A BILL TO BE ENTITLED
AN ACT TO REFORM THE METHOD OF ELECTING SUPREME COURT JUSTICES AND COURT OF APPEALS JUDGES AND TO ESTABLISH A FAIR ELECTIONS FUND THAT PROVIDES CANDIDATES FOR THESE OFFICES WITH AN ALTERNATIVE MEANS OF FINANCING THEIR CAMPAIGNS.  
The General Assembly of North Carolina enacts:
SECTION 1.  Chapter 163 of the General Statutes is amended by adding a new Article to read:
"Article 22D.
"The North Carolina Fair Elections Fund.
"§ 163‑278.61.  Purpose of the North Carolina Fair Elections Fund.
The purpose of this Article is to ensure the fairness of democratic elections in North Carolina and to protect the constitutional rights of voters and candidates from the detrimental effects of increasingly large amounts of money being raised and spent to influence the outcome of elections. The potential for corruption and its appearance is especially problematic in elections of the judiciary, since impartiality is uniquely important to the integrity and credibility of the courts. Accordingly, this Article establishes the North Carolina Fair Elections Fund as an alternative source of campaign financing for candidates who demonstrate public support and voluntarily accept strict fund‑raising and spending limits. This Article is available to candidates for justice of the Supreme Court and judge of the Court of Appeals in elections to be held in 2004 and thereafter.
"§ 163‑278.62. Definitions.
The following definitions apply in this Article:
(1)	Board. – The State Board of Elections.
(2)	Candidate. – An individual who becomes a candidate as described in G.S. 163‑278.6(4). The term includes a political committee authorized by the candidate for that candidate's election.
(3)	Certified candidate. – A candidate running for office who chooses to receive campaign funds from the Fund and who is certified under G.S. 163‑278.64(c).
(4)	Contested primary and contested general election. – An election in which there are more candidates than the number to be elected.
(5)	Contribution. – Defined in G.S. 163-278.6.
(6)	Expenditure. – Defined in G.S. 163-278.6.
(7)	Fund. – The North Carolina Fair Elections Fund established in G.S. 163‑278.63.
(8)	Independent expenditure. – Defined in G.S. 163-278.6.
(9)	Maximum qualifying contributions. – An amount of qualifying contributions equal to 60 times the filing fee for candidacy for the office.
(10)	Minimum qualifying contributions. – An amount of qualifying contributions equal to 30 times the filing fee for candidacy for the office.
(11)	Nonparticipating candidate. – A candidate running for office who is not seeking to be certified under G.S. 163‑278.64(c).
(12)	Office. – A position on the North Carolina Court of Appeals or North Carolina Supreme Court.
(13)	Participating candidate. – A candidate for office who has filed a declaration of intent to participate under G.S. 163‑278.64.
(14)	Political committee. – Defined in G.S. 163-278.6.
(15)	Qualifying contribution. – A contribution of not less than ten dollars ($10.00) and not more than five hundred dollars ($500.00) in the form of a check or money order to the candidate or the candidate's committee that meets both of the following conditions:
a.	Made by any registered voter in this State.
b.	Made during the qualifying period and obtained with the approval of the candidate or candidate's committee.
(16)	Qualifying period. – The period beginning September 1 in the year before the election and ending on the day of the primary of the election year. 
(17)	Referendum committee. – Defined in G.S. 163-278.6.
(18)	Trigger for rescue funds. – The dollar amount at which rescue funds are released for certified candidates. In the case of a primary, the trigger equals the maximum qualifying contributions for participating candidates. In the case of a contested general election, the trigger equals the base level of funding available under G.S. 163‑278.65(b)(4).
"§ 163‑278.63. North Carolina Fair Elections Fund established; sources of funding.
(a)	Establishment of Fund. – The North Carolina Fair Elections Fund is established to finance the election campaigns of certified candidates for office and to pay administrative and enforcement costs of the Board related to this Article. The Fund is a special, dedicated, nonlapsing, nonreverting fund. Any interest generated by the Fund is credited to the Fund. The Board shall administer the Fund.
(b)	Sources of Funding. – Money received from all the following sources must be deposited in the Fund:
(1)	Money from the North Carolina Candidates Financing Fund.
(2)	Designations made to the Fair Elections Fund by individual taxpayers pursuant to G.S. 105‑159.2.
(3)	Any contributions made by attorneys in accordance with G.S. 105-41. 
(4)	Fair Elections Fund revenues distributed for an election that remain unspent or uncommitted at the time the recipient is no longer a certified candidate in the election.
(5)	Money ordered returned to the Fair Elections Fund in accordance with G.S. 163-278.70.
(6)	Voluntary donations made directly to the Fair Elections Fund. Corporations, other business entities, labor unions, and professional associations may make donations to the Fund.
(c)	Determination of Fund Amount. – By October 1, 2003, and every two years thereafter, the Board, in conjunction with the Advisory Council for the Fair Elections Fund, shall prepare and provide to the Joint Legislative Commission on Governmental Operations of the General Assembly a report documenting, evaluating, and making recommendations relating to the administration, implementation, and enforcement of this Article. In its report, the Board shall set out the funds received to date and the expected needs of the Fund for the next election.
"§ 163‑278.64.  Requirements for participation; certification of candidates.
(a)	Declaration of Intent to Participate. – Any individual choosing to receive campaign funds from the Fund shall first file with the Board a declaration of intent to participate in the act as a candidate for a stated office. The declaration of intent shall be filed before or during the qualifying period and before collecting any qualifying contributions. In the declaration, the candidate shall swear or affirm that only one political committee, identified with its treasurer, shall handle all contributions, expenditures, and obligations for the participating candidate and that the candidate will comply with the contribution and expenditure limits set forth in subsection (d) of this section and all other requirements set forth in this Article or adopted by the Board. Failure to comply is a violation of this Article.
(b)	Demonstration of Support of Candidacy. – Except for candidates described elsewhere in this subsection, participating candidates who seek certification to receive campaign funds from the Fund shall first, during the qualifying period, obtain qualifying contributions from at least 350 registered voters in an aggregate sum that at least equals the amount of minimum qualifying contributions described in G.S. 163‑278.62(10) but that does not exceed the amount of maximum qualifying contributions described in G.S. 163‑278.62(9). Candidates who hold office on the Supreme Court or Court of Appeals and candidates who were elected to the Supreme Court or Court of Appeals within four years of the beginning of the qualifying period are deemed to have demonstrated support and are not required to comply with the previous sentence of this subsection.
No payment, gift, or anything of value shall be given in exchange for a qualifying contribution.
(c)	Certification of Candidates. – Upon receipt of a submittal of the record of demonstrated support by a participating candidate, the Board shall determine whether or not the candidate has complied with all the following requirements, if they apply to that candidate:
(1)	Signed and filed a declaration of intent to participate in this Article.
(2)	Submitted a report itemizing the appropriate number of qualifying contributions received from registered voters, which the Board shall verify through a random sample or other means it adopts. The report shall include the county of residence of each registered voter listed.
(3)	Qualified to receive votes on the ballot as a candidate for the office.
(4)	Otherwise met the requirements for participation in this Article.
The Board shall certify candidates complying with the requirements of this section as soon as possible and no later than five business days after receipt of a satisfactory record of demonstrated support. Candidates not required to obtain a minimum number of qualifying donations shall submit a record of any qualifying contributions received at the time they request certification according to procedures set forth by the Board.
(d)	Restrictions on Contributions and Expenditures for Participating and Certified Candidates. – The following restrictions shall apply to contributions and expenditures with respect to participating and certified candidates:
(1)	Beginning January 1 of the year before the election and before the filing of a declaration of intent, a candidate for office may accept in contributions up to ten thousand dollars ($10,000) from sources and in amounts permitted by Article 22A of this Chapter and may expend up to ten thousand dollars ($10,000) for any campaign purpose. A candidate who exceeds either of these limits shall be ineligible to file a declaration of intent or receive funds from the Fair Elections Fund.
(2)	From the filing of a declaration of intent through the end of the qualifying period, a candidate shall expend no more than an amount equal to the maximum qualifying contributions for that candidate, not including possible rescue funds or the remaining money raised pursuant to subdivision (1) of this subsection. Contributions a candidate may use to expend to that limit shall be limited to qualifying contributions and personal and family contributions permitted by subdivision (4) of this subsection. 
(3)	After the qualifying period and through the date of the general election, the candidate shall expend only the funds the candidate receives from the Fund pursuant to G.S. 163-278.65(b)(4) plus any funds remaining from the qualifying period and possible rescue funds. 
(4)	During the qualifying period, the candidate may contribute up to one thousand dollars ($1,000) of that candidate's own money to the campaign and may accept in contributions one thousand dollars ($1,000) from each member of that candidate's family consisting of spouse, parent, child, brother, and sister.
(5)	A candidate and the candidate's committee shall limit the use of all revenues permitted by this subsection to expenditures for campaign-related purposes only. The Board shall publish guidelines outlining permissible campaign-related expenditures.
(6)	Any contribution received by a participating or certified candidate that falls outside that permitted by this subsection shall be returned to the donor as soon as practicable. Contributions intentionally made, solicited, or accepted in violation of this Article are subject to civil penalties as specified in G.S. 163-278.70. The funds involved shall be forfeited to the Civil Penalty and Forfeiture Fund.
(7)	A candidate shall return to the Fund any amount distributed for an election that is unspent and uncommitted at the date of the election, or at the time the individual ceases to be a certified candidate, whichever occurs first. For accounting purposes, all qualifying, personal, and family contributions shall be considered spent before revenue from the Fund is spent or committed.
(e)	Revocation. – A candidate may revoke, in writing to the Board, a decision to participate in the Fair Elections Fund at any time before the deadline set by the Board for the candidate's submission of information for the Voter Guide described in 
G.S. 163-278.69. After a timely revocation, that candidate may accept and expend outside the limits of this Article without violating this Article. Within 10 days after revocation, a candidate shall return to the Board all money received from the Fund.
"§ 163‑278.65. Distribution from the Fund.
(a)	Timing of Fund Distribution. – The Board shall distribute to a certified candidate revenue from the Fund in an amount determined under subdivision (b)(4) of this section within five business days after the certified candidate's name is approved to appear on the ballot in a contested general election, but no earlier than five business days after the primary.
(b)	Amount of Fund Distribution. – By August 1, 2003, and no less frequently than every two years thereafter, the Board shall determine the amount of funds, rounded to the nearest one hundred dollars ($100.00), to be distributed to certified candidates as follows:
(1)	Uncontested primaries. – No funds shall be distributed.
(2)	Contested primaries. – No funds shall be distributed except as provided in G.S. 163‑278.67. 
(3)	Uncontested general elections. – No funds shall be distributed.
(4)	Contested general elections. – Funds shall be distributed to a certified candidate for a position on the Court of Appeals in an amount equal to 125 times the candidate's filing fee as set forth in G.S. 163‑107. Funds shall be distributed to a certified candidate for a position on the Supreme Court in an amount equal to 175 times the candidate's filing fee as set forth in G.S. 163‑107.
(c)	Method of Fund Distribution. – The Board, in consultation with the State Treasurer and the State Controller, shall develop a rapid, reliable method of conveying funds to certified candidates. In all cases, the Board shall distribute funds to certified candidates in a manner that is expeditious, ensures accountability, and safeguards the integrity of the Fund. If the money in the Fund is insufficient to fully fund all certified candidates, then the available money shall be distributed proportionally, according to each candidate's eligible funding.
"§ 163‑278.66. Reporting requirements.
(a)	Reporting by Noncertified Candidates and Independent Expenditure Entities. – Any noncertified candidate with a certified opponent shall report total income, expenses, and obligations to the Board by facsimile machine or electronically within 24 hours after the total amount of campaign expenditures or obligations made, or funds raised or borrowed, exceeds eighty percent (80%) of the trigger for rescue funds as defined in G.S. 163‑278.62(18). Any entity making independent expenditures in excess of three thousand dollars ($3,000) in support of or opposition to a certified candidate shall report the total funds received, spent, or obligated for those expenditures to the Board by facsimile machine or electronically within 24 hours after the total amount of expenditures or obligations made, or funds raised or borrowed, for the purpose of making the independent expenditures, exceeds fifty percent (50%) of the trigger for rescue funds. After this 24‑hour filing, the noncertified candidate or independent expenditure entity shall comply with an expedited reporting schedule by filing additional reports after receiving each additional amount in excess of one thousand dollars ($1,000) or after making or obligating to make each additional expenditure(s) in excess of one thousand dollars ($1,000). The schedule and forms for reports required by this subsection shall be made according to procedures developed by the Board.
(b)	Reporting by Participating and Certified Candidates. – Notwithstanding other provisions of law, participating and certified candidates shall report any money received, including all previously unreported qualifying contributions, all campaign expenditures, obligations, and related activities to the Board according to procedures developed by the Board. A certified candidate who ceases to be certified or ceases to be a candidate or who loses an election shall file a final report with the Board and return any unspent revenues received from the Fund. In developing these procedures, the Board shall utilize existing campaign reporting procedures whenever practical.
(c)	Timely Access to Reports. – The Board shall ensure prompt public access to the reports received in accordance with this Article. The Board may utilize electronic means of reporting and storing information.
"§ 163‑278.67. Rescue funds.
(a)	When Rescue Funds Become Available. – When any report or group of reports shows that 'funds in opposition to a certified candidate or in support of an opponent to that candidate' as described in this section, exceed the trigger for rescue funds as defined in G.S. 163‑278.62(18), the Board shall issue immediately to that certified candidate an additional amount equal to the reported excess within the limits set forth in this section. 'Funds in opposition to a certified candidate or in support of an opponent to that candidate' shall be equal to the sum of the following:
(1)	Campaign expenditures or obligations made, or funds raised or borrowed, whichever is greater, reported by any one uncertified opponent of a certified candidate. Where a certified candidate has more than one uncertified opponent, the measure shall be taken from the uncertified candidate showing the highest relevant dollar amount.
(2)	The sum of all expenditures reported in accordance with G.S. 163‑278.66 of entities making independent expenditures in opposition to the certified candidate or in support of any opponent of that certified candidate.
(b)	Limit on Rescue Funds in Contested Primary. – Total rescue funds to a certified candidate in a contested primary shall be limited to an amount equal to two times the maximum qualifying contributions for the office sought. 
(c)	Limit on Rescue Funds in Contested General Election. – Total rescue funds to a certified candidate in a contested general election shall be limited to an amount equal to two times the amount described in G.S. 163‑278.65(b)(4).
"§ 163‑278.68.  Enforcement and administration.
(a)	Enforcement by the Board. – The Board, with the advice of the Advisory Council for the Fair Elections Fund, shall administer the provisions of this Article.
(b)	Advisory Council for the Fair Elections Fund. – There is established under the Board the Advisory Council for the Fair Elections Fund to advise the Board on the rules, procedures, and opinions it adopts for the enforcement and administration of this Article and on the funding needs and operation of the Fair Elections Fund. The Advisory Council shall consist of five members to be appointed as follows:
(1)	The Governor shall name two members from a list of individuals nominated by the State Chair of the political party with which the greatest number of registered voters is affiliated. The State Chair of that party shall submit to the Governor the names of five nominees.
(2)	The Governor shall name two members from a list of individuals nominated by the State Chair of the political party with which the second greatest number of registered voters is affiliated. The State Chair of that party shall submit to the Governor the names of five nominees.
(3)	The Board shall name one member by unanimous vote of all members of the Board. If the Board cannot reach unanimity on the appointment of that member, the Advisory Council shall consist of the remaining members.
No individual shall be eligible to be a member of the Advisory Council who would be ineligible to serve on a county board of elections in accordance with G.S. 163‑30. The initial members shall be appointed by December 1, 2002. Of the initial appointees, two are appointed for one‑year terms, two are appointed for two‑year terms, and one is appointed for a three‑year term according to random lot. Thereafter, appointees are appointed to serve four‑year terms. An individual may not serve more than two full terms. The appointed members receive the legislative per diem pursuant to G.S. 120‑3.1. One of the Advisory Council members shall be elected by the members as Chair. A vacancy during an unexpired term shall be filled in the same manner as the regular appointment for that term, but a vacancy appointment is only for the unexpired portion of the term.
(c)	Appeals. – The initial decision on an issue concerning qualification, certification, or distribution of funds under this Article shall be made by the Executive Director of the Board. The procedure for challenging that decision is as follows:
(1)	An individual or entity aggrieved by a decision by the Executive Director of the Board may appeal to the full Board within three business days of the decision. The appeal shall be in writing and shall set forth the reasons for the appeal.
(2)	Within five business days after an appeal is properly made, and after due notice is given to the parties, the Board shall hold a hearing. The appellant has the burden of providing evidence to demonstrate that the decision of the Executive Director was improper. The Board shall rule on the appeal within three business days after the completion of the hearing.
(d)	Board to Adopt Rules and Issue Opinions. – The Board shall adopt rules and issue opinions to ensure effective administration of this Article. Such rules and opinions shall include, but not be limited to, procedures for obtaining qualifying contributions, certification of candidates, addressing circumstances involving special elections, vacancies, recounts, withdrawals, or replacements, collection of revenues for the Fund, distribution of Fund revenue to certified candidates, return of unspent Fund disbursements, and compliance with this Article. For races involving special elections, recounts, vacancies, withdrawals, or replacement candidates, the Board shall establish procedures for qualification, certification, disbursement of Fund revenues, and return of unspent Fund revenues. The Board shall fulfill each of these duties in consultation with the Advisory Council on the Fair Elections Fund.
(e)	Report to the Public. – The Advisory Council for the Fair Elections Fund shall issue a report by March 1, 2005, and every two years thereafter that evaluates and makes recommendations about the implementation of this Article and the feasibility of expanding its provisions to include other candidates for State office based on the experience of the Fund and the experience of similar programs in other states.
"§ 163‑278.69. Voter education.
(a)	Judicial Voter Guide. – The Board shall publish a Judicial Voter Guide that explains the functions of the appellate courts and the laws concerning the election of appellate judges, the purpose and function of the Fair Elections Fund, and the laws concerning voter registration. The Board shall distribute the Guide to as many voting-age individuals in the State as practical, through a mailing to all residences or other means it deems effective. The distribution shall occur no more than 28 days nor fewer than seven days before the primary and no more than 28 days nor fewer than seven days before the general election. 
(b)	Candidate Information. – The Judicial Voter Guide shall include information concerning all candidates for the Supreme Court and the Court of Appeals, as provided by those candidates according to a format provided to the candidates by the Board. The Board shall request information for the Guide from each candidate according to the following format:
(1)	Place of residence.
(2)	Education.
(3)	Occupation.
(4)	Employer.
(5)	Date admitted to the bar.
(6)	Legal/judicial experience.
(7)	Candidate statement, limited to 150 words. Concerning that statement, the Board shall send to the candidates instructions as follows: 'Your statement may include information such as your qualifications, your endorsements, your ratings, why you are seeking judicial office, why you would make a good judge, what distinguishes you from your opponent(s), your acceptance of spending and fund-raising limits to qualify to receive funds from the Fair Elections Fund, and any other information relevant to your candidacy. We will correct incidental errors of spelling, grammar, and punctuation which might prejudice the candidate’s statement unfairly or confuse voters. We will make no changes to the content of any statement which would alter the meaning or substance of the statement. The State Board of Elections will reject any portion of any statement which it determines contains obscene, profane, or defamatory language.'
"§ 163‑278.70. Civil penalty.
In addition to any other penalties that may be applicable, any individual, political committee, or other entity that violates any provision of this Article is subject to a civil penalty of up to ten thousand dollars ($10,000) per violation or three times the amount of any financial transactions involved in the violation, whichever is greater. In addition to any fine, for good cause shown, a candidate found in violation of this Article may be required to return to the Fund all amounts distributed to the candidate from the Fund. If the Board makes a determination that a violation of this Article has occurred, the Board shall calculate and assess the amount of the civil penalty and shall notify the entity that is assessed the civil penalty of the amount that has been assessed. The Board shall then proceed in the manner prescribed in G.S. 163‑278.34. In determining whether or not a candidate is in violation of this Article, the Board may consider as a mitigating factor any circumstances out of the candidate’s control."
SECTION 2. G.S. 163‑278.13 reads as rewritten:
"§ 163‑278.13.  Limitation on contributions.
(a)	No individual, political committee, or other entity shall contribute to any candidate or other political committee any money or make any other contribution in any election in excess of four thousand dollars ($4,000) for that election.
(b)	No candidate or political committee shall accept or solicit any contribution from any individual, other political committee, or other entity of any money or any other contribution in any election in excess of four thousand dollars ($4,000) for that election.
(c)	Notwithstanding the provisions of subsections (a) and (b) of this section, it shall be lawful for a candidate or a candidate's spouse, parents, brothers and sisters to make a contribution to the candidate or to the candidate's treasurer of any amount of money or to make any other contribution in any election in excess of four thousand dollars ($4,000) for that election.
(d)	For the purposes of this section, the term "an election" means any primary, second primary, or general election in which the candidate or political committee may be involved, without regard to whether the candidate is opposed or unopposed in the election, except that where a candidate is not on the ballot in a second primary, that second primary is not "an election" with respect to that candidate.
(e)	This section shall not apply to any national, State, district or county executive committee of any political party. For the purposes of this section only, the term "political party" means only those political parties officially recognized under 
G.S. 163‑96.
(e1)	No referendum committee which received any contribution from a corporation, labor union, insurance company, business entity, or professional association may make any contribution to another referendum committee, to a candidate or to a political committee.
(e2)	The potential for corruption and its appearance resulting from campaign contributions is especially problematic in elections of the judiciary, since impartiality is uniquely important to the integrity and credibility of the courts. Accordingly, the following provisions shall apply with respect to candidates for justice of the Supreme Court, judge of the Court of Appeals, judge of the Superior Court, and judge of the District Court:
(1)	No candidate shall accept, and no contributor shall make to that candidate, a contribution in any election exceeding one thousand dollars ($1,000) except as provided for elsewhere in this subsection.
(2)	A candidate may accept, and a family contributor may make to that candidate, a contribution not exceeding two thousand dollars ($2,000) in an election if the contributor is that candidate's parent, child, brother, or sister.
(3)	No candidate for justice of the Supreme Court or judge of the Court of Appeals shall accept, and no contributor shall make to that candidate, a contribution during the period beginning 21 days before the day of the general election and ending the day after the general election. This subdivision applies with respect to a candidate opposed in the general election by a certified candidate as defined in Article 22D of this Chapter who has not received the maximum rescue funds available under G.S. 163-278.67. The recipient of a contribution that apparently violates this subdivision has three days to return the contribution or file a detailed statement with the State Board of Elections explaining why the contribution does not violate this subdivision.
As used in this subsection, 'candidate' is also a political committee authorized by the candidate for that candidate’s election. Nothing in this subsection shall prohibit a candidate or the spouse of that candidate from making a contribution or loan secured entirely by that individual's assets to that candidate’s own campaign.
(f)	Any individual, candidate, political committee, referendum committee, or other entity that violates the provisions of this section is guilty of a Class 2 misdemeanor."
SECTION 3.  G.S. 105‑41(a)(1) reads as rewritten:
"§ 105‑41.  Attorneys‑at‑law and other professionals.
(a)	Every individual in this State who practices a profession or engages in a business and is included in the list below must obtain from the Secretary a statewide license for the privilege of practicing the profession or engaging in the business. A license required by this section is not transferable to another person. The tax for each license is fifty dollars ($50.00).
(1)	An attorney‑at‑law. In addition to the tax, a contribution of fifty dollars ($50.00) to support the Fair Elections Fund established by G.S. 
163-278.63 shall be requested by providing for the contribution on the annual privilege license tax form. Payment of the contribution is not required and is not considered part of the tax owed.
…."
SECTION 4.  Article 4 of Chapter 105 of the General Statutes is amended by adding a new section to read:
"§ 105‑159.2.  Designation of tax to North Carolina Fair Elections Fund.
(a)	Allocation to the North Carolina Fair Elections Fund. – One dollar ($1.00) from the income taxes paid each year by each individual with an income tax liability of at least that amount shall be allocated to the North Carolina Fair Elections Fund established in Article 22D of Chapter 163 of the General Statutes, unless the taxpayer indicates an objection to the allocation on the income tax return in the manner described in subsection (b) of this section. In the case of a married couple filing a joint return, each individual shall have the option of objecting to the allocation. The amounts allocated under this subsection to the Fund shall be credited to it on a quarterly basis.
(b)	Form. – Individual income tax returns shall include a place for the designation of one dollar ($1.00) to the North Carolina Fair Elections Fund with two options given to the taxpayer: 'For' and 'Against,' and the following statement: 'One dollar will go to the North Carolina Fair Elections Fund to support a nonpartisan court system, unless you fill in the circle labeled "Against." Your tax remains the same regardless of which circle you choose.' A paid preparer of tax returns shall not choose one of the two options for a taxpayer without the taxpayer’s consent. The Department of Revenue shall not approve for use in preparing North Carolina income tax returns any software package if that software package defaults to the option 'Against' on that question. 
(c)	Instructions. – Individual income tax returns shall include in their instructions an explanatory statement for the designation described in subsection (b) of this section which shall read: 'The North Carolina Fair Elections Fund provides campaign money to candidates for the North Carolina Supreme Court and Court of Appeals who voluntarily accept strict campaign spending and fund‑raising limits. The Fund also helps finance educational materials about voter registration, the role of the appellate courts, and the candidates seeking election as appellate judges in North Carolina. One dollar ($1.00) from the taxes you pay will go to the Fund unless you fill in the circle marked "Against." Regardless of what choice you make, your tax will not increase, nor will any refund you are entitled to be reduced.' The exact wording of this statement or the statement specified in subsection (b) of this section may be modified if the new wording does not change the statement’s essential meaning and is approved by the State Board of Elections and the Advisory Council for the Fair Elections Fund."
SECTION 5.  Article 22C of Chapter 163 of the General Statutes is repealed.
SECTION 6.(a)  G.S. 105‑269.6 is repealed.
SECTION 6.(b)  The Secretary of Revenue shall transfer to the North Carolina Fair Elections Fund any funds contributed to the North Carolina Candidates Financing Fund pursuant to G.S. 105‑269.6 before its repeal by this section.
SECTION 7.  Subchapter X of Chapter 163 of the General Statutes reads as rewritten:
"SUBCHAPTER X. ELECTION OF APPELLATE,   superior, AND DISTRICT COURT JUDGES.
"Article 25.
"Nomination and Election of Appellate,  Superior, and District Court Judges.
"§ 163‑321.  Applicability.
The nomination and election of justices of the Supreme Court, judges of the Court of Appeals, and superior and district court judges of the General Court of Justice shall be as provided by this Article.
"§ 163‑322.  Nonpartisan primary election method.
(a)	General. – Except as provided in G.S. 163‑329, there shall be a primary to narrow the field of candidates to two candidates for each position to be filled if, when the filing period closes, there are more than two candidates for a single office or the number of candidates for a group of offices exceeds twice the number of positions to be filled. If only one or two candidates file for a single office, no primary shall be held for that office and the candidates shall be declared nominated. If the number of candidates for a group of offices does not exceed twice the number of positions to be filled, no primary shall be held for those offices and the candidates shall be declared nominated.
(b)	Determination of Nominees. – In the primary, the two candidates for a single office receiving the highest number of votes, and those candidates for a group of offices receiving the highest number of votes, equal to twice the number of positions to be filled, shall be declared nominated. If two or more candidates receiving the highest number of votes each receive the same number of votes, the State Board of Elections shall determine their relative ranking by lot, and shall declare the nominees accordingly. The canvass of the primary shall be held on the same date as the primary canvass fixed under G.S. 163‑188. The canvass shall be conducted in accordance with Article 16 of this Chapter.
(c)	Determination of Election Winners. – In the election, the names of those candidates declared nominated without a primary and those candidates nominated in the primary shall be placed on the ballot. The candidate for a single office receiving the highest number of votes shall be elected. Those candidates for a group of offices receiving the highest number of votes, equal in number to the number of positions to be filled, shall be elected. If two candidates receiving the highest number of votes each received the same number of votes, the State Board of Elections shall determine the winner by lot. 
"§ 163‑323.  Notice of candidacy.
(a)	Form of Notice. – Each person offering to be a candidate for election shall do so by filing a notice of candidacy with the State Board of Elections in the following form, inserting the words in parentheses when appropriate:

	Date: 	

	I hereby file notice that I am a candidate for election to the office of __________ in the regular election to be held _____________, ____.

	Signed: 	
								     (Name of Candidate)

Witness: 	

The notice of candidacy shall be either signed in the presence of the chairman or secretary of the State Board of Elections, or signed and acknowledged before an officer authorized to take acknowledgments who shall certify the notice under seal. An acknowledged and certified notice may be mailed to the State Board of Elections. In signing a notice of candidacy, the candidate shall use only the candidate's legal name and, in his discretion, any nickname by which commonly known. A candidate may also, in lieu of that candidate's first name and legal middle initial or middle name, if any, sign that candidate's nickname, provided the candidate appends to the notice of candidacy an affidavit that the candidate has been commonly known by that nickname for at least five years prior to the date of making the affidavit. The candidate shall also include with the affidavit the way the candidate's name (as permitted by law) should be listed on the ballot if another candidate with the same last name files a notice of candidacy for that office.
A notice of candidacy signed by an agent or any person other than the candidate himself shall be invalid.
(b)	(Effective until January 1, 2003) Time for Filing Notice of Candidacy. – Candidates seeking election to the following offices shall file their notice of candidacy with the State Board of Elections no earlier than 12:00 noon on the first Monday in January and no later than 12:00 noon on the first Monday in February preceding the election:
Judges of the superior courts.
Judges of the district courts.
(b)	(Effective January 1, 2003) Time for Filing Notice of Candidacy. – Candidates seeking election to the following offices shall file their notice of candidacy with the State Board of Elections no earlier than 12:00 noon on the second Monday in February and no later than 12:00 noon on the last business day in February preceding the election:
Justices of the Supreme Court.
Judges of the Court of Appeals.
Judges of the superior courts.
Judges of the district courts.
(c)	Withdrawal of Notice of Candidacy. – Any person who has filed a notice of candidacy for an office shall have the right to withdraw it at any time prior to the date on which the right to file for that office expires under the terms of subsection (b) of this section.
(d)	Certificate That Candidate Is Registered Voter. – Candidates shall file along with their notice a certificate signed by the chairman of the board of elections or the supervisor of elections of the county in which they are registered to vote, stating that the person is registered to vote in that county, and if the candidacy is for superior court judge and the county contains more than one superior court district, stating the superior court district of which the person is a resident. In issuing such certificate, the chairman or supervisor shall check the registration records of the county to verify such information. During the period commencing 36 hours immediately preceding the filing deadline, the State Board of Elections shall accept, on a conditional basis, the notice of candidacy of a candidate who has failed to secure the verification ordered herein subject to receipt of verification no later than three days following the filing deadline. The State Board of Elections shall prescribe the form for such certificate, and distribute it to each county board of elections no later than the last Monday in December of each odd‑numbered year.
(e)	Candidacy for More Than One Office Prohibited. – No person may file a notice of candidacy for more than one office or group of offices described in subsection (b) of this section, or for an office or group of offices described in subsection (b) of this section and an office described in G.S. 163‑106(c), for any one election. If a person has filed a notice of candidacy with a board of elections under this section or under G.S. 163‑106(c) for one office or group of offices, then a notice of candidacy may not later be filed for any other office or group of offices under this section when the election is on the same date unless the notice of candidacy for the first office is withdrawn under subsection (c) of this section.
(f)	Notice of Candidacy for Certain Offices to Indicate Vacancy. – In any election in which there are two or more vacancies for the office of justice of the Supreme Court, judge of the Court of Appeals, or district court judge to be filled by nominations, each candidate shall, at the time of filing notice of candidacy, file with the State Board of Elections a written statement designating the vacancy to which the candidate seeks election. Votes cast for a candidate shall be effective only for election to the vacancy for which the candidate has given notice of candidacy as provided in this subsection.
A person seeking election for a specialized district judgeship established under G.S. 7A‑147 shall, at the time of filing notice of candidacy, file with the State Board of Elections a written statement designating the specialized judgeship to which the person seeks nomination.
(g)	No person may file a notice of candidacy for superior court judge unless that person is at the time of filing the notice of candidacy a resident of the judicial district as it will exist at the time the person would take office if elected. No person may be nominated as a superior court judge under G.S. 163‑114 unless that person is at the time of nomination a resident of the judicial district as it will exist at the time the person would take office if elected. This subsection implements Article IV, Section 9(1) of the North Carolina Constitution which requires regular Superior Court Judges to reside in the district for which elected.
"§ 163‑324.  Filing fees required of candidates; refunds.
(a)	 Fee Schedule. – At the time of filing a notice of candidacy under this Article, each candidate shall pay to the State Board of Elections a filing fee for the office he seeks in the amount of one percent (1%) of the annual salary of the office sought.
(b)	Refund of Fees. – If any person who has filed a notice of candidacy and paid the filing fee prescribed in subsection (a) of this section withdraws his notice of candidacy within the period prescribed in G.S. 163‑323(c), he shall be entitled to have the fee he paid refunded. The chairman of the State Board of Elections shall cause a warrant to be drawn on the State Treasurer for the refund payment.
If any person who has filed a notice of candidacy and paid the filing fee prescribed in subsection (a) of this section dies prior to the date of the election, the personal representative of the estate shall be entitled to have the fee refunded if application is made to the board of elections to which the fee was paid no later than one year after the date of death, and refund shall be made in the same manner as in withdrawal of notice of candidacy.
"§ 163‑325.  Petition in lieu of payment of filing fee.
(a)	General. – Any qualified voter who seeks election under this Article may, in lieu of payment of any filing fee required for the office he seeks, file a written petition requesting him to be a candidate for a specified office with the State Board of Elections.
(b)	Requirements of Petition; Deadline for Filing. – If the candidate is seeking the office of Justice of the Supreme Court, judge of the Court of Appeals, or superior or district court judge, that individual shall file a written petition with the State Board of Elections no later than 12:00 noon on Monday preceding the filing deadline before the primary. If the office is Justice of the Supreme Court or judge of the Court of Appeals, the petition shall be signed by 10,000 registered voters in the State. If the office is superior court or district court judge, the petition shall be signed by ten percent (10%) of the registered voters of the election area in which the office will be voted for. The board of elections shall verify the names on the petition, and if the petition and notice of candidacy are found to be sufficient, the candidate's name shall be printed on the appropriate ballot. Petitions must be presented to the county board of elections for verification at least 15 days before the petition is due to be filed with the State Board of Elections. The State Board of Elections may adopt rules to implement this section and to provide standard petition forms. 
"§ 163‑326.  Certification of notices of candidacy.
(a)	Names of Candidates Sent to Secretary of State. – Within three days after the time for filing notices of candidacy with the State Board of Elections under the provisions of G.S. 163‑323(b) has expired, the chairman or secretary of that Board shall certify to the Secretary of State the name and address of each person who has filed with the State Board of Elections, indicating in each instance the office sought.
(b)	Notification of Local Boards. – No later than 10 days after the time for filing notices of candidacy under the provisions of G.S. 163‑323(b) has expired, the chairman of the State Board of Elections shall certify to the chairman of the county board of elections in each county in the appropriate district the names of candidates for nomination to the offices of Justice of the Supreme Court, judge of the Court of Appeals, and superior and district court judge who have filed the required notice and paid the required filing fee or presented the required petition to the State Board of Elections, so that their names may be printed on the official judicial ballot for Justice of the Supreme Court, judge of the Court of Appeals, and superior and district court.
(c)	Receipt of Notification by County Board. – Within two days after receipt of each of the letters of certification from the chairman of the State Board of Elections required by subsection (b) of this section, each county elections board chairman shall acknowledge receipt by letter addressed to the chairman of the State Board of Elections. 
"§ 163‑327.  Vacancies of candidates or elected officers.
(a)	Death or Disqualification of Candidate Before Primary. – If a candidate for nomination in a primary dies or becomes disqualified before the primary but after the ballots have been printed, the State Board of Elections shall determine whether or not there is time to reprint the ballots. If the Board determines that there is not enough time to reprint the ballots, the deceased or disqualified candidate's name shall remain on the ballots. If that candidate receives enough votes for nomination, such votes shall be disregarded and the candidate receiving the next highest number of votes below the number necessary for nomination shall be declared nominated. If the death or disqualification of the candidate leaves only two candidates for each office to be filled, the nonpartisan primary shall not be held and all candidates shall be declared nominees.
(b)	Death, Disqualification, or Resignation of Official After Election. – If a person elected to the office of Justice of the Supreme Court, judge of the Court of Appeals, or superior or district court judge dies, becomes disqualified, or resigns on or after election day and before he has qualified by taking the oath of office, the office shall be deemed vacant and shall be filled as provided by law. 
"§ 163‑328.  Failure of candidates to file; death or other disqualification of a candidate before election.
(a)	Insufficient Number of Candidates. – If when the filing period expires, candidates have not filed for an office to be filled under this Article, the State Board of Elections shall extend the filing period for five days for any such offices.
(b)	Death or Other Disqualification of Candidate; Reopening Filing. – If there is no primary because only one or two candidates have filed for a single office, or the number of candidates filed for a group of offices does not exceed twice the number of positions to be filled, and thereafter a candidate dies or otherwise becomes disqualified before the election and before the ballots are printed, the State Board of Elections shall, upon notification of the death or other disqualification, immediately reopen the filing period for an additional five days during which time additional candidates shall be permitted to file for election. If the ballots have been printed at the time the State Board of Elections receives notice of the candidate's death or other disqualification, the Board shall determine whether there will be sufficient time to reprint them before the election if the filing period is reopened for three days. If the Board determines that there will be sufficient time to reprint the ballots, it shall reopen the filing period for three days to allow other candidates to file for election, and such election shall be conducted on the plurality basis.
(c)	Vacancy Caused by Nominated Candidate; Ballots Not Reprinted. – If the ballots have been printed at the time the State Board of Elections receives notice of a candidate's death, other disqualification, or resignation, and if the Board determines that there is not enough time to reprint the ballots before the election if the filing period is reopened for three days, then regardless of the number of candidates remaining for the office or group of offices, the ballots shall not be reprinted and the name of the vacated candidate shall remain on the ballots. If a vacated candidate should poll the highest number of votes in the election for a single office or enough votes to be elected to one of a group of offices, the State Board of Elections shall declare the office vacant and it shall be filled in the manner provided by law. 
"§ 163‑329.  Elections to fill vacancy created after primary filing period to use plurality method.
(a)	General. – If a vacancy is created in the office of Justice of the Supreme Court, judge of the Court of Appeals, or judge of superior court after the filing period for the primary opens but more than 60 days before the general election, and under the Constitution of North Carolina an election is to be held for that position, such that the office shall be filled in the general election as provided in G.S. 163‑9, the election to fill the office for the remainder of the term shall be conducted without a primary using the plurality method as provided in subsection (b) of this section. If a vacancy is created in the office of Justice of the Supreme Court, judge of the Court of Appeals, or judge of superior court before the filing period for the primary opens, and under the Constitution of North Carolina an election is to be held for that position, such that the office shall be filled in the general election as provided in G.S. 163‑9, the election to fill the office for the remainder of the term shall be conducted in accordance with G.S. 163‑322.
(b)	Plurality Election Rules. – Elections under this section shall be conducted using the following rules:
(1)	The filing period shall be prescribed by the State Board of Elections, but in no event may it be less than five working days. If a vacancy occurs in a second office in the same superior court district after the first filing period established under the section has closed, the State Board of Elections shall reopen filing for a period of not less than five working days for the office of Justice of the Supreme Court, judge of the Court of Appeals, or superior court judge. All persons filing in either filing period shall run as a group and the election results shall be determined by subdivision (3) of this subsection.
(2)	When more than one person is seeking election to a single office, the candidate who receives the highest number of votes shall be declared elected.
(3)	When more persons are seeking election to two or more offices (constituting a group) than there are offices to be filled, those candidates receiving the highest number of votes, equal in number to the number of offices to be filled, shall be declared elected.
(4)	If two or more candidates receiving the highest number of votes each receive the same number of votes, the board of elections shall resolve the tie in accordance with G.S. 163‑182.8.
(5)	Except as provided in this section, the provisions of this Article apply to elections conducted under this section. 
"§ 163‑330.  Voting in primary.
Any person who will become qualified by age or residence to register and vote in the general election for which the primary is held, even though not so qualified by the date of the primary, shall be entitled to register for the primary and general election prior to the primary and then to vote in the primary after being registered. Such person may register not earlier than 60 days nor later than the last day for making application to register under G.S. 163‑82.6(c) prior to the primary. 
"§ 163‑331.  Date of primary.
The primary shall be held on the same date as established for primary elections under G.S. 163‑1(b). 
"§ 163‑332.  Ballots.
(a)	General. – In elections there shall be official ballots. The ballots shall be printed to conform to the requirement of G.S. 163‑165.6(c) and to show the name of each person who has filed notice of candidacy, and the office for which each aspirant is a candidate.
Only those who have filed the required notice of candidacy with the proper board of elections, and who have paid the required filing fee or qualified by petition, shall have their names printed on the official primary ballots. Only those candidates properly nominated shall have their names appear on the official general election ballots.
(b)	Ballots to Be Furnished by County Board of Elections. – It shall be the duty of the county board of elections to print official ballots for the following offices to be voted for in the primary:
Justice of the Supreme Court.
Judge of the Court of Appeals.
Superior court judge.
District court judge.
In printing ballots, the county board of elections shall be governed by instructions of the State Board of Elections with regard to width, color, kind of paper, form, and size of type.
Three days before the election, the chairman of the county board of elections shall distribute official ballots to the chief judge of each precinct in his county, and the chief judge shall give a receipt for the ballots received. On the day of the primary, it shall be the chief judge's duty to have all the ballots so delivered available for use at the precinct voting place. 
"§ 163‑333: Repealed by Session Laws 2001‑398, s. 15, effective January 1, 2002.
"§ 163‑334.  Counting of ballots.
Counting of ballots in primaries and elections held under this Article shall be under the same rules as for counting of ballots in nonpartisan municipal elections under Article 24 of this Chapter. 
"§ 163‑335.  Other rules.
Except as provided by this Article, the conduct of elections shall be governed by Subchapter VI of this Chapter."
SECTION 8. G.S. 163‑106(c) reads as rewritten:
"(c)	(Effective January 1, 2003) Time for Filing Notice of Candidacy. – Candidates seeking party primary nominations for the following offices shall file their notice of candidacy with the State Board of Elections no earlier than 12:00 noon on the second Monday in February and no later than 12:00 noon on the last business day in February preceding the primary:
Governor
Lieutenant Governor
All State executive officers
United States Senators
Members of the House of Representatives of the United States
District attorneys
Candidates seeking party primary nominations for the following offices shall file their notice of candidacy with the county board of elections no earlier than 12:00 noon on the second Monday in February and no later than 12:00 noon on the last business day in February preceding the primary:
State Senators
Members of the State House of Representatives
All county offices."
SECTION 9.  G.S. 163‑106(d) reads as rewritten:
"(d)	Notice of Candidacy for Certain Offices to Indicate Vacancy. – In any primary in which there are two vacancies for United States Senator from North Carolina, each candidate shall, at the time of filing notice of candidacy, file with the State Board of Elections a written statement designating the vacancy to which he seeks nomination. Votes cast for a candidate shall be effective only for his nomination to the vacancy for which he has given notice of candidacy as provided in this subsection."
SECTION 10.  G.S. 163‑107(a) reads as rewritten:
"(a)	Fee Schedule. – At the time of filing a notice of candidacy, each candidate shall pay to the board of elections with which he files under the provisions of G.S. 163‑106 a filing fee for the office he seeks in the amount specified in the following tabulation:
Office Sought		Amount of Filing
Governor 		One percent (1%) of the annual salary of the office sought 
Lieutenant Governor 		One percent (1%) of the annual salary of the office sought 
All State executive offices 		One percent (1%) of the annual salary of the office sought 
All District 		One percent (1%) of the annual
	Attorneys of the General Court of 			salary of the office sought
	Justice 	
United States Senator 		One percent (1%) of the annual salary of the office sought 
Members of the United States House of 		One percent (1%) of the annual
	Representatives 			salary of the office sought 
State Senator 		One percent (1%) of the annual salary of the office sought 
Member of the State House of 		One percent (1%) of the annual
	Representatives 			salary of the office sought
All county offices not compensated by		One percent (1%) of the annual 
	fees 			salary of the office sought 
County commissioners, if compensated		Ten dollars ($10.00) 
	entirely by fees
Members of county board of education,		Five dollars ($5.00) 
	if compensated entirely by fees
Sheriff, if compensated entirely by fees 		Forty dollars ($40.00), plus one percent (1%) of the income of the office above four thousand dollars ($4,000)
Clerk of superior court, if compensated 
	entirely by fees 		Forty dollars ($40.00), plus one percent (1%) of the income of the office above four thousand dollars ($4,000) 
Register of deeds, if compensated 
	entirely by fees 		Forty dollars ($40.00), plus one percent (1%) of the income of the office above four thousand dollars ($4,000) 
Any other county office, if compensated 
	entirely by fees 		Twenty dollars ($20.00), plus one percent (1%) of the income of the office above two thousand dollars ($2,000) 
All county offices compensated partly 
	by salary and partly by fees 		One percent (1%) of the first annual salary to be received (exclusive of fees) "
SECTION 11.  G.S. 163‑107.1(b) reads as rewritten:
"(b)	If the candidate is seeking the office of United States Senator, Governor, Lieutenant Governor, or any State executive officer, the petition must be signed by 10,000 registered voters who are members of the political party in whose primary the candidate desires to run, except that in the case of a political party as defined by G.S. 163‑96(a)(2) which will be making nominations by primary election, the petition must be signed by ten percent (10%) of the registered voters of the State who are affiliated with the same political party in whose primary the candidate desires to run, or in the alternative, the petition shall be signed by no less than 10,000 registered voters regardless of the voter's political party affiliation, whichever requirement is greater. The petition must be filed with the State Board of Elections not later than 12:00 noon on Monday preceding the filing deadline before the primary in which he seeks to run. The names on the petition shall be verified by the board of elections of the county where the signer is registered, and the petition must be presented to the county board of elections at least 15 days before the petition is due to be filed with the State Board of Elections. When a proper petition has been filed, the candidate's name shall be printed on the primary ballot."
SECTION 12.  G.S. 163‑111(c)(1) reads as rewritten:
"(1)	A candidate who is apparently entitled to demand a second primary, according to the unofficial results, for one of the offices listed below, and desiring to do so, shall file a request for a second primary in writing or by telegram with the Executive Director of the State Board of Elections no later than 12:00 noon on the seventh day (including Saturdays and Sundays) following the date on which the primary was conducted, and such request shall be subject to the certification of the official results by the State Board of Elections. If the vote certification by the State Board of Elections determines that a candidate who was not originally thought to be eligible to call for a second primary is in fact eligible to call for a second primary, the Executive Director of the State Board of Elections shall immediately notify such candidate and permit him to exercise any options available to him within a 48‑hour period following the notification:
Governor,
Lieutenant Governor,
All State executive officers,
District Attorneys of the General Court of Justice, 
United States Senators,
Members of the United States House of Representatives,
State Senators in multi‑county senatorial districts, and
Members of the State House of Representatives in multi‑county representative districts."
SECTION 13.  G.S. 163‑123(g) reads as rewritten:
"(g)	Municipal and Nonpartisan Elections Excluded. – This section does not apply to municipal elections conducted under Subchapter IX of Chapter 163 of the General Statutes, and does not apply to nonpartisan elections except for elections under Article 25 of this Chapter."
SECTION 14.  G.S. 163‑165.6(b)(3) reads as rewritten:
"(3)	Partisan offices, regardless of the size of the constituency, shall be listed before nonpartisan offices."
SECTION 15.  The provisions of this act are severable.  If any provision of this act is held invalid by a court of competent jurisdiction, the invalidity does not affect other provisions of the act that can be given effect without the invalid provision.
SECTION 16.  Section 1 of this act is effective when it becomes law, provided that distributions from the Fund shall begin in the 2004 election year. Section 2 becomes effective January 1, 2003. Section 3 becomes effective July 1, 2003. Sections 4 and 6 become effective for taxable years beginning on or after January 1, 2003.  Section 5 becomes effective January 1, 2003.  Sections 7 through 13 become effective with respect to primaries and elections held on or after January 1, 2004.  Except as otherwise provided in this act, this act is effective when it becomes law.