GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1989

S	2 

SENATE BILL 44*
Appropriations Committee Substitute Adopted 6/28/89

Short Title:  Expansion Budget 1989-91.	(Public)
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Sponsors:
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Referred to:  
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January 23, 1989

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

Requested by:  Senator Royall
––-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.

Requested by:  Senator Royall
––-TITLE OF ACT
Sec. 2.  This act shall be known as "The Expansion Budget Appropriations Act of 1989."

            *****
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.)

––-INTRODUCTION 	1
––-TITLE OF ACT 	1
PART I.––-CURRENT OPERATIONS/GENERAL FUND 	7
PART II.––-CURRENT OPERATIONS/HIGHWAY FUND 	8
PART III.––-CURRENT OPERATIONS/GENERAL FUND/AID TO CERTAIN GOVERNMENTAL AND NONGOVERNMENTAL UNITS  9
PART IV.––-CURRENT OPERATIONS/HIGHWAY FUND/AID TO CERTAIN GOVERNMENTAL AND NONGOVERNMENTAL UNITS  10
PART V.––-APPROPRIATIONS OF BLOCK GRANT FUNDS 	10
––-BLOCK GRANT APPROPRIATIONS 	10
PART VI.––-GENERAL PROVISIONS 	16
––-ALLOCATION OF RAPE CRISIS CENTER FUNDS 	16
––-REVENUE FUNDS TO SIPS 	17
––-CONTINGENCY AND EMERGENCY FUND RESERVE/RESTRICTED RESERVE 	17
––-NO TRANSFERS BETWEEN ITEMS IN THE BUDGET 	19
––-LIMIT ON NUMBER OF STATE EMPLOYEES 	20
––-EXPENDITURE OF FUNDS 	20
––-BENEFIT AND TECHNICAL ADJUSTMENTS/TEACHERS' AND STATE EMPLOYEES' HEALTH BENEFIT PLAN  21
––-GOVERNOR'S SALARY INCREASE 	35
––-COUNCIL OF STATE/SALARY INCREASE 	36
––-NONELECTED DEPARTMENT HEAD/SALARY INCREASES 	36
––-LEGISLATORS/SALARY AND EXPENSE INCREASES 	37
––-GENERAL ASSEMBLY PRINCIPAL CLERKS/SALARY 
INCREASES 	38
––-SERGEANT-AT-ARMS AND READING CLERKS/SALARY INCREASES 	38
––-LEGISLATIVE EMPLOYEES/SALARY INCREASES 	38
––-JUDICIAL BRANCH OFFICIALS/SALARY INCREASE 	39
––-CLERKS OF COURT/SALARY INCREASE 	40
––-ASSISTANT AND DEPUTY CLERKS OF COURT/SALARY INCREASE 	41
––-MAGISTRATES/SALARY INCREASE 	42
––-COMMUNITY COLLEGES PERSONNEL/SALARY INCREASES 	45
––-HIGHER EDUCATION PERSONNEL/SALARY INCREASES 	46
––-MOST STATE EMPLOYEES/SALARY INCREASES/1989-90 	46
––-MOST STATE EMPLOYEES/SALARY INCREASES/1990-91 	48
––-PUBLIC SCHOOL PERSONNEL/SALARY INCREASES	49
––-CERTAIN EXECUTIVE BRANCH OFFICIALS/SALARY INCREASES 	52
––-ALL STATE-SUPPORTED PERSONNEL/SALARY INCREASES 	54
––-PERMIT DEVIATIONS FROM CERTAIN PROVISIONS OF THE EXECUTIVE BUDGET ACT  56
––-OVER REALIZED RECEIPTS 	56
––-CONTINGENCY AND EMERGENCY FUND ALLOCATION 	57
––-PRIVATE LICENSE TAGS ON STATE-OWNED CARS AUTHORIZED 	57
––-POST-RETIREMENT ALLOWANCE INCREASES/RETIRED TEACHERS, STATE EMPLOYEES, JUDICIAL OFFICIALS, LOCAL GOVERNMENT EMPLOYEES, AND LEGISLATORS  58
––-SALARY RELATED CONTRIBUTIONS/EMPLOYERS 	59
––-STUDY OF MEDICAL, DISABILITY, DEATH, RETIREMENT, AND RELATED BENEFITS PROVIDED BY FEDERAL, STATE, AND LOCAL GOVERNMENTS FOR FIREMEN  61
––-RESERVE FOR LOCAL TAX REIMBURSEMENTS 	61
PART VII.––-DEPARTMENT OF PUBLIC INSTRUCTION 	66
––-ASSISTANT PRINCIPALS 	66
––-BASIC EDUCATION PROGRAM FUNDS 	66
––-PUPIL TRANSPORTATION 	67
––-CHILD NUTRITION 	67
––-KINDERGARTEN STUDY 	67
––-DROPOUT PREVENTION COORDINATORS 	68
––-DROPOUT PREVENTION/IN-SCHOOL SUSPENSION 	68
––-REDUCTION OF VANDALISM IN THE PUBLIC SCHOOLS 	69
––-PRELIMINARY SCHOLASTIC APTITUDE TEST OPPORTUNITIES ENCOURAGED  69
––-ADMINISTRATION OF DEPARTMENT OF PUBLIC INSTRUCTION BUDGET 	70
PART VIII.––-DEPARTMENT OF COMMUNITY COLLEGES 	73
––-TUITION INCREASE 	73
––-ACCOUNTABILITY AND FLEXIBILITY 	73
––-FULL-TIME EQUIVALENT TEACHING POSITIONS/COMMUNITY COLLEGES 	74
––-FOCUSED INDUSTRIAL TRAINING PROGRAM 	74
––-RETOOLING FOR THE YEAR 2000: GAINING THE COMPETITIVE EDGE 	74
––-LITERACY ALLOCATION BASIS 	76
––-NORTH CAROLINA EMPLOYERS CHARGED IN-STATE 
TUITION 	76
––-EQUINE INSTRUCTION/MARTIN COMMUNITY COLLEGE 	77
PART IX.––-COLLEGES AND UNIVERSITIES 	77
––-UNIVERSITY OF NORTH CAROLINA HOSPITALS AT CHAPEL HILL/NURSING  77
––-NORTH CAROLINA SCHOOL OF SCIENCE AND 
MATHEMATICS 	78
––-ECU MEDICARE REIMBURSEMENT 	78
––-AID TO PRIVATE COLLEGES INCREASE/PROCEDURE 	79
PART X.––-DEPARTMENT OF TRANSPORTATION 	80
––-SPECIAL APPROPRIATIONS FOR HIGHWAYS 	80
––-COMMISSION PAID TO BRANCH AGENTS 	81
––-COMMISSIONER OF MOTOR VEHICLES TO REPORT ON PRINTING AND BINDING FUNDS  81
––-CURRITUCK/DARE BRIDGE MAINTENANCE YARD CONSOLIDATION 	82
––-NC 400 UNDER VOYAGES COMMISSION 	82
––-ELDERLY AND HANDICAPPED TRANSPORTATION ASSISTANCE PROGRAM 	82
––-CONTINUING AVIATION APPROPRIATIONS 	82
PART XI.––-DEPARTMENT OF JUSTICE 	83
––-STATE BUREAU OF INVESTIGATION SALARY ADJUSTMENT 	83
––-TELECOMMUNICATORS' CERTIFICATION STUDY 	83
PART XII.––-DEPARTMENT OF CRIME CONTROL AND PUBLIC SAFETY 	83
––-STATE LAW ENFORCEMENT STUDY 	83
––-COMMUNITY SERVICE COORDINATOR APPOINTMENT 	84
––-VICTIMS COMPENSATION PROGRAM STUDY 	84
––-REVIEW OF THE CIVIL AIR PATROL OPERATIONS 	85
––-REVIEW OF NATIONAL GUARD OPERATIONS 	85
PART XIII.––-DEPARTMENT OF CORRECTION 	86
––-REPORT ON NEED FOR TRAINING COORDINATOR POSITIONS FOR 1991-93 BIENNIUM  86
––-SUBSTANCE ABUSE PROGRAM AND DWI PAROLE PROGRAM EVALUATIONS 	86
––-ENGINEERING SUPPORT SECTION AUDIT 	87
––-SUMMIT HOUSE FUNDS 	88
PART XIV.––-DEPARTMENT OF HUMAN RESOURCES 	88
––-BLOCK GRANT FAMILY PLANNING FUNDS 	88
––-BLOCK GRANT ADOLESCENT PREGNANCY FUNDS 	88
––-ALCOHOL, DRUG ABUSE, AND MENTAL HEALTH SERVICES BLOCK GRANT FUNDS  89
––-EASTERN REGIONAL DETOXIFICATION FUNDS 	90
––-SPECIALIZED RESIDENTIAL CENTERS' BED 
CONVERSIONS 	90
––-THOMAS S. 	90
––-STUDY OF FUNDS USED FOR LOCAL PROGRAM SALARIES 	91
––-ONE-ON-ONE PROGRAM FUNDS 	91
––-CHILD PROTECTIVE SERVICES FUNDS 	92
––-DOMICILIARY CARE RATE INCREASE 	93
––-FOSTER CARE RATE INCREASE 	93
––-REVISED/EXPANDED MEDICAID COVERAGE FOR PREGNANT WOMEN AND FOR CHILDREN  94
––-ANSON COUNTY SEWER FUNDS 	95
PART XV.––-DEPARTMENT OF AGRICULTURE 	95
––-AQUACULTURE DEVELOPMENT 	95
PART XVI.––-DEPARTMENT OF COMMERCE 	97
––-WORKER READJUSTMENT PROGRAM FUNDS 	97
––-PETROLEUM OVERCHARGE FUNDS ALLOCATION 	98
––-BUSINESS ENERGY IMPROVEMENT PROGRAM 	99
PART XVII.––-DEPARTMENT OF NATURAL RESOURCES AND COMMUNITY DEVELOPMENT  100
––-ZOO RECEIPTS 	100
––-AUTHORIZATION FOR USE OF WATER QUALITY FEES 	101
––-AUTHORIZATION FOR USE OF AIR QUALITY FEES 	102
––-SALES TAX PROCEEDS FOR WILDLIFE FUND MODIFIED 	102
––-TEXASGULF SETTLEMENT FUNDS 	103
––-AGRICULTURE COST SHARE PROGRAM 	103
PART XVIII.––-MISCELLANEOUS PROVISIONS 	104
––-EFFECT OF HEADINGS 	104
––-EXECUTIVE BUDGET ACT REFERENCE 	104
––-COMMITTEE REPORT 	104
––-EFFECT OF MOST LIMITATIONS AND DIRECTIONS IN THE CURRENT OPERATIONS ACT OF 1989 APPLY  104
––-MOST TEXT APPLIES ONLY TO 1989-91 	105
––-SEVERABILITY CLAUSE 	105
––-EFFECTIVE DATE 	105

PART I.––-CURRENT OPERATIONS/GENERAL FUND

Sec. 3.  Appropriations from the General Fund of the State for the operations and maintenance of the State departments, institutions, and agencies, and for other purposes as enumerated, except for aid to certain governmental and nongovernmental units, are made for the biennium ending June 30, 1991, according to the following schedule:

Current Operations - General Fund	1989-90	 1990-91

General Assembly  	 $ 866,327	$ 467,455

Department of Secretary of State	245,025	233,437

Department of State Auditor	262,350	244,187

Department of State Treasurer	453,300	557,204

Department of Public Education	68,898,725	190,881,865

Department of Justice	2,137,896	1,464,208

Department of Administration	1,735,266	1,660,822

Department of Agriculture	1,223,046	2,465,716

Department of Labor	1,194,639	791,867

Department of Natural Resources and
Community Development	1,841,900	3,582,281

Department of Human Resources
01.	DHR-Administration and Support
       Program	200,000	50,000
02.	Division of Health Service	1,541,651	1,638,124
03.	Social Services	3,048,277	5,767,135
04.	Medical Assistance	4,554,806	10,503,790
05.	Division of Services for the
     	Blind	26,970	53,940
06.	Cherry Hospital	1,306,634	1,425,419
07.	Division of Facility
   	Services	535,086	394,483
Total Department of
Human Resources	11,213,424	19,832,891

Department of Correction	11,319,979	23,923,531

Department of Commerce	(934,247)	(3,278,951)

Department of Revenue	5,120,236	3,047,331

Department of Cultural Resources	180,511	123,253

Department of Crime Control and
Public Safety	1,341,337	957,380

University of North Carolina-
Board of Governors
01.	University Operations-
   	Lump Sum	10,100,209	13,704,089
02.	Related Educational
     	Programs	2,015,000	3,140,000
03.	North Carolina School of
Science and Mathematics	202,000	348,250
Total University of North
Carolina	12,317,209	17,192,339

Department of Community Colleges	11,076,891	11,076,891

Reserve for Employee Health Plan	30,000,000	40,000,000

Reserve for State Employees and
Teachers Salary Increases	299,700,000	614,000,000

GRAND TOTAL CURRENT OPERATIONS–
GENERAL FUND	$ 460,193,814	$ 929,223,707

PART II.––-CURRENT OPERATIONS/HIGHWAY FUND

Sec. 4.  Appropriations from the Highway Fund of the State for the maintenance and operation of the Department of Transportation, and for other purposes as enumerated, except for aid to certain governmental and nongovernmental units, are made for the biennium ending June 30, 1991, according to the following schedule:

Current Operations-Highway Fund	        1989-90	          1990-91

Department of Transportation
01.	Administration	$ 1,132,040 $ 1,729,634
02.	Highways
a.	Administration and 
Operations	1,036,253 924,216
b.	State Construction
(01)	Special Appropriation
for Highways	6,000,000 6,000,000
(02)	Spot Safety
Improvements	2,900,000 2,900,000
c.	Ferry Operations	1,864,202 2,235,654
03.	Division of Motor Vehicles	3,170,077 2,639,652
04.	Governor's Highway Safety
Program	6,000 6,000
05.	Reserve to Correct Occupational
Safety and Health Conditions	200,000 150,000
Total Department of Transportation	16,308,572 16,585,156

Appropriations to Other State Agencies
01.	Department of Revenue	160,000 160,000

Reserve for Hospital/Medical Benefit	3,000,000 3,500,000

Reserve for Compensation Increase	17,600,000 36,200,000

GRAND TOTAL CURRENT OPERATIONS–
HIGHWAY FUND	$ 37,068,572 $ 56,445,156

PART III.––-CURRENT OPERATIONS/GENERAL FUND/AID TO CERTAIN GOVERNMENTAL AND NONGOVERNMENTAL UNITS

Sec. 5.  Appropriations from the General Fund of the State to State departments, institutions, and agencies for aid to certain governmental and nongovernmental units as enumerated are made for the biennium ending June 30, 1991, according to the following schedule:

General Fund	                           1989-90	          1990-91

Department of Public Education	$ 2,000,000 $ 4,000,000

Department of Administration	368,000 368,000

Department of Transportation
01.	Aeronautics	355,000 855,000
02.	Aid to Railroads	1,000,000 -  
Total Department of Transportation	1,355,000 855,000

Department of Natural Resources
and Community Development	1,000,000 2,064,826

Department of Commerce
01.	Biotechnology Center    	-   2,000,000

Department of Human Resources
01.	Division of Aging	3,749,437 5,024,337
02.	Division of Health Services	100,000 -  
03.	Social Services	2,650,000 2,650,000
04.	Division of Mental Health,
Mental Retardation and
Substance Abuse Services	11,371,398 16,373,805
05.	Division of Youth Services	197,250 197,250
Total Department of Human Resources	18,068,085 24,245,392

Department of Correction	75,000 -  

University of North Carolina-
Board of Governors	2,649,431 2,649,431

State Board of Elections	481,555    -   

GRAND TOTAL STATE AID–
GENERAL FUND	$ 25,997,071 $ 36,182,649

PART IV.––-CURRENT OPERATIONS/HIGHWAY FUND/AID TO CERTAIN GOVERNMENTAL AND NONGOVERNMENTAL UNITS

Sec. 6.  Appropriations from the Highway Fund of the State to State departments, institutions, and agencies for aid to certain governmental and nongovernmental units as enumerated are made for the biennium ending June 30, 1991, according to the following schedule:

Highway Fund	                           1989-90	1990-91

State Aid for Public Transportation	$ 2,000,000 $ 2,000,000

GRAND TOTAL STATE AID–
HIGHWAY FUND	$ 2,000,000 $ 2,000,000

PART V.––-APPROPRIATIONS OF BLOCK GRANT FUNDS

Requested by:   Senator Royall
––-BLOCK GRANT APPROPRIATIONS
Sec. 7.  (a)	Appropriations from federal block grant funds are made for the fiscal year ending June 30, 1990, according to the following schedule:
JOB TRAINING PARTNERSHIP ACT
01.	Title II A funds to the 27
service delivery areas to train
economically disadvantaged youth
and adults	$21,537,460
02.	Education set aside to State
education agencies for projects
to serve eligible participants	2,208,970
03.	Incentive grants and technical
assistance funds to service
delivery areas	1,656,728
04.	Funds for training economically
disadvantaged older workers	828,364
05.	Funds to the Department of Natural
Resources and Community Development
to administer and audit all
activities related to the Job
Training Partnership Act Programs	1,380,606
06.	Title II B Summer Youth Employment
and Training funds to service
delivery areas for economically
disadvantaged youth	10,903,115
07.	Title III Dislocated workers funds
to the Employment Security
Commission	2,318,402
TOTAL JOB TRAINING PARTNERSHIP ACT	$40,833,645

COMMUNITY SERVICES BLOCK GRANT
01.	Community Action Agencies	$ 7,815,918
02.	Limited Purpose Agencies	434,218
03.	Department of Natural Resources
and Community Development to
administer and monitor the
activities of the Community
Services Block Grant	434,218
TOTAL COMMUNITY SERVICES BLOCK GRANT	$ 8,684,354

COMMUNITY DEVELOPMENT BLOCK GRANT
01.	State Administration	$   858,080
02.	Urgent Needs/Contingency	1,852,296
03.	Development Planning Housing	1,111,378
04.	Economic Development	7,409,184
05.	Community Revitalization	26,673,062
TOTAL COMMUNITY DEVELOPMENT
BLOCK GRANT	$37,904,000

EDUCATION CONSOLIDATION AND IMPROVEMENT
BLOCK GRANT	$12,000,346

PREVENTIVE HEALTH BLOCK GRANT
01.	Emergency Medical Services	424,828
02.	Basic Public Health Services    	891,309
03.	Hypertension Programs	552,640
04.	Health Education/Risk Reduction Programs	483,131
05.	Health Promotion/Local Health Departments	459,461
06.	Fluoridation of Water Supplies	148,063
07.	Rape Prevention and Rape
	Crisis Programs	89,369
08.	AIDS/HIV Education, Counseling,
and Testing	294,374
TOTAL PREVENTIVE HEALTH BLOCK GRANT	$3,343,175

MATERNAL AND CHILD HEALTH SERVICES
BLOCK GRANT
01.	Healthy Mother/Healthy Children
Block Grants to Local Health
Departments	$11,718,781
02.	High Risk Maternity Clinic Services,
Perinatal Education, and Consultation
to Local Health Departments
and Other Health Care Providers	1,275,498
03.	Services to Disabled Children	4,056,661
04.	Sudden Infant Death Syndrome	32,633
05.	Lead-based Paint Poisoning	71,200
06.	New Special Projects	606,740
07.	Reimbursements for Local Health
Departments for Contracted
Nutritional Services	120,530
TOTAL MATERNAL AND CHILD HEALTH SERVICES
BLOCK GRANT	$17,882,043

SOCIAL SERVICES BLOCK GRANT
01.	County Departments of Social Services	$41,603,354
02.	Division of Mental Health, Mental
Retardation, and Substance Abuse	5,770,693
03.	Division of Services for the Blind	2,691,673
04.	Division of Youth Services	1,051,428
05.	Division of Facility Services	224,299
06.	Division of Aging	327,424
07.	Day Care Services	12,517,760
08.	Volunteer Services	44,970
09.	State Administration and State Level
Contracts	3,362,775
10.	Voluntary Sterilization Funds	100,000
11.	Transfer to Maternal and Child
Health Block Grant	1,691,909
12. 	Adult Day Care Services	653,910
13.	County Departments of Social Services for
Child Abuse/Prevention and
Permanency Planning	400,000
14.	Allocation to Division of Health Services
for Grants in Aid to Prevention
Programs                      	445,000
15.	Transfer to Preventive Health
Block Grant for Health
Promotion Programs	459,461
16.	Allocation to Preventive Health Block
Grant for AIDS Education	294,374

TOTAL SOCIAL SERVICES BLOCK GRANT	$71,639,030

LOW INCOME ENERGY BLOCK GRANT
01.	Energy Assistance Programs	$17,923,064
02.	Crisis Intervention	4,362,032
03.	Administration	1,933,215
04.	Weatherization Program	1,737,187
05.	Indian Affairs	27,222
06.	Emergency Medical Services	209,116
07.	Transfer to Social Services
Block Grant for Adult
Day Care Services	410,139
08.	Transfer to Social Services Block
Grant for State Administration
& Contract Services	192,748
09.	Transfer to Maternal and Child Health
Grant for Maternal and Child Health
Block Grant in the Division of
Health Services for Healthy Minors
and Children	1,696,362
10.	Allocation to the Department of
Administration for the North
Carolina Fund for Children	45,270
TOTAL LOW INCOME ENERGY BLOCK GRANT	$28,536,355

ALCOHOL AND DRUG ABUSE AND MENTAL HEALTH
SERVICES BLOCK GRANT
01.	Funds to Area Mental Health,
Mental Retardation, and
Substance Abuse Programs to
be distributed on a per
capita basis	$1,866,556
02.	Services to Persons Who Have
Aged Out of the Willie M. Class	300,000
03.	Programs for the Chronically
Mentally Ill	3,084,847
04.	Community-based Substance Abuse Programs	4,743,447
05.	Administration	712,213
06.	Non-Residential Child Mental Health
Services             	279,781
07.	Residential Child Mental Health Services 	341,418
08.	Treatment Alternatives to Street Crimes	232,371
09.	Eastern Region Detox Services	353,110
10.	Community-based Services for Youth
Substance Abusers	1,962,191

TOTAL ALCOHOL AND DRUG ABUSE AND
MENTAL HEALTH SERVICES BLOCK GRANT	 $13,875,934

ALCOHOL AND DRUG ABUSE TREATMENT AND
REHABILITATION BLOCK GRANT
01.	Community-based Services for Youth
Substance Abusers	$ 968,673
02.	Treatment Alternatives to Street Crimes	114,733
TOTAL ALCOHOL AND DRUG ABUSE TREATMENT 
AND REHABILITATION BLOCK GRANT	$1,083,406

MENTAL HEALTH SERVICES FOR THE HOMELESS
BLOCK GRANT
01.	Specialized Community Services for the 
Chronically Mentally Ill	$215,588
02.	Community-based Services for Chronically
Mentally Ill Youth	75,195
TOTAL MENTAL HEALTH SERVICES FOR THE
HOMELESS BLOCK GRANT	$290,783

COMMUNITY YOUTH ACTIVITY PROGRAM BLOCK GRANT
01.	Development of Community-based Substance 
Abuse Prevention Programs
for Youth	$61,709
02.	Evaluation	6,800
TOTAL COMMUNITY YOUTH ACTIVITY PROGRAM
BLOCK GRANT	$68,509
(b) Decreases in Federal Fund Availability
If federal funds are reduced below the amounts specified above after the effective date of this act, then every program, in each of the federal block grants listed above, shall be reduced by the same percentage as the reduction in federal funds.  If federal funds are reduced in the Education Consolidation and Improvement Act Chapter II Block Grant, then the State Board of Education shall determine how reductions are to be made among the various local agencies.
(c) Increases in Federal Fund Availability
If the United States Congress appropriates additional funds for block grants after the effective date of this act, these funds shall be held in a reserve in each block grant for future allocations by the General Assembly.  This subsection shall not apply to the Community Development Block Grant, the Community Services Block Grant, and to Job Training Partnership Act funds.
(d) Education Setaside of JTPA Funds
The Department of Natural Resources and Community Development shall certify to the Joint Legislative Commission on Governmental Operations and to the Fiscal Research Division of the Legislative Services Office when Job Training Partnership Act funds have been distributed to each agency, the total amount distributed to each agency, and the total amount of eight percent (8%) Education Setaside funds received.

PART VI.––-GENERAL PROVISIONS

Requested by:   Senator Martin of Guilford
––-ALLOCATION OF RAPE CRISIS CENTER FUNDS
Sec. 8.  All funds for the Rape Crisis Centers appropriated to the Department of Administration, Council on the Status of Women, for fiscal years 1989-90 and 1990-1991, and included in Section 5 of this act shall be available to Rape Crisis Centers providing direct services to victims of sexual assault and rape prevention services.  Funds shall be awarded according to criteria developed by the North Carolina Department of Administration.  Grants must be awarded by September 1 each fiscal year and the funds awarded no later than November 1 each fiscal year.

Requested by:   Senator Martin of Guilford
––-REVENUE FUNDS TO SIPS

Sec. 10.  Of the funds appropriated in Section 3 of this act to the Department of Revenue, $1,400,000 shall be paid to the State Information Processing System Center for prior years' receivables of the Department of Revenue.  Upon receipt by the Center of the $1,400,000 payment, the State Computer Commission shall use these funds to reduce rates of charges to General Fund departments and institutions using services provided by the Center.
To the extent possible, the reduction in cost to each General Fund department and institution shall revert to the General Fund at the end of each fiscal year in the 1989-91 biennium.  General Fund appropriations to departments and institutions budgeted in Data Processing Services line items may not be transferred to other line items nor expended for other purposes.

Requested by:   Senator Royall
––-CONTINGENCY AND EMERGENCY FUND RESERVE/RESTRICTED RESERVE
Sec. 11.  G.S. 143-12 reads as rewritten:
"§ 143-12. Bills containing proposed appropriations.
The Director shall cause to be prepared and submitted to the General Assembly the following bills:
(1)	A bill containing all proposed current operations appropriations of the budget for each year in the ensuing biennium, which shall be known as the ‘Current Operations Appropriations Bill', and a bill containing all proposed capital appropriations of the budget for each year in the ensuing biennium, which shall be known as the ‘Capital Improvement Appropriations Bill'.
(2)	If necessary, a bill containing the Director of the Budget's views on revenue for the ensuing biennium, which shall be known as the ‘Budget Revenue Bill', and shall provide an amount of revenue for the ensuing biennium sufficient, in the opinion of the Director and the Commission, to meet the appropriations contained in the Current Operations Appropriations Bill and the Capital Improvement Appropriations Bill.
(3)	Repealed by Session Law 1983 (Regular Session, 1984), c. 1034, s. 153.
To the end that all expenses of the State may be brought and kept within the budget, the Current Operations Appropriations Bill shall contain a specific sum as a contingent or emergency appropriation, and shall allocate a specific portion of that sum to a special reserve to be used solely for purposes as outlined in G.S. 143-23(a1), (3), (4), and (5). The manner of the allocation of such contingent or emergency appropriation shall be as follows: Any institution, department, commission, or other agency or activity of the State, or other activity in which the State is interested, desiring an allotment out of such contingent or emergency appropriation, shall upon forms prescribed and furnished by the Director of the Budget, present such request in writing to the Director of the Budget, with such information as he may require, and if the Director of the Budget shall approve such request, in whole or in part, he shall forthwith present the same to the Governor and Council of State, and upon their order only shall such allotment be made.  If the Director shall disapprove the request of such an allotment out of the emergency or contingent appropriation, he shall transmit his refusal and his reason therefor to the Governor and Council of State for their information.
Funds allocated from the contingent or emergency appropriation may be used only for the purpose for which they were allocated and may not be reallocated for another purpose by the Governor and the Council of State. If the funds are not spent or encumbered for the purpose for which they were allocated by the end of the fiscal biennium and if the Governor and the Council of State do not reallocate them for that same purpose, the funds shall revert to the fund from which the contingent or emergency appropriation was made. Also, if the funds are not needed for the purpose for which they were allocated, the funds shall revert to the fund from which the contingent or emergency appropriation was made.
The Director of the Budget may, in preparation of the Appropriations and Revenue Bills, seek the advice of the Advisory Budget Commission. If the Director and the Commission shall not agree as to the Appropriations and Revenue Bills in substantial particulars, the Director shall prepare the same, based on his conclusions and judgment, and the Commission or any of its members retain the right to submit separately to the General Assembly such statement of disagreement and the particulars thereof as they shall find proper to submit as representing their own views.”

Requested by:   Senator Royall
––-NO TRANSFERS BETWEEN ITEMS IN THE BUDGET
Sec. 12.  G.S. 143-23(a1) reads as rewritten:
"(a1)	No transfers may be made between line items in the budget of any department, institution, or other spending agency; however, with the approval of the Director of the Budget, a department, institution, or other spending agency may spend more than was appropriated for a line item if the overexpenditure is:
(1)	In a program for which funds were appropriated for that fiscal  period and the total amount spent for the program is no more than was appropriated for the program for the fiscal period;
(2)	Required to continue a program because of unforeseen events, so long as the scope of the program is not increased;
(3)	Required by a court, Industrial Commission, or administrative hearing officer's order or award or to match unanticipated federal funds;
(4)	Required to respond to an unanticipated disaster such as a fire, hurricane, or tornado; or
(5)	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 and to the Fiscal Research Division of the Legislative Services Office the reason if the amount expended for a program is more than the amount appropriated for it from all sources.
Funds appropriated for salaries and wages may only be used for salaries and wages or for premium pay, overtime pay, longevity, unemployment compensation, workers' compensation, temporary wages, contracted personal services, moving expenses, payment of accumulated annual leave, certain awards to employees, tort claims, and employer's social security, retirement, and hospitalization payments: provided, however, funds appropriated for salaries and wages may also be used for purposes for which over expenditures are permitted by subdivisions (3), (4), and (5) of this subsection 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 and to  the Fiscal Research Division of the Legislative Services Office. Lapsed salary funds that become available from vacant positions may not be used for new permanent employee positions or to raise the salary of existing employees.
As used in this subsection, ‘program' means a group of expenditure and receipt line items for support of a specific budgeted activity outlined in the certified budget for each department, agency, or institution, as designated by the four-digit fund (purpose)	number in the Budget Preparation System."

Requested by:   Senator Royall
––-LIMIT ON NUMBER OF STATE EMPLOYEES
Sec. 13.  G.S. 143-47.15 is repealed.
Sec. 14.  (a)	Article 1 of Chapter 143 of the General Statutes is amended by adding a new section to read:
"§ 143-10.2.  Limit on number of State employees.
The total number of permanent State funded employees, excluding employees in the State's public school system funded by way of State aid to local public school units, shall not be increased by the end of any State fiscal year by a greater percentage than the percentage rate of the residential population growth for the State of North Carolina.  The percentage rates shall be computed by the Office of State Budget and Management.  The population growth shall be computed by averaging the rate of residential population growth in each of the preceding 10 fiscal years as stated in the annual estimates of residential population in North Carolina made by the United States Census Bureau.  The growth rate of the number of employees shall be computed by averaging the rate of growth of State employees in each of the preceding 10 fiscal years as of July 1 of each fiscal year as stated in the State Budget."
(b)	The substance of subsection (a) of this section shall be studied by the Commission on the Future of Education if that Commission is created by act of the General Assembly.

Requested by:   Senator Royall
––-EXPENDITURE OF FUNDS
Sec. 15.  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, and funds allocated from the Contingency and Emergency Fund by the Council of State, may be expended for any purpose 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 when that purpose is included in a bill or petition or when any committee of the Senate or the House of Representatives deliberates on that purpose."

Requested by:   Senators Royall, Ward, and Sands
––-BENEFIT AND TECHNICAL ADJUSTMENTS/TEACHERS' AND STATE EMPLOYEES' HEALTH BENEFIT PLAN
Sec. 16.  (a) G.S. 135-39.5 reads as rewritten:
"§ 135-39.5. Powers and duties of the Executive Administrator and Board of Trustees.
The Executive Administrator and Board of Trustees of the Teachers' and State Employees' Comprehensive Major Medical Plan shall have the following powers and duties:
(1)	Supervising and monitoring of the Claims Processor.
(2)	Providing for enrollment of employees in the Plan.
(3)	Communicating with employees enrolled under the Plan.
(4)	Communicating with health care providers providing services under the Plan.
(5)	Making payments at appropriate intervals to the Claims Processor for benefit costs and administrative costs.
(6)	Conducting administrative reviews under G.S. 135-39.7.
(7)	Annually assessing the performance of the Claims Processor.
(8)	Preparing and submitting to the Governor and the General Assembly cost estimates for the health benefits plan, including those required by Article 15 of Chapter 120 of the General Statutes.
(9)	Recommending to the Governor and the General Assembly changes or additions to the health benefits program and health care cost containment programs, together with statements of financial and actuarial effects as required by Article 15 of Chapter 120 of the General Statutes.
(10)	Working with State employee groups to improve health benefit programs.
(11)	Repealed by Session Laws 1985, c. 732, s. 9.
(12)	Determining basis of payments to health care providers, including payments in accordance with G.S. 58-260.6.
(13)	Requiring bonding of the Claims Processor in the handling of State funds.
(14)	Repealed by Session Laws 1985, c. 732, s. 7.
(15)	In case of termination of the contract under G.S. 135-39.5A, to select a new Claims Processor, after competitive bidding procedures approved by the Department of Administration.
(16)	Notwithstanding the provisions of Part 3 of this Article, to formulate and implement cost-containment measures which are not in direct conflict with that Part.
(17)	Implementing pilot programs necessary to evaluate proposed cost containment measures which are not in direct conflict with Part 3 of this Article, and expending funds necessary for the implementation of such programs.
(18)	Authorizing coverage for alternative forms of care not otherwise provided by the Plan in individual cases when medically necessary, medically equivalent to services covered by the Plan, and when such alternatives would be less costly than would have been otherwise.
(19)	Establishing and operating a hospital bill audit program and a fraud detection program."
(b) Effective January 1, 1989, G.S. 135-40 reads as rewritten:
"§ 135-40.  Undertaking.
(a)	The State of North Carolina undertakes to make available a Comprehensive Major Medical Plan (hereinafter called the "Plan" ) exclusively for the benefit of its employees, retired employees and certain of their dependents which will pay benefits in accordance with the terms hereof.  The Plan shall have all the powers and privileges of a corporation and shall be known as the North Carolina Teachers' and State Employees' Comprehensive Major Medical Plan.  The Executive Administrator and Board of Trustees shall carry out their duties and responsibilities as fiduciaries for the Plan.
(b)	The Plan benefits will be provided under contracts between the State and the Claims Processor selected by the State.  Claims Processor refers to the administrator, third party administrator or other party contracting with the State to administer the Plan benefits.  Such contracts shall include the substance of G.S. 135-40.1 through G.S. 135-40.13 and the description of Plan in the request for proposal, and shall be administered by the respective Claims Processor of the State which will determine benefits and other questions arising thereunder.  The contracts necessarily will conform to applicable State laws.  If any of the provisions of G.S. 135-40.1 through G.S. 135-40.13 and the request for proposals must be modified for inclusion in the contract because of State laws, such modification will be made.
(c)	Payroll deduction shall be available for coverage under this Part or under G.S. 135-39.5B of amounts not paid by the State.
(d)	Notwithstanding any other provisions of the Plan, the Executive Administrator and Board of Trustees are specifically authorized to use all appropriate means to secure tax qualification of the Plan under any applicable provisions of the Internal Revenue Code of 1954 as amended.  The Executive Administrator and Board of Trustees shall furthermore comply with all applicable provisions of the Internal Revenue Code as amended, to the extent that this compliance is not prohibited by this Article."
(c) G.S. 135-40.1(2) reads as rewritten:
"(2)	Deductible. – Deductible shall mean an amount of covered expenses during a fiscal year which must be incurred after which benefits (subject to the deductible) becomes payable.   The deductible for an employee, retired employee and/or his or her dependents shall be one hundred fifty dollars ($150.00) for each fiscal year.
		The deductible applies separately to each covered individual in each fiscal year, subject to an aggregate maximum of four hundred fifty dollars ($450.00) per family (employee or retiree and his or her covered dependents) in any fiscal year.
		If two or more family members are injured in the same accident only one deductible is required for charges related to that accident during the benefit period."
(d) G.S. 135-40.1(17) reads as rewritten:
"(17)	Retired Employee (Retiree). – Retired teachers, State employees, and members of the General Assembly who are receiving monthly retirement benefits from any retirement system supported in whole or in part by contributions of the State of North Carolina, so long as the retiree is enrolled.  On and after January 1, 1988, a retiring employee or retiree must have completed at least five years of contributory retirement service with an employing unit prior to retirement from any State-supported retirement system in order to be eligible for group benefits under this Part as a retired employee or retiree."
(e) G.S. 135-40.2 is amended by adding a new subsection to read:
"( h)	No person shall be eligible for coverage as an employee or retired employee or as a dependent of an employee or retired employee upon a finding by the Executive Administrator or Board of Trustees or by a court of competent jurisdiction that the employee or dependent knowingly and willfully made or caused to be made a false statement or false representation of a material fact in a claim for reimbursement of medical services under the Plan."
(f) Effective September 1, 1987, G.S. 135-40.2(a) reads as rewritten:
"(a)	The following persons are eligible for coverage under the Plan, on a noncontributory basis, subject to the provisions of G.S. 135-40.3:
(1)	All permanent full-time employees of an employing unit who meet the following conditions:
a.	Paid from general or special State funds, or
b.	Paid from non-State funds and in a group for which his or her employing unit has agreed to provide coverage.
	Employees of State agencies, departments, institutions, boards, and commissions not otherwise covered by the Plan who are employed in permanent job positions on a recurring basis and who work 30 or more hours per week for nine or more months per calendar year are covered by the provisions of this subdivision.
(1a)	Permanent hourly employees as defined in G.S. 126-5(c4) who work at least one-half of the workdays of each pay period.
(2)	Retired teachers, State employees, and members of the General Assembly.
(2a)	Surviving spouses of:
a.	Deceased retired employees, provided the death of the former plan member occurred prior to October 1, 1986; and
b.	Deceased teachers, State employees, and members of the General Assembly who are receiving a survivor's alternate benefit under any of the State-supported retirement programs, provided the death of the former plan member occurred prior to October 1, 1986.
(3)	Repealed by Session Laws 1985 (Reg. Sess., 1986), c. 1020, s. 29(b), effective January 1, 1988.
(3a)	Employees of the General Assembly, not otherwise covered by this section, as determined by the Legislative Services Commission, except for legislative interns and pages.
(4)	Members of the General Assembly."
(g)  Effective July 1, 1986, G.S. 135-40.6 is amended in the portion of the section preceding the first subdivision by deleting the phrase "per calendar year”and by substituting the phrase "per fiscal year".
(h)  G.S. 135-40.6(1) reads as rewritten:
"(1)	In-Hospital Benefits. – The Plan pays in-hospital benefits for each single confinement, when charged by a hospital, for room accommodation, including bed, board and general nursing care, but not to exceed the charge for semiprivate room or ward accommodations, or the rate negotiated for the Plan.
The Plan will pay the following covered charges, when charged by a hospital, for each confinement.
a.	Intensive and cardiac nursing care.
b.	All recognized drugs and medicines for use in the hospital.
c.	Radiation services, including diagnostic x-rays, x-ray therapy, radiation therapy and treatment.
d.	Clinical and pathological laboratory examinations.
e.	Electrocardiograms and electroencephalograms.
f.	Physical therapy.
g.	Intravenous solutions.
h.	Oxygen and oxygen therapy, plus the use of equipment.
i.	Dressings, ordinary splints, plaster casts and sterile supplies.
j.	Use of operating, delivery, recovery and treatment rooms and equipment.
k.	Routine nursery charges, if the mother is eligible to receive maternity benefits.
l.	Anesthetics and the administration thereof by the hospital's employee anesthesiologist.
m.	Devices or appliances surgically inserted within the body.
n.	Processing and administering of blood and blood plasma.
o.	Children are entitled to benefits for treatment of illnesses or congenital defect, incubation or isolette care, and treatment of prematurity or postmaturity.
		If the mother is a covered individual, benefits are provided for the newborn's circumcision and routine nursery care.
p.	When a covered individual is admitted to or transferred to a section of a hospital providing ambulant, convalescent, or rehabilitative care, benefits are provided up to the average number of days of service for treatment of the particular diagnosis or condition involved, or more if medical necessity requires.
q.	The Plan pays benefits for laboratory testing and administration of blood provided to a covered individual.
		When a covered individual is the recipient of transplanted organs or bones, benefits are provided for services to the donor which are directly and specifically related to the transplantation.
r.	Thirty days per fiscal year are provided for inpatient treatment of mental illness. Readmission for this condition within 365 days of last discharge shall be considered a single confinement. When furnished to a patient in a skilled nursing facility, 30 days less the days of care already provided for the same illness in a hospital are provided. Additional inpatient treatment, based on individual consideration, may be provided if prior approval is obtained from the Claims Processor.
s.	The use of nebulizers when authorized as medically necessary by the attending physician."
(i) G.S. 135-40.6(2) reads as rewritten:
"(2)	Limitations and Exclusions to In-Hospital Benefits. –
a.	The services of physicians, surgeons and technicians not employed by or under contract to the hospital are not covered.
b.	Any admission for diagnostic tests or procedures which could be, and generally are, performed on an outpatient basis, if no hospitalization would have been required except for such diagnostic services is not covered. However, benefits are provided at ninety percent (90%) of Plan benefits for diagnostic tests and procedures consistent with the symptoms or diagnosis for which admitted.
c.	The Plan will not cover any admission to a hospital prior to the effective date of coverage or beginning prior to the expiration of any waiting period so long as the individual remains continuously in a hospital.
d.	Hospitalization for custodial, domiciliary or sanitarium care, or rest cures, is not covered.
e.	Hospitalization for dental care and treatment is not covered, except when a hospital setting is medically necessary.
f.	Prior to admission for scheduled inpatient hospitalization, the admitting physician shall contact the Plan and secure approval certification for an inpatient admission, including a length of stay, based upon clinical criteria established by the medical community, before any in-hospital benefits are allowed under G.S. 135-40.8(a).  Effective January 1, 1987, failure to secure certification, or denial of certification, shall result in in-hospital benefits being allowed at the rate maximum amount of out-of-pocket expenses established by G.S. 135-40.8(b).  Denial of certification by the Plan shall be made only after contact with the admitting physician and shall be subject to appeal to the Executive Administrator and Board of Trustees."
(j)  G.S. 135-40.6(5) reads as rewritten:
"(5)	Surgical Benefits. – The Plan pays the usual, customary and reasonable charges for covered surgical services as follows:
a.	Surgery: Cutting procedures, treatment of fractures, transfusions, operative preparation for diagnostic x-ray examinations, surgical implantation radiation sources, major endoscopic examinations, biopsies, surgical sterilization, other standard services and operations.
		For the purpose of this subdivision, the term ‘standard services and operations' includes the following organ transplants: liver, heart, corneal, bone marrow, and kidney.  All other organ transplants shall be considered nonreimbursable under the Plan. Benefits for the above listed organ transplants shall be payable only in accordance with rules established by the Executive Administrator and Board of Trustees.  The Executive Administrator and Board of Trustees may limit the Plan's reimbursement for selected organ transplants to amounts that would otherwise be allowed in accordance with G.S. 135-40.4.
b.	Anesthesia: Administration of general, spinal block or local anesthesia. Covered services include pre- and postoperative visits, the administration of the anesthetic, fluids and/or blood provided by the anesthesiologist and incidental to the anesthesia, and necessary drugs and materials provided by the anesthesiologist. No benefits are provided for administration of local anesthesia or for anesthesia administered by the operating surgeon or surgical assistant(s).
c.	Oral Surgery: Services which are within the scope of practice of both a doctor of medicine and a dentist, such as excision of tumors and lesions of the mouth, treatment of jaw fractures and surgery to correct injuries of the mouth structure other than teeth and their supporting structure. Developmental and congenital orthognathic surgery procedures will be covered under the Plan, provided such surgery is medically necessary, is the only method of treatment which will correct the patient's deformity, is not performed for cosmetic reasons, and is approved in advance by the Claims Processor on the basis of the surgeon's documentation that the correction of the deformity is medically necessary for the maintenance of good physical health.
d.	Maternity Care: Independent operative procedures in connection with pregnancy, such as: manipulative obstetrical delivery, delivery by Caesarean section, removal of ectopic pregnancy, dilation and curettage. Benefits for manipulative obstetrical delivery include use of forceps and/or episiotomy. No benefits are provided for antepartum or postpartum care, except for direct surgical procedures of delivery and surgical treatment.
e.	Surgical Assistants: Services of an assistant surgeon when medical judgment requires the services of an assistant surgeon and no hospital-employed doctor in training is available.
f.	Multiple Procedures: When multiple or bilateral surgical procedures are performed by the same doctor through separate incisions or approaches during the same session, the surgical benefits will be the greater UCR allowance, plus fifty percent (50%) of the lesser UCR allowance. Anesthesia benefits will be the greater UCR allowance.
		When multiple surgical procedures are performed by the same doctor through the same incision or operative approach, the surgical benefits are limited to the procedure which has the highest UCR allowance.
		When a surgical procedure is performed in two or more stages, the surgical benefit for the entire procedure is the same as it would be were the procedure performed in one stage (except where otherwise provided in the benefit schedule). This limitation does not apply to anesthesia benefits.
g.	Cleft Palate: Notwithstanding G.S. 135-40.6(6)a and G.S. 135-40.7(11), medical treatment and care needed by an individual born with cleft palate, including specialized dental and orthodontic care necessitated by the congenital condition."
(k) G.S. 135-40.6(8) reads as rewritten:
"(8)	Other Covered Charges. –
a.	Prescription Drugs: Prescription legend drugs in excess of the first two dollars ($2.00) per prescription for generic drugs and brand name drugs without a generic equivalent and in excess of the first three dollars ($3.00) per prescription for brand name drugs for use outside of a hospital or skilled nursing facility. A prescription legend drug is defined as an article the label of which, under the Federal Food, Drug, and Cosmetic Act, is required to bear the legend: ‘Caution: Federal Law Prohibits Dispensing Without Prescription.' Such articles may not be sold to or purchased by the public without a prescription order. Benefits are provided for insulin even though prescription is not required.
b.	Private Duty Nursing: Services of licensed nurses (not immediate relatives or members of the participant's household or private duty nursing used in lieu of or as a substitute for hospital staff nurses) ordered by the attending doctor for a condition requiring skilled nursing services.  Private Duty Nursing ordered must be approved in advance by the Claims Processor as medically necessary. Allowances for Private Duty Nursing shall not exceed the Plan's usual, customary and reasonable allowances or ninety percent (90%) of the daily semiprivate rate by skilled nursing facilities as determined by the Plan.
c.	Home Health Agency Services: Services provided in a covered individual's home, when ordered by the attending physician who certifies that hospital or skilled nursing facility confinement would be required without such treatment and cannot be readily provided by family members. Services may include medical supplies, equipment, appliances, therapy services (when provided by a qualified speech therapist or licensed physiotherapist), and nursing services. Nursing services will be allowed for:
1.	Services of a registered nurse (RN); or
2.	Services of a licensed practical nurse (LPN) under the supervision of a RN; or
3.	Services of a home health aide under the supervision of a RN, limited to four hours a day.
		Home health services shall be limited to 60 days per fiscal year, except that additional home health services may be provided on an individual basis if prior approval is obtained from the Claims Processor. Plan allowances for home health services shall be limited to licensed or Medicare certified home health agencies and shall not exceed ninety percent (90%) of the skilled nursing facility semiprivate rates as determined by the Plan, or charges negotiated by the Plan.
d.	Licensed Ambulance Service: Local ambulance transportation:
1.	To or from a hospital for inpatient care or outpatient accident care;
2.	From a hospital to the nearest facility able to provide needed services not available at the transferring hospital; or
3.	From a hospital to a skilled nursing facility.
		The word ‘local' means ambulance transportation of not more than 50 miles unless the Claims Processor authorizes ambulance transportation beyond this distance.
e.	Prosthetic and Orthopedic Appliances and Durable Medical Equipment: Appliances and equipment including corrective and supportive devices such as artificial limbs and eyes, wheelchairs, traction equipment, inhalation therapy and suction machines, hospital beds, braces, orthopedic corsets and trusses, and other prosthetic appliances or ambulatory apparatus which are provided solely for the use of the participant. Eligible charges include repair and replacement when medically necessary. Benefits will be provided on a rental or purchase basis at the sole discretion of the Administrator and agreements to rent or purchase shall be between the Administrator and the supplier of the appliance.
		For the purposes of this subdivision, the term ‘durable medical equipment' means standard equipment normally used in an institutional setting which can withstand repeated use, is primarily and customarily used to serve a medical purpose, is generally not useful to a person in the absence of an illness or injury and is appropriate for use in the home. Decisions of the Claims Processor, the Executive Administrator and Board of Trustees as to compliance with this definition and coverage under the Plan shall be final.
f.	Dental Services: Dental surgery and appliances for mouth, jaw, and tooth restoration necessitated because of external violent and accidental means, such as the impact of moving body, vehicle collision, or fall occurring while an individual is covered under G.S. 135-40.3. No benefits are provided in connection with injury incurred in the act of chewing, nor for damage or breakage of an appliance such as bridge or denture being cleaned or otherwise not in normal mouth usage at the time of accident, nor for appliances for orthodontic treatment when a class of malocclusion, other than orthognathic, or cross bite has been diagnosed. Benefits for temporomandibular joint (TMJ) disfunction appliance therapy are limited to cases where the TMJ disfunction has been diagnosed as solely resulting from accidental means as certified by the attending practitioner and approved by the Claims Processor.
		Benefits shall include extractions, fillings, crowns, bridges, or other necessary therapeutic and restorative techniques and appliances to reasonably restore condition and function to that existing immediately prior to the accident. Injury or breakage of existing appliances such as bridges and dentures is limited to repair of such appliances unless certified as damaged beyond repair.
g.	Medical Supplies: Colostomy bags, catheters, dressings, oxygen, syringes and needles, and other similar supplies.
h.	Blood: Transfusions including cost of blood, plasma, or blood plasma expanders.
i.	Physical Therapy: Recognized forms of physical therapy for restoration of bodily function, provided by a doctor, hospital, or by a licensed professional physiotherapist. No benefits are provided for eye exercises or visual training.
j.	Inhalation Therapy: When provided by a doctor, hospital, or other organization.
k.	Speech Therapy: Speech therapy provided by certified speech therapist.  
l.	Cataract Lenses: Cataract lenses prescribed as medically necessary for aphakia persons, including charges for necessary examinations and fittings. Benefits will be limited to one set of cataract lenses every 24 months for persons 18 years of age or older, and one set of cataract lenses every 12 months for persons less than 18 years of age.
m.	Cardiac Rehabilitation: Charges not to exceed six hundred fifty dollars ($650.00) per fiscal year for cardiac testing and exercise therapy, when determined medically necessary by an attending physician and approved by the Claims Processor for patients with a medical history of myocardial infarction, angina pectoris, arrhythmias, cardiovascular surgery, hyperlipidemia, or hypertension, provided such charges are incurred in a medically supervised facility fully certified by the North Carolina Department of Human Resources.
n.	Chiropractic Services: Limited to the alignment of the spine and releasing of pressure by manipulation in accordance with the definitions in G.S. 90-143.  Maximum benefits for x-rays, manipulations, and modalities shall be one thousand dollars ($1,000) per fiscal year.
o.	Foot Surgery: All foot surgery on bones and joints in excess of one thousand dollars ($1,000), except for emergencies, shall require prior approval from the Claims Processor.
p.	Outpatient Diabetes Self-Care Programs: Charges, not to exceed three hundred dollars ($300.00) per fiscal year, when determined to be medically necessary by an attending physician and approved by the Executive Administrator and Claims Processor as meeting the standards of the National Diabetes Advisory Board for patients with a medical history of diabetes, provided such charges are incurred in a medically supervised facility.
q.	Necessary medical services provided to terminally ill patients by duly licensed hospice organizations, when directed by the attending physician and approved in advance by the Claims Processor and the Executive Administrator.
r.	Occupational Therapy:  Recognized forms of occupational therapy provided by a doctor, hospital, or by a licensed professional occupational therapist to restore fine motor skills for the resumption of bodily functions."
(l) G.S. 135-40.7A(b) reads as rewritten:
"(b)	Notwithstanding any other provisions of this Part, the maximum  benefit for each covered individual for treatment of chemical dependency is as follows:
		Fiscal Year	  	$ 8,000
Lifetime		25,000
Daily benefits are limited to two hundred dollars ($200.00) except for medical detoxification treatment under rules established by the Executive Administrator and Board of Trustees."
(m) Effective July 1, 1986, G.S. 135-40.8(a) reads as rewritten:
"(a)	For the balance of any fiscal year after each eligible employee, retired employee, or dependent satisfies the cash deductible, the Plan pays ninety percent (90%) of the eligible expenses outlined in G.S. 135-40.6. The covered individual is then responsible for the remaining ten percent (10%) until three hundred dollars ($300.00), in excess of the deductible, has been paid out-of-pocket. The Plan then pays one hundred percent (100%) of the remaining covered expenses."
(n)  Effective October 1, 1986, G.S. 40.8(b) reads as rewritten:
"(b)	Where a covered individual fails to obtain a second surgical opinion as required under the Plan, the covered individual shall be responsible for fifty percent (50%) of the eligible expenses, provided, however, that no covered individual shall be required to pay, in addition to the expenses in subsection (a) above, out-of-pocket in excess of five hundred dollars ($500.00) per fiscal year."
(o) Effective October 1, 1982, G.S. 135-40.10(b) reads as rewritten:
"(b)	For those participants eligible for Medicare, the State's plan will be administered on a’carve out' basis.  The provisions of the plan are applied to the charges not paid by Medicare (Parts A & B).  In other words, those charges not paid by Medicare would be subject to the deductible and coinsurance of the Plan just as of the charges not paid by Medicaid were the total bill."
(p)  G.S. 135-40.11(a) reads as rewritten:
"(a)	Coverage under this Plan of an employee and his or her surviving spouse or eligible dependent children or of a retired employee and his or her surviving spouse or eligible dependent children shall cease on the earliest of the following dates:
(1)	The last day of the month in which an employee or retired employee dies. Provided such surviving spouse or eligible dependent children were covered under the Plan at the time of death of the former employee or retired employee, or were covered on September 30, 1986, any such surviving spouse or eligible dependent children may then elect to continue coverage under the Plan by submitting written application to the Claims Processor and by paying the cost for such coverage when due at the applicable fees. Such coverage shall cease on the last day of the month in which such surviving spouse or eligible dependent children die, except as provided by this Article.
(2)	The last day of the month in which an employee's employment with the State is terminated as provided in subsection (c) of this section.
(3)	The last day of the month in which a divorce becomes final.
(4)	The last day of the month in which an employee or retired employee requests cancellation of coverage.
(5)	The last day of the month in which a covered individual enters active military service.
(6)	The last day of the month in which a covered individual is found to have knowingly and willfully made or caused to be made a false statement or false representation of a material fact in a claim for reimbursement of medical services under the Plan."

Requested by:   Senator Royall
––-GOVERNOR'S SALARY INCREASE
Sec. 17. (a) Effective July 1, 1989, G.S. 147-11(a) reads as rewritten:
"(a)	The salary of the Governor shall be one hundred sixteen thousand three hundred sixteen dollars ($116,316) annually, payable monthly."
(b) Effective July 1, 1990, G.S. 147-11(a) as amended by subsection (a) of this section reads as rewritten:
"(a)	The salary of the Governor shall be one hundred twenty-three thousand three hundred dollars ($123,300) annually, payable monthly."

Requested by:   Senator Royall
––-COUNCIL OF STATE/SALARY INCREASE
Sec. 18.  The annual salaries for members of the Council of State, payable monthly, for the following fiscal years are:
Council of State	1989-90	1990-91
Lieutenant Governor	$ 70,992	$75,252
Attorney General	 70,992	75,252
Secretary of State	 70,992	75,252
State Treasurer	 70,992	75,252
State Auditor	 70,992	75,252
Superintendent of Public Instruction	 70,992	75,252
Agriculture Commissioner	 70,992	75,252
Insurance Commissioner	 70,992	75,252
Labor Commissioner	 70,992	75,252.

Requested by:   Senator Royall
––-NONELECTED DEPARTMENT HEAD/SALARY INCREASES
Sec. 19.  In accordance with G.S. 143B-9, the maximum annual salaries, payable monthly, for the nonelected heads of the principal State departments for the following fiscal years are:
Nonelected Department Heads	1989-90	1990-91
Secretary of Administration	$ 70,992	$75,252
Secretary of Commerce	 70,992	75,252
Secretary of Correction	 70,992	75,252
Secretary of Crime Control and
Public Safety	 70,992	75,252
Secretary of Cultural Resources	 70,992	75,252
Secretary of Human Resources	 70,992	75,252
Secretary of Natural Resources
and Community Development	 70,992	75,252
Secretary of Revenue	 70,992	75,252
Secretary of Transportation	 70,992	75,252.

Requested by:   Senator Royall
––-LEGISLATORS/SALARY AND EXPENSE INCREASES
Sec. 20.  Effective upon convening of the 1991 Regular Session of the General Assembly, G.S. 120-3 reads as rewritten:
"§ 120-3. Pay of members and officers of the General Assembly.
(a)	The Speaker of the House shall be paid an annual salary of $35,100, payable monthly, and an expense allowance of $1,320 per month.  The President Pro Tempore of the Senate shall be paid an annual salary of $35,100, payable monthly, and an expense allowance of $1,320 per month.  The Speaker Pro Tempore of the House shall be paid an annual salary of $19,776, payable monthly, and an expense allowance of $780.00 per month; and the Deputy President Pro Tempore of the Senate shall be paid an annual salary of $19,776, payable monthly, and an expense allowance of $780.00  per month.  The majority and minority leaders in the House and the majority and minority leaders in the Senate shall be paid an annual salary of $15,396, payable monthly, and an expense allowance of $622.00 per month.
(b)	Every other member of the General Assembly shall receive increases in annual salary only to the extent of and in the amounts equal to the average increases received by employees of the State, effective upon convening of the next Regular Session of the General Assembly after enactment of these increased amounts.  Accordingly, upon convening of the 1991 Regular Session of the General Assembly, every other member of the General Assembly shall be paid an annual salary of $12,504, payable monthly, and an expense allowance of $522.00 per month.
(c)	The salary and expense allowances provided in this section are in addition to any per diem compensation and any subsistence and travel allowance authorized by any other law with respect to any regular or extra session of the General Assembly, and service on any State board, agency, commission, standing committee and study commission."

Requested by:   Senator Royall
––-GENERAL ASSEMBLY PRINCIPAL CLERKS/SALARY INCREASES
Sec. 21.  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 $43,548 from July 1, 1989 through June 30, 1990, and an annual salary of $46,164 on and after July 1, 1990, 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:   Senator Royall
––-SERGEANT-AT-ARMS AND READING CLERKS/SALARY INCREASES
Sec. 22.  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 $197.00 per week from July 1, 1989 through June 30, 1990, and $209.00 per week on and after July 1, 1990, 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:   Senator Royall
––-LEGISLATIVE EMPLOYEES/SALARY INCREASES
Sec. 23. (a) The Legislative Administrative Officer may increase the salaries of nonelected employees of the General Assembly in effect for fiscal year 1988-89 by an amount equal to six percent (6%), rounded to conform to the steps in the salary ranges adopted by the Legislative Services Commission, commencing July 1, 1989.  Nothing in this Part limits any of the provisions of G.S. 120-32.
(b) The Legislative Administrative Officer may increase the salaries of nonelected employees of the General Assembly in effect for fiscal year 1989-90 by an amount equal to six percent (6%), rounded to conform to the steps in the salary ranges adopted by the Legislative Services Commission, commencing July 1, 1990.  Nothing in this Part limits any of the provisions of G.S. 120-32.

Requested by:   Senator Royall
––-JUDICIAL BRANCH OFFICIALS/SALARY INCREASE
Sec. 24. (a)	The annual salaries, payable monthly, for specified judicial branch officials for following fiscal years are:
Judicial Branch Officials	1989-90	1990-91
Chief Justice, Supreme Court	$ 86,232	$91,416
Associate Justice, Supreme Court	 84,456	89,532
Chief Judge, Court of Appeals	 81,756	86,664
Judge, Court of Appeals	 79,968	84,768
Judge, Senior Regular Resident
Superior Court	 73,332	77,736
Judge, Superior Court	 70,992	75,252
Chief Judge, District Court	 62,628	66,396
Judge, District Court	 60,240	63,864
District Attorney	 66,060	70,032
Assistant District Attorney - an
average of  	 42,732	45,300
Administrative Officer of the Courts	 73,332	77,736
Assistant Administrative Officer
of the Courts	 59,772	63,360
Public Defender	 66,060	70,032
Assistant Public Defender - an
average of   	 42,732	45,300
If an acting senior regular resident superior court judge is appointed under the provisions of G.S. 7A-41, he shall receive the salary for Judge, Senior Regular Resident, Superior Court, until his temporary appointment is vacated, and the judge he replaces shall receive the salary indicated for Judge, Superior Court.
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 $42,732 effective July 1, 1989, and $45,300 effective July 1, 1990, and the minimum salary of any assistant district attorney or assistant public defender is at least $21,576 effective July 1, 1989, and $22,872 effective July 1, 1990.
(b) The salaries in effect for fiscal year 1988-89 for permanent employees of the Judicial Department, except for those whose salaries are itemized in this Part, shall be increased by an amount, commencing July 1, 1989, equal to six percent (6%), rounded to conform to the steps in the salary ranges adopted by the Judicial Department.
(c) The salaries in effect for fiscal year 1989-90 for permanent employees of the Judicial Department, except for those whose salaries are itemized in this Part, shall be increased by an amount, commencing July 1, 1990, equal to six percent (6%), rounded to conform to the steps in the salary ranges adopted by the Judicial Department.

Requested by:   Senator Royall
––-CLERKS OF COURT/SALARY INCREASE
Sec. 25.  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 by the population projections of the Office of State Budget and Management for the year preceding the first year of each biennial budget, according to the following schedule:
Population        	Annual Salary
	1989-90	1990-91
Less than 30,000	$ 38,472	40,788
30,000 to 99,999	44,256	46,920
100,000 to 199,999	50,016	53,028
200,000 and above	57,072	60,504

When a county changes from one population group to another, the salary of the clerk shall be changed to the salary appropriate for the new population group on July 1 of the first year of each biennial budget, 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:   Senator Royall
––-ASSISTANT AND DEPUTY CLERKS OF COURT/SALARY INCREASE
Sec. 26.  G.S. 7A-102(c) reads as rewritten:
"(c)	Notwithstanding the provisions of subsection (a), the Administrative Officer of the Courts shall establish an incremental salary plan for assistant clerks and for deputy clerks based on a series of salary steps corresponding to the steps contained in the Salary Plan for State Employees adopted by the Office of State Personnel, subject to a minimum and a maximum annual salary as set forth below. On and after July 1, 1985, each assistant clerk and each deputy clerk shall be eligible for an annual step increase in his salary plan based on satisfactory job performance as determined by each clerk. Notwithstanding the foregoing, if an assistant or deputy clerk's years of service in the office of superior court clerk would warrant an annual salary greater than the salary first established under this section, that assistant or deputy clerk shall be eligible on and after July 1, 1984, for an annual step increase in his salary plan. Furthermore, on and after July 1, 1985, that assistant or deputy clerk shall be eligible for an increase of two steps in his salary plan, and shall remain eligible for a two-step increase each year as recommended by each clerk until that assistant or deputy clerk's annual salary corresponds to his number of years of service. A full-time assistant clerk or a full-time deputy clerk shall be paid an annual salary subject to the following minimum and maximum rates:
Assistant Clerks	Annual Salary
	1989-90	1990-91
Minimum	$ 19,536	20,712
Maximum	 32,772	34,740

Deputy Clerks	Annual Salary
				1989-90 	1990-91
Minimum	$ 15,312	16,236
Maximum	 25,128	26,640"

Requested by:   Senator Royall
––-MAGISTRATES/SALARY INCREASE
Sec. 27.  G.S. 7A-171.1(a) reads as rewritten:
"(a)	The Administrative Officer of the Courts, after consultation with the chief district judge and pursuant to the following provisions, shall set an annual salary for each magistrate.
(1)	A full-time magistrate, so designated by the Administrative Officer of the Courts, shall be paid the annual salary indicated in the table below according to the number of years he has served as a magistrate. The salary steps shall take effect on the anniversary of the date the magistrate was originally appointed:
Table of Salaries of Full-Time Magistrates
Number of Prior Years of Service	Annual Salary
	1989-90	1990-91
Less than 1	$ 15,600	16,536
1 or more but less than 3	 16,416	17,412
3 or more but less than 5	 18,084	19,176
5 or more but less than 7	 19,920	21,120
7 or more but less than 9	 21,972	23,292
9 or more but less than 11	 24,204	25,656
11 or more	 26,628	28,236

		A ‘Full-time magistrate' is a magistrate who is assigned to work an average of not less than 40 hours a week during his term of office.
		Notwithstanding any other provision of this subdivision, a full-time magistrate, who was serving as a magistrate on December 31, 1978, and who was receiving an annual salary in excess of that which would ordinarily be allowed under the provisions of this subdivision, shall not have the salary, which he was receiving reduced during any subsequent term as a full-time magistrate. That magistrate's salary shall be fixed at the salary level from the table above which is nearest and higher than the latest annual salary he was receiving on December 31, 1978, and, thereafter, shall advance in accordance with the schedule in the table above.
(2)	A part-time magistrate, so designated by the Administrative Officer of the Courts, is included, in accordance with G.S. 7A-170, under the provisions of G.S. 135-1(10) and 135-40.2(a) and shall receive an annual salary based on the following formula: The average number of hours a week that a part-time magistrate is assigned work during his term shall be multiplied by the annual salary payable to a full-time magistrate who has the same number of years of service prior to the beginning of that term as does the part-time magistrate and the product of that multiplication shall be divided by the number 40. The quotient shall be the annual salary payable to that part-time magistrate.
		A ‘part-time magistrate' is a magistrate who is assigned to work an average of less than 40 hours of work a week during his term. No magistrate may be assigned an average of less than 10 hours of work a week during his term.
		Notwithstanding any other provision of this subdivision, upon reappointment as a magistrate and being assigned to work the same or greater number of hours as he worked as a magistrate for a term of office ending on December 31, 1978, a person who received an annual salary in excess of that to which he would be entitled under the formula contained in this subdivision shall receive an annual salary equal to that received during the prior term. That magistrate's salary shall increase in accordance with the salary formula contained in this subdivision.
(3)	Notwithstanding any other provision of this section, a magistrate with a two-year Associate in Applied Science degree in criminal justice or paralegal training from a North Carolina community college or the equivalent degree from a private educational institution in North Carolina, shall receive the annual salary provided in the table above for a magistrate with three years of service in addition to those which the magistrate has served; a  magistrate with a four-year degree from an accredited senior institution of higher education shall receive the annual salary provided in the table above for a magistrate with five years of service in addition to those which the magistrate has served; a magistrate who holds a law degree from an accredited law school shall receive the annual salary provided in the table above for a magistrate with seven years of service in addition to those which the magistrate has served; and a magistrate who is licensed to practice law in North Carolina shall receive the annual salary provided in the table above for a magistrate with nine years of service in addition to those which the magistrate has served. 
		Magistrates with a two or four-year degree or a law degree described herein who became magistrates before July 1, 1979 are entitled to an increase of three, five and seven years, respectively, in their seniority, for pay purposes only. Full-time magistrates licensed to practice law in North Carolina who became magistrates before July 1, 1979 are entitled to the pay of a magistrate with 9 or more years of service, and part-time magistrates holding a law degree or a license to practice law as described above who became magistrates before July 1, 1979 are entitled to a proportionate adjustment in their pay. Pay increases authorized by this paragraph of this subdivision are not retroactive.
(4)	Notwithstanding any other provision of this section, a magistrate with 10 years' experience within the last 12 years as a sheriff or deputy sheriff, administrative officer for a district attorney, city or county police officer, or highway patrolman in the State of North Carolina, or with 10 years' experience within the last 12 years as clerk of superior court or an assistant or deputy clerk of court in the State of North Carolina shall receive the annual salary provided in the table in subdivision (1) for a magistrate with five years of service in addition to those the magistrate has served.  A magistrate who qualifies for the increased salary under both subdivisions (3) and (4) of this subsection shall receive either the salary determined under subdivision (3) or that determined under subdivision (4), whichever is higher, but no more. 
(5)	The Administrative Officer of the Courts shall provide magistrates with longevity pay at the same rates as are provided by the State to its employees subject to the State Personnel Act."

Requested by:   Senator Royall
––-COMMUNITY COLLEGES PERSONNEL/SALARY INCREASES
Sec. 28. (a) The Director of the Budget may transfer from the salary increase reserve fund created in Section 3 of this act for fiscal year 1989-90 funds necessary to provide an average annual salary increase of six percent (6%), including funds for the employer's retirement and Social Security contributions, commencing July 1, 1989, for all permanent community college institutional personnel supported by State funds.  Subject to the availability of funds, the salaries for temporary community college institutional personnel may be increased by pro rata amounts of the six percent (6%) average annual salary increase provided for permanent institutional employees.  These funds may not be used for any purpose other than for the salary increases and necessary employer contributions provided by this section.
(b) The Director of the Budget may transfer from the salary increase reserve fund created in Section 3 of this act for fiscal year 1990-91 funds necessary to provide an average annual salary increase of six percent (6%), including funds for the employer's retirement and Social Security contributions, commencing July 1, 1990, for all permanent community college institutional personnel supported by State funds.  Subject to the availability of funds, the salaries for temporary community college institutional personnel may be increased by pro rata amounts of the six percent (6%) average annual salary increase provided for permanent institutional employees.  These funds may not be used for any purpose other than for the salary increases and necessary employer contributions provided by this section.

Requested by:   Senator Royall
––-HIGHER EDUCATION PERSONNEL/SALARY INCREASES
Sec. 29. (a) The Director of the Budget may transfer from the salary increase reserve fund created in Section 3 of this act for fiscal year 1989-90 funds necessary to provide an annual average salary increase of six percent (6%), including funds for the employer's retirement and Social Security contributions, commencing July 1, 1989, for all employees of The University of North Carolina, as well as employees of the North Carolina School of Science and Mathematics, supported by State funds and whose salaries are exempt from the State Personnel Act.  These funds shall be allocated to individuals according to rules adopted by the Board of Governors, or the Board of Trustees of the North Carolina School of Science and Mathematics, as appropriate, and may not be used for any purpose other than for the salary increases and necessary employer contributions provided by this section.
(b) The Director of the Budget may transfer from the salary increase reserve fund created in Section 3 of this act for fiscal year 1990-91 funds necessary to provide an annual average salary increase of six percent (6%), including funds for the employer's retirement and Social Security contributions, commencing July 1, 1990, for all employees of The University of North Carolina, as well as employees of the North Carolina School of Science and Mathematics, supported by State funds and whose salaries are exempt from the State Personnel Act.  These funds shall be allocated to individuals according to rules adopted by the Board of Governors, or the Board of Trustees of the North Carolina School of Science and Mathematics, as appropriate, and may not be used for any purpose other than for the salary increases and necessary employer contributions provided by this section.

Requested by:   Senator Royall
––-MOST STATE EMPLOYEES/SALARY INCREASES/1989-90
Sec. 30.  (a)	The salaries in effect for fiscal year 1988-89 for 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 and after July 1, 1989, unless otherwise provided by this Part, by an average of four percent (4%), rounded to conform to the steps in the salary ranges adopted by the State Personnel Commission.  If an employee's salary for fiscal year 1988-89 is not equal to a specific pay rate on the 1988-89 salary schedule, his salary increase, effective July 1, 1989, unless otherwise provided by this Part, shall be four percent (4%) with the annual salary adjusted so as to be divisible by 12.  The provisions of this subsection shall also apply to employees whose salaries are determined in accordance with G.S. 20-187.3(a).
(b) The salary increase reserve funds in Sections 3 and 4 of this act contain funds equivalent to an average annual salary increase of two percent (2%) for permanent State employees, which shall be transferred by the Director of the Budget, including funds for the employer's retirement and Social Security contributions, to all employing agencies to be awarded, on and after July 1, 1989, to permanent 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, on the basis of job performance that exceeds satisfactory levels in accordance with the policies, rules, and regulations established by the State Personnel Commission.  The funds so transferred by the Director of the Budget shall be computed on the annualized salaries payable on June 30, 1989, so as not to be compounded with any other increases in salary granted by the 1989 General Assembly.  The provisions of this subsection shall not apply to employees whose salaries are determined in accordance with G.S. 20-187.3(a).
(c) Except as otherwise provided in this act, the fiscal year 1988-89 salaries 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 an average of six percent (6%), commencing July 1, 1989.
(d) The salaries in effect for fiscal year 1988-89 for all permanent part-time State employees shall be increased on and after July 1, 1989, by pro rata amounts of the four percent (4%) average salary increase provided for permanent full-time employees covered under subsection (a) of this section.
(e) 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, 1989, in accordance with subsections (a) and (b), or subsection (c), or subsections (b) and (d), including funds for the employer's retirement and Social Security contributions, for the permanent full-time and part-time employees of the agency, provided the employing agency elects to make available the necessary funds.
(f) 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 of the four percent (4%) average salary increase provided for permanent full-time employees covered by the provisions of subsection (a) of this section, commencing July 1, 1989.

Requested by:   Senator Royall
––-MOST STATE EMPLOYEES/SALARY INCREASES/1990-91
Sec. 31.  (a)	The salaries in effect for fiscal year 1989-90 for 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 and after July 1, 1990, unless otherwise provided by this Part, by an average of four percent (4%), rounded to conform to the steps in the salary ranges adopted by the State Personnel Commission.  If an employee's salary for fiscal year 1989-90 is not equal to a specific pay rate on the 1989-90 salary schedule, his salary increase, effective July 1, 1990, unless otherwise provided by this Part, shall be four percent (4%) with the annual salary adjusted so as to be divisible by 12.  The provisions of this subsection shall also apply to employees whose salaries are determined in accordance with G.S. 20-187.3(a).
(b) The salary increase reserve funds in Sections 3 and 4 of this act contain funds equivalent to an average annual salary increase of two percent (2%) for permanent State employees, which shall be transferred by the Director of the Budget, including funds for the employer's retirement and Social Security contributions, to all employing agencies to be awarded, on and after July 1, 1990, to permanent 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, on the basis of job performance that exceeds satisfactory levels in accordance with the policies, rules, and regulations established by the State Personnel Commission.  The funds so transferred by the Director of the Budget shall be computed on the annualized salaries payable on June 30, 1990, so as not to be compounded with any other increases in salary granted by the 1989 General Assembly.  The provisions of this subsection shall not apply to employees whose salaries are determined in accordance with G.S. 20-187.3(a).
(c) Except as otherwise provided in this act, the fiscal year 1989-90 salaries 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 an average of six percent (6%), commencing July 1, 1990.
(d) The salaries in effect for fiscal year 1989-90 for all permanent part-time State employees shall be increased on and after July 1, 1990, by pro rata amounts of the four percent (4%) average salary increase provided for permanent full-time employees covered under subsection (a) of this section.
(e) 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, 1990, in accordance with subsections (a) and (b), or subsection (c), or subsections (b) and (d), including funds for the employer's retirement and Social Security contributions, for the permanent full-time and part-time employees of the agency, provided the employing agency elects to make available the necessary funds.
(f) 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 of the four percent (4%) average salary increase provided for permanent full-time employees covered by the provisions of subsection (a) of this section, commencing July 1, 1990.

Requested By:  Senator Royall
––-PUBLIC SCHOOL PERSONNEL/SALARY INCREASES
Sec. 32.  (a) Superintendents, Assistant Superintendents, Associate Superintendents, Supervisors, Directors, Coordinators, Evaluators, and Program Administrators.  The Director of the Budget may transfer from the salary increase reserve fund created in Section 3 of this act for fiscal year 1989-90 funds necessary to provide an annual average salary increase of six percent (6%), including funds for the employer's retirement and Social Security contributions, commencing July 1, 1989, for all public school superintendents, assistant superintendents, associate superintendents, supervisors, directors, coordinators, evaluators, and program administrators 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 and may not be used for any purpose other than for the salary increase and necessary employer contributions provided by this subsection.
(a1) Superintendents, Assistant Superintendents, Associate Superintendents, Supervisors, Directors, Coordinators, Evaluators, and Program Administrators.  The Director of the Budget may transfer from the salary increase reserve fund created in Section 3 of this act for fiscal year 1990-91 funds necessary to provide an annual average salary increase of six percent (6%), including funds for the employer's retirement and Social Security contributions, commencing July 1, 1990, for all public school superintendents, assistant superintendents, associate superintendents, supervisors, directors, coordinators, evaluators, and program administrators 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 and may not be used for any purpose other than for the salary increase and necessary employer contributions provided by this subsection.
(b)	Principals, Assistant Principals, and Teachers.  The Director of the Budget may transfer from the salary increase reserve fund created in Section 3 of this act for fiscal year 1989-90 and for fiscal year 1990-91 funds necessary to provide an annual average salary increase of six percent (6%), including funds for the employer's retirement and Social Security contributions, commencing July 1, 1989, and July 1, 1990, for all public school principals, assistant principals, and 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 so as to begin the first and second years of a three-year implementation schedule that will provide an experience-based State salary schedule in fiscal year 1991-92 incorporating (i) 25 annual salary steps based upon years of experience with a two percent (2%) difference between steps except for between the third and fourth steps which shall have a five percent (5%) difference; (ii) a five percent (5%) salary increase for principals, assistant principals and teachers with certification based upon academic preparation at the master's degree level; (iii) a seven and one-half percent (7.5%) salary increase for principals, assistant principals, and teachers with certification based upon academic preparation at the six-year degree level; (iv) a ten percent (10%) salary increase for principals, assistant principals, and teachers with certification based upon academic preparation at the doctoral degree level; and (v) annual longevity pay at four and one-half percent (4.5%) of base salary only upon the completion of 25 years of State service.
(c)	Noncertified Employees.  The Director of the Budget may transfer from the salary increase reserve fund created in Section 3 of this act for fiscal year 1989-90 funds necessary 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, 1989, for all noncertified public school employees, except school bus drivers, whose salaries are supported from the State's General Fund.  An additional amount of funds equal to an average annual salary increase of two percent (2%) for these employees may also be transferred by the Director of the Budget for fiscal year 1989-90 to further adjust the salaries and State salary schedules for noncertified employees commensurate, insofar as possible, with the salary schedules for comparable State employees whose salaries are set in accordance with the State Personnel Act, as determined by the State Board of Education and the Superintendent of Public Instruction.  The salary adjustment funds so transferred by the Director of the Budget shall be computed on the annualized salaries payable on June 30, 1989, so as not to be compounded with any other increases in salary granted by the 1989 General Assembly.  In addition, local boards of education are authorized to use, within available funds, any unexpended salary allocations for noncertified personnel to further help relieve any salary inequities for noncertified employees through salary adjustments.  These funds shall be allocated to individuals according to rules adopted by the State Board of Education and the Superintendent of Public Instruction and may not be used for any purpose other than for the salary increases and necessary employer contributions provided by this subsection.
(c1)  Noncertified Employees.  The Director of the Budget may transfer from the salary increase reserve fund created in Section 3 of this act for fiscal year 1990-91 funds necessary 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, 1990, for all noncertified public school employees, except school bus drivers, whose salaries are supported from the State's General Fund.  An additional amount of funds equal to an average annual salary increase of two percent (2%) for these employees may also be transferred by the Director of the Budget for fiscal year 1990-91 to further adjust the salaries and State salary schedules for noncertified employees commensurate, insofar as possible, with the salary schedules for comparable State employees whose salaries are set in accordance with the State Personnel Act, as determined by the State Board of Education and the Superintendent of Public Instruction.  The salary adjustment funds so transferred by the Director of the Budget shall be computed on the annualized salaries payable on June 30, 1990, so as not to be compounded with any other increases in salary granted by the 1989 General Assembly.  These funds shall be allocated to individuals according to rules adopted by the State Board of Education and the Superintendent of Public Instruction and may not be used for any purpose other than for the salary increases and necessary employer contributions provided by this subsection.
(d)	The fiscal year 1988-89 pay rates adopted by local boards of education for school bus drivers shall be increased by at least six percent (6%), on and after July 1, 1989, to the extent that such rates of pay are supported by the allocation of State funds from the State Board of Education.  Local boards of education shall increase the rates of pay for all school bus drivers who were employed during fiscal year 1988-89 and who continue their employment for fiscal year 1989-90 by at least six percent (6%), on and after July 1, 1989.  The Director of the Budget may transfer from the salary increase reserve fund created in Section 3 of this act for fiscal year 1989-90 funds necessary to provide the salary increases for school bus drivers whose salaries are supported from the State's General Fund in accordance with the provisions of this subsection.
(d1)  The fiscal year 1989-90 pay rates adopted by local boards of education for school bus drivers shall be increased by at least six percent (6%), on and after July 1, 1990, to the extent that such rates of pay are supported by the allocation of State funds from the State Board of Education.  Local boards of education shall increase the rates of pay for all school bus drivers who were employed during fiscal year 1989-90 and who continue their employment for fiscal year 1990-91 by at least six percent (6%), on and after July 1, 1990.  The Director of the Budget may transfer from the salary increase reserve fund created in Section 3 of this act for fiscal year 1990-91 funds necessary to provide the salary increases for school bus drivers whose salaries are supported from the State's General Fund in accordance with the provisions of this subsection.

Requested by:   Senator Royall
––-CERTAIN EXECUTIVE BRANCH OFFICIALS/SALARY INCREASES
Sec. 33.  (a) The annual salaries, payable monthly, for the following fiscal years for the following executive branch officials are:
Executive Branch Officials	Annual Salary
1989-90	1990-91
Chairman, Alcoholic Beverage Control
Commission	$ 68,304	72,408
State Controller	110,772	117,420
Commissioner of Motor Vehicles	 68,304	72,408
Commissioner of Banks	 68,304	72,408
Chairman, Employment Security Commission	 68,304	72,408
State Personnel Director	 70,992	75,252
Chairman, Parole Commission	 62,328	66,072
Members of the Parole Commission	 57,504	60,960
Chairman, Industrial Commission	 61,320	65,004
Members of the Industrial Commission	 59,808	63,408
Executive Director, Agency for Public
Telecommunications	 57,504	60,960
General Manager, Ports Railway
Commission	 51,876	54,996
Director, Museum of Art	 70,008	74,208
Director, State Ports Authority	 79,392	84,156
Executive Director, Wildlife Resources
Commission	 58,884	62,424
Executive Director, North Carolina
Housing Finance Agency	 84,648	89,736
Executive Director, North Carolina
Technological Development Authority	 45,156	47,868
Executive Director, North Carolina
Agricultural Finance Authority	 66,468	70,464
Director, Office of Administrative 
Hearings	 60,240	63,864
(b) Any person carrying on the functions of a position listed in subsection (a) of this section shall be paid only the salary set out in that subsection, and the mere classification of the position to be some other position does not allow the salary of that position to be set in some other manner.
(c) G.S. 53-93.1 reads as rewritten:
"§ 53-93.1. Deputy commissioner.
The Commissioner of Banks shall appoint, with approval of the Governor, and may remove at his discretion a deputy commissioner, who, in the event of the absence, death, resignation, disability or disqualification of the Commissioner of Banks, or in case the office of Commissioner shall for any reason become vacant, shall have and exercise all the powers and duties vested by law in the Commissioner of Banks. 
Irrespective of the conditions under which the deputy commissioner may exercise the powers and perform the duties of the Commissioner of Banks, pursuant to the preceding paragraph, such deputy commissioner, in addition thereto, is hereby authorized and empowered at any and all times, at the discretion of the Commissioner of Banks, to perform such duties and exercise such powers of the Commissioner of Banks in the name of and on behalf of the Commissioner as the Commissioner, in his discretion, may direct.
This section is not to be construed to modify the provisions of G.S. 53-97."
(d) G.S. 113-315.26 reads as rewritten:
"§ 113-315.26. Personnel.
The Secretary of Commerce shall appoint such personnel as deemed necessary who shall serve at the pleasure of the Secretary of Commerce. The Secretary of Commerce shall have the power to appoint, employ and dismiss such number of employees as he may deem necessary to accomplish the purposes of this Article subject to the availability of funds. It is recommended that, to the fullest extent possible, the Secretary of Commerce consult with the Authority on matters of personnel."

Requested by:   Senator Royall
––-ALL STATE-SUPPORTED PERSONNEL/SALARY INCREASES
Sec. 34.  (a)	Salaries 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 Part does not affect the status of eligibility for salary increments for which employees may be eligible unless otherwise required by this Part.
(c)	The salary range maximums for all employees shall be increased to accommodate the across-the-board salary increase provided by this Part so that every employee will continue to have the same relative position with respect to salary increases and future increments as he would have had if these salary increases had not been made.
(d)	The salary increases provided in this Part to be effective July 1, 1989, 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, 1989; or to employees involved in written disciplinary procedures.  Payroll checks issued to employees after July 1, 1989, which represent payment for services provided prior to July 1, 1989, 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.
(d1)  The salary increases provided in this Part to be effective July 1, 1990, 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, 1990; or to employees involved in written disciplinary procedures.  Payroll checks issued to employees after July 1, 1990, which represent payment for services provided prior to July 1, 1990, 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.
(e)  Notwithstanding the provisions of Section 19.1 of Chapter 1137 of the 1979 Session Laws as amended by Chapter 1053 of the 1981 Session Laws, G.S. 115C-12(9)a., 115C-12(16), 126-7, or any other provision of law other than G.S. 20-187.3(a) or G.S. 7A-102(c), no employee or officer of the public school system shall receive an automatic increment, and no State employee or officer shall receive a merit increment, during the 1989-90 fiscal year, or the 1990-91 fiscal year, except as otherwise permitted by this act.
(f)  The Director of the Budget shall transfer from the salary increase reserve funds created in Sections 3 and 4 of this act for fiscal year 1989-90 and fiscal year 1990-91 all funds necessary for the salary increases provided by this Part, including funds for the employer's retirement and Social Security contributions.
(g)  Nothing in this Part authorizes the transfer of funds from the General Fund to the Highway Fund for salary increases.

Requested by:   Senator Royall
––-PERMIT DEVIATIONS FROM CERTAIN PROVISIONS OF THE EXECUTIVE BUDGET ACT
Sec. 35.  Sections 156 through 160 of Chapter 479 of the 1985 Session Laws, as amended, do not apply to the extent that the Director of the Budget finds that compliance is impossible and that deviation is necessary because of complications in the budget process that were not contemplated when the budget for the 1989-91 fiscal biennium was enacted.
The Director of the Budget shall report, prior to each deviation, on a monthly basis to the Joint Legislative Commission on Governmental Operations and to the Fiscal Research Division of the Legislative Services Office on any contemplated deviations from Sections 156 through 160 of Chapter 479 of the 1985 Session Laws, as amended, and the reasons it was impossible to comply.
This section does not authorize deviations from Sections 156 through 160 of Chapter 479 of the 1985 Session Laws, as amended, to combine fund codes.

Requested by:   Senator Royall
––-OVER REALIZED RECEIPTS
Sec. 36.  G.S. 143-27 reads as rewritten:
"§ 143-27.  Appropriations to educational, charitable and correctional institutions are in addition to receipts by them.
(a)	All appropriations now or hereafter made to the educational institutions, and to the charitable and correctional institutions, and to such other departments and agencies of the State as receive moneys  available for expenditure by them are declared to be in addition to such receipts of said institutions, departments or agencies, and are to be available as and to the extent that such receipts are insufficient to meet the costs anticipated in the budget authorized by the General Assembly, of maintenance of such institutions, departments, and agencies; Provided, however, that if the receipts, other than gifts and grants that are unanticipated and are for a specific purpose only, collected in a fiscal year by an institution, department, or agency exceed the receipts certified for it in General Fund Codes or Highway Fund Codes, the Director of the Budget shall decrease the amount he allots to that institution, department, or agency from appropriations from that Fund by the amount of the excess, unless the Director of the Budget finds that the appropriations from that Fund are necessary to maintain the function that generated the receipts at the level anticipated in the certified Budget Codes for that Fund.
(b)	The Office of State Budget and Management shall report to the Joint Legislative Commission on Governmental Operations and to the Fiscal Research Division of the Legislative Services Office within 30 days after the end of each quarter on expenditures of receipts in excess of the amounts certified in General Fund Codes or Highway Fund Codes that did not result in a corresponding reduced allotment from appropriations from that Fund.  This subsection does not apply to expenditures of receipts by entities that are wholly receipt supported, except for entities supported by the Wildlife Resources Fund."

Requested by:   Senator Royall
––-CONTINGENCY AND EMERGENCY FUND ALLOCATION
Sec. 37.  Of the funds appropriated to the Contingency and Emergency Fund in Section 3 of the Current Operations Appropriations Act of 1989, the sum of $900,000 for the 1989-90 fiscal year and the sum of $900,000 for the 1990-91 fiscal year shall be designated for emergency allocations and the sum of $225,000 for the 1989-90 fiscal year and the sum of $225,000 for the 1990-91 fiscal year shall be designated for contingency allocations.

Requested by:   Senator Royall
––-PRIVATE LICENSE TAGS ON STATE-OWNED CARS AUTHORIZED
Sec. 38.  (a)	Pursuant to the provisions of G.S. 14-250, for the 1989-91 fiscal biennium, the General Assembly authorizes the use of private license tags on State-owned motor vehicles only for the State Highway Patrol and for the following:
Department	Exemption Category	Number
Motor Vehicles	License and Theft	97
Justice	SBI Agents 	277
Correction	Probation/Parole Surveillance
Officers (intensive probation)	25
(b)	Except as provided in this section, all State-owned motor vehicles shall bear permanent registration plates issued under G.S. 20-84.

Requested by:   Senator Royall and Block
––-POST-RETIREMENT ALLOWANCE INCREASES/RETIRED TEACHERS, STATE EMPLOYEES, JUDICIAL OFFICIALS, LOCAL GOVERNMENT EMPLOYEES, AND LEGISLATORS
Sec. 38.1.  (a)	G.S. 135-5 is amended by adding a new subsection to read:
"( pp)	From and after July 1, 1989, the retirement allowance to or on account of beneficiaries whose retirement commenced on or before July 1, 1988, shall be increased by three and one-half percent (3.5%) of the allowance payable on July 1, 1988, in accordance with G.S. 135-5(o).  Furthermore, from and after July 1, 1989, the retirement allowance to or on account of beneficiaries whose retirement commenced after July 1, 1988, but before June 30, 1989, shall be increased by a prorated amount of three and one-half percent (3.5%) 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, 1988, and June 30, 1989."
(b) G.S. 135-65 is amended by adding a new subsection to read:
"( j)	From and after July 1, 1989, the retirement allowance to or on account of beneficiaries whose retirement commenced on or before July 1, 1988, shall be increased by three and one-half percent (3.5%) of the allowance payable on July 1, 1988.  Furthermore, from and after July 1, 1989, the retirement allowance to or on account of beneficiaries whose retirement commenced after July 1, 1988, but before June 30, 1989, shall be increased by a prorated amount of three and one-half percent (3.5%) 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, 1988, and June 30, 1989."
(c) G.S. 128-27 is amended by adding a new subsection to read:
"( ff)	From and after July 1, 1989, the retirement allowance to or on account of beneficiaries whose retirement commenced on or before July 1, 1988, shall be increased by three and one-half percent (3.5%) of the allowance payable on July 1, 1988, in accordance with G.S. 128-27(k).  Furthermore, from and after July 1, 1989, the retirement allowance to or on account of beneficiaries whose retirement commenced after July 1, 1988, but before June 30, 1989, shall be increased by a prorated amount of three and one-half percent (3.5%) 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, 1988, and June 30, 1989."
(d) G.S. 120-4.22A is amended by adding a new subsection to read:
"(e)	In accordance with subsection (a) of this section, from and after July 1, 1989, the retirement allowance to or on account of beneficiaries whose retirement commenced on or before January 1, 1989, shall be increased by the same amount as provided to retired members and beneficiaries of the Teachers' and State Employees' Retirement System pursuant to the provisions of G.S. 135-5(11) and (mm)."
(e) Of the funds appropriated to the General Assembly in Section 3 of this act for the 1989-90 fiscal year, the sum of $135,000 shall be transferred to the Legislative Retirement System to fund the provisions of subsection (d) of this section.

Requested by:   Senator Royall
––-SALARY RELATED CONTRIBUTIONS/EMPLOYERS
Sec. 38.2.  (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)	The State's employer contribution rates budgeted for retirement and related benefits as a percentage of covered salaries for the 1989-90 fiscal year are (i) eleven and sixty-four hundredths percent (11.64%) - Teachers and State Employees; (ii) sixteen and sixty-four hundredths percent (16.64%) - State Law Enforcement Officers; (iii) eight and seventeen hundredths percent (8.17%) - University Employees' Optional Retirement Program; (iv) thirty-one and twenty-six hundredths percent (31.26%) - Consolidated Judicial Retirement System; and (v) thirty-eight and seventy-five hundredths percent (38.75%) - Legislative Retirement System.  Each of the foregoing contribution rates includes one and fifty-five hundredths percent (1.55%) 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 includes fifty-two hundredths percent (0.52%) for the Disability Income Plan.
(c)	The State's employer contribution rates budgeted for retirement and related benefits as a percentage of covered salaries for the 1990-91 fiscal year are (i) eleven and seventy-four hundredths percent (11.74%) - Teachers and State Employees; (ii) sixteen and seventy-four hundredths percent (16.74%) - State Law Enforcement Officers; (iii) eight and twenty-seven hundredths percent (8.27%) - University Employees' Optional Retirement Program; (iv) thirty-one and thirty-six hundredths percent (31.36%) - Consolidated Judicial Retirement System; and (v) thirty-eight and eighty-five hundredths percent (38.85%) - Legislative Retirement System.  Each of the foregoing contribution rates includes one and sixty-five hundredths percent (1.65%) 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 includes fifty-two hundredths percent (0.52%) for the Disability Income Plan.
(d)	The maximum annual employer contributions, payable monthly, by the State for each covered employee or retiree for the 1989-90 fiscal year to the Teachers' and State Employees' Comprehensive Major Medical Plan are: (i) Medicare eligible employees and retirees - $954.00; and (ii) Non-Medicare eligible employees and retirees - $1,253.
(e)  The maximum annual employer contributions, payable monthly, by the State for each covered employee or retiree for the 1990-91 fiscal year to the Teachers' and State Employees' Comprehensive Major Medical Plan are: (i) Medicare eligible employees and retirees - $986.00; and (ii) Non-Medicare eligible employees and retirees - $1,295.

Requested by:   Senators Royall and Block
––-STUDY OF MEDICAL, DISABILITY, DEATH, RETIREMENT, AND RELATED BENEFITS PROVIDED BY FEDERAL, STATE, AND LOCAL GOVERNMENTS FOR FIREMEN
Sec. 38.3.  Of the Funds appropriated to the General Assembly in Section 3 of this act, the sum of $5,000 for the 1989-90 fiscal year and the sum of $5,000 for the 1990-91 fiscal year shall be used by the Legislative Research Commission to study, with the staff assistance of the Legislative Services Office and the Department of Insurance, the receipt and disposition of premium taxes levied by the State on fire and lightning insurance policies issued within the State in accordance with Articles 1 and 2 of Chapter 118 of the North Carolina General Statutes.  This study shall include, but not be limited to, the amount of premium tax receipts and earnings thereon maintained by trustees, the coordination of medical, disability, death, retirement, and related benefits provided by trustees with similar benefits provided in the course of a fireman's employment or otherwise provided by the State of North Carolina or agencies of the United States, and eligibility requirements administered by trustees for firemen's receipt of the foregoing types of benefits.  The study shall also include a review of the revenue collections on other premium taxes levied by the State on fire and lightning insurance policies issued within the State in accordance with Article 8B of Chapter 105 of the North Carolina General Statutes, in comparison with the amount of General Fund and other revenues expended annually by the State for medical, disability, death, retirement, and related benefits for firemen.  The Legislative Research Commission shall complete its study and make a report of its findings and recommendations to the General Assembly upon the convening of the 1991 Session of the General Assembly.

Requested by:   Senator Royall
––-RESERVE FOR LOCAL TAX REIMBURSEMENTS
Sec. 38.4.  (a)	There is created in the Department of Revenue a special reserve to be known as the Local Government Tax Reimbursement Reserve.  Funds in the Reserve shall be used to reimburse local governments for certain reductions in tax revenue resulting from tax legislation enacted by the General Assembly.  There is appropriated from the General Fund to the Local Government Tax Reimbursement Reserve $231,677,461 for the 1989-90 fiscal year and $234,015,743 for the 1990-91 fiscal year.  The Department of Revenue shall distribute the funds appropriated to the Local Government Tax Reimbursement Reserve for the 1989-90 and 1990-91 fiscal years as follows:
(1)	The sum of $5,366,497 for the 1989-90 fiscal year and the sum of $5,618,722 for the 1990-91 fiscal year shall be used as needed to reimburse local governments, in accordance with G.S. 105-164.44C, for the impact of the exemption of food stamp purchases from sales tax under Chapter 656 of the 1985 Session Laws.
(2)	The sum of $5,439,102 for the 1989-90 fiscal year and the sum of $5,874,231 for the 1990-91 fiscal year shall be used to reimburse local governments, in accordance with the second sentence of the third paragraph of G.S. 105-213(a), for the impact of the intangibles tax exemption of certain accounts and accounts receivable under Chapter 656 of the 1985 Session Laws.
(3)	The sum of $24,902,468 for the 1989-90 fiscal year and the sum of $25,496,225 for the 1990-91 fiscal year shall be used to reimburse local governments, in accordance with G.S. 105-213.1, for the impact of the intangibles tax exemption of money on deposit and money on hand under Chapter 656 of the 1985 Session Laws.
(4)	The sum of $107,895,809 for the 1989-90 fiscal year and the sum of $107,895,809 for the 1990-91 fiscal year shall be used to reimburse local governments, in accordance with G.S. 105-275.1 as enacted by Chapter 622 of the 1987 Session Laws and rewritten by Chapters 813 and 1041 of the 1987 Session Laws, for the impact of the property tax exemption for inventories of manufacturers and for livestock, poultry, and feed under Chapters 622, 813, and 1041 of the 1987 Session Laws.
(5)	The sum of $80,373,585 for the 1989-90 fiscal year and the sum of $81,445,756 for the 1990-91 fiscal year shall be used to reimburse local governments, in accordance with G.S. 105-277A as rewritten by Chapters 622, 813, and 1041 of the 1987 Session Laws, for the impact of the property tax exemption for inventories of wholesalers and retailers under Chapter 656 of the 1985 Session Laws and Chapter 622 of the 1987 Session Laws.
(6)	The sum of $7,700,000 for the 1989-90 fiscal year and the sum of $7,685,000 for the 1990-91 fiscal year shall be used as needed to reimburse local governments, in accordance with G.S. 105-277.1A, for the impact of the expansion of the property tax homestead exemption under Chapter 1052 of the 1981 Session Laws and Chapter 656 of the 1985 Session Laws.
The amounts designated for the reimbursements are estimates.  If the amount designated is insufficient to pay for any of the reimbursements provided in this section, the Department of Revenue shall draw additional funds from the Local Government Tax Reimbursement Reserve to be used to make the reimbursement.  If the funds appropriated to the Reserve are insufficient to pay for the reimbursements provided in this section, the State Budget Officer shall withhold from net collections under Article 2B of Chapter 105 of the General Statutes the remaining amount necessary to pay for the reimbursements.  Funds remaining in the the Local Government Tax Reimbursement Reserve at the end of each fiscal year shall revert to the General Fund.
(b)	G.S. 105-164.44C reads as rewritten:
"§ 105-164.44C. Reimbursement for sales taxes on food stamp foods and supplemental foods.
As soon as practicable after July 1 of each year, the Secretary shall determine from available information the amount of local sales taxes that would have been collected in each county during the preceding fiscal year on foods purchased with food stamp coupons or supplemental food instruments in the county, had these foods not been exempt from tax under G.S. 105-164.13(38).  The Secretary shall then distribute the amounts determined to be due each county between the county and the cities located in the county in accordance with the method by which local sales and use taxes are distributed in that county.  In order to pay for the reimbursement under this section and the cost to the Department of Revenue for administering the reimbursement, the Secretary of Revenue shall draw from the Local Government Tax Reimbursement Reserve an amount equal to the amount of the reimbursement and the cost of administration."
(c)	G.S. 105-213.1(d) reads as rewritten:
"(d)	Source.  Funds distributed under this section shall be drawn from the Local Government Tax Reimbursement Reserve."
(d)	G.S. 105-275.1(b) reads as rewritten:
"(b)	Subsequent Distributions. – As soon as practicable after January 1, 1990, the Secretary shall pay to each county and city the amount it received under subsection (a) in 1989 plus an amount equal to the county or city average rate multiplied by the value of the items described in subdivisions (ii) and (iii) of subsection (a) that were required to be listed and assessed as of January 1, 1987, and were listed on or before September 1, 1987, in the county or city, plus or minus the percentage of this product that equals the percentage by which State personal income has increased or decreased during the most recent 12-month period for which State personal income data has been compiled by the Bureau of Economic Analysis of the United States Department of Commerce.  As soon as practicable after January 1, 1990, the Secretary shall also pay to each county and city an amount equal to the average rate for each special district for which the county or city collected taxes in 1987, but whose tax rates were not included in the county or city's rates, multiplied by the value of the items described in subdivisions (ii) and (iii) of subsection (a) that were required to be listed and assessed as of January 1, 1987, and were listed on or before September 1, 1987, in the district, plus or minus the percentage of this product that equals the percentage by which State personal income has increased or decreased during the most recent 12-month period for which State personal income data has been compiled by the Bureau of Economic Analysis of the United States Department of Commerce.  Thereafter, except as provided in subsection (f), as soon as practicable after January 1 of each year, the Secretary shall distribute to each county and city the amount it received under this section the preceding year.
Of the funds received by each county and city pursuant to this subsection in 1990, the portion that was received because the county or city was collecting taxes for a special district (either because the district's tax rate was included in the city or county's rate or because the Secretary paid the county or city the product of the district's average rate and the value of the inventories and other items in the district) shall be distributed among the districts in the county or city as soon as practicable after the city or county receives the funds.  The county or city shall distribute to each special district in the county or city the amount it distributed to the district in 1989 plus an amount equal to the average rate for the district multiplied by the value of the items, other than inventory, described in subdivisions (ii) and (iii) of subsection (a) that were required to be listed and assessed as of January 1, 1987, and were listed on or before September 1, 1987, in the district, plus or minus the percentage of this product that equals the percentage by which State personal income has increased or decreased during the most recent 12-month period for which State personal income data has been compiled by the Bureau of Economic Analysis of the United States Department of Commerce.
Each year thereafter, as soon as practicable after receiving funds under this subsection, every county and city shall distribute among the special districts for which the county or city collects tax an amount equal to the amount it distributed among such districts the previous year. The Local Government Commission may adopt rules for the resolution of disputes and correction of errors in the distribution among special districts provided in this subsection.  In addition, the Local Government Commission may adopt rules for the reallocation of funds when a special district is dissolved, merged, or consolidated, or when a special district ceases to levy tax, either temporarily or permanently."
(e)  G.S. 105-275.1(e) reads as rewritten:
"(e)	Source of Funds.  To pay for the distribution required by this section and the cost to the Department of Revenue of making the distribution, the Secretary of Revenue shall draw from the Local Government Tax Reimbursement Reserve an amount equal to the amount distributed and the cost of making the distribution."
(f)  G.S. 105-277A(f) reads as rewritten:
"(f)	Source of Funds.  The Secretary of Revenue shall pay for the distribution required by this section and the cost of making the distribution as follows:
(1)	For the distribution made in 1989, the Secretary shall draw an amount equal to the amount distributed and the cost of making the distribution first from the Inventory Tax Reimbursement Fund created in Section 15.1 of the School Facilities Finance Act of 1987, until it is exhausted, and then the remainder of that amount from collections received by the Department under Division I of Article 4 of this Chapter.
(2)	For distributions made in subsequent years, the Secretary shall draw from the Local Government Tax Reimbursement Reserve for the distribution required by this section an amount equal to the amount distributed and the cost of making the distribution."
(g)  G.S. 105-277.1A(f) reads as rewritten:
"(f)	In order to pay for the reimbursement under this section and the cost to the Department of Revenue for administering the reimbursement, the Secretary of Revenue shall draw from the Local Government Tax Reimbursement Reserve an amount equal to the reimbursement and the cost of administration.  "

PART VII.––-DEPARTMENT OF PUBLIC INSTRUCTION

Requested by:   Senator Ward
––-ASSISTANT PRINCIPALS
Sec. 39.  Funds appropriated in Section 3 of the Current Operations Appropriations Act of 1989 for assistant principals shall be used only for assistant principals and shall be allocated on the basis of months of employment.  Local superintendents shall determine the number and term of employment of assistant principals and shall, to the extent practical, make an equitable distribution of these positions among schools on the basis of average daily membership.

Requested by:   Senator Ward
––-BASIC EDUCATION PROGRAM FUNDS
Sec. 40.  Funds are appropriated in Section 3 of this act to the Department of Public Education for further implementation of the Basic Education Program in public schools.  These funds will provide for the fifth and sixth years of the planned eight-year implementation schedule.
These funds shall be used by the local school administrative units for the following purposes:  Additional Teachers, Vocational Education Teachers, Instructional Support, Instructional/Lab Clerical Assistants, Athletic Trainer Supplement, Assistant Principals - Extension of Term, Assistant/Associate Superintendents, and Clerical Assistants and Supervisors.
These funds shall be in addition to other State and local funds for education and shall not be used to supplant local funds for education.  The Department of Public Instruction shall report by October 1, 1989, on how such funds appropriated for the 1989-90 fiscal year were budgeted by the local school administrative units, to the Study Commission on the Future of Education and to the Joint Legislative Commission on Governmental Operations.

Requested by:   Senator Ward
––-PUPIL TRANSPORTATION
Sec. 41.  The Department of Public Instruction shall implement the Pupil Transportation Operational Study authorized by Section 94 of Chapter 1086 of the 1987 Session Laws.  The State Board of Education shall allocate up to $400,000 of the funds appropriated for the 1989-90 fiscal year for aid to local school administrative units for pupil transportation to implement the findings of this study.
The Department shall also report its final recommendations for achieving improved efficiency and economy in the pupil transportation system to the 1990 Session of the General Assembly.  These recommendations shall include incentives for encouraging cost-effective operations in local school administrative units, as provided in G.S. 115C-240(e) and 115C-246(a).

Requested by:   Senator Ward
––-CHILD NUTRITION
Sec. 42.  Of the funds appropriated to the Department of Public Education for the 1989-90 fiscal year for aid to local school administrative units for staff development, the State Board of Education shall allocate $280,000 to local school units for staff development of school food service personnel.

Requested by:   Senator Chalk
––-KINDERGARTEN STUDY
Sec. 43.  Of the funds appropriated for education studies by the Joint Legislative Commission on Governmental Operations in Sections 15.2, 18.2, and 19.2 of Chapter 873 of the 1987 Session Laws and not expended or encumbered prior to July 1, 1989, the sum of $24,900 shall be allocated to the Board of Governors of The University of North Carolina for a study of the impact of kindergarten education on subsequent school performance.  The study shall be carried out by the Collegium for the Advancement of Schools, Schooling, and Education at the University of North Carolina at Greensboro.  The Board of Governors shall report the results of the study to the General Assembly prior to May 1, 1991.

Requested by:   Senator Ward
––-DROPOUT PREVENTION COORDINATORS
Sec. 44.  Of the funds appropriated to the Department of Public Education for aid to local school administrative units for dropout prevention, the State Board of Education shall allocate to the Department of Public Instruction up to $225,000 for the 1989-90 fiscal year and up to $225,000 for the 1990-91 fiscal year for three dropout prevention coordinators.  The State Superintendent shall assign the dropout prevention coordinators to designated areas within the State and shall develop job descriptions for them.

Requested by:   Senator Ward
––-DROPOUT PREVENTION/IN-SCHOOL SUSPENSION
Sec. 44.1.  Of the funds appropriated to the Department of Public Education for the 1988-89 fiscal year for aid to local school administration units for the Dropout Prevention/In-School Suspension Program, the sum of $200,000 for each year of the 1989-91 fiscal biennium may be used to fund eight pilot public/private educational compacts to bring together on an ongoing basis representatives from public education, community colleges, higher education, and business and industry leaders to determine how to improve attendance, prevent dropping out of school, increase academic performance, and increase participation in higher education and the workforce by at-risk students.  The funds may also be used to fund eight parental involvement pilot programs, and to provide for operating costs, workshops, and committee meetings for the State Department of Public Instruction's dropout prevention staff.
The State Board of Education may adopt rules governing the use of these funds.
The State Board of Education shall report to the General Assembly on the use of these funds prior to April 1, 1991.

Requested by:   Senator Ward
––-REDUCTION OF VANDALISM IN THE PUBLIC SCHOOLS
Sec. 45.  Of the funds appropriated to the Department of Public Education for the operation of the Department of Public Instruction, the Department of Public Instruction may use up to $80,000 for the 1989-90 fiscal year and up to $80,000 for the 1990-91 fiscal year for salaries and support costs to develop plans and procedures to reduce vandalism of public school facilities.

Requested by:   Senator Ward
––-PRELIMINARY SCHOLASTIC APTITUDE TEST OPPORTUNITIES ENCOURAGED
Sec. 46. (a) Article 10A of Chapter 115C of the General Statutes is amended by adding a new Part to read:
“Part 3. Preliminary Scholastic Aptitude Test
Opportunities Encouraged.
"§ 115C-174.18.  Opportunity to take Preliminary Scholastic Aptitude Test.
Every student in the eighth through tenth grades who has completed Algebra I or who is in the last month of Algebra I shall be given an opportunity to take a version of the Preliminary Scholastic Aptitude Test (PSAT)	one time at State expense.  The State Board of Education shall contract with the College Board for the tests and for comprehensive diagnostic information to accompany PSAT score reports.
"§ 115C-174.19. Reports and recommendations.
The Superintendent of Public Instruction shall report biennially to the Governor, the Lieutenant Governor, and the Speaker of the House of Representatives on the effect of the implementation of this Part, and shall make such recommendations for modification or revision as he deems appropriate and necessary."
(b) The State Board of Education shall allocate up to three hundred sixty-five thousand dollars ($365,000) of the funds available for aid to local school administrative units for the 1989-90 fiscal year and up to three hundred ninety-six thousand dollars ($396,000) of the funds available for aid to local school administrative units for the 1990-91 fiscal year to implement subsection (a) of this section.  For each year of the biennium, no more than five percent (5%) of these funds may be used for administration of the program by the Department of Public Instruction.

Requested by:   Senator Ward
––-ADMINISTRATION OF DEPARTMENT OF PUBLIC INSTRUCTION BUDGET
Sec. 47. (a) G.S. 115C-21 reads as rewritten:
"§ 115C-21. Powers and duties generally.
(a)	Administrative Duties. – It shall be the duty of the Superintendent of Public Instruction:
(1)	To organize and establish a Department of Public Instruction which shall include such divisions and departments as are necessary for supervision and administration of the public school system, to administer the funds for the operation of the Department of Public Instruction, and to enter into contracts for the operations of the Department of Public Instruction.
(2)	To keep the public informed as to the problems and needs of the public schools by constant contact with all school administrators and teachers, by his personal appearance at public gatherings, and by information furnished to the press of the State.
(3)	To report biennially to the Governor 30 days prior to each regular session of the General Assembly, such report to include information and statistics of the public schools, with recommendations for their improvement and for such changes in the school law as shall occur to him.
(4)	To have printed and distributed such educational bulletins as he shall deem necessary for the professional improvement of teachers and for the cultivation of public sentiment for public education, and to have printed all forms necessary and proper for the administration of the Department of Public Instruction.
(5)	To have under his direction, in his capacity as the constitutional head of the public school system, all those matters relating to the supervision and administration of the public school system.
(b)	Duties as Secretary to the State Board of Education. – As secretary, under the direction of the Board, it shall be the duty of the Superintendent of Public Instruction:
(1)	To administer through the Department of Public Instruction, all policies established by the Board.
(1a)	To administer the funds appropriated to the Department of Public Education for the operations of the State Board of Education and for aid to local school administrative units.
(2)	To keep the Board informed regarding developments in the field of public education.
(3)	To make recommendations to the Board with regard to the problems and needs of education in North Carolina.
(4)	To make available to the public schools a continuous program of comprehensive supervisory services.
(5)	To collect and organize information regarding the public schools, on the basis of which he shall furnish the Board such tabulations and reports as may be required by the Board.
(6)	To communicate to the public school administrators all information and instructions regarding instructional policies and procedures adopted by the Board.
(7)	To have custody of the official seal of the Board and to attest all deeds, leases, or written contracts executed in the name of the Board. All deeds of conveyance, leases, and contracts affecting real estate, title to which is held by the Board, and all contracts of the Board required to be in writing and under seal, shall be executed in the name of the Board by the chairman and attested by the secretary; and proof of the execution, if required or desired, may be had as provided by law for the proof of corporate instruments.
(8)	To attend all meetings of the Board and to keep the minutes of the proceedings of the Board in a wellbound and suitable book, which minutes shall be approved by the Board prior to its adjournment; and, as soon thereafter as possible, to furnish to each member of the Board a copy of said minutes.
(9)	To perform such other duties as the Board may assign to him from time to time."
(b) Of the funds appropriated in the Current Operations  Appropriations Act of 1989 and in this bill to the Department of Public Education for the 1989-91 fiscal biennium, the funds for the operation and maintenance of the Department of Public Instruction, for State aid to nonstate agencies, and for the operation of the State Board of Education are as follows:
DEPARTMENT OF PUBLIC EDUCATION
TOTAL REQUIREMENTS

	1989-90

	Aid to Local
	Department of	School Administra-	State Board
FUND	Public Instruction	tive Units	of Education

xxxx	(750,000)	–	–
1000	3,111,801	–	149,329
1100	11,162,654	–	–
1200	7,219,708	–	–
1300	14,502,317	–	–
1400	11,748,276	–	–
1500	6,315,195	–	–
1600	7,979,324	–	18,000
1700	183,744	312,511,180	–
1800	63,397,949	2,841,244,481	12,994
1900	587,455	–	–
	––––––-	––––––-	–––––-
TOTAL	125,458,423	3,153,755,661	180,323

	1990-91
	Aid to Local
	Department of	School Administra-	State Board
FUND	Public Instruction	tive Units	of Education

xxxx	(1,500,000)	–	–
1000	3,128,081	–	149,329
1100	11,177,977	–	–
1200	7,337,666	–	–
1300	14,538,316	–	–
1400	16,008,769	–	–
1500	6,319,109	–	–
1600	7,990,552	–	18,000
1700	183,744	320,840,726	–
1800	64,086,914	2,982,126,919	12,994
1900	599,673	–	–
	––––––-	––––––	––––––
TOTAL	129,870,801	3,302,967,645	180,323

PART VIII.––-DEPARTMENT OF COMMUNITY COLLEGES

Requested by:   Senator Ward
––-TUITION INCREASE
Sec.  48.  The State Board of Community Colleges shall adopt tuition rates beginning in the fall quarter of 1989 in the amount of ninety dollars ($90) per quarter for in-State students and eight hundred forty dollars ($840) per quarter for out-of-State students.

Requested by:   Senator Ward
––-ACCOUNTABILITY AND FLEXIBILITY
Sec.  49.  The State Board of Community Colleges shall develop a "Critical Success Factors”list to define statewide measures of accountability for all community colleges.  Each college shall develop an institutional effectiveness plan, tailored to the specific mission of the college.  This plan shall be consistent with the Southern Association of Colleges and Schools criteria and provide for collection of data as required by the "Critical Success Factors”list.  The Department of Community Colleges shall provide assistance to the colleges in developing their institutional effectiveness plans.
To maximize the opportunity for each college to achieve its institutional effectiveness plan, the State Board shall develop policies that allow maximum budget flexibility.  However, in no instance shall the system budget have transfers greater than five percent (5%) from salaries to other costs and from instruction to administration.  Nevertheless, it is the intent of the General Assembly that each community college strive to attain the average monthly salary paid in the Southern Regional Education Board (SREB) states for community colleges. There shall be no limitations on transfers from administration to instruction or from other cost to salaries.  No transfers shall be made from literacy or community services programs.  It is the intent of the General Assembly that in no instance shall excess fringe benefit funds be used to increase the salaries of administrators.
The State Board shall promote and encourage local flexibility, creativity and ingenuity in the pursuit of educational goals of the Community College System.
The State Board shall report semiannually to the Joint Legislative Commission on Governmental Operations on the progress of the "Critical Success Factors”list and on the institutional effectiveness plans.

Requested by:   Senator Ward
––-FULL-TIME EQUIVALENT TEACHING POSITIONS/COMMUNITY COLLEGES
Sec.  50.  For the purpose of determining the community college system-wide number of full-time equivalent (FTE) teaching positions each year, the total curriculum full-time equivalent student enrollment shall be divided by 21, and occupational extension full-time equivalent student enrollment shall be divided by 22.

Requested by:   Senator Ward
––-FOCUSED INDUSTRIAL TRAINING PROGRAM
Sec.  51.  Notwithstanding the provisions of G.S. 96-5(f), there is appropriated from the Worker Training Trust Fund to the Department of Community Colleges the sum of $500,000 for the 1989-90 fiscal year and the sum of $500,000 for the 1990-91 fiscal year to continue the Focused Industrial Training Program administered by the Department of Community Colleges.

Requested by:   Senator Ward
––-RETOOLING FOR THE YEAR 2000: GAINING THE COMPETITIVE EDGE
Sec.  52.  (a) Of the funds appropriated to the Department of Community Colleges in Section 3 of this act, the sum of $5,000,000 for the 1989-90 fiscal year and the sum of $10,000,000 for the 1990-91 fiscal year shall be used by the State Board of Community Colleges in initiating the retooling of the Community College System, as provided in subsection (b) of this section.
(b)	Chapter 115D of the General Statutes is amended by adding a new section to read:
"§ 115D-8. ‘Retooling for the year 2000:  Gaining the Competitive Edge.'
(a)	The State Board of Community Colleges shall adopt a Community College Education Blueprint not inconsistent with the Commission on the Future Report on the North Carolina Community College System, ‘Gaining the Competitive Edge,' which will allow the State to compete successfully in the national and global economy of today and the next century.  The State Board shall implement the Education Blueprint for community colleges within funds appropriated for that purpose by the General Assembly.  It is the goal of the General Assembly that by July 1, 1993, the community colleges be fully funded to retool for the year 2000 in order to support the State in gaining the competitive edge.
(b)	The Community College Education Blueprint shall define the programs necessary to provide every community college student access to quality teaching and academic support services by addressing the following:
(1)	Exemplary faculty and staff,
(2)	Effective learning experiences,
(3)	Educational advancement for all adult learners,
(4)	Expanded access to adult education.
(c)	The Community College Education Blueprint shall establish effective mechanisms to promote accountability and increased flexibility in funding and shall address the following:
(1)	Flexible funding tied to performance,
(2)	Strategic goal setting and assessment,
(3)	Channels for outside assessment,
(4)	Efficient resource distribution.
(d)	The Community College Education Blueprint shall provide opportunities for all adult North Carolinians to master the basic critical thinking skills demanded in a complex and competitive economy by addressing the following:
(1)	A work force with comprehensive basic skills,
(2)	Reduction of the basic skills gap,
(3)	Performance based education for the underskilled.
(e)	The Community College Education Blueprint shall set forth methods to help business and industry adapt to technological change and promote small business development throughout the State by addressing the following:
(1)	Workplaces with competitive technology,
(2)	Job creation through expanded entrepreneurship.
(f)	The Community College Education Blueprint shall set forth ways to build strong partnerships with the public schools and the State's universities to establish a comprehensive, integrated education system in North Carolina.
(g)	The Community College Education Blueprint shall provide for strong leadership for the future of the system and its colleges by addressing the following:
(1)	Visionary leadership for the future,
(2)	Responsive governance and management."

Requested by:   Senator Ward
––-LITERACY ALLOCATION BASIS
Sec.  53.  Literacy education funds, as defined by the State Board of Community Colleges, shall be expended only for literacy education and for no other purposes.  The Department of Community Colleges shall distribute literacy funds on the basis of a formula that provides for equitable treatment of all colleges.  The formula shall encompass incentives and rewards for improvement in literacy education.  This revised formula shall include a base allotment, a target population of individuals between 16 and 54 years of age with less than a high school education, consideration of past performance in literacy education based on prior years' FTE earnings, an amount for each GED and Adult High School diploma awarded, and a reward for serving a higher percentage of the population to be served than the statewide average.  Literacy FTE shall be reported on a contact hour basis.
Notwithstanding G.S. 150B-13, the State Board of Community Colleges may, until six months from the effective date of this act, adopt temporary rules for college formula allocations without prior notice or hearing or upon any abbreviated notice or hearing the State Board of Community Colleges finds practicable.  The State Board of Community Colleges shall begin normal rule-making procedures on permanent rules in accordance with Article 2 of Chapter 150B at the same time it adopts a temporary rule as authorized under this section.  Temporary rules adopted under this section shall be published by the Director of the Office of Administrative Hearings in the North Carolina Register and shall be effective for a period of not longer than 180 days.

Requested by:   Senator Ward
––-NORTH CAROLINA EMPLOYERS CHARGED IN-STATE TUITION
Sec. 54.  G.S. 115D-39 reads as rewritten:
"§ 115D-39. Student tuition and fees.
The State Board of Community Colleges shall fix and regulate all tuition and fees charged to students for applying to or attending any institution pursuant to this Chapter.
The receipts from all student tuition and fees, other than student  activity fees, shall be State funds and shall be deposited as provided by regulations of the State Board of Community Colleges.
The legal resident limitation with respect to tuition, set forth in G.S. 116-143.1 and 116-143.3, shall apply to students attending institutions operating pursuant to this Chapter; provided, however, that when an employer other than the armed services, as that term is defined in G.S. 116-143.3, pays tuition for an employee to attend an institution operating pursuant to this Chapter and when the employee works at a North Carolina business location, the employer shall be charged the in-State tuition rate."

Requested by:   Senator Taft
––-EQUINE INSTRUCTION/MARTIN COMMUNITY COLLEGE
Sec.  55.  Notwithstanding any other provision of law, the Board of Trustees of Martin Community College may permit students under 16 years of age to participate in equine instruction at the college on a self-supporting basis.  These students may not be included in the computation of budget full-time equivalent student enrollment for the college.

PART IX.––-COLLEGES AND UNIVERSITIES

Requested by:   Senator Ward
––-UNIVERSITY OF NORTH CAROLINA HOSPITALS AT CHAPEL HILL/NURSING
Sec. 56.  Notwithstanding the provisions of G.S. 126-4(1), G.S. 126-4(2), and Section 9 of Chapter 738 of the 1987 Session Laws, as amended by Section 100(a) of the 1987 Session Laws, and as further amended by Section 54 of the Current Operations Appropriations Act of 1989, the Board of Directors of the University of North Carolina Hospitals at Chapel Hill shall establish policies and rules governing the performance of competitive position classification studies and competitive compensation plan studies and the implementation of competitive classification and compensation plans for clinical nursing employees.  These plans shall provide for minimum, maximum, and intermediate rates of pay, and may include provisions for range revisions and shift premium pay and for salary adjustments to address internal inequities and job performance.  The Office of State Personnel shall review the classification and compensation plans on an annual basis, and all changes in compensation plans for clinical nursing employees shall be submitted to the Office of State Personnel upon implementation.

Requested by:   Senator Royall
––-NORTH CAROLINA SCHOOL OF SCIENCE AND MATHEMATICS
Sec. 57.  Of the funds appropriated in Section 3 of this act to the Board of Governors of The University of North Carolina for the North Carolina School of Science and Mathematics, the sum of $202,000 for the 1989-90 fiscal year and the sum of $348,250 for the 1990-91 fiscal year shall be used for implementation of a salary plan for the faculty of the School.

Requested by:   Senator Taft
––-ECU MEDICARE REIMBURSEMENT
Sec. 58.  (a) Effective July 1, 1989, and remaining in effect for each succeeding year thereafter, funds appropriated to the Board of Governors of The University of North Carolina for the East Carolina University School of Medicine for Medicare education shall be allocated as follows:
(1)	That portion of the Medicare reimbursement that can be identified as having been generated through the effort and at the expense of the School's Medical Faculty Practice Plan shall be transferred to the appropriate Medical Faculty Practice Plan account within the School; and
(2)	The remainder shall be transferred to a special nonreverting account within the School.
Funds deposited in the account pursuant to subdivision (2) of this section shall be spent for nonrecurring items of equipment and facilities that are required to maintain the School of Medicine's teaching facilities within Pitt County Memorial Hospital and the Brody Medical Sciences Building.
(b) All revenue heretofore or subsequently received by the East Carolina University School of Medicine Medical Faculty Practice Plan from patients or their health insurance companies for treatment received in the Radiation Therapy Facility shall be retained by the School's Medical Faculty Practice Plan and used to defray current operating expenses and for future support and enhancement of the facility.

Requested by:  Senator Ward
––-AID TO PRIVATE COLLEGES INCREASE/PROCEDURE
Sec. 58.1.  Section 30 of the Current Operations Appropriations Act of 1989, reads as rewritten:
"Requested by:  Senator Ward, Representatives J. Crawford, Tart
––-AID TO PRIVATE COLLEGES INCREASE/PROCEDURE
Sec. 30.  (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 four hundred fifty dollars ($450.00) 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 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, the sum of one thousand one hundred fifty dollars ($1,150) 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 may 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 10th 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."

PART X.––-DEPARTMENT OF TRANSPORTATION

Requested by:   Senator Martin of Pitt
––-SPECIAL APPROPRIATIONS FOR HIGHWAYS
Sec. 59.  Of the funds appropriated to the Department of Transportation for special appropriations for highways in the Current Operations Appropriations Act of 1989 and in this act, sixty-six million dollars ($66,000,000) for fiscal year 1989-90 and sixty-six million dollars ($66,000,000) for fiscal year 1990-91 may be used for:
(1)	Supplemental funding for highway construction, reconstruction, and rehabilitation projects for State and Federal Aid road systems;
(2)	Supplemental funding for the planning, design and engineering of highways and acquisition of highway rights-of-way;
(3)	Matching funds for unanticipated federal-aid construction funds;
(4)	Payment for all or any portion of the interest or principal on bonds issued by the State for road and highway purposes;
(5)	A means of maintaining a uniform seasonal pace of highway construction, including scheduled ferry replacement.
Construction funds shall be allocated equitably each year among the 14 Highway Divisions.  Notwithstanding any other provisions of Chapter 136 of the General Statutes, the Department shall make allocations under this section in a manner that assures that at the end of the second year each of the 14 Highway Divisions, over the two-year period, has been allocated an equal amount, insofar as possible, of all funds allocated under this section.  The Secretary shall report in writing, on a monthly basis, to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division on the projects that have been funded, and those projects that he reasonably expects to be funded under this section.  The report shall set out the reasons this method of funding serves the best interest of the State's transportation improvement programs.  That report shall include, among other things, the cost savings realized, and the manner in which the cost savings have been realized by the use of the funds allocated under this section.

Requested by:   Senator Martin of Pitt
––-COMMISSION PAID TO BRANCH AGENTS
Sec. 60.  Section 202 of Chapter 1034 of the 1983 Session Laws (Regular Session 1984) as amended by Section 172 of Chapter 738 of the 1987 Session Laws reads as rewritten:
"Sec. 202.  Section 140 of Chapter 761 of the 1983 Session Laws is amended in the last sentence by deleting the language ‘sixty-four cents (64¢)' and substituting ‘eighty-two cents (82¢) for fiscal year 1989-90 and ninety-two cents (92¢) thereafter'."

Requested by:   Senator Martin of Pitt
––-COMMISSIONER OF MOTOR VEHICLES TO REPORT ON PRINTING AND BINDING FUNDS
Sec. 61.  The Commissioner of Motor Vehicles shall report, no later than May 15, 1990, to the Chairmen of the  Highway Fund Subcommittee of the Appropriations Committee of the House of Representatives and to the Chairman of the Senate Appropriations Committee on Natural and Economic Resources on the expenditure of the funds requested for printing and binding.  Copies of the report mandated by this section shall also be delivered to the Chairmen of the Appropriations Committees of the House of Representatives and of the Senate and to the Fiscal Research Division of the Legislative Services Office.

Requested by:   Senator Martin of Pitt
––-CURRITUCK/DARE BRIDGE MAINTENANCE YARD CONSOLIDATION
Sec.  62.  The existing Department of Transportation Bridge Maintenance facilities in Currituck County and Dare County are declared to be surplus and the Department of Transportation shall dispose of them through the normal procedures for the disposition of real property.  The proceeds shall be used for the consolidation of the Currituck County and Dare County bridge maintenance yards.

Requested by:   Senator Basnight
––-NC 400 UNDER VOYAGES COMMISSION
Sec. 63.  Section 7 of Chapter 1194 of the 1981 Session Laws, as amended by Chapter 673 of the 1985 Session Laws, reads as rewritten:
"Sec. 7.  The word ‘highway' as used in this act means U.S. Highway 64 and 264 on Roanoke Island between the William B. Umstead Memorial Bridge over Croatan Sound, the Washington Baum Bridge over Roanoke Sound, and the highway designated by the Department of Transportation as North Carolina 400 (NC 400)."

Requested by:   Senator Martin of Pitt
––-ELDERLY AND HANDICAPPED TRANSPORTATION ASSISTANCE PROGRAM
Sec. 64.  (a) Of the funds appropriated in Section 6 of this act $2,000,000 for fiscal year 1989-90 and $2,000,000 for fiscal year 1990-1991 shall be used to provide funds for the North Carolina Elderly and Handicapped Transportation Assistance Program established under G.S. 136-44.27.
(b) Section 1(b) of Chapter 1095 of the 1987 Session Laws, Section 8 of Chapter 1101 of the 1987 Session Laws, and Section 8.2 of Chapter 1101 of the 1987 Session Laws are repealed.

Requested by:   Senators Royall and Martin of Pitt
––-CONTINUING AVIATION APPROPRIATIONS
Sec. 65.  G.S. 136-16.4 is repealed.

PART XI.––-DEPARTMENT OF JUSTICE

Requested by:   Senator Marvin
––-STATE BUREAU OF INVESTIGATION SALARY ADJUSTMENT
Sec. 66.  The State Bureau of Investigation may continue in fiscal year 1989-90 to pay overtime compensation for supervisory personnel as is being done on June 30, 1989, up to a maximum of five thousand two hundred dollars ($5,200) annually per individual.  The Office of State Personnel shall study the issue of overtime compensation for State Bureau of Investigation supervisory personnel and make recommendations to the Senate Appropriations Committee on Justice and Public Safety and the Fiscal Research Division by April 15, 1990 as to whether such compensation should continue.

Requested by:   Senator Marvin
––-TELECOMMUNICATORS' CERTIFICATION STUDY
Sec. 67.  The Justice Department shall study the need to establish a certification requirement and program for Telecommunicators in the State's Criminal Justice System.  The Department shall consider possible training requirements and standards for certification, methods, procedures, and staffing needs required to implement a telecommunicators' certification program, and whether certified telecommunicators shall be entitled to law enforcement officer retirement benefits.  The Department may also study any other matters relevant to the issue of certification of telecommunicators.  The Department shall report its findings and recommendations to the 1989 General Assembly, Regular Session 1990.

PART XII.––-DEPARTMENT OF CRIME CONTROL AND PUBLIC SAFETY

Requested by:   Senators Marvin and Sands
––-STATE LAW ENFORCEMENT STUDY
Sec. 69.  (a) The Joint Legislative Commission on Governmental Operations shall conduct a study of State law enforcement agencies and make recommendations for coordinating the activities of those agencies as appropriate. The recommendations should address methods of reducing the duplication and overlapping of law enforcement responsibilities, training, and technical assistance among State law enforcement agencies. The Commission may hire outside consultants, if necessary, to assist in its study.
(b) The Commission may make an interim report by May 1, 1990, and a final report including its findings and any recommendations by February 1, 1991, to the Joint Legislative Commission on Governmental Operations.

Requested by:   Senator Sands
––-COMMUNITY SERVICE COORDINATOR APPOINTMENT
Sec. 71.  (a) G.S. 143B-475.1(a) reads as rewritten:
	"(a) The Department of Crime Control and Public Safety may conduct a deferred prosecution, community service restitution, and volunteer program for youthful and adult offenders. The Secretary of Crime Control and Public Safety may assign one or more coordinators to each district court district as defined in G.S. 7A-133 to assure and report to the Court the offender's compliance with the requirements of the program. The appointment of each coordinator shall be made in consultation with and is subject to the approval of the chief district court judge in the district to which the coordinator is assigned. Each county must provide office space in the courthouse or other convenient place, for the use of each coordinator assigned to that county."
(b) G.S. 20-179.4(b) reads as rewritten:
	"(b) The Secretary of Crime Control and Public Safety must assign at least one coordinator to each district court district as defined in G.S. 7A-133 to assure and report to the court the person's compliance with the community service sentence. The appointment of each coordinator shall be made in consultation with and is subject to the approval of the chief district court judge in the district to which the coordinator is assigned. Each county must provide office space in the courthouse or other convenient place, necessary equipment, and secretarial service for the use of each coordinator assigned to that county."

Requested by:   Senator Marvin
––-VICTIMS COMPENSATION PROGRAM STUDY
Sec. 73.  The Office of the State Auditor shall study the costs of administering the North Carolina Crime Victims Compensation Program, established in Chapter 15B of the General Statutes, and shall submit a report to the Senate Appropriations Committee on Justice and Public Safety and to the Fiscal Research Division by May 1, 1990, on more cost-effective methods of administration, including the possible computerization of data.  The study shall also include a review of the information obtained by the Victim Witness Coordinators, to determine if that information is acceptable for use by the Department and may relieve the Department from duplicating efforts.

Requested by: Senator Odom
––-REVIEW OF THE CIVIL AIR PATROL OPERATIONS
Sec. 73.1.  The Senate Appropriations Base Budget Committee on Justice and Public Safety requests that the Office of the State Auditor conduct a performance audit of the Civil Air Patrol administered by the Department of Crime Control and Public Safety that will address, but is not limited to, a review of the responsibilities of the supervisory personnel and the Military Board; the role of the Department of Crime Control and Public Safety in structuring the programs and activities of the Civil Air Patrol; and the use of funds appropriated annually from the General Fund for State personnel and operating expenses.
The Office of State Auditor shall report its findings and recommendations to the Senate Appropriations Base Budget Committee on Justice and Public Safety by April 15, 1990.

Requested by:   Senators Ballance and Bryan
––-REVIEW OF NATIONAL GUARD OPERATIONS
Sec. 73.2.  The Office of the State Auditor shall conduct, within funds available, a performance audit of the North Carolina National Guard administered by the Department of Crime Control and Public Safety that will address but is not limited to determining:
(1)	The proportion of minorities that are in the National Guard, the percentage of minorities occupying positions of responsibility, and a breakdown of National Guard membership by race, sex, and rank.
(2)	The procedure used by the Retention Board for officers and soldiers when they reach 20 years of service, whether these procedures are well known, and the type of information that disqualifies an individual for retention after 20 years of service.
(3)	The proportion of minorities that are full-time National Guardsmen and the percentage who hold full-time leadership positions; the standard practices concerning the retention of  a Guardsman who is full-time before he reaches 20 years of qualifying service with full-time employment; the proportion of full-time Guardsmen not retained prior to reaching 20 years of qualifying service with full-time benefits, and providing a breakdown of this information by race, sex, and rank.
(4)	The breakdown of retirees paid from the $1.8 million transfer to the State Treasurer for retirement of National Guardsmen by rank, race, sex, and number of years for retirement purposes.
(5)	Whether adequate procedures are in place for Guardsmen to report acts of discrimination, and the difficulty experienced by Guardsmen in reporting acts of discrimination through official channels.
The Office of State Auditor shall report its findings and recommendations to the Senate Appropriations Base Budget Committee on Justice and Public Safety by April 15, 1990.

PART XIII.––-DEPARTMENT OF CORRECTION

Requested by:   Senators Marvin and Sands
––-REPORT ON NEED FOR TRAINING COORDINATOR POSITIONS FOR 1991-93 BIENNIUM
Sec.  74.  The Department of Correction, Division of Prisons, shall not include in its continuation budget for the 1991-93 biennium funding for the six training coordinator positions authorized for the 1989-91 biennium. The Department shall submit a report by April 1, 1991 to the General Assembly and the Fiscal Research Division on the need to refund these positions in future biennia, including recommendations for the consolidation of basic and in-service training for employees of the Division of Prisons. 

Requested by:   Senators Marvin and Sands
––-SUBSTANCE ABUSE PROGRAM AND DWI PAROLE PROGRAM EVALUATIONS
Sec.  75. (a) The Department of Correction shall prepare an evaluation of the operation and results of the substance abuse program established by G.S. 143B-262(d) and G.S. 143B-264.  The report shall include information on the number of inmates who have been accepted into the program, the number who have completed treatment or are presently receiving treatment through the program, the number who did not complete treatment through the program, and any follow-up information indicating the results of the program. The Department shall submit its report not later than May 1, 1990, to the Chairmen of the Senate and House Appropriations Committees, the Chairman of the House Base Budget Appropriations Committee, the Chairman of the Senate Appropriations Committee on Justice and Public Safety, the Chairmen of the House Appropriations Committees on Justice and Public Safety, the Special Committee on Prisons, the Joint Legislative Commission on Governmental Operations, and the Fiscal Research Division.
(b) The Department of Correction shall prepare an evaluation of the implementation, operation, and results of the DWI program at Cherry Hospital established in Chapter 8 of the 1989 Session Laws.  The report shall include information on the number of persons who have been accepted into the program, the number who have completed treatment or are presently receiving treatment through the program, the number who did not complete treatment through the program, and any follow-up information indicating the results of the program.  The Department shall submit its report not later than May 1, 1990, to the Chairmen of the Senate and House Appropriations Committees, the Chairman of the House Base Budget Appropriations Committee, the Chairman of the Senate Appropriations Committee on Justice and Public Safety, the Chairmen of the House Appropriations Committees on Justice and Public Safety, the Special Committee on Prisons, the Joint Legislative Commission on Governmental Operations, and the Fiscal Research Division.

Requested by:   Senator Marvin
––-ENGINEERING SUPPORT SECTION AUDIT
Sec. 76.  (a) The Office of the State Auditor shall conduct an operational audit of the organization, functioning, and personnel of the Engineering Support Section of the Department of Correction. The audit shall address the organizational placement of the Section, staffing and procedures for carrying out assignments, and recommendations for methods of improving the efficiency of the Section.
(b) The Office of the State Auditor shall report its findings and recommendations not later than May 1, 1990, to Chairmen of the Senate and House Appropriations Committees, the Chairmen of the House Appropriations Committees on Justice and Public Safety, the Chairmen of the Senate Appropriations Committee on Justice and Public Safety, the Special Committee on Prisons, and the Joint Legislative Commission on Governmental Operations.

Requested by:   Senator Marvin
––-SUMMIT HOUSE FUNDS
Sec. 77.  Of the funds appropriated to the Department of Correction for the 1989-90 fiscal year, $75,000 shall be used to support a pilot program at Summit House, a community-based residential alternative to incarceration for mothers and pregnant women convicted of nonviolent crimes. Summit House shall provide a quarterly report 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.

PART XIV.––-DEPARTMENT OF HUMAN RESOURCES

Requested by:   Senator Walker
––-BLOCK GRANT FAMILY PLANNING FUNDS
Sec. 78.  Family planning services provided by local health departments and funded by federal block grant funds shall be continued at or above the 1988-89 fiscal year levels.  In the event of federal reductions for maternal and child health-care services, family-planning services shall not be subject to reductions greater than the average for other maternal or child health program.

Requested by:   Senator Walker
––-BLOCK GRANT ADOLESCENT PREGNANCY FUNDS
Sec. 79.  (a) Social Services Block Grant funds appropriated for fiscal year 1989-90 and included in Section 7 of this act shall be allocated as follows:
Swain County Cherokee Boys Club, Inc.	$30,000
Caldwell County Health Department	30,000
Robeson County Health Department	30,000
Harnett County Health Department	40,000
Buncombe County Health Department	40,000
Carteret County Community Action, Inc.	40,000
Davidson County Health Department	40,000
Greene County Health Care, Inc.	40,000
Bertie County Health Department	40,000
Scotland County Health Department	40,000
Macon County Programs for Progress	55,000
Mecklenburg County N.C. Coalition on Adolescent
Pregnancy		20,000
(b) Programs receiving funds allocated under this section shall use these funds for adolescent pregnancy prevention and prematurity prevention projects.
(c)	No funds allocated under this section shall be used for purchase and prescriptions of contraceptives, nor shall contraceptives be distributed on school property under this section.  None of the funds allocated under this section may be used for transportation to and from abortion services.  None of the funds allocated under this section may be used for abortions.  This subsection applies only to the funds allocated under this section.
(d) Each program receiving funds under this section shall be subject to the provisions of Section 91 of the Current Operations Appropriations Act of 1989.

Requested by:   Senator Walker
––-ALCOHOL, DRUG ABUSE, AND MENTAL HEALTH SERVICES BLOCK GRANT FUNDS
Sec. 80.  If additional Alcohol, Drug Abuse, and Mental Health Services Block Grant funds are made available to the State above the current levels of $14,476,000 for federal fiscal year 1989 and the projected amount of $14,167,000 for federal fiscal year 1990, the Department of Human Resources may:
(1)	Allocate additional funds to mental health items in the State fiscal year 1989-90 block grant plan sufficient to restore reductions but not exceed State fiscal year 1988-89 funding levels set forth in Chapter 1086 of the 1987 Session Laws; and
(2)	Budget additional block grant funds for mental health and substance abuse programs as may be necessary to meet federal Alcohol, Drug Abuse, and Mental Health Services Block Grant requirements.

Requested by:   Senators Basnight and Martin of Pitt
––-EASTERN REGIONAL DETOXIFICATION FUNDS
Sec. 81.  Funds appropriated to the Department of Human Resources, Division of Mental Health, Mental Retardation, and Substance Abuse Services,  for the 1989-90 fiscal year and the 1990-91 fiscal year for Eastern Regional Detoxification Services  shall be allocated to the Division's Eastern Regional Office and distributed to area mental health, mental retardation, and substance abuse authorities as determined by the regional management team.

Requested by:   Senator Walker
––-SPECIALIZED RESIDENTIAL CENTERS' BED CONVERSIONS
Sec. 82.  Funds made available as a result of the conversion of State supported beds in specialized residential centers to ICF/MR beds shall be used to increase the State subsidy provided to centers.  Funds made available to centers by this section shall be used, as they become available, to increase the subsidy rate to sixty-five percent (65%) of the statewide 1988-89 average cost of providing this service.
Funds made available in addition to those needed to increase the subsidy rate shall be transferred to the Division of Medical Assistance to be used as State match for the converted ICF/MR beds.

Requested by:   Senator Walker
––-THOMAS S.
Sec. 83.  (a) Funds appropriated to the Department of Human Resources in Section 5 of this act for the 1989-90 fiscal year and the 1990-91 fiscal year for members of the Thomas S. class as identified in Thomas S., et al., vs. Flaherty, shall be placed in a reserve in the Division of Mental Health, Mental Retardation, and Substance Abuse Services, and shall be expended only for programs serving Thomas S. class members or for services for those clients who are likely to become class members.
(b) The Department of Human Resources shall provide periodic reports of funds expended and services performed on behalf of members of the Thomas S. class and on behalf of those clients who are likely to become class members to the Joint Legislative Commission on Governmental Operations and to the Fiscal Research Division of the Legislative Services Office.

Requested by:   Senator Walker
––-STUDY OF FUNDS USED FOR LOCAL PROGRAM SALARIES
Sec. 84.  The Department of Human Resources shall conduct a study of the use of funds provided under G.S. 143-10.1 for salary and salary-related items for employees in locally operated State-funded programs.  The study shall include a five-year comparative analysis of the funds made available under G.S. 143-10.1 with the changes in the cost of salaries in the locally operated State-funded programs.  The Department shall report its findings by May 1, 1990, to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division of the Legislative Services Office.

Requested by:   Senator Walker
––-ONE-ON-ONE PROGRAM FUNDS
Sec. 85.  Of the funds appropriated in Section 5 of this act to the Department of Human Resources, Division of Youth Services, the sum of $197,250 for the 1989-90 fiscal year and the sum of $197,250 for the 1990-91 fiscal year shall be allocated as follows:
(1)	$97,250 for the 1989-90 fiscal year and $97,250 for the 1990-91 fiscal year for the existing 34 local programs of the Governor's One-on-One Volunteer Program;
(2)	$20,000 for the 1989-90 fiscal year and $20,000 for the 1990-91 fiscal year to allow two of the 34 programs that are currently part-time programs to be expanded to full-time programs; and
(3)	$80,000 for the 1989-90 fiscal year and $80,000 for the 1990-91 fiscal year to establish and implement four new programs.
Funds allocated pursuant to this section shall not supplant or diminish funds appropriated for the Program from Social Services Block Grant funds.

Requested by:   Senator Walker
––-CHILD PROTECTIVE SERVICES FUNDS
Sec. 86.  (a)	Of the funds appropriated to the Department of Human Resources, Division of Social Services for the 1989-90 fiscal year and for the 1990-91 fiscal year for Child Protective Services and included in Sections 3 and 5 of this act, the Division shall use up to $174,910 in the 1989-90 fiscal year and up to $174,910 in the 1990-91 fiscal year for child protective services training; and shall use up to $175,090 in the 1989-90 fiscal year and up to $175,090 in the 1990-91 fiscal year to provide consultation and technical assistance to county departments of social services to strengthen and support local child protective services.   The Division may establish one training position and four consultant positions to carry out these purposes.  The remaining funds shall be allocated to the county departments of social services as follows:
(1)	$10,000 for the 1989-90 fiscal year and $10,000 for the 1990-91 fiscal year shall be allocated to each of the 15 county departments that did not receive an allocation of the 1985 State appropriation for child protective services;
(2)	In addition, each of the 100 county departments shall receive an allocation of $10,000 for the 1989-90 fiscal year and $10,000 for the 1990-91 fiscal year;
(3)	The balance of available funds shall be allocated to each county department based upon the percentage that the total number of abuse and neglect reports within that county represents to the statewide total number of abuse and neglect reports.  These percentages shall be computed from the reports received by the Central Registry of Abuse and Neglect cases for the next two prior fiscal years.
(b)	Funds allocated to county departments of social services pursuant to this section shall to be used for staff carrying out investigations of reports of child abuse or neglect or providing protective or preventive services in cases in which the department confirms neglect, abuse, or dependency.  If a county department demonstrates that it has adequate protective services staff, these funds may be used to purchase or provide treatment and other support services to children and their families in confirmed cases.  All expenditures shall be directly in support of the departments' program of protective services for children.  These funds shall not be used to supplant any Social Services Block Grant funds or county appropriations previously budgeted for protective services for children.
(c)	The Department of Human Resources, Division of Social Services, shall establish criteria and guidelines to assure that the allocations to county departments of social services are used in accordance with the intent and purposes of this section.  The Division shall evaluate the results and any progress achieved in improving statewide protective services for children through the expenditure of the appropriation, and shall report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division of the Legislative Services Office by May 1, 1990.

Requested by:   Senator Walker
––-DOMICILIARY CARE RATE INCREASE
Sec. 87.  Section 81 of the Current Operations Appropriations Act of 1989, reads as rewritten:
"Sec. 81.  Effective January 1, 1990, the maximum monthly rate for ambulatory residents in domiciliary care facilities shall be seven hundred twenty-four dollars ($724.00) and the maximum monthly rate for semi-ambulatory residents shall be seven hundred sixty dollars ($760.00).  Effective January 1, 1991, the maximum monthly rates for ambulatory residents shall be increased to seven hundred thirty-four dollars ($734.00) and for semi-ambulatory residents seven hundred seventy dollars ($770.00)."

Requested by:   Senator Walker
––-FOSTER CARE RATE INCREASE
Sec. 88. (a) Section 75 of the Current Operations Appropriations Act of 1989, reads as rewritten:
––-FOSTER CARE BOARD RATE
"Sec. 75.  Effective July 1, 1989 through December 31, 1989, funds appropriated to the Department of Human Resources by Section 3 of this act for foster care board rates shall be used to set the rates at two hundred dollars ($200.00) per child per month."
(b) Effective January 1, 1990, funds appropriated to the Department of Human Resources by Section 3 of this act for foster care board rates shall be used to set the rates at $250.00 per child per month.

Requested by:   Senator Walker
––-REVISED/EXPANDED MEDICAID COVERAGE FOR PREGNANT WOMEN AND FOR CHILDREN
Sec. 89.  Section 70(m) of the Current Operations Appropriations Act of 1989, reads as rewritten:
"(m)	
The Department of Human Resources shall provide Medicaid coverage to pregnant women, to infants, and to children according to the following schedule:
(1)	Effective July 1, 1989, through December 31, 1989, pregnant women with family incomes equal to or less than the federal poverty guidelines as revised annually shall be covered for Medicaid benefits;
(2)	Effective January 1, 1990, pregnant women with incomes equal to or less than one hundred thirty percent (130%) of the federal poverty guidelines as revised annually shall be covered for Medicaid benefits;
(3)	Effective July 1, 1989, through December 31, 1989, infants under the age of one with family incomes equal to or less than the federal poverty guidelines as revised annually shall be covered for Medicaid benefits;
(4)	Effective January 1, 1990, infants under the age of one with family incomes equal to or less than one hundred thirty percent (130%) of the federal poverty guidelines as revised annually shall be covered for Medicaid benefits;
(5)	Effective July 1, 1989, through September 30, 1989, children under the age of three with family incomes equal to or less than the federal poverty guidelines as revised annually shall be covered for Medicaid benefits; and
(6)	Effective October 1, 1989, children under the age of six with family incomes equal to or less than the federal poverty guidelines as revised annually shall be covered for Medicaid benefits.
Services to pregnant women eligible under this section 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 eligible under this section, no resources test shall be applied."

Requested by:   Senator Plyler
––-ANSON COUNTY SEWER FUNDS
Sec. 90.  The funds allocated to Anson County by Section 4 of Chapter 876 of the 1987 Session Laws to extend the sewer line from the Anson County sewer line on U.S. Highway 74 westward to Anson Community College that were not needed for that purpose may be used by Anson County to extend the sewer line to the west of Anson Community College.

PART XV.––-DEPARTMENT OF AGRICULTURE

Requested by:   Senators Basnight and Barker
––-AQUACULTURE DEVELOPMENT
Sec. 91.  Chapter 106 of the General Statutes is amended by adding a new article to read:
“ARTICLE 63.
"Aquaculture Development Act.
"§ 106-756.  Legislative findings and purpose.
The General Assembly finds and declares that it is in the best interest of the citizens of North Carolina to promote and encourage the development of the State's aquacultural resources in order to augment food supplies, expand employment, promote economic activity, increase stocks of native aquatic species, enhance commercial and recreational fishing and protect and better use the land and water resources of the State.
"§ 106-757.  Short title.
This Article shall be known as the Aquaculture Development Act.
"§ 106-758.  Definitions.
As used in this Article,
(1)	‘Aquaculture' means the propagation and rearing of aquatic species in controlled or selected environments, including, but not limited to, ocean ranching;
(2)	‘Aquaculture facility' means any land, structure or other appurtenance that is used for aquaculture, including, but not limited to, any laboratory, hatchery, rearing pond, raceway, pen, incubator, or other equipment used in aquaculture;
(3)	‘Aquatic species' means any species of finfish, mollusk, crustacean, or other aquatic invertebrate, amphibian, reptile, or aquatic plant, and including, but not limited to, ‘fish' and ‘fishes' as defined in G.S. 113-129(f);  
(4)	‘Commissioner' means the Commissioner of Agriculture;
(5)	‘Department' means the North Carolina Department of Agriculture.
"§ 106-759.  Lead agency; powers and duties.
(a)	For the purposes of this Article, aquaculture is considered to be a form of agriculture and thus the Department of Agriculture is designated as the lead State agency in matters pertaining to aquaculture.
(b)	The Department shall have the following powers and duties:
(1)	To provide aquaculturalists with information and assistance in obtaining permits related to aquacultural activities;
(2)	To promote investment in aquaculture facilities in order to expand production and processing capacity; and
(3)	To work with appropriate State and federal agencies to review, develop and implement policies and procedures to facilitate aquacultural development.
"§ 106-760.  Advisory Board.
(a)	There is created within the Department of Agriculture the Aquaculture Advisory Board, to consist of the following persons:
(1)	The Commissioner of Agriculture, or his designee;
(2)	The Secretary of Commerce, or his designee;
(3)	The Secretary of Natural Resources and Community Development, or his designee;
(4)	The President of the North Carolina Biotechnology Center, or his designee;
(5)	The President of The University of North Carolina, or his designee;
(6)	One Senator designated by the President Pro Tempore of the Senate; and
(7)	One Representative designated by the Speaker of the House of Representatives.
(b)	The Commissioner of Agriculture or his designee shall serve as Chairman of the Board.  A majority of the Board shall constitute a quorum for the transaction of business.  Clerical and other assistance shall be provided by the Department of Agriculture.  The Commissioner may appoint advisory committees, pursuant to G.S. 143B-10(d), to assist the Board in carrying out its duties.
(c)	The Board shall review State and federal policies, laws and regulations affecting aquaculture and recommend changes which may be necessary or useful to carry out the purposes of this Article.  The Board shall present its recommendations to the Governor and the General Assembly.  The Board shall also assist in the coordination of aquaculture-related activities of the various State agencies and institutions, and shall coordinate research and technology transfer activities to respond to the emerging requirements of aquaculture."

PART XVI.––-DEPARTMENT OF COMMERCE

Requested by:   Senator Martin of Pitt
––-WORKER READJUSTMENT PROGRAM FUNDS
Sec. 92.  (a)	There is appropriated from the Worker Training Trust Fund to the Employment Security Commission of North Carolina the sum of $1,200,000 for the 1989-90 fiscal year and the sum of $1,200,000 for the 1990-91 fiscal year for a Worker Readjustment Program to provide a statewide program of rapid response to plant closings.
(b)	The Employment Security Commission shall report to the Joint Legislative Commission on Governmental Operations by the first of each month prior to the expenditure of any funds appropriated by this section.  The report required by this section may be included in any other report that the Employment Security Commission is required to make to the Joint Legislative Commission on Governmental Operations.
(c)	The Employment Security Commission shall use supplemental federal funds or other additional funds received by the Employment Security Commission for similar purposes before expending funds appropriated by this section.

Requested by:   Senator Martin of Pitt
––-PETROLEUM OVERCHARGE FUNDS ALLOCATION
Sec. 93.  (a)	There is appropriated from the case of United States v. Exxon and appropriated to the Special Reserve for Oil Overcharge Funds to the Department of Commerce the sum of $10,900,000 for the 1989-90 fiscal year and the sum of $10,900,000 for the 1990-91 fiscal year to be allocated as follows:
(1)	The sum of $2,200,000 for the 1989-90 fiscal year and the sum of $2,200,000 for the 1990-91 fiscal year shall be used for projects under the State Energy Conservation and Energy Extension Service Programs;
(2)	The sum of $3,200,000 for the 1989-90 fiscal year and the sum of $3,200,000 for the 1990-91 fiscal year shall be used for the Low Income Weatherization Program;
(3)	The sum of $2,500,000 for the 1989-90 fiscal year and the sum of $2,500,000 for the 1990-91 fiscal year shall be used for energy conservation programs for hospitals and schools; and
(4)	The sum of $3,000,000 for the 1989-90 fiscal year and the sum of $3,000,000 for the 1990-91 fiscal year shall be used for the Low Income Home Energy Assistance Program (LIHEAP).
Any remaining funds in the Special Reserve for Oil Overcharge Funds 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 for Oil Overcharge Funds.
(b)	There is appropriated from funds received from the U.S. Department of Energy's Stripper Well Litigation (MDL378) and appropriated to the Special Reserve for Oil Overcharge Funds to the Department of Commerce the sum of $5,975,000 for the 1989-90 fiscal year to be allocated as follows:
(1)	The sum of $2,500,000 shall be paid to the Business Energy Improvement Program Revolving Loan Fund;
(2)	The sum of $1,675,000 shall be used to expand the Transportation Information Management System (TIMS);
(3)	The sum of $350,000 shall be used for waste tire utilization;
(4)	The sum of $1,350,000 shall be used for local government energy conservation; and
(5)	The sum of $100,000 shall be used for the Energy Assurance Study Commission.
(c)	The Department of Commerce shall submit comprehensive annual reports to the General Assembly by May 15, 1990, and January 31, 1991, which detail the use of all funds received in the cases of United States v. Exxon and Stripper Well that were used or expended by State agencies.  Any State department or agency that has received oil overcharge funds shall provide all information requested by the Department of Commerce for the purpose of preparing this report.

Requested by:   Senator Martin of Pitt
––-BUSINESS ENERGY IMPROVEMENT PROGRAM
Sec. 94.  Article 10 of Chapter 143B of the General Statutes is amended by adding a new Part to read:
“Part 14.  Business Energy Improvement Program.
"§ 143B-472.30.  Short title.
	This Part shall be known as the Business Energy Improvement Program.
"§ 143B-472.31.  Legislative findings and purpose.
	The General Assembly finds and declares that it is in the best interest of the citizens of North Carolina to promote and encourage energy efficiency within the State's industrial and commercial base in order to conserve energy, promote economic competitiveness, and expand employment in the State.
"§ 143B-472.32.  Lead agency; powers and duties.
	(a)	For the purposes of this Part, the Department of Commerce, Energy Division, is designated as the lead State agency in matters pertaining to industrial and commercial energy conservation.
	(b)	The Division shall have the following powers and duties with respect to this Part:
(1)	To provide industrial and commercial concerns doing business in North Carolina with information and assistance in undertaking energy conserving capital improvement projects to enhance industrial and commercial capacity.
(2)	To establish a revolving fund within the Division for the purpose of providing secured loans in amounts not greater than five hundred thousand dollars ($500,000) per business entity to install energy-efficient capital improvements within businesses located within or translocating to North Carolina.  In providing these loans, priority shall be given to businesses already located in the State.
(3)	To work with appropriate State and federal agencies to develop and implement rules and regulations to facilitate this program.
	(c)	The annual interest rate charged for the use of the funds from the revolving fund established pursuant to subdivision (b)(2) of this section shall be one-half of the 90-day rate for United States Treasury Bills, not to exceed five percent (5%) per annum, excluding other fees required for loan application review and origination.  The term of any loan originated under this section may not be greater than seven years.
(d)	In accordance with the terms of the Stripper Well Settlement, administrative expenses for activities under this section shall be limited to five percent (5%) of funds appropriated for this purpose."

PART XVII.––-DEPARTMENT OF NATURAL RESOURCES AND COMMUNITY DEVELOPMENT

Requested by:   Senator Hunt of Moore
––-ZOO RECEIPTS
Sec. 96.   Part 22 of Article 7 of Chapter 143B is amended by adding a new section to read:
"§ 143B-337.  Special Zoo Fund.
A special continuing and nonreverting fund, to be called the Special Zoo Fund, is created.  The North Carolina Zoological Park shall retain unbudgeted receipts at the end of each fiscal year, beginning June 30, 1989, and deposit these receipts into this Fund.  This Fund shall be used for maintenance, repairs, and renovations of exhibits in existing habitat clusters and visitor services facilities, and for the replacement of tram equipment as required to maintain adequate service to the public.  The Special Zoo Fund may also be used to match private funds which are raised for these purposes.  Funds may be expended for these purposes by the Department of Natural Resources and Community Development on the advice of the North Carolina Zoological Park Council and with the approval of the Office of State Budget and Management.  The Department of Natural Resources and Community Development shall provide an annual report to the Office of State Budget and Management and to the Fiscal Research Division of the Legislative Services Office on the use of fees collected pursuant to this section."

Requested by:   Senator Martin of Pitt
––-AUTHORIZATION FOR USE OF WATER QUALITY FEES
Sec. 98.  (a)	There is appropriated from the water quality fees collected and deposited in the nonreverting account established in G.S. 143-215.3A, a sum not to exceed $1,143,540 for the 1989-90 fiscal year and a sum not to exceed $1,465,585 for the 1990-91 fiscal year to the Department of Natural Resources and Community Development to retain and provide all necessary support for a position, or to establish and provide all necessary support for a position in the water quality program, when sufficient fees for a position and all necessary support for the 1989-90 fiscal year and for the 1990-91 fiscal year have been deposited.  No more than nine new positions for the 1989-90 fiscal year and no more than nine new positions for the 1990-91 fiscal year may be funded and supported in this manner.  First priority will be to retain and support those positions that were previously established by the General Assembly.  Water quality fees shall be the only source of funds for these positions and all necessary support, including fringe benefits.  These positions shall be used to reduce the backlog of permit applications and to improve the rate of compliance of facilities with environmental standards for toxic substances.
(b)	The Department of Natural Resources and Community Development shall provide a quarterly report to the Joint Legislative Commission on Governmental Operations and to the Director of the Fiscal Research Division beginning October 1, 1989.  Each report shall state the amount and type of fees collected for the quarter and since the beginning of the fiscal year, the number of permit applications processed for the quarter and since the beginning of the fiscal year, the number of permit applications not processed, and the progress made in reducing the backlog of permit applications.

Requested by:   Senator Martin of Pitt
––-AUTHORIZATION FOR USE OF AIR QUALITY FEES
Sec. 99.   (a)	There is appropriated from the air quality fees collected and deposited in the nonreverting account established in G.S. 143-215.3A, a sum not to exceed $627,000 for the 1989-90 fiscal year and a sum not to exceed $918,000 for the 1990-91 fiscal year, to the Department of Natural Resources and Community Development to establish and provide all necessary support for a position in the Department of Natural Resources and Community Development, when sufficient fees for a position and all necessary support for the 1989-90 fiscal year and for the 1990-91 fiscal year have been collected and deposited.  No more than eight new positions in the 1989-90 fiscal year and no more than six new positions in the 1990-91 fiscal year may be established in this manner.  First priority will be to retain and support those positions that were previously established by the General Assembly.  Air quality fees shall be the only source of funds for these positions and all necessary support, including fringe benefits.  These positions shall be used to conduct air quality permitting and air quality compliance and monitoring activities.
(b)	The Department of Natural Resources and Community Development shall provide quarterly reports to the Joint Legislative Commission on Governmental Operations and to the Director of the Fiscal Research Division beginning October 1, 1989.  Each report shall state the amount and type of fees collected for the quarter and since the beginning of the fiscal year, the number of permit applications processed for the quarter and since the beginning of the fiscal year, the number of permit applications not processed, and the progress made in reducing the backlog of permit applications.

Requested by:   Senators Barker and Martin of Pitt
––-SALES TAX PROCEEDS FOR WILDLIFE FUND MODIFIED
Sec. 100.  G.S. 105-164.44B reads as rewritten:
"§ 105-164.44B. Transfer to Wildlife Resources Fund of taxes on hunting and fishing supplies and equipment.
Each fiscal year, 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, one fourth of two million eight hundred thirty-four thousand six hundred seventy-five dollars ($2,834,675) plus or minus the percentage of that amount by which the total collection of State sales and use taxes increased or decreased during the preceding fiscal year."

Requested by:   Senators Basnight and Taft
––-TEXASGULF SETTLEMENT FUNDS
Sec. 101.  The sum of $1,001,907, received by the Department of Natural Resources and Community Development in accordance with a settlement agreement with Texasgulf Inc., dated June 2, 1989, and placed in General Fund receipt code 1310-0720 in the Environmental Management Division, shall not be available for expenditure by the Department of Natural Resources and Community Development, and shall not revert to the General Fund, but instead is reallocated to the Beaufort County Board of Commissioners.  The money shall be paid by the Office of State Budget and Management to the Beaufort County Board of Commissioners within 15 days after request for the funds by the Board of Commissioners.

Requested by:   Senator Martin of Pitt
––-AGRICULTURE COST SHARE PROGRAM
Sec. 102.  (a)	Of the funds appropriated to the Department of Natural Resources and Community Development in Section 5 of the Current Operations Appropriations Act of 1989, if that bill becomes law, for the Agriculture Cost Share Program for Nonpoint Source Pollution Control, a sum not to exceed $40,000 for the 1989-90 fiscal year and a sum not to exceed $40,000 for the 1990-91 fiscal year shall be used to fund tide gates in Hyde County in accordance with the match requirements specified in G.S. 143-215.74(b)(6).
(b)	Funds appropriated to the Department of Natural Resources and Community Development for the 1989-90 fiscal year and for the 1990-91 fiscal year in Section 5 of this act and in Section 5 of the Current Operations Appropriations Act of 1989, if that bill becomes law, for the Agriculture Cost Share Program for Nonpoint Source Pollution Control shall be used to implement the Agriculture Cost Share Program statewide beginning in the 1989-90 fiscal year.  Of these funds, the Department of Natural Resources and Community Development shall use the sum of $64,826 for the 1989-90 fiscal year and the sum of $64,826 for the 1990-91 fiscal year to establish two positions to administer the Agriculture Cost Share Program.

PART XVIII.––-MISCELLANEOUS PROVISIONS

Requested by:  Senator Royall
––-EFFECT OF HEADINGS
Sec. 103.  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:   Senator Royall 
––-EXECUTIVE BUDGET ACT REFERENCE
Sec. 104.  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:  Senator Royall
––-COMMITTEE REPORT
Sec. 105.  The Senate Expansion Appropriations Committee Report, dated June 28, 1989, which was distributed in the Senate and used to explain this act, shall indicate action by the General Assembly on this act and shall therefore be used to construe this act, as provided in G.S. 143-15 of the Executive Budget Act, and for such purposes shall be considered a part of this act.

Requested by:   Senator Royall
––-EFFECT OF MOST LIMITATIONS AND DIRECTIONS IN THE CURRENT OPERATIONS ACT OF 1989 APPLY
Sec. 106.  Except where expressly repealed or amended by this act, the provisions of the Current Operations Appropriations Act of 1989 remain in effect.
Notwithstanding any modifications by this act in the amounts appropriated, except where expressly repealed or amended, the limitations and directions for the 1989-91 fiscal biennium in the Current Operations Appropriations Act of 1989 that applied to appropriations to particular agencies or for particular purposes apply to the newly enacted appropriations of this act for those same purposes.

Requested by:  Senator Royall
––-MOST TEXT APPLIES ONLY TO 1989-91
Sec. 107.  Except for statutory changes or other provisions that clearly indicate an intention to have effects beyond the 1989-91 biennium, the textual provisions of this act shall apply only to funds appropriated for and activities occurring during the 1989-91 biennium.

Requested by:   Senator Royall
––-SEVERABILITY CLAUSE
Sec. 108.  If any section or provision of this act is declared unconstitutional or invalid by the courts, it does not affect the validity of the act as a whole or any part other than the part so declared to be unconstitutional or invalid.

Requested by:   Senator Royall
––-EFFECTIVE DATE
Sec. 109.  Except as otherwise provided, this act shall become effective July 1, 1989.