A BILL TO BE ENTITLED
AN ACT to limit the governor's authority to transfer between line items and objects to ten percent of the line item or object, to provide that no transfer of funds may be made between a purpose or program except in limited circumstances, and to limit general fund budget expenditures for a fiscal year to the amount of general fund revenue collections from the prior fiscal year.
The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 143‑23 reads as rewritten:
"§ 143‑23.  All maintenance funds for itemized purposes; transfers between objects or line items; limit transfers by the Governor to ten percent (10%) of the object or line item from which the transfer is made.
(a)	All appropriations now or hereafter made for the maintenance of the various departments, institutions and other spending agencies of the State, are for the (i) purposes or programs and (ii) objects or line items enumerated in the itemized requirements of such departments, institutions and other spending agencies submitted to the General Assembly by the Director of the Budget and the Advisory Budget Commission, as amended by the General Assembly. The function of the Advisory Budget Commission under this subsection applies only if the Director of the Budget consults with the Commission in preparation of the budget.
(a1)	Notwithstanding the provisions of subsection (a) of this section, a department, institution, or other spending agency may, with approval of the Director of the Budget, spend more than was appropriated for:
(1)	An object or line item within a purpose or program so long as:  (i) 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, and the transfer or change of funds does not exceed ten percent (10%) of the object or line item from which the transfer is made.
(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.
					If the Joint Legislative Commission on Governmental Operations does not meet for more than 30 days, the Director of the Budget may satisfy the requirements of the subsection to report to or consult with the Commission by reporting to or consulting with a joint meeting of the Chairs of the Appropriations Committees of the Senate and the House of Representatives.
(a2)	Funds appropriated for salaries and wages are also subject to the limitation that they may only be used for:
(1)	Salaries and wages or for premium pay, overtime pay, longevity, unemployment compensation, workers' compensation, temporary wages, moving expenses of employees, payment of accumulated annual leave, certain awards to employees, tort claims, and employer's social security, retirement, and hospitalization payments;
(2)	Contracted personal services if (i) the contract is for temporary services or special project services, (ii) the term of the contract does not extend beyond the fiscal year, (iii) the contract does not impose obligations on the State after the end of the fiscal year; and (iv) the total of all overexpenditures for contracted personal services approved in a program for a fiscal year does not exceed the greater of five hundred thousand dollars ($500,000) or ten percent (10%) of the lapsed salary funds in the program for the fiscal year; and
(3)	Uses for which overexpenditures are permitted by subdivision (2) of subsection (a1) of this section but the Director of the Budget shall include such use and the reason for it in his quarterly report to the Joint Legislative Commission on Governmental Operations.
Lapsed salary funds shall not be used for new permanent employee positions or to raise the salary of existing employees.
(a3),  (a4) Repealed by Session Laws 1996, Second Extra Session, c. 18, s. 7.4(f).
(b)	Repealed by Session Laws 1985, c. 290, s. 8.
(c)	Transfers or changes as between objects or line items in the budget of the Senate may be made by the President Pro Tempore of the Senate.
(d)	Transfers or changes as between objects or line items in the budget of the House of Representatives may be made by the Speaker of the House of Representatives.
(e)	Transfers or changes as between objects or line items in the budget of the General Assembly other than of the Senate and House of Representatives may be made jointly by the President Pro Tempore of the Senate and the Speaker of the House of Representatives.
(e1)	Transfers or changes as between objects or line items in the budget of the Office of the Governor may be made by the Governor.
(e2)	Transfers or changes as between objects or line items in the Office of the Lieutenant Governor may be made by the Lieutenant Governor.
(f)	As used in this section:
(1)	"Object or line item" means a budgeted expenditure or receipt in the budget enacted by the General Assembly that is designated by (i) a thirteen‑digit code in the 1000‑object code series or (ii) an eleven‑digit code in all other object code series, in accordance with the Budget Code Structure and the State Accounting System Uniform Chart of Accounts set out in the Administrative Policies and Procedures Manual of the Office of the State Controller.
(2)	"Purpose or program" means a group of objects or line items for support of a specific activity outlined in the budget adopted by the General Assembly that is designated by a nine‑digit fund code in accordance with the Budget Code Structure and the State Accounting System Uniform Chart of Accounts set out in the Administrative Policies and Procedures Manual of the Office of the State Controller. "
SECTION 2.  G.S. 143‑15.1(a) reads as rewritten:
"(a)	The General Assembly shall enact the Current Operations Appropriations Act by June 15 of odd‑numbered years and by June 30 of even‑numbered years in which a Current Operations Appropriations Act is enacted. The Current Operations Appropriations Act shall state the amount of General Fund appropriations availability upon which the General Fund budget is based. The statement of availability shall list separately the beginning General Fund credit balance, anticipated General Fund revenue collections for the prior fiscal year, and any other components of the availability amount.
The General Fund operating budget appropriations, including appropriations for local tax reimbursements and local tax sharing, for the second year in a Current Operations Appropriations Act that contains a biennial budget shall not be more than the General Fund total revenue collections for the first year of the biennial budget."
SECTION 3.  G.S. 143‑15.4 reads as rewritten:
"§ 143‑15.4.  General Fund operating budget size limited.
	The General Fund operating budget each fiscal year shall not be greater than  the total revenue collections for the prior fiscal year. For the purpose of this section, the General Fund operating budget includes any appropriations for local tax‑sharing, but does not include appropriations for (i) capital expenditures or (ii) one‑time expenditures due to natural disasters, federal mandates, or other emergencies.
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SECTION 4.  This act becomes effective July 1, 2002.