GENERAL ASSEMBLY OF NORTH CAROLINA
1991 SESSION

CHAPTER 674
HOUSE BILL 547

AN ACT TO PROVIDE FOR PAYMENT OF EXCESS DAMAGES AGAINST A STATE EMPLOYEE FOR COLLECTING OR ADMINISTERING AN UNCONSTITUTIONAL TAX.

The General Assembly of North Carolina enacts:

Section 1.  Article 31A of Chapter 143 of the General Statutes is amended by adding at the end a new section to read:
"§ 143-300.9.  Payment of excess damages relating to unconstitutional taxes.
In an action to which this Article applies, the State shall pay the excess amount of a judgment or settlement under G.S. 143-300.6 for damages against a State employee for collecting or administering a tax that is held unconstitutional.  The excess amount is the amount of the judgment or settlement over (i) the limit provided in G.S. 143-300.6(a) and (ii) any coverage under G.S. 58-32-15.  This section does not waive the sovereign immunity of the State with respect to any claim."
Sec. 2.  G.S. 143-300.6 reads as rewritten:
"§ 143-300.6. Payments of judgments; compromise and settlement of claims.
(a)	Payment of Judgments and Settlements.  In an action to which this Article applies, the State shall pay (i) a final judgment awarded in a court of competent jurisdiction against a State employee or (ii) the amount due under a settlement of the action under this section.  The unit of State government by which the employee was employed shall make the payment.  This section does not waive the sovereign immunity of the State with respect to any claim.  A payment of a judgment or settlement of a claim against a State employee or several State employees as joint tort-feasors may not exceed the amount payable for one claim under the Tort Claims Act.  
(b)	Settlement of Claims.  The Attorney General may compromise and settle any claim covered by this section to the extent he finds the claim valid.  A settlement in excess of the limit provided in subsection (a) must be approved by the employee.  In an action in which the Attorney General has stated in writing that private counsel should be provided the employee because of a conflict of interest between the employee and the State, a settlement in excess of the limit provided in subsection (a) must be approved by the private counsel.  
(c)	Other Insurance.  The coverage afforded employees and former employees under this Article shall be excess coverage over any commercial liability insurance, other than insurance written under G.S. 58-32-15, up to the limit provided in subsection (a). "
Sec. 3.  G.S. 58-32-15(b) reads as rewritten:
"(b)	The Commission, pursuant to this section, may acquire professional liability insurance covering the officers and employees, or any group thereof, of a department, institution or agency of State government or a community college or technical college only if the coverage to be provided by the insurance policy is in excess of the protection provided by Articles 31 and 31A of Chapter 143 of the General Statutes, other than the protection provided by G.S. 143-300.9."
Sec. 4.  This act is effective upon ratification and applies to payments made on or after the date of ratification.
In the General Assembly read three times and ratified this the 13th day of July, 1991.

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James C. Gardner
President of the Senate

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Daniel Blue, Jr.
Speaker of the House of Representatives