GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1991

H	1 

HOUSE BILL 1514

Short Title:  Budget Clarifications.	(Public)
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Sponsors: Representatives Nesbitt, Diamont; and Bowman.
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Referred to:  Appropriations.
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June 2, 1992

A BILL TO BE ENTITLED
AN ACT TO CLARIFY THE PROVISIONS OF THE EXECUTIVE BUDGET ACT AND THE STATE BUDGET FOR THE 1991-93 FISCAL BIENNIUM.
The General Assembly of North Carolina enacts:
Section 1.  The General Assembly finds that it is necessary to clarify the provisions of the State budget for the 1991-93 fiscal biennium and the Executive Budget Act.  Sections 1 through 6 of this act are intended to provide this clarification and are not intended to make substantive changes in the law.
Sec. 2.  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, position, or other expenditure for which the General Assembly has considered but not enacted an appropriation of funds for the current fiscal period. For the purpose of this section, the General Assembly has considered a purpose, position, or other expenditure when that purpose is included in a bill or petition or when any committee of the Senate or the House of Representatives deliberates on that purpose."
Sec.  3.  G.S. 143-23 reads as rewritten:
"§ 143-23.  All maintenance funds for itemized purposes; transfers between objects or line items.
(a)	All appropriations now or hereafter made for the maintenance of the various departments, institutions and other spending agencies of the State, are for the (i) purposes or programs and (ii) objects or line items enumerated in the itemized requirements of such departments, institutions and other spending agencies submitted to the General Assembly by the Director of the Budget and the Advisory Budget Commission, as amended by the General Assembly. The function of the Advisory Budget Commission under this subsection applies only if the Director of the Budget consults with the Commission in preparation of the budget.
(a1)	No transfers may be made between objects or 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 an object or line item if the overexpenditure is:
(1)	In a purpose or program for which funds were appropriated for that fiscal period and the total amount spent for the purpose or program is no more than was appropriated for the purpose or program for the fiscal period;
(2)	Required to continue a purpose or program because of unforeseen events, so long as the scope of the purpose or 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 purpose or program is more than the amount appropriated for it from all sources.
Funds appropriated for salaries and wages are also subject to the limitation that they may only be used for (i)	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; or (ii) uses 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 are also subject to the limitation that they may not be used for new permanent employee positions or to raise the salary of existing employees.
" 		The requirements in this section that the Director of the Budget report to the Joint Legislative Commission on Governmental Operations shall not apply to expenditures of receipts by entities that are wholly receipt supported, except for entities supported by the Wildlife Resources Fund.
(b)	Repealed by Session Laws 1985, c. 290, s. 8, effective July 1, 1985.
(c)	Transfers or changes as between objects or line items in the budget of the Senate may be made by the President Pro Tempore of the Senate;
(d)	Transfers or changes as between objects or line items in the budget of the House of Representatives may be made by the Speaker of the House of Representatives;
(e)	Transfers or changes as between objects or line items in the budget of the General Assembly other than of the Senate and House of Representatives may be made jointly by the President Pro Tempore of the Senate and the Speaker of the House of Representatives.
(f)	As used in this section:
(1)	'Object or line item' means a budgeted expenditure or receipt in the budget enacted by the General Assembly that is designated by (i) a thirteen-digit code in the 1000-object code series or (ii) an eleven-digit code in all other object code series, in accordance with the Budget Code Structure and the State Accounting System Uniform Chart of Accounts set out in the Administrative Policies and Procedures Manual of the Office of the State Controller.
(2)	'Purpose or program' means a group of objects or line items for support of a specific activity outlined in the budget adopted by the General Assembly that is designated by a nine-digit fund code in accordance with the Budget Code Structure and the State Accounting System Uniform Chart of Accounts set out in the Administrative Policies and Procedures Manual of the Office of the State Controller."
Sec.  4.  Section 351 of Chapter 689 of the 1991 Session Laws reads as rewritten:
"Sec. 351.  (a)	The Joint Appropriations Committee House/Senate Base and Expansion Budget Report and the Joint Appropriations Committee House/Senate Base and Expansion Budget Conference Report dated July 11, 1991, which were distributed in the House and Senate and used to explain this act, shall indicate action by the General Assembly on this act and shall therefore be used to construe this act, as provided in G.S. 143-15 of the Executive Budget Act, and for these purposes shall be considered a part of this act.
(b)	The budget enacted by the General Assembly for the maintenance of the various departments, institutions, and other spending agencies of the State for the 1991-93 fiscal biennium is a line item budget, in accordance with the Budget Code Structure and the State Accounting System Uniform Chart of Accounts set out in the Administrative Policies and Procedures Manual of the Office of the State Controller.  This budget includes the appropriations made from all sources including the General Fund, Highway Fund, special funds, cash balances, federal receipts, and departmental receipts.
The General Assembly amended the itemized budget requests submitted to the General Assembly by the Director of the Budget and the Advisory Budget Commission, in accordance with the steps that follow and the line item detail in the budget enacted by the General Assembly may be derived accordingly:
(1)	Negative reserves set out in the submitted budget were deleted and the totals were increased accordingly.
(2)	The base budget was adjusted in accordance with the base budget cuts and additions that were set out in the Joint Appropriations Committee House/Senate Base and Expansion Budget Report and the Joint Appropriations Committee House/Senate Base and Expansion Budget Conference Report dated July 11, 1991.
(3)	The expansion budget items were added in accordance with the Joint Appropriations Committee House/Senate Base and Expansion Budget Report and the Joint Appropriations Committee House/Senate Base and Expansion Budget Conference Report dated July 11, 1991, and the accompanying correction sheets.  Some of those expansion budget items were in the budget submitted to the General Assembly by the Director of the Budget and the Advisory Budget Commission.
		Expansion budget items that were funded from new receipts are included in the budget enacted by the General Assembly with program level detail.
(4)	Transfers of funds supporting programs were made in accordance with the Joint Appropriations Committee House/Senate Base and Expansion Budget Report and the Joint Appropriations Committee House/Senate Base and Expansion Budget Conference Report dated July 11, 1991, and the accompanying correction sheets.
The budget enacted by the General Assembly shall also be interpreted in accordance with the special provisions in this act and in accordance with other appropriate legislation.
In the event that there is a conflict between the line item budget certified by the Director of the Budget and the budget enacted by the General Assembly, the budget enacted by the General Assembly shall prevail."
Sec. 5.  G.S. 58-6-25(d) reads as rewritten:
"(d)	Use of Proceeds. The Department of Insurance Fund is created in the State treasury.  The proceeds of the charge levied in this section and all fees collected under Articles 69 through 71 of this Chapter and under Articles 9 and 9C of Chapter 143 of the General Statutes shall be credited to the Fund.  The Fund shall be placed in an interest-bearing account and any interest or other income derived from the Fund shall be credited to the Fund.  Moneys in the Fund may be spent only pursuant to appropriation by the General Assembly and in accordance with the line item budget enacted by the General Assembly.  The Fund is subject to the provisions of the Executive Budget Act, except that no unexpended surplus of the Fund shall revert to the General Fund.  All money credited to the Fund shall be used only to pay the expenses of the Commissioner and the Department that are incurred in regulating the insurance industry and other industries in this State and the general administrative expenses of the State incident thereto."
Sec. 6.  Of the funds appropriated to the Department of Public Education for the 1991-93 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

1991-92

	Department of	Aid to Local	State Board
FUND	Public Instruction	School Administrative	of Education
	Units

1000	2,276,885	–      	118,900
1100	11,594,516	–      	    –
1200	 2,542,623	–      	    –
1300	 4,370,254	–      	    –
1400	12,551,101	–      	 16,146
1500	 2,927,256	–      	    –
1600	11,386,980	–      	 17,668
1700	    –    	    –
1800	    –    	3,199,427,158	    –
1900	  491,734	–      	    –

TOTAL	48,141,349	3,199,427,158	152,714

1992-93

	Department of	Aid to Local	State Board
FUND	Public Instruction	School Administrative	of Education
	Units

1000	 2,271,969	–      	 93,900
1100	11,578,464	–      	    –
1200	 2,543,364	–      	    –
1300	 4,326,584	–      	    –
1400	12,826,595	–      	 16,146
1500	 2,923,299	–      	    –
1600	11,281,018	–      	 17,668
1700	    –    	–      	    –
1800	    –    	3,267,053,247	    –
1900	   491,734	–      	    –

TOTAL	48,243,027	3,267,053,247	127,714.
Sec.  7.  Effective July 1, 1992, G.S. 143-23, as rewritten by Section 3 of this act, reads as rewritten:
"§ 143-23.  All maintenance funds for itemized purposes; transfers between objects or line items.
(a)	All appropriations now or hereafter made for the maintenance of the various departments, institutions and other spending agencies of the State, are for the (i) purposes or programs and (ii) objects or line items enumerated in the itemized requirements of such departments, institutions and other spending agencies submitted to the General Assembly by the Director of the Budget and the Advisory Budget Commission, as amended by the General Assembly. The function of the Advisory Budget Commission under this subsection applies only if the Director of the Budget consults with the Commission in preparation of the budget.
(a1)	No transfers may be made between objects or 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 an object or line item if the overexpenditure is:
(1)	In a purpose or program for which funds were appropriated for that fiscal period and the total amount spent for the purpose or program is no more than was appropriated for the purpose or program for the fiscal period;
(2)	Required to continue a purpose or program because of unforeseen events, so long as the scope of the purpose or 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 purpose or program is more than the amount appropriated for it from all sources.  If the overexpenditure was authorized under subdivision (2)	of this subsection, the Director of the Budget shall identify in the report the unforeseen event that required the overexpenditure.
Funds appropriated for salaries and wages are also subject to the limitation that they may only be used for (i)	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; or (ii) uses 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 are also subject to the limitation that they may not be used for new permanent employee positions or to raise the salary of existing employees.
	The requirements in this section that the Director of the Budget report to the Joint Legislative Commission on Governmental Operations shall not apply to expenditures of receipts by entities that are wholly receipt supported, except for entities supported by the Wildlife Resources Fund.
(b)	Repealed by Session Laws 1985, c. 290, s. 8, effective July 1, 1985.
(c)	Transfers or changes as between objects or line items in the budget of the Senate may be made by the President Pro Tempore of the Senate;
(d)	Transfers or changes as between objects or line items in the budget of the House of Representatives may be made by the Speaker of the House of Representatives;
(e)	Transfers or changes as between objects or line items in the budget of the General Assembly other than of the Senate and House of Representatives may be made jointly by the President Pro Tempore of the Senate and the Speaker of the House of Representatives.
(f)	As used in this section:
(1)	'Object or line item' means a budgeted expenditure or receipt in the budget enacted by the General Assembly that is designated by (i) a thirteen-digit code in the 1000-object code series or (ii) an eleven-digit code in all other object code series, in accordance with the Budget Code Structure and the State Accounting System Uniform Chart of Accounts set out in the Administrative Policies and Procedures Manual of the Office of the State Controller.
(2)	'Purpose or program' means a group of objects or line items for support of a specific activity outlined in the budget adopted by the General Assembly that is designated by a nine-digit fund code in accordance with the Budget Code Structure and the State Accounting System Uniform Chart of Accounts set out in the Administrative Policies and Procedures Manual of the Office of the State Controller."
Sec. 8.  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 on:
(1)	All employee positions that were abolished that resulted or will result in the generation of salary reserves;
(2)	All promotions, reclassifications, and salary range revisions, of greater than ten percent (10%), that will be funded with salary reserves; and
(3)	All new positions created that will be funded with salary reserves.
This section does not apply to actions taken regarding employees of The University of North Carolina.
Sec. 9.  Sections 1 through 6 of this act are effective upon ratification.  Sections 7 and 8 of this act become effective July 1, 1992.