILDREN, INC. 	119
Section 11.25. 	119
ADULT CARE HOME BED VACANCIES 	119
Section 11.26. 	119
ADULT CARE HOMES REPORT 	119
Section 11.27. 	119
ADULT CARE HOMES REIMBURSEMENT RATE/ADULT CARE HOMES ALLOCATION OF NONFEDERAL COST OF MEDICAID PAYMENTS  120
Section 11.28. 	120
IN-HOME SPECIAL ASSISTANCE DEMONSTRATION PROJECT 	120
Section 11.29. 	120
ADULT CARE HOME STAFFING FOR ENHANCED PERSONAL CARE SERVICES 	121
Section 11.30. 	121
SENIOR CENTER OUTREACH 	122
Section 11.31. 	122
SURROGATE CONSENT FOR HEALTH CARE/STUDY 	122
Section 11.32. 	122
COMMISSION ON AGING STUDY OF ADULT CARE HOME MONITORING 	123
Section 11.33. 	123
SENIOR CENTER FUNDS 	123
Section 11.34. 	123
IN-HOME AND CAREGIVER SUPPORT FUNDS 	123
Section 11.35. 	123
CLINICAL SOCIAL WORKER EXEMPTION 	123
Section 11.36. 	123
MIXED BEVERAGE TAX FOR AREA MENTAL HEALTH PROGRAMS 	123
Section 11.37. 	123
LIABILITY INSURANCE 	123
Section 11.38. 	123
PHYSICIAN SERVICES 	124
Section 11.39. 	124
PRIVATE AGENCY UNIFORM COST FINDING REQUIREMENT 	124
Section 11.40. 	124
THOMAS S. 	124
Section 11.41. 	124
WILLIE M. 	126
Section 11.42. 	126
CAROLINA ALTERNATIVES 	128
Section 11.43. 	128
LIMITATION ON USE OF SPECIAL ALZHEIMER'S UNIT IN WILSON 	128
Section 11.44. 	128
EFFICIENCY STUDY OF STATE PSYCHIATRIC HOSPITALS 	129
Section 11.45. 	129
THOMAS S. LAWSUIT COMPLIANCE 	129
Section 11.46. 	129
THOMAS S. FUNDS/COST CONTAINMENT 	129
Section 11.47. 	129
MENTAL HEALTH COMMITMENT LAW/THOMAS S. 	130
Section 11.48. 	130
BUTNER COMMUNITY LAND RESERVATION 	133
Section 11.49. 	133
ALLOCATION OF MENTAL HEALTH, DEVELOPMENTAL DISABILITIES, AND SUBSTANCE ABUSE EXPANSION FUNDS  133
Section 11.50. 	133
PROCEDURE FOR PRISONERS HELD IN COUNTY JAIL 	133
Section 11.51. 	133
LEGISLATIVE STUDY COMMISSION ON MENTAL HEALTH, DEVELOPMENTAL DISABILITIES, AND SUBSTANCE ABUSE
SERVICES 	134
Section 11.52. 	134
WHITAKER SCHOOL REPLACEMENT FACILITY 	134
Section 11.53. 	134
FORENSIC TREATMENT PROGRAM 	135
Section 11.54. 	135
STUDY DOWNSIZING OF MENTAL RETARDATION CENTERS 	135
Section 11.55. 	135
EARLY INTERVENTION FUNDING/REFERRAL 	135
Section 11.56. 	135
REIMBURSEMENT AND COMPENSATION OF MEMBERS OF THE NORTH CAROLINA VOCATIONAL REHABILITATION ADVISORY COUNCIL, THE STATEWIDE INDEPENDENT LIVING COUNCIL, AND THE COMMISSION FOR THE BLIND  136
Section 11.57. 	136
DIVISION OF SERVICES FOR BLIND/PERFORMANCE AUDIT 	136
Section 11.58. 	136
SERVICES FOR BLIND/EXTENDED SERVICE PROVIDER POSITIONS 	136
Section 11.59. 	136
GOVERNOR MOREHEAD SCHOOL/TEXTBOOK FUNDS 	136
Section 11.60. 	136
FAMILY SUPPORT/DEAF AND HARD OF HEARING SERVICES
CONTRACT 	136
Section 11.61. 	136
S.O.S. AND FAMILY RESOURCE CENTER GRANT PROGRAMS ADMINISTRATIVE COST LIMITS  137
Section 11.62. 	137
ANNUAL EVALUATION OF WILDERNESS CAMP, COACH MENTOR TRAINING, AND GOVERNOR'S ONE-ON-ONE PROGRAMS  137
Section 11.63. 	137
DYS TRAINING SCHOOLS/STUDENT EVALUATIONS 	137
Section 11.64. 	137
RECEIPTS OF FEDERAL FUNDS FOR EMERGENCY ASSISTANCE 	137
Section 11.65. 	137
COMMUNITY-BASED ALTERNATIVES PARTICIPATION 	138
Section 11.66. 	138
CHILD CARE FUNDS MATCHING REQUIREMENT 	138
Section 11.67. 	138
CHILD CARE SUBSIDIES 	138
Section 11.68. 	138
CHILD CARE ALLOCATION FORMULA 	140
Section 11.69. 	140
CHILD DAY CARE REVOLVING LOAN FUND 	140
Section 11.70. 	140
EARLY CHILDHOOD EDUCATION AND DEVELOPMENT INITIATIVES PROGRAM 	140
Section 11.71. 	140
EXTEND DHR ADMINISTRATION OF TRI-COUNTY/TRI-COUNTY- REALIGNMENT INCENTIVE FUNDS  148
Section 11.72. 	148
NO STATE FUNDS FOR LOBBYING 	149
Section 11.73. 	149
PART XI-A.  WELFARE REFORM INITIATIVES AND CONFORMING CHANGES 	149
SUBPART A.  WELFARE REFORM INITIATIVES. 	149
Section 11A.1. 	149
Section 11A.2. 	149
Section 11A.3. 	151
Section 11A.4. 	152
Section 11A.5. 	152
Section 11A.6. 	157
Section 11A.7. 	161
Section 11A.8. 	162
Section 11A.9. 	162
Section 11A.10. 	162
Section 11A.11. 	164
Section 11A.12. 	165
Section 11A.13. 	165
Section 11A.14. 	165
Section 11A.15. 	165
Section 11A.16. 	165
Section 11A.17. 	166
Section 11A.18. 	166
Section 11A.19. 	166
Section 11A.20. 	166
Section 11A.21. 	167
Section 11A.22. 	167
SUBPART B.  STATUTORY TECHNICAL AND CONFORMING CHANGES RELATING TO ENACTMENT OF THE WORK FIRST PROGRAM.  170
Section 11A.24. 	170
Section 11A.25. 	171
Section 11A.26. 	171
Section 11A.27. 	172
Section 11A.28. 	172
Section 11A.29. 	174
Section 11A.30. 	174
Section 11A.31. 	175
SUBPART C.  STATUTORY TECHNICAL AND CONFORMING CHANGES RELATING TO THE ABOLISHMENT OF THE COMMISSION ON THE FAMILY.  175
Section 11A.76. 	175
Section 11A.79. 	176
Section 11A.86. 	177
Section 11A.86A. 	177
Section 11A.87. 	177
PART XII. DEPARTMENT OF AGRICULTURE 	177
DEPARTMENTS OF AGRICULTURE/COMMERCE/LABOR/AND ENVIRONMENT, HEALTH, AND NATURAL RESOURCES/RECEIPT SUPPORTED POSITIONS  177
Section 12. 	177
MOUNTAIN STATE FAIR TO BECOME ENTERPRISE FUND 	178
Section 12A. 	178
TIMBER SALES FOR MAINTENANCE OF STATE FARMS FORESTLAND 	178
Section 12.1. 	178
TRANSFER MARITIME MUSEUM TO CULTURAL RESOURCES 	178
Section 12.2. 	178
WESTERN NORTH CAROLINA DEVELOPMENT ASSOCIATION 	179
Section 12.3. 	179
INCREASE GRAPE GROWERS FUNDS 	179
Section 12.4. 	179
AUTHORIZE THE AGRICULTURAL FINANCE AUTHORITY TO USE THE INTEREST FROM THE RESERVE FOR FARM LOANS FOR ADMINISTRATIVE EXPENSES  180
Section 12.5. 	180
EASTERN NORTH CAROLINA LIVESTOCK ARENA FUNDS 	180
Section 12.6. 	181
ASSISTANCE FOR SMALL, FAMILY FARMS 	181
Section 12.7. 	181
SOUTHERN DAIRY COMPACT COMMISSION FUNDS 	181
Section 12.8. 	182
PART XIII.  DEPARTMENT OF ENVIRONMENT, HEALTH, AND NATURAL RESOURCES  182
STUDY DESIRABILITY OF REORGANIZING DEPARTMENT OF ENVIRONMENT, HEALTH, AND NATURAL RESOURCES  182
Section 13. 	182
ENVIRONMENTAL EDUCATION GRANTS 	183
Section 13A. 	183
GRASSROOTS SCIENCE PROGRAM 	183
Section 13.1. 	183
FORESTRY AIRCRAFT LEASE RECEIPTS 	184
Section 13.2. 	184
STATE PARKS FORESTS MANAGEMENT PLANS 	184
Section 13.3. 	184
DEHNR LAW ENFORCEMENT PAY STUDY BY THE OFFICE OF STATE PERSONNEL  185
Section 13.4. 	185
MARINE FISHERIES COMMISSION REFORM FUNDS 	185
Section 13.5. 	185
MARINE FISHERIES INFORMATION TECHNOLOGY REPORT 	185
Section 13.6. 	185
MARINE PATROL VESSEL 	186
Section 13.7. 	186
SHELLFISH REHABILITATION PROGRAM 	186
Section 13.8. 	186
SOIL SURVEY SUPERVISOR ASSIGNMENT 	186
Section 13.9. 	186
BEAVER DAMAGE CONTROL FUNDS 	186
Section 13.10. 	187
AREA THREE SOIL AND WATER REGIONAL COORDINATOR 	188
Section 13.11. 	188
ANIMAL WASTE COMPLIANCE PROGRAM REPORT 	188
Section 13.12. 	188
ANIMAL WASTE MANAGEMENT SYSTEM GENERAL PERMIT REVISIONS 	189
Section 13.13. 	189
ODOR CONTROL STUDY FUNDS 	190
Section 13.14. 	190
SUPERFUND PROGRAM/INACTIVE HAZARDOUS SITES FUNDS 	191
Section 13.15. 	191
FUNDS FOR VOLUNTARY REMEDIAL ACTIONS 	191
Section 13.16. 	191
POLLUTION PREVENTION AND ENVIRONMENTAL ASSISTANCE TO SMALL BUSINESSES WITH NEED  191
Section 13.17. 	191
PERMIT INFORMATION CENTER 	191
Section 13.18. 	191
AGRICULTURE WASTE RESEARCH REPORTS 	191
Section 13.19. 	191
TOWN FORK CREEK SOIL CONSERVATION PROJECT 	192
Section 13.20. 	192
MEADOW BRANCH WATER PROJECT AND DEEP CREEK PROJECT FUNDS DO NOT REVERT  192
Section 13.21. 	192
RANDLEMAN DAM FUNDS DO NOT REVERT 	193
Section 13.22. 	193
WATER QUALITY PERMIT PROGRAMS/RESERVE FUNDS 	193
Section 13.23. 	193
FEDERAL FUNDS FOR WATER QUALITY INDIRECT COSTS USED FOR WATER QUALITY  194
Section 13.24. 	194
STATE MATCH FOR FEDERAL WATER SUPPLY AND WASTEWATER ASSISTANCE FUNDS  194
Section 13.25. 	194
ESTABLISH DRINKING WATER REVOLVING LOAN FUND 	194
Section 13.26. 	194
SOLID WASTE OPERATOR COURSE EXEMPT 	195
Section 13.27. 	195
PARTNERSHIP FOR THE SOUNDS 	195
Section 13.28. 	195
COMMUNICABLE DISEASE CONTROL AID TO COUNTIES FLEXIBILITY 	196
Section 13.29. 	196
DWI TEST CHANGES 	196
Section 13.30. 	196
STATE TRAINING/ENVIRONMENTAL HEALTH SPECIALISTS 	196
Section 13.31. 	196
CHILDHOOD LEAD EXPOSURE CONTROL 	196
Section 13.32. 	197
EXTEND HEART DISEASE AND STROKE PREVENTION TASK FORCE 	197
Section 13.33. 	197
CANCER CONTROL FUNDS 	197
Section 13.34. 	197
IMMUNIZATION PROGRAM FUNDING 	197
Section 13.35. 	197
WIC PROGRAM FUNDS 	198
Section 13.36. 	198
ADOLESCENT PREGNANCY PREVENTION COALITION OF
NC/REPORTING 	199
Section 13.37. 	199
NORTH CAROLINA HEALTHY START FOUNDATION/REPORTING 	199
Section 13.38. 	199
PREVENT BLINDNESS, INC./REPORTING 	200
Section 13.39. 	200
FEDERAL ABSTINENCE EDUCATION FUNDS 	200
Section 13.40. 	200
PART XIV.  DEPARTMENT OF COMMERCE 	200
WORKER TRAINING TRUST FUND APPROPRIATIONS 	200
Section 14. 	200
JOB TRAINING STUDY COMMISSION 	201
Section 14.1. 	201
NC REAL ENTERPRISES REPORTING 	203
Section 14.2. 	203
SPECIAL EMPLOYMENT SECURITY ADMINISTRATION FUND 	203
Section 14.3. 	203
INDUSTRIAL RECRUITMENT COMPETITIVE FUND 	203
Section 14.4. 	203
COUNCIL OF GOVERNMENT FUNDS 	204
Section 14.5. 	204
PETROLEUM OVERCHARGE ATTORNEYS' FEES 	204
Section 14.6. 	205
PETROLEUM OVERCHARGE FUNDS ALLOCATION 	205
Section 14.7. 	205
INDUSTRIAL DEVELOPMENT FUND/LOCAL MATCH 	206
Section 14.8. 	206
INDUSTRIAL DEVELOPMENT FUND UTILITY ACCOUNT 	206
Section 14.9. 	206
REGIONAL COMMISSION REPORTS 	206
Section 14.10. 	206
REGIONAL ECONOMIC DEVELOPMENT COMMISSION ALLOCATIONS 	207
Section 14.11. 	207
TOURISM PROMOTION FUNDS 	208
Section 14.12. 	208
RURAL TOURISM DEVELOPMENT FUNDS 	208
Section 14.13. 	208
NORTH CAROLINA ALLIANCE FOR COMPETITIVE TECHNOLOGIES REPORT 	209
Section 14.13A. 	209
DIVISION OF EMPLOYMENT AND TRAINING AND COMMISSION ON WORKFORCE PREPAREDNESS CONSOLIDATED  209
Section 14.13B. 	209
FUNDS FOR ECONOMIC DEVELOPMENT 	209
Section 14.15. 	209
NORTH CAROLINA INSTITUTE FOR MINORITY ECONOMIC DEVELOPMENT REPORT  210
Section 14.15A. 	210
TECHNOLOGICAL DEVELOPMENT AUTHORITY REPORT 	211
Section 14.16. 	211
WORLD TRADE CENTER FUNDS 	211
Section 14.17. 	212
CENTER FOR COMMUNITY SELF-HELP FUNDS 	212
Section 14.18. 	212
STATE GOVERNMENT COMPETITION INITIATIVE 	213
Section 14.18A. 	213
MCNC 	215
Section 14.19. 	215
BIOTECHNOLOGY CENTER 	216
Section 14.20. 	216
BIOTECHNOLOGY FUNDS FOR MINORITY UNIVERSITIES 	217
Section 14.21. 	217
RURAL ECONOMIC DEVELOPMENT CENTER 	217
Section 14.22. 	217
COMMUNITY DEVELOPMENT INITIATIVE 	220
Section 14.23. 	220
OPPORTUNITIES INDUSTRIALIZATION CENTER FUNDS 	220
Section 14.24. 	220
PART XIV-A.  DEPARTMENT OF LABOR 	221
OSHA TECHNICAL ASSISTANCE 	221
Section 14A.1. 	221
ESTABLISH DEPARTMENTAL SAFETY OFFICER 	222
Section 14A.2. 	222
PART XV.  JUDICIAL DEPARTMENT 	222
TRANSFER OF EQUIPMENT AND SUPPLY FUNDS 	222
Section 15. 	222
INDIGENT PERSONS' ATTORNEY FEE FUND 	222
Section 15.2. 	222
REPORT ON DISPUTE SETTLEMENT CENTERS 	223
Section 15.3. 	223
COMMUNITY PENALTIES PROGRAM 	224
Section 15.4. 	224
MAKE SENTENCING COMMISSION PERMANENT 	225
Section 15.6. 	225
VICTIMS' RIGHTS AMENDMENT/FLEXIBILITY IN USE OF VICTIM WITNESS ASSISTANTS AND LEGAL ASSISTANTS  225
Section 15.8A. 	225
CRIMINAL CASE MANAGEMENT FUNDS 	226
Section 15.9. 	226
DIVIDE DISTRICT COURT DISTRICT 30 AND PROSECUTORIAL DISTRICT 30 INTO DISTRICTS 30A AND 30B  226
Section 15.11A. 	226
ADDITIONAL ASSISTANT DISTRICT ATTORNEYS/REESTABLISH ASSISTANT DISTRICT ATTORNEY POSITIONS IN DISTRICTS 19B AND 20  230
Section 15.12. 	230
AUTHORIZE ADDITIONAL MAGISTRATES 	231
Section 15.14. 	231
ADDITIONAL INVESTIGATORIAL ASSISTANTS 	234
Section 15.16A. 	234
IRMC REVIEW OF INFORMATION TECHNOLOGY PLANS OF THE ADMINISTRATIVE OFFICE OF THE COURTS  234
Section 15.17. 	234
STUDY COMMISSION ON THE ALLOCATION OF JUDICIAL RESOURCES 	235
Section 15.18. 	235
GUARDIAN AD LITEM ATTORNEY BILLINGS 	236
Section 15.19. 	236
PROJECT CHALLENGE REPORT 	236
Section 15.20. 	236
EDUCATIONAL PROGRAM FOR PARENTS WHO ARE PARTIES TO A CUSTODY OR VISITATION ACTION  237
Section 15.21. 	237
CUMBERLAND JUVENILE ASSESSMENT CENTER 	238
Section 15.22. 	238
BAD CHECK PILOT PROGRAM FUNDS/REPORT 	239
Section 15.23. 	240
DISTRICT COURT CIVIL CASE MANAGEMENT 	240
Section 15.24. 	240
ESTABLISH TEEN COURTS IN ORANGE, GUILFORD, CABARRUS, FORSYTH, AND BRUNSWICK COUNTIES  240
Section 15.25. 	240
PART XVI.  DEPARTMENT OF CORRECTION 	241
REIMBURSE COUNTIES FOR HOUSING AND EXTRAORDINARY MEDICAL COSTS FOR INMATES, PAROLEES, AND POST-RELEASE SUPERVISEES AWAITING TRANSFER TO STATE PRISON SYSTEM  241
Section 16. 	241
INMATE HOUSING FUNDS 	242
Section 16.1. 	242
LIMIT USE OF OPERATIONAL FUNDS 	242
Section 16.3. 	242
USE OF FACILITIES CLOSED UNDER GPAC 	242
Section 16.4. 	242
FEDERAL GRANT REPORTING 	243
Section 16.5. 	243
HARRIET'S HOUSE FUNDS 	243
Section 16.6. 	243
REPORT ON SUMMIT HOUSE 	243
Section 16.7. 	243
MODIFICATION OF FUNDING FORMULA FOR THE NORTH CAROLINA STATE- COUNTY CRIMINAL JUSTICE PARTNERSHIP ACT  243
Section 16.8. 	243
REPORT ON DART/DWI PROGRAM AT CHERRY HOSPITAL 	244
Section 16.8A. 	244
REDUCE MEMBERSHIP ON POST-RELEASE SUPERVISION AND PAROLE COMMISSION  244
Section 16.9. 	244
IMPACT DEFENDANTS IN DOC FACILITIES 	245
Section 16.9A. 	245
REPORT ON WOMEN AT RISK 	245
Section 16.9B. 	245
PERFORMANCE AUDIT OF DIVISION OF ADULT PROBATION AND PAROLE 	245
Section 16.9C. 	246
CORRECTIONAL OFFICER WORKING HOURS 	246
Section 16.9D. 	246
TRANSFER ROCKINGHAM CORRECTIONAL CENTER 	246
Section 16.9E. 	246
FUNDING OF PRISON ROAD SQUADS 	246
Section 16.9F. 	247
PRIVATE PRISON EXPANSION 	247
Section 16.9G. 	247
TITLE VII FUNDS 	247
Section 16.9H. 	247
MODULAR PRISON UNITS 	247
Section 16.9I. 	247
REPORT ON BUNKING INMATES IN SHIFTS 	247
Section 16.9J. 	247
INMATE COSTS 	247
Section 16.9K. 	247
INCREASE REIMBURSEMENT TO COUNTIES FOR STATE INMATES HOUSED IN LOCAL CONFINEMENT FACILITIES  248
Section 16.9L. 	248
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/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 FOR CERTAIN OFFENSES COMMITTED WHILE IN PRISON/RECLASSIFY CERTAIN OFFENSES RELATED TO ESCAPE FROM CORRECTIONAL FACILITIES/INCREASE THE PENALTIES FOR CERTAIN ASSAULTS ON A PROBATION OFFICER, PAROLE OFFICER, OR STATE OR COUNTY CORRECTIONS EMPLOYEE/LOWER MARIJUANA TRAFFICKING AMOUNTS/LIMIT, MODIFY AND ENHANCE ATTEMPTING TO ELUDE ARREST STATUTES  248
Section 16.14. 	248
INTIMIDATION TO INFLUENCE LEGISLATOR 	265
Section 16.15. 	265
DIRECT CRIMINAL JUSTICE EDUCATION AND TRAINING STANDARDS COMMISSION TO REVISE HIRING AND RECORD-KEEPING PROCEDURES FOR EMPLOYEES OF DEPARTMENT OF
CORRECTION 	266
Section 16.16. 	266
PART XVII.  DEPARTMENT OF JUSTICE 	266
SBI FUNDS/SPENDING PRIORITIES 	266
Section 17.1. 	266
SBI USE OF COURT-ORDERED REIMBURSEMENT FUNDS  	266
Section 17.2. 	266
PRIVATE PROTECTIVE SERVICES AND ALARM SYSTEMS LICENSING BOARDS PAY FOR USE OF STATE FACILITIES AND SERVICES  266
Section 17.3. 	267
LIMITS ON COMPUTER SYSTEM UPGRADE 	267
Section 17.4. 	267
CERTAIN LITIGATION EXPENSES TO BE PAID BY CLIENTS 	267
Section 17.5. 	267
REIMBURSEMENT FOR UNC BOARD OF GOVERNORS LEGAL REPRESENTATION 	267
Section 17.6. 	267
USE OF SEIZED AND FORFEITED PROPERTY TRANSFERRED TO STATE LAW ENFORCEMENT AGENCIES BY THE FEDERAL GOVERNMENT  267
Section 17.7. 	267
DEPARTMENT OF JUSTICE RECORD CHECKS FUNDS AND REPORTS 	268
Section 17.8. 	268
INCREASE THE NUMBER OF FICTITIOUS LICENSES AND REGISTRATION PLATES AUTHORIZED FOR PUBLICLY OWNED MOTOR VEHICLES AND REMOVE THE SUNSET ON PRIOR INCREASE ON NUMBER OF PLATES   268
Section 17.10. 	268
SHERIFF EDUCATION AND TRAINING STANDARDS COMMISSION TO ESTABLISH MINIMUM EMPLOYMENT, TRAINING, AND RETENTION STANDARDS FOR TELECOMMUNICATORS  269
Section 17.11. 	269
DEPARTMENT OF JUSTICE TO PROVIDE TRAINING TO STATE AND LOCAL LAW ENFORCEMENT OFFICERS IN THE IDENTIFICATION OF ACCIDENT- TRAUMA VICTIMS IN ORDER TO FACILITATE TIMELY IDENTIFICATION OF POTENTIAL ORGAN AND TISSUE DONORS AND TO PROVIDE FOR THE IDENTIFICATION OF ACCIDENT-TRAUMA VICTIMS  271
Section 17.12. 	271
CRIMINAL JUSTICE INFORMATION NETWORK REPORT 	272
Section 17.13. 	272
STATE BUREAU OF INVESTIGATION LAW ENFORCEMENT OFFICERS' SALARY ADJUSTMENTS  273
Section 17.14. 	273
ATTORNEY GENERAL APPROVAL REQUIRED FOR ALL STATE SETTLEMENTS 	274
Section 17.15. 	274
PART XVIII.  DEPARTMENT OF CRIME CONTROL AND PUBLIC SAFETY 	274
LEGISLATIVE REVIEW OF DRUG LAW ENFORCEMENT AND OTHER GRANTS 	274
Section 18. 	274
VICTIMS ASSISTANCE NETWORK FUNDS 	274
Section 18.1. 	274
REPORT ON COMMUNITY SERVICE WORKERS 	275
Section 18.2. 	275
REPORT ON CRIME VICTIMS COMPENSATION FUND 	275
Section 18.3. 	275
EXTEND DEPARTMENT OF CRIME CONTROL AND PUBLIC SAFETY STUDY COMMISSION  275
Section 18.4. 	275
PART XIX. GENERAL ASSEMBLY 	276
ANALYSIS OF STATE BUDGET DURING THE INTERIM 	276
Section 19. 	276
HEALTH CARE OVERSIGHT COMMITTEE 	276
Section 19.1. 	276
STATE EMPLOYEES' COMMUNICATIONS WITH LEGISLATORS 	278
Section 19.2. 	278
PART XX.  OFFICE OF THE GOVERNOR 	278
FIRE PROTECTION AND RESCUE GRANT FUNDS 	278
Section 20.1. 	278
HOME PROGRAM MATCHING FUNDS 	279
Section 20.2. 	279
AFFORDABLE HOUSING ASSISTANCE FUNDS 	280
Section 20.3. 	280
PART XXI.  DEPARTMENT OF SECRETARY OF STATE 	280
INFORMATION RESOURCES MANAGEMENT COMMISSION 	280
Section 21. 	280
PART XXII.  DEPARTMENT OF STATE AUDITOR 	281
PERFORMANCE AUDIT OF SIPS 	281
Section 22.1. 	281
RETIREMENT SYSTEM ADMINISTRATIVE EXPENSES TO COMPLY WITH SUPREME COURT DECISIONS  282
Section 22A. 	282
PART XXIII.  DEPARTMENT OF INSURANCE 	282
CONSTRUCTION CODE RECEIPTS 	282
Section 23. 	282
EXPAND USE OF INSURANCE REGULATORY FUND 	282
Section 23.1. 	282
PART XXIV.  DEPARTMENT OF ADMINISTRATION 	283
COMBINE PROGRAMS TO HELP WOMEN AND CHILDREN 	283
Section 24. 	283
PROCUREMENT CARD PILOT PROGRAM 	283
Section 24.1. 	283
STATE HEALTH PLAN PURCHASING ALLIANCE BOARD OPERATING FUNDS REVERT  284
Section 24.2. 	284
GOVERNOR'S ADVOCACY COUNCIL FOR PERSONS WITH DISABILITIES 	284
Section 24.3. 	284
FEES FOR USE OF STATE-OWNED OFFICE SPACE 	284
Section 24.4. 	284
PARKING REVENUES 	284
Section 24.5. 	284
STATE CONSTRUCTION STUDY COMMISSION 	284
Section 24.6. 	284
TRANSFER POSITIONS FROM CAPITOL POLICE TO REVENUE 	286
Section 24.7. 	286
CONSOLIDATE YOUTH COUNCILS 	286
Section 24.8. 	286
PART XXV.  OFFICE OF STATE CONTROLLER 	291
NORTH CAROLINA INFORMATION HIGHWAY 	291
Section 25. 	291
FUNDS FOR YEAR 2000 CONVERSION OF THE STATE'S COMPUTER SYSTEM 	291
Section 25.1. 	291
PART XXVI.  RESERVED 	292
PART XXVI-A. OFFICE OF ADMINISTRATIVE HEARINGS 	292
ADMINISTRATIVE LAW JUDGE SALARY 	292
Section 26A. 	292
PART XXVII. DEPARTMENT OF CULTURAL RESOURCES 	292
DEPARTMENT OF CULTURAL RESOURCES RETAIN HISTORICAL PUBLICATIONS RECEIPTS  292
Section 27. 	292
MODIFY THE AREAS OF RESPONSIBILITY OF THE ROANOKE ISLAND COMMISSION  292
Section 27.1. 	292
MUSEUM OF HISTORY RESTAURANT 	293
Section 27.3. 	293
NORTH CAROLINA POSTAL HISTORY COMMISSION 	293
Section 27.6. 	293
SCHOOL VISIT/BALLET THEATER PROGRAM 	295
Section 27.7. 	295
PRESERVATION OF BLACKBEARD'S FLAGSHIP 	295
Section 27.8. 	295
PRINCEVILLE CEMETERY OVERSIGHT 	295
Section 27.9. 	295
ARTS COUNCIL GRANTS 	295
Section 27.10. 	295
PART XXVIII. STATE BOARD OF ELECTIONS 	296
STATEWIDE DATA ELECTIONS MANAGEMENT SYSTEM 	296
Section 28. 	296
FLEXIBILITY IN VOTING EQUIPMENT ALLOCATION 	296
Section 28.1. 	296
STATE TO SUPPLY ABSENTEE BALLOTS TO COUNTY ONLY IF IT IS SUPPLYING BALLOTS FOR THAT COUNTY FOR USE AT THE PRECINCTS  297
Section 28.2. 	297
PART XXIX.  DEPARTMENT OF TRANSPORTATION 	297
GLOBAL TRANSPARK AUTHORITY TO REIMBURSE HIGHWAY FUND FROM FEDERAL SOURCES  297
Section 29. 	297
AIRCRAFT AND FERRY ACQUISITIONS 	297
Section 29.1. 	297
DEPARTMENT OF TRANSPORTATION TO PAY DEPARTMENT OF CORRECTION ONLY FOR ACTUAL MEDIUM CUSTODY INMATE LABOR  297
Section 29.2. 	297
HIGHWAY FUND ALLOCATIONS BY CONTROLLER 	297
Section 29.3. 	297
SMALL URBAN CONSTRUCTION PROGRAM DISCRETIONARY FUNDS 	298
Section 29.4. 	298
USE OF ANNUAL UNRESERVED HIGHWAY FUND CREDIT BALANCE 	298
Section 29.5. 	298
DRIVERS EDUCATION FUNDING 	299
Section 29.6. 	299
BRANCH AGENT REIMBURSEMENT RATE 	300
Section 29.7. 	300
INTERNATIONAL REGISTRATION PLAN BUDGET CODE MERGED INTO VEHICLE REGISTRATION BUDGET CODE  301
Section 29.8. 	301
PRIVATIZATION OF THE SCHOOL BUS DRIVER TRAINING PROGRAM 	301
Section 29.9. 	301
HIGHWAY FUND LIMITATIONS ON OVEREXPENDITURES 	301
Section 29.10. 	301
DEPARTMENT OF TRANSPORTATION EXEMPTION FROM GENERAL STATUTES FOR EXPERIMENTAL PROJECT–CONGESTION MANAGEMENT  302
Section 29.11. 	302
RESURFACED ROADS MAY BE WIDENED 	302
Section 29.12. 	302
CASH FLOW HIGHWAY FUND AND HIGHWAY TRUST FUND APPROPRIATIONS 	302
Section 29.13. 	303
F.E.M.A. RECEIVABLES 	303
Section 29.14. 	303
FEASIBILITY STUDY OF DRIVERS EDUCATION TESTING 	303
Section 29.15. 	303
GLOBAL TRANSPARK AUTHORITY BUSINESS PLAN FOR DISADVANTAGED BUSINESS PARTICIPATION  303
Section 29.16. 	303
USE OF PUBLIC TRANSPORTATION AND PASSENGER RAIL FUNDING 	303
Section 29.17. 	303
FEDERAL FUNDS FOR PUBLIC TRANSPORTATION IMPROVEMENTS 	304
Section 29.18. 	304
BIENNIAL REPORT ON MAINTENANCE REQUIREMENTS 	304
Section 29.19. 	304
GRADUATED DRIVERS LICENSE PROGRAM 	305
Section 29.20. 	305
PHASE OUT OPERATIONAL SUPPORT FOR VISITORS CENTERS 	305
Section 29.22. 	305
CONTRACT AGENT TRANSACTION ANALYSIS 	307
Section 29.23. 	307
DEPARTMENT OF TRANSPORTATION MINORITY- AND WOMEN-OWNED BUSINESS PARTICIPATION PLAN  307
Section 29.24. 	307
CONTAMINATED PROPERTY REMEDIATION 	307
Section 29.25. 	307
FEDERAL DRIVER'S PRIVACY PROTECTION ACT COMPLIANCE 	308
Section 29.26. 	308
SALVAGE VEHICLE INSPECTIONS 	308
Section 29.27. 	308
WESTERN PASSENGER RAIL SERVICE ROUTE MAJOR INVESTMENT STUDY 	309
Section 29.28. 	309
GOVERNOR'S HIGHWAY SAFETY PROGRAM NOT HIRE PAID
LOBBYISTS 	309
Section 29.29. 	309
DIVISION OF MOTOR VEHICLES TO CONDUCT AN ON-LINE REGISTRATION STUDY  309
Section 29.30. 	309
PART XXX.  SALARIES AND BENEFITS 	309
GOVERNOR AND COUNCIL OF STATE/SALARY INCREASES 	309
Section 30. 	309
NONELECTED DEPARTMENT HEADS/SALARY INCREASES 	310
Section 30.1. 	310
CERTAIN EXECUTIVE BRANCH OFFICIALS/SALARY INCREASES 	310
Section 30.2. 	310
SALARY OF THE CHAIRMAN OF THE EMPLOYMENT SECURITY COMMISSION 	311
Section 30.3A. 	311
SALARIES OF MEMBERS AND CHAIR OF THE UTILITIES COMMISSION 	311
Section 30.4A. 	311
TEMPORARY SALES TAX TRANSFER FOR WILDLIFE RESOURCES COMMISSION SALARY INCREASES  311
Section 30.6. 	311
JUDICIAL BRANCH OFFICIALS/SALARY INCREASES 	312
Section 30.7. 	312
CLERKS OF SUPERIOR COURT/SALARY INCREASES 	312
Section 30.8. 	312
ASSISTANT CLERKS OF SUPERIOR COURT/SALARY RANGE 	313
Section 30.8A. 	313
GENERAL ASSEMBLY PRINCIPAL CLERKS/SALARY INCREASES 	313
Section 30.9. 	313
SERGEANT-AT-ARMS AND READING CLERKS 	313
Section 30.10. 	313
LEGISLATIVE EMPLOYEES/SALARY INCREASES 	314
Section 30.11. 	314
COMMUNITY COLLEGES PERSONNEL/SALARY INCREASES 	314
Section 30.12. 	314
UNIVERSITY OF NORTH CAROLINA SYSTEM - EPA SALARY INCREASES 	314
Section 30.13. 	314
MOST STATE EMPLOYEES/SALARY INCREASES 	315
Section 30.14. 	315
ALL STATE-SUPPORTED PERSONNEL 	315
Section 30.15. 	315
EXTEND SUNSET ON FICA SAVINGS USE 	316
Section 30.15A. 	316
SALARY ADJUSTMENT FUND 	316
Section 30.16. 	316
ENHANCE THE RETIREMENT BENEFITS PAYABLE FROM THE TEACHERS' AND STATE EMPLOYEES' RETIREMENT SYSTEM, THE CONSOLIDATED JUDICIAL RETIREMENT SYSTEM, THE LEGISLATIVE RETIREMENT SYSTEM, AND THE LOCAL GOVERNMENTAL EMPLOYEES' RETIREMENT SYSTEM  316
Section 30.17. 	316
INCREASE THE MONTHLY BENEFITS FROM THE NORTH CAROLINA FIREMEN'S AND RESCUE SQUAD WORKERS' PENSION FUND  324
Section 30.18A. 	324
SALARY-RELATED CONTRIBUTIONS/EMPLOYERS 	325
Section 30.19. 	325
LOCAL EMPLOYEES PURCHASE STATE TIME/STATE EMPLOYEES PURCHASE LOCAL TIME  326
Section 30.22. 	326
RETIREMENT SYSTEM TRANSFER/PROVIDE FOR MEMBERS OF THE CONSOLIDATED JUDICIAL RETIREMENT SYSTEM TO TRANSFER CREDITABLE SERVICE FROM THE TEACHERS' AND STATE EMPLOYEES' RETIREMENT SYSTEM, THE LEGISLATIVE RETIREMENT SYSTEM, OR THE LOCAL GOVERNMENTAL EMPLOYEES' RETIREMENT SYSTEM TO THE CONSOLIDATED JUDICIAL RETIREMENT SYSTEM.  328
Section 30.23. 	328
PROVIDE A RETIREMENT INCENTIVE BY GRANTING A SEPARATION ALLOWANCE FOR ALL ELIGIBLE MEMBERS OF THE TEACHERS' AND STATE EMPLOYEES' RETIREMENT SYSTEM  331
Section 30.24. 	331
PART XXXI.  GENERAL CAPITAL APPROPRIATIONS/PROVISIONS 	332
INTRODUCTION 	332
Section 31. 	332
CAPITAL IMPROVEMENT PLANNING AND BUDGETING 	333
Section 31A. 	333
HISTORIC SITES REPAIRS AND RENOVATIONS FUNDS 	335
Section 31.1. 	335
STATE CAPITAL AND VISITOR'S CENTER SITE 	335
Section 31.2. 	335
RESERVE FOR ADVANCE PLANNING 	335
Section 31.3. 	335
ENCUMBERED APPROPRIATIONS AND PROJECT RESERVE FUND 	335
Section 31.4. 	335
PROJECT COST INCREASE 	336
Section 31.5. 	336
NEW PROJECT AUTHORIZATION 	336
Section 31.6. 	336
ADVANCE PLANNING OF CAPITAL IMPROVEMENT PROJECTS 	336
Section 31.7. 	336
APPROPRIATIONS LIMITS/REVERSION OR LAPSE 	336
Section 31.8. 	336
EXPENDITURE OF FUNDS FROM RESERVE FOR REPAIRS AND RENOVATIONS 	337
Section 31.9. 	337
HIGHWAY PATROL–UNDERGROUND FUEL TANK REMOVAL AND REMEDIATION FUNDS  337
Section 31.10. 	337
PROCEDURES FOR DISBURSEMENT 	337
Section 31.11. 	337
WATER RESOURCES DEVELOPMENT PROJECTS FUNDS 	338
Section 31.12. 	338
CAPITAL IMPROVEMENT PROJECTS/SUPPLEMENTAL FUNDING APPROVAL/REPORTING REQUIREMENT  339
Section 31.13. 	339
PUBLICATION OF AVAILABILITY OF STATE GRANT-IN-AID FUNDS 	339
Section 31.14. 	339
UNIFORM FINANCIAL ACCOUNTABILITY 	340
Section 31.15. 	340
UNC-A HIGHSMITH CENTER FUNDS 	342
Section 31.16. 	342
PART XXXII.  MISCELLANEOUS PROVISIONS 	342
EXECUTIVE BUDGET ACT APPLIES 	342
Section 32. 	342
COMMITTEE REPORT 	342
Section 32.1. 	342
MOST TEXT APPLIES ONLY TO 1997-99 	343
Section 32.2. 	343
EFFECT OF HEADINGS 	343
Section 32.3. 	343
SEVERABILITY CLAUSE 	343
Section 32.4. 	343
EFFECTIVE DATE 	343
Section 32.5. 	343

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	$   30,726,277	$  34,142,598

Judicial Department	324,271,559	325,088,510

Office of the Governor
01.	Office of the Governor	5,134,624	5,150,352
02.	Office of State Budget
and Management	7,098,018	7,030,838
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	10,016,613

Department of State Treasurer	18,890,311	18,872,768

Department of Public Education	4,506,966,784	4,486,681,491

Department of Justice	69,523,290	67,539,435

Department of Administration	57,334,144	57,814,012

Department of Agriculture	49,802,660	49,785,632

Department of Labor	15,917,134	15,828,463

Department of Insurance	24,286,640	24,341,742

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

Department of Environment, Health, and
Natural Resources	261,047,135	252,347,598

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	33,670,146	33,435,886
02.	Division of Aging	24,508,916	23,564,197
03.	Division of Child Development	167,493,379	166,668,985
04.	Division of Services for the
Deaf and the Hard of Hearing	27,843,994	27,797,823
05.	Division of Social Services	176,674,189	181,969,720
06.	Division of Medical Assistance	1,253,658,044	1,387,538,513
07.	Division of Services
for the Blind	15,317,973	15,335,955
08.	Division of Mental Health,
Developmental Disabilities, and
Substance Abuse Services	529,025,863	545,903,882
09.	Division of Facility Services	8,838,793	8,940,125
10.	Division of Vocational
Rehabilitation Services	33,034,755	32,834,876
11.	Division of Youth Services	84,578,571	85,915,373
Total Department of Human Resources	2,354,644,623	2,509,905,335

Department of Correction	827,192,782	867,041,502

Department of Commerce
01.	Commerce	42,139,786	37,622,471
02.	Biotechnology Center	9,664,396	7,664,396
03.	MCNC	4,500,000	2,500,000
04.	Rural Economic Development
Center	6,770,000	4,070,000
05.	State Aid to non-State
Entities	10,175,000	2,800,000

Department of Revenue	67,717,995	68,746,867

Department of Cultural Resources	56,179,672	56,253,016

Department of Crime Control
and Public Safety	33,743,793	33,719,040

Office of State Controller	19,317,773	10,705,706

University of North Carolina - Board
of Governors
01.	General Administration	37,174,175	37,248,792
02.	University Institutional
Programs	67,730,488	67,958,424
03.	Related Educational Programs	66,753,509	68,955,374
04.	University of North Carolina
at Chapel Hill
a.  Academic Affairs	162,097,964	163,908,261
b.  Health Affairs	131,844,663	132,505,230
c.  Area Health Education
    Centers	38,317,066	38,298,828
05.	North Carolina State University
at Raleigh
a.  Academic Affairs	210,711,631	211,170,461
b.  Agricultural Research Service	40,675,732	40,699,199
c.  Cooperative Extension Service	32,268,366	32,261,009
06.	University of North Carolina at
Greensboro	62,538,002	63,174,909
07.	University of North Carolina at
Charlotte	68,516,099	69,065,019
08.	University of North Carolina at
Asheville	20,074,355	20,128,419
09.	University of North Carolina at
Wilmington	38,928,327	39,321,546
10.	East Carolina University
a.  Academic Affairs	85,080,264	85,710,908
b.  Division of Health Affairs	41,088,406	41,131,370
11.	North Carolina Agricultural and
Technical State University	49,527,350	49,890,470
12.	Western Carolina University	43,458,211	43,516,116
13.	Appalachian State University	62,036,516	62,336,363
14.	The University of North
Carolina at Pembroke	18,594,577	18,469,961
15.	Winston-Salem State University	20,012,597	20,026,674
16.	Elizabeth City State
University	17,995,877	18,012,825
17.	Fayetteville State University	23,587,398	23,754,224
18.	North Carolina Central
University	35,546,465	36,234,446
19.	North Carolina School of the
Arts	11,808,727	11,855,365
20.	North Carolina School of
Science and Mathematics	9,519,375	9,582,725
21.	UNC Hospitals at Chapel Hill	35,615,701	35,615,701
Total University of North
Carolina - Board of Governors	1,431,501,841	1,440,832,619

Department of Community Colleges	522,642,983	504,000,909

State Board of Elections	1,487,787	2,070,381

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

Reserve for Compensation Increase	355,267,819	353,109,761

Reserve for Retirement Rate Changes	(40,292,000)	(40,292,000)

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

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

Reserve for Welfare Reform	7,150,000	3,300,000

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 –	$ 11,288,632,957	$ 11,463,929,910

PART II-A.  CAPITAL APPROPRIATIONS/GENERAL FUND

Section 2A.  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:

	1997-98
Department of Administration
1.	State Government Visitors' Center Planning	$  1,000,000

Department of Agriculture (Total)	4,044,400
1.	Piedmont Triad Farmers Market
Wholesale/Retail Building Planning	3,444,400
2.	Cattle and Livestock Exposition Center Planning	600,000

State Ports Authority (Total)	13,707,200
1.	Wilmington
a.	Cargo Facility	6,141,800
b.	Pier Replacement	1,383,400
2.	Morehead City
Cargo Facility	6,182,000

Department of Cultural Resources (Total)	3,700,000
1.	Museum of History Restaurant	1,800,000
2.	Reserve for Exhibits	1,900,000

Department of Environment, Health, and Natural Resources (Total)	10,098,200
1.	Water Resources Development/Watershed Projects	6,063,100
2.	Amphibious Water Scooping Tanker Aircraft	4,035,100

University Board of Governors (Total)	67,337,500
1.	Technology Reserve	3,000,000
2.	Fire Safety Improvements for Student Residence Halls	5,000,000
3.	Appalachian State University
Convocation Center Supplement	3,900,000
4.	Elizabeth City State University
Addition to Academic Computing Center 	3,557,600
5.	East Carolina University
a.	Science Labs & Technology Building: Continued Design	2,000,000
b.	Addition to Nursing/Home Economics Building Planning	500,000
6.	North Carolina Central University
a.	Lee Biology Building Renovation	1,359,200
b.	Repairs to 5 Academic Buildings	10,515,000
c.	B.N. Duke Auditorium Addition/Renovation	2,962,500
7.	North Carolina School of the Arts
Classrooms, offices and support space for School of Filmmaking 1,700,000
8.	North Carolina State University
a.	Nelson Hall Renovations	6,914,900
b.	Toxicology Building Planning	760,600
c.	Research & Teaching Feed Mill	2,604,400
9.	UNC Asheville
Graduate Center, Phase II (Completion of third floor)	792,700
10.	UNC Chapel Hill
Paul J. Rizzo Conference Center Supplement	2,800,000
11.	UNC Charlotte
Additional Planning for Academic Facilities	780,000
12.	UNC Greensboro
Music Building Supplement	2,300,000
13.	UNC Wilmington
General Classroom Building Planning/Construction	8,465,500
14.	Winston-Salem State University
Expansion/Renovation of F.L. Atkins Nursing Building	5,198,500
15.	Western Carolina University
Renovate Camp Lab School, Phase II	   2,226,600

GRAND TOTAL CAPITAL IMPROVEMENTS 	$ 99,887,300

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	34,667,278 34,723,375
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	453,635,520	444,145,948
d.	Ferry Operations	18,098,290	18,098,290
e.	Capital Improvements	12,000,000	 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	89,230,731	89,071,677
06.	Reserves and Transfers	  238,396,026	  232,513,926
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:   Representatives Gardner, Cansler, Clary
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	$ 30,395,663

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	13,853,152

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	2,255,301

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 child welfare improvements	2,211,687

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

TOTAL SOCIAL SERVICES BLOCK GRANT	$ 66,965,690

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

SUBSTANCE ABUSE PREVENTION
AND TREATMENT BLOCK GRANT

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.	Services for former SSI recipients	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 SUBSTANCE ABUSE PREVENTION 
AND TREATMENT BLOCK GRANT	$ 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	5,599,759

05.	Transfer from TANF Block Grant for the
development of child care centers at
community colleges	600,000

TOTAL CHILD CARE AND DEVELOPMENT FUND
BLOCK GRANT	$115,919,906

TEMPORARY ASSISTANCE TO NEEDY FAMILIES
(TANF) BLOCK GRANT 

01.	Block Grants to county departments
of social services (partial funding)	$302,029,076

02.	Transfer to Child Care and Development
Fund for development of child care centers
at community colleges	600,000

03.	Transfer to the Child Care and 
Development Fund for Work First child
care subsidies	5,599,759

04.	Allocation to the Division of Mental
Health, Developmental Disabilities, and
Substance Abuse Services for Work First
substance abuse treatment and testing services	3,000,000

05.	Allocation to the Division of Social
Services for evaluation	300,000

06.	Allocation to the Division of Social
Services for State and county
staff development	500,000

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

08.	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

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

10.	Transfer to the Social Services Block Grant
to establish the Special Children 
Adoption Fund	300,000

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

(b)	Decreases in Federal Fund Availability Except the TANF Block Grant
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, the TANF Block Grant, and the Child Care and Development Fund 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 for direct services only 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 for mandatory services; and
(2)	The remaining fifty percent (50%) shall be allocated for direct services only among the programs funded in this section.
All these budgeted increases shall be reported to the members of the House and Senate Appropriations Subcommittees on Human Resources and to the Fiscal Research Division.
(e)  Of the funds appropriated in this act to the Department of Human Resources, Division of Social Services, the sum of one million three hundred thousand dollars ($1,300,000) for the 1997-98 fiscal year and the sum of one million three hundred thousand dollars ($1,300,000) for the 1998-99 fiscal year shall be allocated to county departments of social services for hiring or contracting for additional child protective services, foster care, and adoption worker positions created after July 1, 1997, based upon a formula which takes into consideration the number of child protective services, foster care, and adoption cases, and child protective services, foster care, and adoption workers necessary to meet recommended standards adopted by the North Carolina Association of County Directors of Social Services.  No local match shall be required as a condition for receipt of these funds.
(f) There is established in the Department of Human Resources, Division of Social Services, a Special Children Adoption Fund.  The purpose of the fund is to provide funds for adoptive placements of children described in G.S. 108A-50 in foster care above those funds that participating licensed public and private adoption agencies can provide with existing resources.
Of the funds appropriated in this act to the Department of Human Resources, Special Children Adoption Fund, the sum of nine hundred eleven thousand six hundred eighty-seven dollars ($911,687) for the 1997-98 fiscal year and the sum of nine hundred eleven thousand six hundred eighty-seven dollars ($911,687) for the 1998-99 fiscal year shall be used to implement this subsection.  Of the monies in the Special Children Adoption Fund, the Department shall award a minimum of four hundred thousand dollars ($400,000) to licensed private adoption agencies.  The Department of Human Resources, Division of Social Services, in consultation with the North Carolina Association of County Directors of Social Services and representatives of licensed private adoption agencies, shall develop guidelines for the awarding of funds to licensed public and private adoption agencies upon successful placement for adoption of children described in G.S. 108A-50 and in foster care.  No local match shall be required as a condition for receipt of these funds.  Funds not expended at the end of a fiscal year shall not revert but shall remain in the Fund for the purpose enumerated in this subsection.
The Department of Human Resources, Division of Social Services, shall report by May 1, 1998, to the House and Senate Appropriations Subcommittees on Human Resources on the use of funds allocated in this subsection and the number of children placed.
(g)  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.
(h)  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.
(i)  Increases in Federal Fund Availability - Child Care and Development Fund Block Grant
The Child Care and Development Fund 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 and are within the scope of the block grant plan approved by the General Assembly.
(j)  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.
(k)  Of the funds appropriated in this act to the Department of Human Resources, Division of Child Development, the sum of six hundred thousand dollars ($600,000) for fiscal year 1997-98 shall be transferred to the Department of Community Colleges to establish three model early childhood education centers in three community colleges, one in the eastern part of the State, one in the western part of the State, and one in the Piedmont.
(l)  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.
(m)  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 TANF Block Grant to ensure that those funds are used for substance abuse services.
(n)  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), (l), and (m) of this section will be allocated. 
(o)  If the United States Congress reduces the amount of TANF funds below the amounts specified above after the effective date of this act, then the Department shall reduce every item in the TANF Block Grant section listed above pro rata.  Any TANF funds appropriated by the United States Congress in addition to the funds specified in this act shall not be expended until appropriated by the General Assembly.  Any TANF Block Grant fund changes shall be reported to the Joint Legislative Public Assistance Commission within 30 days after the change.

Requested by:  Representatives Mitchell, Baker, Carpenter
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 dollars ($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	$ 200.0
b.	Disaster Relief Reserve	(115.0)
c.	Revenue collections in 1996-97 in excess of
  authorized estimates	447.9
d.	Unexpended appropriations during
  1996-97 (reversions)	151.0
e.	Adjustment for Emergency Appropriation to
  Community Colleges, S.L. 1997-38	   (4.7)
Subtotal	679.2
f.	Reserve for North Carolina Railroad
Acquisition	(61.0)
g.	Transfer to Reserve for Repairs
  and Renovations	(135.0)
h.	Transfer to Clean Water Management Reserve	(13.1)
i.	Appropriation Adjustment in 1996-97	.3
j.	Reserve for Intangible Tax Refunds	(156.0)
Ending Fund Balance	314.4

	($ Millions)	($ Millions)
	  1997-98 	  1998-99
(2)	Beginning Unrestricted Fund Balance	314.4
(3)	Revenues Based on Existing Tax
  Structure	11,164.7	11,829.2
(4)	Tax Changes:
H57 - Nonresident Withholding	8.5	10.0
H59 - Internal Revenue Code Update	(8.5)	(16.8)
S323 - Historic Rehabilitation Tax Credit	-	(.1)
H260 - Conservation Tax Credit	(3.2)	(3.2)
S727 - Reduce Sales Tax on Food	(37.8)	(89.6)
H35 - Conform Sales Tax Refund Period	(.2)	(.2)
H36 - Consumer Use Tax Returns	-	  -
H204 - Foreclosure Filing Fee	.1	.1
S316 - Amend Bill Lee Act	(.5)	(1.6)
H13 - Simplify and Reduce Inheritance Tax	(9.9)	(22.1)
H15 - Conform Tax on Restored Income	(.1)	(.1)
H19 - Expand Corporate Tax Deduction	-	(4.9)
H20 - Increase Nonitemizer Charity Credit	-	(7.6)
H271 - School District Sales Tax Refund	(13.1)	(30.4)
H272 - Public College Sales Tax Refund	(10.2)	(21.3)
H754 - Illicit Liquor Tax	.1	.1
H537 - Federal Retiree Relief	(7.6)	(3.3)
H1057 - Exempt Audiovisual Masters	(1.4)	(1.6)
(5)	Court Fee Increases (S727)	13.9	15.1
(6)	Insurance Regulatory Charge (S727)	-	-
(7)	Utilities Regulatory Charge (S727)	-	-
(8)	Secretary of State - Fee Increase (S727)	1.7	1.7
(9)	Treasurer's Banking and
Local Government Commission	.5	.5
(10)	Revenue - Corporate Filing Charge	.3	.3
(11)	Interest on Bond Proceeds	35.0	-
(12)	Local Government Payments - Clean
  Water Bonds	4.1	4.0
(13)	Disproportionate Share Receipts	83.0	83.0
(14)	Highway Fund Transfer	12.6	13.4
(15)	Revenue Assessments for Additional
  Interstate Auditors	2.6	7.9
(16)	State Health Plan Purchasing Alliance
  Board - Transfer Cash Balance	0.6
(17)	Earmarked Refunds for
  Federal Retirees	  (35.5)	  (35.5)

  Total Availability	$11,514.1	$11,727.0

Requested by:  Representatives Holmes, Creech, Esposito, Crawford
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:   Representatives Holmes, Creech, Esposito, Crawford
GENERAL FUND CREDIT BALANCE/PRIORITY USES
Section 7.8.  (a)	G.S. 143-15.2 reads as rewritten:
"§ 143-15.2.  Use of General Fund credit balance; priority uses.
(a)	As used in G.S. 143-15.3, 143-15.3A, and 143-15.3B, 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 G.S. 143-15.3, 143-15.3A, and 143-15.3B.  
(b)	The State Controller shall transfer funds from the unreserved credit balance to the Savings Reserve Account in accordance with G.S. 143-15.3(a).
(c)	The State Controller shall transfer funds from the unreserved credit balance to the Repairs and Renovation Reserve Account in accordance with G.S. 143-15.3A(a).
(d)	The State Controller shall transfer funds from the unreserved credit balance to the Clean Water Management Trust Fund in accordance with G.S. 143-15.3B(a).
(e)	If insufficient funds are available in the unreserved credit balance to fulfill the requirements of G.S. 143-15.3(a), 143-15.3A(a), and 143-15.3B(a), the State Controller shall transfer funds based on the following priorities:
(1)	The Savings Reserve Account has first priority.
(2)	The Repairs and Renovations Reserve Account has second priority.
(3)	The Clean Water Management Trust Fund has third priority.
(f)	The General Assembly may appropriate that part of the anticipated General Fund credit balance not expected to be reserved only for capital improvements or other one-time expenditures."
(b)	G.S. 143-15.3 reads as rewritten:
"§ 143-15.3.  Savings Reserve Account.
(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, that were directly appropriated.  In the event that the one-fourth exceeds the amount necessary to reach the five percent (5%) level, only funds necessary to reach that level shall be reserved.
(a1)	If the balance in the Savings Reserve Account falls below the five percent (5%)  level during a fiscal year, the State Controller shall, in accordance with subsection (a) of this section, 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 the five percent (5%) level set out in subsection (a) of this section.  " 
(b)	The Director may not use funds in the Savings Reserve Account unless the use has been approved by an act of the General Assembly."
(c)	G.S. 143-15.3A reads as rewritten:
"§ 143-15.3A.  Repairs and Renovations Reserve Account.
(a)	There is established a Repairs and Renovations Reserve Account as a restricted reserve in the General Fund. The State Controller shall reserve to the Repairs and Renovations Reserve Account three percent (3%) of the replacement value of all State buildings supported from the General Fund, at the end of each fiscal year. 
(b)	The funds in the Repairs and Renovations Reserve Account shall be used only for the repair and renovation of State facilities and related infrastructure that are supported from the General Fund. Funds from the Repairs and Renovations Reserve Account shall be used only for the following types of projects:
(1)	Roof repairs and replacements;
(2)	Structural repairs;
(3)	Repairs and renovations to meet federal and State standards;
(4)	Repairs to electrical, plumbing, and heating, ventilating, and air-conditioning systems;
(5)	Improvements to meet the requirements of the Americans with Disabilities Act, 42 U.S.C. § 12101 et seq., as amended;
(6)	Improvements to meet fire safety needs;
(7)	Improvements to existing facilities for energy efficiency;
(8)	Improvements to remove asbestos, lead paint, and other contaminants, including the removal and replacement of underground storage tanks;
(9)	Improvements and renovations to improve use of existing space;
(10)	Historical restoration;
(11)	Improvements to roads, walks, drives, utilities infrastructure; and
(12)	Drainage and landscape improvements.
Funds from the Repairs and Renovations Reserve Account shall not be used for new construction or the expansion of the footprint of an existing facility unless required in order to comply with federal or State codes or standards.
The Director of the Budget shall not use funds in the Repairs and Renovations Reserve Account unless the use has been approved by an act of the General Assembly or, if the General Assembly is not in session, the Director of the Budget has first consulted with the Joint Legislative Commission on Governmental Operations under G.S. 143-15.3A(c).
(c)	The Governor shall consult with the Joint Legislative Commission on Governmental Operations before making allocations from the Repairs and Renovations Reserve Account.
Notwithstanding this subsection, whenever an expenditure is required because of an emergency that poses an imminent threat to public health or public safety, and is either the result of a natural event, such as a hurricane or a flood, or an accident, such as an explosion or a wreck, the Governor may take action under this subsection without consulting the Commission if the action is determined by the Governor to be related to the emergency. The Governor shall report to the Commission on any expenditures made under this paragraph no later than 30 days after making the expenditure and shall identify in the report the emergency, the type of action taken, and how it was related to the emergency."
(d)	G.S. 143-15.3B reads as rewritten:
"§ 143-15.3B.  The Clean Water Management Trust Fund.
(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, until the Clean Water Management Trust Fund equals fifty million dollars ($50,000,000).  In the event that six and one-half percent (6.5%) exceeds the amount necessary to equal the fifty million dollar ($50,000,000) level, only funds necessary to equal fifty million dollars ($50,000,000) shall be reserved. " 
(b)	The funds in the Clean Water Management Trust Fund shall be used only in accordance with Article 13A of Chapter 113 of the General Statutes."

Requested by:  Representatives Gray, Holmes, Creech, Esposito, Crawford
INTANGIBLES TAX REMEDY
Section 7.9. (a)	Of the unreserved credit balance as of June 30, 1997, the sum of one hundred fifty-six million dollars ($156,000,000) is reserved for the costs of intangibles tax refunds required by G.S. 105-267, including interest, and the Department of Revenue's additional costs of administering the refunds.  If this sum is not sufficient, the Department of Revenue may draw additional funds from collections under Division II of Article 4 of Chapter 105 of the General Statutes, as necessary, but in no case may the Department of Revenue receive pursuant to this subsection more than a total of five hundred thousand dollars ($500,000) for its additional costs of administering the refunds.
(b) This section becomes effective only if legislation directing the Secretary of Revenue to make intangibles tax refunds required by G.S. 105-267 is enacted by the 1997 General Assembly and becomes law.

Requested by:   Representatives Holmes, Creech, Esposito, Crawford
EXECUTIVE BUDGET ACT EXCEPTION
Section 7.10.  (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, funds allocated from the Repairs and Renovations Reserve Account in accordance with G.S. 143-15.3A, and funds allocated from the Contingency and Emergency Fund in accordance with G.S. 143-12(b), may be expended for any purpose, position, or other expenditure for which the General Assembly has considered but not enacted an appropriation of funds for the current fiscal period.  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. 143-16.3 does not apply to the following projects:
(1)	The acquisition of gamelands in the South Mountains (House Bill 610).
(2)	Blue Ridge Parkway - Scenic Vistas.

Requested by: Representatives Holmes, Creech, Esposito, Crawford
TRANSFERS FOR OVEREXPENDITURES OF A PURPOSE OR PROGRAM
Section 7.11.  G.S. 143-23(a1) reads as rewritten:
	"(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), and only if: (i) the overexpenditure is required to continue the purpose or programs due to complications or changes in circumstances that could not have been foreseen when the budget for the fiscal period was enacted and (ii) the scope of the purpose or program is not increased.  "

Requested by:   Representatives Bowie, Dockham, McMahan
NORTH CAROLINA RAILROAD ACQUISITION
Section 7.12. (a) The sum of sixty-one million dollars ($61,000,000) of the unreserved General Fund balance as of June 30, 1997, is placed in a reserve account.
(b) Notwithstanding G.S. 147-69.1, the State Treasurer shall invest on a one-time basis up to sixty-one million dollars ($61,000,000) from the reserve account created in subsection (a) of this section in obligations of the Beaufort and Morehead Railroad Company or any successor company.  Such obligations shall provide for total repayment within seven years, with no principal or interest payments required for two years, with capitalization of the interest accrued but not paid during that two-year period.
(c) Section 54 of Chapter 82 of the Laws of 1848-49, as amended by Chapter 1046 of the 1951 Session Laws, reads as rewritten:
"No stock owned by the State of North Carolina in the North Carolina Railroad Company shall be sold or transferred except with the prior consent of the General Assembly, except as part of a transaction or series of transactions relating to a plan of merger or consolidation of that company with another company, and where the State will be the owner of all of the stock in the merged or consolidated corporation."
(d)	G.S. 136-16.6(c) reads as rewritten:
"(c)	There is annually appropriated to the Department of Transportation for railroad purposes including capital contributions to the Beaufort and Morehead Railroad Company one hundred percent (100%) of the funds credited to the Highway Fund pursuant to subsection (a) of this section."
(e)  G.S. 147-12(7) is repealed.
(f)  G.S. 124-6 reads as rewritten:
"§ 124-6. Appointment of proxies, director of railroad companies, etc.
(a)	The Governor shall appoint on behalf of the State all such officers or agents as, by any act, incorporating a company for the purpose of internal improvement, are allowed to represent the stock or other interests which the State may have in such company; and such person or persons shall cast the vote to which the State may be entitled in all the meetings of the stockholders of such company under the direction of said Governor; and the said Governor may, if in his opinion the public interest so requires, remove or suspend such persons, officers, agents, proxies, or directors in his discretion.
(b)	Notwithstanding subsection (a) of this section, for any railroad company organized as a corporation in which the State is the owner of all the stock and which has trackage in more than two counties, four of the members of the Board of Directors shall be appointed by the Governor, four of the members of the Board of Directors shall be appointed by the General Assembly upon the recommendation of the Speaker of the House of Representatives in accordance with G.S. 120-121, and four of the members of the Board of Directors shall be appointed by the President Pro Tempore of the Senate in accordance with G.S. 120-121.  The Board of Directors shall consist of 15 members.  The four members appointed by the Governor shall include an investment banker, a person with experience in railroad management, a certified public accountant, and an at-large member.  The four members recommended to the General Assembly by the Speaker of the House of Representatives shall include an attorney with experience in corporate law, a member of a regional economic development commission whose region contains track of the company, a person with experience in railroad management, and an at-large member.  The four members recommended to the General Assembly by the President Pro Tempore of the Senate shall include an investment banker, an attorney with experience in corporate law, a member of a regional economic development commission whose region contains track of the company, and an at-large member.  These 12 appointed members of the Board of Directors shall elect the remaining three members of the Board.  The Board of Directors shall elect its chairman from among its membership."
(g)  Any railroad company covered by G.S. 124-6(b) shall present to the Joint Legislative Transportation Oversight Committee, by November 20, 1998, a business plan for the railroad including, but not limited to:
(1)	A mission statement with goals and objectives;
(2)	Areas and types of services to be provided;
(3)	Pro forma financial statements that cover a five-year period beginning January 1, 1999; and
(4)	Alternative forms of organization.

Requested by:   Representatives Holmes, Creech, Esposito, Crawford
DISASTER RELIEF FUNDS/REPORTING REQUIREMENTS
Section 7.13.  (a)	The Department of Crime Control and Public Safety shall report to the 1997 General Assembly, 1998 Regular Session, regarding the status of the federal disaster relief funds.  The report shall include the purpose for which the funds were spent, the total amount of the expenditure, and the total funds remaining for disaster relief.  A copy of the report shall also be provided to the Fiscal Research Division of the General Assembly.
(b)	State funds that are designated to match federal funds for disaster relief, but that are not needed as matching funds, shall revert to the General Fund.

Requested by:  Representatives Holmes, Creech, Esposito, Crawford, Justus, Thompson, Kiser, Redwine
ANALYSIS OF STATE ADMINISTRATIVE SPAN OF GOVERNMENT CONTROL
Section 7.14.  The Office of State Budget and Management shall continue to review and analyze the administrative span of control of State agencies.  That study was authorized by the General Assembly in Section 10.1 of Chapter 324 of the 1995 Session Laws.  The starting point for the continued review shall be the recommendations in the May 1996 study report, "Study of State Agency Spans of Control and Organizational Layers." In its review, the Office of State Budget and Management shall focus on four major areas:  (i) excessively narrow spans of control goals (supervisors with few employees to supervise); (ii) excessive layers of management between top management and employees; (iii) one-to-one reporting relationships; and (iv) work units with small numbers of staff.
The study goals shall be fewer management layers; realistic supervisor to employee ratios; proper classification of supervisors; cost savings by eliminating unnecessary positions; and improved policies and procedures for reviewing and monitoring organizational layers and supervisor to employee ratios.
The review shall be conducted as a joint effort between the Office of State Budget and Management, the Office of State Personnel and State agencies to further review the number of organizational levels and the average span of control in each State agency and determine the appropriate span of control and management levels for the agency and for each major division and section within that agency.  This review shall use the statewide benchmarks in the 1996 Span of Control study as a starting point for analysis, not as the required goal for each department.  However, the study shall highlight the reasons for any deviation from the statewide benchmarks recommended in the 1996 study.
In its study, the Office of State Budget and Management shall:
(1)	Document any cost savings available from eliminating positions.  These cost savings must be based on a reduced number of organizational layers and positions or a reduced number of supervisors due to increasing employee to supervisor ratios.
(2)	Highlight classifications that appear to be improperly classified as supervisors and, conversely, those nonsupervisory classifications that should be designated as supervisors.  Potential costs or cost savings for reclassification of positions should be documented where possible.
(3)	Recommend new policies and procedures to be implemented by the Office of State Budget and Management and the Office of State Personnel for reviewing and monitoring agency organizational and supervisory changes.  State Personnel should specifically review possible modifications to the State Personnel Management Information System that would allow for easy access and monitoring of agency organizational layers and supervisor to employee ratios.
(4)	Expand its scope to include The University of North Carolina System and the North Carolina Community College System.
(5)	Include a timetable for completing implementation of the study recommendations.
The Office of State Budget and Management shall report its findings and recommendations to the 1997 General Assembly by April 1, 1998.  A progress report shall be provided quarterly by the Office of State Budget and Management to the Joint Legislative Commission on Governmental Operations, the Chairs of the Senate and House Appropriations Committees, and the Fiscal Research Division.

Requested by:   Representatives Gray, Holmes, Creech, Esposito, Crawford
INTANGIBLES TAX REMEDY
Section 7.15. (a)	Of the unreserved credit balance as of June 30, 1997, the sum of one hundred fifty-six million dollars ($156,000,000) is reserved for the costs of intangibles tax refunds required by G.S. 105-267, including interest, and the Department of Revenue's additional costs of administering the refunds.  If this sum is not sufficient, the Department of Revenue may draw additional funds from collections under Division II of Article 4 of Chapter 105 of the General Statutes, as necessary, but in no case may the Department of Revenue receive pursuant to this subsection more than a total of five hundred thousand dollars ($500,000) for its additional costs of administering the refunds.
(b) This section becomes effective only if legislation directing the Secretary of Revenue to make intangibles tax refunds required by G.S. 105-267 is enacted by the 1997 General Assembly and becomes law.

Requested by:   Representatives Justus, Kiser, Thompson, Holmes, Creech, Esposito, Crawford
AUTHORIZATION OF PRIVATE LICENSE TAGS ON STATE-OWNED MOTOR VEHICLES
Section 7.16. (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	301
Correction	Probation/Parole Surveillance
	Officers (intensive probation)	25
Crime Control and
Public Safety	ALE Officers	160
Revenue		3
Capital Area
Police		2.
(b)	The 160 ALE vehicles authorized by this section to use private license tags shall be distributed as follows:
(1)	114 license tags for line vehicles;
(2)	14 license tags for spare vehicles;
(3)	12 license tags for surveillance vehicles; and
(4)	20 license tags for undercover vehicles.
(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:   Representative Arnold
NO STATE AGENCY CONTRACT LOBBYING
Section 7.17.  No state agency may retain any person who would be required to register as a lobbyist under Article 9A of Chapter 120 of the General Statutes in order to carry out the task for which that person is retained.

PART VIII.  PUBLIC SCHOOLS

Requested by:  Representatives Arnold, Grady, Preston
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:  Representatives Arnold, Grady, Preston
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:  Representatives Arnold, Grady, Preston
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 one hundred fifty thousand dollars ($150,000), 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:  Representatives Arnold, Grady, Preston
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:  Representatives Arnold, Grady, Preston
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%) 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 142,956 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:  Representatives Arnold, Grady, Preston
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:  Representatives Arnold, Grady, Preston
LOSS OF BUDGET FLEXIBILITY UNDER CERTAIN CIRCUMSTANCES/PROHIBITION ON USE OF STATE FUNDS TO BUY OUT SUPERINTENDENTS' CONTRACTS
Section 8.7.  (a) G.S. 115C-451 reads as rewritten:
"§ 115C-451.  Reports to State Board of Education; failure to comply with School Budget Act.
(a)	The State Board of Education shall have authority to require local school administrative units to make such reports as it may deem advisable with respect to the financial operation of the public schools.
(b)	The State Board of Education shall be responsible for assuring that local boards of education comply with State laws and regulations regarding the budgeting, management, and expenditure of funds.  When a local board of education willfully or negligently fails or refuses to comply with these laws and regulations, the State Board of Education shall issue a warning to the local board of education and direct it to take remedial action.  In addition, the State Board may suspend the flexibility given to the local board under G.S. 115C-105.21A and may require the local board to use funds during the term of suspension only for the purposes for which they were allotted or for other purposes with the specific approval from the State Board.
(c)	If the local board of education, after warning, persists in willfully or negligently failing or refusing to comply with these laws and regulations, the State Board of Education shall by resolution assume control of the financial affairs of the local board of education and shall appoint an administrator to exercise the powers assumed.  The adoption of a resolution shall have the effect of divesting the local board of education of its powers as to the adoption of budgets, expenditure of money, and all other financial powers conferred upon the local board of education by law."
(b) G.S. 115C-271 reads as rewritten:
"§ 115C-271.  Selection by local board of education, term of office.
(a)	It is the policy of the State that each local board of education has the sole discretion to elect a superintendent of schools.  However, the State Board shall adopt rules that establish the qualifications for election.  At a minimum, each superintendent shall have been a principal in a North Carolina public school or shall have equivalent experience.  In addition, the State Board may establish other minimum credentials, educational prerequisites, and experience requirements.  It is the duty of each local board to elect a superintendent who is qualified. If a local board elects a superintendent who is not qualified or who cannot qualify under this section, then the election and contract are null and void, and the board shall elect a person who is qualified.
(b)	Each local board of education shall elect a superintendent under a written contract of employment for a term of no more than four years, ending on June 30 of the final months of the contract.  Contracts of employment for a period of less than one year shall be governed and limited by G.S. 115C-275.  Each local board shall file a copy of the contract with the State Board of Education before the individual is eligible for this office.
(c)	At any time after the first 12 months of the contract, a local board may, with the written consent of the current superintendent, extend or renew the term of the superintendent's contract for a term of no more than four years. If new board members have been elected or appointed and are to be sworn in, a board shall not act to extend or renew the current superintendent's contract until after the new members have been sworn in.
(d)	A local board may terminate the superintendent's contract before the contract term of employment has expired so long as all the following conditions are met:
(1)	No State funds are used for this purpose.
(2)	Local funds appropriated for teachers, textbooks, or classroom materials, supplies and equipment are not transferred or used for this purpose.
(3)	The local board makes public the funds that are to be transferred or used for this purpose.
(4)	The local board notifies the State Board of the funds that are to be transferred or used for this purpose.
(5)	No funds acquired through donation or fund-raising are used for this purpose, except for funds raised specifically for this purpose or for funds donated by private for-profit corporations.
Immediately upon receipt of the notification from a local board under this subsection, the State Board shall review the accounts of that local school administrative unit. If the State Board finds that the local board failed to meet all the conditions set out in this subsection, the State Board shall issue a warning to the local board as provided in G.S. 115C-451 and, in addition to any other actions the State Board may take under G.S. 115C-451, shall order the local board to take action to comply with this subsection."

Requested by:  Representatives Arnold, Grady, Preston
DELETE REPORT ON GUARANTEED ENERGY SAVINGS CONTRACTS
Section 8.8.  Section 9 of Chapter 775 of the 1993 Session Laws is repealed.

Requested by:  Representatives Arnold, Grady, Preston
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:  Representatives Arnold, Grady, Preston
ALTERNATIVE SCHOOLS/AT-RISK STUDENTS
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:  Representatives Arnold, Grady, Preston
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:  Representatives Arnold, Grady, Preston
DATA ON TEACHER ASSISTANTS' YEARS OF EXPERIENCE, CREDENTIALS, AND PLACEMENT ON LOCALLY ADOPTED SALARY SCHEDULES/REVIEW OF TEACHER ASSISTANT EDUCATION PROGRAMS AND STANDARDS
Section 8.12. (a) 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.
(b) The State Board of Education shall review existing teacher assistant education programs, including the program offered by the North Carolina Association of Teacher Assistants.  
The State Board of Education shall also develop educational standards, goals, and competencies for teacher assistants.
The State Board of Education shall report on the results of its study and on the educational standards, goals, and competencies to the Joint Legislative Education Oversight Committee prior to February 15, 1998.
(c)	The State Board of Community Colleges shall review the reports submitted to the Joint Legislative Education Oversight Committee by the State Board of Education pursuant to subsection (b) of this section and shall use the reports to develop a plan for a certification program for teacher assistants.  The State Board of Community Colleges shall report to the Joint Legislative Education Oversight Committee on the plan it develops, including the costs of implementing the plan.

Requested by:  Representatives Arnold, Grady, Preston
CLASS-SIZE COMPUTATION FOR K-2
Section 8.13. The expansion budget funds appropriated by the 1993 and 1995 General Assemblies to provide teacher positions to reduce class size in kindergarten through second grade shall be allocated by the State Board of Education to local school administrative units on the basis of one teacher for every 23 students in each grade.  Local school administrative units shall use these funds (i) to reduce class size in kindergarten through second grade to 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 the grade span kindergarten, first grade, and second grade, the ratio of teachers to students shall at no time exceed one to 23.  In addition, the size of an individual class within this grade span shall not exceed the allotment ratio by more than three students.

Requested by:  Representatives Arnold, Grady, Preston
ABC'S PERFORMANCE RECOGNITION FOR PERSONNEL SERVING PREKINDERGARTEN THROUGH TWELFTH GRADE
Section 8.14.  G.S. 115C-105.36 reads as rewritten:
"§ 115C-105.36.  Performance recognition.
(a)	The personnel serving students in prekindergarten 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 prekindergarten 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:  Representatives Arnold, Grady, Preston
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)	Recommend revisions to 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:  Representatives Arnold, Grady, Preston
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:  Representatives Arnold, Grady, Preston
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:  Representatives Arnold, Grady, Preston
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:  Representatives Arnold, Grady, Preston
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:  Representatives Arnold, Grady, Preston
TEACHER CERTIFICATION
Section 8.22. (a) 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 postbachelors degree experience.
The State Board of Education shall report the results of its study to the Joint Legislative Education Oversight Committee prior to April 15, 1998.
(b) 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.  
(c) An applicant is eligible for initial certification as a teacher if the applicant (i) took the NTE specialty area tests and completed an approved out-of-state teacher education program prior to July 1, 1996, and (ii) met the minimum specialty area test score in effect for North Carolina when the applicant took the test.

Requested by:  Representatives Arnold, Grady, Preston
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) 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:  Representatives Daughtry, Arnold, Grady, Preston
PUBLIC-PRIVATE PARTNERSHIP TO EXPAND TECHNOLOGY IN PUBLIC SCHOOLS
Section 8.25.  (a)	The State Board of Education may use up to five hundred thousand dollars ($500,000) for the 1997-98 fiscal year from the School Technology Fund 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:  Representatives Arnold, Grady, Preston
UNIFORM EDUCATION REPORTING SYSTEMS FUNDS/BUILDING LEVEL REPORTS ON SCHOOL FUNDING
Section 8.26. (a) 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 student information software, in order to support the State Board of Education's responsibilities under G.S. 115C-12(18).
(b)	The State Board of Education shall modify the Uniform Education Reporting System to provide clear, accurate, and standard information on the use of funds at the unit and school level.  The plan shall provide information that will enable the General Assembly to determine State, local, and federal expenditures for personnel at the unit and school level.  The plan also shall allow the tracking of expenditures for textbooks, educational supplies and equipment, capital outlay, at-risk students, and other purposes.  The revised Uniform Education Reporting System shall be implemented beginning with the 1998-99 school year.

Requested by:  Representatives Arnold, Grady, Preston
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:  Representatives Arnold, Grady, Preston
RIGOROUS ACADEMIC CONTENT STANDARDS
Section 8.28.  (a) G.S. 115C-12 is amended by adding the following new subdivision to read:
"(9b)	Power to Develop Content Standards. – The Board shall develop a comprehensive plan to revise content standards and the standard course of study in the core academic areas of reading, writing, mathematics, science, history, geography, and civics. The Board shall involve and survey a representative sample of parents, teachers, and the public to help determine academic content standard priorities and usefulness of the content standards.  A full review of available and relevant academic content standards that are rigorous, specific, sequenced, clear, focused, and measurable, whenever possible, shall be a part of the process of the development of content standards.  The revised content standards developed in the core academic areas shall (i) reflect high expectations for students and quality; (ii) be clearly grounded in the content of each academic area; (iii) be defined grade-by-grade and course-by-course; (iv) be understandable to parents and teachers; (v) be developed in full recognition of the time available to teach the core academic areas at each grade level; and (vi) be measurable, whenever possible, in a reliable, valid, and efficient manner for accountability purposes.
   High school course content standards shall include alignment with coursework required for admission to constituent institutions of The University of North Carolina and end-of-course testing.  This alignment shall include a plan to develop and implement end-of-course tests for the minimum courses required for admission to these institutions. The Board of Governors of The University of North Carolina shall work in collaboration with the State Board of Education to ensure that teacher and school administrator programs, ongoing professional development and other university activity in the State's public schools align with the State Board's priorities.
	The Board also shall develop and implement an ongoing process to align State programs and support materials with the revised academic content standards for each core academic area every five years. Alignment shall include revising textbook criteria, support materials, State tests, teacher and school administrator preparation, and ongoing professional development programs to be compatible with content standards.  The Board shall develop and make available to teachers and parents support materials, including teacher and parent guides, for academic content standards."
(b) The State Board of Education shall report to the Joint Legislative Education Oversight Committee by April 15, 1998, on the implementation of this section, including the Board's comprehensive plan to revise content standards and the standard course of study and the Board's proposed timetable to align State programs and support materials with these standards so that the first cycle of alignment is completed by December 31, 2002.  The Board, in its report, may recommend any necessary statutory changes.
(c) The North Carolina Standards and Accountability Commission has 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.
Funds appropriated to the Standards and Accountability Commission for the 1997-99 fiscal biennium shall be used by the State Board of Education to develop core academic area standards and to align State programs and support materials with the core academic standards in accordance with G.S. 115C-12(9b).

Requested by:  Representatives Arnold, Grady, Preston, Black
SAFE SCHOOLS
Section 8.31.   (a)	G.S. 115C-366 is amended by adding the following new subsections to read:
"( a3)	When a student transfers into the public schools of a local school administrative unit, that local board shall require the student's parent, guardian, or custodian 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.  This subsection does not apply to the enrollment of a student who has never been enrolled in or attended a private or public school 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)."
(b)	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 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 or 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."
(c)	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 or to improve the educational opportunities for the student or others.  Upon receipt of each document, the principal shall share the document with appropriate staff members who shall indicate in writing that they have read the document and that they agree to maintain its confidentiality.  For the purposes of this section, 'appropriate staff members' are those individuals who have direct guidance, teaching, or supervisory responsibility for the student, or who have a specific need to know in order to protect the safety of the student or others.  The failure of a principal or staff member to maintain the confidentiality of these documents as required by this section is grounds for the dismissal of that individual.
(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."
(d)	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)	When a person is charged with a criminal offense that is a felony, except for a criminal offence under Chapter 20 of the General Statutes, a representative from the District Attorney's office 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 representative from the District Attorney's office 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."
(e)  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.
(f)(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 Chair of the State Board of Community Colleges, 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.
(g)  G.S. 115C-12(24), as amended by Section 15(e) of S.L. 1997-18, 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."
	(h) G.S. 115C-391 reads as rewritten:
"§ 115C-391.  Corporal punishment, suspension, or expulsion of pupils.
(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 subsection and make them available to each student and his parent or guardian at the beginning of each school year.
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.
(b)	The principal of a school, or his delegate, shall have authority to suspend for a period of 10 days or less any student who willfully violates policies of conduct established by the local board of education: Provided, that a student suspended pursuant to this subsection shall be provided an opportunity to take any quarterly, semester or grading period examinations missed during the suspension period.
(c)	The principal of a school, with the prior approval of the superintendent, shall have the authority to suspend for periods of times in excess of 10 school days but not exceeding the time remaining in the school year, any pupil who willfully violates the policies of conduct established by the local board of education. The pupil or his parents may appeal the decision of the principal to the local board of education.
(d)	Notwithstanding G.S. 115C-378, a local board of education may, upon recommendation of the principal and superintendent, expel any student 14 years of age or older whose behavior indicates that the student's continued presence in school constitutes a clear threat to the safety of other students or employees. The local board of education's decision to expel a student under this section shall be based on clear and convincing evidence. Prior to ordering the expulsion of a student pursuant to this subsection, the local board of education shall consider whether there is an alternative program offered by the local school administrative unit that may provide education services for the student who is subject to expulsion. At any time after the first July 1 that is at least six months after the board's decision to expel a student under this subsection, a student may request the local board of education to reconsider that decision. If the student demonstrates to the satisfaction of the local board of education that the student's presence in school no longer constitutes a threat to the safety of other students or employees, the board shall readmit the student to a school in that local school administrative unit on a date the board considers appropriate. 
(d1)	A local board of education shall suspend for 365 days any student who brings a weapon, as defined in G.S. 14-269.2(b) and G.S. 14-269.2(g), onto school property.  The local board of education upon recommendation by the superintendent may modify this suspension requirement on a case-by-case basis that includes, but is not limited to, the procedures established for the discipline of students with disabilities and may also provide, or contract for the provision of, educational services to any student suspended pursuant to this subsection in an alternative school setting or in another setting that provides educational and other services.
(d2)	A local board of education shall suspend for 365 days or shall remove to an alternative educational setting, as provided in this subsection, any student who physically assaults and seriously injures a teacher or other individual on school property or while attending a school-sponsored or school-related activity on or off school property.  If the other individual is a student, then this subsection shall not apply when the board finds that the student who is subject to suspension or removal was acting in self-defense.  If the board chooses to remove the student to an alternative educational setting and the conduct leading to the suspension occurred on or before the ninetieth school day, the board shall remove the student to that setting for the remainder of the current school year and the first 90 school days in the following school year. If the board chooses to remove the student to an alternative educational setting and the conduct leading to the suspension occurred after the ninetieth school day, the board shall remove the student to that setting for the remainder of the current school year and for the entire subsequent school year.  If a teacher is assaulted and seriously injured and as a result a student is suspended or removed to an alternative educational setting under this subsection, then the student shall not be returned to that teacher's classroom unless the teacher consents.
(e)	A decision of a local board under subsection (c), (d), (d1), or (d2) of this section is final and, except as provided in this subsection, is subject to judicial review in accordance with Article 4 of Chapter 150B of the General Statutes. A person seeking judicial review shall file a petition in the superior court of the county where the local board made its decision.
(f)	Local boards of education shall ensure they have clear policies governing the conduct of students.  At a minimum, these policies shall state the consequences of violent or assaultive behavior, possessions of weapons, and criminal acts committed on school property or at school-sponsored functions. The State Board shall develop guidelines to assist local boards in this process.
(g)	Notwithstanding the provisions of this section, the policies and procedures for the discipline of students with disabilities shall be consistent with federal laws and regulations.
(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."
(i)  G.S. 115C-402 reads as rewritten:
"§ 115C-402.  Student records; maintenance; contents; confidentiality.
The official record of each student enrolled in North Carolina public schools shall be permanently maintained in the files of the appropriate school after the student graduates, or should have graduated, from high school unless the local board determines that such files may be filed in the central office or other location designated by the local board for that purpose.
The official record shall contain, as a minimum, adequate identification data including date of birth, attendance data, grading and promotion data, and such other factual information as may be deemed appropriate by the local board of education having jurisdiction over the school wherein the record is maintained.  Each student's official record also shall include notice of any suspension for a period of more than 10 days or of any expulsion under G.S. 115C-391 and the conduct for which the student was suspended or expelled.   The notice of suspension or expulsion shall be expunged from the record if the student (i)	graduates from high school or (ii) is not expelled or suspended again during the two-year period commencing on the date of the student's return to school after the expulsion or suspension.
The official record of each student is not a public record as the term 'public record' is defined by G.S. 132-1. The official record shall not be subject to inspection and examination as authorized by G.S. 132-6."
(j)  G.S. 115C-288(g) reads as rewritten:
"(g)	To Report Certain Acts to Law Enforcement. – When the principal has actual notice that an act has occurred on school property involving assault resulting in serious personal injury, sexual assault, sexual offense, rape, kidnapping, indecent liberties with a minor, assault involving the use of a weapon, possession of a firearm in violation of the law, possession of a weapon in violation of the law, or possession of a controlled substance in violation of the law, the principal shall immediately report the act to the appropriate local law enforcement agency. Failure to report under this subsection is a Class 3 misdemeanor.  For purposes of this subsection, 'school property' shall include any public school building, bus, public school campus, grounds, recreational area, or athletic field, in the charge of the principal.  It is the intent of the General Assembly that the principal notify the superintendent and the superintendent notify the local board of any report made to law enforcement under this subsection."
(k)  Chapter 115C of the General Statutes is amended by adding a new Article to read:
"ARTICLE 8C.
"Local Plans for Maintaining Safe and Orderly Schools.
"§ 115C-105.45.  Legislative findings.
The General Assembly finds that all schools should be safe, secure, and orderly.  If students are to aim for academic excellence, it is imperative that there is a climate of respect in every school and that every school is free of disruption, drugs, violence, and weapons. All schools must have plans, policies, and procedures for dealing with disorderly and disruptive behavior.  All schools and school units must have effective measures for assisting students who are at risk of academic failure or of engaging in disruptive and disorderly behavior.
"§ 115C-105.46.  State Board of Education responsibilities.
In order to implement this Article, the State Board of Education:
(1)	Shall adopt guidelines for developing local plans under G.S. 115C-105.47;
(2)	Shall provide, in cooperation with the Board of Governors of The University of North Carolina, ongoing technical assistance to the local school administrative units in the development, implementation, and evaluation of their local plans under G.S. 115C-105.47;
(3)	May require a local board of education to withhold the salary of any administrator or other employee of local school administrative units who delays or refuses to prepare and implement local safe school plans in accordance with G.S. 115C-105.47; and
(4)	May revoke the certificate of the superintendent, pursuant to G.S. 115C-274(c), for failure to fulfill the superintendent's duties under a local safe school plan.
"§ 115C-105.47.  Local safe school plans.
(a)	Each local board of education shall develop a local school administrative unit safe school plan designed to ensure that every school in the local school administrative unit is safe, secure, and orderly, that there is a  climate of respect in every school, and that appropriate personal conduct is a priority for all students and all public school personnel.  The board shall include parents, the school community, representatives of the community, and others in the development of this plan. The plan may be developed by or in conjunction with other committees.
(b)	Each plan shall include each of the following components:
(1)	Clear statements of the standard of behavior expected of students at different grade levels and of school personnel  and clear statements of the consequences that will result from one or more violations of those standards.
(2)	A clear statement of the responsibility of the superintendent for coordinating the adoption and the implementation of the plan, evaluating principals' performance regarding school safety, monitoring and evaluating the implementation of safety plans at the school-level, and coordinating with local law enforcement and court officials appropriate aspects of implementation of the plan.  The statement of responsibility shall provide appropriate disciplinary consequences that may occur if the superintendent fails to carry out these responsibilities, including a reprimand in the superintendent's personnel file and withholding of the superintendent's salary.
(3)	A clear statement of the responsibility of the school principal for restoring, if necessary, and maintaining a safe, secure, and orderly school environment and of the consequences that may occur if the principal fails to meet that responsibility.  The principal's duties shall include exhibiting appropriate leadership for school personnel and students, providing for alternative placements for students who are seriously disruptive, reporting all criminal acts pursuant to G.S. 115C-288(g), and providing appropriate disciplinary consequences for disruptive students.  The consequences to the principal that may occur shall include a reprimand in the principal's personnel file,  disciplinary proceedings under G.S. 115C-325 for principals who hold career status, and disciplinary proceedings under the principal's contract for principals who are under contract.
(4)	Clear statements of the roles of other administrators, teachers, and other school personnel in restoring, if necessary, and maintaining a safe, secure, and orderly school environment.
(5)	Procedures for identifying and serving the needs of students who are at risk of academic failure or of engaging in disruptive or disorderly behavior.
(6)	Mechanisms for assessing the needs of disruptive and disorderly students, providing them with services to assist them in achieving academically and in modifying their behavior, and removing them from the classroom when necessary.
(7)	Measurable objectives for improving school safety and order.
(8)	Measures of the effectiveness of efforts to assist students at risk of academic failure or of engaging in disorderly or disruptive behavior.
(9)	Professional development clearly matched to the goals and objectives of the plan.
(10)	A plan to work effectively with local law enforcement officials and court officials to ensure that schools are safe and laws are enforced.
(11)	A plan to provide access to information to the school community, parents, and representatives of the local community on the ongoing implementation of the local plan, monitoring of the local plan, and the integration of educational and other services for students into the total school program.
(12)	The name and role description of the person responsible for implementation of the plan.
(13)	Direction to school improvement teams within the local school administrative unit to consider the special conditions at their schools and to incorporate into their local school improvement plans the appropriate components of the local plan for maintaining safe and orderly schools.
(14)	Any other information the local board considers necessary or appropriate to implement this Article.
(c)	The local board may amend the plan as often as it considers necessary or appropriate."
(k1)  G.S. 115C-105.27 reads as rewritten:
"§ 115C-105.27.  Development and approval of school improvement plans.
In order to improve student performance, each school shall develop a school improvement plan that takes into consideration the annual performance goal for that school that is set by the State Board under G.S. 115C-105.35. The principal of each school, representatives of the assistant principals, instructional personnel, instructional support personnel, and teacher assistants assigned to the school building, and parents of children enrolled in the school shall constitute a school improvement team to develop a school improvement plan to improve student performance. Parents serving on school improvement teams shall reflect the racial and socioeconomic composition of the students enrolled in that school and shall not be members of the building-level staff. Parental involvement is a critical component of school success and positive student achievement; therefore, it is the intent of the General Assembly that parents, along with teachers, have a substantial role in developing school improvement plans. To this end, school improvement team meetings shall be held at a convenient time to assure substantial parent participation. The strategies for improving student performance shall include a plan for the use of staff development funds that may be made available to the school by the local board of education to implement the school improvement plan and shall include a plan to address school safety and discipline concerns in accordance with the safe school plan developed under Article 8C of this Chapter.  The strategies may include a decision to use State funds in accordance with G.S. 115C-105.25. The strategies may also include requests for waivers of State laws, rules, or policies for that school. A request for a waiver shall meet the requirements of G.S. 115C-105.26.
Support among affected staff members is essential to successful implementation of a school improvement plan to address improved student performance at that school. The principal of the school shall present the proposed school improvement plan to all of the principals, assistant principals, instructional personnel, instructional support personnel, and teacher assistants assigned to the school building for their review and vote. The vote shall be by secret ballot. The principal shall submit the school improvement plan to the local board of education only if the proposed school improvement plan has the approval of a majority of the staff who voted on the plan.
The local board of education shall accept or reject the school improvement plan. The local board shall not make any substantive changes in any school improvement plan that it accepts. If the local board rejects a school improvement plan, the local board shall state with specificity its reasons for rejecting the plan; the school improvement team may then prepare another plan, present it to the principals, assistant principals, instructional personnel, instructional support personnel, and teacher assistants assigned to the school building for a vote, and submit it to the local board to accept or reject. If no school improvement plan is accepted for a school within 60 days after its initial submission to the local board, the school or the local board may ask to use the process to resolve disagreements recommended in the guidelines developed by the State Board under G.S. 115C-105.20(b)(5). If this request is made, both the school and local board shall participate in the process to resolve disagreements. If there is no request to use that process, then the local board may develop a school improvement plan for the school. The General Assembly urges the local board to utilize the school's proposed school improvement plan to the maximum extent possible when developing such a plan.
A school improvement plan shall remain in effect for no more than three years; however, the school improvement team may amend the plan as often as is necessary or appropriate. If, at any time, any part of a school improvement plan becomes unlawful or the local board finds that a school improvement plan is impeding student performance at a school, the local board may vacate the relevant portion of the plan and may direct the school to revise that portion. The procedures set out in this subsection shall apply to amendments and revisions to school improvement plans."
(k2)  The State Board of Education shall develop a plan to reward school principals for improving school safety and school climate.  The Board shall report this plan, along with any recommended statutory changes, to the Joint Legislative Education Oversight Committee by April 15, 1998.
(k3)  Local boards of education shall begin implementation of local safe school plans developed under this section by the beginning of the 1998-99 school year.
(l)  G.S. 115C-12 is amended by adding the following new subdivision to read:
"(26)	Reporting Dropout Rates. – The State Board shall not include students that have been expelled from school when calculating the dropout rate."
(m) The Board of Governors of The University of North Carolina, in consultation with the State Board of Education, the Administrative Office of the Courts, the Department of Crime Control and Public Safety, and other appropriate State agencies, shall develop a program for the ongoing training of school officials, local law enforcement officials, and local court officials.  The program shall be designed to promote local collaboration on school safety and discipline issues.  The Board of Governors shall report to the Joint Legislative Education Oversight Committee on the development of this program by January 15, 1998.

Requested by:  Representatives Arnold, Grady, Preston
SCHOOL CENTRAL OFFICE SALARIES
Section 8.33.  (a) The following monthly salary ranges apply to 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 - $4,715
(2)	School Administrator II:	$2,991 - $5,004
(3)	School Administrator III:	$3,174 - $5,311
(4)	School Administrator IV:	$3,302 - $5,526
(5)	School Administrator V:	$3,435 - $5,750
(6)	School Administrator VI:	$3,645 - $6,102
(7)	School Administrator VII:	$3,792 - $6,349
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 - $6,738
(2)	Superintendent II (2,501 - 5,000 ADM):	$4,272 - $7,149
(3)	Superintendent III (5,001 - 10,000 ADM):	$4,533 - $7,587
(4)	Superintendent IV (10,001 - 25,000 ADM):	$4,811 - $8,051
(5)	Superintendent V (Over 25,000 ADM):	$5,106 - $8,544
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 8.35A 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 four percent (4%), 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:  Representatives Arnold, Grady, Preston
NONCERTIFIED PUBLIC SCHOOL EMPLOYEES' SALARY INCREASE
Section 8.34.   The Director of the Budget may transfer from the Reserve for Compensation Increase created in this act for fiscal year 1997-98, commencing July 1, 1997, funds necessary to provide a salary increase of four percent (4%), 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 four percent (4%), 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 Reserve for Compensation Increase 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.

Requested by:  Representatives Arnold, Grady, Preston
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 Compensation Increase 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 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
"A"Teachers

	Years of	 "A"	  NBPTS   
Experience	Teachers	 Certification

	0	2,150	N/A
	1	2,257	N/A
	2	2,300	N/A
	3	2,378	2,615
	4	2,529	2,781
	5	2,576	2,833
	6	2,624	2,886
	7	2,673	2,940
	8	2,722	2,994
	9	2,771	3,048
	10	2,821	3,103
	11	2,873	3,160
	12	2,926	3,218
	13	2,980	3,278
	14	3,035	3,338
	15	3,091	3,400
	16	3,148	3,462
	17	3,206	3,526
	18	3,266	3,592
	19	3,327	3,659
	20	3,390	3,729
	21	3,453	3,798
	22	3,517	3,868
	23	3,582	3,940
	24	3,649	4,013
	25	3,718	4,089
	26	3,788	4,166
	27	3,859	4,244
	28	3,932	4,325
	29+ 	4,006	4,406

1997-98 Monthly Salary Schedule
"G"Teachers

	Years of	 "G" 	  NBPTS   
	Experience	Teachers	 Certification

	0	2,353	N/A
	1	2,398	N/A
	2	2,444	N/A
	3	2,527	2,779
	4	2,687	2,955
	5	2,737	3,010
	6	2,788	3,066
	7	2,840	3,124
	8	2,892	3,181
	9	2,944	3,238
	10	2,997	3,296
	11	3,053	3,358
	12	3,109	3,419
	13	3,166	3,482
	14	3,225	3,547
	15	3,284	3,612
	16	3,345	3,679
	17	3,406	3,746
	18	3,470	3,817
	19	3,535	3,888
	20	3,602	3,962
	21	3,669	4,035
	22	3,737	4,110
	23	3,806	4,186
	24	3,877	4,264
	25	3,950	4,345
	26	4,025	4,427
	27	4,100	4,510
	28	4,178	4,595
	29+ 	4,256	4,681
(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:  Representatives Arnold, Grady, Preston
SCHOOL-BASED ADMINISTRATOR SALARIES
Section 8.35A.  (a)	Funds appropriated to the Reserve for Compensation Increase 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:
Assistant Principal	Principal I
Step	Base	Base	Base	Base	Base	Base
	+ 1%	+ 2%	+ 1%	+ 2%

4	$2,627	$2,653	$2,679	–  	–  	–  
5	2,679	2,706	2,732	–  	–  	–  
6	2,732	2,759	2,787	–  	–  	–  
7	2,787	2,815	2,843	–  	–  	–  
8	2,843	2,871	2,900	2,843	2,871	2,900
9	2,900	2,929	2,958	2,900	2,929	2,958
10	2,958	2,988	3,018	2,958	2,988	3,018
11	3,018	3,048	3,078	3,018	3,048	3,078
12	3,078	3,109	3,140	3,078	3,109	3,140
13	3,140	3,171	3,203	3,140	3,171	3,203
14	3,203	3,235	3,267	3,203	3,235	3,267
15	3,267	3,300	3,332	3,267	3,300	3,332
16	3,332	3,365	3,399	3,332	3,365	3,399
17	3,399	3,433	3,467	3,399	3,433	3,467
18	3,467	3,502	3,536	3,467	3,502	3,536
19	3,536	3,571	3,607	3,536	3,571	3,607
20	3,607	3,643	3,679	3,607	3,643	3,679
21	3,679	3,716	3,753	3,679	3,716	3,753
22	3,753	3,791	3,828	3,753	3,791	3,828
23	3,828	3,866	3,905	3,828	3,866	3,905
24	3,905	3,944	3,983	3,905	3,944	3,983
25	3,983	4,023	4,063	3,983	4,023	4,063
26	4,063	4,104	4,144	4,063	4,104	4,144
27	4,144	4,185	4,227	4,144	4,185	4,227
28	4,227	4,269	4,312	4,227	4,269	4,312
29	4,312	4,355	4,398	4,312	4,355	4,398
30	4,398	4,442	4,486	4,398	4,442	4,486
31	4,486	4,531	4,576	4,486	4,531	4,576
32	–  	–  	–  	4,576	4,622	4,668

Principal II	Principal III
Step	Base	Base	Base	Base	Base	Base
	+ 1%	+ 2%	+ 1%	+ 2%

4	–  	–  	–  	–  	–  	–  
5	–  	–  	–  	–  	–  	–  
6	–  	–  	–  	–  	–  	–  
7	–  	–  	–  	–  	–  	–  
8	–  	–  	–  	–  	–  	–  
9	–  	–  	–  	–  	–  	–  
10	$3,018	$3,048	$3,078	–  	–  	–  
11	3,078	3,109	3,140	–  	–  	–  
12	3,140	3,171	3,203	3,203	3,325	3,267
13	3,203	3,235	3,267	3,267	3,300	3,332
14	3,267	3,300	3,332	3,332	3,365	3,399
15	3,332	3,365	3,399	3,399	3,433	3,467
16	3,399	3,433	3,467	3,467	3,502	3,536
17	3,467	3,502	3,536	3,536	3,571	3,607
18	3,536	3,571	3,607	3,607	3,643	3,679
19	3,607	3,643	3,697	3,679	3,716	3,753
20	3,679	3,716	3,753	3,753	3,791	3,828
21	3,753	3,791	3,828	3,828	3,866	3,905
22	3,828	3,866	3,905	3,905	3,944	3,983
23	3,905	3,944	3,983	3,983	4,023	3,063
24	3,983	4,023	4,064	4,063	4,104	4,144
25	4,063	4,104	4,144	4,144	4,185	4,227
26	4,144	4,185	4,227	4,227	4,269	4,312
27	4,227	4,269	4,312	4,312	4,355	4,398
28	4,312	4,355	4,398	4,398	4,442	4,486
29	4,398	4,442	4,486	4,486	4,531	4,576
30	4,486	4,531	4,576	4,576	4,622	4,668
31	4,576	4,622	4,668	4,668	4,715	4,761
32	4,668	4,715	4,761	4,761	4,809	4,856
33	4,761	4,809	4,856	4,856	4,905	4,953
34	4,856	4,905	4,953	4,953	5,003	5,052
35	–  	–  	–  	5,052	5,103	5,153
36	–  	–  	–  	5,153	5,205	5,256

Principal IV	Principal V
Step	Base	Base	Base	Base	Base	Base
	+ 1%	+ 2%	+ 1%	+ 2%

4	–	–	–	–	–	–
5	–	–	–	–	–	–
6	–	–	–	–	–	–
7	–	–	–	–	–	–
8	–	–	–	–	–	–
9	–	–	–	–	–	–
10	–	–	–	–	–	–
11	–	–	–	–	–	–
12	–	–	–	–	–	–
13	$3,332	$3,365	$3,399	–	–	–
14	3,399	3,433	3,467	$3,467	$3,502	$3,536
15	3,467	3,502	3,536	3,536	3,571	3,607
16	3,536	3,571	3,607	3,607	3,643	3,679
17	3,607	3,643	3,679	3,679	3,716	3,753
18	3,679	3,716	3,753	3,753	3,791	3,828
19	3,753	3,791	3,828	3,828	3,866	3,905
20	3,828	3,866	3,905	3,905	3,944	3,983
21	3,905	3,944	3,983	3,983	4,023	4,063
22	3,983	4,023	4,063	4,063	4,104	4,144
23	4,063	4,104	4,144	4,144	4,185	4,227
24	4,144	4,185	4,227	4,227	4,269	4,312
25	4,227	4,269	4,312	4,312	4,355	4,398
26	4,312	4,355	4,398	4,398	4,442	4,486
27	4,398	4,442	4,486	4,486	4,531	4,576
28	4,486	4,531	4,576	4,576	4,622	4,668
29	4,576	4,622	4,668	4,668	4,715	4,761
30	4,668	4,715	4,761	4,761	4,809	4,856
31	4,761	4,809	4,856	4,856	4,905	4,953
32	4,856	4,905	4,953	4,953	5,003	5,052
33	4,953	5,003	5,052	5,052	5,103	5,153
34	5,052	5,103	5,153	5,153	5,205	5,256
35	5,153	5,205	5,256	5,256	5,309	5,361
36	5,256	5,309	5,361	5,361	5,415	5,468
37	5,361	5,415	5,468	5,468	5,523	5,577
38	–	–	–	5,577	5,633	5,689
39	–	–	–	–	–	–
40	–	–	–	–	–	–
41	–	–	–	–	–	–

Principal VI	Principal VII
Step	Base	Base	Base	Base	Base	Base
	+ 1%	+ 2%	+ 1%	+ 2%

4	–	–	–	–	–	–
5	–	–	–	–	–	–
6	–	–	–	–	–	–
7	–	–	–	–	–	–
8	–	–	–	–	–	–
9	–	–	–	–	–	–
10	–	–	–	–	–	–
11	–	–	–	–	–	–
12	–	–	–	–	–	–
13	–	–	–	–	–	–
14	–	–	–	–	–	–
15	–	–	–	–	–	–
16	3,679	3,716	3,753	–	–	–
17	3,753	3,791	3,828	3,828	3,866	3,905
18	3,828	3,866	3,905	3,905	3,944	3,983
19	3,905	3,944	3,983	3,983	4,023	4,063
20	3,983	4,023	4,063	4,063	4,104	4,144
21	4,063	4,104	4,144	4,144	4,185	4,227
22	4,144	4,185	4,227	4,227	4,269	4,312
23	4,227	4,269	4,312	4,312	4,355	4,398
24	4,312	4,355	4,398	4,398	4,442	4,486
25	4,398	4,442	4,486	4,486	4,531	4,576
26	4,486	4,531	4,576	4,576	4,622	4,668
27	4,576	4,622	4,668	4,668	4,715	4,761
28	4,668	4,715	4,761	4,761	4,809	4,856
29	4,761	4,809	4,856	4,856	4,905	4,953
30	4,856	4,905	4,953	4,953	5,003	5,052
31	4,953	5,003	5,052	5,052	5,103	5,153
32	5,052	5,103	5,153	5,153	5,205	5,256
33	5,153	5,205	5,256	5,256	5,309	5,361
34	5,256	5,309	5,361	5,361	5,415	5,468
35	5,361	5,415	5,468	5,468	5,523	5,577
36	5,468	5,523	5,577	5,577	5,633	5,689
37	5,577	5,633	5,689	5,689	5,746	5,803
38	5,689	5,746	5,803	5,803	5,861	5,919
39	5,803	5,861	5,919	5,919	5,978	6,037
40	5,919	5,978	6,037	6,037	6,097	6,158
41	–	–	–	6,158	6,220	6,281

(c)	The appropriate classification for placement of principals and assistant principals on the salary schedule, except for principals in alternative schools, 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.
Principals in alternative schools shall be classified at the  Principal III level, regardless of the number of teachers supervised.
(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) For the 1997-98 fiscal year, a principal or assistant principal shall be placed on the appropriate step plus one percent (1%) if:
(1)	The principal's or assistant principal's school exceeds the projected levels of improvement in student performance, in accordance with the ABC's of Public Education Program; or
(2)	The local board of education finds that the principal's or assistant principal's performance in developing the local plan for maintaining safe and orderly schools is exemplary.
The principal or assistant principal shall be placed on the appropriate step plus two percent (2%) if the conditions set out in both subdivision (1) and (2) are satisfied.
(f)  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.
(g)  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.
(h)  Longevity pay for principals and assistant principals shall be as provided for State employees.
(i)(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.
(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.
(k)  The State Board of Education may use up to fifty thousand dollars ($50,000) of the funds appropriated to State Aid to Local School Administrative Units to study (i) the relationship of principal's salaries to the salaries of teachers and other certified school personnel and (ii) the tenure rights of psychologists, speech pathologists, and audiologists. The State Board shall report the results of the study to the Joint Legislative Education Oversight Committee.

Requested by:  Representatives Arnold, Grady, Preston
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 seventy-two million four hundred thousand dollars ($72,400,000) 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 five hundred dollars ($1,500) 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) seven hundred fifty dollars ($750.00) for each teacher and for certified personnel; and (ii) three hundred seventy-five dollars ($375.00) for each teacher assistant.
(b)	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:  Representatives Arnold, Grady, Preston
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:  Representatives Arnold, Grady, Preston
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:  Representatives Arnold, Grady, Preston
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's Plan and  mathematics education.

Requested by:  Representatives Arnold, Grady, Preston
ADDITIONAL PAY FOR TEACHERS WITH ADDITIONAL RESPONSIBILITIES
Section 8.39A.  Of the funds appropriated to State Aid to Local School Administrative Units, the sum of one million nine hundred thousand dollars ($1,900,000) for the 1997-98 fiscal year and the sum of one million nine hundred thousand dollars ($1,900,000) for the 1998-99 fiscal year shall be used to compensate teachers for additional assignments and responsibilities designed to improve student achievement for additional workdays outside of the school calendar.  These funds shall be allocated to local school administrative units on the basis of average daily membership.  The local board shall use one-half of the funds on the recommendation of the local superintendent and one-half on the recommendation of school improvement teams.  These funds shall be used to compensate teachers for purposes such as teaching after-school or Saturday academies for students at risk of academic failure, developing curriculum,  participating in teacher training and development outside of the school calendar, and teaching classes on Saturday to students needing additional instructional opportunities.

Requested by:  Representatives Arnold, Grady, Preston
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 must fall within the same State 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 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.  The school calendar shall include a plan for making up days when schools close early or are not opened due to inclement weather.
(2)	A minimum of 10 annual vacation leave days and 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.
(3)	The remaining days shall be 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 days for the principal to schedule.  A local board or a principal may schedule different purposes for different personnel on any given day and is not required 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)	School shall not be held on Sundays.
(3)	Veterans Day shall be a holiday for all children enrolled in the public schools.
(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 may 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.
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.  In order that only 30 days of annual vacation leave carry forward to July 1, on June 30 of each year any teacher or other personnel paid on the teacher salary schedule who has accumulated more than 30 days of annual vacation leave shall:
(1)	Convert to either sick leave or pay the excess accumulation that is the result of the teacher having to forfeit annual vacation leave in order to attend required workdays; and
(2)	Convert to sick leave the remaining excess accumulation.
Local boards of education shall identify which days are accumulated due to the teacher forfeiting annual vacation leave in order to attend required workdays.  Actual payment for excess accumulated annual vacation leave may be made after July 1.
Upon separation from service due to retirement, 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.  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)	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.
(e)	Overpayment. – Each local board of education shall sustain any loss by reason of an overpayment to any teacher paid from State funds.
(f)	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.
(g)	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 positions 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.
(h)	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.
(i)	Longevity Pay. –  Longevity pay shall be based on the annual salary on the employee's anniversary date.
(j)	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-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."
(g)  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." 
(h)  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."
(i)  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. "
(j)  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(h), 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."
(k)  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.
(l)  Of the funds appropriated to State Aid to Local School Administrative Units, the sum of five million dollars ($5,000,000) for the 1997-98 school year and the sum of five million dollars ($5,000,000) 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 pay teachers for working on, and thereby forfeiting, up to two annual vacation leave days, in accordance with G.S. 115C-302.1(c); 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 two annual vacation leave days, in accordance with G.S. 115C-302.1(c).
(m)  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 (e) of this section, that permit teachers to opt to have excess vacation leave converted to pay apply to only two annual 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 (e) of this section, that permit teachers to opt to have excess vacation leave converted to pay apply to up to two annual 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.
(n)  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."
(o)  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."

Requested by:  Representatives Arnold, Grady, Preston
GLOBAL CURRICULUM PROGRAM
Section 8.41.  The funds appropriated in this act for the Global Curriculum Program shall be used to improve the knowledge and understanding of middle and high school students in the areas of international and cultural studies, by identifying and training  master teachers and providing orientations and materials.  The State Board of Education may enter into contracts to implement the Program.

Requested by:  Representatives Reynolds, Arnold, Grady, Preston
PILOT PROGRAM FOR COMPUTER NETWORK ADMINISTRATION
Section 8.42.   (a)	The State Board of Education shall use up to five hundred thousand dollars ($500,000) for the 1997-98 fiscal year from the State School Technology Fund to establish pilot programs in the administration, design, and maintenance of computer  networks in public schools business programs as part of Tech Prep and School-to-Work.
(b)	The State Board of Education shall select local school administrative units to participate in the pilot 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, (iii) indicators of the need for the program in the community, such as lack of comparable training or resources in the community, and (iv) the availability of the necessary computer hardware.
The program shall be implemented in one to three high schools in each participating unit. Two teachers shall participate at each high school in which the program is implemented.  Classes shall be limited to 15 students each.
(c) Each pilot program shall meet the following criteria:
(1)	The program shall be available to high school juniors and seniors and shall be four semesters in length, including a work-based learning component;
(2)	The program shall be taught by a certified North Carolina business education teacher who is appropriately certified in computer network administration, design, and maintenance;
(3)	Courses shall be taught in an appropriate classroom/laboratory environment;
(4)	The program shall be designed to extend into the community college system to provide engineer and instructor certification;
(5)	Students successfully completing the program shall be provided an opportunity to take the appropriate certification examination in network administration, design, and maintenance; and
(6)	The program shall be monitored and managed by the State Board of Education, in consultation with private industry business partners.
(d)	The State Board of Education may contract with outside consultants or with private nonprofit corporations to assist it in implementing and evaluating the pilot programs. 
(e)  The State Board of Education shall evaluate the educational components of the programs.
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:  Representatives Arnold, Grady, Preston
FUNDS TO GRADE STANDARDIZED TESTS
Section 8.43.  (a)	The State Board of Education may use up to five hundred thousand dollars ($500,000) appropriated for the operations of the Department of Public Instruction for the 1997-98 fiscal year to upgrade or replace equipment used by local school administrative units to score end-of-grade and end-of-course tests.
(b)	The State Board of Education may use up to eight hundred thousand dollars ($800,000) appropriated for the operations of the Department of Public Instruction for the 1997-98 fiscal year to grade the additional fifth and eighth grade short essay tests.

Requested by:  Representatives Arnold, Grady, Preston
PROTOTYPE SCHOOL DESIGN CLEARINGHOUSE
Section 8.44.  Of the funds appropriated to State Aid to Local School Administrative Units, the State Board of Education may use up to one hundred seventy thousand four hundred dollars ($170,400) for the 1997-98 fiscal year and up to seventy-seven thousand nine hundred dollars ($77,900) to establish a prototype school design clearinghouse in accordance with G.S. 115C-521(e).

Requested by:  Representatives Arnold, Grady, Preston
INCENTIVES AND SALARY STUDIES
Section 8.45.  (a) The State Board of Education may use up to one hundred fifty thousand dollars ($150,000) of funds appropriated to State Aid to Local School Administrative Units for the 1997-98 fiscal year for a Study of Performance Pay and Employee Accountability Plans.  The State Board shall contract with the most creditable provider possible to conduct the study.
The purposes of the study shall be to:
(1)	Identify ways in which the General Assembly could strengthen the employee accountability and incentive provisions of the Excellent Schools Act,
(2)	Evaluate the issues, including compensation, relating to noninstructional duties of teachers, and
(3)	Identify ways in which the State Board of Education could develop and revise uniform performance standards and criteria to be used in evaluating professional public school employees, including school administrators.
The State Board shall report the results of the study to the Joint Legislative Education Oversight Committee prior to April 15, 1998.
(b) The State Board of Education may use up to fifty thousand dollars ($50,000) of funds appropriated by this act to State Aid to Local School Administrative Units for the 1997-98 fiscal year for a Study of Principal Salaries.
The State Board shall report the results of the study to the Joint Legislative Education Oversight Committee prior to April 15, 1998.

Requested by:  Representatives Arnold, Grady, Preston
STUDY OF TEACHER SUPPLY AND DEMAND
Section 8.46.  The State Board of Education, in consultation with the Board of Governors of The University of North Carolina, shall conduct a comprehensive study of teacher supply and demand. The State Board of Education shall report the results of the study to the Joint Legislative Education Oversight Committee prior to April 15, 1998.

Requested by:   Representatives Thompson, Clary, Justus, Weatherly, Baker, G. Wilson, Owens
ALLOCATION OF INVESTMENT EARNINGS ON SCHOOL BONDS TO SMALL COUNTY SCHOOL SYSTEMS
Section 8.47. (a) Section 5 of Chapter 631 of the 1995 Session Laws reads as rewritten:
"Sec. 5.  Uses of Bond and Note Proceeds. – The proceeds of Public School Building Bonds and notes shall be used for the purpose of making grants to counties for paying the cost of public school capital outlay projects.
Any additional moneys that may be received by means of a grant or grants from the United States of America or any agency or department thereof or from any other source to aid in financing the cost of any public school capital outlay projects authorized by this act may be placed by the State Treasurer in the Public School Building Bonds Fund or in a separate account or fund and shall be disbursed, to the extent permitted by the terms of the grant or grants, without regard to any limitations imposed by this act.
Moneys in the Public School Building Bonds Fund or in any separate fund or account may be invested from time to time by the State Treasurer in the same manner permitted for investment of moneys belonging to the State or held in the State treasury except with respect to grant money to the extent otherwise directed by the terms of the grant, and any investment earnings shall be credited to the Public School Building Bonds Fund or the particular fund or account from which the investment was made.  When the State Budget Officer determines that uncommitted funds are available, the State Board of Education shall allocate from these investment earnings the sum of one million four hundred forty thousand eight hundred twenty-one dollars ($1,440,821) as a grant to Avery County, the sum of one million three hundred ninety-three thousand sixty-nine dollars ($1,393,069) as a grant to Alleghany County, the sum of one million three hundred fifty-seven thousand eight hundred thirty-five dollars ($1,357,835) as a grant to Currituck County, and the sum of one million four hundred seventy-one thousand nine hundred seventeen dollars ($1,471,917) as a grant to Polk County, because these counties (i) have a small county school system, (ii) did not receive an allocation under Section 6(b) of this act, and (iii) have school construction needs that were not met by the allocations under Section 6(c) of this act.
All moneys deposited in, or accruing to the credit of, the Public School Building Bonds Fund, other than moneys set aside for administrative expenses, including expenses related to determining compliance with applicable requirements of the federal tax law and cost of issuance, shall be used to pay the cost of public school capital outlay projects in the manner authorized by this act.
The proceeds of Public School Building Bonds and notes may be used with any other moneys made available by the General Assembly for public school capital outlay projects, including the proceeds of any other State bond issues, whether heretofore made available or that may be made available at the session of the General Assembly at which this act is ratified or any subsequent sessions.  The proceeds of Public School Building Bonds and notes shall be expended and disbursed under the direction and supervision of the Director of the Budget.  The funds provided by this act for public school capital outlay projects shall be disbursed for the purposes provided in this act upon warrants drawn on the State Treasurer by the State Controller, which warrants shall not be drawn until requisition has been approved by the Director of the Budget and which requisition shall be approved only after full compliance with the Executive Budget Act, Article 1 of Chapter 143 of the General Statutes.
The Director of the Budget shall provide quarterly reports to the State Board of Education, the Superintendent of Public Instruction, and the General Assembly on the expenditure of moneys from the Public School Building Bonds Fund.  Reports to the General Assembly shall be filed with the Legislative Library, the Speaker of the House of Representatives, the President Pro Tempore of the Senate, and the Fiscal Research Division."
(b) This section is effective when this act becomes law.

PART IX.  COMMUNITY COLLEGES

Requested by:  Representatives Arnold, Grady, Preston
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:  Representatives Arnold, Grady, Preston
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:  Representatives Arnold, Grady, Preston
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:  Representatives Arnold, Grady, Preston
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:  Representatives Arnold, Grady, Preston
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:  Representatives Arnold, Grady, Preston
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:  Representatives Arnold, Grady, Preston
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.  A project approved as an exception under the Guidelines shall be approved for one year only.

Requested by:  Representatives Arnold, Grady, Preston
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:  Representatives Arnold, Grady, Preston
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:  Representatives Arnold, Grady, Preston
HRD MULTIENTRY/MULTIEXIT CLASSES
Section 9.11.  (a)	The State Board of Community Colleges may allow the Human Resources Development Program to offer multientry/multiexit 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.

Requested by:  Representatives Arnold, Grady, Preston, Davis
OPERATIONS AND MAINTENANCE OF PLANT FUNDS
Section 9.12. (a) The Department of Community Colleges may use up to two hundred thousand dollars ($200,000) for the 1997-98 fiscal year to provide operations and maintenance of plant funds for community colleges with seven or more counties in their service delivery areas.
(b) Of the funds allocated to Central Carolina Community College for the 1997-98 fiscal year, the College may use up to one hundred ninety thousand dollars ($190,000) for the operations and maintenance of the plant.
(c)	Of the funds allocated to Southwestern Community College for the 1997-98 fiscal year, the College may use up to one hundred twenty-one thousand dollars ($121,000) for the operations and maintenance of the plant.

Requested by:   Representative Berry
HOSIERY TECHNOLOGY CENTER FUNDS
Section 9.13.  For the 1997-98 fiscal year only, the State Board of Community Colleges may use up to two hundred thousand dollars ($200,000) of funds within the budget of the Department of Community Colleges for the Hosiery Technology Center of North Carolina.

Requested by:  Representative Shubert
UNION COUNTY TO SELECT COMMUNITY COLLEGE
Section 9.14.  Notwithstanding any other provision of law, the Board of Commissioners of Union County, as the duly elected governing body of Union County, may select one or more of the existing institutions of the North Carolina Community College System to serve the citizens of Union County.  If the institutions selected agree, Union County may enter into contracts with those institutions on terms satisfactory to the Board of Commissioners and the institutions for the provision of community college services to the citizens of Union County.

PART X. UNIVERSITIES

Requested by:   Representatives Preston, Arnold, Grady
FUNDING FOR OFF-CAMPUS AND DISTANCE LEARNING DEGREE-CREDIT EXTENSION INSTRUCTION
Section 10.  The General Assembly has focused attention in recent sessions on increasing access and providing for additional enrollment in higher education.  The 1995 Session Laws directed the Board of Governors of The University of North Carolina to "consider different funding approaches to meeting the needs of an increasing pool of high school graduates, as well as adult learners unable to return to a university campus for additional education." Among the methods the Board was directed to consider was funding for off-campus degree programs "on a basis more comparable to the current regular term funding." The Board recommended that "state-appropriated support for instruction be extended to all forms of regular term degree-credit instruction, whether it occurs on campus or off-campus, through traditional means or distance learning technologies." It stated that the funding mechanisms for implementing this recommendation would be addressed in the new funding model currently being developed.  In a second report responding to legislative directives, the Board found evidence of deep and widespread desire for access to higher education throughout the State and reiterated the importance of funding comparable to that provided for regular-term instruction in order to meet these demands and provide an alternative means of delivering education to the large number of North Carolinians expected to seek higher education in the future. 
The Board of Governors shall make a budget request to the 1998 reconvened session of the General Assembly for funding for off-campus and distance learning degree-credit extension instruction that is proportional to regular term funding and shall propose tuition rates that are comparable to the rates charged for regular-term instruction.  The funding request shall be sufficient to provide for projected off-campus and distance learning enrollments in the 1998-99 fiscal year.  This request shall be made to the Chairs of the House and Senate Appropriations Committees on Education and to the Chairs of the House and Senate Appropriations Committees by March 1, 1998.

Requested by:   Representatives Preston, Arnold, Grady, Kinney
MILITARY RESIDENCY/UNC TUITION
Section 10A.  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 eligible to be charged the in-State tuition rate and shall pay the full amount of the in-State tuition rate."

Requested by:   Representatives Preston, Arnold, Grady
WAKE FOREST AND DUKE MEDICAL SCHOOL ASSISTANCE/FUNDING FORMULA
Section 10B.  (a) 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).
(b) If the 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 are insufficient to cover the enrolled students in accordance with this section, then the Board of Governors may transfer unused funds from other programs in the Related Educational Programs budget code to cover the extra students.

Requested by:   Representatives Preston, Arnold, Grady
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:   Representatives Preston, Arnold, Grady
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:   Representatives Preston, Arnold, Grady
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:   Representatives Preston, Arnold, Grady
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:   Representatives Preston, Arnold, Grady
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:   Representatives Preston, Arnold, Grady
UNC LIBRARIES FUNDING
Section 10.8A.  Of the funds appropriated to the Board of Governors of The University of North Carolina in this act, the sum of two million dollars ($2,000,000) shall be allocated each year of the biennium for enhancement of libraries for the constituent institutions.  Of this amount, a sufficient sum 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:   Representatives Preston, Arnold, Grady
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 dollars ($2,000,000) 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.

Requested by:   Representatives Preston, Arnold, Grady
MANUFACTURING EXTENSION PARTNERSHIP
Section 10.9A.  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:   Representatives Preston, Arnold, Grady
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:   Representatives Preston, Arnold, Grady
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:   Representatives Preston, Arnold, Grady
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:   Representatives Preston, Arnold, Grady
ACADEMIC ENHANCEMENT FUNDS CLARIFICATION
Section 10.18.  In Section 16.11 of Chapter 18 of the Session Laws of the 1996 Second Extra Session, the Board of Governors of The University of North Carolina was 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:   Representatives Preston, Arnold, Grady
ASU CENTENNIAL CELEBRATION
Section 10.20.  The Board of Governors of The University of North Carolina shall allocate from balances in its overhead receipts fund the sum of two hundred thousand dollars ($200,000) for the 1997-98 fiscal year to Appalachian State University for costs associated with the celebration of the one hundredth anniversary of the founding of Appalachian State University.

Requested by:   Representatives Adams, Oldham
UNC CAPITAL FACILITIES STUDY
Section 10.21.  Based on findings of The Legislative Study Commission on the Status of Education at The University of North Carolina, the General Assembly is concerned about perceived differences in the quality of capital facilities on the different campuses, which may impact the ability of some campuses to attract students and faculty.  Since the Board of Governors has recently completed studies of equity of funding for operating costs among the constituent institutions and of the Board of Governors' capital improvements request process, it is timely that the remaining questions of equity be addressed.
The Board of Governors of The University of North Carolina shall study the relative equity and adequacy of the physical facilities of its constituent institutions.  The study shall consider the condition of the facilities, whether or not facilities are comparable among the campuses given the different missions of the institutions, comparable adequacy of the physical facilities given the size of the school, and such other factors deemed appropriate by the Board of Governors.  The study shall include all facilities contributing to the accomplishment of the campuses' missions, including academic, administrative, research, residential, dining, and other facilities.
The Board of Governors shall report to the General Assembly by January 15, 1999, with the results of its study.  The report shall include recommendations to rectify any inequities or inadequacies found in the study.  The Board of Governors shall consider its policies on funding of self-liquidating projects and whether those policies contribute to any inequities among the campuses.

Requested by:   Representatives Preston, Arnold, Grady
AGRICULTURAL ENHANCEMENT
Section 10.22.  Of the funds appropriated to the Board of Governors of The University of North Carolina for Agricultural Programs, the amount of one million one hundred thousand dollars ($1,100,000) shall be allocated to the Agricultural Budget codes at North Carolina State University.  These funds may be used to increase nonpersonnel budgets which had been reduced in order to provide competitive salary increases during the 1996-97 fiscal year.  None of these funds may be used for additional salary increases.

PART XI.  DEPARTMENT OF HUMAN RESOURCES

Requested by:   Representatives Gardner, Cansler, Clary
REORGANIZATION OF THE DEPARTMENT OF HUMAN RESOURCES
Section 11.  (a) The Department of Human Resources shall, using the report of KPMG Peat Marwick, L.L.P. to the General Assembly dated March 20, 1997, develop and begin implementing a plan to reorganize the Department of Human Resources.  The reorganization plan shall be designed:
(1)	To structure planning, management, and service delivery around a strategic shared mission and long-range vision for the Department;
(2)	To better achieve a consolidated family-center services orientation that facilitates identification of gaps in services, improvement of efficient and effective access to services, and reduces fragmentation of leadership, management, and service delivery;
(3)	To facilitate a system of incentives within the Department and within local agencies that will reinforce personnel efforts at integrated services delivery; and
(4)	To enable assessment of program performance in terms of actual client outcomes, effective and efficient service delivery, and the impact services and departmental functions are having in the lives of clients, rather than in terms of process measures.
(b) With funds from within the Department, and in consultation with the Legislative Oversight Committee on the Reorganization of the Department of Human Resources, the Department of Human Resources shall engage an entity with proven expertise to provide the Department leadership and management with the knowledge and tools needed to ensure a change in departmental culture that creates an environment:
(1)	Where there is an understanding and appreciation for a departmental mission and primary goals that portray a coordinated system of services, rather than a group of independently operating group of services;
(2)	Where, although the Department delivers few direct services, a client needing multiple services can have them delivered in a coordinated manner through local governing entities and by local service providers;
(3)	Where counties have the opportunity, where practicable, to develop approaches to service delivery that work best for them; 
(4)	Where the Department can restructure around functions rather than programs; and
(5)	Where the Department can develop an internal management capacity for strategic planning, program planning and evaluation, and formal senior management reviews, on a regular basis, of client needs, program performance, and issues related to resource allocation and risk assessment.
(c) The Department of Human Resources shall begin establishment of the following service delivery functions:  services, regulation, institutional management, education, and health care financing.
(d) The Department of Human Resources shall give very strong consideration to establishing the following coordination and infrastructure functions:  information services and performance services.

Requested by:   Representatives Gardner, Cansler, Clary
LEGISLATIVE OVERSIGHT COMMITTEE ON DHR REORGANIZATION
Section 11.1.  (a)	The General Assembly intends to reorganize the Department of Human Resources, using the report of KPMG Peat Marwick, L.L.P. to the General Assembly dated March 20, 1997, to provide an alternative and improved approach to the organization and delivery of human services in North Carolina.
(b)	There is established the Legislative Oversight Committee on the Reorganization of the Department of Human Resources to oversee the reorganization of the Department.
(c)	The Committee shall be composed of 10 members, as follows:
(1)	Five members of the House of Representatives at the time of their appointment, two appointed by the Speaker of the House of Representatives, one other a chair of the House Appropriations Subcommittee on Human Resources, one other a member of the House Appropriations Subcommittee on Human Resources, and one other the House of Representatives chair or other member of the Subcommittee on Human Resources of the Joint Legislative Commission on Governmental Operations; and
(2)	Five members of the Senate at the time of their appointment, two appointed by the President Pro Tempore of the Senate, one other the chair of the Senate Appropriations Subcommittee on Human Resources, one other a member of the Senate Appropriations Subcommittee on Human Resources, and one other the Senate chair or other member of the Subcommittee on Human Resources of the Joint Legislative Commission on Governmental Operations.
(d)	The Speaker of the House of Representatives and the President Pro Tempore of the Senate shall each select a member from their respective chambers to serve as cochair of the Committee.
	(e)	The Committee, while in the discharge of official duties, may exercise all the powers provided for under the provisions of G.S. 120-19 and G.S. 120-19.1 through G.S. 120-19.4.  The Committee may meet at any time upon the joint call of the cochairs.  The Committee may meet in the Legislative Building or the Legislative Office Building.
(f)  Members of the Committee shall receive subsistence and travel expenses at the rates set forth in G.S. 120-3.1.
(g)  The Committee may contract for professional, clerical, or consultant services as provided by G.S. 120-32.02.  The Legislative Services Commission, through the Legislative Services Officer, shall assign professional and clerical staff to staff the Committee. The House of Representatives' and the Senate's Supervisors of Clerks shall assign clerical staff to the Committee, upon the direction of the Legislative Services Commission.  The expenses relating to professional and clerical employees supplied through the Legislative Services Commission shall be borne by the Legislative Services Commission.
Notwithstanding any Legislative Services Office policy to the contrary, the Committee may meet during any session of the General Assembly, and legislative staff may serve the Committee during session.
(h)  Members serve at the pleasure of their appointing officer.  When a vacancy occurs in the membership of the Committee, the vacancy shall be filled by the same appointing officer who made the initial appointment.
(i)  All State departments and agencies and local governments and their subdivisions shall furnish the Committee with any information in their possession or available to them.
(j)  The Committee shall report on the progress of the reorganization and any recommendations, including any legislative proposals, to the General Assembly by December 1, 1998, and then by April 1 and November 1 every year until April 1, 2003, or until the Committee completes its work, at which time the Committee shall terminate.
(k) If a provision in this act or in another act of the 1997 General Assembly authorizes the Standing Appropriations Committees and Standing Appropriations Subcommittees of the House and Senate to meet separately or jointly during the interim between the Regular 1997 and 1998 Sessions of the General Assembly, then this section is repealed on the date the act authorizing the interim meetings becomes law.

Requested by:   Representatives Gardner, Cansler, Clary
IMPLEMENT ABC'S PLAN FOR RESIDENTIAL SCHOOLS
Section 11.2.  (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:   Representatives Gardner, Cansler, Clary
DHR STUDY OF PROVIDER REIMBURSEMENT RATES/REPORT
Section 11.3.  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:   Representatives Gardner, Cansler, Clary
DHR EMPLOYEES/IN-KIND MATCH
Section 11.4.  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:   Representatives Gardner, Cansler, Clary
TRANSFER OF CERTAIN FUNDS AUTHORIZED
Section 11.5.  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:   Representatives Gardner, Cansler, Clary
MEDICAL RECORDS COPY FEES/SOCIAL SECURITY DISABILITY CLAIMS
Section 11.6.  G.S. 90-411 reads as rewritten:
"§ 90-411.  Record copy fee.
(a)	A health care provider operated by a governmental unit 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,  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.
(b)	A health care provider not operated by a governmental unit 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 seventy-five cents (75¢) per page, provided that the health care provider may impose a minimum fee of up to twelve dollars ($12.00), 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."

Requested by:   Representatives Gardner, Cansler, Clary
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:   Representatives Gardner, Cansler, Clary
MEDICAL DATA PROCESSING FUNDS
Section 11.8.  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:   Representatives Gardner, Cansler, Clary
FIRE PROTECTION REVOLVING LOAN FUND
Section 11.9.  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:   Representatives Gardner, Cansler, Clary
DISPOSITION OF DISPROPORTIONATE SHARE RECEIPT CLARIFICATION
Section 11.10.  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:   Representatives Gardner, Cansler, Clary
MEDICAID
Section 11.11.  (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:   Representatives Gardner, Cansler, Clary
MEDICAID TRUST FUND TRANSFER/SHORTFALL
Section 11.12.  Upon certification to the Director of the Budget that all alternative sources of funding are exhausted and receipt of approval by the Director of the Budget, notwithstanding any prohibition which may exist in G.S. 143-23.2, the Department may use up to twenty-five million dollars ($25,000,000) during fiscal year 1997-98 from the fund established pursuant to G.S. 143-23.2 to support Medicaid program expenditures.

Requested by:   Representatives Gardner, Cansler, Clary
MEDICAID GROWTH REDUCTION
Section 11.13. (a) The Department of Human Resources shall develop and implement 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 consider the following actions in developing the plan to reduce Medicaid growth:
(1)	Changes in the methods of reimbursement;
(2)	Changes in the method of determining or limiting inflation factors or both;
(3)	Recalibration of existing methods of reimbursement;
(4)	Develop more specific criteria for determining medical necessity of services;
(5)	Contracting for services;
(6)	Application of limits on specific numbers of slots or expenditure levels for certain services or both;
(7)	Expansion of managed care; and
(8)	Recommend changes in statutes to enhance the ability of the Department to manage the program.
(c)	In considering the actions listed in subsection (b) of this section and in the development of the Medicaid growth reduction plan, the Division of Medical Assistance, Department of Human Resources, shall not adjust reimbursement rates to levels which would cause Medicaid providers of service to be out of compliance with certification requirements, licensure rules, or other mandated quality or safety standards.
(d)	The Division of Medical Assistance, Department of Human Resources, shall report to the Chairs of the House and Senate Appropriations Subcommittees on Human Resources by September 1, 1997, on the actions the Department intends to take to meet the required reductions for 1998-99.  The Division of Medical Assistance shall not implement any of these actions until after the September 1, 1997, report.
(e) The Division of Medical Assistance, Department of Human Resources shall report to the Chairs of the House and Senate Appropriations Subcommittees on Human Resources by April 1, 1998, on the final plan to reduce Medicaid growth by eight percent (8%) by the year 2001.   

Requested by:   Representatives Gardner, Cansler, Clary
ADULT DAY HEALTH CARE MEDICAID WAIVER
Section 11.14.  The Division of Medical Assistance, Department of Human Resources, shall request a waiver from the Health Care Financing Administration to provide adult day health care services to Medicaid recipients who are not participating in a community alternative program.  The Division shall report to the Chairs of the House and Senate Appropriations Subcommittees on Human Resources by May 1, 1998, on its progress in obtaining this waiver.  The Division of Medical Assistance shall not implement this waiver, if obtained, until it has reported to the Chairs of the House and Senate Appropriations Subcommittees on Human Resources on the impact of the waiver on the provision of long-term care services for Medicaid recipients and the fiscal impact of adding this additional service.

Requested by:   Representatives Gardner, Cansler, Clary
FOSTER CARE ASSISTANCE PAYMENTS
Section 11.15.  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:   Representatives Gardner, Cansler, Clary
AUTHORIZED ADDITIONAL USE OF HIV FOSTER CARE AND ADOPTIVE FAMILY FUNDS
Section 11.16.  (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:   Representatives Gardner, Cansler, Clary
ADOPTION ASSISTANCE PAYMENTS
Section 11.17.  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:   Representatives Gardner, Cansler, Clary
CHILD PROTECTIVE SERVICES
Section 11.18.  (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:   Representatives Cansler, Gardner, Clary
CHILD CARING INSTITUTION FUND
Section 11.19.  (a)	There is allocated from the funds appropriated to the Department of Human Resources, Division of Social Services, Child Caring Institution Fund, 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 in order to increase the balance in the CCI Fund.  Funds allocated under this section shall be used to increase the private child caring agency reimbursement rate for the State-funded portion of services to children who are not eligible for federal IV-E or AFDC-EA subsidies.
(b)	Funds allocated under this section shall be used to increase reimbursement rates to those child caring agencies providing residential care services and behavioral health care services under agreements with the county departments of social services during fiscal year 1996-97.  Counties shall not reduce their contributions to the agencies' cost of care as a result of the allocation of funds under subsection (a) of this section.  County contributions to the cost of care shall continue to be negotiated between the counties and the agencies.  County contributions to the cost of care shall not be used to reduce or offset State reimbursement for the cost of care in private child caring institutions.
(c)	Funds allocated under this section shall be allocated to agencies by the Division of Social Services according to the current and agreed upon formulas and reimbursement methodologies, adjusted to reflect the additional funds appropriated.  Funds allocated from the CCI Fund may be used by agencies to match federal funds for eligible children.

Requested by:  Representatives Gardner, Cansler, Clary, Easterling
CHILD WELFARE SYSTEM IMPROVEMENTS
Section 11.20.  (a) Of the funds appropriated in this act to the Department of Human Resources, Division of Social Services, the sum of two million two hundred sixty-nine thousand seven hundred fifty-two dollars ($2,269,752) for the 1997-98 fiscal year and the sum of two million two hundred sixty-nine thousand seven hundred fifty-two dollars ($2,269,752) for the 1998-99 fiscal year shall be allocated to county departments of social services for hiring or contracting for additional foster care and adoption worker positions created after July 1, 1997, based upon a formula which takes into consideration the number of foster care and adoption cases and the number of foster care and adoption workers necessary to meet recommended standards adopted by the North Carolina Association of County Directors of Social Services.
(b)	Of the funds appropriated in this act to the Department of Human Resources, Division of Social Services, the sum of one hundred fifty-nine thousand dollars ($159,000) for the 1997-98 fiscal year and the sum of one hundred sixty-three thousand dollars ($163,000) for the 1998-99 fiscal year shall be used to establish and maintain a State Child Fatality Review Team to conduct in-depth reviews of any child fatalities which have occurred involving children and families involved with local departments of social services child protective services in the 12 months preceding the fatality.
The purpose of these reviews shall be to implement a team approach to identifying factors which may have contributed to conditions leading to the fatality and to develop recommendations for improving coordination between local and State entities which might have avoided the threat of injury or fatality and to identify appropriate remedies.  The Division of Social Services shall make public the findings and recommendations developed for each fatality reviewed relating to improving coordination between local and State entities.
The State Child Fatality Review Team shall include representatives of the local departments of social services and the Division of Social Services, a member of the local Community Child Protection Team, a member of the local child fatality prevention team, a representative from local law enforcement, a prevention specialist, and a medical professional.
The State Child Fatality Review Team shall have access to all medical records, hospital records, and records maintained by this State, any county, or any local agency as necessary to carry out the purposes of this subsection, including police investigative data, medical examiner investigative data, health records, mental health records, and social services records.  Any member of the State Child Fatality Review Team may share, only in an official meeting of the State Child Fatality Review Team, any information available to that member that the State Child Fatality Review Team needs to carry out its duties.
Meetings of the State Child Fatality Review Team are not subject to the provisions of Article 33C of Chapter 143 of the General Statutes.  However, the State Child Fatality Review Team may hold periodic public meetings to discuss, in a general manner not revealing confidential information about children and families, the findings of their reviews and their recommendations for preventive actions.  Minutes of all public meetings, excluding those of executive sessions, shall be kept in compliance with Article 33C of Chapter 143 of the General Statutes.  Any minutes or any other information generated during any executive session shall be sealed from public inspection.
All otherwise confidential information and records acquired by the State Child Fatality Review Team, in the exercise of its duties are confidential; are not subject to discovery or introduction into evidence in any proceedings; and may only be disclosed as necessary to carry out the purposes of the State Child Fatality Review Team.  In addition, all otherwise confidential information and records created by the State Child Fatality Review Team in the exercise of its duties are confidential; are not subject to discovery or introduction into evidence in any proceedings; and may only be disclosed as necessary to carry out the purposes of the State Child Fatality Review Team.  No member of the State Child Fatality Review Team, nor any person who attends a meeting of the State Child Fatality Review Team, may testify in any proceeding about what transpired at the meeting, about information presented at the meeting, or about opinions formed by the person as a result of the meetings.  This subsection shall not, however, prohibit a person from testifying in a civil or criminal action about matters within that person's independent knowledge.
Each member of the State Child Fatality Review Team and invited participant shall sign a statement indicating an understanding of and adherence to confidentiality requirements, including the possible civil or criminal consequences of any breach of confidentiality.
Funds allocated under this subsection shall be used as follows:
(1)	To contract with a statewide prevention organization and a statewide medical organization to identify and orient prevention specialists and medical professionals with experience in reviewing child fatalities to serve on the State Child Fatality Review Team; and
(2)	To pay per diem expenses for the five participants in each review who are not employed by the Division of Social Services or county departments of social services.
The Division of Social Services, Department of Human Resources, shall report quarterly to the Cochairs of the House and Senate Appropriations Subcommittees on Human Resources and the Fiscal Research Division on the activities of the State Child Fatality Review Team and shall provide a final report to the House and Senate Appropriations Subcommittees on Human Resources within one week of the convening of the 1997 General Assembly, Regular Session 1998, including recommendations for changes in the statewide child protection system.

Requested by:   Representatives Gardner, Cansler, Clary
REVIEW OF AUTOMATED COLLECTION AND TRACKING SYSTEM
Section 11.21.  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:   Representatives Gardner, Cansler, Clary
LIMITATIONS ON STATE ABORTION FUND
Section 11.22.  The limitations on funding of the performance of abortion established in Section 23.27 of Chapter 324 of the 1995 Session Laws, Regular Session 1996, as amended by Section 23.8A of Chapter 507 of the 1995 Session Laws, Regular Session 1996, apply to the 1997-98 and 1998-99 fiscal years.

Requested by:   Representatives Gardner, Cansler, Clary
FOOD STAMP ELECTRONIC BENEFITS TRANSFER FUNDS SPECIFICATIONS
Section 11.23.  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:   Representatives Gardner, Cansler, Clary
WORK FIRST FRAUD CONTROL PROGRAM/DEBT SETOFF/CLIENT PROTECTION
Section 11.24.  (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:   Representatives Gardner, Cansler, Clary
ANNUAL REPORT ON CARING PROGRAM FOR CHILDREN, INC.
Section 11.25.  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:   Representatives Cansler, Gardner, Clary
ADULT CARE HOME BED VACANCIES
Section 11.26.  (a) From the effective date of this act until 18 months after the effective date of this act, the Department of Human Resources shall not approve the addition of any adult care home beds for any type home or facility in the State, except as follows:
(1)	Plans submitted for approval prior to May 18, 1997, may continue to be processed for approval;
(2)	Plans submitted for approval subsequent to May 18, 1997, may be processed for approval if the individual or organization submitting the plan demonstrates to the Department that on or before May 18, 1997, the individual or organization purchased real property, entered into a binding contract to purchase real property, or entered into a binding real property lease arrangement for the purpose of establishing or expanding an adult care home facility; or
(3)	If the Department determines that the vacancy rate of adult care home beds in a county is less than fifteen percent (15%) of the total number of beds in the county as of the effective date of this act and no new beds have been approved or licensed in the county or plans submitted for approval in accordance with subdivision (1) or (2) of this section, then the Department may accept and approve the addition of beds in that county.
(b)	The Department shall study the issue of high vacancy rates for adult care home beds, including the impact of those vacancy rates on cost-effectiveness and quality of care for the occupants of adult care homes and other facilities, and make recommendations with respect to the need for the establishment of a certificate of need type process for adult care homes and any change needed in the certificate of need process for any other facilities to prevent high vacancy rates for adult care home beds.  The Department shall report the results of its study, along with the recommendations required by this section and any other proposals and recommendations, to either the Chairs of the House and Senate Appropriations Subcommittees on Human Resources or to a study commission established to study this issue, should one be established, by December 1, 1997.  The Department's report shall include any observations or recommendations it deems appropriate with respect to correlations between the vacancy rates and the condition or age of facilities.

Requested by:   Representatives Gardner, Cansler, Clary
ADULT CARE HOMES REPORT
Section 11.27.  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:  Representatives Gardner, Cansler, Clary
ADULT CARE HOMES REIMBURSEMENT RATE/ADULT CARE HOMES ALLOCATION OF NONFEDERAL COST OF MEDICAID PAYMENTS
Section 11.28. (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 seventy-four dollars ($874.00) per month per resident.
(d)	Effective July 1, 1998, the maximum monthly rate for residents in adult care home facilities shall be eight hundred seventy-four dollars ($874.00) per month per resident.

Requested by:   Representatives Gardner, Cansler, Clary, Earle
IN-HOME SPECIAL ASSISTANCE DEMONSTRATION PROJECT
Section 11.29.  (a)	Notwithstanding any law to the contrary, the Department of Human Resources, Division of Social Services, in consultation with the Department of Human Resources, Division of Aging, shall develop and implement an In-Home Special Assistance Demonstration Project.  The purpose of the project is to determine the feasibility of using State and county funds to provide financial assistance to low-income elderly or disabled adults who are otherwise eligible for Special Assistance under G.S. 108A-41(b) but who would rather live at home than in an adult care home and whose daily care needs can be adequately met through in-home services.
(b)	The Department shall select five counties to participate in the project.  Counties desiring to participate shall apply to the Department for selection. The Department shall provide information to all counties about the scope and duration of the project, the procedure for applying to be a participating county, and what will be required of participating counties. The counties selected to participate in the project shall be representative of the State as a whole.  In selecting the participating counties, the Department shall consider each applicant county's:
(1)	Total population;
(2)	Regional location;
(3)	Urban or rural composition;
(4)	Percentage of county population eligible for Special Assistance services; 
(5)	Ability to offer case management services to each client selected for the project;
(6)	Ongoing support system for the aging and disabled; and
(7)	Ability to effectively and efficiently administer the project.
(c) Individuals who are eligible for Special Assistance under G.S. 108A-41(b) and who reside in a participating county shall be eligible for project assistance.   However, each participating county shall allocate project funds for not more than 40 eligible individuals.  Funds used for project assistance and administration shall be matched State-County in the same proportion as under the State-County Special Assistance for Adults Program.
(d)	The Department shall:
(1)	Monitor local administration to ensure that adequate case management services are provided to project recipients and that the health, safety, and well-being of project recipients are being protected;
(2)	Oversee approval of services purchased by project recipients; 
(3)	Collect information about the service providers and types of services purchased by project funds; and
(4)	Obtain comprehensive data and information to enable the State to anticipate, plan for, and provide in-home services to its elderly and disabled citizens in the future.
(e)  The Department shall set a monthly budget for each eligible individual participating in the project which shall not exceed the statewide average monthly payment for Special Assistance plus the maximum monthly payment allowed for Special Assistance recipients receiving basic or enhanced Medicaid personal care services.  Project participants who are Medicaid eligible shall be entitled to receive any and all Medicaid-funded services for which they are eligible.
(f)  The North Carolina Study Commission on Aging, with assistance from the Division of Aging, Department of Human Resources, shall contract for professional services to evaluate the In-Home Special Assistance Demonstration Project.  The Commission shall determine the scope of the evaluation and shall require the contractor to provide written reports to the Commission on July 1, 1998, and January 30, 1999.
The Department shall report to the North Carolina Study Commission on Aging, to the Cochairs of the House and Senate Appropriations Subcommittees on Human Resources, and to the Fiscal Research Division on October 1, 1997, March 1, 1998, and October 1, 1998, on the progress of project development and implementation.  The Department's October 1998 report shall include recommendations on whether the project should be continued and, if so, the extent to which it should be continued, why it should be continued, and the costs associated with continuing the project.  If the Department recommends that the project not be continued, it shall provide the reasons for the recommendation.
(g)  This section becomes effective July 1, 1997, and expires June 30, 1999.  Nothing in this section shall be construed as creating an entitlement to Special Assistance funds or services under the In-Home Special Assistance Demonstration Project created by this section.

Requested by:   Representatives Clary, Gardner, Cansler
ADULT CARE HOME STAFFING FOR ENHANCED PERSONAL CARE SERVICES
Section 11.30. (a) The Department of Human Resources shall develop and implement a methodology for ensuring that adult care homes with 12 or more beds have adequate staff to meet the enhanced personal care needs of the home's heavy-care residents.  As used in this section, the term:
(1)	"Adequate staff" means one staff person for every 7-10 heavy-care residents of the adult care home; and
(2)	" Heavy-care resident" means an individual residing in an adult care home who, according to Medicaid criteria, needs intensive assistance or is totally dependent on another person for eating, toileting, or both eating and toileting.
If the Department finds that an adult care home has not provided adequate staff to meet the enhanced personal care needs of its heavy-care residents, then the Department shall withhold payment for enhanced personal care services until the staffing requirements of this section have been met.
	(b)	The methodology developed by the Department shall be applied effective October 1, 1997.  The methodology shall be incorporated into the chart of accounts used by adult care homes to complete all required cost reporting under G.S. 131D-4.2 beginning with the October 1, 1997, through September 30, 1998, cost reporting time period.

Requested by:   Representatives Gardner, Cansler, Clary
SENIOR CENTER OUTREACH
Section 11.31.  (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:   Representatives Gardner, Cansler, Clary
SURROGATE CONSENT FOR HEALTH CARE/STUDY
Section 11.32.  (a) The North Carolina Study Commission on Aging, as established under G.S. 120-180, shall study and recommend a procedure for determining which person or persons may make health care decisions for adult individuals in nursing homes and other health care facilities who lack sufficient understanding or capacity to make or communicate health care decisions for themselves and for whom there is no authorized health care agent, guardian of the person, or attorney-in-fact to make the decision.  The Commission shall ensure that the procedure recommended operates consistently with existing law, including living wills, health care powers of attorney, and durable powers of attorney.  In conducting the study, the Commission may consider the provisions of House Bill 1112, first edition, 1997 General Assembly.
(b) The Commission shall report its findings and recommendations to the 1997 General Assembly, Regular Session 1998, upon its convening.

Requested by:   Representatives Gardner, Cansler, Clary
COMMISSION ON AGING STUDY OF ADULT CARE HOME MONITORING
Section 11.33.  The North Carolina Study Commission on Aging shall study the effectiveness and efficiency of State and county monitoring and regulation of adult care homes.  The Commission shall report its findings and recommendations to the 1997 General Assembly, Regular Session 1998, upon its convening.

Requested by:   Representatives Gardner, Cansler, Clary
SENIOR CENTER FUNDS
Section 11.34.  Of the funds appropriated in this act to the Department of Human Resources, the sum of one million dollars ($1,000,000) 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:   Representatives Gardner, Cansler, Clary
IN-HOME AND CAREGIVER SUPPORT FUNDS
Section 11.35.  Of the funds appropriated in this act to the Department of Human Resources, Division of Aging, the sum of five million dollars ($5,000,000) for the 1997-98 fiscal year and the sum of five million dollars ($5,000,000) 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:   Representatives Gardner, Cansler, Clary
CLINICAL SOCIAL WORKER EXEMPTION
Section 11.36.  Section 8 of Chapter 732 of the 1991 Session Laws reads as rewritten:
"Sec. 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:   Representatives Gardner, Cansler, Clary
MIXED BEVERAGE TAX FOR AREA MENTAL HEALTH PROGRAMS
Section 11.37.  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:   Representatives Gardner, Cansler, Clary
LIABILITY INSURANCE
Section 11.38.  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:   Representatives Gardner, Cansler, Clary
PHYSICIAN SERVICES
Section 11.39.  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:   Representatives Gardner, Cansler, Clary
PRIVATE AGENCY UNIFORM COST FINDING REQUIREMENT
Section 11.40.  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:   Representatives Gardner, Cansler, Clary
THOMAS S.
Section 11.41.  (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 subdivision (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;
(3)	The number of confirmed Class members awaiting services;
(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;
(6)	An analysis of the use of funds appropriated for the Class; and
(7)	The total State funds expended, by program, on Thomas S. Class members, other than those funds specifically appropriated for the Thomas S. program and services.
(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:   Representatives Gardner, Cansler, Clary
WILLIE M.
Section 11.42.  (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 area program/authority:  (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 area program/authority;  (iii) the number of children served as members of the Class in each area program/authority;  (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:   Representatives Gardner, Cansler, Clary
CAROLINA ALTERNATIVES
Section 11.43.  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:   Representatives Gardner, Cansler, Clary
LIMITATION ON USE OF SPECIAL ALZHEIMER'S UNIT IN WILSON
Section 11.44. (a)	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 a similar private facility.
(b)	The Department of Human Resources shall solicit information from private providers for the operation of the Special Alzheimer's Unit in Wilson.  The Department shall report to the members of the House and Senate Appropriations Subcommittees on Human Resources, and the Fiscal Research Division, not less than 90 days prior to the opening of the Unit for operation.  The report shall provide the cost of operation of the Unit by the State as compared to the cost of operation by private providers who have submitted information.

Requested by:   Representatives Cansler, Gardner, Clary
EFFICIENCY STUDY OF STATE PSYCHIATRIC HOSPITALS
Section 11.45. (a)	The Department of Human Resources shall contract with an independent consulting firm with proven experience in hospital administration/management and an understanding of the special operational issues related to psychiatric hospitals to conduct a study of the management and operation of the four State psychiatric hospitals.  The purpose of the study shall be to identify areas for improved operations and efficiency.  The study shall address, but not be limited to, patient-to-staff ratios, cost-efficiency of the various patient units within the hospitals, and potential areas for achieving greater cost-efficiencies by contracting with private providers.  If the findings of the study reflect the need for specific physical plant renovations, replacements, or new construction, the report shall provide information which reflects the cost-efficiencies which would result from the improvements and the time period over which the cost-efficiencies would repay the cost of improvements.  The study shall also consider all potential sources of revenue for the hospitals and what impact any proposed operational changes may have on that revenue and the overall need for appropriations from the General Fund.  Contract services shall be paid for from funds available to the Department.
(b) The results of the study and the Department's response to the study shall be provided to the cochairs of the House and Senate Appropriations Subcommittees on Human Resources and the Fiscal Research Division not later than February 3, 1998.

Requested by:   Representatives Gardner, Cansler, Clary
THOMAS S. LAWSUIT COMPLIANCE
Section 11.46.  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:   Representatives Gardner, Cansler, Clary
THOMAS S. FUNDS/COST CONTAINMENT
Section 11.47. (a) 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 fifteen million two hundred thousand dollars ($15,200,000).
(b) The Department of Human Resources, in conjunction with area mental health programs, shall develop and implement cost containment measures to reduce the cost of direct services.  The Department shall develop these strategies to emphasize positive client outcomes through developmental disability long-term managed supports rather than to emphasize process.  These measures shall include, but not be limited to, the following:
(1)	Reduction of those process-oriented tasks required by the State, including, but not limited to, tasks required by the Divisions of: Medical Assistance, Vocational Rehabilitation Services, Social Services, Facilities Services, and Mental Health, Developmental Disabilities, and Substance Abuse Services;
(2)	Single stream funding from all available sources;
(3)	Waivers of federal requirements in order to comply with the federal court order; and
(4)	Review and, if necessary, amendment or repeal of rules that conflict or otherwise interfere with cost containment measures.
(c) The Department shall provide to the members of the House and Senate Appropriations Subcommittees on Human Resources, and to the Fiscal Research Division a detailed report of the status of development and implementation of cost containment measures required under this section. The report shall address each of the measures listed in subsection (b) of this section, and any other related cost containment measures developed by the Department.  The Department shall provide the report on December 1, 1997, and May 1, 1998.

Requested by:   Representatives Gardner, Cansler, Clary
MENTAL HEALTH COMMITMENT LAW/THOMAS S.
Section 11.48. (a)	G.S. 122C-261(f) reads as rewritten:
"(f)	When a petition is filed for an individual who is a resident of a single portal area, the procedures for examination by a physician or eligible psychologist as set forth in G.S. 122C-263 shall be carried out in accordance with the area plan.  Prior to issuance of a custody order for a respondent who resides in an area authority with a single portal plan, the clerk or magistrate shall communicate with the area authority to determine the appropriate 24-hour facility to which the respondent should be admitted according to the area plan or to determine if there are more appropriate resources available through the area authority to assist the petitioner or the respondent.  When an individual from a single portal area is presented for commitment at a 24-hour or State facility directly, the individual may not be accepted for admission until the facility notifies the area authority and the area authority agrees to the admission.  If the area authority does not agree to the admission, it shall determine the appropriate 24-hour facility to which the individual should be admitted according to the area plan or determine if there are more appropriate resources available through the area authority to assist the individual.  If the area authority agrees to the admission, further planning of treatment for the client is the joint responsibility of the area authority and the facility as prescribed in the area plan.
Notwithstanding the provisions of this section, in no event shall an individual who is 18 years of age or older and known or reasonably believed to be mentally retarded be admitted to a State psychiatric hospital, except as follows:
(1)	Persons described in G.S. 122C-266(b);
(2)	Persons admitted pursuant to G.S. 15A-1321;
(3)	Respondents who are so extremely dangerous as to pose a serious threat to the community and to other patients committed to non-State hospital psychiatric inpatient units, as determined by the Director of the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services or his designee; and
(4)	Respondents who are so gravely disabled by both multiple disorders and medical fragility or multiple disorders and deafness that alternative care is inappropriate, as determined by the Director of the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services or his designee.
Individuals transported to a State facility for the mentally ill who are not admitted by the facility may be transported by law enforcement officers or designated staff of the State facility in State-owned vehicles to an appropriate 24-hour facility that provides psychiatric inpatient care.
No later than 24 hours after the transfer, the responsible professional at the original facility shall notify the petitioner, the clerk of court, and, if consent is granted by the respondent, the next of kin, that the transfer has been completed."
(b) G.S. 122C-262(d) reads as rewritten:
"(d)	Anyone, including a law enforcement officer if necessary, may transport the individual to a 24-hour facility described in G.S. 122C-252 for examination and treatment pending a district court hearing.  If there is no area 24-hour facility and if the respondent is indigent and unable to pay for care at a private 24-hour facility, the law enforcement officer or other designated person providing transportation shall take the respondent to a State facility for the mentally ill designated by the Commission in accordance with G.S. 143B-147(a)(1)a and immediately notify the clerk of superior court of this action.  The physician's or eligible psychologist's certificate shall serve as the custody order and the law enforcement officer or other designated person shall provide transportation in accordance with the provisions of G.S. 122C-251.
In the event an individual who is 18 years of age or older and known or reasonably believed to be mentally retarded is transported to a State facility for the mentally ill, in no event shall that individual be admitted to that facility except as follows:
(1)	Persons described in G.S. 122C-266(b);
(2)	Persons admitted pursuant to G.S. 15A-1321;
(3)	Respondents who are so extremely dangerous as to pose a serious threat to the community and to other patients committed to non-State hospital psychiatric inpatient units, as determined by the Director of the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services or his designee; and
(4)	Respondents who are so gravely disabled by both multiple disorders and medical fragility or multiple disorders and deafness that alternative care is inappropriate, as determined by the Director of the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services or his designee.
Individuals transported to a State facility for the mentally ill who are not admitted by the facility may be transported by law enforcement officers or designated staff of the State facility in State-owned vehicles to an appropriate 24-hour facility that provides psychiatric inpatient care.
No later than 24 hours after the transfer, the responsible professional at the original facility shall notify the petitioner, the clerk of court, and, if consent is granted by the respondent, the next of kin, that the transfer has been completed."
(c) G.S. 122C-263(d) reads as rewritten:
"(d)	After the conclusion of the examination the physician or eligible psychologist shall make the following determinations:
(1)	If the physician or eligible psychologist finds that:
a.	The respondent is mentally ill;
b.	The respondent is capable of surviving safely in the community with available supervision from family, friends, or others;
c.	Based on the respondent's psychiatric history, the respondent is in need of treatment in order to prevent further disability or deterioration that would predictably result in dangerousness as defined by G.S. 122C-3(11); and
d.	The respondent's current mental status or the nature of the respondent's illness limits or negates the respondent's ability to make an informed decision to seek voluntarily or comply with recommended treatment.
	The physician or eligible psychologist shall so show on the examination report and shall recommend outpatient commitment. In addition the examining physician or eligible psychologist shall show the name, address, and telephone number of the proposed outpatient treatment physician or center. The person designated in the order to provide transportation shall return the respondent to the respondent's regular residence or, with the respondent's consent, to the home of a consenting individual located in the originating county, and the respondent shall be released from custody.
(2)	If the physician or eligible psychologist finds that the respondent is mentally ill and is dangerous to self, as defined in G.S. 122C-3(11)a., or others, as defined in G.S. 122C-3(11)b., the physician or eligible psychologist shall recommend inpatient commitment, and shall so show on the examination report. If, in addition to mental illness and dangerousness, the physician or eligible psychologist also finds that the respondent is known or reasonably believed to be mentally retarded, this finding shall be shown on the report. The law enforcement officer or other designated person shall take the respondent to a 24-hour facility described in G.S. 122C-252 pending a district court hearing. If there is no area 24-hour facility and if the respondent is indigent and unable to pay for care at a private 24-hour facility, the law enforcement officer or other designated person shall take the respondent to a State facility for the mentally ill designated by the Commission in accordance with G.S. 143B-147(a)(1)a. for custody, observation, and treatment and immediately notify the clerk of superior court of this action.
		In the event an individual who is 18 years of age or older and known or reasonably believed to be mentally retarded is transported to a State facility for the mentally ill, in no event shall that individual be admitted to that facility except as follows:
a.	Persons described in G.S. 122C-266(b);
b.	Persons admitted pursuant to G.S. 15A-1321;
c.	Respondents who are so extremely dangerous as to pose a serious threat to the community and to other patients committed to non-State hospital psychiatric inpatient units, as determined by the Director of the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services or his designee; and
d.	Respondents who are so gravely disabled by both multiple disorders and medical fragility or multiple disorders and deafness that alternative care is inappropriate, as determined by the Director of the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services or his designee.
		Individuals transported to a State facility for the mentally ill who are not admitted by the facility may be transported by law enforcement officers or designated staff of the State facility in State-owned vehicles to an appropriate 24-hour facility that provides psychiatric inpatient care.
		No later than 24 hours after the transfer, the responsible professional at the original facility shall notify the petitioner, the clerk of court, and, if consent is granted by the respondent, the next of kin, that the transfer has been completed.
(3)	If the physician or eligible psychologist finds that neither condition described in subdivisions (1) or (2) of this subsection exists, the proceedings shall be terminated. The person designated in the order to provide transportation shall return the respondent to the respondent's regular residence or, with the respondent's consent, to the home of a consenting individual located in the originating county and the respondent shall be released from custody."

Requested by:   Representatives Crawford, Gardner, Cansler, Clary, Wilkins
BUTNER COMMUNITY LAND RESERVATION
Section 11.49.  The Department of Human Resources shall reserve and dedicate the following described land for the construction of a Community Building and related facilities to serve the Butner Reservation:  
"Approximately 2 acres, on the east side it borders Central Avenue with a line running along the Wallace Bradshur property on the north back to the tree line next to the ADATC.  From there it follows the tree line south and west to and including the softball field.  From the softball field it turns east to the State Employees Credit Union and follows the Credit Union property on the south side back to Central Avenue."
This land shall be reserved and dedicated for the project which shall be funded with contributions from Granville County, contributions from the residents of the Butner Reservation, the use of cablevision franchise rebate funds received by the Department of Human Resources on behalf of the Butner Reservation, and other public and private sources.
The Butner Planning Council shall advise the Secretary of Human Resources, through resolutions adopted by the Council, regarding the use of this reserved and dedicated land, the construction of the Community Building, and the expenditure of the cablevision franchise rebate funds.
The Department of Human Resources shall reserve and dedicate the above described property for the above described purposes until the time, if any, that a permanent local government is established on the Butner Reservation at which time the land shall be transferred to the local government.

Requested by:   Representatives Gardner, Cansler, Clary
ALLOCATION OF MENTAL HEALTH, DEVELOPMENTAL DISABILITIES, AND SUBSTANCE ABUSE EXPANSION FUNDS
Section 11.50.  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 1995 General Assembly, 1996 Regular Session.

Requested by:   Representatives Gardner, Cansler, Clary
PROCEDURE FOR PRISONERS HELD IN COUNTY JAIL
Section 11.51.  Notwithstanding Chapter 122C of the General Statutes, prisoners held in a county jail, other than prisoners who have been found to be incapable of proceeding to trial pursuant to Article 56 of Chapter 15A of the General Statutes, who require mental health treatment that the county decides can best be provided by inpatient care, shall be transported to the mental health unit of Central Prison in accordance with G.S. 162-39.

Requested by:   Representatives Gardner, Cansler, Clary
LEGISLATIVE STUDY COMMISSION ON MENTAL HEALTH, DEVELOPMENTAL DISABILITIES, AND SUBSTANCE ABUSE SERVICES
Section 11.52.  G.S. 120-205 reads as rewritten:
"§ 120-205.  Commission membership; meetings; terms; vacancies.
(a)	This commission shall be composed of 22 members appointed as follows:
(1)	Seven members of the House of Representatives at the time of their appointment, appointed by the Speaker of the House of Representatives. Of these members, one shall be a Chair of the House Appropriations Subcommittee on Human Resources;
(2)	Seven members of the Senate at the time of their appointment, appointed by the President Pro Tempore of the Senate. Of these members, one shall be the Chair of the Senate Human Resources Appropriations Committee;
(3)	Three members who are representatives of Coalition 2001, appointed by the Governor. Of these members, one shall be a representative from mental health, one from developmental disabilities, and one from substance abuse services;
(4)	Two members of the public, appointed by the Speaker of the House of Representatives. Of these members, one shall be a county commissioner at the time of appointment, selected from a list of four candidates nominated by the North Carolina Association of County Commissioners. If the Association has failed to submit nominations by September 1, 1996, the Speaker of the House of Representatives may appoint any county commissioner; 
(5)	Two members of the public, appointed by the President Pro Tempore of the Senate. Of these members, one shall be a county commissioner at the time of appointment, selected from a list of four candidates nominated by the North Carolina Association of County Commissioners. If the Association has failed to submit nominations by September 1, 1996, the President Pro Tempore of the Senate may appoint any county commissioner; and
(6)	One member who is a representative of the North Carolina Hospital Association, appointed by the Governor.
(b)	The Speaker of the House of Representatives and the President Pro Tempore of the Senate shall each select a legislative member from their appointments to serve as cochair of the commission. Meetings shall be called at the will of the cochairs.
(c)	All members shall serve at the will of their appointing officer. Unless removed or unless resigning, members shall serve for two-year terms. Members may be reappointed. Vacancies in membership shall be filled by the appropriate appointing officer."

Requested by:   Representatives Gardner, Cansler, Clary
WHITAKER SCHOOL REPLACEMENT FACILITY
Section 11.53.  The Department of Human Resources and the Office of State Budget and Management shall, in consultation with the Human Rights Committee of the Whitaker School in Butner, attempt to locate a facility that would be a suitable replacement facility for the Whitaker School.  The facility may be located in Butner or elsewhere.   To be a suitable replacement, the existing facility must be of size and structural condition to reasonably accommodate current needs and must represent overall an improvement over the current facility housing Whitaker School.  The Department may also investigate and consider whether it would be more cost-effective to build a new facility than to renovate an existing facility.   If a suitable existing facility is located, then the Department and Office of State Budget and Management shall pursue funding for repairs and renovations that may be necessary to render the facility a suitable replacement.  Not later than May 1, 1998, the Department shall provide a status report on its search for a replacement facility to the House and Senate Appropriations Subcommittees on Human Resources, the Fiscal Research Division, and the Human Rights Committee of the Whitaker School.  If the Department determines that it would be more cost-effective to build a new facility than to repair an existing facility, then the Department shall provide information supporting its determination in its May 1, 1998, report.

Requested by:   Representatives Gardner, Cansler, Clary
FORENSIC TREATMENT PROGRAM
Section 11.54.  The Commission for Mental Health, Developmental Disabilities, and Substance Abuse Services shall adopt temporary rules, in accordance with Chapter 150B of the General Statutes, to implement the forensic treatment program at Dorothea Dix Hospital.  Notwithstanding the provisions of Chapter 122C of the General Statutes pertaining to seclusion, the rules shall include, for the purpose of protecting the health, safety, and welfare of patients, employees, and the general public, provisions for locking the rooms of patients in the forensic treatment program during rest times, including normal sleeping hours.

Requested by:   Representatives Gardner, Cansler, Clary
STUDY DOWNSIZING OF MENTAL RETARDATION CENTERS
Section 11.55.  The Department of Human Resources shall conduct a study of the impact of the plan for downsizing mental retardation centers currently being implemented by the Department.  The study shall include the time period from the commencement of implementation through June 30, 1996.  The study shall include, but is not limited to, the impact on patient census, staffing in general, staff-to-patient ratios, budget changes, placement of clients in the community, and development of community services for developmental disability clients.  The Department shall provide the results of the study to the House and Senate Appropriations Subcommittees on Human Resources and the Fiscal Research Division not later than March 2, 1998.

Requested by:   Representatives Gardner, Cansler, Clary
EARLY INTERVENTION FUNDING/REFERRAL
Section 11.56.  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 five million dollars ($5,000,000) for the 1997-98 fiscal year and the sum of five million dollars ($5,000,000) 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.  The Department may create up to 41 new positions, as needed, in the Division of Services for the Blind and the Division of Services for the Deaf and the Hard of Hearing to expand early intervention-related preschool services.
The agencies providing early intervention services to children from birth through five years of age shall work together to develop procedures to ensure that Beginnings for Parents of Hearing-Impaired Children, Inc., shall be notified of children newly identified with hearing loss and determined to be eligible for services.

Requested by:   Representatives Gardner, Cansler, Clary
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 11.57.  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:   Representatives Gardner, Cansler, Clary
DIVISION OF SERVICES FOR BLIND/PERFORMANCE AUDIT
Section 11.58.  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:  Representatives Gardner, Cansler, Clary
SERVICES FOR BLIND/EXTENDED SERVICE PROVIDER POSITIONS
Section 11.59.  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:   Representatives Gardner, Cansler, Clary
GOVERNOR MOREHEAD SCHOOL/TEXTBOOK FUNDS
Section 11.60.  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:   Representatives Gardner, Cansler, Clary
FAMILY SUPPORT/DEAF AND HARD OF HEARING SERVICES CONTRACT
Section 11.61.  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:   Representatives Gardner, Cansler, Clary
S.O.S. AND FAMILY RESOURCE CENTER GRANT PROGRAMS ADMINISTRATIVE COST LIMITS
Section 11.62.  (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:   Representatives Gardner, Cansler, Clary
ANNUAL EVALUATION OF WILDERNESS CAMP, COACH MENTOR TRAINING, AND GOVERNOR'S ONE-ON-ONE PROGRAMS
Section 11.63.  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:   Representatives Gardner, Cansler, Clary
DYS TRAINING SCHOOLS/STUDENT EVALUATIONS
Section 11.64.  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:   Representatives Gardner, Cansler, Clary
RECEIPTS OF FEDERAL FUNDS FOR EMERGENCY ASSISTANCE
Section 11.65.  The Department of Human Resources may use up to twenty-five percent (25%) 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:   Representatives Gardner, Cansler, Clary
COMMUNITY-BASED ALTERNATIVES PARTICIPATION
Section 11.66.  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:   Representatives Gardner, Cansler, Clary
CHILD CARE FUNDS MATCHING REQUIREMENT
Section 11.67.  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:   Representatives Gardner, Cansler, Clary
CHILD CARE SUBSIDIES
Section 11.68.  (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:   Representatives Gardner, Cansler, Clary
CHILD CARE ALLOCATION FORMULA
Section 11.69.  (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:   Representatives Gardner, Cansler, Clary
CHILD DAY CARE REVOLVING LOAN FUND
Section 11.70.  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:   Representatives Gardner, Cansler, Clary
EARLY CHILDHOOD EDUCATION AND DEVELOPMENT INITIATIVES PROGRAM
Section 11.71. (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.
(2a)	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)  G.S. 143B-168.15 reads as rewritten:
"§ 143B-168.15.  Use of State funds.
(a)	State funds allocated to local projects for services to children and families shall be used to meet assessed needs, expand coverage, and improve the quality of these services.  The local plan shall address the assessed needs of all children to the extent feasible.  It is the intent of the General Assembly that the needs of both young children below poverty who remain in the home, as well as the needs of young children below poverty who require services beyond those offered in child care settings, be addressed.  Therefore, as local partnerships address the assessed needs of all children, they should devote an appropriate amount of their State allocations, considering these needs and other available resources, to meet the needs of children below poverty and their families.
(b)	Depending on local, regional, or statewide needs, funds may be used to support activities and services that shall be made available and accessible to providers, children, and families on a voluntary basis.  Of the total funds allocated to all local partnerships for direct services, 
																											seventy percent (70%) shall be used in child care-related activities and programs which improve access to child care services, develop new child care services, or improve the quality of child care services in all settings.
(c)	Long-term plans for local projects that do not receive their full allocation in the first year, other than those selected in 1993, should consider how to meet the assessed needs of low-income children and families within their neighborhoods or communities.  These plans also should reflect a process to meet these needs as additional allocations and other resources are received.
(d)	State funds designated for start-up and related activities may be used for capital expenses or to support activities and services for children, families, and providers. State funds designated to support direct services for children, families, and providers shall not be used for major capital expenses unless the North Carolina Partnership approves this use of State funds based upon a finding that a local partnership has demonstrated that (i) this use is a clear priority need for the local plan, (ii) it is necessary to enable the local partnership to provide services and activities to underserved children and families, and (iii) the local partnership will not otherwise be able to meet this priority need by using State or federal funds available to that local partnership.  The funds approved for capital projects in any two consecutive fiscal years may not exceed ten percent (10%) of the total funds for direct services allocated to a local partnership in those two consecutive fiscal years.
(e)	State funds allocated to local partnerships shall not supplant current expenditures by counties on behalf of young children and their families, and maintenance of current efforts on behalf of these children and families shall be sustained. State funds shall not be applied without the Secretary's approval where State or federal funding sources, such as Head Start, are available or could be made available to that county.
(f)	Local partnerships may carry over funds from one fiscal year to the next, subject to the following conditions:
(1)	Local partnerships in their first year of receiving direct services funding may, on a one-time basis only, carry over any unspent funds to the subsequent fiscal year.
(2)	Any local partnership may carry over any unspent funds to the subsequent fiscal year, subject to the limitation that funds carried over may not exceed the increase in funding the local partnership received during the current fiscal year over the prior fiscal year.
(g)	Not less than thirty percent (30%) of each local partnership's direct services allocation shall be used to expand child care subsidies. To the extent practicable, these funds shall be used to enhance the affordability, availability, and quality of child care services as described in this section.  The North Carolina Partnership may increase this percentage requirement up to a maximum of fifty percent (50%) when, based upon the local waiting list for subsidized child care or the total percentage of children served whose families are income eligible for subsidized child care, the North Carolina Partnership determines a higher percentage is justified."
(o) The North Carolina Partnership shall not apply the subsidy requirement in G.S. 143B-168.15(g) to the 45 counties eligible to receive planning funds in 1997-98.
	(p)	There is allocated from the funds appropriated to the Department of Human Resources, Division of Child Development, in this act, the sum of twenty-one million one hundred seventy-nine thousand seven hundred forty-seven dollars ($21,179,747) for the 1997-98 fiscal year and the sum of twenty million three hundred twenty-nine thousand seven hundred forty-seven dollars ($20,329,747) 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 $14,137,034 for the 1997-98 fiscal year and $14,137,034 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 $5,252,713 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.
(q)  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:   Representative Gardner
EXTEND DHR ADMINISTRATION OF TRI-COUNTY/TRI-COUNTY-REALIGNMENT INCENTIVE FUNDS
Section 11.72. (a)	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 subsection 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 aligning with another existing area authority.
(b) 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 one million two hundred thousand dollars ($1,200,000) in the 1997-98 fiscal year and the sum of one million two hundred thousand dollars ($1,200,000) for the 1998-99 fiscal year shall be allocated by the Division to any existing area authority that has aligned with one or more of the counties that comprised the Tri County Area Authority.  Funds shall be allocated only if the per capita funding level for the existing area authority is greater than the per capita funding level of the county that aligned with the existing area authority.  Funds allocated to an existing area authority under this subsection shall not exceed the amount necessary in each fiscal year to raise the aligned county's level of per capita funding to that of the existing area authority. 
If the funds appropriated for the purpose of this subsection are not sufficient, then notwithstanding G.S. 143-16.3 and G.S 143-23, the Department of Human Resources shall allocate from funds available to the Department the amount necessary to make up the difference between the amount needed and the amount appropriated.  Funds allocated under this subsection shall not be used for any purpose other than the purpose authorized.  Funds appropriated but not allocated at the end of the 1997-99 fiscal biennium shall revert to the General Fund.

Requested by:  Representatives Gardner, Cansler, Clary
NO STATE FUNDS FOR LOBBYING
Section 11.73. (a) Funds appropriated by this act to the Department of Human Resources shall not be used to conduct activities aimed at influencing the General Assembly.  The prohibition in this subsection does not apply to employees of the Department of Human Resources, to employees of county departments of social services, or to private grantees.
(b)	Neither the Department of Human Resources nor any county department of social services, area mental health authority, or county human services agency may retain any person who would be required to register as a lobbyist under Article 9A of Chapter 120 of the General Statutes in order to carry out the task for which that person is retained.

PART XI-A.  WELFARE REFORM INITIATIVES AND CONFORMING CHANGES

Requested by:   Representatives Berry, Howard
SUBPART A.  WELFARE REFORM INITIATIVES.

Section 11A.1.  The title of Part 2 of Article 2 of Chapter 108A of the General Statutes reads as rewritten:
"Part 2. Work First Program."
Section 11A.2.   G.S. 108A-24 reads as rewritten:
"§ 108A-24.  Definitions.
As used in Chapter 108A:
(1)	'Applicant' is any person who requests assistance or on whose behalf assistance is requested.
(1a)	'Attainment' means to equal or exceed the outcomes and goals set forth in a County Plan or the State Plan.
(1b)	'Biometric' means a digitized image of selected features of an individual encoded and processed in a manner that ensures an extraordinarily high correlation between the digital data and the actual characteristics of an individual.
(1c)	'Child Development Agreement' ('CDA') means an agreement between a county and a recipient of Work First Program assistance which describes the parental responsibilities and child development goals required to maintain eligibility for qualification for Work First Family Assistance and Work First Services, and what the county will provide to assist the recipient in achieving those child development goals.
(1d)	'Community service' means work exchanged for temporary public assistance.
(1e)	'County block grant' means nonreverting federal and State money appropriated to implement and maintain a county's Work First Program.
(1f)	'County department of social services' means a county department of social services, consolidated human services agency, or other local agency designated to administer or provide services pursuant to this Article.
(1g)	'County Plan' is the biennial Work First Program plan prepared by each county pursuant to this Article and submitted to the Department for incorporation into the State Plan.
(2)	'Department' is the Department of Human Resources, unless the context clearly indicates otherwise.
	(3a)	'Employment' means work that requires either a contribution to FICA or the filing of a State N.C. Form D-400, or the equivalent.
(3b)	'Family' means a unit consisting of a minor child or children and one or more of their biological parents, adoptive parents, or grandparents living together and in which one or more of the parents is employed or performing community service.
(3c)	'Federal TANF funds' means the Temporary Assistance for Needy Families block grant funds provided for in Title IV-A of the Social Security Act.
(3d)	'First Stop Employment Assistance' is the program established to assist recipients of Work First Program assistance or food stamps with employment through job registration, job search, job preparedness, and community service.
(3e)	'Full-time employment' means employment averaging over 30 hours a week for at least 50 consecutive weeks and which either requires a contribution to FICA for four consecutive quarters or the filing of a State N.C. Form D-400.
(3f)	'FICA' means the taxes imposed by the Federal Insurance Contribution Act, 26 U.S.C. § 3101, et seq.
(4)	Repealed by Session Laws 1983, c. 14, s. 3.
(4a)	'Mutual Responsibility Agreement' ('MRA') is an agreement between a county and a recipient of Work First Program assistance which describes the conditions for eligibility for the assistance and what the county will provide to assist the recipient in moving from assistance to self-sufficiency.  Improvement in literacy shall be a part of a MRA with persons who cannot read above the eighth grade level.  A MRA is a prerequisite for any temporary Work First Program assistance under this Article.
(4b)	'Parent' means biological parent, adoptive parent, or grandparent.
(5)	'Recipient' is a person to whom, or on whose behalf, assistance is granted under this Article.
(6)	'Resident,' unless otherwise defined by federal regulation, is a person who is living in North Carolina at the time of application with the intent to remain permanently or for an indefinite period; or who is a person who enters North Carolina seeking employment or with a job commitment.
(7)	'Secretary' is the Secretary of Human Resources, unless the context clearly indicates otherwise. 
(8)	'State Plan' is the biennial Work First Program plan, based upon the aggregate of the County Plans, prepared by the Department for the State's Work First Program pursuant to this Article, and submitted sequentially to the Budget Director, to the General Assembly, to the Governor, and to the appropriate federal officials.
(9)	'Temporary' is a time period, not to exceed 60 cumulative months, which meets the federal requirement of Title IV-A.
(10)	'Title IV-A' means the Social Security Act, 42 U.S.C. § 601, et seq., as amended by the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, P.L. 104-193, and to other provisions of federal law as may apply to assistance provided in this Article.
(11)	'Underemployment' means anything less than full-time employment except unemployment.
(12)	'Unemployment' means no FICA contributions for four consecutive quarters or earnings less than those required for filing a State N.C. Form D-400.
(13)	'Work' is lawful activity exchanged for cash, goods, uses, or services.
(14)	'Work First Diversion Assistance' is a short-term cash payment that is intended to produce a substantial reduction in the likelihood of a family requiring Work First Family Assistance.
(15)	'Work First Family Assistance' is a program of time-limited periodic payments to assist in maintaining the children of eligible families while the adult family members engage in activities to prepare for entering and to enter the workplace.
(16)	'Work First Program' is the temporary assistance to needy families program established in this Article.
(17)	'Work First Program assistance' means the goods, uses, or services provided under the Work First Program.
(18)	'Work First Services' are services funded from appropriations made pursuant to this Article and designed to facilitate the purposes of the Work First Program."
Section 11A.3.  G.S. 108A-25 reads as rewritten:
"§ 108A-25. Creation of programs.
(a)	The following programs of public assistance are hereby established, and shall be administered by the county department of social services or board of commissioners or the Department of Human Resources under federal regulations or under rules adopted by the Social Services Commission and under the supervision of the Department of Human Resources:
(1)	Work First Program;
(2)	State-county special assistance for adults;
(3)	Food stamp program;
(4)	Foster care and adoption assistance payments;
(5)	Low income energy assistance program.
(b)	The program of medical assistance is hereby established as a  program of public assistance and shall be administered by the county departments of social services under rules adopted by the Department of Human Resources.
(c)	The Department of Human Resources shall accept all grants-in-aid for programs of public assistance which may be available to the State by the federal government. The provisions of this Article shall be liberally construed in order that the State and its citizens may benefit fully from the federal grants-in-aid."
Section 11A.4.  G.S. 108A-27 reads as rewritten:
"§ 108A-27.  Authorization of Work First Program.
 (a)	Each county shall develop, implement, and administer a biennial County Plan that begins to reduce unemployment and underemployment in that county.  This County Plan shall be in accordance with:
(1)	This Article;
(2)	Applicable federal, State, and local laws; and
(3)	Rules adopted pursuant to this Article by the Department.
(b)	The Department shall adopt rules regarding the biennial County Plans that shall be the most flexible and least restrictive while ensuring that federal and State laws, regulations, and goals for the State are met or achieved.
(c)	The Department shall establish, administer, and supervise the Work First Program in accordance with:
(1)	This Article;
(2)	The State Plan;
(3)	Rules adopted pursuant to this Article by the Department; and
(4)	Applicable federal and State laws."
Section 11A.5.  Part 2 of Article 2 of Chapter 108A of the General Statutes is amended by adding the following new sections:
"§ 108A-27.1.  Assistance not an entitlement.
Any assistance programs established under this Part are not entitlements, and nothing in this Part shall create any property right.
"§ 108A-27.2.  Purpose; program description.
(a)	The purpose of the Work First Program is to provide eligible families with short-term assistance to facilitate their movement to self-sufficiency through lawful employment.
(b)	The Work First Program shall include program administration and four categories of assistance to participants:
(1)	First Stop Employment Assistance;
(2)	Work First Diversion Assistance;
(3)	Work First Family Assistance; and
(4)	Work First Services.
(c)	A case in which benefits are paid only for a child may be considered a family for the Work First Program.
"§ 108A-27.3.  Duties of county boards of commissioners.
(a)	The duties of the county boards of commissioners under the Work First Program are as follows:
(1)	Establish county outcome and performance goals based on county economic, educational, and employment factors and adopt criteria for determining the progress of the county in moving persons and families to self-sufficiency.
(2)	Establish eligibility criteria for recipients.
(3)	Prescribe the method of calculating benefits for recipients.
(4)	Determine and list individuals and families eligible for the Work First Program.
(5)	Develop and enter into Mutual Responsibility Agreements with Work First Program recipients.
(6)	Develop and enter into Child Development Agreements with every eligible parent who has a MRA.
(7)	Provide community service work for any recipient who cannot find employment.
(8)	Make payments of Work First Diversion Assistance and Work First Family Assistance to recipients having MRAs and CDAs.
(9)	Monitor compliance with Mutual Responsibility Agreements and enforce the agreement provisions.
(10)	Monitor compliance with Child Development Agreements and enforce the agreement provisions.
(11)	Ensure compliance with State and federal law, rules, and regulations for the Work First Program.
(12)	Adopt and submit to the Department a biennial County Plan.
(b)	County boards of commissioners shall not delegate the responsibilities described in subdivisions (a)(1), (a)(11), and (a)(12) of this section but may delegate other duties to public or private entities.
"§ 108A-27.4.  Duties of the Department.
The Department shall have the following duties:
(1)	Establish and maintain a uniform system of identifying Work First Program, food stamp, and Medicaid recipients.  This system shall provide security and portability throughout the State and between the departments within the State involved in the Work First Program, the food stamp program, and the Medicaid program.  The system shall use multiple biometrics to ensure greater than ninety-nine percent (99%) accuracy for interdepartmental identification.  The Department shall ensure that the biometric identification system will be able to interface with any existing departmental biometric identification system.
(2)	Provide technical assistance to counties developing and implementing their County Plans, including providing information concerning applicable federal law and regulations and changes to federal law and regulations that effect the permissible use of federal funds and scope of the Work First Program in a county.
(3)	Adopt necessary rules, terms of funding, and promulgate criteria that allows counties maximum flexibility in designing and implementing County Plans.
(4)	Ensure that County Plans comply with federal and State laws, rules, and regulations.
(5)	Establish schedules for counties to submit their County Plans to ensure that all County Plans are adopted by the counties by the first day of February of each even-numbered calendar year.
(6)	Accept County Plans after ensuring that the aggregate of the County Plans is in compliance with federal law and regulations for receipt of federal funds and maximizes federal receipts for the Work First Program.
(7)	Coordinate activities of other State agencies providing technical support to counties developing their County Plans.
(8)	At the request of the counties, provide assistance to counties in their activities with private sector individuals and organizations relative to County Plans.
(9)	Transmit federal annual block grant funds to the counties as soon as they become available to the State and in accordance with federal cash management laws and regulations.  The Department shall transmit one-fourth of the counties' annual block grant funds funded by the General Fund to the counties at the beginning of each quarter.  Once paid, these funds shall be nonreverting.
(10)	Provide for exceptions to criteria and standards for federal programs.
(11)	Describe authorized federal and State work activities.
(12)	Define requirements for assignment of child support income and compliance with child support enforcement activities.
(13)	Monitor the performance of counties on a quarterly basis relative to their County Plans and report quarterly to the Director of the Budget and to the Joint Legislative Public Assistance Commission and annually to the General Assembly on the counties' attainment of the outcomes and goals specified in Part II of each County Plan.
(14)	Prepare and submit, by April 1 of each even-numbered calendar year, a biennial State Plan to the Director of the Budget in accordance with federal laws and regulations and State laws and rules.
(15)	Establish the baseline for the State maintenance of effort.
(16)	Establish a Work First Reserve Fund to provide for future needs of the Work First Program.  Funds placed in this reserve shall not be expended until the Department notifies the Joint Legislative Public Assistance Commission, submits a request for expenditure of these funds to the House and Senate Appropriations Subcommittees on Human Resources, and funds are appropriated by the General Assembly for the expenditure.
"§ 108A-27.5.  County Plan.
(a)	Each county shall submit to the Department, according to the schedule established by the Department and in compliance with all federal and State laws, rules and regulations, a County Plan.
(b)	A County Plan shall have the following five parts:
(1)	Part I.  Conditions Within the County;
(2)	Part II.  Outcomes and Goals for the County;
(3)	Part III.  Plans to Achieve the Outcomes and Goals;
(4)	Part IV.  Administration; and
(5)	Part V.  Funding Requirements.
(c)	Funding requirements shall, at least, identify the amount of a county block grant for Work First Diversion Assistance, a county block grant for Work First Family Assistance, a county block grant for Work First Services, and the county's maintenance of effort contribution.  A county may establish a reserve.
(d)	Each county shall include in its County Plan the following:
(1)	The number of MRAs and CDAs entered into by the county;
(2)	A description of the county's priorities for serving families who need child care based on the needs of the community and the availability of services and funding;
(3)	A list of the community service programs equivalent to full-time employment that are being offered to Work First Program recipients who are unable to find full-time employment; and
(4)	Any request from the Department for waivers to rules or any proposals for statutory changes to remove any impediments to implementation of the County's Plan.
(e)	Each county shall provide to the general public an opportunity to review and comment upon its County Plan prior to its submission to the Department.
(f)	A county may modify its County Plan once each biennium but not at any other time except by special request to the Joint Legislative Public Assistance Commission.
"§ 108A-27.6.  Performance standards; corrective action.
(a)	All adult recipients of Work First Program assistance are expected to achieve full-time employment and at least eighth grade literacy.  Adult recipients of Work First Program assistance shall comply with the provisions and requirements in their MRAs and CDAs.  Failure to comply shall be cause to terminate Work First Program assistance.
(b)	County performance shall be judged solely upon its ability to attain the outcomes and goals established in that county's County Plan.
(c)	When a county fails to achieve its Work First Program goals, the Department may take one or more of the following actions to assist the county in meeting its goals:
(1)	Notify the county of the deficiencies and add additional monitoring and reporting requirements.
(2)	Require the county to develop and submit for approval by the Department a corrective action plan.
If a county fails to achieve its Work First Program goals for two consecutive years, or fails to comply with a corrective action plan developed pursuant to this section, the county shall lose an appropriate portion of the State's block grant to the county in the subsequent State Plan.
"§ 108A-27.7.  State Plan.
(a)	The Department shall prepare and submit to the Director of the Budget, in accordance with the procedures established in G.S. 143-16.1 for federal block grant funds, a biennial State Plan that proposes the terms of the Work First Program for each fiscal year.  The State Plan shall be based upon the aggregate of the County Plans.  The State Plan shall include the following:
(1)	Allocations of federal and State funds for the Work First Program, including block grants to counties and the allocation of funding for administration not to exceed the federally established limitations on the use of federal TANF funds and the limits imposed under this Article;
(2)	Maintenance of effort and levels of State and county funding for the Work First Program;
(3)	Federal eligibility requirements and a description of the eligibility requirements in each county;
(4)	A description of eligible federal and State work activities;
(5)	A description of the federal, State, and each county's financial participation in the Work First Program;
(6)	Provisions to ensure that no Work First Program recipients, required to participate in work activities, shall be employed or assigned when:
a.	Any regular employee is on layoff from the same or substantially equivalent job;
b.	An employer terminates any regular employee or otherwise causes an involuntary reduction in the employer's workforce in order to hire Work First recipients; or
c.	An employer otherwise causes the displacement of any currently employed worker or positions, including partial displacements such as reductions in hours of nonovertime work, wages, or employment benefits, in order to hire Work First recipients;
(7)	Provisions to ensure the establishment and maintenance of grievance procedures to resolve complaints by regular employees who allege that the employment or assignment of a Work First Program recipient is in violation of subdivision (6) of this section;
(8)	Provisions to ensure that Work First Program participants, required to participate in work activities, shall be subject to and have the same rights under federal, State, or local laws applicable to non-Work First Program employees in similarly situated work activities, including, but not limited to, health and safety standards and nondiscrimination laws, provided that nothing in this subdivision shall be construed to prohibit Work First Program participants from receiving State or county services designed to assist Work First Program participants achieve job stability and self-sufficiency;
(9)	Requirements for assignment of child support income and compliance with child support enforcement activities; and
(10)	Anything else required by federal or State law, rule, or regulation to be included in the State Plan.
(b)	The State Plan may provide for automatic Medicaid eligibility for Work First Program recipients.
(c)	The State Plan may distinguish among potential groups of recipients on whatever basis necessary to enhance program purposes and to increase federal revenues.
(d)	The Department may modify the State Plan once a biennium but at no other time except by special request to the Joint Legislative Public Assistance Commission.  Any changes to the State Plan shall be reported to the General Assembly during the next session following the changes.
"§ 108A-27.8.  Duties of the Director of the Budget/Governor.
(a)	The Director of the Budget shall, by April 15 of each even-numbered calendar year, approve and recommend adoption by the General Assembly of the State Plan.
(b)	At the beginning of every fiscal year, the Director of the Budget shall report to the General Assembly the number of permanent State employees who have been Work First Program recipients during the previous calendar year.
(c)	After the State Plan has become law, the Governor shall sign it and cause it to be submitted to federal officials in accordance with federal law.
"§ 108A-27.9.  Maintenance of effort.
(a)	The Department shall maintain the State's maintenance of effort at one hundred percent (100%) of the amount the State budgeted for programs under this Part during fiscal year 1996-97.  A county's maintenance of effort shall be no less than eighty percent (80%) of the amount the county budgeted for programs under this Part during fiscal year 1996-97.
(b)	The Department shall provide to counties a list of activities that qualify for maintenance of effort requirements.
"§ 108A-27.10.  Exemption from limitations for individuals convicted of certain drug-related felonies.
Individuals convicted of Class H or I controlled substance felony offenses in this State shall be eligible to participate in the Work First Program and food stamp program:
(1)	Six months after release from custody if no additional controlled substance felony offense is committed during that period and successful completion of a required substance abuse treatment program determined appropriate by the area mental health authority; or
(2)	If not in custody, six months after the date of conviction if no additional controlled substance felony offense is committed during that period and successful completion of a required substance abuse treatment program determined appropriate by the area mental health authority.
A county department of social services shall require individuals who are eligible for Work First Program assistance and food stamp benefits pursuant to this section to undergo substance abuse treatment as a condition for receiving Work First Program or food stamp benefits, if funds and programs are available.
"§ 108A-27.11.  Appeals.
The Work First Program is a program of temporary public assistance for the purpose of an appeal under G.S. 108A-79."
Section 11A.6.  (a) G.S. 108A-29 reads as rewritten:
"§ 108A-29.  First Stop Employment Assistance; priority for employment services.
	(a1)	There is established in the Employment Security Commission, Department of Commerce, a program to be called First Stop Employment Assistance.  The Chairman of the Employment Security Commission shall administer the program with the participation and cooperation of county boards of commissioners, the Department of Human Resources, the Department of Labor, the Department of Crime Control and Public Safety, and the community college system.
(a2)	Individuals seeking to apply or reapply for Work First Program assistance or food stamps who are unemployed or underemployed shall make their 'first stop' in the application process for assistance the Employment Security Commission, where they shall register for a job, unless exempt either temporarily or permanently from participating in a work program by federal or State law, rules, or regulations.
(a3)	Individuals who are not otherwise exempt shall present verification of registration with the Employment Security Commission at the time of applying for public assistance.  Unless exempt, the individual shall not be approved for Work First Program assistance or food stamps until verification is received.  Child-only cases are exempt from this requirement.
(a4)	The Employment Security Commission shall expand its Labor Market Information System.  The expansion shall at least include:  statistical information on unemployment rates and other labor trends by county; and publications dealing with licensing requirements, economic development, and career projections, and information technology systems which can be used to track participants through the employment and training process.
(a5)	The First Stop Employment Program shall assist Work First Program and food stamp recipients with employment through job registration, job search, job preparedness, and community service.
(a6)	The Employment Security Commission shall offer a continuum of services to individuals seeking employment and training assistance ranging from self-help options to labor-intensive case management approaches.  The Employment Security Commission shall provide an intense program of employment or reemployment services such as job seeking skills, workshops, employment counseling, and testing to move individuals into the workforce as quickly as possible.
(a7)	If after evaluation of an individual the Employment Security Commission believes it necessary, the Employment Security Commission also may refer an individual placed in the Job Preparedness component of the First Stop Employment Program to a local community college for enrollment in General Education Development, Adult Basic Education, or Human Resources Development programs which are already in existence.  Additionally, the Commission may refer an individual to a literacy council.  Whenever an individual is referred to a community college or to a literacy council, the Employment Security Commission shall monitor the individual's progress through close communications with those agencies.  The Employment Security Commission shall adopt rules to accomplish this subsection.
(a8)	The Job Preparedness component of the Program shall last a maximum of 12 weeks unless the recipient is registered and is satisfactorily progressing in a program that requires additional time to complete.  Every effort shall be made to place the recipient in part-time employment or part-time community service if the time required exceeds the 12-week maximum.
(a9)	An individual placed in the Job Search component of the First Stop Employment Program shall look for work and shall accept any suitable employment.  The Employment Security Commission shall refer individuals to current job openings and shall make job development contacts for individuals.  Individuals shall be required to keep a record of their job search activities on a job search record form provided by the Commission, and the Employment Security Commission will monitor these activities.  A 'job search record' means a written list of dates, times, places, addresses, telephone numbers, names, and circumstances of job interviews.  The Job Search component shall include at least one weekly contact with the Employment Security Commission.  The Employment Security Commission shall adopt rules to accomplish this subsection.
(a10)	The Employment Security Commission shall work with the Private Personnel Service Division of the Department of Labor to develop a relationship with these private employment agencies to utilize their services and make referrals of individuals registered with the Employment Security Commission.
(a11)	The Employment Security Commission shall notify all employers in the State of the 'Exclusive No-Fault' Referral Service available through the Employment Security Commission to employers who hire personnel through Job Service referrals.
(a12)	All individuals referred to jobs through the Employment Security Commission shall be instructed in the procedures for applying for the Federal Earned Income Credit (FEIC).  All individuals referred to jobs through the Employment Security Commission who qualify for the FEIC shall apply for the FEIC by filing a W-5 form with their employers.
(a13)	The FEIC shall not be counted as income when eligibility is determined for Work First Program assistance, Medicaid, food stamps, subsidies, public housing, or Supplemental Security Income.
(a14)	An individual who has not found a job within 12 weeks of being placed in the Job Search component of the Program may also be placed in the Community Service component at the county's option.
(a15)	Once an individual has registered with the Employment Security Commission and upon verification of the registration by the agency or contractor providing the Work First Program assistance, the individual's eligibility for Work First Program assistance may be evaluated and the application completed.  The individual then may be eligible for all the benefits for which the individual is eligible under the county's County Plan.  Continued receipt of Work First Program benefits is contingent upon successful participation in the First Stop Employment Program, and lack of cooperation and participation in the First Stop Employment Program may result in the termination of benefits to the individual.
(a16)	The county board of commissioners shall determine which agencies or nonprofit or private contractors will participate with the Employment Security Commission in developing the rules to implement the First Stop Employment Program.  The rules and operations of the program shall be reviewed by the Joint Legislative Public Assistance Commission before implementation.
(a17)	Each county shall organize a Job Service Employer Committee, based on the membership makeup of the Job Service Employer Committees in existence at the time this act becomes law.  Each Job Service Employer Committee shall oversee the operation of the First Stop Employment Program in that county.  The Committee shall report to the local Employment Security Commission quarterly on its recommendations to improve the First Stop Employment Program.  The Employment Security Commission shall develop the reporting method and time frame and shall coordinate a full report to be presented to the Joint Legislative Public Assistance Commission by the end of each calendar year.
(b)	Members of families with dependent children and with aggregate family income at or below the level required for eligibility for Work First Family Assistance, regardless of whether or not they have applied for such assistance, shall be given priority in obtaining employment services including training and community service provided by or through State agencies or counties or with funds which are allocated to the State of North Carolina directly or indirectly through prime sponsors or otherwise for the purpose of employment of unemployed persons.
(c)	[Repealed.]"
(b)	Each county's Job Service Employer Committee shall develop a study of the "working poor" in their respective counties and shall include the following in the study:
(1)	Determine the extent to which current labor market participation enables individuals and families to earn the amount of disposable income necessary to meet their basic needs;
(2)	Determine how many North Carolinians work and earn wages below one hundred fifty percent (150%) of the Federal Poverty Guideline and study trends in the size and demographic profiles of this underemployed group within the respective county;
(3)	Examine job market factors that contribute to any changes in the composition and numbers of the working poor including, but not limited to, shifts from manufacturing to service, from full-time to part-time work, from permanent to temporary or their contingent employment;
(4)	Consider and determine the respective responsibilities of the public and private sectors in ensuring that working families and individuals have disposable income adequate to meet their basic needs;
(5)	Evaluate the effectiveness of the unemployment insurance system in meeting the needs of low-wage workers when they become unemployed;
(6)	Examine the efficacy of a State earned income tax credit that would enable working families to meet the requirements of the basic needs budget;
(7)	Examine the wages, benefits, and protections available to part-time and temporary workers, leased employees, independent contractors, and other contingent workers as compared to regular full-time workers;
(8)	Solicit, receive, and accept grants or other funds from any person or entity and enter into agreements with respect to these grants or other funds regarding the undertaking of studies or plans necessary to carry out the purposes of the committee; and
(9)	Request any necessary data from either public or private entities that relate to the needs of the committee.
Each committee shall prepare and submit a report on the finding for the county which it represents by May 1, 1998, to the Joint Legislative Public Assistance Commission.
(c)	The First Stop Employment Assistance program becomes effective beginning July 1, 1997.  Funds shall be allocated from the Work First Program to establish the First Stop Employment Program and to assist the Job Service Employer Committees in their completion of the study of the working poor.
(d) G.S. 126-7.1 reads as rewritten:
"§ 126-7.1.  Posting requirement; State employees receive priority consideration; reduction-in-force rights; Work First hiring.
(a)	All vacancies for which any State agency, department, or institution openly recruit shall be posted within at least the following:
(1)	The personnel office of the agency, department, or institution having the vacancy; and
(2)	The particular work unit of the agency, department, or institution having the vacancy
in a location readily accessible to employees. If the decision is made, initially or at any time while the vacancy remains open, to receive applicants from outside the recruiting agency, department, or institution, the vacancy shall be listed with the Office of State Personnel for the purpose of informing current State employees of such vacancy. The State agency, department, or institution may not receive approval from the Office of State Personnel to fill a job vacancy if the agency, department, or institution cannot prove to the satisfaction of the Office of State Personnel that it complied with these posting requirements. The agency, department, or institution which hires any person in violation of these posting requirements shall pay such person when employment is discontinued as a result of such violation for the work performed during the period of time between his initial employment and separation.
(a1)	State employees to be affected by a reduction in force shall be notified of the reduction in force as soon as practicable, and in any event, no less than 30 days prior to the effective date of the reduction in force.
(a2)	The State Personnel Commission shall adopt rules to provide that priority consideration for State employees separated from State employment as the result of reductions in force is to enable a State employee's return to career service at a salary grade and salary rate equal to that held in the most recent position. The State Personnel Commission shall provide that a State employee who:
(1)	Accepts a position at the same salary grade shall be paid at the same salary rate as the employee's previous position.
(2)	Accepts a position at a lower salary grade than the employee's previous position shall be paid at the same rate as the previous position unless the salary rate exceeds the maximum of the new salary grade. When the salary rate exceeds the maximum of the salary grade, the employee's new salary rate shall be reduced to the maximum of the new salary grade.
(b)	Subsection (a) of this section does not apply to vacancies which must be filled immediately to prevent work stoppage or the protection of the public health, safety, or security.
(c)	If a State employee subject to this section:
(1)	Applies for another position of State employment that would constitute a promotion and;
(2)	Has substantially equal qualifications as an applicant who is not a State employee
then the State employee shall receive priority consideration over the applicant who is not a State employee. This priority consideration shall not apply when the only applicants considered for the vacancy are current State employees.
(c1)	If a State employee who has been separated due to reduction in force or who has been given notice of imminent separation due to reduction in force:
(1)	Applies for another position of State employment equal to or lower in salary grade than the position held by the employee at the time of notification or separation; and
(2)	Is determined qualified for that position
then within all State agencies, the State employee shall receive priority consideration over all other applicants but shall receive equal consideration with other applicants who are current State employees not affected by the reduction in force. This priority shall remain in effect for a period of 12 months from the date the employee receives notification of separation by reduction in force. State employees separated due to reduction in force shall receive higher priority than other applicants with employment or reemployment priorities, except that the reemployment priority created by G.S. 126-5(e)(1) shall be considered as equal. The reduction-in-force priority created by this subsection shall be administered in accordance with rules promulgated by the State Personnel Commission.
(c2)	If the applicants for reemployment for a position include current State employees, a State employee with more than 10 years of service shall receive priority consideration over a State employee having less than 10 years of service in the same or related position classification. This reemployment priority shall be given by all State departments, agencies, and institutions with regard to positions subject to this Chapter.
(d)	'Qualifications' within the meaning of subsection (c) of this section shall consist of:
(1)	Training or education;
(2)	Years of experience; and
(3)	Other skills, knowledge, and abilities that bear a reasonable functional relationship to the abilities and skills required in the job vacancy applied for.
(e)	Each State agency, department, and institution is encouraged to hire into State government employment qualified applicants who are current or former Work First program participants."
Section 11A.7.  Chapter 108A of the General Statutes is amended by adding a new section to read:
"§ 108A-29.1.  Substance abuse treatment required; drug testing for Work First Program recipients.
(a)	Each applicant or current recipient of Work First Program benefits, determined by a Qualified Substance Abuse Professional (QSAP) or by a physician certified by the American Society of Addiction Medicine (ASAM) to be addicted to alcohol or drugs and to be in need of professional substance abuse treatment services shall be required, as part of the person's MRA and as a condition to receiving Work First Program benefits, to participate satisfactorily in an individualized plan of treatment in an appropriate treatment program.  As a mandatory program component of participation in an addiction treatment program, each applicant or current recipient shall be required to submit to an approved, reliable, and professionally administered regime of testing for presence of alcohol or drugs, without advance notice, during and after participation, in accordance with the addiction treatment program's individualized plan of treatment, follow-up, and continuing care services for the applicant or current recipient.
(b)	An applicant or current recipient who fails to comply with any requirement imposed pursuant to this section shall not be eligible for benefits or shall be subject to the termination of benefits, but shall be considered to be receiving benefits for purposes of determining eligibility for medical assistance.
(c)	The children of any applicant or current recipient shall remain eligible for benefits, and these benefits shall be paid to a protective payee pursuant to G.S. 108A-38.
(d)	An applicant or current recipient shall not be regarded as failing to comply with the requirements of this section if an appropriate drug or alcohol treatment program is unavailable.
(e)	Area mental health authorities organized pursuant to Article 4 of Chapter 122C of the General Statutes shall be responsible for administering the provisions of this section."
Section 11A.8.  G.S. 108A-38 reads as rewritten:
"§ 108A-38.  Protective and vendor payments.
When necessary to comply with any present or future federal law or regulation in order to obtain federal participation in public assistance payments, the payments may be made direct to vendors to reimburse them for goods and services provided the applicants or recipients, and may be made to protective payees who shall act for the applicant or recipient for receiving and managing assistance. Payments to vendors and protective payees shall be made to the extent provided in, and in accordance with, rules of the Social Services Commission or the Department, which rules shall be subject to applicable federal laws and regulations."
Section 11A.9.  G.S. 108A-49 reads as rewritten:
"§ 108A-49. Foster care and adoption assistance payments.
(a)	Benefits in the form of foster care assistance shall be granted in accordance with the rules of the Social Services Commission to any dependent child who would have been eligible to receive Aid to Families with Dependent Children (as that program was in effect on June 1, 1995), but for his or her removal from the home of a specified relative for placement in a foster care facility; provided, that the child's placement and care is the responsibility of a county department of social services.
(b)	Adoption assistance payments for certain adoptive children shall be granted in accordance with the rules of the Social Services Commission to adoptive parents who adopt a child eligible to receive foster care maintenance payments or supplemental security income benefits; provided, that the child cannot be returned to his or her parents; and provided, that the child has special needs which create a financial barrier to adoption.
(c)	The Department is authorized to use available federal payments to states under Title IV-E of the Social Security Act for foster care and adoption assistance payments."
Section 11A.10.  G.S. 108A-58 reads as rewritten:
"§ 108A-58.  Transfer of property for purposes of qualifying for medical assistance; periods of ineligibility.
(a)	Any person, otherwise eligible, who, either while receiving medical assistance benefits or within one year prior to the date of applying for medical assistance benefits, unless some other time period is mandated by controlling federal law, sells, gives, assigns or transfers countable real or personal property or an interest in real or personal property for the purpose of retaining or establishing eligibility for medical assistance benefits, shall be ineligible to receive medical assistance benefits as set forth in subsection (c) of this section.
Countable real and personal property includes real property, excluding a homesite, intangible personal property, nonessential motor and recreational vehicles, nonincome producing business equipment, boats and motors. The provisions of this act shall not apply to the sale, gift, assignment or transfer of real or personal property if and to the extent that the person applying for medical assistance would have been eligible for such assistance notwithstanding ownership of such property or an interest therein.
(b)	Any sale, gift, assignment or transfer of real or personal property or an interest in real or personal property, as provided in subsection (a) of this section, shall be presumed to have been made for the purpose of retaining or establishing eligibility for medical assistance benefits unless the person, or the person's legal representative, who sells, gives, assigns or transfers the property or interest, receives valuable consideration at least equal to the fair market value, less encumbrances, of the property or interest.
(c)	Any person who sells, gives, assigns or transfers real or personal property or an interest in real or personal property for the purpose of retaining or establishing eligibility for medical assistance benefits, as provided in subsection (a) of this section, shall, after the time of transfer, be ineligible to receive these benefits until an amount equal to the uncompensated value of the property or interest has been expended by or on behalf of the person for the person's maintenance and support, including medical expenses, paid or incurred, or shall be ineligible in accordance with the following schedule, whichever is sooner:
(1)	For uncompensated value of at least one thousand dollars ($1,000) but not more than six thousand dollars ($6,000), a one-year period of ineligibility from date of sale, gift, assignment or transfer;
(2)	For uncompensated value of more than six thousand dollars ($6,000) but not more than twelve thousand dollars ($12,000), a two-year period of ineligibility from date of sale, gift, assignment or transfer;
(3)	For uncompensated value of more than twelve thousand dollars ($12,000), a two-year period of ineligibility from date of sale, gift, assignment or transfer, plus one additional month of ineligibility for each five hundred dollar ($500.00) increment or portion thereof by which the uncompensated value exceeds twelve thousand dollars ($12,000), but in no event to exceed three years.
(d)	The sale, gift, assignment or transfer for a consideration less than fair market value, less encumbrances, of any tangible personal property which was acquired with the proceeds of sale, assignment or transfer of real or intangible personal property described in subsection (a) of this section or in exchange for such real or intangible personal property shall be presumed to have been for the purpose of evading the provisions of this section if the acquisition and sale, gift, assignment or transfer of the tangible personal property is by or on behalf of a person receiving medical assistance or within one year of making application for such assistance and the consequences of the sale, gift, assignment of transfer of such tangible personal property shall be determined under the provisions of subsections (c), (f) and (g) of this section.
(e)	The presumptions created by subsections (b) and (d) may be overcome if the person receiving or applying for medical assistance, or the person's legal representative, establishes by the greater weight of the evidence that the sale, gift, assignment or transfer was exclusively for some purpose other than retaining or establishing eligibility for medical assistance benefits.
(f)	For the purpose of establishing uncompensated value under subsection (c), the value of property or an interest therein shall be the fair market value of the property or interest at the time of the sale, gift, assignment or transfer, less the amount of compensation, if any, received for the property or interest. There shall be a rebuttable presumption that the fair market value of real property is the most recent property tax value of the property, as ascertained according to Subchapter II of Chapter 105 of the General Statutes. Fair market value for purpose of this subsection shall be such value, determined as above set out, less any legally enforceable encumbrances to which the property is subject.
(g)	In the event that there is more than one sale, gift, assignment or transfer of property or an interest therein by a person receiving medical assistance or within one year of the date of an application for medical assistance, unless some other time period is mandated by controlling federal law, the uncompensated value, for the purposes of subsection (c), shall be the aggregate uncompensated value of all sales, gifts, assignments and transfers. The date which is the midpoint between the date of the first and last sale, gift, assignment or transfer shall be the date from which the period of ineligibility shall be determined under subsection (c).
(h)	This section shall not apply to applicants for or recipients of Work First Family Assistance or to persons entitled to medical assistance by virtue of their eligibility for Work First Family Assistance.
(i)	This section shall apply only to transfers made before July 1, 1988."
Section 11A.11.  G.S. 108A-80 reads as rewritten:
"§ 108A-80.  Confidentiality of records.
(a)	Except as provided in (b) below, it shall be unlawful for any person to obtain, disclose or use, or to authorize, permit, or acquiesce in the use of any list of names or other information concerning persons applying for or receiving public assistance or social services that may be directly or indirectly derived from the records, files or communications of the Department or the county boards of social services, or county departments of social services or acquired in the course of performing official duties except for the purposes directly connected with the administration of the programs of public assistance and social services in accordance with federal law, rules and regulations, and the rules of the Social Services Commission or the Department.
(b)	Each county shall furnish a copy of the recipient check register monthly to its county auditor showing a complete list of all recipients of Work First Family Assistance and State-County Special Assistance for Adults, their addresses, and the amounts of the monthly grants.  This register shall be a public record open to public inspection during the regular office hours of the county auditor, but said register or the information contained therein may not be used for any commercial or political purpose.  Any violation of this section shall constitute a Class 1 misdemeanor.
(c)	Any listing of recipients of benefits under any public assistance or social services program compiled by or used for official purposes by a county board of social services or a county department of social services shall not be used as a mailing list for political purposes.  This prohibition shall apply to any list of recipients of benefits of any federal, State, county or mixed public assistance or social services program.  Further, this prohibition shall apply to the use of such listing by any person, organization, corporation, or business, including but not limited to public officers or employees of federal, State, county, or other local governments, as a mailing list for political purposes.  Any violation of this section shall be punishable as a Class 1 misdemeanor.
(d)	The Social Services Commission may adopt rules governing access to case files for social services and public assistance programs, except the Medical Assistance Program.  The Secretary of the Department of Human Resources shall have the authority to adopt rules governing access to medical assistance case files."
Section 11A.12.  Part 10B of Article 3 of Chapter 143B of the General Statutes is amended by adding a new section to read:
"§ 143B-168.17.  Priority/programs for children in Work First families.
(a)	All programs authorized and funded in whole or in part under this Part shall give the children in Work First Program families priority in appropriate programs or services.
(b)	Counties which do not have programs funded in whole or in part under this Part shall develop programs which first address the needs of children in participating Work First Program families whenever funds under this Part become available.
(c)	Counties may use funds provided under this Part for Work First Services but shall not use funds provided for Work First Services for programs authorized under this Part."
Section 11A.13.  G.S. 153A-255 reads as rewritten:
"§ 153A-255. Authority to provide social service programs.
(a)	Each county shall have the duty to provide temporary assistance to its poor residents.
(b)	Each county shall provide social service programs pursuant to Chapter 108A and Chapter 111 and may otherwise undertake, sponsor, organize, engage in, and support other social service programs intended to further the health, welfare, education, employment, safety, comfort, and convenience of its citizens."
Section 11A.14.  G.S. 108A-28, 108A-28.1, 108A-30, 108A-31,  108A-32, 108A-33, 108A-34, 108A-35, 108A-39.1, and 108A-92 are repealed.
Section 11A.15.  Article 12G of Chapter 120 of the General Statutes is repealed.
Section 11A.16.  (a)	The Department of Labor shall establish a pilot project creating Individual Development Accounts (IDA) to assist working families.
(b)	Of the funds appropriated in this act to the Department of Labor, the sum of three hundred thousand dollars ($300,000) for the 1997-98 fiscal year and the sum of three hundred thousand dollars ($300,000) for the 1998-99 fiscal year shall be used to establish a pilot project creating Individual Development Accounts (IDA) to:
(1)	Provide individuals and families, especially the underemployed, an opportunity and an incentive to accumulate assets.
(2)	Promote investments in education, homeownership, and microenterprise development.
(3)	Demonstrate that household savings strategies, such as the development of IDAs, can be a powerful strategy for assisting working persons and families to achieve long-term self-sufficiency.
(4)	Utilize and build comprehensive community partnerships that support asset building in low-wealth communities.
(c) The funds allocated in this section shall be made available to serve as matching funds for personal savings of qualified participants selected to participate in a multiyear demonstration to last not more than five years.  Other expenses of the demonstration, including training, technical assistance, evaluation, and other program and administrative expenses, shall be covered from other public and private sources.  Matching funds provided from the funds allocated in this section may be used by qualified participants for home purchase, investment in a business or self-employment venture owned by the participant, or costs of postsecondary education or training for the participant.  Participants shall not be restricted as to the amounts or sources of funds deposited in the account, but in order to create the incentive for continued savings, only savings from earned income will qualify for State matching funds.  Tax return reports of earned income shall be used to verify compliance.
(d)	This section becomes effective July 1, 1997.
Section 11A.17.  (a)	In order to ensure that the intent of the people is carried out, it is the intent of the General Assembly to sit in Special Session to enact the first State Plan developed pursuant to this Part.  Thereafter, the State Plan shall be adopted as part of the Current Operations Appropriations Act.
(b)	While sitting in Special Session, the General Assembly shall entertain requests by counties for proposed changes to statutory requirements or rules which a county considers an impediment to its County Plan.  In subsequent regular sessions, county requests for changes shall be in the form of local bills.
(c)	The requirement that the Department prepare and submit the State Plan to the General Assembly for approval in accordance with the procedures set forth in G.S. 143-16.1 shall not be applicable for fiscal year 1997-98.  Until the counties have prepared their County Plans and the State has prepared its State Plan in accordance with this Part and that State Plan has been enacted by the General Assembly and it becomes law, either during its Regular Session 1998, or by Special Session, the provisions of the State Plan submitted to the federal government on October 16, 1996, shall remain in effect.  State Plans submitted after the 1997-98 fiscal year shall be enacted by the General Assembly in order to be effective.
Section 11A.18.  (a)	All funds intended for the Work First Program shall be appropriated to that Program through the 1997-99 biennium.  No Work First Program funds shall be diverted into other programs during the 1997-99 biennium.
(b)	The administrative costs of the Work First Program, at any level, shall not exceed eight percent (8%) of the State's federal TANF block grant funds, and one-time expenditures for equipment and support shall not exceed ten percent (10%) of the State's federal TANF block grant funds.
(c)	Federal, State, and county funding for the Work First Program shall be commingled and shall not be separated to frustrate the purposes of the Work First Program.
(d)	The commingled block grants paid quarterly to counties shall not be reverted.
Section 11A.19.  Notwithstanding any other provision of law, beginning July 1, 1997, each county shall dedicate seventy-five percent (75%) of the total AFDC and Work First Cash Assistance benefit amount that was determined fraudulent or erroneous and recovered by that county pursuant to the AFDC Fraud Control Program to enhance and improve program integrity.
Section 11A.20.  (a) There is established a Joint Legislative Public Assistance Commission.  The Joint Legislative Public Assistance Commission shall monitor and oversee the implementation of the provisions of this Part and shall make any necessary recommendations to the General Assembly regarding any further changes to law or rule.  The Speaker of the House of Representatives shall appoint 10 members, two of whom shall be cochair, and the President Pro Tempore of the Senate shall appoint 10 members, two of whom shall be cochair.  The Joint Legislative Public Assistance Commission shall first convene within 30 days after this act becomes law.
(b)	Of the funds appropriated in this act to the General Assembly, the sum of one hundred thousand dollars ($100,000) for the 1997-98 fiscal year and the sum of one hundred thousand dollars ($100,000) for the 1998-99 fiscal year shall be used for the Joint Legislative Public Assistance Commission.
(c)	This section becomes effective July 1, 1997.
Section 11A.21.  The Legislative Research Commission may study issues relating to the Medical Assistance Program and the State-County Special Assistance Program, including the following:  the need for further restrictions and longer periods of disqualification for the transfer of property for purposes of qualifying for medical assistance and State-County Special Assistance, and appropriate recovery from recipient estates of benefits paid by the Medical Assistance Program and the State-County Special Assistance Program.  The Legislative Research Commission may report the results of its study, along with any legislative proposals and cost analyses, to the 1998 General Assembly.
Section 11A.22.  (a) Article 3 of Chapter 143B of the General Statutes is amended by adding a new Part to read:
"Part 31.  Office of Inspector General.
"§ 143B-216.50.  Department of Human Resources Inspector General.
(a)	The Office of Inspector General is established in the Department of Human Resources to provide a central point for coordination of and responsibility for activities that promote accountability, integrity, and efficiency in the Department and in means-tested public assistance programs.  The Office of Inspector General is designated as the State Law Enforcement Bureau (SLEB) to take custody and control of food stamps from the federal Food and Consumer Service to make them available to nonfederal law enforcement and investigative agencies to conduct criminal and food stamp program violation investigations.
(b)	It shall be the duty and responsibility of the Inspector General to:
(1)	Advise in the development of performance measures, standards, and procedures for the evaluation of the Department.
(2)	Assess the reliability and validity of the information provided by the Department on performance measures and standards and make recommendations for improvement, if necessary.
(3)	Review the actions taken by the Department to improve program performance and meet program standards and make recommendations for improvement, if necessary.
(4)	Provide direction for, supervise, and coordinate audits, investigations, and management reviews relating to the programs and operations of the Department.
(5)	Conduct, supervise, or coordinate other activities and programs carried out or financed by the Department for the purpose of promoting economy and efficiency in the administration of, or preventing and detecting fraud and abuse in, its programs and operations, including coordinating activities between local program integrity workers and the State.
(6)	Keep the Secretary of Human Resources informed concerning fraud, abuses, and deficiencies relating to programs and operations administered or financed by the Department, recommend corrective action concerning fraud, abuses, and deficiencies, and report on the progress made in implementing corrective action.
(7)	Ensure effective coordination and cooperation between the State Auditor, federal auditors, and other governmental bodies with a view toward avoiding duplication.
(8)	Review, as appropriate, rules relating to the programs and operations of the Department and make recommendations concerning their impact.
(9)	Ensure that an appropriate balance is maintained between audit, investigative, and other accountability activities.
(c)	The Inspector General shall be appointed by the Secretary. The appointment shall be made after notifying the Governor in writing, at least seven days prior to an offer of employment, of the Secretary's intention to hire the Inspector General.
(d)	The Inspector General shall report to and be under the general supervision of the Secretary and shall not be subject to supervision by any other employee of the Department. The Inspector General shall be appointed without regard to political affiliation.
(e)	The Inspector General may be removed from office by the Secretary.  The Secretary shall notify the Governor, in writing, of the intention to terminate the Inspector General at least seven days prior to the removal.
(f)	The Secretary shall not prevent or prohibit the Inspector General from initiating, carrying out, or completing any audit or investigation.
(g)	The Inspector General shall have access to any records, data, and other information of the Department the Inspector General believes necessary to carry out the Inspector General's duties. The Inspector General is also authorized to request such information or assistance as may be necessary from the Department or from any federal, State, or local government entity.
"§ 143B-216.51.  Inspector General – Department audits.
(a)	To ensure that Department audits are performed in accordance with applicable auditing standards, the Inspector General shall possess the following qualifications:
(1)	A bachelors degree from an accredited college or university with a major in accounting, or with a major in business which includes five courses in accounting, and five years of experience as an internal auditor or independent postauditor, electronic data processing auditor, accountant, or any combination thereof. The experience shall at a minimum consist of audits of units of government or private business enterprises operating for profit or not for profit;
(2)	A masters degree in accounting, business administration, or public administration from an accredited college or university and four years of experience as required in subdivision (1) of this subsection; or
(3)	A certified public accountant license issued pursuant to law or a certified internal audit certificate issued by the Institute of Internal Auditors or earned by examination, and four years of experience as required in subdivision (1) of this subsection.
The Inspector General shall, to the extent both necessary and practicable, include on the Inspector General's staff individuals with electronic data processing auditing experience.
(b)	In carrying out the auditing duties and responsibilities of this Part, the Inspector General shall review and evaluate internal controls necessary to ensure the fiscal accountability of the Department. The Inspector General shall conduct financial, compliance, electronic data processing, and performance audits of the Department and prepare audit reports of the findings. The scope and assignment of the audits shall be determined by the Inspector General; however, the Secretary may at any time direct the Inspector General to perform an audit of a special program, function, or organizational unit. The performance of the audit shall be under the direction of the Inspector General.
(c)	Audits undertaken pursuant to this Part shall be conducted in accordance with the current Standards for the Professional Practice of Internal Auditing and subsequent Internal Auditing Standards or Statements on Internal Auditing Standards published by the Institute of Internal Auditors, Inc., or, where appropriate, in accordance with generally accepted governmental auditing standards. All audit reports issued by internal audit staff shall include a statement that the audit was conducted pursuant to the appropriate standards.
(d)	Audit workpapers and reports shall be public records to the extent that they do not include information which, under the laws of the State, is confidential and exempt from Chapter 132 of the General Statutes.
(e)	At the conclusion of each audit, the Inspector General shall submit tentative findings and recommendations to the person responsible for supervision of the program function or operational unit who shall respond to any adverse findings within 20 working days after receipt of the tentative findings. The response and the Inspector General's rebuttal to the response shall be included in the final audit report.
(f)	The Inspector General shall submit the final report to the Secretary and to the State Auditor.
(g)	The State Auditor, in connection with any audit of the Department pursuant to law, shall give appropriate consideration to internal audit reports and the resolution of findings therein. The Joint Legislative Commission on Governmental Operations may inquire into the reasons or justifications for failure of the Secretary to correct the deficiencies reported in internal audits that are also reported by the State Auditor and shall take appropriate action. The State Auditor shall also review a sample of the Department's internal audit reports at least once every three years to determine compliance with current Standards for the Professional Practice of Internal Auditing or, if appropriate, generally accepted governmental auditing standards. If the State Auditor finds that these standards have not been complied with, the State Auditor shall include a statement of this finding in the audit report of the Department.
(h)	The Inspector General shall monitor the implementation of the Department's response to any audit of the Department conducted by the State Auditor pursuant to law. No later than six months after the State Auditor publishes a report of the audit of the Department, the Inspector General shall report to the Secretary on the status of corrective actions taken. A copy of the report shall be filed with the Joint Legislative Commission on Governmental Operations.
(i)	The Inspector General shall develop long-term and annual audit plans based on the findings of periodic risk assessments. The plan, where appropriate, should include postaudit samplings of payments and accounts. The plan shall show the individual audits to be conducted during each year and related resources to be devoted to the respective audits. The State Controller may utilize audits performed by the Inspector General.  The plan shall be submitted to the Secretary for approval. A copy of the approved plan shall be submitted to the State Auditor.
"§ 143B-216.52.  Inspector General – investigations.
(a)	In carrying out the investigative duties and responsibilities specified in this section, the Inspector General shall initiate, conduct, supervise, and coordinate investigations designed to detect, deter, prevent, and eradicate fraud, waste, mismanagement, misconduct, and other abuses in the Department and in means-tested public assistance programs.  For these purposes, the Inspector General shall:
(1)	Receive and consider complaints and conduct, supervise, or coordinate such inquiries, investigations, or reviews as the Inspector General deems appropriate.
(2)	Establish policies and standards for the investigation, detection, and elimination of fraud, abuse, waste, and mismanagement in the Department and in means-tested public assistance programs.
(3)	Establish and conduct training programs for local and State program integrity workers to improve detection of fraud and abuse.
(4)	Conduct, supervise, and coordinate a program aimed at eliminating food stamp violations, enter into any agreements with the federal government necessary to establish this program, and serve as the official authorized to accept food stamps from the federal Food and Consumer Service for this purpose.
(5)	Report expeditiously to the State Bureau of Investigation or other law enforcement agencies, as appropriate, whenever the Inspector General has reasonable grounds to believe there has been a violation of criminal law.
(6)	Conduct investigations and other inquiries free of actual or perceived impairment to the independence of the Inspector General or the Inspector General's office. This shall include freedom from any interference with investigations and timely access to records and other sources of information.
(7)	Submit in a timely fashion final reports on investigations conducted by the Inspector General to the Secretary.
(b)	The Inspector General shall, not later than September 30 of each year, prepare an annual report summarizing the activities of the office during the immediately preceding State fiscal year. The final report shall be furnished to the Secretary.  Such report shall include, but need not be limited to:
(1)	A description of activities relating to the development, assessment, and validation of performance measures.
(2)	A description of significant abuses and deficiencies relating to programs and to operations of the Department disclosed by investigations, audits, reviews, or other activities during the reporting period.
(3)	A description of the recommendations for corrective action made by the Inspector General during the reporting period with respect to significant problems, abuses, or deficiencies identified.
(4)	The identification of each significant recommendation described in previous annual reports on which corrective action has not been completed.
(5)	A summary of each audit and investigation completed during the reporting period."
(b)	The Department shall immediately proceed with the implementation of this section, including proceeding with all actions necessary to establish a State Law Enforcement Bureau (SLEB) program for food stamps in this State.

SUBPART B.  STATUTORY TECHNICAL AND CONFORMING CHANGES RELATING TO ENACTMENT OF THE WORK FIRST PROGRAM.

Section 11A.24.  G.S. 1-110(a) reads as rewritten:
"(a)	Subject to the provisions of subsection (b) of this section with respect to prison inmates, any superior or district court judge or clerk of the superior court may authorize a person to sue as an indigent in their respective courts when the person makes affidavit that he or she is unable to advance the required court costs. The clerk of superior court shall authorize a person to sue as an indigent if the person makes the required affidavit and meets one or more of the following criteria:
(1)	Receives food stamps.
(2)	Receives Work First Family Assistance.
(3)	Receives Supplemental Security Income (SSI).
(4)	Is represented by a legal services organization that has as its primary purpose the furnishing of legal services to indigent persons.
(5)	Is represented by private counsel working on the behalf of or under the auspices of a legal services organization under subdivision (4) of this section.
(6)	Is seeking to obtain a domestic violence protective order pursuant to G.S. 50B-2.
A superior or district court judge or clerk of superior court may authorize a person who does not meet one or more of these criteria to sue as an indigent if the person is unable to advance the required court costs. The court to which the summons is returnable may dismiss the case and charge the court costs to the person suing as an indigent if the allegations contained in the affidavit are determined to be untrue or if the court is satisfied that the action is frivolous or malicious."
Section 11A.25.  G.S. 15-155.1 reads as rewritten:
"§ 15-155.1.  Reports to district attorneys of Work First Family Assistance and out-of-wedlock births.
The Department of Human Resources, by and through the Secretary of Human Resources, shall promptly after June 19, 1959, make a report to each district attorney, setting out the names and addresses of all mothers who reside in his prosecutorial district as defined in G.S. 7A-60 and are recipients of assistance under the provisions of Part 2, Article 2, Chapter 108A of the General Statutes. Such report shall in some manner show the identity of the unwed mothers and shall set forth the number of children born to each said mother. Such a report shall also be made monthly thereafter setting out the names and addresses of all such mothers who reside in the district and who may have become recipients of assistance under the provisions of Part 2, Article 2, Chapter 108A of the General Statutes since the date of the last report."
Section 11A.26.  G.S. 15-155.2(a) reads as rewritten:
"(a)	Upon receipt of such reports as are provided for in G.S. 15-155.1, the district attorney of superior court may make an investigation to determine whether the mother of an out-of-wedlock child or who is a recipient of Work First Family Assistance, has abandoned, is willfully neglecting or is refusing to support and maintain the child within the meaning of G.S. 14-326 or 49-2 or is diverting any part of the funds received as Work First Family Assistance to any purpose other than for the support and maintenance of a child in violation of G.S. 108-76.1. In making this investigation the district attorney is authorized to call upon:
(1)	Any county board of social services or the Department of Human Resources for personal, clerical or investigative assistance and for access to any records kept by either such board and relating to the matter under investigation and such boards are hereby directed to assist in all investigations hereunder and to furnish all records relating thereto when so requested by the district attorney;
(2)	The board of county commissioners of any county within his district for legal or clerical assistance in making any investigation or investigations in such county and such boards are hereby authorized to furnish such assistance in their discretion; and
(3)	The district attorney of any inferior court in his district for personal assistance in making any investigation or investigations in the county in which the court is located and any district attorney so called upon is hereby authorized to furnish such assistance by and with the consent of the board of county commissioners of the county in which the court is located, which board shall provide and fix his compensation for assistance furnished."
Section 11A.27.  G.S. 95-25.3(d) reads as rewritten:
"(d)	The Commissioner, in order to prevent curtailment of opportunities for employment of the economically disadvantaged and the unemployed, may, by regulation, establish a wage rate not less than eighty-five percent (85%) of the otherwise applicable wage rate in effect under subsection (a) which shall apply to all persons (i) who have been unemployed for at least 15 weeks and who are economically disadvantaged, or (ii) who are, or whose families are, receiving Work First Family Assistance or who are receiving supplemental security benefits under Title XVI of the Social Security Act.
Pursuant to regulations issued by the Commissioner, certificates establishing eligibility for such subminimum wage shall be issued by the Employment Security Commission.
The regulation issued by the Commissioner shall not permit employment at the subminimum rate for a period in excess of 52 weeks."
Section 11A.28.  G.S. 105A-2(1) reads as rewritten:
"(1)	'Claimant agency' means and includes:
a.	The State Education Assistance Authority as enabled by Article 23 of Chapter 116 of the General Statutes;
b.	The North Carolina Department of Human Resources when in the exercise of its authority to collect health profession student loans made pursuant to G.S. 131-121;
c.	The North Carolina Department of Human Resources when in the performance of its duties under the Medical Assistance Program enabled by Chapter 108A, Article 2, Part 6, and any county operating the same Program at the local level, when and only to the extent such a county is in the performance of Medical Assistance Program collection functions;
d.	The North Carolina Department of Human Resources when in the performance of its duties, under the Child Support Enforcement Program as enabled by Chapter 110, Article 9 and Title IV, Part D of the Social Security Act to obtain indemnification for past paid public assistance or to collect child support arrearages owed to an individual receiving program services and any county operating the program at the local level, when and only to the extent that the county is engaged in the performance of those same duties;
e.	The University of North Carolina, including its constituent institutions as specified by G.S. 116-2(4);
f.	The University of North Carolina Hospitals at Chapel Hill in the conduct of its financial affairs and operations pursuant to G.S. 116-37;
g.	The Board of Governors of the University of North Carolina and the State Board of Education through the College Scholarship Loan Committee when in the performance of its duties of administering the Scholarship Loan Fund for Prospective College Teachers enabled by Chapter 116, Article 5;
h.	The Office of the North Carolina Attorney General on behalf of any State agency when the claim has been reduced to a judgment;
i.	The State Board of Community Colleges through community colleges as enabled by Chapter 115D in the conduct of their financial affairs and operations;
j.	State facilities as listed in G.S. 122C-181(a), School for the Deaf at Morganton, North Carolina Sanatorium at McCain, Western Carolina Sanatorium at Black Mountain, Eastern North Carolina Sanatorium at Wilson, and Gravely Sanatorium at Chapel Hill under Chapter 143, Article 7; Governor Morehead School under Chapter 115, Article 40; Central North Carolina School for the Deaf under Chapter 115, Article 41; Wright School for Treatment and Education of Emotionally Disturbed Children under Chapter 122C; and these same institutions by any other names by which they may be known in the future;
k.	The North Carolina Department of Revenue;
l.	The Administrative Office of the Courts;
m.	The Division of Forest Resources of the Department of Environment, Health, and Natural Resources;
n.	The Administrator of the Teachers' and State Employees' Comprehensive Major Medical Plan, established in Article 3 of General Statutes Chapter 135;
o.	The State Board of Education through the Superintendent of Public Instruction when in the performance of his duties of administering the Scholarship Loan Fund for Prospective Teachers enabled by Chapter 115C, Article 32A and the scholarship loan and grant programs enabled by Chapter 115C, Article 24C, Part 1;
p.	The Board of Trustees of the Teachers' and State Employees' Retirement System and the Board of Trustees of the Local Governmental Employees' Retirement System in the performance of their duties pursuant to Chapters 120, 128, 135 and 143 of the General Statutes;
q.	The North Carolina Teaching Fellows Commission in the performance of its duties pursuant to Chapter 115C, Article 24C, Part 2;
r.	The North Carolina Department of Human Resources when in the performance of its collection duties for intentional program violations and violations due to inadvertent household error under the Food Stamp Program enabled by Chapter 108A, Article 2, Part 5, and any county operating the same Program at the local level, when and only to the extent such a county is in the performance of Food Stamp Program collection functions.
		The North Carolina Department of Human Resources when, in the performance of its duties under the Work First Program provided in Part 2 of Article 2 of Chapter 108A of the General Statutes, or under the State-County Special Assistance for Adults Program provided in Part 3 of Article 2 of Chapter 108A, it seeks to collect public assistance payments obtained through an intentional false statement, intentional misrepresentation, intentional failure to disclose a material fact, or inadvertent household error;
s.	The Employment Security Commission of North Carolina;
t.	Any State agency in the collection of salary overpayments from former employees; or
u.	The State Board of Education through the Superintendent of Public Instruction when in the performance of his duties of administering the program under which the State encourages participation in the National Board for Professional Teaching Standards (NBPTS) Program, enabled by Section 19.28 of Chapter 769 of the 1993 Session Laws."
Section 11A.29.  G.S. 110-129(6) reads as rewritten:
"(6)	'Disposable income' means any form of periodic payment to an individual, regardless of sources, including but not limited to wages, salary, commission, self-employment income, bonus pay, severance pay, sick pay, incentive pay, vacation pay, compensation as an independent contractor, worker's compensation, unemployment compensation benefits, disability, annuity, survivor's benefits, pension and retirement benefits, interest, dividends, rents, royalties, trust income and other similar payments, which remain after the deduction of amounts for federal, State, and local taxes, Social Security, and involuntary retirement contributions. However, Supplemental Security Income, Work First Family Assistance, and other public assistance payments shall be excluded from disposable income. For employers, disposable income means 'wage' as it is defined by G.S. 95-25.2(16). Unemployment compensation benefits shall be treated as disposable income only for the purposes of income withholding under the provisions of G.S. 110-136.4, and the amount withheld shall not exceed twenty-five percent (25%) of the unemployment compensation benefits."
Section 11A.30.  G.S. 110-130.1 reads as rewritten:
"§ 110-130.1.  Non-Work First services.
(a)	All child support collection and paternity determination services provided under this Article to recipients of public assistance shall be made available to any individual not receiving public assistance in accordance with federal law and as contractually authorized by the nonrecipient, upon proper application and payment of a nonrefundable application fee of ten dollars ($10.00).
(b)	Repealed by Session Laws 1989, c. 490.
(b1)	In cases in which a public assistance debt which accrued pursuant to G.S. 110-135 remains unrecovered, support payments shall be transmitted to the Department of Human Resources for appropriate distribution. When services are terminated and all costs and any public assistance debts have been satisfied, the support payment shall be redirected to the client.
(c)	Actions or proceedings to establish, enforce, or modify a duty of support or establish paternity as initiated under this Article shall be brought in the name of the county or State agency on behalf of the public assistance recipient or nonrecipient client. Collateral disputes between a custodial parent and noncustodial parent, involving visitation, custody and similar issues, shall be considered only in separate proceedings from actions initiated under this Article. The attorney representing the designated representative of programs under Title IV-D of the Social Security Act shall be deemed attorney of record only for proceedings under this Article, and not for the separate proceedings. No attorney/client relationship shall be considered to have been created between the attorney who represents the child support enforcement agency and any person by virtue of the action of the attorney in providing the services required.
(c1)	The Department is hereby authorized to use the electronic and print media in attempting to locate absent and deserting parents. Due diligence must be taken to ensure that the information used is accurate or has been verified. Print media shall be under no obligation or duty, except that of good faith, to anyone to verify the correctness of any information furnished to it by the Department or county departments of social services.
(d)	Any fee imposed by the North Carolina Department of Revenue or the Secretary of the Treasury to cover their costs of withholding for non-Work First arrearages certified for the collection of past due support from State or federal income tax refunds shall be borne by the client by deducting the fee from the amount collected.
Any income tax refund offset amounts which are subsequently determined to have been incorrectly withheld and distributed to a client, and which must be refunded by the State to a responsible parent or the nondebtor spouse, shall constitute a debt to the State owed by the client."
Section 11A.31.  G.S. 111-21 reads as rewritten:
"§ 111-21.  Disqualifications for relief.
No aid to needy blind persons shall be given under the provisions of this Article to any individual for any period with respect to which he is receiving aid under the laws of North Carolina  providing Work First Family Assistance and/or relief for the aged, and/or aid for the permanently and totally disabled."

SUBPART C.  STATUTORY TECHNICAL AND CONFORMING CHANGES RELATING TO THE ABOLISHMENT OF THE COMMISSION ON THE FAMILY.

Section 11A.76.  G.S. 143-318.14A(a) reads as rewritten:
"(a)	Except as provided in subsection (e) below, all official meetings of commissions, committees, and standing subcommittees of the General Assembly (including, without limitation, joint committees and study committees), shall be held in open session. For the purpose of this section, the following also shall be considered to be 'commissions, committees, and standing subcommittees of the General Assembly':
(1)	The Legislative Research Commission;
(2)	The Legislative Services Commission;
(3)	The Advisory Budget Commission;
(4)	The Joint Legislative Utility Review Committee;
(5)	The Joint Legislative Commission on Governmental Operations;
(6)	The Joint Legislative Commission on Municipal Incorporations;
	(8)	The Joint Select Committee on Low-Level Radioactive Waste;
(9)	The Environmental Review Commission;
(10)	The Joint Legislative Transportation Oversight Committee;
(11)	The Joint Legislative Education Oversight Committee;
(12)	The Joint Legislative Commission on Future Strategies for North Carolina;
(13)	The Commission on Children with Special Needs;
(14)	The Legislative Committee on New Licensing Boards;
(15)	The Agriculture and Forestry Awareness Study Commission;
(16)	The North Carolina Study Commission on Aging; and
(17)	The standing Committees on Pensions and Retirement."
Section 11A.79.  G.S. 143B-150.8 reads as rewritten:
"§ 143B-150.8. Advisory Committee on Family-Centered Services; responsibilities.
(a)	The Advisory Committee on Family-Centered Services shall have the following responsibilities:
(1)	Provide guidance and advice to the Secretary in the development of a plan for the statewide implementation of an inter-agency family preservation services program whereby family-centered preservation services are available to all counties by July 1, 1995, through the coordinated efforts of the Division of Social Services, Division of Youth Services, and Division of Mental Health, Developmental Disabilities, and Substance Abuse Services.
(2)	Recommend standards for:
a.	Oversight and development of family-centered preservation services;
b.	Development and maintenance of inter-agency training and technical assistance in the provision of family-centered services;
c.	Professional staff qualifications, program monitoring, and data collection;
d.	Statewide evaluation of locally-based family preservation programs;
e.	Coordination of funding sources for family preservation programs;
f.	Procedures for awarding grants to local agencies providing family-centered services; and
g.	Annual reports to the Governor and the General Assembly on the services provided and achievements of the Family Preservation Services Program.
(3)	The Committee shall submit a written report not later than May 1, 1992, and not later than October 1 of each year thereafter, to the Governor, to the Joint Legislative Commission on Governmental Operations.  The report shall address the progress in implementation of the Family Preservation Services Program.  The report shall include an accounting of funds expended and anticipated funding needs for full implementation of the program.  The report shall also include the following information for each county participating in the Program and for the Program as a whole:
a.	The number of families receiving service through the Program;
b.	The number of children at risk of placement prior to initiation of service in families receiving Program services;
c.	Among those children in sub-subdivision b., the number of children placed in foster care, in group homes, and in other facilities outside their homes and families;
d.	The average cost of the service provided to families under the Program;
e.	The estimated cost of out-of-home placement, through foster care, group homes, or other facilities, which would otherwise have been expended on behalf of children at risk of placement who successfully remain united with their families as a result of services provided through the Program.  Cost estimates should be based on average length of stay and average cost of such out-of-home placements;
f.	The number of children who remain unified with their families for one, two, and three years after receiving services under the Program; and
g.	An overall statement of the progress of the Program and local projects during the preceding year, along with recommendations for improvements.
(b)	The Committee may use funds allocated to it to contract for services to monitor local projects and for an independent evaluation of the Family Preservation Services Program."
Section 11A.86.  (a)	Of the funds appropriated in this act to the Department of Human Resources, the sum of six million seven hundred fifty thousand dollars ($6,750,000) for the 1997-98 fiscal year and the sum of two million nine hundred thousand dollars ($2,900,000) for the 1998-99 fiscal year shall be used as follows:
(1)	To establish the uniform system of Work First Program, food stamp, and Medicaid recipient identification;
(2)	To provide counties with workstations for biometric imaging; and
(3)	To fund one program integrity worker in each county.
(b)	This section becomes effective July 1, 1997.
Section 11A.86A.  (a)	Of the funds appropriated in this act to the Department of Human Resources, the sum of twenty million dollars ($20,000,000) shall be placed in the Work First Reserve Fund established pursuant to G.S. 108A-27.4.
(b)	This section becomes effective July 1, 1997.
Section 11A.87.  The Department of Human Resources shall have the uniform system of Work First Program, food stamp, and Medicaid recipient identification in place and operating before June 1, 1998.  Except as otherwise provided in this Part, this Part is effective when it becomes law.

PART XII. DEPARTMENT OF AGRICULTURE

Requested by:   Representative Owens
DEPARTMENTS OF AGRICULTURE/COMMERCE/LABOR/AND ENVIRONMENT, HEALTH, AND NATURAL RESOURCES/RECEIPT SUPPORTED POSITIONS
Section 12.  (a) The Department of Agriculture, the Department of Commerce, the Department of Environment, Health, and Natural Resources, and the Department of Labor shall by October 15, 1997, and semiannually thereafter, report to the Joint Legislative Commission on Governmental Operations, the Appropriations Subcommittees on Natural and Economic Resources in both the House of Representatives and the Senate, and the Fiscal Research Division regarding the creation of new receipt-supported positions created within each Department.  The report shall include the following information for each new position created with receipts:
(1)	The Commission, Division, program or office in which the position is created.
(2)	The position title or classification.
(3)	The salary.
(4)	The funding source.
(5)	An explanation of the position responsibilities and the justification for the position.
(6)	The designation of the position as full-time, part-time, and if time-limited, the length of time that the position is anticipated to be required.
(b) The Department of Agriculture, the Department of Commerce, the Department of Environment, Health, and Natural Resources, and the Department of Labor shall abolish any receipt supported position upon approval of the Office of State Budget and Management if:  (i) the position is vacant for more than one calendar year, and (ii) receipts are insufficient to adequately fund the positions.
The Department of Agriculture, the Department of Commerce, the Department of Environment, Health, and Natural Resources, and the Department of Labor shall by October 15, 1997, and semiannually thereafter, report to the Joint Legislative Commission on Governmental Operations, the Appropriations Subcommittees on Natural and Economic Resources in both the House of Representatives and the Senate, and the Fiscal Research Division regarding any receipt-supported positions that are abolished and shall justify any position that is vacant for a calendar year or longer and is not abolished.

Requested by:   Representatives Mitchell, Baker, Carpenter
MOUNTAIN STATE FAIR TO BECOME ENTERPRISE FUND
Section 12A.  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:   Representatives Mitchell, Baker, Carpenter
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:   Representatives Mitchell, Baker, Carpenter
TRANSFER MARITIME MUSEUM TO CULTURAL RESOURCES
Section 12.2.  The North Carolina Maritime Museum, all funds appropriated by the General Assembly for the museum, and all resources and personnel provided for the museum by the Department of Agriculture are transferred from the Department of Agriculture to the Department of Cultural Resources.  This transfer shall have all of the elements of a Type I transfer, as that term is defined in G.S. 143A-6(a).  Where a conflict arises in connection with the transfer, the transfer shall be resolved by the Governor, and the decision of the Governor shall be final.

Requested by:   Representatives Mitchell, Baker, Carpenter
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:   Representatives Mitchell, Baker, Carpenter
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:   Representatives Mitchell, Baker, Carpenter, H. Hunter
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."

Requested by:   Representatives Tolson, Arnold
EASTERN NORTH CAROLINA LIVESTOCK ARENA FUNDS
Section 12.6.  Section 94 of Chapter 561 of the 1993 Session Laws reads as rewritten:
"Sec. 94.  	The seven hundred thousand dollars ($700,000) appropriated in Section 4 of Chapter 1014 of the 1985 Session Laws and allocated in Section 158(b) of Chapter 1014 of the 1985 Session Laws, as amended by Section 137(a) of Chapter 738 of the 1987 Session Laws, Section 154 of Chapter 1086 of the 1987 Session Laws, and Section 34 of Chapter 1100 of the 1987 Session Laws, to the Rocky Mount Business Development Authority for the agricultural complex located at Fountain 
			Park, plus all interest accrued, shall be used for the construction of a facility to replace the Eastern North Carolina Livestock Arena.  This facility shall be used for horse- and swine-breeding stock auctions, for cattle sales, and for functions of the Future Farmers of America and 4-H Clubs."

Requested by:   Representatives Mitchell, Baker, Carpenter, Brown, H. Hunter
ASSISTANCE FOR SMALL, FAMILY FARMS
Section 12.7.   Of the funds appropriated in this act to the Department of Agriculture for the 1997-98 fiscal year, the sum of fifty thousand dollars ($50,000) shall be used to provide assistance to farmers who operate small, family farms.  By March 1, 1998, the Department shall report to the Joint Legislative Commission on Governmental Operations, the Appropriations Subcommittees on Natural and Economic Resources in both the House of Representatives and the Senate, and the Fiscal Research Division on the use of these funds, including the number and geographic location of the small, family farms assisted through this allocation of funds, the type of assistance provided, and any other information or indicators that demonstrate the overall impact of this allocation of funds.

Requested by:   Representatives Mitchell, Baker, Carpenter
SOUTHERN DAIRY COMPACT COMMISSION FUNDS
Section 12.8.  (a)	Of the funds appropriated in this act to the Department of Agriculture, the sum of twenty-five thousand dollars ($25,000) for the 1997-98 fiscal year and the sum of twenty-five thousand dollars ($25,000) for the 1998-99 fiscal year shall be used to support the Southern Dairy Compact Commission.
(b)	The allocation of funds under subsection (a) of this section is contingent upon the enactment of House Bill 998 of the 1997 Session of the General Assembly, Senate Bill 977 of the 1997 Session of the General Assembly, or substantially similar legislation that creates the Southern Dairy Compact Commission.

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

Requested by:   Representative Carpenter
STUDY DESIRABILITY OF REORGANIZING DEPARTMENT OF ENVIRONMENT, HEALTH, AND NATURAL RESOURCES
Section 13.  (a)	The Office of State Budget and Management shall review the programs, divisions, boards, commissions, councils, and committees currently within the Department of Environment, Health, and Natural Resources and shall conduct a study to determine the desirability of reorganizing the Department of Environment, Health, and Natural Resources so as to create two separate departments with one department that would manage and protect the State's natural resources and with a separate department that would protect the environment and the public health and contain regulatory programs.  The study shall determine:
(1)	A proposal for allocating existing administrative operating support and personnel between these two separate departments;
(2)	Any additional personnel that would be needed in association with creating these two separate departments and the projected cost of these personnel;
(3)	Any additional equipment that would be needed in association with creating these two separate departments and the projected cost of this equipment;
(4)	Any additional office space that would be required and its projected cost;
(5)	Which programs, divisions, boards, commissions, councils, and committees should be in a department of natural resources, which programs, divisions, boards, commissions, councils, and committees should be in a department of environment and health, and which programs, divisions, boards, commissions, councils, and committees, if any, should be in other departments;
(6)	Any additional factors and costs that should be considered were the Department of Environment, Health, and Natural Resources reorganized so as to create these two separate departments; and
(7)	The total costs of reorganizing the Department of Environment, Health, and Natural Resources so as to create these two separate departments.
(b)	The Office of State Budget and Management shall recommend whether the Department of Environment, Health, and Natural Resources should be reorganized so as to create two separate departments, with one department that would manage and protect the State's natural resources and with a separate department that would protect the environment and public health and contain regulatory programs.  By March 15, 1998, the Office of State Budget and Management shall report on all matters contained in subdivisions (1) through (7) of subsection (a) of this section to the Joint Legislative Commission on Governmental Operations, the Environmental Review Commission, and the Fiscal Research Division.
(c)	If House Bill 478 of the 1997 Session of the General Assembly, Senate Bill 383 of the 1997 Session of the General Assembly, or substantially similar legislation that transfers health services to the Department of Human Resources is enacted by the General Assembly, the Office of State Budget and Management shall exclude from its study under this section the programs, divisions, boards, commissions, councils, and committees related to health services. 

Requested by:   Representatives Mitchell, Baker, Carpenter, H. Hunter
ENVIRONMENTAL EDUCATION GRANTS
Section 13A.  (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 shall be used to provide grants to promote environmental education throughout the State.  Grants under this section may be awarded to:
(1)	Schools, community organizations, and environmental education centers for the development of environmental education library collections; or
(2)	School groups for field trips to environmental education centers across the State, provided the activities of the field trip are correlated with the Department of Public Instruction's curriculum objectives.
(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 July 1, 1998, on the grant program.  The report shall include a list of amounts awarded and project descriptions for each grant recipient.

Requested by:   Representative Mitchell
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 six hundred thousand dollars ($600,000) 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	$50,000	$50,000
Museum of Coastal Carolina	$50,000	$50,000
Rocky Mount Children's Museum	$50,000	$50,000
Imagination Station	$50,000	$50,000
Western North Carolina Nature Center	$25,000	$25,000
The Health Adventure Museum
  of Pack Place Education,
  Arts and Science Center, Inc.	$25,000	$25,000
Cape Fear Museum	$50,000	$50,000
Catawba Science Center	$50,000	$50,000
Sci Works Science Center and
   Environmental Park of 
   Forsyth County	$50,000	$50,000
Natural Science 
   Center of Greensboro	$50,000	$50,000
Schiele Museum of Natural History	$50,000	$50,000
North Carolina Museum of
  Life and Science	$50,000	$50,000
Discovery Place	$50,000	$50,000

                           TOTAL	$600,000	$600,000

Requested by:   Representatives Mitchell, Baker, Carpenter
FORESTRY AIRCRAFT LEASE RECEIPTS
Section 13.2.  The Division of Forest Resources, Department of Environment, Health, and Natural Resources, shall use receipts received from the leasing of an amphibious water-scooping tanker aircraft to offset the operating costs associated with the aircraft.  At the end of each fiscal year of the 1997-99 biennium after all receipts received for that fiscal year from the leasing of this aircraft have been applied to the operating costs associated with the aircraft for that fiscal year, any excess funds appropriated by the General Assembly for that fiscal year for the operating costs associated with this aircraft shall revert.

Requested by:   Representative Owens
STATE PARKS FORESTS MANAGEMENT PLANS
Section 13.3.  (a)	G.S. 113-44.13 reads as rewritten:
"§ 113-44.13.  General management plans; forest management plans.
(a)	Every park classified pursuant to G.S. 113-44.12 shall have a general management plan.  The plan shall include a statement of purpose for the park based upon its relationship to the System Plan and its classification.  An analysis of the major resources and facilities on hand to achieve those purposes shall be completed along with a statement of management direction.  The general management plan shall be revised as necessary to comply with the System Plan and to achieve the purposes of this Article. 
(b)	The Division of Forest Resources and the Division of State Parks and Recreation shall cooperatively develop forest management plans for every park classified pursuant to G.S. 113-44.12.  The park's forest management plan shall be included as a component of its general management plan under subsection (a) of this section.  A forest management plan shall contain, at a minimum, provisions regarding fire control, insect and pest control, and timber management."
(b)	G.S. 113-35(a) reads as rewritten:
"(a)	Timber and other products of such State forestlands and timber of State parks may be sold, cut, and removed under rules of the Department.  The Department may establish and operate forest tree nurseries and forest tree seed orchards in State forests.  Forest tree seedlings and seed from these nurseries and seed orchards may be sold to landowners of the State for purposes of forestation under rules of the Department.  When the Secretary determines that a surplus of seedlings or seed exists, this surplus may be sold, and such sale shall be in conformity with the following priority of sale: first, to agencies of the federal government for planting in the State of North Carolina; second, to commercial nurseries and nurserymen within this State; and third, without distinction, to federal agencies, to other states, and to recognized research organizations for planting either within or outside of this State.  The Department shall adopt reasonable rules for the regulation of the use by the public of such and all State forests, State parks, State lakes, game refuges and public shooting grounds under its charge, which rules, after having been posted in conspicuous places on and adjacent to such properties of the State and at the courthouse of the county or counties in which such properties are situated shall have the force and effect of law and any violation of such rules shall constitute a Class 3 misdemeanor."
(c)	G.S. 113-36(a) reads as rewritten:
"(a)	Application of Proceeds Generally. – Except as provided in subsection (b) of this section, all money received from the sale of wood, timber, minerals, or other products from the State forests shall be paid into the State treasury and to the credit of the Department; and such money shall be expended in carrying out the purposes of this Article and of forestry in general, under the direction of the Secretary.  All moneys received from the sale of timber from the State parks shall be paid into the State treasury and to the credit of the Department, and this money shall be expended for capital improvements within the State Parks System."

Requested by:   Representative Owens
DEHNR LAW ENFORCEMENT PAY STUDY BY THE OFFICE OF STATE PERSONNEL
Section 13.4.  (a) The Office of State Personnel shall study employee classifications, salary schedules, pay equities, and pay inequities for sworn law enforcement personnel certified by the North Carolina Criminal Justice Training and Standards Commission who are employed in the Department of Environment, Health, and Natural Resources, Division of Parks and Recreation, in comparison to law enforcement officers employed in the Division of Marine Fisheries and the Wildlife Resources Commission.  The study by the Office of State Personnel shall consider appropriate factors related to the compensation of law enforcement officers in the Division of Parks and Recreation as compared to law enforcement officers in the Division of Marine Fisheries and the Wildlife Resources Commission, including job specifications and qualifications, the compensation of personnel in accordance with educational levels and years of experience, and the equity of compensation among law enforcement personnel in the Division of Parks and Recreation as compared to the Division of Marine Fisheries and the Wildlife Resources Commission.
(b)	The Office of State Personnel shall report its findings and recommendations to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division by  January 15, 1998.

Requested by:   Representatives Mitchell, Baker, Carpenter
MARINE FISHERIES COMMISSION REFORM FUNDS
Section 13.5.  (a) Of the funds appropriated in this act to the Department of Environment, Health, and Natural Resources, the sum of two hundred forty-seven thousand four hundred seventy-five dollars ($247,475) for the 1997-98 fiscal year and the sum of two hundred thirty thousand four hundred seventy-five dollars ($230,475) for the 1998-99 fiscal year shall be used to provide funding for standing advisory committees and permanent staff for the Marine Fisheries Commission.
(b) The allocation of funds under subsection (a) of this section is contingent upon the enactment into law of Section 2.1 of House Bill 1097 (Second Edition) or identical legislation that reduces the membership of the Marine Fisheries Commission and requires the establishment of advisory committees for the Commission.

Requested by:   Representatives Mitchell, Baker, Carpenter
MARINE FISHERIES INFORMATION TECHNOLOGY REPORT
Section 13.6.  The Division of Marine Fisheries of the Department of Environment, Health, and Natural Resources shall by March 15, 1998, and more frequently as requested, report to the Joint Legislative Commission on Seafood and Aquaculture, the Joint Legislative Commission on Governmental Operations, and the Fiscal Research Division the following information:
(1)	An update on the consolidation and modernization of the Division's computer-based management information systems.
(2)	A list of objectives and performance measures for the information technologies improvement project, for each of the following phases of the project:  development, implementation, and ongoing operation and maintenance of the new system.
(3)	An explanation, justification, and itemized list of expenditures to date for consolidation and modernization of the Division's computer-based management information systems.
(4)	An explanation, justification, and estimate of any additional anticipated expenditures required beyond fiscal year 1997-98 to complete the project.  If additional expenditures are required, then the Division shall provide a calendar-based project schedule delineating the additional phases required including the associated expenditures for each additional project phase.
(5)	A calendar-based project schedule delineating the various phases of the project including development, implementation, and completion.  This schedule shall identify the associated expenditures for each project phase.

Requested by:   Representatives Mitchell, Baker, Carpenter
MARINE PATROL VESSEL
Section 13.7.  The Department of Environment, Health, and Natural Resources shall make a reasonable effort to obtain a marine patrol vessel from excess federal property.  If the Department fails to obtain such a vessel from excess federal property, then the Department may use available funds for the 1997-99 biennium, not to exceed two hundred thousand dollars ($200,000) to complete the purchase of a marine patrol vessel.

Requested by:   Representatives Mitchell, Baker, Carpenter
SHELLFISH REHABILITATION PROGRAM
Section 13.8.  The Oyster Rehabilitation Program in the Division of Marine Fisheries in the Department of Environment, Health, and Natural Resources shall be renamed the Shellfish Rehabilitation Program.  Funds appropriated for the Oyster Rehabilitation Program or the Shellfish Rehabilitation Program shall be used for the Shellfish Rehabilitation Program.  The Oyster, Clam, and Scallop Subcommittee of the Marine Fisheries Commission shall advise the Division of Marine Fisheries on the expenditure of Shellfish Rehabilitation Program funds.  The Division of Marine Fisheries shall report to the Joint Legislative Commission on Seafood and Aquaculture on the expenditure of Shellfish Rehabilitation Program funds annually, beginning January 1, 1998.

Requested by:   Representatives Mitchell, Baker, Carpenter
SOIL SURVEY SUPERVISOR ASSIGNMENT
Section 13.9.  The Department of Environment, Health, and Natural Resources shall assign a soil survey supervisor to complete soil surveys in Buncombe and Madison Counties.  This position shall remain assigned to these counties until the soil surveys are complete.

Requested by:   Representatives Mitchell, Baker, Carpenter, H. Hunter
BEAVER DAMAGE CONTROL FUNDS
Section 13.10.  (a)	Subsection (b) of Section 69 of Chapter 1044 of the 1991 Session Laws, as amended by Section 111 of Chapter 561 of the 1993 Session Laws, Section 27.3 of Chapter 769 of the 1993 Session Laws, Section 26.6 of Chapter 507 of the 1995 Session Laws, and Section 27.15 of Chapter 18 of the Session Laws of the 1996 Second Extra Session reads as rewritten:
"(b)	The Beaver Damage Control Advisory Board shall develop a program to control beaver damage on private and public lands. Anson, Bertie, Bladen, Brunswick, Carteret, Chatham, Chowan, Craven, Columbus, Cumberland, Duplin, Edgecombe, Franklin, Gates, Granville, Greene, Halifax, Harnett, Hertford, Hoke, Johnston, Jones, Lee, Lenoir, Lincoln, Martin, Nash, Northampton, Onslow, Pamlico, Pender, Pitt, Robeson, Sampson, Scotland, Vance, Warren, Washington, Wayne, and Wilson Counties shall participate in the program.  The Beaver Damage Control Advisory Board shall act in an advisory capacity to the Wildlife Resources Commission in the implementation of the program.  In developing the program, the Board shall:
(1) 	Orient the program primarily toward public health and safety and toward landowner assistance, providing some relief to landowners through beaver control and management rather than eradication;
(2)	Develop a priority system for responding to complaints about beaver damage;
(3)	Develop a system for documenting all activities associated with beaver damage control, so as to facilitate evaluation of the program;
(4)	Provide educational activities as a part of the program, such as printed materials, on-site instructions, and local workshops;
(5)	Provide for the hiring of personnel necessary to implement beaver damage control activities, administer the program, and set salaries of personnel;
(6)	Evaluate the costs and benefits of the program that might be applicable elsewhere in North Carolina.
No later than January 15 of each year, the Board shall issue a report to the Wildlife Resources Commission on the program to date, including recommendations on the feasibility of continuing the program in participating counties and the desirability of expanding the program into other counties.  The Wildlife Resources Commission shall prepare a plan to implement a statewide program to control beaver damage on private and public lands.  No later than March 15 of each year, the Wildlife Resources Commission shall present its plan in a report to the House Appropriations Subcommittee on Natural and Economic Resources, the Senate Appropriations Committee on Natural and Economic Resources, and the Fiscal Research Division."
(b)	Subsection (h) of Section 69 of Chapter 1044 of the 1991 Session Laws, as amended by Section 111 of Chapter 561 of the 1993 Session Laws, Section 27.3 of Chapter 769 of the 1993 Session Laws, Section 26.6 of Chapter 507 of the 1995 Session Laws, and Section 27.15 of Chapter 18 of the Session Laws of the 1996 Second Extra Session reads as rewritten:
"(h)	Subsections (a) through (d) of this section expire June 30, 1998."
(c)	Of the funds available to the Wildlife Resources Commission for the 1997-98 fiscal year, up to the sum of four hundred fifty thousand dollars ($450,000) shall be used to provide the State share necessary to continue the beaver damage control program, provided the sum of twenty-five thousand dollars ($25,000) in federal funds is available for the 1997-98 fiscal year to provide the federal share.  These funds shall be matched by four thousand dollars ($4,000) of local funds for the 1997-98 fiscal year from each of the participating counties.  Counties participating in this program shall make a commitment of their local matching funds to the Wildlife Resources Commission no later than September 30, 1997.

Requested by:   Representative Hall
AREA THREE SOIL AND WATER REGIONAL COORDINATOR
Section 13.11.  Of the funds appropriated in this act to the Department of Environment, Health, and Natural Resources, the sum of forty-six thousand six hundred dollars ($46,600) for the 1997-98 fiscal year and the sum of forty-three thousand six hundred dollars ($43,600) for the 1998-99 fiscal year shall be allocated to support a new position and equipment needs of a regional coordinator for Area 3 of the State Soil and Water Conservation districts.  Area 3 of the State Soil and Water Conservation districts includes the Neuse River Basin and the following 11 counties:  Alamance, Caswell, Chatham, Guilford, Lee, Montgomery, Moore, Orange, Person, Randolph, and Rockingham. 

Requested by:   Representatives Mitchell, Baker, Carpenter, H. Hunter
ANIMAL WASTE COMPLIANCE PROGRAM REPORT
Section 13.12.  (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:   Representative Mitchell
ANIMAL WASTE MANAGEMENT SYSTEM GENERAL PERMIT REVISIONS
Section 13.13.  (a)	The interagency group created in Section 18 of Chapter 626 of the 1995 Session Laws and the Department of Environment, Health, and Natural Resources shall, by October 1, 1997, cooperatively revise the general permits for animal waste management systems that were previously developed by the Department and accordingly revise the proposed time schedule for issuing these general permits.  The provisions of the revised general permits shall be more flexible for the farmer and more practical for the farmer to implement and shall not conflict with the site-specific certified animal waste management plans.  The interagency group and the Department may refer to House Bill 357 of the 1997 Regular Session of the General Assembly for guidance in determining the issues that need to be addressed in the revision process.  By October 1, 1997, the interagency group and the Department shall submit a joint report of the revised general permits and the revised time schedule for issuing these permits to the Environmental Review Commission.
(b)	Subsection (c) of Section 19  of Chapter 626 of the 1995 Session Laws reads as rewritten:
"(c)	(1)	G.S. 143-215.10C, as enacted by Section 1 of this act, becomes effective January 1, 1997.  In order to ensure an orderly and cost-effective phase-in of the permit program, the Department of Environment, Health, and Natural Resources shall issue permits for animal operations over a five-year period.  Subject to subdivision (5) of this subsection, the Department shall issue permits for  approximately twenty percent (20%) of the animal waste management facilities that are in operation on January 1, 1997, during each of the five calendar years beginning January 1, 1997, and shall give priority to those animal waste management systems serving the largest animal operations.  An animal waste management system that is deemed permitted by rule on January 1, 1997, under 15A N.C.A.C. 2H.0217 may continue to operate on a deemed permitted basis as provided in subdivision (2) of this subsection.
(2)	In accordance with its phase-in schedule, the Department shall notify each owner or operator of an animal waste management system that is deemed permitted of the date by which an application for a permit for that animal waste management system shall be submitted by certified mail.  An owner or operator of an animal waste management system who fails to submit an application for a permit by the date specified by the Department shall not operate the animal waste management system after that date.  An animal waste management system that is authorized to continue operation under this section and for which a timely application for a permit is submitted may continue to operate on a deemed permitted basis until the Department either issues a permit or notifies the owner or operator that the application for a permit is denied.  An animal waste management system that is deemed permitted shall be subject to the annual operational review and annual inspection requirements as though it were permitted.
(3)	The Department shall act on an application for a permit for a new facility or for the expansion of an existing facility within 90 days after the Department receives the application.
(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.
(5)	Animal waste management systems for dairy facilities that are constructed or expanded on or after January 1, 1998, shall be required to obtain a permit in accordance with G.S. 143-215.10C prior to the construction or expansion.  An animal waste management system for any dairy facility in operation before January 1, 1998, shall continue to be deemed permitted under 15A N.C.A.C. 2H.0217 so long as both of the following are satisfied:
a.	That facility obtains a certified animal waste management plan by December 31, 1997, or the operator of that facility and the Environmental Management Commission enter into a special agreement pursuant to Section 14(b) of Chapter 626 of the 1995 Session Laws.
b.	That facility remains in compliance with the certified animal waste management plan or the special agreement, whichever applies.
	The Department shall issue permits for  approximately twenty percent (20%) of the animal waste management systems for dairy facilities in operation before January 1, 1998, during each of the five calendar years beginning January 1, 1999, and shall give priority to those animal waste management systems serving the largest dairies.  An animal waste management system for a dairy facility in operation before January 1, 1998, that is deemed permitted by rule under 15A N.C.A.C. 2H.0217 may continue to operate on a deemed permitted basis as provided in this subdivision and subdivision (2) of this subsection."
(c)	After the revised general permits are adopted, the Department shall issue the revised general permit to all animal waste management operations currently holding general permits.

Requested by:   Representatives Mitchell, Baker, Carpenter
ODOR CONTROL STUDY FUNDS
Section 13.14.  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:   Representatives Mitchell, Baker, Carpenter
SUPERFUND PROGRAM/INACTIVE HAZARDOUS SITES FUNDS
Section 13.15.  (a)	The Department of Environment, Health, and Natural Resources may use available funds, with the approval of the Office of State Budget and Management, to provide the ten percent (10%) cost share required for Superfund cleanups on the National Priority List sites, to pay the operating and maintenance costs associated with these Superfund cleanups, and for the cleanup of priority inactive hazardous substance or waste disposal sites under Part 3 of Article 9 of Chapter 130A of the General Statutes.  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 Environmental Review Commission and 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:   Representatives Mitchell, Baker, Carpenter
FUNDS FOR VOLUNTARY REMEDIAL ACTIONS
Section 13.16.  (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:   Representatives Mitchell, Baker, Carpenter, H. Hunter
POLLUTION PREVENTION AND ENVIRONMENTAL ASSISTANCE TO SMALL BUSINESSES WITH NEED
Section 13.17.  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:   Representatives Mitchell, Baker, Carpenter
PERMIT INFORMATION CENTER
Section 13.18.  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:   Representatives Mitchell, Baker, Carpenter
AGRICULTURE WASTE RESEARCH REPORTS
Section 13.19.  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:   Representatives Mitchell, Baker, Carpenter
TOWN FORK CREEK SOIL CONSERVATION PROJECT
Section 13.20.  (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:   Representatives Mitchell, Baker, Carpenter, Yongue
MEADOW BRANCH WATER PROJECT AND DEEP CREEK PROJECT FUNDS DO NOT REVERT
Section 13.21.  Section 107(b) of Chapter 561 of the 1993 Session Laws as rewritten by Section 26.1 of Chapter 507 of the 1995 Session Laws reads as rewritten:
"(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 1993-94 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:
(1)	Corps of Engineers project feasibility studies, or
(2)	Corps of Engineers projects whose schedules have advanced and require State matching funds in fiscal year 1993-94, or 
(3)	State-local Water Resources Development Projects.
Funds, except those allocated in subdivisions (a)(14), (15), (16), and (17) of this section, not expended or encumbered for these purposes shall revert to the General Fund at the end of the 1994-95 fiscal year.  The funds allocated in subdivisions (a)(14), and (16) of this section shall not revert until June 30, 1997.  The funds allocated in subdivisions (15) and (17) of this section shall not revert until June 30, 1999."

Requested by:   Representative Culp
RANDLEMAN DAM FUNDS DO NOT REVERT
Section 13.22.  Subsection (c) of Section 8 of Chapter 777 of the 1993 Session laws as rewritten by Section 26.2 of Chapter 507 of the 1995 Session Laws reads as rewritten:
"(c)	All funds appropriated in Chapter 769 of the 1993 Session Laws for the construction of Randleman Dam shall revert to the General Fund on October 1, 1999, if construction has not begun before that date."

Requested by:   Representatives Mitchell, Baker, Carpenter
WATER QUALITY PERMIT PROGRAMS/RESERVE FUNDS
Section 13.23.   (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:   Representatives Mitchell, Baker, Carpenter
FEDERAL FUNDS FOR WATER QUALITY INDIRECT COSTS USED FOR WATER QUALITY
Section 13.24.  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 by the Water Quality Section of the Water Quality Division for the permit programs and activities administered by that section.

Requested by:   Representatives Mitchell, Baker, Carpenter
STATE MATCH FOR FEDERAL WATER SUPPLY AND WASTEWATER ASSISTANCE FUNDS
Section 13.25.  For the 1997-98 fiscal year, of the funds reserved under G.S. 143-15.3B to the Clean Water Management Trust Fund, the State Controller shall transfer the sum of thirteen million two hundred twenty-four thousand five hundred ninety-five dollars ($13,224,595) to the Department of Environment, Health, and Natural Resources to be allocated as follows:  
(1)	The sum of $4,001,775 shall be used for the twenty percent (20%) State match required to receive federal wastewater assistance funds for revolving construction loans and other assistance as set forth in Chapter 159G of the General Statutes.  The funds allocated under this section shall be deposited in the State Revolving Water Fund account of the Clean Water Pollution Control Revolving Fund.
(2)	The sum of $9,222,820 shall be used for the twenty percent (20%) State match required to receive federal water supply assistance funds for revolving construction loans and other assistance as set forth in Title I, section 130 of the federal Safe Drinking Water Act Amendments of 1996.  The funds allocated under this section are to be deposited in a State fund that is available from year to year for the purpose of providing revolving loans and grants to local government units for water supply assistance.

Requested by:   Representative Culp
ESTABLISH DRINKING WATER REVOLVING LOAN FUND
Section 13.26.  G.S. 159G-5 is amended by adding a new subsection to read:  
"( d)	The Drinking Water Treatment Revolving Loan Fund is established as a special account within the Clean Water Revolving Loan and Grant Fund.  This account shall be established and managed in accordance with the requirements of section 130 of Title I of the federal Safe Drinking Water Act Amendments of 1996 (Pub. L. 104-182; 110 Stat. 1662;  42 U.S.C. § 300j-12), to achieve the purposes and goals of the federal Safe Drinking Water Act Amendments of 1996.  The funds in the Drinking Water Treatment Revolving Loan Fund may be used only for the purposes of providing revolving construction loans and other assistance as set forth in section 130 of Title I of the federal Safe Drinking Water Act Amendments of 1996 and the regulations promulgated thereunder, including making grants to the extent permitted by these amendments or these regulations." 

Requested by:   Representative Baker
SOLID WASTE OPERATOR COURSE EXEMPT
Section 13.27.  G.S. 130A-309.25 is amended by adding a new subsection to read:
"( f)	This section does not apply to any operator of a solid waste management facility who has five years continuous experience as an operator of a solid waste management facility immediately preceding January 1, 1998, provided that the operator attends a course and completes the continuing education requirements approved by the Department."

Requested by:   Representatives Mitchell, Baker, Carpenter, H. Hunter
PARTNERSHIP FOR THE SOUNDS
Section 13.28.  (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:   Representatives Mitchell, Baker, Carpenter
COMMUNICABLE DISEASE CONTROL AID TO COUNTIES FLEXIBILITY
Section 13.29.  (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:   Representatives Mitchell, Baker, Carpenter
DWI TEST CHANGES
Section 13.30.  (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:   Representatives Mitchell, Baker, Carpenter
STATE TRAINING/ENVIRONMENTAL HEALTH SPECIALISTS
Section 13.31.  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:   Representatives  Mitchell, Baker, Carpenter
CHILDHOOD LEAD EXPOSURE CONTROL
Section 13.32. (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 House Bill 1007, Senate Bill 806, or identical legislation, by the 1997 General Assembly.

Requested by:   Representatives Mitchell, Baker, Carpenter
EXTEND HEART DISEASE AND STROKE PREVENTION TASK FORCE
Section 13.33.  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:   Representatives Mitchell, Baker, Carpenter
CANCER CONTROL FUNDS
Section 13.34.  Of the funds appropriated in this act to the Department of Environment, Health, and Natural Resources, the sum of three hundred fifty thousand dollars ($350,000) 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 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 five full-time 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:  Representatives Mitchell, Baker, Carpenter, H. Hunter
IMMUNIZATION PROGRAM FUNDING
Section 13.35.  (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:  Representatives Mitchell, Baker, Carpenter, H. Hunter
WIC PROGRAM FUNDS
Section 13.36.  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 five hundred thousand dollars ($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 two hundred fifty thousand dollars ($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 seventy-five thousand dollars ($75,000) of funds allocated under this subdivision for each fiscal year shall be used for rental of space.
(3)	Not more than three hundred thousand dollars ($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 sixty thousand dollars ($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 one hundred seventy thousand dollars ($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:   Representatives Mitchell, Baker, Carpenter, H. Hunter
ADOLESCENT PREGNANCY PREVENTION COALITION OF NC/REPORTING
Section 13.37.  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:   Representatives Mitchell, Baker, Carpenter
NORTH CAROLINA HEALTHY START FOUNDATION/REPORTING
Section 13.38.  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:   Representatives Mitchell, Baker, Carpenter, H. Hunter
PREVENT BLINDNESS, INC./REPORTING
Section 13.39.  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)	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:   Representatives Mitchell, Baker, Carpenter
FEDERAL ABSTINENCE EDUCATION FUNDS
Section 13.40.  If federal funds are received under the Maternal and Child Health Block Grant for abstinence education, pursuant to Section 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.

PART XIV.  DEPARTMENT OF COMMERCE

Requested by:   Representatives Mitchell, Baker, Carpenter, H. Hunter
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 six million six hundred eighty-nine thousand nine hundred sixty-four dollars ($6,689,964) for the 1997-98 fiscal year and the sum of six million six hundred eighty-nine thousand nine hundred sixty-four dollars ($6,689,964) 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 State 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.
(8)	$500,000 for the 1997-98 fiscal year and $1,000,000 for the 1998-99 fiscal year to the Department of Labor to expand the Apprenticeship Program.  It is intended that the appropriation of funds in this subdivision will result in the Department of Labor serving a benchmark performance level of 10,000 adult and youth apprentices by the year 2000.

Requested by:   Representatives Mitchell, Baker, Carpenter
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:   Representatives Mitchell, Baker, Carpenter
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:   Representatives Mitchell, Baker, Carpenter
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:   Representatives Mitchell, Baker, Carpenter
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:   Representatives Mitchell, Baker, Carpenter, H. Hunter
COUNCIL OF GOVERNMENT FUNDS
Section 14.5.  (a)	Of the funds appropriated in this act to the Department of Commerce, eight hundred sixty-four thousand two hundred seventy dollars ($864,270) for the 1997-98 fiscal year and eight hundred sixty-four thousand two hundred seventy dollars ($864,270) 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 forty-eight thousand fifteen dollars ($48,015) 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 forty-eight thousand fifteen dollars ($48,015) 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:   Representatives Mitchell, Baker, Carpenter
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:   Representatives Mitchell, Baker, Carpenter
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:  Representatives Mitchell, Baker, Carpenter, H. Hunter
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:   Representatives Mitchell, Baker, Carpenter, H. Hunter
INDUSTRIAL DEVELOPMENT FUND UTILITY ACCOUNT
Section 14.9.  (a)	 Of the funds appropriated in this act to the Department of Commerce for the 1997-98 fiscal year, the sum of five hundred thousand dollars ($500,000) shall be deposited to and used for the Utility Account established under G.S. 143B-437A(b1).
(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:   Representatives Mitchell, Baker, Carpenter
REGIONAL COMMISSION REPORTS
Section 14.10.  (a)	Each regional economic 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 subdivisions (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 subdivisions (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:   Representatives Mitchell, Baker, Carpenter
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:   Representatives Mitchell, Baker, Carpenter, H. Hunter
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:   Representatives Mitchell, Baker, Carpenter, H. Hunter
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 one hundred thousand dollars ($100,000) 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:   Representatives Mitchell, Baker, Carpenter
NORTH CAROLINA ALLIANCE FOR COMPETITIVE TECHNOLOGIES REPORT
Section 14.13A.  The North Carolina Alliance for Competitive Technologies, a Division of the Department of Commerce, 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; and
(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.

Requested by:   Representatives Mitchell, Baker, Carpenter
DIVISION OF EMPLOYMENT AND TRAINING AND COMMISSION ON WORKFORCE PREPAREDNESS CONSOLIDATED
Section 14.13B.  The Department of Commerce shall consolidate the functions, staff, and budget of the Commission on Workforce Preparedness into the Division of Employment and Training.  In consolidating these departmental entities, the Department shall eliminate budget expenditures and personnel positions, including management, that are duplicative.  To the maximum extent possible, the Department shall use the efficiencies realized from the consolidation of the entities and the elimination of duplicative positions and budget expenditures to increase funds available for job training for individuals eligible for services under State and federal programs administered by the Division of Employment and Training.  The Department shall complete the consolidation required under this section not later than October 1, 1997, and shall report on the consolidation to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division not later than November 1, 1997.

Requested by:   Representatives Mitchell, Baker, Carpenter, H. Hunter
FUNDS FOR ECONOMIC DEVELOPMENT
Section 14.15.  (a)	Of the funds appropriated in this act to the Department of Commerce, the sum of nine hundred seventy-five thousand dollars ($975,000) for the 1997-98 fiscal year shall be allocated as follows:
(1)	$350,000 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; and
(3)	$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:   Representatives Mitchell, Baker, Carpenter, H. Hunter
NORTH CAROLINA INSTITUTE FOR MINORITY ECONOMIC DEVELOPMENT REPORT
Section 14.15A.  The North Carolina Institute for Minority Economic Development, 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:   Representatives Mitchell, Baker, Carpenter, H. Hunter
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:   Representatives Mitchell, Baker, Carpenter
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:   Representatives Mitchell, Baker, Carpenter
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 three million dollars ($3,000,000) 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 Department of 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:   Representatives Mitchell, Baker, Carpenter
STATE GOVERNMENT COMPETITION INITIATIVE
Section 14.18A.  (a)	The General Statutes are amended by adding a new Chapter to read:
"Chapter 143C.
"North Carolina Government Competition Act of 1997.
"§ 143C-1.  Short title.
This Chapter shall be known and may be cited as the 'North Carolina Government Competition Act'.
"§ 143C-2.  Definitions.
As used in this Chapter, unless the context otherwise requires:
(1)	'Commission' means the North Carolina Government Competition Commission.
(2)	'State agency' means any State department, agency, or institution.
"§ 143C-3.  North Carolina Government Competition Commission created; duties.
(a)	There is hereby created the North Carolina Government Competition Commission.  The purpose of the Commission is to be the catalyst to cause the use of competition to improve the delivery of State government services, to make State government more effective and more efficient, and to reduce the costs of government to taxpayers.
(b)	The Commission shall:
(1)	Develop an institutional framework for a statewide competition initiative to encourage innovation and competition within State government.
(2)	Establish a system to encourage the use of feasibility studies and innovation to determine where competition could reduce government costs without adversely affecting essential services.
(3)	Monitor the activities, products, and services of State agencies to bring an element of competition and to ensure a spirit of innovation and entrepreneurship to compete with the private sector to increase the quality of services or reduce costs to taxpayers.
(4)	Identify any barriers to competition in State government and recommend actions to overcome those barriers.
(5)	Promote acceptance of competition by State government officials and State employees as a viable alternative to in-house operations for delivering State government services where savings to the State may be realized through competition, including the development and implementation of State employee adjustment and incentive programs.
(6)	Advocate, develop, and accelerate implementation of a competitive program for State agencies to ensure competition for the provision or production of government services from both public sector and private sector entities.
(7)	Establish approval, planning, and reporting processes required to carry out the functions of the Commission.
(8)	Determine the competition potential of a State program or activity, perform cost and benefit analyses, and conduct public and private competition analyses.
(9)	Devise evaluation criteria to be used in conducting performance reviews of any State program or activity which is subject to a competition recommendation.
(10)	Assess the short-term and long-term results of State government competition efforts.
(11)	Appoint, as needed, ad hoc committees relating to specific matters within the Commission's purview.
"§ 143C-4.  Membership; appointment; terms; vacancies; chair; quorum; compensation.
(a)	The Commission shall be composed of nine members to be appointed as follows:
(1)	Three members appointed by the Governor, one of whom shall be a State employee and two of whom shall be members of the  private sector, and one of these private sector members shall have large scale purchasing experience.
(2)	Three members appointed by the Speaker of the House of Representatives, two of whom shall be members of the private sector.
(3)	Three members appointed by the President Pro Tempore of the Senate, two of whom shall be members of the private sector.
Members of the Commission shall serve two-year terms.  In making the initial appointments to the Commission, the respective appointing authorities shall appoint at least one member for a one-year term so that subsequent terms stagger.
(b)	All initial appointments shall be effective July 1, 1997. The initial members' terms shall end on June 30 of the applicable year in which a term expires, with the subsequent term beginning on July 1 of that year.  No member may serve more than two consecutive terms. Vacancies shall be filled by the appointing authority for any unexpired portion of a term. Members shall receive subsistence, per diem, and travel allowances as provided by G.S. 138-5.
(c)	A majority of the members shall constitute a quorum.  The Commission shall annually elect its chair and vice-chair from among its members.
"§ 143C-5.  Cooperation of other State agencies.
All State agencies shall cooperate with the Commission and, upon request, assist the Commission in the performance of its duties and responsibilities.  The Commission shall not impose unreasonable burdens or costs in connection with requests of State agencies.
"§ 143C-6.  Staff support; application for and acceptance of gifts and grants; authority to enter into contract.
(a)	The Office of State Budget and Management shall provide staff support to the Commission to enable it to perform its duties as provided by this Chapter.
(b)	The Commission may apply for, accept, and expend gifts, grants, or donations from public or private sources to enable it to better carry out its objectives.  No entity which provides a gift, donation, or grant shall be eligible for a contract award which results from action of a Commission recommendation.
(c)	The Commission may enter into contracts for professional or consultant services.  Any consultant awarded a contract under this subsection shall be ineligible for a contract award resulting from the consultant's recommendations.
"§ 143C-7.  Public-private competition analysis; proposals for competition.
(a)	The Governor or the General Assembly may direct any State agency to perform a public-private competition analysis covering any service for which the Commission has received a qualifying unsolicited proposal for competition from a private entity which is consistent with the Commission's purposes and duties as provided by this Chapter.
(b)	The Commission may solicit competition proposals from private entities in order to make cost comparison decisions.  Any State agency may submit proposals to the Commission for cost comparison decisions.
"§ 143C-8.  Duties of the Office of State Budget and Management.
The Office of State Budget and Management shall determine the amount of an existing appropriation that would no longer be needed by a State agency as the result of savings realized through competition and shall report annually, by February 1, the nature and amount of the savings to the Governor and to the General Assembly.
"§ 143C-9.  Reports to the Governor and General Assembly.
The Commission shall report annually, by February 1, its findings and recommendations to the Governor and to the General Assembly and may make other interim reports it deems advisable.  By February 1, 1999, the Commission shall make a special report of its progress to the Governor and to the General Assembly."
(b) Of the funds appropriated in this act to the Department of Commerce, the sum of five thousand six hundred dollars ($5,600) for the 1997-98 fiscal year and the sum of five thousand six hundred dollars ($5,600) for the 1998-99 fiscal year are transferred to the Office of State Budget and Management to carry out the purposes of this section.
(c)	This section becomes effective July 1, 1997, and expires June 30, 2001.

Requested by:   Representatives Mitchell, Baker, Carpenter
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:   Representatives Mitchell, Baker, Carpenter
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:   Representatives Mitchell, Baker, Carpenter, H. Hunter
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, the sum of two million dollars ($2,000,000) for the 1997-98 fiscal year and the sum of one million dollars ($1,000,000) for the 1998-99 fiscal year shall be used to continue the special biotechnology program initiative for North Carolina's Public Historically Black Colleges and Universities and the University of North Carolina at Pembroke.  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 the University of North Carolina at Pembroke and North Carolina's Public Historically Black Colleges and 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:   Representatives Mitchell, Baker, Carpenter, H. Hunter
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 two hundred fifty thousand dollars ($5,250,000) for the 1997-98 fiscal year and the sum of two million five hundred fifty thousand dollars ($2,550,000) for the 1998-99 fiscal year shall be allocated as follows:
(1)	$1,400,000 in fiscal year 1997-98 and $1,350,000 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 and $150,000 in fiscal year 1998-99 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)	$3,600,000 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.  No grant recipient shall receive a total of more than $250,000 in grant awards in each fiscal year.
(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:   Representatives Mitchell, Baker, Carpenter, H. Hunter
COMMUNITY DEVELOPMENT INITIATIVE
Section 14.23.  Of the funds appropriated in this act to the Department of Commerce, 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:   Representatives Mitchell, Baker, Carpenter
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.

PART XIV-A.  DEPARTMENT OF LABOR

Requested by:   Representatives Mitchell, Baker, Carpenter, Owens
OSHA TECHNICAL ASSISTANCE
Section 14A.1. (a)	Article 22 of Chapter 95 of the General Statutes is amended by adding a new section to read:
"§ 95-255.1.  Technical assistance.
Employers notified pursuant to G.S. 95-255(a)	shall be offered technical assistance from the Division of Occupational Safety and Health to reduce injuries and illnesses in their workplaces."
(b)	G.S. 95-136.1(b) reads as rewritten:
"(b)	The Department shall develop and implement a special emphasis inspection program that targets for special emphasis inspection employers who:
(1)	Have a high rate of serious or willful violations of any standard, rule, order, or other requirement under this Article, or of regulations prescribed pursuant to the Federal Occupational Safety and Health Act of 1970, in a one-year period;
(2)	Have a high rate of work-related deaths, or a high rate of work-related serious injuries or illnesses, in a one-year period; or
(3)	Are engaged in a type of industry determined by the Department to be at high risk for serious or fatal work-related injuries or illnesses.
	To identify an employer for a special emphasis inspection, the Department shall use the most current data available from its own database and from other sources, including State departments, divisions, boards, commissions, and other State entities. The Department shall ensure that every employer targeted for a special emphasis inspection is inspected at least one time within the two-year period following targeting of the employer by the Department. The Department shall update its special emphasis inspection records at least annually."
(c)	The Department of Labor shall use up to the sum of four hundred fifty thousand dollars ($450,000) in additional federal funds received from the United States Department of Labor under the federal OSHA 23(g) grant to provide technical assistance to employers notified pursuant to G.S. 95-255(a).

Requested by:   Representatives Mitchell, Baker, Carpenter
ESTABLISH DEPARTMENTAL SAFETY OFFICER
Section 14A.2.  The Department of Labor shall use up to the sum of fifty thousand dollars ($50,000) in additional federal funds received from the United States Department of Labor under the federal OSHA 23(g) grant to establish a departmental Safety Officer position.

PART XV.  JUDICIAL DEPARTMENT

Requested by:   Representatives Justus, Kiser, Thompson
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:   Representatives Justus, Kiser, Thompson
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:   Representatives Justus, Kiser, Thompson
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:   Representatives Justus, Kiser, Thompson
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 two hundred five thousand three hundred eighty-two dollars ($4,205,382) for the 1997-98 fiscal year and the sum of four million three hundred five thousand three hundred eighty-two dollars ($4,305,382) 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:   Representatives Justus, Kiser, Thompson
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:   Representatives Justus, Kiser, Thompson
VICTIMS' RIGHTS AMENDMENT/FLEXIBILITY IN USE OF VICTIM WITNESS ASSISTANTS AND LEGAL ASSISTANTS
Section 15.8A. (a)	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.
(b)	In order to better manage current workloads, the district attorney may temporarily assign a victim witness assistant to perform duties normally performed by a legal assistant and may temporarily assign a legal assistant to perform duties normally performed by a victim witness assistant.

Requested by:   Representatives Justus, Kiser, Thompson
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:   Representatives Justus, Kiser, Thompson
DIVIDE DISTRICT COURT DISTRICT 30 AND PROSECUTORIAL DISTRICT 30 INTO DISTRICTS 30A AND 30B
Section 15.11A. (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	4	Craven
Pamlico
Carteret
4	6	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	12 	Wake
11	6	Harnett
Johnston
Lee
12	8	Cumberland
13	4	Bladen
Brunswick
Columbus
	14	5	Durham
15A	3	Alamance
15B	3	Orange
Chatham
16A	3	Scotland
Hoke
16B	5	Robeson
17A	2	Rockingham
17B	3	Stokes
Surry
18	10	Guilford
19A	3	Cabarrus
19B	5	Montgomery
Moore
Randolph
19C	3	Rowan
20	6	Stanly
Union
Anson
Richmond
Moore
21	7	Forsyth
22	7	Alexander
Davidson
Davie
Iredell
23	4	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
30A	2	Cherokee
Clay
Graham
Macon
Swain
30B	2	Haywood
Jackson."
(b)	The district court judgeships established for District 30A by subsection (a) of this section shall be filled by the district court judges from current District 30 who reside in Cherokee and Swain Counties.  The term of the judge residing in Swain County expires the first Monday in December of 1998.  That judge's successor shall be elected in the 1998 election.  The term of the judge residing in Cherokee County expires the first Monday in December of 2000.  That judge's successor shall be elected in the 2000 election.
(c)	The district court judgeships established for District 30B by subsection (a) of this section shall be filled by the district court judges from current District 30 who reside in Haywood County.  The term of one of the judges residing in Haywood County expires the first Monday in December of 1998.  That judge's successor shall be elected in the 1998 election.  The term of the other judge residing in Haywood County expires the first Monday in December of 2000.  That judge's successor shall be elected in the 2000 election.
(d)	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	8
3B	Carteret, Craven, Pamlico	8
4	Duplin, Jones, Onslow,	12
Sampson
5	New Hanover, Pender	11
6A	Halifax	4
6B	Bertie, Hertford,	4
	Northampton
	7	Edgecombe, Nash, Wilson	12
8	Greene, Lenoir, Wayne	10
9	Franklin, Granville,	9
Vance, Warren
9A	Person, Caswell	3
	10	Wake	23
11	Harnett, Johnston, Lee	11
12	Cumberland	14
13	Bladen, Brunswick, Columbus	8
14	Durham	10
15A	Alamance	7
15B	Orange, Chatham	6
16A	Scotland, Hoke	4
16B	Robeson	8
17A	Rockingham	5
17B	Stokes, Surry	5
18	Guilford	22
19A	Cabarrus	 	5
19B	Montgomery, Moore, Randolph	9
19C	Rowan	5
20	Anson, Richmond,	12
Stanly, Union
21	Forsyth	13
22	Alexander, Davidson, Davie,	13
Iredell
23	Alleghany, Ashe, Wilkes,	5
Yadkin
24	Avery, Madison, Mitchell,	4
Watauga, Yancey
25	Burke, Caldwell, Catawba	12
26	Mecklenburg	29
	27A	Gaston	10
27B	Cleveland,	6
Lincoln
28	Buncombe	9
29	Henderson, McDowell, Polk,	10
Rutherford, Transylvania
30A	Cherokee, Clay, Graham,	4
Macon,
Swain
30B	Haywood, Jackson	3."
(e)  The district attorney position established for District 30B by subsection (d) of this section shall be filled by the district attorney from current District 30B who resides in Haywood County.  The district attorney position established for District 30A by subsection (d) of this section shall be filled by appointment by the Governor. That district attorney's term expires on December 31, 2000.  A successor shall be elected in the 2000 election.
(f)  The four assistant district attorney positions established for District 30A by subsection (d) of this section shall be filled by four assistant district attorneys currently serving Cherokee, Clay, Graham, Macon, and Swain Counties in current District 30.  The three assistant district attorney positions established for District 30B by subsection (d) of this section shall be filled by three assistant district attorneys currently serving Haywood and Jackson Counties in current District 30.
(g)  Subsections (a), (b), and (c) of this act become effective October 1, 1997, or the date upon which those subsections are approved under section 5 of the Voting Rights Act of 1965, whichever is later.  The remainder of this section becomes effective October 1, 1997.

Requested by:   Representatives Justus, Kiser, Thompson
ADDITIONAL ASSISTANT DISTRICT ATTORNEYS/REESTABLISH ASSISTANT DISTRICT ATTORNEY POSITIONS IN DISTRICTS 19B AND 20
Section 15.12.  (a) G.S. 7A-60(a1), as amended by Section 15.11A of this act, 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,	10
Dare, Gates, Pasquotank,
Perquimans
2	Beaufort, Hyde, Martin,	6
Tyrrell, Washington
3A	Pitt	9
3B	Carteret, Craven, Pamlico	9
4	Duplin, Jones, Onslow,	14
Sampson
5	New Hanover, Pender	12
6A	Halifax	5
6B	Bertie, Hertford,	5
	Northampton
	7	Edgecombe, Nash, Wilson	14
8	Greene, Lenoir, Wayne	12
9	Franklin, Granville,	10
Vance, Warren
9A	Person, Caswell	4
	10	Wake	28
11	Harnett, Johnston, Lee	13
12	Cumberland	16
13	Bladen, Brunswick, Columbus	9
14	Durham	12
15A	Alamance                      	8
15B	Orange, Chatham	7
16A	Scotland, Hoke	5
16B	Robeson	9
17A	Rockingham	6
17B	Stokes, Surry	6
18	Guilford	26
19A	Cabarrus	 	6
19B	Montgomery, Moore, Randolph	11
19C	Rowan	6
20	Anson, Richmond,	14
Stanly, Union
21	Forsyth	14
22	Alexander, Davidson, Davie,	16
Iredell
23	Alleghany, Ashe, Wilkes,	6
Yadkin
24	Avery, Madison, Mitchell,	5
Watauga, Yancey
25	Burke, Caldwell, Catawba	13
26	Mecklenburg	31
	27A	Gaston	11
27B	Cleveland,	7
Lincoln
28	Buncombe	10
29	Henderson, McDowell, Polk,	11
Rutherford, Transylvania
30A	Cherokee, Clay, Graham,	5
Macon, Swain
30B	Haywood, Jackson	4."
(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 December 1, 1997.

Requested by:   Representatives Justus, Kiser, Thompson
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	6
Person	3	4
Caswell	2	5
Wake	12	21	Apex,
Wendell,
Fuquay-
Varina,
Wake Forest
Harnett	7	11	Dunn
Johnston	10	12	Benson,
Clayton,
Selma
Lee	4	6
Cumberland	10	18
Bladen	4	6
Brunswick	4	7
Columbus	6	8	Tabor City
Durham	8	12
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	7
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	7
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	21
Cleveland	5	8
Lincoln	4	7
Buncombe	6	16
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:   Representatives Justus, Kiser, Thompson
ADDITIONAL INVESTIGATORIAL ASSISTANTS
Section 15.16A.  G.S. 7A-69 reads as rewritten:
"§ 7A-69.  Investigatorial assistants.
The district attorney in prosecutorial districts 1, 3B, 4, 7, 8, 10, 11, 12, 14, 15A, 15B, 18, 20, 21, 24, 25, 26, 27A, 27B, 28, 29, and 30A is entitled to one investigatorial assistant to be appointed by the district attorney and to serve at his pleasure. The investigatorial assistant for prosecutorial district 30A shall also serve district 30B, and the district attorneys for those districts shall cooperate to ensure that the investigatorial assistant performs a substantially equivalent amount of work for each district.
It shall be the duty of the investigatorial assistant to investigate cases preparatory to trial and to perform such other duties as may be assigned by the district attorney. The investigatorial assistant is entitled to reimbursement for his subsistence and travel expenses to the same extent as State employees generally."

Requested by:   Representatives Justus, Kiser, Thompson
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:   Representatives Justus, Kiser, Thompson
STUDY COMMISSION ON THE ALLOCATION OF JUDICIAL RESOURCES
Section 15.18.  (a) The Study Commission on the Allocation of Judicial Resources is created.  The Commission shall consist of 19 voting members as follows:
(1)	Four members of the House of Representatives to be appointed by the Speaker of the House of Representatives;
(2)	Four members of the Senate to be appointed by the President Pro Tempore of the Senate;
(3)	Two superior court judges, one to be appointed by the Speaker of the House and one to be appointed by the President Pro Tempore of the Senate;
(4)	Two district court judges, one to be appointed by the Speaker of the House and one to be appointed by the President Pro Tempore of the Senate;
(5)	Two district attorneys, one to be appointed by the Speaker of the House and one to be appointed by the President Pro Tempore of the Senate;
(6)	Two clerks of superior court, one to be appointed by the Speaker of the House and one to be appointed by the President Pro Tempore of the Senate;
(7)	Two magistrates, one to be appointed by the Speaker of the House and one to be appointed by the President Pro Tempore of the Senate; and
(8)	The Director of the Administrative Office of the Courts, or the Director's designee.
The Speaker of the House of Representatives and the President Pro Tempore of the Senate shall each designate a cochair from the General Assembly membership serving on the Commission.  The Commission shall meet upon the call of the cochairs.  A majority of the Commission shall constitute a quorum for the transaction of business.
(b)	The Commission shall study the allocation of judicial resources, including superior court judges, district court judges, assistant district attorneys, deputy clerks of court, assistant clerks of court, magistrates, and support staff.  The study shall include a review of the existing workload and staffing formulas for judicial personnel.
(c)	The  Commission may contract for consultant services as provided by G.S. 120-32.02.  Upon approval of the Legislative Services Commission, the Legislative Services Officer shall assign professional and clerical staff to assist in the work of the Commission.  Clerical staff shall be furnished to the Commission through the offices of the House of Representatives and Senate Supervisors of Clerks.  The Commission may meet in the Legislative Building or the Legislative Office Building upon the approval of the Legislative Services Commission.  The Commission, while in the discharge of official duties, may exercise all the powers provided under the provisions of G.S. 120-19 through G.S. 120-19.4, including the power to request all officers, agents, agencies, and departments of the State to provide any information, data, or documents within their possession, ascertainable from their records, or otherwise available to them, and the power to subpoena witnesses.
Members of the Commission shall receive per diem, subsistence, and travel allowances as follows:
(1)	Commission members who are members of the General Assembly at the rate established in G.S. 120-3.1;
(2)	Commission members who are officials or employees of the State or of local government agencies at the rate established in G.S. 138-6; and
(3)	All other Commission members at the rate established in G.S. 138-5.
(d)	The Commission shall report the results of its study and its recommendations to the 1999 General Assembly and may make an interim report to the 1998 Regular Session of the 1997 General Assembly.  The Commission shall terminate upon filing its final report.
(e)  There is allocated from the funds appropriated to the Legislative Services Commission's studies reserve to the Study Commission on the Allocation of Judicial Resources Study Commission the sum of fifteen thousand dollars ($15,000) for the 1997-98 fiscal year and the sum of fifteen thousand dollars ($15,000) for the 1998-99 fiscal year to conduct the study directed by this section.

Requested by:   Representatives Justus, Kiser, Thompson
GUARDIAN AD LITEM ATTORNEY BILLINGS
Section 15.19.  Attorneys providing legal services for the Guardian Ad Litem program shall bill the Judicial Department within 30 days after the end of each quarter of the fiscal year  in order to be reimbursed for those services.

Requested by:   Representatives Justus, Kiser, Thompson
PROJECT CHALLENGE REPORT
Section 15.20.  (a)	Of the funds appropriated in this act to the Administrative Office of the Courts for the 1997-98 fiscal year, the sum of one hundred thousand dollars ($100,000) shall be used to support the operation of Project Challenge North Carolina, Inc., a nonprofit corporation that provides alternative dispositions and services to juveniles who have been adjudicated delinquent or undisciplined in District Court District 24, and for expansion of the program.  The funds shall be used to:
(1)	Provide community resources and dispositional alternatives for juveniles in the form of community services, including services to the elderly and economically disadvantaged;
(2)	Promote the involvement of juveniles in community programs that instill in juveniles pride in their communities and develop self-respect and the skills needed for them to be productive, responsible members of their communities;
(3)	Coordinate with the local schools and State and local law enforcement to educate juveniles regarding the justice system and to promote respect for authority and an appreciation of societal laws and mores; and
(4)	Collaborate with community agencies and organizations to provide guidance to and positive role models for juveniles.
(b)	Project Challenge North Carolina, Inc. shall report by March 1, 1998, to the Joint Legislative Commission on Governmental Operations, the Chairs of the House and Senate Appropriations Committees, and the Chairs of the House and Senate Appropriations Subcommittees on Justice and Public Safety on the expenditure of State appropriations and on the operations and the effectiveness of the program, including information on the number of juveniles served.  Thereafter, Project Challenge North Carolina, Inc. shall report quarterly to the Chairs of the House and Senate Appropriations Subcommittees on Justice and Public Safety on the operations and effectiveness of the program. 

Requested by:   Representatives Alexander, Justus, Kiser, Thompson
EDUCATIONAL PROGRAM FOR PARENTS WHO ARE PARTIES TO A CUSTODY OR VISITATION ACTION
Section 15.21.   (a)	The Administrative Office of the Courts shall develop a program to educate and sensitize separated or divorcing couples with children about the needs of their children during and after the separation and divorce process. Program development shall include the following:
(1)	An educational course that parties to a custody or visitation action may attend voluntarily or if ordered by the court. The course should be designed to inform attendees of the impact of their separation, custody, or visitation action on:
a.	The children,
b.	The parents' relationship with one another,
c.	The family's relationship, and
d.	The couple's financial responsibilities for the children;
	The course should provide information to attendees on resources available in the community to help them address these issues;
(2)	An administrative plan for the implementation of the program in at least four judicial districts selected by the Administrative Office of the Courts; the administrative plan shall include:
a.	Provisions to ensure the program will be financially self-sustaining in each district,
b.	Methods for evaluating the courses to ensure effectiveness, and for certifying attendance,
c.	How the program will be implemented at the local level, and
d.	Other administrative matters identified by the Administrative Office of the Courts as necessary for effective and efficient program implementation;
(3)	Identification of course providers with whom the Administrative Office of the Courts would contract to make courses available at reasonable times and to ensure that courses will be available with sufficient regularity to meet the needs of the judicial district in which the program is offered; and
(4)	Other matters considered by the Administrative Office of the Courts to be important program components.
The Administrative Office of the Courts shall ensure that the program is operational in judicial districts to be selected by the Administrative Office of the Courts no later than January 1, 1998.  The Administrative Office of the Courts shall consider implementing the program in judicial districts 4, 12, 19B, and 26.  The program shall expire on July 1, 1999, unless the program is implemented statewide.
(b)	The Administrative Office of the Courts shall ensure involvement and input into the development of the program by persons who have experience in assisting families through and after the divorcing process.
(c)	The court shall order participation in this educational course if it finds that significant parental conflict has adversely affected the children and that the children's best interests would be served by the party or parties' participation in the course.
(d)	The Administrative Office of the Courts shall report to the General Assembly not later than March 1, 1999, on the program developed pursuant to this section.  The report shall include the following:
(1)	Progress made on the implementation of the targeted pilot districts and recommendations for the expansion of the program to other districts or statewide;
(2)	The amount of State funds that will be necessary  for the Administrative Office of the Courts to supervise and oversee program operation;
(3)	Estimates of reasonable fees that attendees would be charged if the program were implemented statewide and a method for waiving such fees in cases of severe financial hardship;
(4)	Legislation that may be needed to facilitate program implementation and operation; and
(5)	Other recommendations the Administrative Office of the Courts considers appropriate.

Requested by:   Representatives Morris, Hurley, Justus, Kiser, Thompson
CUMBERLAND JUVENILE ASSESSMENT CENTER
Section 15.22. (a)	Of the funds appropriated in this act to the Administrative Office of the Courts for the 1997-98 fiscal year, the sum of sixty thousand dollars ($60,000) shall be used to fund the Juvenile Assessment Project authorized by this section. These funds shall be matched by local funds on the basis of one dollar ($1.00) of local funds for every three dollars ($3.00) of State funds.
(b) The Administrative Office of the Courts, in collaboration with the Chief Court Counselor of District Court District 12, the Cumberland County Department of Social Services, and the appropriate local school administrative units, shall develop and implement a Juvenile Assessment Center Project in District Court District 12 to operate from the effective date of this act to June 30, 1998.  The purpose of the Project is to facilitate efficient prevention and intervention service delivery to juveniles who are (i) alleged to be delinquent or undisciplined and have been taken into custody or (ii) at risk of becoming delinquent or undisciplined because they have behavioral problems and have committed delinquent acts even though they have not been taken into custody.  The Project shall assist these juveniles by providing a centralized point of intake and assessment for the juveniles, by addressing the educational, emotional, and physical needs of the juveniles, and by providing juveniles with an atmosphere for learning personal responsibility, self-respect, and respect for others.  The Administrative Office of the Courts shall consider the recommendations of the Juvenile Assessment Advisory Board in developing and implementing the Project.
(c) The Project shall be modeled after the Juvenile Assessment Center in Hillsborough County, Florida, and shall:
(1)	Identify those juveniles who are alleged to be delinquent or undisciplined or are at risk of becoming delinquent or undisciplined;
(2)	Evaluate the educational, emotional, and physical needs of the juveniles identified and determine whether the juveniles have problems related to substance abuse, depression, or other emotional conditions;
(3)	Develop in-depth and comprehensive assessment plans for the juveniles identified that recommend appropriate treatment, counseling, and disposition of the juveniles; and
(4)	Provide services to juveniles identified and their families through collaboration with public and private resources, including local law enforcement, parents' organizations, the Fayetteville Chamber of Commerce, and county and community programs and organizations that provide substance abuse treatment and child and family counseling.
(d) There is established the Juvenile Assessment Advisory Board to make recommendations to the Administrative Office of the Courts regarding the development and operations of the Project.  The Board shall consist of 13 members, including:
(1)	The director of the Department of Social Services of Cumberland County, or the director's designee.
(2)	A representative from the local mental health area authority of Cumberland County.
(3)	A member of the Cumberland County Board of Education.
(4)	The sheriff of Cumberland County, or the sheriff's designee.
(5)	The chief of police of the Fayetteville Police Department, or the designee of the chief of police.
(6)	A judge of District Court District 12.
(7)	A juvenile court counselor from District Court District 12.
(8)	The director of the Guardian Ad Litem program in Cumberland County, or the director's designee.
(9)	The director of the Health Department of Cumberland County, or the director's designee.
(10)	Two public members appointed by the Fayetteville City Council.
(11)	Two public members appointed by the Board of County Commissioners of Cumberland County.
The members of the Board shall, within 30 days after the initial appointment is made, meet and elect one member as chair.  The Board shall meet at least once a month at the call of the chair, and a quorum of the Board shall consist of a majority of its members. The Board of County Commissioners of Cumberland County shall provide necessary clerical and professional assistance to the Board.
Initial appointments shall be made by August 1, 1997, and all terms shall expire June 30, 1998. 
(e) The Administrative Office of the Courts, in consultation with the Department of Human Resources, shall evaluate the Project and report to the Chairs of the House and Senate Appropriations Committees, the Chairs of the House and Senate Appropriations Subcommittees on Justice and Public Safety and Human Resources, and the Fiscal Research Division of the General Assembly on December 1, 1997, and May 1, 1998, on the progress of the development and implementation of the Project.  In the May 1998 report, the Administrative Office of the Courts, in consultation with the Department of Human Resources, shall evaluate the effectiveness of the Project, including the number of juveniles served or expected to be served, and shall recommend whether the Project should be continued.  If the May 1998 report recommends that the Project be continued, it shall also provide a cost analysis outlining the long-term staffing and operating needs of the Project.

Requested by:   Representatives Sexton, Eddins, Justus, Kiser, Thompson
BAD CHECK PILOT PROGRAM FUNDS/REPORT
Section 15.23. Of the funds appropriated to the Judicial Department for the 1997-98 fiscal year, the sum of one hundred thirty-five thousand dollars ($135,000) shall be used to establish a bad check collection pilot program in Wake and Rockingham Counties.  The Administrative Office of the Courts shall add two administrative positions to the district attorney's office in each county to assist in implementing the pilot program.
The Administrative Office of the Courts shall report by May 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 implementation of the programs, including their effectiveness in assisting the recipients of worthless checks in obtaining restitution and the amount of time saved in prosecuting worthless check cases.

Requested by:   Representatives Justus, Kiser, Thompson
DISTRICT COURT CIVIL CASE MANAGEMENT
Section 15.24.  The Administrative Office of the Courts shall report by May 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 civil case management pilot programs established in District Court Districts 13, 18, 30A, and 30B. The report shall assess the success of these programs in reducing the backlog of civil court cases and in resolving new cases more quickly.

Requested by:   Representatives Redwine, Hackney, Bowie, Justus, Kiser,Thompson
ESTABLISH TEEN COURTS IN ORANGE, GUILFORD, CABARRUS, FORSYTH, AND BRUNSWICK COUNTIES
Section 15.25. (a) Of the funds appropriated in this act to the Judicial Department, the Administrative Office of the Courts shall use:
(1)	The sum of fifteen thousand dollars ($15,000) for the 1997-98 fiscal year and the sum of fifteen thousand dollars ($15,000) for the 1998-99 fiscal year to establish a "teen court" program in Orange County.
(2)	The sum of twenty thousand dollars ($20,000) for the 1997-98 fiscal year and the sum of twenty thousand dollars ($20,000) for the 1998-99 fiscal year to establish a "teen court" program in Guilford County.
(3)	The sum of twenty thousand dollars ($20,000) for the 1997-98 fiscal year and the sum of twenty thousand dollars ($20,000) for the 1998-99 fiscal year to establish a "teen court" program in Brunswick County.
(4)	The sum of fourteen thousand three hundred thirty dollars ($14,330) for the 1997-98 fiscal year and the sum of fourteen thousand three hundred thirty dollars ($14,330) for the 1998-99 fiscal year to establish a "teen court" program in Forsyth County.
(5)	The sum of fourteen thousand three hundred thirty dollars ($14,330) for the 1997-98 fiscal year and the sum of fourteen thousand three hundred thirty dollars ($14,330) for the 1998-99 fiscal year to establish a "teen court" program in Cabarrus County.
The Administrative Office of the Courts shall establish the programs pursuant to the guidelines and objectives set forth in Section 40 of Chapter 24 of the Session Laws of the 1994 Extra Session.
(b)	Each of the programs established pursuant to this section shall report to the Administrative Office of the Courts on the expenditures and operations of the program by March 1, 1998, and thereafter on a quarterly basis.  The Administrative Office of the Courts shall evaluate the effectiveness of the programs and report its findings and recommendations to the Joint Legislative Commission on Governmental Operations and to the Chairs of the House of Representatives and Senate Appropriations Subcommittees on Justice and Public Safety by April 15, 1998.  

PART XVI.  DEPARTMENT OF CORRECTION

Requested by:   Representatives Justus, Kiser, Thompson
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:   Representatives Justus, Kiser, Thompson
INMATE HOUSING FUNDS
Section 16.1.  If delays in the construction of prison units funded in the 1997-99 biennium continuation budget reserves for operating prisons result in the availability of non-recurring funds for the 1997-98 fiscal year, those funds shall be used to contract for prison beds to house inmates in out-of-state prisons or in local jails.  To the extent that funds from the reserves for operating prisons are not available, 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 one million dollars ($1,000,000) 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:   Representatives Justus, Kiser, Thompson
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:   Representatives Justus, Kiser, Thompson
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 transfer or the lease for 20 years or more 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.  A prison unit under lease to a county pursuant to the provisions of this section is exempt for the period of the lease from any of the minimum standards adopted by the Secretary of Human Resources pursuant to G.S. 153A-221 that would subject the unit to greater standards than those required of a unit of the State prison system.
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:   Representatives Justus, Kiser, Thompson
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 preapproved 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, the State match expended to receive the funds, and the period to be covered by each grant.  If the department intends to continue the program beyond the end of the grant period, the department shall report on the proposed method for continuing the funding of the program at the end of the grant period.  Each department shall also report on any information it may have indicating that the State will be requested to provide future funding for a program presently supported by a local grant.

Requested by:   Representatives Justus, Kiser, Thompson
HARRIET'S HOUSE FUNDS
Section 16.6.  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.

Requested by:   Representatives Justus, Kiser, Thompson
REPORT ON SUMMIT HOUSE
Section 16.7.  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.

Requested by:   Representatives Justus, Kiser, Thompson
MODIFICATION OF FUNDING FORMULA FOR THE NORTH CAROLINA STATE-COUNTY CRIMINAL JUSTICE PARTNERSHIP ACT
Section 16.8. (a) 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).
(b)	G.S. 143B-273.4(a) reads as rewritten:
"(a)	An eligible offender is an adult offender who either is in confinement awaiting trial, or was convicted of a misdemeanor or a felony offense and received a nonincarcerative sentence of an intermediate punishment or is serving a term of parole or post-release supervision after serving an active sentence of imprisonment."

Requested by:   Representatives Justus, Kiser, Thompson
REPORT ON DART/DWI PROGRAM AT CHERRY HOSPITAL
Section 16.8A.  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:   Representatives Justus, Kiser, Thompson
REDUCE MEMBERSHIP ON POST-RELEASE SUPERVISION AND PAROLE COMMISSION
Section 16.9. (a)	G.S. 143B-267 reads as rewritten:
"§ 143B-267.  Post-Release Supervision and Parole Commission – members; selection; removal; chairman; compensation; quorum; services.
The Post-Release Supervision and Parole Commission shall consist of three full-time members.  The three full-time members shall be appointed by the Governor from persons whose recognized ability, training, experience, and character qualify them for service on the Commission.  In order to stagger the terms of the three members serving on the Commission on July 1, 1997, the Governor shall designate one of those members to serve a term expiring on June 30, 1999, one to serve a term expiring on June 30, 2000, and one to serve a term expiring on June 30, 2001.  Thereafter, the terms of office of persons appointed by the Governor as members of the Commission shall be for four years or until their successors are appointed and qualify.  Any appointment to fill a vacancy on the Commission created by the resignation, removal, death or disability of a full-time member shall be for the balance of the unexpired term only.
The Governor shall have the authority to remove any member of the Commission from office for misfeasance, malfeasance or nonfeasance, pursuant to the provisions of G.S. 143B-13.  The Governor shall designate a full-time member of the Commission to serve as chairman of the Commission at the pleasure of the Governor.
The full-time members of the Commission shall receive the salary fixed by the General Assembly in the Current Operations Appropriations Act and shall receive necessary travel and subsistence expenses in accordance with the provisions of G.S. 138-6.
All clerical and other services required by the Commission shall be supplied by the Secretary of Correction."
(b)	This section becomes effective June 30, 1997.

Requested by:   Representatives Justus, Kiser, Thompson
IMPACT DEFENDANTS IN DOC FACILITIES
Section 16.9A.  G.S. 15A-1343(b1)(2a) reads as rewritten:
"(2a)	Submit to a period of confinement in a facility operated by the Department of Correction for a minimum of 90 days or a maximum of 120 days under special probation, reference G.S. 15A-1351(a) or G.S. 15A-1344(e), and abide by all rules and regulations as provided in conjunction with the Intensive Motivational Program of Alternative Correctional Treatment (IMPACT), which provides an atmosphere for learning personal confidence, personal responsibility, self-respect, and respect for attitudes and value systems.  This condition may also include a period of supervision through the Post-Boot Camp Probation Program."

Requested by:   Representatives Justus, Kiser, Thompson
REPORT ON WOMEN AT RISK
Section 16.9B.  Women at Risk shall report by December 1 and May 1 of each year to the Joint Legislative Commission on Governmental Operations on the expenditure of State funds and on the effectiveness of the program, including information on the number of clients served, the number of clients who have had their probation revoked, and the number of clients who have successfully completed the program.

Requested by:   Representatives Justus, Kiser, Thompson
PERFORMANCE AUDIT OF DIVISION OF ADULT PROBATION AND PAROLE
Section 16.9C.  The Department of Correction, in consultation with the State Auditor, shall select an independent firm recognized in performance auditing to conduct an independent performance audit of the Division of Adult Probation and Parole in the Department of Correction.  The Department shall consult with the State Auditor both in issuing the request for proposals and in making the final selection of the auditing firm.
The Department of Correction shall provide for the reporting of the audit results to the Chairs of the Senate and House Appropriations Committees, the Chairs of the Senate and House Appropriations Subcommittees on Justice and Public Safety, the Chairs of the Joint Legislative Corrections Oversight Committee, and the Joint Legislative Commission on Governmental Operations by May 1, 1998.
The performance audit of the Division of Adult Probation and Parole shall review the efficiency and effectiveness of major management policies, practices, and functions, including the following areas:
(1)	Organization and structure;
(2)	Effect of organizational relationships with other community correction programs and the Post-Release Supervision and Parole Commission;
(3)	Current staffing patterns and workload;
(4)	Personnel and patronage practices; and
(5)	General effectiveness of probation and parole.

Requested by:   Representatives Justus, Kiser, Thompson
CORRECTIONAL OFFICER WORKING HOURS
Section 16.9D.  G.S. 95-28 reads as rewritten:
"§ 95-28.  Working hours of employees in State institutions.
It shall be unlawful for any person or official or foreman or other person in authority in Dorothea Dix Hospital, Broughton Hospital, or Cherry Hospital to require any employee to work for a greater number of hours than 12 during any 24-hour period, or not more than 72 hours during any one week, or permit the same, during which period the said employee shall be permitted to take one continuous hour off duty; except in case of an emergency as determined by the superintendent, in which case the limitation of 12 hours in any consecutive 24 hours shall not apply.  Nothing in this section shall be construed to affect the hours of doctors and superintendents in these hospitals.  Any violation of this section shall be a Class 1 misdemeanor."

Requested by:   Representatives  Sexton, Justus, Kiser, Thompson
TRANSFER ROCKINGHAM CORRECTIONAL CENTER
Section 16.9E. (a) The below described land and improvements with property installed in the buildings and other movable equipment and supplies are transferred by the State of North Carolina to Rockingham County:
All that property lying south of N.C. Highway 65 upon which is situated the former Rockingham County Correctional Center building and grounds containing approximately 24 acres.
(b)	The transfer made in subsection (a) of this section shall be evidenced by a deed executed under G.S. 146-75 and registered in accordance with G.S. 146-77.

Requested by:   Representatives Justus, Kiser, Thompson
FUNDING OF PRISON ROAD SQUADS
Section 16.9F. The Department of Transportation shall reimburse the Department of Correction for the cost of inmate road squads on a cost basis, as provided for in G.S. 148-26.5.

Requested by:   Representatives Justus, Kiser, Thompson
PRIVATE PRISON EXPANSION
Section 16.9G.  The Department of Correction, in consultation with the United States Corrections Corporation, shall determine the feasibility of expanding each of the two 500-bed private confinement facilities presently under construction to 1,000-bed facilities and the cost savings of that expansion over the construction of new facilities.  The Department shall report its findings to the Joint Legislative Commission on Governmental Operations and the Joint Legislative Corrections Oversight Committee by December 1, 1997.  If the report determines that there would be cost savings associated with expansion to 1,000-bed facilities, the Department of Correction may use funds available to the Department for the 1997-98 fiscal year and the 1998-99 fiscal year to accomplish that expansion.

Requested by:   Representatives Justus, Kiser, Thompson
TITLE VII FUNDS
Section 16.9H. The Department of Correction may use funds available to the Department during the 1997-98 fiscal year for payment to claimants as part of the settlement of the Title VII lawsuit over the recruitment, hiring, and promotion of females in the Department.

Requested by:   Representatives Justus, Kiser, Thompson
MODULAR PRISON UNITS
Section 16.9I.  The five modular housing units scheduled to be constructed at the Warren, Craven, and Hyde prison units shall instead be constructed at the Haywood, Henderson, Yadkin, Davie, and Catawba prison units.

Requested by:   Representatives Justus, Kiser, Thompson
REPORT ON BUNKING INMATES IN SHIFTS
Section 16.9J.  The Department of Correction shall report to the Joint Legislative Corrections Oversight Committee by November 1, 1997, on the Department's progress in implementing the pilot program to bunk inmates in shifts at the Lincoln Correctional Center.

Requested by:   Representatives Justus, Kiser, Thompson
INMATE COSTS
Section 16.9K.  The Department of Correction may use funds appropriated to the Department for the 1997-99 biennium to pay the cost of providing food and health care to inmates housed in the Division of Prisons if:
(1)	The prison population exceeds the December 1996 population projections of the North Carolina Sentencing and Policy Advisory Commission; and
(2)	The cost of providing food and health care to inmates is anticipated to exceed the continuation budget amounts provided for that purpose in this act.
The Department of Correction shall report on any expenditures that exceed the food and health care continuation budget to the Joint Legislative Commission on Governmental Operations, the Joint Legislative Corrections Oversight Committee, and the Chairs of the House and Senate Appropriations Committees.

Requested by:   Representatives Justus, Kiser, Thompson
INCREASE REIMBURSEMENT TO COUNTIES FOR STATE INMATES HOUSED IN LOCAL CONFINEMENT FACILITIES
Section 16.9L.  Of the funds appropriated to the Department of Correction in this act, the sum of three million ten thousand eighty-nine dollars ($3,010,089) for the 1997-98 fiscal year shall be used to raise the per diem reimbursement to counties from fourteen dollars and fifty cents ($14.50) per day to twenty dollars ($20.00) per day for State inmates serving sentences of 30 days or more in local confinement facilities.  This reimbursement will resume at fourteen dollars and fifty cents ($14.50) per day during the 1998-99 fiscal year.

Requested by:   Representatives Justus, Kiser, Thompson
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/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 FOR CERTAIN OFFENSES COMMITTED WHILE IN PRISON/RECLASSIFY CERTAIN OFFENSES RELATED TO ESCAPE FROM CORRECTIONAL FACILITIES/INCREASE THE PENALTIES FOR CERTAIN ASSAULTS ON A PROBATION OFFICER, PAROLE OFFICER, OR STATE OR COUNTY CORRECTIONS EMPLOYEE/LOWER MARIJUANA TRAFFICKING AMOUNTS/LIMIT, MODIFY AND ENHANCE ATTEMPTING TO ELUDE ARREST STATUTES
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 one hundred thirty-five thousand dollars ($135,000) 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. 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 resulted in 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."
(s)  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."
(t)  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."
(u)  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 1 misdemeanor for the first offense and of a Class I felony for second or subsequent offenses."
(v)  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."
(w)  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."
(x)  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."
(y)  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."
(z)  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."
(aa)  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."
(bb)  G.S. 14-34.5 reads as rewritten:
"§ 14-34.5.  Assault with a firearm on a law enforcement, probation, or parole officer or on a person employed at a State or local detention facility.
(a)	Any person who commits an assault with a firearm upon a law enforcement officer, probation officer, or parole officer while the officer is in the performance of his or her duties is guilty of a Class E felony.
(b)	Anyone who commits an assault with a firearm upon a person who is employed at a detention facility operated under the jurisdiction of the State or a local government while the employee is in the performance of the employee's duties is guilty of a Class E felony."
(cc)  G.S. 14-34.7 reads as rewritten:
"§ 14-34.7.  Assault on a law enforcement, probation, or parole officer or on a person employed at a State or local detention facility.
(a)	Unless covered under some other provision of law providing greater punishment, a person is guilty of a Class F felony if the person assaults a law enforcement officer, probation officer, or parole officer while the officer is discharging or attempting to discharge his or her official duties and inflicts serious bodily injury on the officer.
(b)	Anyone who assaults a person who is employed at a detention facility operated under the jurisdiction of the State or a local government while the employee is in the performance of the employee's duties and inflicts serious bodily injury on the employee is guilty of a Class F felony, unless the person's conduct is covered under some other provision of law providing greater punishment." 
(dd)  G.S. 90-95(h) reads as rewritten:
	"(h)  Notwithstanding any other provision of law, the following provisions apply except as otherwise provided in this Article.
(1)	Any person who sells, manufactures, delivers, transports, or possesses in excess of 10 pounds (avoirdupois) of marijuana shall be guilty of a felony which felony shall be known as 'trafficking in marijuana' and if the quantity of such substance involved:
a.	Is in excess of 10 pounds, but less than 100 pounds, such person shall be punished as a Class H felon and shall be sentenced to a minimum term of 25 months and a maximum term of 30 months in the State's prison and shall be fined not less than five thousand dollars ($5,000);
b.	Is 100 pounds or more, but less than 2,000 pounds, such person shall be punished as a Class G felon and shall be sentenced to a minimum term of 35 months and a maximum term of 42 months in the State's prison and shall be fined not less than twenty-five thousand dollars ($25,000);
c.	Is 2,000 pounds or more, but less than 10,000 pounds, such person shall be punished as a Class F felon and shall be sentenced to a minimum term of 70 months and a maximum term of 84 months in the State's prison and shall be fined not less than fifty thousand dollars ($50,000);
d.	Is 10,000 pounds or more, such person shall be punished as a Class D felon and shall be sentenced to a minimum term of 175 months and a maximum term of 219 months in the State's prison and shall be fined not less than two hundred thousand dollars ($200,000).
(2)	Any person who sells, manufactures, delivers, transports, or possesses 1,000 tablets, capsules or other dosage units, or the equivalent quantity, or more of methaqualone, or any mixture containing such substance, shall be guilty of a felony which felony shall be known as 'trafficking in methaqualone' and if the quantity of such substance or mixture involved:
a.	Is 1,000 or more dosage units, or equivalent quantity, but less than 5,000 dosage units, or equivalent quantity, such person shall be punished as a Class G felon and shall be sentenced to a minimum term of 35 months and a maximum term of 42 months in the State's prison and shall be fined not less than twenty-five thousand dollars ($25,000);
b.	Is 5,000 or more dosage units, or equivalent quantity, but less than 10,000 dosage units, or equivalent quantity, such person shall be punished as a Class F felon and shall be sentenced to a minimum term of 70 months and a maximum term of 84 months in the State's prison and shall be fined not less than fifty thousand dollars ($50,000);
c.	Is 10,000 or more dosage units, or equivalent quantity, such person shall be punished as a Class D felon and shall be sentenced to a minimum term of 175 months and a maximum term of 219 months in the State's prison and shall be fined not less than two hundred thousand dollars ($200,000).
(3)	Any person who sells, manufactures, delivers, transports, or possesses 28 grams or more of cocaine and any salt, isomer, salts of isomers, compound, derivative, or preparation thereof, or any coca leaves and any salt, isomer, salts of isomers, compound, derivative, or preparation of coca leaves, and any salt, isomer, salts of isomers, compound, derivative or preparation thereof which is chemically equivalent or identical with any of these substances (except decocainized coca leaves or any extraction of coca leaves which does not contain cocaine) or any mixture containing such substances, shall be guilty of a felony, which felony shall be known as 'trafficking in cocaine' and if the quantity of such substance or mixture involved:
a.	Is 28 grams or more, but less than 200 grams, such person shall be punished as a Class G felon and shall be sentenced to a minimum term of 35 months and a maximum term of 42 months in the State's prison and shall be fined not less than fifty thousand dollars ($50,000);
b.	Is 200 grams or more, but less than 400 grams, such person shall be punished as a Class F felon and shall be sentenced to a minimum term of 70 months and a maximum term of 84 months in the State's prison and shall be fined not less than one hundred thousand dollars ($100,000);
c.	Is 400 grams or more, such person shall be punished as a Class D felon and shall be sentenced to a minimum term of 175 months and a maximum term of 219 months in the State's prison and shall be fined at least two hundred fifty thousand dollars ($250,000).
(3a)	Any person who sells, manufactures, delivers, transports, or possesses 1,000 tablets, capsules or other dosage units, or the equivalent quantity, or more of amphetamine, its salts, optical isomers, and salts of its optical isomers or any mixture containing such substance, shall be guilty of a felony which felony shall be known as 'trafficking in amphetamine' and if the quantity of such substance or mixture involved:
a.	Is 1,000 or more dosage units, or equivalent quantity, but less than 5,000 dosage units, or equivalent quantity, such person shall be punished as a Class G felon and shall be sentenced to a minimum term of 35 months and a maximum term of 42 months in the State's prison and shall be fined not less than twenty-five thousand dollars ($25,000);
b.	Is 5,000 or more dosage units, or equivalent quantity, but less than 10,000 dosage units, or equivalent quantity, such person shall be punished as a Class F felon and shall be sentenced to a minimum term of 70 months and a maximum term of 84 months in the State's prison and shall be fined not less than fifty thousand dollars ($50,000);
c.	Is 10,000 or more dosage units, or equivalent quantity, such person shall be punished as a Class D felon and shall be sentenced to a minimum term of 175 months and a maximum term of 219 months in the State's prison and shall be fined not less than two hundred thousand dollars ($200,000).
(3b)	Any person who sells, manufactures, delivers, transports, or possesses 28 grams or more of methamphetamine shall be guilty of a felony which felony shall be known as 'trafficking in methamphetamine' and if the quantity of such substance or mixture involved:
a.	Is 28 grams or more, but less than 200 grams, such person shall be punished as a Class G felon and shall be sentenced to a minimum term of 35 months and a maximum term of 42 months in the State's prison and shall be fined not less than fifty thousand dollars ($50,000);
b.	Is 200 grams or more, but less than 400 grams, such person shall be punished as a Class F felon and shall be sentenced to a minimum term of 70 months and a maximum term of 84 months in the State's prison and shall be fined not less than one hundred thousand dollars ($100,000);
c.	Is 400 grams or more, such person shall be punished as a Class D felon and shall be sentenced to a minimum term of 175 months and a maximum term of 219 months in the State's prison and shall be fined at least two hundred fifty thousand dollars ($250,000).
(4)	Any person who sells, manufactures, delivers, transports, or possesses four grams or more of opium or opiate, or any salt, compound, derivative, or preparation of opium or opiate (except apomorphine, nalbuphine, analoxone and naltrexone and their respective salts), including heroin, or any mixture containing such substance, shall be guilty of a felony which felony shall be known as 'trafficking in opium or heroin' and if the quantity of such controlled substance or mixture involved:
a.	Is four grams or more, but less than 14 grams, such person shall be punished as a Class F felon and shall be sentenced to a minimum term of 70 months and a maximum term of 84 months in the State's prison and shall be fined not less than fifty thousand dollars ($50,000);
b.	Is 14 grams or more, but less than 28 grams, such person shall be punished as a Class E felon and shall be sentenced to a minimum term of 90 months and a maximum term of 117 months in the State's prison and shall be fined not less than one hundred thousand dollars ($100,000);
c.	Is 28 grams or more, such person shall be punished as a Class C felon and shall be sentenced to a minimum term of 225 months and a maximum term of 279 months in the State's prison and shall be fined not less than five hundred thousand dollars ($500,000).
(4a)	Any person who sells, manufactures, delivers, transports, or possesses 100 tablets, capsules, or other dosage units, or the equivalent quantity, or more, of Lysergic Acid Diethylamide, or any mixture containing such substance, shall be guilty of a felony, which felony shall be known as 'trafficking in Lysergic Acid Diethylamide'. If the quantity of such substance or mixture involved:
a.	Is 100 or more dosage units, or equivalent quantity, but less than 500 dosage units, or equivalent quantity, such person shall be punished as a Class G felon and shall be sentenced to a minimum term of 35 months and a maximum term of 42 months in the State's prison and shall be fined not less than twenty-five thousand dollars ($25,000);
b.	Is 500 or more dosage units, or equivalent quantity, but less than 1,000 dosage units, or equivalent quantity, such person shall be punished as a Class F felon and shall be sentenced to a minimum term of 70 months and a maximum term of 84 months in the State's prison and shall be fined not less than fifty thousand dollars ($50,000);
c.	Is 1,000 or more dosage units, or equivalent quantity, such person shall be punished as a Class D felon and shall be sentenced to a minimum term of 175 months and a maximum term of 219 months in the State's prison and shall be fined not less than two hundred thousand dollars ($200,000).
(5)	Except as provided in this subdivision, a person being sentenced under this subsection may not receive a suspended sentence or be placed on probation. The sentencing judge may reduce the fine, or impose a prison term less than the applicable minimum prison term provided by this subsection, or suspend the prison term imposed and place a person on probation when such person has, to the best of his knowledge, provided substantial assistance in the identification, arrest, or conviction of any accomplices, accessories, co-conspirators, or principals if the sentencing judge enters in the record a finding that the person to be sentenced has rendered such substantial assistance.
(6)	Sentences imposed pursuant to this subsection shall run consecutively with and shall commence at the expiration of any sentence being served by the person sentenced hereunder."
(ee)  Chapter 20 of the General Statutes is amended by adding a new section to read:
"§ 20-141.5.  Speeding to elude arrest.
(a)	It shall be unlawful for any person to operate a motor vehicle or knowingly allow a vehicle owned by him, or under his control, to be operated on a street, highway, or public vehicular area while fleeing or attempting to elude a law enforcement officer who is in the lawful performance of his duties.
(b)	If two or more of the following aggravating factors are present at the time the violation occurs, the person operating the vehicle shall be guilty of a Class H felony.
(1)	Speeding in excess of 15 miles per hour over the legal speed limit.
(2)	Gross impairment of the person's faculties while driving due to:
a.	Consumption of an impairing substance; or
b.	A blood alcohol concentration of 0.14 or more within a relevant time after the driving.
(3)	Especially reckless or dangerous driving.
(4)	Negligent driving leading to an accident causing:
a.	Property damage in excess of one thousand  dollars ($1,000); or
b.	Personal injury.
(5)	Driving when the person's drivers license is revoked.
(6)	Driving through a marked school zone or work zone.
(7)	Passing a stopped school bus.
(8)	Driving with a child under 12 years of age in the vehicle.
Any other violation of this section shall be punished as a Class 1 misdemeanor.
(c)	Whenever evidence is presented in any court or administrative hearing of the fact that a vehicle was operated in violation of this section, it shall be prima facie evidence that the vehicle was operated by the person in whose name the vehicle was registered at the time of the violation, according to the Division's records.  If the vehicle is rented, then proof of that rental shall be prima facie evidence that the vehicle was operated by the renter of the vehicle at the time of the violation.
(d)	The Division shall revoke, for one year, the drivers license of any person convicted of a misdemeanor under this section.  The Division shall revoke, for three years, the drivers license of any person convicted of a felony under this section.  In the case of a first felony conviction under this section, the licensee may apply to the sentencing court for a limited driving privilege after a period of 18 months of revocation, provided the operator's license has not also been revoked or suspended under any other provision of law.  A limited driving privilege issued under this subsection shall be valid for the period of revocation remaining in the same manner and under the terms and conditions prescribed in G.S. 20-16.1(b).  If the person's license is revoked under any other statute, the limited driving privilege issued pursuant to this subsection is invalid.
(e)	When the probable cause of the law enforcement officer is based on the prima facie evidence rule set forth in subsection (c) above, the officer shall make a reasonable effort to contact the registered owner of the vehicle prior to initiating criminal process."
(ff)  G.S. 20-141(j) and G.S. 20-17(10) are repealed.
(gg)  G.S. 20-179(d) reads as rewritten:
"(d)	Aggravating Factors to Be Weighed. – The judge must determine before sentencing under subsection (f) whether any of the aggravating factors listed below apply to the defendant.  The judge must weigh the seriousness of each aggravating factor in the light of the particular circumstances of the case.  The factors are:
(1)	Gross impairment of the defendant's faculties while driving or an alcohol concentration of 0.16 or more within a relevant time after the driving.
(2)	Especially reckless or dangerous driving.
(3)	Negligent driving that led to a reportable accident.
(4)	Driving by the defendant while his driver's license was revoked.
(5)	Two or more prior convictions of a motor vehicle offense not involving impaired driving for which at least three points are assigned under G.S. 20-16 or for which the convicted person's license is subject to revocation, if the convictions occurred within five years of the date of the offense for which the defendant is being sentenced, or one or more prior convictions of an offense involving impaired driving that occurred more than seven years before the date of the offense for which the defendant is being sentenced.
(6)	Conviction under G.S. 20-141.5 of speeding by the defendant while fleeing or attempting to elude apprehension.
(7)	Conviction under G.S. 20-141 of speeding by the defendant by at least 30 miles per hour over the legal limit.
(8)	Passing a stopped school bus in violation of G.S. 20-217.
(9)	Any other factor that aggravates the seriousness of the offense.
Except for the factor in subdivision (5) the conduct constituting the aggravating factor must occur during the same transaction or occurrence as the impaired driving offense."
(hh)  G.S. 58-36-75(c) reads as rewritten:
"(c)	The subclassification plan promulgated pursuant to G.S. 58-36-65(b) shall provide for facility recoupment surcharges pursuant to G.S. 58-37-40(f) and G.S. 58-37-75, in addition to premium surcharges, for convictions for the following moving traffic violations:
General Statute	Description of Offense
20-12.1	Being impaired while accompanying a permittee who is learning to drive
20-28	Driving while license is suspended or revoked
20-138.1	Driving a vehicle while impaired
20-138.2	Driving a commercial vehicle while impaired
20-138.3	Driving by provisional licensee after consuming alcohol or drugs
20-140(a)	Driving carelessly and heedlessly in willful or wanton disregard of the rights of others
20-140(b)	Driving without due caution in a manner so as to endanger other people or property
20-141(a)	Only driving at least 11 miles per hour over the posted speed limit
	20-141(j1)	Driving more than 15 mph over legal limit
20-141.1	Speeding in a school zone
20-141.3(a)	Engaging in prearranged speed competition with another motor vehicle
20-141.3(b)	Willfully engaging in speed competition with another motor vehicle (not prearranged)
20-141.3(c)	Allowing or authorizing others to use one's motor vehicle in prearranged speed competition or placing or receiving a bet or wager on a prearranged speed competition
20-141.4(a1)	Death by vehicle (unintentionally causing death of another while engaged in impaired driving)
20-141.4(a2)	Death by vehicle (unintentionally causing death of another as a result of a violation of motor vehicle law intended to regulate traffic or used to control operation of a vehicle)
20-141.5	Speeding while fleeing or attempting to elude arrest
20-166(a)	Failure to stop by driver who knew or should have known he was involved in accident and that accident caused death or injury to any person
20-166(c)	Failure of driver involved in accident causing property damage or personal injury or death (if driver did not know of injury or death) to stop at scene of accident
20-175.2	Failure to yield right-of-way to blind person at crossings, intersections, and traffic control signal points
20-217	Failure to stop and remain stopped when approaching a stopped school bus engaged in receiving or discharging passengers and while bus has mechanical stop signal displayed
14-18	Voluntary manslaughter
14-18	Involuntary manslaughter".
(ii)  G.S. 143-116.8(b) reads as rewritten:
"(b)	(1)	It shall be unlawful for a person to operate a vehicle in the State parks and forests road system at a speed in excess of twenty-five miles per hour (25 mph).  When the Secretary of Environment, Health, and Natural Resources determines that this speed is greater than reasonable and safe under the conditions found to exist in the State parks and forests road system, the Secretary may establish a lower reasonable and safe speed limit.  No speed limit established by the Secretary pursuant to this provision shall be effective until posted in the part of the system sought to be affected.
(2)	Any person convicted of violating this subsection by operating a vehicle on the State parks and forests road system while fleeing or attempting to elude arrest or apprehension by a law enforcement officer with authority to enforce the motor vehicle laws, shall be punished as provided in G.S. 20-141.5.
(3)	For the purposes of enforcement and administration of Chapter 20, the speed limits stated and authorized to be adopted by this section are speed limits under Chapter 20.
(4)	The Secretary may designate any part of the State parks and forests road system for one-way traffic and shall erect appropriate signs giving notice thereof.  It shall be a violation of G.S. 20-165.1 for any person to willfully drive or operate any vehicle on any part of the State parks and forests road system so designated except in the direction indicated.
(5)	The Secretary shall have power, equal to the power of local authorities under G.S. 20-158 and G.S. 20-158.1, to place vehicle control signs and signals and yield-right-of-way signs in the State parks and forests road system; the Secretary also shall have power to post such other signs and markers and mark the roads in accordance with Chapter 20 as the Secretary may determine appropriate for highway safety and traffic control.  The failure of any vehicle driver to obey any vehicle control sign or signal, or any yield-right-of-way sign placed under the authority of this section in the State parks and forests road system shall be an infraction and shall be punished as provided in G.S. 20-176."
(jj)  This section becomes effective December 1, 1997, and applies to offenses committed on or after that date. Prosecutions for offenses under subsection (y), (z), or (aa) of this section committed before the effective date of those subsections are not abated or affected by those subsections and the statutes that would be applicable but for those subsections remain applicable to those prosecutions.

Requested by: Representatives Morgan, Justus, Kiser, Thompson
INTIMIDATION TO INFLUENCE LEGISLATOR
Section 16.15.  G.S. 120-86 reads as rewritten:
"§ 120-86.  Bribery, etc.
(a)	No person shall offer or give to a legislator or a member of a legislator's immediate household, or to a business with which the legislator is associated, and no legislator shall solicit or receive, anything of monetary value, including a gift, favor or service or a promise of future employment, based on any understanding that the legislator's vote, official actions or judgment would be influenced thereby, or where it could reasonably be inferred that the thing of value would influence the legislator in the discharge of the legislator's duties.
(b)	It shall be unlawful for the partner, client, customer, or employer of a legislator or the agent of that partner, client, customer, or employer, directly or indirectly, to threaten economically that legislator with the intent to influence the legislator in the discharge of the legislator's duties.
(b1)	It shall be unlawful for any person, directly or indirectly, to threaten economically another person in order to  compel the threatened person to attempt to influence a legislator in the discharge of the legislator's duties.
(c)	It shall be unethical for a legislator to contact the partner, client, customer, or employer of another legislator if the purpose of the contact is to cause the partner, client, customer, or employer, directly or indirectly, to threaten economically that legislator with the intent to influence that legislator in the discharge of the legislator's duties.
(d)	For the purposes of this section, the term 'legislator' also includes any person who has been elected or appointed to the General Assembly but who has not yet taken the oath of office.
(e)	Violation of subsection (a), (b), or (b1) is a Class F felony.  Violation of subsection (c) is not a crime but is punishable under G.S. 120-103."

Requested by:   Representatives Justus, Kiser, Thompson
DIRECT CRIMINAL JUSTICE EDUCATION AND TRAINING STANDARDS COMMISSION TO REVISE HIRING AND RECORD-KEEPING PROCEDURES FOR EMPLOYEES OF DEPARTMENT OF CORRECTION
Section 16.16.  No later than June 30, 1998, the Criminal Justice Education and Training Standards Commission shall reestablish the hiring and record-keeping procedures for the employment of certified positions in the Department of Correction.

PART XVII.  DEPARTMENT OF JUSTICE

Requested by:   Representatives Justus, Kiser, Thompson
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 to make overtime payments to SBI agents in the Field Investigations Division.

Requested by:   Representatives Justus, Kiser, Thompson
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:   Representatives Justus, Kiser, Thompson
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:   Representatives Justus, Kiser, Thompson
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 Chairs of the Senate and House of Representatives Appropriations Committees, and to the Chairs of the Senate and House  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:   Representatives Justus, Kiser, Thompson
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:   Representatives Justus, Kiser, Thompson
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:   Representatives Justus, Kiser, Thompson
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:   Representatives Justus, Kiser, Thompson
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:   Representatives Justus, Kiser, Thompson
INCREASE THE NUMBER OF FICTITIOUS LICENSES AND REGISTRATION PLATES AUTHORIZED FOR PUBLICLY OWNED MOTOR VEHICLES AND REMOVE THE SUNSET ON PRIOR INCREASE ON NUMBER OF PLATES 
Section 17.10.  G.S. 20-39(h) reads as rewritten:
"(h)	The Commissioner, notwithstanding any other provision of this Chapter, may lawfully and to the extent necessary, provide local, State or federal law-enforcement officers on special undercover assignments with motor vehicle drivers licenses and motor vehicle registration plates under assumed names using false or fictitious addresses. Such registration plates shall only be used on publicly owned or leased vehicles. Requests for these licenses and registration plates shall be made to the Commissioner by the head of the local, State or federal law-enforcement agency and be accompanied by approval in writing from the Director of the State Bureau of Investigation upon a specific finding by the Director that the request is justified and necessary. The Director shall keep a record of all such licenses, registration plates, assumed names, false or fictitious addresses, and law-enforcement officers using the licenses or registration plates, and shall request the immediate return of any license or registration plate that is no longer necessary. Licenses and registration plates provided under this subsection shall expire six months after initial issuance or subsequent validation after the request for extension has been approved in writing by the Director of the State Bureau of Investigation. The head of the local, State or federal law-enforcement agency shall be responsible for the use of the licenses and registration plates and shall return them immediately to the Commissioner for cancellation upon either (i) their expiration, (ii) request of the Director of the State Bureau of Investigation, or (iii) request of the Commissioner. Failure to return a license or registration plates issued pursuant to this subsection shall be punished as a Class 2 misdemeanor. At no time shall the number of valid licenses and registration plates issued under this act exceed one hundred fifty, and those issued shall be strictly monitored by the Director. All of the private registration plates issued to special agents of the State Bureau of Investigation under the Department of Justice and to alcohol law enforcement agents under the Department of Crime Control and Public Safety, pursuant to G.S. 14-250, may be fictitious plates and shall not be counted in the total number of fictitious plates authorized by this subsection."
(b)	Subsection (c) of Section 23 of Chapter 18 of the Session Laws of the 1996 Second Extra Session is repealed.
(c) This section becomes effective June 29, 1997.

Requested by:   Representatives Justus, Kiser, Thompson
SHERIFF EDUCATION AND TRAINING STANDARDS COMMISSION TO ESTABLISH MINIMUM EMPLOYMENT, TRAINING, AND RETENTION STANDARDS FOR TELECOMMUNICATORS
Section 17.11. (a) Of the funds appropriated in this act to the Department of Justice for the 1997-99 biennium, the sum of one hundred fifty-six thousand seven hundred thirty-one dollars ($156,731) for the 1997-98 fiscal year and the sum of one hundred thirty-two thousand two hundred thirty-one dollars ($132,231) for the 1998-99 fiscal year shall be used to fund a criminal justice research associate, a processing assistant, a criminal justice instructor-coordinator, and related expenses to implement this section.
(b)	G.S. 17E-2(3) reads as rewritten:
"(3)	'Justice officer' means:
a.	A person who, through the special trust and confidence of the sheriff, has taken the oath of office prescribed by Chapter 11 of the General Statutes as a peace officer in the office of the sheriff.  This term includes 'deputy sheriffs', 'reserve deputy sheriffs', and 'special deputy sheriffs', but does not include clerical and support personnel not required to take an oath.  The term 'special deputy' means a person who, through appointment by the sheriff, becomes an unpaid criminal justice officer to perform a specific act directed by the sheriff; or
b. 	A person who, through the special trust and confidence of the sheriff, has been appointed as a detention officer by the sheriff; or
c.	A person who is either the administrator or other custodial personnel of district confinement facilities as defined in G.S. 153A-219; however, nothing in this Chapter transfers any supervisory or administrative control over employees of district confinement facilities to the office of the sheriff; or
d.	A person who, through the special trust and confidence of the sheriff, is under the direct supervision and control of the sheriff and serves as a telecommunicator, or who is presented to the Commission for appointment as a telecommunicator by an employing entity other than the sheriff for the purpose of obtaining certification from the Commission as a telecommunicator."
(c)	G.S. 17E-7 reads as rewritten:
"§ 17E-7.  Required standards.
(a)	Justice officers, other than those set forth in subsection (c1) of this section, shall not be required to meet any requirements of subsections (b) and (c) of this section as a condition of continued employment, nor shall failure of a justice officer to fulfill such requirements make him ineligible for any promotional examination for which he is otherwise eligible if the officer held an appointment prior to July 1, 1983, and is a sworn law-enforcement officer with power of arrest. The legislature finds, and it is hereby declared to be the policy of this Chapter, that such officers have satisfied such requirements by their experience. It is the intent of the Chapter that all justice officers employed at the entry level after the Commission has adopted the required standards shall meet the requirements of this Chapter. All justice officers who are exempted from the required entry level standards by this subsection are subject to the requirements of subsections (b) and (c) of this section as well as the requirements of G.S. 17E-4(a) in order to retain certification.
(b)	The Commission shall provide, by regulation, that no person may be appointed as a justice officer at entry level, except on a temporary or probationary basis, unless such person has satisfactorily completed an initial preparatory program of training at a school certified by the Commission or has been exempted from that requirement by the Commission pursuant to this Chapter. Upon separation of a justice officer from a sheriff's department within the temporary or probationary period of appointment, the probationary certification shall be terminated by the Commission. Upon the reappointment to the same department or appointment to another department of an officer who has separated from a department within the probationary period, the officer shall be charged with the amount of time served during his initial appointment and allowed the remainder of the probationary period to complete the basic training requirement. Upon the reappointment to the same department or appointment to another department of an officer who has separated from a department within the probationary period and who has remained out of service for more than one year from the date of separation, the officer shall be allowed another probationary period to complete such training as the Commission shall require by rule for an officer returning to service.
(c)	In addition to the requirements of subsection (b) of this section, the Commission, by rules and regulations, may fix other qualifications for the employment and retention of justice officers including minimum age, education, physical and mental standards, citizenship, good moral character, experience, and such other matters as relate to the competence and reliability of persons to assume and discharge the responsibilities of the office, and the Commission shall prescribe the means for presenting evidence of fulfillment of these requirements.
Where minimum educational standards are not met, yet the individual shows potential and a willingness to achieve the standards by extra study, they may be waived by the Commission for the reasonable amount of time it will take to achieve the standards required. Upon petition from a sheriff, the Commission may grant a waiver of any provisions of this section (17E-7) for any justice officer serving that sheriff.
(c1)	Any justice officer appointed as a telecommunicator at the entry level after October 1, 1997, shall meet all requirements of this Chapter.  Any person employed in the capacity of a telecommunicator as defined by the Commission on or before October 1, 1997, shall not be required to meet any entry-level requirements as a condition of continued employment but shall be reported to the Commission for certification.  All justice officers who are exempted from the required entry-level standards by this subsection are subject to the requirements of subsections (b) and (c) of this section as well as the requirements of G.S. 17E-4(a) in order to retain certification.
(d)	The Commission may issue a certificate evidencing satisfaction of the requirements of subsections (b), (c), and (c1) of this section to any applicant who presents such evidence as may be required by its rules and regulations of satisfactory completion of a program or course of instruction in another jurisdiction."
(d) Any entity, other than a sheriff's office, that employs telecommunicators is not required to submit telecommunicators under its employment for certification pursuant to Chapter 17E of the General Statutes and is not subject to criminal or civil liability if it does not do so.

Requested by:   Representatives Preston, Justus, Kiser, Thompson
DEPARTMENT OF JUSTICE TO PROVIDE TRAINING TO STATE AND LOCAL LAW ENFORCEMENT OFFICERS IN THE IDENTIFICATION OF ACCIDENT-TRAUMA VICTIMS IN ORDER TO FACILITATE TIMELY IDENTIFICATION OF POTENTIAL ORGAN AND TISSUE DONORS AND TO PROVIDE FOR THE IDENTIFICATION OF ACCIDENT-TRAUMA VICTIMS
Section 17.12. (a)	Of the funds appropriated in this act to the Department of Justice for the 1997-98 fiscal year, the sum of twenty-five thousand dollars ($25,000) shall be used by the North Carolina Criminal Justice Education and Standards Training Commission, the North Carolina Sheriffs' Education and Training Standards Commission, and the North Carolina Justice Academy to provide for the training of State and local law enforcement officers in the timely identification of accident-trauma victims in order to facilitate the identification of potential organ and tissue donors.
(b)	Chapter 90 of the General Statutes is amended by adding a new Article to read:
"ARTICLE 33.
"Accident-Trauma Victim Identification.
"§ 90-600.  Short title.
This Article shall be known and may be cited as the Carolyn Sonzogni Act.
"§ 90-601.  Purpose.
The identification of accident-trauma victims is crucial to the timely notification of the next of kin of accident-trauma victims and to the recovery of organs and tissues for organ transplants.  In recognition of these facts, it is the policy of this State and the purpose of this act to provide for the timely identification of accident-trauma victims by law enforcement, fire, emergency, rescue, and hospital personnel.
"§ 90-602.  Routine search for donor information.
(a)	The following persons may make a reasonable search for a document of gift or other information identifying the bearer as an organ donor or as an individual who has refused to make an anatomical gift:
(1)	A law enforcement officer, firefighter, paramedic, or other official emergency rescuer finding an individual who the searcher believes is near death; and
(2)	A hospital, upon the admission of an individual at or near the time of death, if there is not immediately available any other source of that information.
(b)	Any law enforcement officer or other person listed in subsection (a) of this section may conduct an administrative search of the accident-trauma victim's Division of Motor Vehicles driver record to determine the individual's authorization for organ donation or refusal of organ donation.
(c)	A physical search pursuant to subsection (a) of this section may be conducted at or near the time of death or hospital admission and shall be limited to those personal effects of the individual where a drivers license reasonably may be stored.  Any information, document, tangible objects, or other items discovered during the search shall be used solely for the purpose of ascertaining the individual's identity, notifying the individual's next of kin, and determining whether the individual intends to make an anatomical gift, and in no event shall any such discovered material be admissible in any subsequent criminal or civil proceeding, unless obtained pursuant to a lawful search on other grounds.
"§ 90-603.  Timely notification of next of kin.
A State or local law enforcement officer shall make a reasonable effort to notify the next of kin of an accident-trauma victim if the individual is hospitalized or dead.  Whenever possible, the notification should be delivered in person and without delay after ensuring positive identification.  If appropriate under the circumstances, the notification may be given by telephone in accordance with State and local law enforcement departmental policies.  In addition to the notification of next of kin made by law enforcement personnel, other emergency rescue or hospital personnel may contact the next of kin, or the nearest organ procurement organization, in order to expedite decision making with regard to potential organ and tissue recovery.
"§ 90-604.  Use of body information tags.
(a)	 In order to provide the identifying information necessary to facilitate organ and tissue transplants, a body information tag shall be attached to or transmitted with the body of an accident-trauma victim by the following persons:
(1)	A law enforcement officer, firefighter, paramedic, or other official emergency rescuer who believes the seriously injured individual to be near death; and
(2)	Hospital personnel, after the individual has been pronounced dead.
(b)	The body information tag shall include information identifying the accident-trauma victim, identifying whether the individual is an organ donor, and providing any information on the next of kin.  The Division of Motor Vehicles shall be responsible for producing and distributing body information tags to all State and local law enforcement departments.  In addition, the tags shall be distributed by the Division of Motor Vehicles to all State and local agencies employing firefighters, paramedics, and other emergency and rescue personnel."

Requested by:   Representatives Justus, Kiser, Thompson
CRIMINAL JUSTICE INFORMATION NETWORK REPORT
Section 17.13.  The Criminal Justice Information Network Governing Board created pursuant to Section 23.3 of Chapter 18 of the Session Laws of the 1996 Second Extra Session shall report by April 15, 1998, 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 on:
(1)	The operations of the Board, including the Board's progress in developing data-sharing standards in cooperation with State and local agencies and the estimated time of completion of the standards;
(2)	The operating budget of the Board, the expenditures of the Board as of the date of the report, and the amount of funds in reserve for the operation of the Board; 
(3)	A long-term strategic plan and cost analysis for statewide implementation of the Criminal Justice Information Network; and
(4)	The status of the implementation of the mobile data network system, including the amount of funds spent on the system as of the date of the report and the long-term costs of implementing the system statewide.
The Board shall make an interim report on these issues 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 November 1, 1997.

Requested by:   Representatives Kiser, Justus, Thompson
STATE BUREAU OF INVESTIGATION LAW ENFORCEMENT OFFICERS' SALARY ADJUSTMENTS
Section 17.14.  (a)	Of the funds appropriated in this act to the Department of Justice, the sum of three million sixty-four thousand seven hundred seventy-eight dollars ($3,064,778) shall be used to adjust the salaries of sworn law enforcement officers employed with the State Bureau of Investigation.  The salary of each sworn law enforcement officer of the State Bureau of Investigation shall be adjusted by increasing the salary of each officer by five percent (5%) per each year of service since 1985 in a sworn status position at the Bureau.  No salary adjustment shall result in an increase beyond the maximum salary set for an officer's pay grade.   If an officer's salary is near or at the top of the officer's pay grade, the officer shall be eligible to receive a salary adjustment up to the top of the officer's pay grade.  If an officer is at the top of the officer's pay grade, then the officer is not eligible to receive the one-time salary adjustment.  Sworn officers holding the following management positions are not eligible to receive the salary adjustment:  SBI Director, SBI Assistant Directors of Support Services, SBI Assistant Director, SBI Assistant Directors of Field Services, SBI Assistant Director of Crime Laboratory, Deputy Director of Medicaid Fraud.
(b)	G.S. 114-13 reads as rewritten:
"§ 114-13. Director of the Bureau; personnel; salaries.
(a)	The Attorney General shall appoint a Director of the Bureau of Investigation, who shall serve at the will of the Attorney General, and whose salary shall be fixed by the Department of Administration under G.S. 143-36 et seq. The Attorney General may further appoint a sufficient number of assistants and stenographic and clerical help, who shall be competent and qualified to do the work of the Bureau. The salaries of such assistants shall be fixed by the Department of Administration under G.S. 143-36 et seq. The salaries of clerical and stenographic help shall be the same as now provided for similar employees in other State departments and bureaus.
(b)	Beginning July 1, 1998, and annually thereafter, each sworn law enforcement officer of the State Bureau of Investigation shall be granted an automatic increase in the amount of five percent (5%) of their total salary, not to exceed the maximum of their salary range.  The Director of the State Bureau of Investigation and Assistant Directors of the State Bureau of Investigation are not eligible to receive the five percent (5%) annual increase."
(c)	Subsection (a) of this section becomes effective July 1, 1997.  Subsection (b) of this section becomes effective July 1, 1998.

Requested by:   Representative Redwine
ATTORNEY GENERAL APPROVAL REQUIRED FOR ALL STATE SETTLEMENTS
Section 17.15.  Chapter 114 of the General Statutes is amended by adding a new section to read:
"§ 114-2.4.  Attorney General to approve settlement agreements.
To be effective against the State, a settlement agreement entered into by the State, a State department, a State agency, a State institution, or a State officer, involving the payment of any public monies must be approved by the Attorney General.  The Attorney General by rule may delegate to a deputy or assistant Attorney General or to another subordinate the power to approve settlement agreements."

PART XVIII.  DEPARTMENT OF CRIME CONTROL AND PUBLIC SAFETY

Requested by:   Representatives Justus, Kiser, Thompson
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:   Representatives Justus, Kiser, Thompson
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:   Representatives Justus, Kiser, Thompson
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:   Representatives Justus, Kiser, Thompson
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 March 15 in odd-numbered years and May 15 in even-numbered years 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.

Requested by:   Representatives Kiser, Justus, Thompson
EXTEND DEPARTMENT OF CRIME CONTROL AND PUBLIC SAFETY STUDY COMMISSION
Section 18.4.  (a) Section 20.4(b) of Chapter 324 of the 1995 Session Laws reads as rewritten:
"(b)	The Commission shall review the efficiency and effectiveness of the Department of Crime Control and Public Safety and determine whether the Department should be reorganized or any of its divisions eliminated or transferred.  The Commission shall also consider whether other State law enforcement agencies should be transferred to the Department. To fulfill its duties and responsibilities in a well-informed manner, the Commission may conduct on-site visits of the Department, the divisions of the Department, and any other State law enforcement agencies. The Commission shall determine the potential cost savings of any recommended reorganizations or transfers."
(b) Section 20.4(d) of Chapter 324 of the 1995 Session Laws, as amended by Section 21.1 of Chapter 18 of the Session Laws of the 1996 Second Extra Session, reads as rewritten:
"(d)	The Study Commission shall report to the 1998 Regular Session of the 1997 General Assembly by May 1, 1998. The report shall be filed with the Speaker of the House of Representatives and the President Pro Tempore of the Senate.  Upon filing the report, the Commission shall terminate."
(c) There is allocated from the funds appropriated to the Legislative Services Commission's Studies Reserve to the Study Commission on the Department of Crime Control and Public Safety the sum of fifty thousand dollars ($50,000) for the 1997-98 fiscal year to conduct the study directed by this section.
(d)	Subsection (b) of this section becomes effective January 15, 1997.

PART XIX. GENERAL ASSEMBLY

Requested by:   Representatives Ives, McCombs, Sherrill
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:   Representatives Ives, McCombs, Sherrill
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."

Requested by:   Representatives Ives, McCombs, Sherrill, Shubert
STATE EMPLOYEES' COMMUNICATIONS WITH LEGISLATORS
Section 19.2.  (a) Chapter 126 of the General Statutes is amended by adding a new Article to read:
"ARTICLE 15.
"Communications With Members of the General Assembly.
"§ 126-90.  Communications with members of the General Assembly.  
A State employee's right to speak to a member of the General Assembly at the member's request shall not be directly or indirectly limited by the employee's supervisor or by any policy of the department, agency, or institution that employs that State employee."
(b)	G.S. 126-5 is amended by adding a new subsection to read:
"( c6)	Article 15 of this Chapter shall apply to all State employees, public school employees, and community college employees."

PART XX.  OFFICE OF THE GOVERNOR

Requested by:   Representatives Ives, McCombs, Sherrill, Hardy, R. Hunter, Jeffus
FIRE PROTECTION AND RESCUE 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 and Rescue Grant Fund.
"§ 58-85A-1.  Creation of Fund; allocation to local fire districts, political subdivisions of the State, volunteer fire departments, and volunteer rescue squads.
(a)	Creation; Purpose. –  There is created in the Office of State Budget and Management the State Fire Protection and Rescue Grant Fund.  The purposes of the Fund are:
(1)	To compensate local fire districts and political subdivisions of the State for providing local fire protection to State-owned buildings and their contents.
(2)	To reimburse volunteer fire departments and volunteer rescue squads for highway use tax they pay on their fire trucks and emergency services vehicles.
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, political subdivisions, and volunteer fire departments and volunteer rescue squads.  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.
(b)	Definitions. – The following definitions apply in this section:
(1)	Fire truck. – A fire truck, a pump truck, a tanker truck, or a ladder truck used to suppress fire; or a four-wheel drive vehicle intended to be mounted with a water tank and hose and used for forest fire fighting.
(2)	Highway use tax. – The tax imposed in Article 5A of Chapter 105 of the General Statutes.
(3)	Volunteer fire department. – A fire department that is not part of a unit of local government, has no more than two paid employees, and is exempt from State income tax under G.S. 105-130.11.
(4)	Volunteer rescue squad. – An organization that provides rescue services, emergency medical services, or both, is not part of a unit of local government, has no more than two paid employees, and is exempt from State income tax under G.S. 105-130.11.
(c)	Funds; Use. – It is the intent of the General Assembly to appropriate annually to the State Fire Protection and Rescue 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 and Rescue Grant Fund.  Funds received from the General Fund shall be allocated only for (i) providing local fire protection for State-owned property supported by the General Fund and (ii) grants to volunteer fire departments and volunteer rescue squads to reimburse them for highway use tax they pay on their fire trucks and emergency services vehicles; 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 and Rescue 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 and Rescue Grant Fund.
(e) Of the funds available to The University of North Carolina from 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 and Rescue Grant Fund for use as provided by G.S. 58-85A-1(c) as enacted by this section.

Requested by:   Representatives Mitchell, Baker, Carpenter, H. Hunter
HOME PROGRAM MATCHING FUNDS
Section 20.2.  (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 Tier One, Tier Two, or Tier Three Enterprise Counties under G.S. 105-129.3; 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:   Representatives Mitchell, Baker, Carpenter, H. Hunter
AFFORDABLE HOUSING ASSISTANCE FUNDS
Section 20.3.  (a) Of the funds appropriated in this act to the North Carolina Housing Finance Agency for the Housing Trust Fund, not more than five hundred thousand dollars ($500,000) for the 1997-98 fiscal year may be allocated by the Housing Finance Agency to community-based nonprofit low-income housing development and technical assistance organizations.  Funds allocated shall be used to support the development of housing affordable to persons of low income, for direct grants to new and existing housing development and technical assistance organizations to support operations and project activities, and for administrative and other operational purposes that expand the capacity of these organizations to provide affordable housing and associated comprehensive services and programs.
(b)	The North Carolina Housing Finance Agency shall adopt rules governing the eligibility of applicants, application procedures, eligibility requirements, criteria and standards for awarding grants and performance standards for continued funding, and shall make available to the general public and interested parties adequate opportunity for input into the rule-making process.
(c)	The North Carolina Housing Finance Agency shall report every six months to the Joint Legislative Commission on Governmental Operations on the use of these funds allocated pursuant to this section.  The Agency shall not use these funds for its own administrative purposes.
(d)	For purposes of this section, the term "community-based nonprofit low-income housing development and technical assistance organization" means a nonprofit corporation chartered pursuant to section 501(c)(3) of the Internal Revenue Code, which has as a major purpose the development and improvement of housing that is affordable to persons of low income; serves the community in which it is located; is neither controlled by, nor under the direction of, individuals or entities seeking to derive profit or gain from the organization; and maintains accountability to low-income community residents through board membership or other formal processes for input into the organization's housing decision-making process.  For purposes of this section, the term "low-income" refers to persons and families whose incomes do not exceed eighty percent (80%) of the area median family income, with adjustments for family size, according to the latest figures available for the United States Department of Housing and Urban Development.

PART XXI.  DEPARTMENT OF SECRETARY OF STATE

Requested by:   Representatives Ives, McCombs, Sherrill
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:   Representatives Ives, McCombs, Sherrill
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, including a review of the business plan and rate setting process. The State Auditor shall report the results of this audit to the Joint Legislative Commission on Governmental Operations prior to April 15, 1998.

PART XXII-A.  DEPARTMENT OF STATE TREASURER

Requested by:   Representatives Ives, McCombs, Sherrill
RETIREMENT SYSTEM ADMINISTRATIVE EXPENSES TO COMPLY WITH SUPREME COURT DECISIONS
Section 22A. 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 the Faulkenberry, Woodard and Peel cases (109PA96) decided by the Supreme Court on April 11, 1997.

PART XXIII.  DEPARTMENT OF INSURANCE

Requested by:   Representative Ives
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:   Representative Ives
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:  Representatives Ives, McCombs, Sherrill
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:   Representatives Ives, McCombs, Sherrill
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:   Representatives Ives, McCombs, Sherrill
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:   Representatives Ives, McCombs, Sherrill
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:   Representatives Ives, McCombs, Sherrill
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:  Representatives Ives, McCombs, Sherrill
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.

Requested by:  Representative Ives
STATE CONSTRUCTION STUDY COMMISSION
Section 24.6.  (a)	The State Construction Study Commission is created.  The Commission shall consist of 15 members:
(1)	Two members of the House of Representatives appointed by the Speaker of the House of Representatives,
(2)	Two members of the Senate appointed by the President Pro Tempore of the Senate,
(3)	The Secretary of Administration or a designee,
(4)	The Commissioner of Insurance or a designee,
(5)	The chair of the State Building Commission or a designee,
(6)	One member appointed by the Speaker of the House of Representatives on the recommendation of the American Institute of Architects, Inc., North Carolina Chapter,
(7)	One member appointed by the President Pro Tempore of the Senate on the recommendation of Carolina's AGC, Inc.,
(8)	One member appointed by the Speaker of the House of Representatives on the recommendation of the Consulting Engineers Council of North Carolina, Inc.,
(9)	One member who is a plumbing contractor appointed by the President Pro Tempore of the Senate on the recommendation of the North Carolina Association of Plumbing-Heating-Cooling Contractors, Incorporated,
(10)	One member who is a heating-cooling contractor appointed by the Speaker of the House of Representatives on the recommendation of the North Carolina Association of Plumbing-Heating-Cooling Contractors, Incorporated,
(11)	One member appointed by the President Pro Tempore of the Senate on the recommendation of the Carolinas Electrical Contractor's Association, Inc.,
(12)	One member appointed by the Speaker of the House of Representatives on the recommendation of  the North Carolina Association of Electrical Contractors, Inc., and
(13)	One member appointed by the President Pro Tempore of the Senate on the recommendation of the American Fire Sprinkler Association Carolinas Chapter, Incorporated.
(b)	The President Pro Tempore of the Senate shall designate one Senator as cochair and the Speaker of the House of Representatives shall designate one Representative as cochair.
(c)	The Commission shall study:
(1)	Ways to streamline the review and approval processes for State projects; and
(2)	Ways to eliminate duplication of effort and overlapping responsibilities among State agencies involved in the review and approval processes.
(d)	The Commission shall submit a final report of its findings and recommendations to the Regular 1998 Session of the 1997 General Assembly by filing the report with the President Pro Tempore of the Senate and the Speaker of the House of Representatives.  Upon filing its final report, the Commission shall terminate.
(e)  The Commission, while in the discharge of official duties, may exercise all the 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.
(f)  Members of the Commission shall receive subsistence and travel expenses at the rates set forth in G.S. 120-3.1.
(g) 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 in the work of the Commission.  The House of Representatives' and the Senate's Supervisors of Clerks shall assign clerical staff to the Commission or committee, upon the direction of the Legislative Services Commission.  The expenses relating to clerical employees shall be borne by the Commission.
(h)  When a vacancy occurs in the membership of the Commission the vacancy shall be filled by the same appointing office who made the initial appointment.
(i)  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.
(j)  Of the funds appropriated to the General Assembly for the 1997-98 fiscal year, the sum of twenty-five thousand dollars ($25,000) shall be allocated to implement the provisions of this section.

Requested by:   Representatives Ives, McCombs, Sherrill
TRANSFER POSITIONS FROM CAPITOL POLICE TO REVENUE
Section 24.7.  The positions of 10 property guards are transferred from the Capitol Police in the Department of Administration to the Department of Revenue.  The funds, equipment, supplies, records, and other property to support the positions transferred by this section are also transferred from the Capitol Police in the Department of Administration to the Department of Revenue.  Any disputes arising out of this transfer shall be resolved by the Director of the Budget.

Requested by:   Representatives Ives, McCombs, Sherrill, Easterling, Moore
CONSOLIDATE YOUTH COUNCILS
Section 24.8.  (a)	Part 18 of Article 9 of Chapter 143B of the General Statutes is repealed.
(b)	G.S. 143B-414 reads as rewritten:
"§ 143B-414. Governor's Council on Children and Youth – creation; powers and duties.
(a)	There is hereby created the Governor's Council on Children and Youth of the Department of Administration. 
(b)	The Council shall have the following functions and duties:
(1)	To act as an advocate for children and youth within State and local governments, and with private agencies serving children and youth;
(2)	To provide assistance to individuals and children in child advocacy systems within the State;
(3)	To perform a continuing review of existing programs of State  government for children and youth and their families;
(4)	To, in cooperation with State, local or private agencies, identify needs of children and youth and their families that are not currently being met and recommend new programs or improvement of existing programs;
(5)	To review any new programs affecting children and youth proposed by any State agency and recommend changes to avoid duplication of services, to promote better planning, or otherwise to make more effective use of available resources;
(5a)	To screen applications for student internships and select from these applications the recipients of student internships;
(5b)	To determine the appropriateness of proposals for projects for student interns submitted by the offices and departments enumerated in subdivision (5.3) of this subsection;
(5c)	To determine the number of student interns to be allocated to each of the following offices or departments:
a.	Office of the Governor
b.	Department of Administration
c.	Department of Correction
d.	Department of Cultural Resources
e.	Department of Revenue
f.	Department of Transportation
g.	Department of Environment, Health, and Natural Resources
h.	Department of Commerce
i.	Department of Crime Control and Public Safety
j.	Department of Human Resources
k.	Office of the Lieutenant Governor
l.	Office of the Secretary of State
m.	Office of the State Auditor
n.	Office of the State Treasurer
o.	Department of Public Instruction
p.	Department of Agriculture
q.	Department of Labor
r.	Department of Insurance
s.	Office of the Speaker of the House of Representatives
t.	Justices of the Supreme Court and Judges of the Court of Appeals
u.	Department of Community Colleges
v.	Office of State Personnel
w.	Office of the Senate President Pro Tempore;
(5d)	To receive on behalf of the Department of Administration and to recommend expenditure of gifts and grants from public and private donors and to award grants;
(5e)	To suggest, monitor, and impact legislation affecting children and youth;
(6)	To present an annual report to the Governor concerning the health and well-being of North Carolina's children and youth and the effectiveness of current programs and the need for new programs for children and youth;
(7)	To provide information to the general public and State, local and private agencies serving children and youth and their families concerning the activities and findings of the Council; 
(8)	To advise the Secretary of Administration upon any matter the Secretary may refer to it; and
(9)	To adopt bylaws, guidelines, and policies necessary to carry out its powers and duties and to recommend rules to the Secretary of Administration that the Secretary may adopt.  This function shall not require the Secretary to adopt rules nor prevent the Secretary from adopting rules when the Secretary believes them to be necessary or desirable."
(c)	G.S. 143B-415 reads as rewritten:
"§ 143B-415.  Governor's Council on Children and Youth – members; selection; quorum; compensation.
(a)	The Governor's Council on Children and Youth shall consist of 20 members as follows:
(1)	One Senator appointed by the General Assembly upon the recommendation of the President Pro Tempore of the Senate.
(2)	One representative of a child or youth organization appointed by the General Assembly upon the recommendation of the President Pro Tempore of the Senate.
(3)	One Representative appointed by the General Assembly upon the recommendation of the Speaker of the House of Representatives.
(4)	One representative of a child or youth organization appointed by the General Assembly upon the recommendation of the Speaker of the House of Representatives.
(5)	Fourteen members appointed by the Governor as follows:
a.	An attorney.
b.	Two young adults, each of whom is over 18 years old but less than 25 years old at the time of appointment and who have an interest in and knowledge of children or youth services or programs.
c.	Two public college or university representatives, one of whom must represent an historically African-American college or university.
d.	A private college or university representative.
e.	A community college representative.
f.	One male and one female youth, each of whom is 18 years old or younger at the time of appointment.
g.	Five representatives of children and youth organizations.
(6)	One male and one female youth elected by the North Carolina State Youth Council, each of whom is 18 years old or younger at the time of appointment.
(b)	The members appointed by the General Assembly upon the recommendation of the President Pro Tempore of the Senate and upon the recommendation of the Speaker of the House of Representatives shall serve for two-year terms to commence as of July 1.  The youth members 18 years old or younger appointed by the Governor and those appointed by the North Carolina State Youth Council shall serve two-year terms to commence as of July 1.  The initial term for six of the remaining members appointed by the Governor shall be one year to commence as of July 1.  The initial terms of the remaining six members appointed by the Governor shall be two years to commence as of July 1.  At the end of the respective terms of office of these last 12 members appointed by the Governor, the appointment of their successors shall be for terms of two years and until their successors are appointed and qualify.
Of the members appointed by the Governor, at least one shall come from each congressional district in accordance with G.S. 147-12(3b).
Vacancies in appointments made by the General Assembly shall be filled in accordance with G.S. 120-122.  Other vacancies shall be filled in the same manner as the original appointment.
(c)	Each appointing officer may remove any member of the Council appointed by that officer or Council respectively.
The Governor shall designate from the membership of the Council a chair and a vice-chair to serve at the Governor's pleasure for not more than two terms.
The members of the Council shall receive per diem and necessary travel and subsistence expenses in accordance with the provisions of G.S. 138-5.
A majority of the Council shall constitute a quorum for the transaction of business. 
(d)	All administrative, management, clerical and other functions and services required by the Council shall be supplied by the Secretary of Administration."
(d)	G.S. 143B-416 reads as rewritten:
"§ 143B-416. Governor's Council on Children and Youth – access to information.
Unless otherwise prohibited by law, every State and local agency, department, board, commission, school, or corporation that supervises, administers, or otherwise directs programs or services for children and youth shall provide the Council with any requested information relating to such programs and services."
(e)  G.S. 143B-385 and G.S. 143B-386 are repealed.
(f)  G.S. 143B-387 reads as rewritten:
"§ 143B-387.  North Carolina State Youth Council – creation; powers and duties.
(a)	There is created the North Carolina State Youth Council in the Department of Administration.
(b)	The Council shall have the following functions and duties:
(1)	To consider problems affecting youth and recommend solutions or approaches to these problems to State and local governments and their officials;
(2)	To promote statewide activities for the benefit of youth; 
(3)	To elect two youth representatives to the Governor's Council on Children and Youth;
(4)	To establish a statewide organization of youth councils at the local, congressional district, and State levels, with the power to call conventions of such youth councils as necessary;
(5)	To encourage the establishment and support of local youth councils in every county of the State;
(6)	To receive on behalf of the Department of Administration and to recommend to the Secretary of Administration the expenditure of gifts and grants from public and private donors and the award of grants;
(7)	To adopt bylaws, guidelines, and policies necessary to carry out its powers and duties and to recommend rules to the Secretary of Administration that the Secretary may adopt.  This function shall not require the Secretary to adopt rules nor prevent the Secretary from adopting rules when the Secretary believes them to be necessary or desirable;
(8)	To advise the Secretary of Administration upon any matter the Secretary may refer to it; and
(9)	To perform any other duties as may be assigned to it by the Secretary of Administration."
(g)  Part 7 of Article 9 of Chapter 143B of the General Statutes is amended by adding a new section to read:
"§ 143B-387.1.  North Carolina State Youth Council – members; selection; quorum; compensation.
(a)	The North Carolina State Youth Council shall consist of 16 members, each of whom shall be 18 years old or younger at the time of election, selected as follows:
(1)	The four North Carolina State Youth Council officers of chair, vice-chair, secretary, and sergeant-at-arms elected at an annual convention of delegates from local youth councils.
(2)	Twelve members elected by an annual convention of delegates from local youth councils.  Each member elected under this provision shall reside in and represent a separate congressional district.
(b)	The term for the four Council officers shall be one year to commence as of July 1.  The terms of the 12 congressional district members shall be two years to commence as of July 1.
The chair of the Council shall fill any vacancy on the Council for the balance of the unexpired term.   The chair shall fill any vacancy in a congressional district member's seat with a youth from that congressional district.
(c)	The members of the Council shall receive per diem and necessary travel and subsistence expenses in accordance with the provisions of G.S. 138-5.  Nevertheless, no Council member nor member of a local or district youth council shall receive per diem, travel, or subsistence for attending conventions.
A majority of the Council shall constitute a quorum for the transaction of business.
(d)	All administrative, management, clerical, and other functions and services required by the Council shall be supplied by the Secretary of Administration."
(h)  The terms of all current members of the Governor's Advocacy Council on Children and Youth shall terminate on June 30, 1997, no matter the expiration date of their terms, and the terms of all new appointees to the Governor's Council on Children and Youth shall begin on July 1, 1997.  The officers and members of the State Youth Council holding office on the effective date of this section shall continue to hold those offices on the North Carolina State Youth Council until a convention elects new officers and members, who shall hold their offices until July 1, 1998.
(i)  The Revisor of Statutes may delete any reference to the Governor's Advocacy Council on Children and Youth in any portion of the General Statutes to which conforming amendments are not made by this section and to substitute, as appropriate and consistent with this section, the Governor's Council on Children and Youth.
(j)  The Revisor of Statutes is authorized to delete any reference to the State Youth Council in any portion of the General Statutes to which conforming amendments are not made by this section and to substitute, as appropriate and consistent with this section, the North Carolina State Youth Council.
(k)  The Governor shall determine whether he should create by Executive Order a body of youth leaders to be denominated the North Carolina Council for Youth.  Such a group would be composed of youth leaders from various youth organizations across the State, including, but not limited to, the North Carolina State Youth Council, the 4-H, the Boy Scouts of America, the Girl Scouts of America, the Future Farmers of America, the Future Homemakers of America, and the Future Business Leaders of America.  The North Carolina Council for Youth would examine issues common to youth and recommend to the Governor, the General Assembly, the Council of State, and the Governor's Cabinet any suggestions for solutions and improvements regarding such issues and problems facing the youth of the State.

PART XXV.  OFFICE OF STATE CONTROLLER

Requested by:   Representatives Ives, McCombs, Sherrill
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)	The Office of State Controller may use the two hundred twenty-four thousand dollars ($224,000) in savings that accrued in fiscal year 1996-97 to fund new sites in fiscal year 1997-98.
(c)	The Office of State Controller is encouraged to consider new technologies and capabilities as a means of providing NCIH users access to the existing ATM-SONET network.  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.
(e) Given the appropriations subcommittees meet in the interim, the House and Senate Appropriations Subcommittees on General Government will consider information leading to a recommendation to adopt an alternate approach to State funding of sites, effective in fiscal year 1998-99.  The subcommittee is not limited to the information that may be considered and may include in the review cost-sharing measures that require sites to participate in the annual cost of network charges; the phasing-out of one hundred percent (100%) State funding of site network charges; and the cost of adding new sites with a specific period of time designated for State funding of network charges.

Requested by:   Representatives Ives, McCombs, Sherrill
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 convert 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.  RESERVED

PART XXVI-A. OFFICE OF ADMINISTRATIVE HEARINGS

Requested by:  Representatives Ives, McCombs, Sherrill
ADMINISTRATIVE LAW JUDGE SALARY
Section 26A.  G.S. 7A-751, as amended by Section 11 of S.L. 1997-34, reads as rewritten:
"§ 7A-751.  Agency head; powers and duties; salaries of Chief Administrative Law Judge and other administrative law judges.
(a)	The head of the Office of Administrative Hearings is the Chief Administrative Law Judge, who shall serve as Director of the Office.  The Chief Administrative Law Judge has the powers and duties conferred on that position by this Chapter and the Constitution and laws of this State and may adopt rules to implement the conferred powers and duties.
The salary of the Chief Administrative Law Judge shall be the same as that fixed from time to time for district court judges.
In lieu of merit and other increment raises, the Chief Administrative Law Judge shall receive longevity pay on the same basis as is provided to employees of the State who are subject to the State Personnel Act.
(b)The salary of other administrative law judges shall be ninety percent (90%) of the salary of the Chief Administrative Law Judge.
In lieu of merit and other increment raises, an administrative law judge shall receive longevity pay on the same basis as is provided to employees who are subject to the Personnel Act."

PART XXVII. DEPARTMENT OF CULTURAL RESOURCES

Requested by:   Representatives Ives, McCombs, Sherrill
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:   Representatives Ives, McCombs, Sherrill
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:   Representatives Ives, McCombs, Sherrill
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.  The Secretary shall negotiate a contract based on marketable prices for the leased space and a percentage of gross income.  The contract shall provide that any agreed-upon profits are payable only to the Department of Cultural Resources.  Proceeds derived from the contract shall be reflected in the Museum of History's budget as a receipt to reduce the General Fund appropriation.

Requested by:   Representatives Ives, McCombs, Sherrill, Decker
NORTH CAROLINA POSTAL HISTORY COMMISSION
Section 27.6.  Chapter 143 of the General Statutes is amended by adding a new Article to read:
"ARTICLE 71.
"North Carolina Postal History Commission.
"§ 143-675.  Commission established; purpose; members; terms of office; quorum; compensation; termination.
(a)	Establishment. – There is established the North Carolina Postal History Commission. The Commission shall be located within the Department of Cultural Resources for organizational, budgetary, and administrative purposes.
(b)	Purpose. – The purpose of the Commission is to advise the Secretary of Cultural Resources on the collection, preservation, cataloging, publication, and exhibition of material associated with North Carolina's postal history.
(c)	Membership. – The Commission shall consist of 16 members, as follows:
(1)	Four persons appointed by the Governor, two of whom shall be recommended by the President of the North Carolina Postal History Society.
(2)	Four persons appointed by the President Pro Tempore of the Senate, two of whom shall be recommended by the President of the North Carolina Postal History Society.
(3)	Four persons appointed by the Speaker of the House of Representatives, two of whom shall be recommended by the President of the North Carolina Postal History Society.
(4)	Four persons appointed by the Secretary of Cultural Resources, two of whom shall be recommended by the President of the North Carolina Postal History Society.
The members appointed to the North Carolina Postal History Commission shall be chosen from among individuals who have education or experience in the fields of archives preservation, North Carolina history, historical administration, museum administration, or a knowledge of North Carolina's postal history.
(d)	Terms. – Members shall serve for the duration of the Commission.  Initial terms shall commence July 1, 1997.
(e)	Chair. – The chair shall be elected biennially from the membership of the Commission from among its members. The initial term shall commence July 1, 1997.
(f)	Vacancies. – Vacancies resulting from the resignation of a member or otherwise shall be filled in the same manner in which the original appointment was made, and the term shall be for the balance of the unexpired term.
(g)	Compensation. – The Commission members shall receive no salary as a result of serving on the Commission but shall receive per diem, subsistence, and travel expenses in accordance with the provisions of G.S. 120-3.1, 138-5, and 138-6, as applicable.
(h)	Removal. – Members may be removed in accordance with G.S. 143B-13.
(i)	Meetings. – The chair shall convene the Commission.  The Commission shall meet at least quarterly until an exhibit on postal history is mounted and at least semiannually thereafter.
(j)	Quorum. – A majority of the members of the Commission shall constitute a quorum for the transaction of business. The affirmative vote of a majority of the members present at meetings of the Commission shall be necessary for action to be taken by the Commission.
(k)	Termination of Commission.  – The Commission shall terminate June 30, 2000.
"§ 143-676.  Powers and duties of the Commission.
(a)	Powers and Duties. – The Commission shall have the following powers and duties:
(1)	To advise the Secretary of Cultural Resources on the collection, preservation, cataloging, publication, and exhibition of materials associated with North Carolina's postal history in cooperation with the North Carolina Museum of History.
(2)	To adopt bylaws by a majority vote of the Commission.
(3)	To accept grants, contributions, devises, bequests, gifts, and services for the purpose of providing support to the Commission. The funds and property shall be retained by the Commission, and the Commission shall prescribe rules under which the Commission may accept donations of money, property, or personal services, and determine the value of donations of property or personal services.
(b)	Contract Authority. – The Commission may procure supplies, services, and property as appropriate and may enter into contracts, leases, or other legal agreements within funds available 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 Cultural Resources 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 Cultural Resources.
"§ 143-677.  Assignment of property; offices.
(a)	Assignment of Property. – Upon request of the Commission, the head of any State agency may assign property, equipment, and personnel of such agency to the Commission to assist the Commission in carrying out its duties under this Article. Assignments under this subsection shall be without reimbursement by the Commission to the agency from which the assignment was made. Property and equipment that remain in the possession of the Commission on the date of the termination of the Commission shall revert to the agency from which the property was acquired.
(b)	Office Space. – The Department of Cultural Resources shall provide office space in Raleigh for use as offices by the North Carolina Postal History Commission, and the Department of Cultural Resources shall receive no reimbursement from the Commission for the use of the property during the life of the Commission.
"§ 143-678.  Commission reports.
(a)	Annual Report. – Before July 1, 1998, the Commission shall submit to the General Assembly a comprehensive report incorporating specific recommendations of the Commission.  After the initial report, the Commission shall submit a report to the General Assembly within 30 days of the convening of each regular session of the General Assembly.
(b)	Final Report. – The Commission shall submit a final report to the General Assembly no later than June 30, 2000.  The final report shall include:
(1)	A summary of the activities of the Commission.
(2)	A final accounting of funds received and expended by the Commission.
"§ 143-679.  Application of Article.
The provisions of Article 1 of Chapter 121 of the General Statutes apply to the Commission."

Requested by:   Representatives Ives, McCombs, Sherrill
SCHOOL VISIT/BALLET THEATER PROGRAM
Section 27.7.  The School Visit/Ballet Theater Program is established in the Department of Cultural Resources.  The program shall offer educational programming through the provision of preparatory classroom instructional materials and teacher training and a live, professional, in-theater performance experience for school children in conjunction with a school visit to the City of Raleigh.

Requested by:   Representatives Ives, McCombs, Sherrill, Culpepper
PRESERVATION OF BLACKBEARD'S FLAGSHIP
Section 27.8.  Of the funds appropriated in this act for the 1997-98 fiscal year to the Department of Cultural Resources, the sum of two hundred thousand dollars ($200,000) shall be used for the surveillance, preservation, and protection of the shipwreck of Blackbeard's flagship, Queen Anne's Revenge, and a systematic underwater archaeological recovery of cargo, tackle, and artifacts for preservation, interpretation, and display.

Requested by:   Representatives Ives, McCombs, Sherrill, Mercer
PRINCEVILLE CEMETERY OVERSIGHT
Section 27.9.  Within funds available, the Department of Cultural Resources shall provide oversight and guidance to the Town of Princeville and the Princeville Cemetery Commission with regard to the restoration of the Princeville Cemetery and the preparation of documents for the Princeville Cemetery to be placed on the National Register of Historic Places.

Requested by:   Representatives Ives, McCombs, Sherrill, Ellis
ARTS COUNCIL GRANTS
Section 27.10.  Chapter 143B of the General Statutes is amended by adding a new section to read: 
"§ 143B-87.8.  Arts council grants; criteria.
(a)	Arts Council grants that are to be used for artworks shall include as a term of each grant that the artwork created with the grant funds shall not be displayed or performed in a publicly funded facility if the governing body of the community that would have zoning jurisdiction over the facility adopts a resolution objecting to the display or performance of the artwork in that community.
(b)	The Department of Cultural Resources shall notify the applicant of the grant terms.  No grant shall be issued to an applicant for artwork unless the applicant agrees in writing to comply with the terms of the grant."

PART XXVIII. STATE BOARD OF ELECTIONS

Requested by:   Representatives Ives, McCombs, Sherrill
STATEWIDE DATA ELECTIONS MANAGEMENT SYSTEM
Section 28.  (a)	The State Board of Elections shall establish a statewide data elections management system. The system shall prescribe data format standards, data communication standards, and data content standards. The State Board of Elections shall establish the system no later than November 1, 1997. Counties shall adhere to the standards prescribed by the system no later than August 31, 1998.  The State Board of Elections may adopt rules to implement this section.  Chapter 150B of the General Statutes governs the adoption of rules by the State Board of Elections.
(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.

Requested by:   Representatives Ives, McCombs, Sherrill
FLEXIBILITY IN VOTING EQUIPMENT ALLOCATION
Section 28.1.  G.S. 163-166 is repealed.

Requested by:   Representatives Ives, McCombs, Sherrill
STATE TO SUPPLY ABSENTEE BALLOTS TO COUNTY ONLY IF IT IS SUPPLYING BALLOTS FOR THAT COUNTY FOR USE AT THE PRECINCTS
Section 28.2.  (a)	G.S. 163-136 is amended by adding a new subsection to read:
"( e)	Notwithstanding any other provision of law, the State Board of Elections shall supply absentee and supplemental ballots for use by a county board of elections only if the State is supplying ballots to the county for use in the precincts as provided by G.S. 163-136(b)(3)."
(b)	This section applies to elections conducted on or after January 1, 1998.

PART XXIX.  DEPARTMENT OF TRANSPORTATION

Requested by:   Representatives Bowie, Dockham, McMahan 
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:   Representatives Bowie, Dockham, McMahan
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:   Representatives Bowie, Dockham, McMahan
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:   Representatives Bowie, Dockham, McMahan
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:   Representatives Bowie, Dockham, McMahan
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: Representatives Bowie, Dockham, McMahan 
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:   Representatives Bowie, Dockham, McMahan
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:   Representatives Bowie, Dockham, McMahan
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:   Representatives Bowie, Dockham, McMahan
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:   Representatives Bowie, Dockham, McMahan
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:   Representatives Bowie, Dockham, McMahan
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:   Representatives Bowie, Dockham, McMahan
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:   Representatives Bowie, Dockham, McMahan
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:   Representatives Bowie, Dockham, McMahan
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:   Representatives Bowie, Dockham, McMahan
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:   Representatives Bowie, Dockham, McMahan, Hiatt
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:   Representatives Bowie, Dockham, McMahan
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:   Representatives Bowie, Dockham, McMahan
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:   Representatives Bowie, Dockham, McMahan
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:   Representatives Bowie, Dockham, McMahan
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:   Representatives Bowie, Dockham, McMahan
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:   Representatives Bowie, Dockham, McMahan
PHASE OUT OPERATIONAL SUPPORT FOR VISITORS CENTERS
Section 29.22.  (a)	G.S. 20-79.7(c) reads as rewritten:
"(c)	Use of Funds in Special Registration Plate Account. – 
(1)	The Division shall deduct the costs of special registration plates, including the costs of issuing, handling, and advertising the availability of the special plates, from the Special Registration Plate Account.
(2)	From the funds remaining in the Special Registration Plate Account after the deductions in accordance with subdivision (1) of this subsection, there is appropriated from the Special Registration Plate Account the following sums to provide operating assistance for the Visitor Centers:
a.	on U.S. Highway 17 in Camden County;
b.	on U.S. Highway 17 in Brunswick County;
c.	on U.S. Highway 441 in Macon County;
d.	in the Town of Boone, Watauga County;
e.	on U.S. Highway 29 in Caswell County;
f.	on U.S. Highway 70 in Carteret County; and
g.	on U.S. Highway 64 in Tyrrell County.
	For each visitor center listed above:
1.	Seventy-five thousand dollars ($75,000) is appropriated for the 1997-98 fiscal year.
2.	Thirty-seven thousand five hundred dollars ($37,500) is appropriated for the 1998-99 fiscal year.
3.	Eighteen thousand seven hundred fifty dollars ($18,750) is appropriated for the 1999-2000 fiscal year.
Thereafter, it is the intention of the General Assembly that no additional state funds shall be appropriated for the operations of any of these visitor centers.
	For visitor centers established in accordance with G.S. 136-18.7 there is appropriated the sum of seventy-five thousand dollars ($75,000) for the first year of operation; thirty-seven thousand five hundred dollars ($37,500) for the second year of operation; and eighteen thousand seven hundred fifty dollars ($18,750) for the third year of operation.  It is the intention of the General Assembly that no additional state funds be appropriated for the operations of a new visitor center after the third year of its operation.
(3)	The Division shall transfer the remaining revenue in the Account quarterly as follows:
a.	Thirty-three percent (33%) to the account of the Department of Commerce to aid in financing out-of-state print and other media advertising under the program for the promotion of travel and industrial development in this State.
b.	Fifty percent (50%) to the Department of Transportation to be used solely for the purpose of beautification of highways other than those designated as interstate. These funds shall be administered by the Department of Transportation for beautification purposes not inconsistent with good landscaping and engineering principles.
c.	Seventeen percent (17%) to the account of the Department of Human Resources to promote travel accessibility for disabled persons in this State.  These funds shall be used to collect and update site information on travel attractions designated by the Department of Commerce in its publications, to provide technical assistance to travel attractions concerning accommodation of disabled tourists, and to develop, print, and promote the publication ACCESS NORTH CAROLINA as provided in G.S. 168-2. Any funds allocated for these purposes that are neither spent nor obligated at the end of the fiscal year shall be transferred to the Department of Administration for removal of man-made barriers to disabled travelers at State-funded travel attractions. Guidelines for the removal of man-made barriers shall be developed in consultation with the Department of Human Resources."
(b)	Chapter 136 of the General Statutes is amended by adding a new section to read:
"§ 136-18.7. Visitor Centers.
Recommendations to the General Assembly on visitor centers to be wholly or partially state funded shall be made by the Joint Legislative Transportation Oversight Committee based on criteria which shall be developed in accordance with the following procedures:
(1)	The legal entity desiring the construction and operation of a wholly or partially state funded visitor center shall petition the Joint Legislative Transportation Oversight Committee for a recommendation concerning that visitor center.
(2)	The petition shall contain a plan for the financing of the operations of the visitor center for at least the first four years of its existence.  The first three years may include the state appropriations authorized by G.S. 20-79.7(c)(2) and funding for the fourth and subsequent years shall provide for operations without state funding.
(3)	Petitions shall be made to the Joint Legislative Transportation Oversight Committee at least 90 days prior to the last meeting of the Committee before the convening of the next session of the General Assembly.
(4)	The Joint Legislative Transportation Oversight Committee shall submit its recommendation to the General Assembly prior to the first day of the next legislative session after the petition has been filed.  If there is insufficient information to make a determination, the Committee shall render a negative recommendation for that legislative session.
(5)	No new visitor center shall be approved by the General Assembly without a positive recommendation from the Joint Legislative Transportation Oversight Committee."

Requested by:   Representatives Bowie, Dockham, McMahan
CONTRACT AGENT TRANSACTION ANALYSIS
Section 29.23.  The Office of Productivity Management in the Administrative Division of the Department of Transportation shall study the transactions performed by tag agents pursuant to the Commission Contracts authorized by G.S. 20-63(h).  The study shall: 
(1)	Analyze and weight the relative complexity and time required to complete the various transactions so that a scale can be established to provide reimbursement based on those factors.
(2)	To the extent possible, determine the costs of performing the transactions based on a review of the actual costs of operating a sample of tag agencies across the State.
The Department shall not recommend a particular reimbursement rate for each transaction.
The Department shall report the results of this study to the Joint Legislative Transportation Oversight Committee by March 1, 1998.

Requested by:   Representatives Bowie, Dockham, McMahan
DEPARTMENT OF TRANSPORTATION MINORITY- AND WOMEN-OWNED BUSINESS PARTICIPATION PLAN
Section 29.24.  The Department of Transportation shall develop a plan for meeting its goals for minority- and women-owned business participation in construction and supply contracts.  The Department of Transportation shall submit a copy of that plan to the Joint Legislative Transportation Oversight Committee and the Fiscal Research Division by December 1, 1997.

Requested by:   Representatives Bowie, Dockham, McMahan
CONTAMINATED PROPERTY REMEDIATION
Section 29.25.  Of the funds appropriated to the Department of Transportation for the State's participation in the cleanup of the 601 Bypass Superfund site, any amounts not required for this purpose may be used by the Department for participation in the cleanup of other contaminated sites currently or previously owned or contaminated by the Department.  These funds may be used for:  (i) site assessments; (ii) site remediation; (iii) settlements of lawsuits, administrative actions, or claims; or (iv) administrative costs.

Requested by:   Representatives Bowie, Dockham, McMahan
FEDERAL DRIVER'S PRIVACY PROTECTION ACT COMPLIANCE
Section 29.26.  (a) Chapter 20 of the General Statutes is amended by adding a new section to read:
"§ 20-43.1.  Disclosure of personal information in motor vehicle records.
The Division shall disclose personal information contained in motor vehicle records in accordance with the federal Driver's Privacy Protection Act of 1994, as amended, 18 U.S.C. §§ 2721, et seq.
As authorized in 18 U.S.C. § 2721, the Division shall not disclose personal information for the purposes specified in 18 U.S.C. § 2721(b)(11) and (b)(12), or establish a waiver procedure described in 18 U.S.C. § 2721(d)."
(b)	G.S. 20-26(c) reads as rewritten: 
"(c)	The Division shall furnish copies of license records required to be kept by subsection (a) of this section in accordance with G.S. 20-43.1 to other persons for uses other than official upon prepayment of the following fees:
(1)	Limited extract copy of license record,
for period up to three years	$5.00 
(2)	Complete extract copy of license record	 5.00 
(3)	Certified true copy of complete license
	record	 7.00.
All fees received by the Division under this subsection shall be credited to the Highway Fund."
(c)	G.S. 20-27(a) reads as rewritten:
"(a)	All records of the Division pertaining to application and to drivers' licenses, except the confidential medical report referred to in G.S. 20-7, of the current or previous five years shall be open to public inspection in accordance with G.S. 20-43.1, at any reasonable time during office hours and copies shall be provided pursuant to the provisions of G.S. 20-26."
(d)	G.S. 20-43(a) reads as rewritten:
"(a)	All records of the Division, other than those declared by law to be confidential for the use of the Division, shall be open to public inspection during office hours in accordance with G.S. 20-43.1. A photographic image or signature recorded in any format by the Division for a drivers license or a special identification card is confidential and shall not be released except for law enforcement purposes."
(e)	This section becomes effective September 13, 1997.

Requested by:   Representatives Bowie, Dockham, McMahan
SALVAGE VEHICLE INSPECTIONS
Section 29.27.  G.S. 20-71.3 reads as rewritten:
"§ 20-71.3.  Titles and registration cards to be branded.
Motor Vehicle certificates of title and registration cards issued pursuant to G.S. 20-57 shall be branded.  As used herein 'branded' means that the title and registration card shall contain a designation that discloses if the vehicle is classified as (a)	Flood Vehicle, (b) Non-U.S.A. Vehicle, (c) Reconstructed Vehicle, (d) Salvage Motor Vehicle, or (e) Salvage Rebuilt Vehicle or other classification authorized by law.  Any motor vehicle up to six model years old damaged by collision or other occurrence which is to be retitled in this State shall be subject to preliminary and final inspections by the Enforcement Section of the Division, and the Division shall refuse to issue a title to a vehicle up to six model years old which has not undergone a preliminary inspection.  These inspections serve as an antitheft measure and do not certify the safety or roadworthiness of a vehicle.  Any motor vehicle which has been branded in another state shall be branded with the nearest applicable brand specified in this section, except that no junk vehicle or vehicle that has been branded junk in another state shall be titled or registered.  A motor vehicle titled in another state and damaged by collision or other occurrence may be repaired and an unbranded title issued in North Carolina only if the cost of repairs, including parts and labor, does not exceed seventy-five percent (75%) of its fair market retail value.  The Commissioner shall prepare necessary forms and may adopt regulations required to carry out the provisions of this Part 3A.  The title shall reflect the branding until surrendered to or cancelled by the Commissioner."

Requested by:   Representatives Gray, Esposito, Oldham, Womble, Decker, Sexton
WESTERN PASSENGER RAIL SERVICE ROUTE MAJOR INVESTMENT STUDY
Section 29.28.  From funds appropriated to the Department of Transportation for the 1997-98 fiscal year, seven hundred fifty thousand dollars ($750,000) shall be used to fund a Major Investment Study (MIS) which shall include:
(1)	A passenger rail proposal providing service between Asheville and Raleigh through Winston-Salem generally following the I-40 corridor; and 
(2)	A passenger rail proposal providing for commuter rail services between Winston-Salem, Greensboro, High Point, and outlying communities.
The MIS shall be administered by the Department of Transportation in consultation with the Forsyth County Metropolitan Planning Organization (MPO), the Greensboro MPO, and the High Point MPO.  A report, including plans and cost analyses for the proposals, shall be presented to the General Assembly by March 1, 1999.

Requested by:   Representatives Bowie, Dockham, McMahan, Morgan
GOVERNOR'S HIGHWAY SAFETY PROGRAM NOT HIRE PAID LOBBYISTS
Section 29.29.  The Governor's Highway Safety Program may not retain any person who would be required to register as a lobbyist under Article 9A of Chapter 120 of the General Statutes in order to carry out the task for which that person is retained.

Requested by:   Representatives Bowie, Dockham, McMahan, Reynolds
DIVISION OF MOTOR VEHICLES TO CONDUCT AN ON-LINE REGISTRATION STUDY
Section 29.30.  The Division of Motor Vehicles shall study the feasibility of a system that would allow motor vehicle dealers to enter information onto the STARS system for the issuance of certificates of title, registration plates, or both for new vehicles sold by them.
The Division shall report the results of this study, including the advisability of a pilot program and necessary legislation to implement the program, as appropriate, to the Joint Legislative Transportation Oversight Committee by March 1, 1998. 

PART XXX.  SALARIES AND BENEFITS

Requested by:   Representatives Holmes, Creech, Esposito, Crawford
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 seven thousand one hundred thirty-two dollars ($107,132) 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	$94,552
Attorney General	94,552
Secretary of State	94,552
State Treasurer	94,552
State Auditor	94,552
Superintendent of Public Instruction	94,552
Agriculture Commissioner	94,552
Insurance Commissioner	94,552
Labor Commissioner	94,552.

Requested by:  Representatives Holmes, Creech, Esposito, Crawford
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	$92,378
Secretary of Correction	92,378
Secretary of Cultural Resources	92,378
Secretary of Commerce	92,378
Secretary of Environment, Health,
  and Natural Resources	92,378
Secretary of Human Resources	92,378
Secretary of Revenue	92,378
Secretary of Transportation	92,378
Secretary of Crime Control and Public Safety	92,378.

Requested by:  Representatives Holmes, Creech, Esposito, Crawford
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	$ 84,080
State Controller	117,669
Commissioner of Motor Vehicles	84,080
Commissioner of Banks	94,552
Chairman, Employment Security Commission	84,080
State Personnel Director	92,378
Chairman, Parole Commission	76,775
Members of the Parole Commission	70,881
Chairman, Industrial Commission	75,544
Members of the Industrial Commission	73,704
Chairman of the Utilities Commission	95,592
Commissioners of the Utilities Commission	94,552
Executive Director, Agency for Public
  Telecommunications	70,881
General Manager, Ports Railway Commission	64,005
Director, Museum of Art	86,155
Executive Director, Wildlife Resources Commission	72,569
Executive Director, North Carolina Housing
  Finance Agency	104,057
Executive Director, North Carolina Agricultural
Finance Authority	81,839
Director, Office of Administrative Hearings	83,141

Requested by:  Representatives Holmes, Creech, Esposito, Crawford, Russell
SALARY OF THE CHAIRMAN OF THE EMPLOYMENT SECURITY COMMISSION
Section 30.3A.  G.S. 96-3(c) reads as rewritten:
"(c)	Salaries. – The chairman of the Employment Security Commission of North Carolina, appointed by the Governor, shall be paid from the Employment Security Administration Fund a salary payable on a monthly basis, which salary shall be fixed by the General Assembly in the Current Operations Appropriations Act; and the members of the Commission, other than the chairman, shall each receive the same amount per diem for their services as is provided for the members of other State boards, commissions, and committees who receive compensation for their services as such, including necessary time spent in traveling to and from his place of residence within the State to the place of meeting while engaged in the discharge of the duties of his office and his actual traveling expenses, the same to be paid from the aforesaid fund."

Requested by:  Representatives Holmes, Creech, Esposito, Crawford
SALARIES OF MEMBERS AND CHAIR OF THE UTILITIES COMMISSION
Section 30.4A.  G.S. 62-10(h) reads as rewritten:
"(h)	The salary of each commissioner and that of the commissioner designated as chairman shall be set by the General Assembly in the Current Operations Appropriations Act. In lieu of merit and other increment raises paid to regular State employees, each commissioner, including the commissioner designated as chairman, shall receive as longevity pay an amount equal to four and eight-tenths percent (4.8%) of the annual salary set forth in the Current Operations Appropriations Act payable monthly after five years of service, and nine and six-tenths percent (9.6%) after 10 years of service. 'Service' means service as a member of the Utilities Commission."

Requested by:  Representatives Holmes, Creech, Esposito, Crawford
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:  Representatives Holmes, Creech, Esposito, Crawford
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	$107,132 
Associate Justice, Supreme Court	104,333 
Chief Judge, Court of Appeals	101,724 
Judge, Court of Appeals	99,986 
Judge, Senior Regular Resident Superior Court	97,269 
Judge, Superior Court	94,552 
Chief Judge, District Court	85,857 
Judge, District Court	83,141 
District Attorney	87,596 
Administrative Officer of the Courts	97,269 
Assistant Administrative Officer of the Courts	81,684 
Public Defender	87,596.

(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 eight hundred eighty-three dollars ($53,883) and the minimum salary of any assistant district attorney or assistant public defender is at least twenty-seven thousand five hundred nine dollars ($27,509), 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 four percent (4%), 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 four percent (4%).

Requested by:  Representatives Holmes, Creech, Esposito, Crawford
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		$62,676
  100,000 to 149,999		70,403
  150,000 to 249,999		78,130
  250,000 and above		85,857.
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:   Representatives Holmes, Creech, Esposito, Crawford, Justus, Kiser, Thompson
ASSISTANT CLERKS OF SUPERIOR COURT/SALARY RANGE
Section 30.8A.  G.S. 7A-102(d) reads as rewritten:
"(d)	Full-time assistant clerks, licensed to practice law in North Carolina, who are employed in the office of superior court clerk on and after July 1, 1984, and full-time assistant clerks possessing a masters degree in business administration, public administration, accounting, or other similar discipline from an accredited college or university who are employed in the office of superior court clerk on and after July 1, 1997, are authorized an annual salary of not less than three-fourths of the maximum annual salary established for assistant clerks; the clerk of superior court, with the approval of the Administrative Office of the Courts, may establish a higher annual salary but that salary shall not be higher than the maximum annual salary established for assistant clerks. Full-time assistant clerks, holding a law degree from an accredited law school, who are employed in the office of superior court clerk on and after July 1, 1984, are authorized an annual salary of not less than two-thirds of the maximum annual salary established for assistant clerks; the clerk of superior court, with the approval of the Administrative Office of the Courts, may establish a higher annual salary, but the entry-level salary may not be more than three-fourths of the maximum annual salary established for assistant clerks, and in no event may be higher than the maximum annual salary established for assistant clerks. The entry-level annual salary for all other assistant and deputy clerks employed on and after July 1, 1984, shall be at the minimum rates as herein established."

Requested by:  Representatives Holmes, Creech, Esposito, Crawford
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 eight hundred sixty-one dollars ($59,861) 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:  Representatives Holmes, Creech, Esposito, Crawford
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-eight dollars ($258.00) 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:  Representatives Holmes, Creech, Esposito, Crawford
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 1996-97 by four percent (4%).  Nothing in this act limits any of the provisions of G.S. 120-32.

Requested by:  Representatives Holmes, Creech, Esposito, Crawford
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 four percent (4%), 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 four percent (4%) to all full-time employees and part-time employees on a pro rata basis.

Requested by:   Representatives Holmes, Creech, Esposito, Crawford
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 Compensation Increase created in this act for fiscal year 1997-98 to provide an annual average salary increase of four percent (4%), 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:  Representatives Holmes, Creech, Esposito, Crawford
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, pursuant to the Comprehensive Compensation System set forth in G.S. 126-7 and rules adopted by the State Personnel Commission, as follows:
(1)	Career growth recognition awards in the amount of two percent (2%); and
(2)	A cost-of-living adjustment in the amount of two percent (2%).
Notwithstanding G.S. 126-7(4a), any permanent full-time State employee whose salary is set in accordance with the State Personnel Act and whose salary is at the top of the salary range or within two percent of the top of the salary range shall receive a one-time bonus of two percent (2%) less the career growth recognition award the employee receives.  The employee shall receive the career growth bonus at the time the employee is eligible for the career growth recognition award, but not earlier than July 1, 1997.
(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 four percent (4%), 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 four percent (4%).

Requested by:  Representatives Holmes, Creech, Esposito, Crawford
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 Compensation Increase 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:   Representatives Holmes, Creech, Esposito, Crawford
EXTEND SUNSET ON FICA SAVINGS USE
Section 30.15A.  (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.

Requested by:  Representatives Holmes, Creech, Esposito, Crawford
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:  Representatives Holmes, Creech, Esposito, Crawford, Barbee
ENHANCE THE RETIREMENT BENEFITS PAYABLE FROM THE TEACHERS' AND STATE EMPLOYEES' RETIREMENT SYSTEM, THE CONSOLIDATED JUDICIAL RETIREMENT SYSTEM, THE LEGISLATIVE RETIREMENT SYSTEM, AND THE LOCAL GOVERNMENTAL EMPLOYEES' RETIREMENT SYSTEM
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 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. 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 a new subsection 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 four percent (4%) 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 four percent (4%) 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."
(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 four percent (4%) 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 four percent (4%) 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. 120-4.22A is amended by adding a new subsection to read:
"( l)	In accordance with subsection (a) of this section, from and after July 1, 1997, the retirement allowance to or on account of beneficiaries whose retirement commenced on or before January 1, 1997, shall be increased by four percent (4%) 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 January 1, 1997, but before June 30, 1997, shall be increased by a prorated amount of four percent (4%) of the allowance payable as determined by the Board of Trustees based upon the number of months that a retirement allowance was paid between January 1, 1997, and June 30, 1997."
(g) 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)."
(h) 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-seven hundredths percent (1.77%) 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-seven hundredths percent (1.77%) 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)."
(i) G.S. 128-27 is amended by adding a new subsection 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 four percent (4%) 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 four percent (4%) 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."
(j) 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:   Representatives Holmes, Creech, Esposito, Crawford, Daughtry
INCREASE THE MONTHLY BENEFITS FROM THE NORTH CAROLINA FIREMEN'S AND RESCUE SQUAD WORKERS' PENSION FUND
Section 30.18A.  (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:  Representatives Holmes, Creech, Esposito, Crawford
SALARY-RELATED CONTRIBUTIONS/EMPLOYERS
Section 30.19. (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 are (i) ten and nine hundredths percent (10.09%) - Teachers and State Employees; (ii) fifteen and nine hundredths percent (15.09%) - State Law Enforcement Officers; (iii) nine and forty hundredths percent (9.40%) - University Employees' Optional Retirement Program; (iv) twenty-three and sixty hundredths percent (23.60%) - 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:  Representatives Holmes, Creech, Esposito, Crawford, Miner
LOCAL EMPLOYEES PURCHASE STATE TIME/STATE EMPLOYEES PURCHASE LOCAL TIME
Section 30.22.  (a) G.S. 128-26(p)(1) reads as rewritten:
"(1)	Notwithstanding any other provision of this Chapter, upon completion of five years of membership service, any member may purchase service previously rendered as a part-time employee of a participating employer as defined in G.S. 128-21(11) or G.S. 135-1(11), except for temporary or part-time service rendered while a full-time student in pursuit of a degree or diploma in a degree-granting program. Payment shall be made in a single lump sum in an amount equal to the full actuarial cost of providing credit for the service, together with interest and an administrative fee, as determined by the Board of Trustees on the advice of the Retirement System's actuary. Notwithstanding the provisions of G.S. 128-26(b), the Board of Trustees shall fix and determine by appropriate rules and regulations how much service in any year, as based on compensation, is equivalent to one year of service in proportion to 'earnable compensation', but in no case shall more than one year of service be creditable for all service in one year. Notwithstanding the foregoing provisions of this subdivision that provide for the purchase of service credits, the terms 'full cost', 'full liability', and 'full actuarial cost' include assumed annual post-retirement allowance increases, as determined by the Board of Trustees, from the earliest age at which a member could retire on an unreduced service allowance."
(b) G.S. 128-26(r) reads as rewritten:
"(r)	Credit at Full Cost for Temporary Government Employment. – Notwithstanding any other provisions of this Chapter, any member may purchase creditable service for government employment when classified as a temporary employee subject to the conditions that:
(1)	The member was employed by an employer as defined in G.S. 128-21(11) or G.S. 135-1(11);
(2)	The member's temporary employment met all other requirements of G.S. 128-21(10) or G.S. 135-1(10) or (25);
(3)	The member has completed five years or more of membership service;
(4)	The member acquires from the employer such certifications of temporary employment as are required by the Board of Trustees; and
(5)	The member makes a lump sum payment into the Annuity Savings Fund equal to the full liability of the service credits calculated on the basis of the assumptions used for purposes of the actuarial valuation of the retirement system's liabilities, and the calculation of the amount payable shall take into account the retirement allowance arising on account of the additional service credit commencing at the earliest age at which the member could retire on an unreduced retirement allowance, as determined by the Board of Trustees upon the advice of the actuary, plus an administrative fee to be determined by the Board of Trustees. Notwithstanding the foregoing provisions of this subdivision that provide for the purchase of service credits, the terms 'full cost', 'full liability', and 'full actuarial cost' include assumed annual post-retirement allowance increases, as determined by the Board of Trustees, from the earliest age at which a member could retire on an unreduced service allowance."
(c) G.S. 135-4(p1)(1) reads as rewritten:
"(1)	Notwithstanding any other provision of this Chapter, upon completion of five years of membership service, any member may purchase service previously rendered as a part-time teacher or employee of an employer as defined in G.S. 135-1(11) or G.S. 128-21(11), except for temporary or part-time service rendered while a full-time student in pursuit of a degree or diploma in a degree-granting program. Payment shall be made in a single lump sum in an amount equal to the full actuarial cost of providing credit for the service, together with interest and an administrative fee, as determined by the Board of Trustees on the advice of the Retirement System's actuary. Notwithstanding the provisions of G.S. 135-4(b), the Board of Trustees shall fix and determine by appropriate rules and regulations how much service in any year, as based on compensation, is equivalent to one year of service in proportion to 'earnable compensation', but in no case shall more than one year of service be creditable for all service in one year. Service rendered for the regular school year in any district shall be equivalent to one year's service. Notwithstanding the foregoing provisions of this subdivision that provide for the purchase of service credits, the terms 'full cost', 'full liability', and 'full actuarial cost' include assumed annual post-retirement allowance increases, as determined by the Board of Trustees, from the earliest age at which a member could retire on an unreduced service allowance."
(d) G.S. 135-4(s) reads as rewritten:
"(s)	Credit at Full Cost for Temporary Employment. – In addition to the provisions of subsection (p) above, any member may purchase creditable service for employment when classified as a temporary teacher or employee subject to the conditions that the:
(1)	Member was employed by an employer as defined in G.S. 135-1(11) or G.S. 128-21(11);
(2)	Member's temporary employment met all other requirements of G.S. 135-1(10) or (25), or G.S. 128-21(10);
(3)	Member has completed five years or more of membership service;
(4)	Member acquires from the employer such certifications of temporary employment as are required by the Board of Trustees; and
(5)	Member makes a lump sum payment into the Annuity Savings Fund equal to the full liability of the service credits calculated on the basis of the assumptions used for purposes of the actuarial valuation of the Retirement System's liabilities and shall take into account the retirement allowance arising on account of the additional service credit commencing at the earliest age at which the member could retire on an unreduced retirement allowance, as determined by the Board of Trustees upon the advice of the actuary, plus an administrative expense fee to be determined by the Board of Trustees. Notwithstanding the foregoing provisions of this subdivision that provide for the purchase of service credits, the terms 'full cost', 'full liability', and 'full actuarial cost' include assumed annual post-retirement allowance increases, as determined by the Board of Trustees, from the earliest age at which a member could retire on an unreduced service allowance.
The provisions of this subsection shall also apply to the purchase of creditable service for State employment when classified as a permanent hourly employee in accordance with G.S. 126-5(c4)."

Requested by:  Representatives Holmes, Creech, Esposito, Crawford, Hardy
RETIREMENT SYSTEM TRANSFER/PROVIDE FOR MEMBERS OF THE CONSOLIDATED JUDICIAL RETIREMENT SYSTEM TO TRANSFER CREDITABLE SERVICE FROM THE TEACHERS' AND STATE EMPLOYEES' RETIREMENT SYSTEM, THE LEGISLATIVE RETIREMENT SYSTEM, OR THE LOCAL GOVERNMENTAL EMPLOYEES' RETIREMENT SYSTEM TO THE CONSOLIDATED JUDICIAL RETIREMENT SYSTEM.
Section 30.23. (a) G.S. 128-34 is amended by adding a new subsection to read:
	"( d)  The accumulated contributions and creditable service of any member whose service as an employee has been or is terminated other than by retirement or death and who, while still a member of this Retirement System, became or becomes a member, as defined in G.S. 135-53(11), of the Consolidated Judicial Retirement System, shall be transferred from this Retirement System to the Consolidated Judicial Retirement System.  In order to effect the transfer of a member's creditable service from the Local Governmental Employees' Retirement System to the Consolidated Judicial Retirement System, there shall be transferred from the Local Governmental Employees' Retirement System to the Consolidated Judicial Retirement System the sum of (i) the accumulated contributions of the member credited in the annuity savings fund; and (ii) the amount of reserve held in the Local Governmental Employees' Retirement System as a result of previous contributions by the employer on behalf of the transferring member."
(b)	G.S. 135-28.1 is amended by adding a new subsection to read:
"( f)	Notwithstanding the provisions of subsections (a), (b), (c), (d), and (e) of this section, the accumulated contributions and creditable service of any member whose service as a teacher or employee has been or is terminated other than by retirement or death and who, while still a member of this Retirement System, became or becomes a member, as defined in G.S. 135-53(11), of the Consolidated Judicial Retirement System, shall be transferred from this Retirement System to the Consolidated Judicial Retirement System.  In order to effect the transfer of a member's creditable service from the Teachers' and State Employees' Retirement System to the Consolidated Judicial Retirement System, there shall be transferred from the Teachers' and State Employees' Retirement System to the Consolidated Judicial Retirement System the sum of (i) the accumulated contributions of the member credited in the annuity savings fund; and (ii) the amount of reserve held in the Teachers' and State Employees' Retirement System as a result of previous contributions by the employer on behalf of the transferring member."
(c)	Article 1A of Chapter 120 of the General Statutes is amended by adding a new subsection to read:
"§ 120-4.32.  Transfer of members.
	The accumulated contributions and creditable service of any member whose service as a member of the General Assembly has been or is terminated other than by retirement or death and who, while still a member of this Retirement System, became or becomes a member, as defined in G.S. 135-53(11), of the Consolidated Judicial Retirement System, shall be transferred from this Retirement System to the Consolidated Judicial Retirement System.  In order to effect the transfer of a member's creditable service from the Legislative Retirement System to the Consolidated Judicial Retirement System, there shall be transferred from the Legislative Retirement System to the Consolidated Judicial Retirement System the sum of (i) the accumulated contributions of the member credited in the annuity savings fund; and (ii) the amount of reserve held in the Legislative Retirement System as a result of previous contributions by the General Assembly on behalf of the transferring member."
(d)	G.S. 135-56 is amended by adding a new subsection to read:
"( f)	The creditable service of a member who was a member of the Legislative Retirement System, Local Governmental Retirement System, or Teachers' and State Employees' Retirement System and whose accumulated contributions and reserves are transferred from that System to this System, includes service that was creditable in the Legislative Retirement System, the Local Governmental Employees' Retirement System, or Teachers' and State Employees' Retirement System, and membership service with those Retirement Systems is membership service with this Retirement System."
(e)  G.S. 135-56.2 is repealed.
(f)  G.S. 135-58(a1) reads as rewritten:
"(a1)	Any member who retires under the provisions of subsection (a) or subsection (c) of G.S. 135-57 on or after July 1, 1990, but before July 1, 1997, after he either has attained his 65th birthday or has completed 24 years or more of creditable service shall receive an annual retirement allowance, payable monthly, which shall commence on the effective date of his retirement and shall be continued on the first day of each month thereafter during his lifetime, the amount of which shall be computed as the sum of (1), (2), and (3) following, provided that in no event shall the annual allowance payable to any member be greater than an amount which, when added to the allowance, if any, to which he is entitled under the Teachers' and State Employees' Retirement System, the Legislative Retirement System or the North Carolina Local Governmental Employees' Retirement System (prior in any case to any reduction for early retirement or for an optional mode of payment) would total three-fourths of his final compensation:
(1)	Four and two-hundredths percent (4.02%) of his final compensation, multiplied by the number of years of his creditable service rendered as a justice of the Supreme Court or judge of the Court of Appeals;
(2)	Three and fifty-two hundredths percent (3.52%) of his final compensation, multiplied by the number of years of his creditable service rendered as a judge of the superior court or as administrative officer of the courts;
(3)	Three and two-hundredths percent (3.02%) of his final compensation, multiplied by the number of years of his creditable service rendered as a judge of the district court, district attorney, or clerk of superior court."
(g)  G.S. 135-58 is amended by adding a new subsection to read:
"( a2)	Any member who retires under the provisions of subsection (a) or subsection (c) of G.S. 135-57 on or after July 1, 1997, after he either has attained his 65th birthday or has completed 24 years or more of creditable service, shall receive an annual retirement allowance, payable monthly, which shall commence on the effective date of his retirement and shall be continued on the first day of each month thereafter during his lifetime, the amount of which shall be computed as the sum of the amounts in subdivisions (1), (2), (3), (4), (5), and (6) following, provided that in no event shall the annual allowance payable to any member be greater than an amount which, prior in any case to any reduction for early retirement or for an optional mode of payment, would total three-fourths of his final compensation:
(1)	Four and two-hundredths percent (4.02%) of his final compensation, multiplied by the number of years of his creditable service rendered as a justice of the Supreme Court or judge of the Court of Appeals;
(2)	Three and fifty-two hundredths percent (3.52%) of his final compensation, multiplied by the number of years of his creditable service rendered as a judge of the superior court or as Administrative Officer of the Courts;
(3)	Three and two-hundredths percent (3.02%) of his final compensation, multiplied by the number of years of his creditable service, rendered as a judge of the district court, district attorney, or clerk of superior court;
(4)	A service retirement allowance computed in accordance with the service retirement provisions of Article 1A of Chapter 120 of the General Statutes using final compensation and creditable service equal to the number of years of the member's creditable service that was transferred from the Legislative Retirement System to this System as provided in G.S. 135-56;
(5)	A service retirement allowance computed in accordance with the service retirement provisions of Article 3 of Chapter 128 of the General Statutes using average final compensation as defined in G.S. 128-21(5) and creditable service equal to the number of years of the member's creditable service that was transferred from the Local Governmental Employees' Retirement System to this System as provided in G.S. 135-56; and
(6)	A service retirement allowance computed in accordance with the service retirement provisions of Article 1 of Chapter 135 of the General Statutes using average final compensation as defined in G.S. 135-53(2a) and creditable service equal to the number of years of the member's creditable service that was transferred from the Teachers' and State Employees' Retirement System to this System as provided in G.S. 135-56."
(h)  G.S. 135-60(a) reads as rewritten:
"(a)	Upon retirement for disability in accordance with G.S. 135-59, a member shall receive a disability retirement allowance computed and payable as provided for service retirement in G.S. 135-58(a2) except that the member's creditable service shall be taken as the creditable service he would have had had he continued in service to the earliest date he could have retired on an unreduced service retirement allowance as a member in the same division of the General Court of Justice in which he was serving on his disability retirement date."
(i)  Chapter 135 of the General Statutes is amended by adding a new section to read:
"§ 135-70A.  Transfer of members from the Legislative Retirement System, Local Governmental Employees' Retirement System, or  Teachers' and State Employees' Retirement System.
(a)	The accumulated contributions, creditable service, and reserves, if any, of a former teacher, employee, or member of the General Assembly, as defined in G.S. 135-1(25), 135-1(10), 120-4.8(9), 120-4.8(12), and  128-21(10), respectively, who is a member of the Consolidated Judicial Retirement System, shall be transferred from the Teachers' and State Employees' Retirement System, the Legislative Retirement System, or the Local Governmental Employees' Retirement System to the Consolidated Judicial Retirement System.  The accumulated contributions, creditable service, and reserves of any member whose service as a teacher, employee, or member of the General Assembly is terminated other than by retirement or death and who becomes a member of the Consolidated Judicial Retirement System, shall be transferred from the Teachers' and State Employees' Retirement System, the Legislative Retirement System, or the Local Governmental Employees' Retirement System to the Consolidated Judicial Retirement System.  In order to effect the transfer of a member's creditable service from the Teachers' and State Employees' Retirement System, the Legislative Retirement System, or the Local Governmental Employees' Retirement System to the Consolidated Judicial Retirement System, the accumulated contributions of each member credited in the annuity savings fund in the Teachers' and State Employees' Retirement System, the Legislative Retirement System, or the Local Governmental Employees' Retirement System shall be transferred and credited to the annuity savings fund in the Consolidated Judicial Retirement System.
(b)	The Board of Trustees shall effect such rules as it may deem necessary to administer the preceding subsection and to prevent any duplication of service credits or benefits that might otherwise occur."
(j)  This section becomes effective July 1, 1997.

Requested by:  Representatives Holmes, Creech, Esposito, Crawford, Grady, Preston, Arnold
PROVIDE A RETIREMENT INCENTIVE BY GRANTING A SEPARATION ALLOWANCE FOR ALL ELIGIBLE MEMBERS OF THE TEACHERS' AND STATE EMPLOYEES' RETIREMENT SYSTEM
Section 30.24.  (a) The catch line of Article 12D of Chapter 143 of the General Statutes reads as rewritten:
"Separation Allowances."
(b)	Article 12D of Chapter 143 of the General Statutes is amended by adding a new section to read:
"§ 143-166.43.  Special separation allowance.
(a)	Notwithstanding any other provision of law, any member of the Teachers' and State Employees' Retirement System who is not eligible for a special separation allowance under G.S. 143-166.41 and who qualifies under this section shall receive, beginning on the last day of the month in which the member retires on a service retirement under the provisions of G.S. 135-5(a), an annual separation allowance equal to eighty-five-hundredths percent (0.85%) of the annual equivalent of the base rate of compensation, excluding shift or holiday premium pay, overtime, annual leave, or longevity, most recently applicable to the member for each year of creditable service. The annual allowance shall be paid in 12 equal installments on the last day of each month. To qualify for the allowance the member shall:
(1)	Have (i) completed 30 or more years of creditable service, or (ii) have attained 60 years of age and completed 25 or more years of creditable service; and
(2)	Not have attained 62 years of age.
(b)	As used in this section, 'creditable service' means the service for which credit is allowed under the Teachers' and State Employees' Retirement System.
(c)	Payment to a retired member under the provisions of this section shall cease at the death of the retired member or on the last day of the month in which the retired member attains 62 years of age or upon the first day of reemployment, contractual or otherwise, by any employer as defined in G.S. 135-1(11).
(d)	This section does not affect the benefits to which a retired member may be entitled from State, federal, or private retirement systems. The benefits payable under this section shall not be subject to any increases in salary or retirement allowances that may be authorized by the General Assembly.
(e)	Each employer as defined in G.S. 135-1(11) shall determine the eligibility of employees for the benefits provided herein.
(f)	The Director of the Budget may authorize from time to time the  transfer of funds within the budgets of each employer necessary to carry out the purposes of this section. These funds shall be taken from those appropriated to the employer for salaries and related fringe benefits.
(g)	The employer shall make the payments set forth in subsection (a) to those persons certified under subsection (e) from funds available under subsection (f) of this section."
(c)	This section is effective when it becomes law and applies to persons who:
(1)	Are eligible to retire under the provisions of G.S. 143-166.43(a)(1) between July 1, 1997, and January 1, 1998;
(2)	Notify their employer in writing their intentions to retire and have a mutually agreed upon date of retirement; and
(3)	Retire with an effective date of retirement no later than August 1, 1998.

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.

Requested by:  Representatives Russell, G. Wilson
CAPITAL IMPROVEMENT PLANNING AND BUDGETING
Section 31A.  Chapter 143 of the General Statutes is amended by adding a new Article to read:
"ARTICLE 1A.
"Capital Improvement Planning and Budgeting Act.
"§ 143-34.8.  Definitions.
The following definitions apply in this Article:
(1)	Capital improvement. – The term includes land acquisition, new construction, or rehabilitation of existing facilities, and repairs and renovations.
(2)	State agency. – The term includes the Board of Governors of The University of North Carolina.
"§ 143-34.8A.  Legislative intent; purpose.   
(a)	The General Assembly recognizes the need to establish a comprehensive process for capital improvement planning that is fully integrated with State financial planning and debt management.
(b)	The capital improvement planning and budgeting process shall include the following elements:
(1)	An inventory of facilities owned by State agencies.
(2)	Explicit criteria used to evaluate capital improvement needs.
(3)	A six-year capital improvement needs inventory.
(4)	A six-year capital improvement plan.
(5)	A two-year capital improvement budget.
(c)	The Office of State Budget and Management has responsibility for management of the capital improvement planning and budgeting process.  The Director of the Budget may assign to any State agency or institution such duties and responsibilities as may in the Director's judgment be necessary to the successful administration of the capital improvement planning and budgeting process.
"§ 143-34.8B.  Capital improvement facilities inventory.
The Department of Administration shall develop and maintain an automated inventory of all facilities owned by State agencies pursuant to G.S. 143-341(4).  The inventory shall include the location, occupying agency, ownership, size, description, condition assessment, maintenance record, parking and employee facilities, and other information to determine maintenance needs and prepare life-cycle cost evaluations of each facility listed in the inventory.  The Department of Administration shall update and publish the inventory at least once every three years. The Department shall also record in the inventory acquisitions of new facilities and significant changes in existing facilities as they occur.
"§ 143-34.8C.  Capital improvement needs criteria.
The Office of State Budget and Management shall develop a weighted list of factors that may be used to evaluate the need for capital improvement projects.  The list shall include all of the following:
(1)	Preservation of existing facilities.
(2)	Health and safety considerations.
(3)	Operational efficiencies.
(4)	Increased demand for governmental services.
"§ 143-34.8D.  Agency capital improvement needs estimates.   
(a)	On or before September 1 of each even-numbered year, each State agency shall submit to the Office of State Budget and Management and to the Division of Fiscal Research a six-year capital improvement needs estimate.  This estimate shall describe the agency's anticipated capital needs for each year of the six-year planning period.  Capital improvement needs estimates shall be shown in two parts.
(b)	The first part of the capital improvement needs estimates shall include only requirements for repairs and renovations necessary to maintain the existing use of existing facilities.  Each proposed repair and renovation expenditure shall be justified by reference to the Facilities Condition Assessment Program operated by the Office of State Construction.
(c)	The second part of the capital improvement needs estimates shall include only proposals for land acquisition and projects involving either construction of new facilities or rehabilitation of existing facilities to accommodate uses for which the existing facilities were not originally designed.  Each project included in this part shall be justified by reference to the needs evaluation criteria established by the Office of State Budget and Management pursuant to G.S. 143-34.8C.
"§ 143-34.8E.  Six-year capital improvement plan.
(a)	The State capital improvement plan shall address the long-term capital improvement needs of all State government agencies and shall incorporate all capital projects, however financed, proposed to meet those needs, except that transportation infrastructure projects shall be excluded.  On or before December 31 of each even-numbered year, the Director of the Budget shall prepare and transmit to the General Assembly a six-year capital improvement plan.  When preparing the plan, the Director of the Budget shall consider the capital improvement needs estimates submitted by State agencies as required in G.S. 143-34.8D.  The plan shall be prepared in two parts.
(b)	The first part of the capital improvement plan shall set forth repair and renovations requirements that, in the judgment of the Director of the Budget, must be met to protect and preserve existing capital improvement facilities.  General Fund expenditure levels anticipated in this part of the plan shall be consistent with the formula establishing the repair and renovation reserve in G.S. 143-15.3A.
(c)	The second part of the capital improvement plan shall set forth an integrated schedule for land acquisition, new construction, or rehabilitation of existing facilities that, in the judgment of the Director of the Budget, should be initiated within each year of the six-year planning period.  The plan shall contain an estimated schedule for each project, along with estimates of planning, design, and construction cost.  General Fund expenditure levels anticipated in this part of the plan shall approximate two percent (2%) of General Fund tax revenues for each year of the planning period.
"§ 143-34.8F.  Biennial capital improvement budget.   
(a)	The Director of the Budget shall submit to the General Assembly a biennial capital improvement budget as a separate component of the budget report required by G.S. 143-11.  Except as provided by G.S. 116-11, the capital improvement budget shall set forth a complete description of those land acquisitions, new construction projects, and reconstruction projects recommended for funding during each year of the succeeding biennium.  The capital improvement budget shall also contain the following information:
(1)	For each project recommended, a justification for funding based upon the capital needs criteria set forth in G.S. 143-34.8C.
(2)	For each project recommended, a detailed account of planning, design, and construction costs.
(3)	For each new construction project, complete life-cycle cost information.
(4)	For each new construction project, the estimated impact on agency operating budgets.
(b)	To the extent that projects recommended for funding in the biennial capital improvements budget differ from those identified and scheduled in the first two years of the six-year capital improvement plan established in G.S. 143-34.8E, the reasons for that variance shall be explained."

Requested by:   Representatives Russell, G. Wilson
HISTORIC SITES REPAIRS AND RENOVATIONS FUNDS
Section 31.1.  (a) Funds allocated in 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 this act.

Requested by:   Representatives Russell, G. Wilson
STATE CAPITAL AND VISITOR'S CENTER SITE
Section 31.2.  The new State Capital and Visitor Center being planned for construction shall be located at the site bounded by Blount Street, Edenton Street, Person Street, and Jones Street in Raleigh, unless that construction site is unacceptable for structural reasons.

Requested by:   Representatives Russell, G. Wilson
RESERVE FOR ADVANCE PLANNING
Section 31.3.  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:   Representatives Russell, G. Wilson
ENCUMBERED APPROPRIATIONS AND PROJECT RESERVE FUND
Section 31.4.  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:   Representatives Russell, G. Wilson
PROJECT COST INCREASE
Section 31.5.    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:   Representatives Russell, G. Wilson
NEW PROJECT AUTHORIZATION
Section 31.6.   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:   Representatives Russell, G. Wilson
ADVANCE PLANNING OF CAPITAL IMPROVEMENT PROJECTS
Section 31.7.   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:   Representatives Russell, G. Wilson
APPROPRIATIONS LIMITS/REVERSION OR LAPSE
Section 31.8.   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.

Requested by:   Representatives Russell, G. Wilson
EXPENDITURE OF FUNDS FROM RESERVE FOR REPAIRS AND RENOVATIONS
Section 31.9.  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 allocations 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.

Requested by:   Representatives Russell, G. Wilson
HIGHWAY PATROL–UNDERGROUND FUEL TANK REMOVAL AND REMEDIATION FUNDS
Section 31.10.  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:   Representatives Russell, G. Wilson
PROCEDURES FOR DISBURSEMENT
Section 31.11.  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:   Representatives Russell, G. Wilson
WATER RESOURCES DEVELOPMENT PROJECTS FUNDS
Section 31.12.  (a)	The Department of Environment, Health, and Natural Resources shall allocate the funds appropriated in Section 2A 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 Long-Term Disposal	1,000,000

4.	Carolina Beach Renourishment	1,148,000

5.	Wrightsville Beach Renourishment	500,000

6.	State - Local Water Projects	828,100

7.	Long Beach Sea Turtle Habitat Restoration	994,000

8.	Clinton Wastewater Treatment Plant	84,000
Flood Protection

9.	AIWW Easement Acquisition	100,000

10.	Corp of Engineers Feasibility Studies	230,000

11.	Emergency Flood Control Projects	134,000

12.	Natural Resources Conservation Service-	500,000
Yadkin County
TOTAL	$6,063,100

(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:   Representatives Russell, G. Wilson
CAPITAL IMPROVEMENT PROJECTS/SUPPLEMENTAL FUNDING APPROVAL/REPORTING REQUIREMENT
Section 31.13. Each department receiving capital improvement authorizations under this act shall report quarterly to the Director of the Budget on the status of those capital projects.  The quarterly report shall include a full justification for any project that is not under contract for construction consistent with the project schedule approved by the Office of State Construction.  The reporting procedure to be followed shall be developed by the Director of the Budget.
Capital improvement projects authorized in this act that have not been placed under contract for construction due to insufficient funds may be supplemented with funds identified by the Director of the Budget, provided:
(1)	That the project was designed and bid within the scope as authorized by the General Assembly;
(2)	That the funds to supplement the project are the same source as authorized for the original project;
(3)	That the department to which the project was authorized has unsuccessfully pursued all statutory authorizations to award the contract; and
(4)	That the action be reported to the Joint Legislative Commission on Governmental Operations and to the Appropriations Committees of the House of Representatives and the Senate.

Requested by:   Representatives Russell, G. Wilson
PUBLICATION OF AVAILABILITY OF STATE GRANT-IN-AID FUNDS
Section 31.14. (a)	Chapter 143 of the General Statutes is amended by adding the following new section to read:
"§ 143-6.2.  State agencies to publish availability of State grants-in-aid funds.
Every State agency that administers grants-in-aid to non-State entities shall publicize in the North Carolina Register and in the North Carolina Community Resource Information System the availability of State grants-in-aid funds.   Information shall be made available on the Internet and shall be updated as frequently as practical.  Information publicized shall include the following:
(1)	The name of the grants-in-aid program, the purposes of the program, and the purposes for which funds will be allocated under the program;
(2)	General requirements for applying for and receiving grants-in-aid funds, including reporting requirements;
(3)	The total amount of funds appropriated for the grants-in-aid program and the amount of grant funds that may be awarded to each grant recipient;
(4)	Methods that will be used by the granting agency for evaluating grant applications and the criteria for the selection of grant projects; and
(5)	The name and telephone number of the agency representative who may be contacted for a grant application or for additional information.
The granting agency shall make available upon request a list of all non-State entities awarded grants-in-aid funds by the agency during the current and immediately preceding fiscal year.  No State grants-in-aid funds shall be disbursed unless the State agency administering the grants-in-aid program has publicized the information required under this section.  As used in this section, 'grants-in-aid funds' are funds appropriated to a State agency or reserved to a State trust fund for discretionary allocation for authorized purposes.  This section does not apply to non-State entities that receive direct appropriations from the General Assembly.
The granting agency shall require each grant-in-aid recipient to report to the agency at least one time during or at the close of the funding cycle on the purposes for which grant funds were expended and the amount expended for each purpose."
(b) G.S. 150B-21.17(a) reads as rewritten:
"(a)	Content. – The Codifier of Rules must publish the North Carolina Register. The North Carolina Register must be published at least two times a month and must contain the following:
(1)	Temporary rules entered in the North Carolina Administrative Code.
(1a)	Notices of rule-making proceedings, the text of proposed rules, and the text of permanent rules approved by the Commission.
(2)	Notices of receipt of a petition for municipal incorporation, as required by G.S. 120-165.
(3)	Executive orders of the Governor.
(4)	Final decision letters from the United States Attorney General concerning changes in laws that affect voting in a jurisdiction subject to section 5 of the Voting Rights Act of 1965, as required by G.S. 120-30.9H.
(5)	Orders of the Tax Review Board issued under G.S. 105-241.2.
(5a)	Information on State grant programs in accordance with G.S. 143-6.2.
(6)	Other information the Codifier determines to be helpful to the public."

Requested by:   Representatives Russell, G. Wilson, McMahan
UNIFORM FINANCIAL ACCOUNTABILITY
Section 31.15.  G.S. 143-6.1 reads as rewritten:
"§ 143-6.1.  Report on use of State funds by non-State entities.
(a)	Disbursement and Use of State Funds. – Every corporation, organization, and institution that receives, uses, or expends any State funds shall use or expend the funds only for the purposes for which they were appropriated by the General Assembly or collected by the State. State funds include federal funds that flow through the State. For the purposes of this section, the term "grantee" means a corporation, organization, or institution that receives, uses, or expends any State funds. The State may not disburse State funds appropriated by the General Assembly to any grantee or collected by the State for use by any grantee if that grantee has failed to provide any reports or financial information previously required by this section. In addition, before disbursing the funds, the Office of State Budget and Management may require the grantee to supply information demonstrating that the grantee is capable of managing the funds in accordance with law and has established adequate financial procedures and controls. All financial statements furnished to the State Auditor pursuant to this section, and any audits or other reports prepared by the State Auditor, are public records.
(b)	State Agency Reports. – A State agency that receives State funds and then disburses the State funds to a grantee must identify the grantee to the State Auditor, unless the funds were for the purchase of goods and services. The State agency must submit documents to the State Auditor in a prescribed format describing standards of compliance and suggested audit procedures sufficient to give adequate direction to independent auditors performing audits.
(c)	Grantee Receipt and Expenditure Reports. – A grantee that receives, uses, or expends between fifteen thousand dollars ($15,000) and three hundred thousand dollars ($300,000) in State funds annually, except when the funds are for the purchase of goods or services, must file annually with the State agency that disbursed the funds a sworn accounting of receipts and expenditures of the State funds. This accounting must be attested to by the treasurer of the grantee and one other authorizing officer of the grantee. The accounting must be filed within six months after the end of the grantee's fiscal year in which the State funds were received. The accounting shall be in the form required by the disbursing agency. Each State agency shall develop a format for these accountings and shall obtain the State Auditor's approval of the format.
(d)	Grantee Audit Reports. – A grantee that receives, uses, or expends State funds in the amount of three hundred thousand dollars ($300,000) or more annually, except when the funds are for the purchase of goods or services, must file annually with the State Auditor a financial statement in the form and on the schedule prescribed by the State Auditor. The financial statement must be audited in accordance with standards prescribed by the State Auditor to assure that State funds are used for the purposes provided by law.
(e)	Federal Reporting Requirements. – Federal law may require a grantee to make additional reports with respect to funds for which reports are required under this section. Notwithstanding the provisions of this section, a grantee may satisfy the reporting requirements of subsection (c) of this section by submitting a copy of the report required under federal law with respect to the same funds or by submitting a copy of the report described in subsection (d) of this section.
(f)	Audit Oversight. – The State Auditor has audit oversight, pursuant to Article 5A of Chapter 147 of the General Statutes, of every grantee that receives, uses, or expends State funds. Such a grantee must, upon request, furnish to the State Auditor for audit all books, records, and other information necessary for the State Auditor to account fully for the use and expenditure of State funds. The grantee must furnish any additional financial or budgetary information requested by the State Auditor."

Requested by:   Representative Sherrill
UNC-A HIGHSMITH CENTER FUNDS
Section 31.16.  If private funds are acquired to supplant the appropriation made in Section 2A of this act to the Board of Governors of the University of North Carolina for the Asheville Graduate Center Phase II, with the approval of the Board of Governors of The University of North Carolina, the Chancellor of the University of North Carolina at Asheville may reallocate these funds to be used for renovation of and expansion to the Highsmith Center at the University of North Carolina at Asheville.

PART XXXII.  MISCELLANEOUS PROVISIONS

Requested by:  Representatives Holmes, Creech, Esposito, Crawford
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:  Representatives Holmes, Creech, Esposito, Crawford
COMMITTEE REPORT
Section 32.1. (a)	The House Appropriations Committee Report on the Continuation, Expansion, and Capital Budget, dated May 30, 1997, which was distributed in the House of Representatives 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 House Appropriations Committee Report on the Continuation, Expansion, and Capital Budget, dated May 30, 1997, together with any accompanying correction sheets.
(3)	Transfers of funds supporting programs were made in accordance with the House Appropriations Committee Report on the Continuation, Expansion, and Capital Budget, dated May 30, 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:  Representatives Holmes, Creech, Esposito, Crawford
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:  Representatives Holmes, Creech, Esposito, Crawford
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:  Representatives Holmes, Creech, Esposito, Crawford
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:  Representatives Holmes, Creech, Esposito, Crawford
EFFECTIVE DATE
Section 32.5.  Except as otherwise provided, this act becomes effective July 1, 1997.