GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1995

H	3 

HOUSE BILL 1108
Committee Substitute Favorable 5/23/96
Third Edition Engrossed 5/24/96

Short Title:  Modify Budget.	(Public)

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Sponsors:

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Referred to:  

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May 14, 1996

A BILL TO BE ENTITLED
AN ACT TO MODIFY THE CONTINUATION BUDGET OPERATIONS APPROPRIATIONS ACT OF 1995, AND THE EXPANSION AND CAPITAL IMPROVEMENTS APPROPRIATIONS ACT OF 1995, AND TO MAKE OTHER CHANGES IN THE BUDGET OPERATION OF THE STATE.
The General Assembly of North Carolina enacts:

PART 1.  INTRODUCTION AND TITLE OF ACT

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.

TITLE OF ACT
Sec. 1.1.  This act shall be known as the Current Operations Appropriations Act of 1996.

PART 2.  GENERAL FUND APPROPRIATIONS

CURRENT OPERATIONS/GENERAL FUND
Sec. 2.  Appropriations from the General Fund of the State for the maintenance of the State departments, institutions, and agencies, and for other purposes as enumerated are made for the biennium ending June 30, 1997, according to the schedule that follows.  Amounts set out in brackets are reductions from General Fund appropriations for the 1996-97 fiscal year.

Current Operations - General Fund	1996-97

General Assembly	   	$  (125,000)

Judicial Department	6,327,117

Office of the Governor
01.	Office of the Governor	(31,388)
02.	Office of State Budget
and Management	(37,689)
03.	Office of State Planning	(5,000)
04.	Housing Finance Agency	3,250,000

Department of Secretary of State	437,048

Department of Public Education	72,480,648

Department of Justice	4,247,979

Department of Administration	(607,903)

Department of Agriculture	278,672

Department of Labor	419,183

Department of Insurance	1,638,839

Department of Environment, Health, and
Natural Resources	30,219,088

Office of Administrative Hearings	262,754

Department of Human Resources
01.	Office of the Secretary	(819,378)
02.	Division of Aging	5,049,468
03.	Division of Child Development	(2,795,235)
04.	Division of Services for the
Deaf and Hard of Hearing	(208,522)
05.	Division of Social Services	(9,781,369)
06.	Division of Medical Assistance	(18,005,897)
07.	Division of Services
for the Blind	(38,480)
08.	Division of Mental Health,
Developmental Disabilities, and
Substance Abuse Services	330,448
09.	Division of Facility Services	(473,845)
10.	Division of Vocational
Rehabilitation Services	567,211
11.	Division of Youth Services	(869,857)
Total Department of Human Resources	(27,045,456)

Department of Correction	(2,066,304)

Department of Commerce
01.	Commerce	4,451,090
02.	MCNC	(14,000,000)
03.	Rural Economic Development
Center	1,025,000

Department of Revenue	3,860,876

Department of Cultural Resources	(365,412)

Department of Crime Control
and Public Safety	1,112,432

Office of the State Controller	8,584,082

University of North Carolina - Board
of Governors
01.	University Institutional
Programs	13,570,564
02.	Related Educational Programs	2,200,000
03.	University of North Carolina
at Chapel Hill
a.  Academic Affairs	(422,425)
b.  Health Affairs	(29,424)
04.	North Carolina State University
at Raleigh
a.  Academic Affairs	(246,316)
05.	University of North Carolina at
Greensboro	(114,556)
06.	University of North Carolina at
Charlotte	(5,000)
07.	University of North Carolina at
Asheville	(4,500)
08.	North Carolina Agricultural and
Technical State University	(438,523)
09.	Western Carolina University	(91,286)
10.	Appalachian State University	(203,487)
11.	Pembroke State University	(3,190)
12.	Winston-Salem State University	(500)
13.	Elizabeth City State
University	(125,503)
14.	Fayetteville State University	(9,000)
15.	North Carolina Central
University	(67,779)
16.	North Carolina School of the
Arts	(317,543)
17.	North Carolina School of
Science and Mathematics	(28,036)
18.	UNC Hospitals at Chapel Hill	(20,000,000)
Total University of North
Carolina - Board of Governors	(6,336,504)

Department of Community Colleges	15,326,317

State Board of Elections	(10,000)

Contingency and Emergency	5,076,466

Reserve for Compensation Increase	174,220,623

Reserve for Moving Expenses	2,000,000

Retirement Rate Adjustment	(325,600)

GRAND TOTAL CURRENT OPERATIONS –
GENERAL FUND	$284,261,958

Capital Improvements - General Fund  	1996-1997

Department of Administration
Prison Construction
1.  Modular Housing Units	$  5,000,000
2.  Southern Piedmont Area Unit	9,000,000
3.  Prison Unit Improvements	1,600,000

TOTAL	$ 15,600,000

PART 3.  CURRENT OPERATIONS/HIGHWAY FUND

Sec. 3.  Appropriations from the Highway Fund of the State for the maintenance and operation of the Department of Transportation, and for other purposes as enumerated, are made for the biennium ending June 30, 1997, according to the following schedule:

Current Operations/Highway Fund	1996-97

Department of Transportation
01.	Administration	$    960,000
02.	Construction and Maintenance	2,206,000
03.	Division of Motor Vehicles	1,743,547
04.	Reserve for Salary Increases	11,936,061

Crime Control and Public Safety	1,016,925

GRAND TOTAL CURRENT OPERATIONS/HIGHWAY FUND	$ 17,862,533

CURRENT OPERATIONS/HIGHWAY FUND - NONRECURRING APPROPRIATIONS
Sec. 3.1.  Appropriations are made from the Highway Fund of the 1996-97 fiscal year for use by the Department of Transportation, and for other purposes to provide for one-time expenditures according to the following schedule:

Current Operations/Highway Fund - Nonrecurring	1996-97

Department of Transportation
01.	Administration	$ 2,781,145
02.	Construction and maintenance
(a) State Maintenance
(01)  Contract Resurfacing	10,437,130
03.	Division of Motor Vehicles	646,716
04.	Reserve for Capital Projects	1,958,126

Appropriations for Other State Agencies
1.	Crime Control and Public Safety	4,007,350

GRAND TOTAL CURRENT OPERATIONS/HIGHWAY FUND -
NONRECURRING	$19,830,467

PART 4.  HIGHWAY TRUST FUND

Sec. 4.  In addition to the appropriations made by Section 4 of Chapter 324 of the 1995 Session Laws, appropriations from the Highway Trust Fund are made for the 1996-97 fiscal year as follows:
01.	Intrastate System	$ 8,569,105
02.	Secondary Roads Construction	612,813
03.	Urban Loops	3,464,990
04.	State Aid - Municipalities	899,099
05.	Program Administration	271,993
06.	Transfer to General Fund	            -

GRAND TOTAL/HIGHWAY TRUST FUND	$ 13,818,000
PART 5.  GENERAL FUND AVAILABILITY STATEMENTS

Requested by:  Representatives Holmes, Esposito, Creech
BUDGET REFORM STATEMENTS
Sec. 5.  The General Fund and availability used in developing the 1996-97 budget is as shown below:
(1)	Composition of the 1996-97 beginning availability:
	($ Million)
a.	Revenue collections in 1995-96
	authorized but not appropriated	$183.8
b.	Revenue collections in 1995-96
	in excess of authorized estimates	280.6
c.	Estimated unexpended appropriations
	for 1995-96 (reversions)	150.0
d.	Reserved 1994-95 Disproportionate
	Share Funds	1.6

	Subtotal	$616.0

e.	Transfer to Savings Reserve Account	77.4
f.	Transfer to Reserve for Repair and
	Renovations	130.0

	Ending Fund Balance	$408.6

(2)	Beginning Unrestricted Fund Balance,
	July 1, 1996	$408.6

(3)	Revenue collections authorized for
	1996-97 by the 1995 General Assembly
	in excess of expenditure authorizations	194.3

(4)	Projected revenue collections above 1995
	Session estimates under existing tax 
	structure	93.7

TOTAL AVAILABILITY	$696.6

HIGHWAY FUND AVAILABILITY INCREASE
Sec. 5.1.  Section 5.1 of Chapter 324 of the 1995 Session Laws reads as rewritten:
"Sec. 5.1.  The Highway Fund appropriations availability used in developing the 1995-97 Highway Fund budget is shown below:

1995-96		1996-97
Beginning Credit Balance	$ 19,382,000 $  20,829,000
Estimated Revenue	1,023,228,000 1,063,180,000
Reversions:
Financial System Funds	1,300,000
Ferry Credit Balance	200,000
Capital Improvements	4,112,266

Total Highway Fund
Availability	$1,048,222,226 $1,084,009,000

Requested by:   Representatives Gardner, Hayes
DISPOSITION OF DISPROPORTIONATE SHARE RECEIPTS CLARIFICATION
Sec. 5.2.  Section 6.8 of Chapter 324 of the 1995 Session Laws reads as rewritten:
"Sec. 6.8.  For the 1995-97 fiscal biennium, as it receives funds associated with Disproportionate Share Payments from the State hospitals, the Division of Medical Assistance shall deposit funds appropriated for the Medicaid program in a sum equal to the federal share of the Disproportionate Share Payments as nontax revenue.  Any of these funds that are not appropriated by the General Assembly shall be reserved by the State Controller for future appropriation."

Requested by:  Holmes, Creech, Esposito
EXPENDITURE OF FUNDS FROM RESERVE FOR REPAIRS AND RENOVATIONS
Sec. 5.3.  Of the funds in the Reserve for Repairs and Renovations for the 1996-97 fiscal year, forty-six percent (46%), shall be allocated to the Board of Governors of The University of North Carolina for repairs and renovations pursuant to G.S.143-15.3A, in accordance with guidelines developed in The University of North Carolina Funding Allocation Model for Reserve for Repairs and Renovations, as approved by the Board of Governors of The University of North Carolina; and fifty-four percent (54%) shall be allocated to the Office of State Budget and Management for repairs and renovations pursuant to G.S. 143-15.3A.
Notwithstanding G.S. 143-15.3A, the Board of Governors may allocate funds for the repair and renovation of facilities not supported from the General Fund if the Board determines that sufficient funds are not available from other sources and that conditions warrant General Fund assistance.  Any such finding shall be included in the Board's submission to the Joint Legislative Commission on Governmental Operations on the proposed allocation of funds.
	The Board of Governors and the Office of State Budget and Management shall submit to the Joint Legislative Commission on Governmental Operations and to the Fiscal Research Division of the Legislative Services Office, for their review, the proposed allocation of these funds.  Subsequent changes in the proposed allocations shall be reported prior to expenditure to the Joint Legislative Commission on Governmental Operations and to the Fiscal Research Division of the Legislative Services Office.

PART 6.  BLOCK GRANT APPROPRIATIONS

Requested by:  Representatives Mitchell, Weatherly
NER BLOCK GRANT FUNDS
Sec. 6.  (a) Appropriations from federal block grant funds are made for the fiscal year ending June 30, 1997, according to the following schedule:

COMMUNITY DEVELOPMENT BLOCK GRANT

01.	State Administration	$  1,000,000

02.	Urgent Needs and Contingency	   2,177,500

03.	Community Empowerment	   2,613,000

04.	Economic Development	   8,710,000

05.	Community Revitalization	  29,178,500

06.	State Technical Assistance	     450,000

07.	Housing Development	871,000

TOTAL COMMUNITY DEVELOPMENT
BLOCK GRANT - 1997 Program Year	$ 45,000,000

TOTAL JOB TRAINING PARTNERSHIP ACT	$ 35,796,741

MATERNAL AND CHILD HEALTH BLOCK GRANT

01.	Healthy Mother/Healthy Children
	Block Grants to Local Health
	Departments	$ 11,303,377

02.	High Risk Maternity Clinic Services,
	Perinatal Education and Training, SIDS,
	and Consultation/Technical Assistance	1,810,112

03.	Services to Children With Special Health
	Care Needs	5,065,331

04.	Nutrition Services	120,530

TOTAL MATERNAL AND CHILD
HEALTH BLOCK GRANT	$ 18,299,350

PREVENTIVE HEALTH SERVICES BLOCK GRANT

01.	Emergency Medical Services	$     452,375

02.	Basic Public Health Services	      180,753

03.	Hypertension Programs	      711,813

04.	Statewide Health Promotion Programs	    2,568,940

05.	Dental Health for Fluoridation
	of Water Supplies	      210,269

06.	Rape Prevention and Rape
	Crisis Programs	      187,110

07.	Rape Prevention and Rape Education	1,335,126

08.	AIDS/HIV Education, Counseling,
	and Testing	       81,001

09.	Office of Minority Health and
	Minority Health Council	      174,915

10.	Administrative and Indirect Cost	199,048

TOTAL PREVENTIVE HEALTH SERVICES BLOCK GRANT	$   6,101,350

(b)	Decreases in Federal Fund Availability
For JTPA and Community Development Block Grants: If federal funds are reduced below the amounts specified above after the effective date of this act, then every program in each of these federal block grants shall be reduced by the same percentage as the reduction in federal funds.
For the Maternal and Child Health Services and Preventive Health Services federal block grants: If federal funds are reduced less than ten percent (10%) below the amounts specified above after the effective date of this act, then every program in the Maternal and Child Health Services and in the Preventive Health Services block grants shall be reduced by the same percentage as the reduction in federal funds. If federal funds are reduced by ten percent (10%) or more below the amounts specified above after the effective date of this act, then for the Maternal and Child Health Services and the Preventive Health Services block grants the Department of Environment, Health, and Natural Resources shall allocate the decrease in funds after considering the effectiveness of the current level of services.
(c)	Increases in Federal Fund Availability
Any block grant funds appropriated by the Congress of the United States in addition to the funds specified in this act shall be expended as follows:
(1)	For the Community Development Block Grant – Each program category under the Community Development Block Grant shall be increased by the same percentage as the increase in federal funds.
(2)	For the Maternal and Child Health Services Block Grant – Thirty percent (30%) of these additional funds shall be allocated to services for children with special health care needs and seventy percent (70%) shall be allocated to local health departments to assist in the reduction of infant mortality.
(3)	For the Preventive Health Block Grants – If federal funds are increased by ten percent (10%) or more, then the Department shall allocate the increase in funds after considering the effectiveness of the current level of services and the effectiveness of services to be funded by the increase.  If federal funds are increased by less than ten percent (10%), then these additional funds may be budgeted by the appropriate department, with the approval of the Office of State Budget and Management, provided the resultant increases are in accordance with federal block grant requirements and are within the scope of the block grant plan approved by the General Assembly.
(d)	Changes to budgeted allocations to the Maternal and Child Health Services and the Preventive Health Services block grants due to increases or decreases in federal funds shall be reported to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division within 30 days of the allocation.  All other increases shall be reported to the Joint Legislative Commission on Governmental Operations and to the Director of the Fiscal Research Division.
(e)  Education Setaside of JTPA Funds
The Department of Commerce 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.
(f)  Limitations on Community Development Block Grant Funds
Of the funds appropriated in this section for the Community Development Block Grant, the following shall be allocated in each category for each program year: up to one million dollars ($1,000,000) may be used for State administration; up to two million one hundred seventy-seven thousand five hundred dollars ($2,177,500) may be used for Urgent Needs and Contingency; up to two million six hundred thirteen thousand dollars ($2,613,000) may be used for Community Empowerment; up to eight million seven hundred ten thousand dollars ($8,710,000) may be used for Economic Development; not less than twenty-nine million one hundred seventy-eight thousand five hundred dollars ($29,178,500) shall be used for Community Revitalization; up to four hundred fifty thousand dollars ($450,000) may be used for State Technical Assistance; up to eight hundred seventy-one thousand dollars ($871,000) may be used for Housing Development.  If federal block grant funds are reduced or increased by the Congress of the United States after the effective date of this act, then these reductions or increases shall be allocated in accordance with subsection (b) or (c) of this section, as applicable.

PART 7.  GENERAL PROVISIONS

CHANGES TO EXECUTIVE BUDGET ACT
Sec. 7.  (a) G.S. 143-15.2 reads as rewritten:
"§ 143-15.2.  Use of General Fund credit balance.
" 	(a) The State Controller shall reserve fifty percent (50%) of any unreserved credit balance, as determined on a cash basis remaining in the General Fund at the end of each fiscal year.
	(b)	Of the fifty percent (50%) reserved in accordance with subsection (a) of this section, one-half or the amount required to reach five percent (5%) of the preceding year's General Fund operating budget, including local government tax-sharing funds if those funds have been directly appropriated, shall be transferred to the Savings Reserve Account as provided in G.S. 143-15.3.  If the transfer of one-half would result in the Savings Reserve Account having funds in excess of five percent (5%) of the amount appropriated the preceding year, the excess shall be available to fund a portion of the Repairs and Renovations Reserve as provided in G.S. 143-15.3A, if the fifty percent (50%) reserved for that purpose is insufficient to fund the three percent (3%) of the replacement value of all State buildings supported from the General Fund.  If no portion of these funds are required to provide the three percent (3%) replacement value of State-owned buildings supported by the General Fund, the excess shall be available for capital improvements or other one-time expenditures.
(c)	Of the fifty percent (50%) reserved in accordance with subsection (a) of this section, one-half or the amount required to reach three percent (3%) of the replacement value of all State buildings supported from the General Fund shall be transferred to the Repairs and Renovations Reserve as provided in G.S. 143-15.3A.  If the transfer of one-half would result in the Repairs and Renovations Reserve having funds in excess of the three percent (3%) replacement value, the excess shall be available for capital improvements and other one-time expenditures.
(d)	Any funds not reserved by the State Controller in subsection (a) of this section may be appropriated by the General Assembly only for capital improvements or other one-time expenditures."
(b) G.S. 143-15.3 reads as rewritten:
"§ 143-15.3.  Savings Reserve Account.
	" (a)	There is established a Savings Reserve Account as a restricted General Fund reserve.  The Savings Reserve Account shall be funded in accordance with G.S. 143-15.2(a) and (b), and the General Assembly may direct that other unappropriated funds be transferred to this account.
(b)	The Director may not use funds in the Savings Reserve Account unless the use has been approved by an act of the General Assembly. As part of the budget presented to the General Assembly, the Governor shall include a statement showing the transfers into the Savings Reserve Account, the transfers out of the Savings Reserve Account, and the fund balance as of the end of the fiscal year."
(c) G.S. 143-15A reads as rewritten:
"§ 143-15.3A.  Repairs and Renovations Reserve Account.
	" (a)	There is established a Repairs and Renovations Reserve Account as a restricted General Fund reserve.  The Repairs and Renovations Reserve Account shall be funded in accordance with G.S. 143-15.1, and the General Assembly may direct that other funds be transferred to this account.
	(b)	The funds in the Repairs and Renovations Reserve Account shall be used only for the repair and renovation of State facilities and related infrastructure that are supported from the General Fund. Funds from the Repairs and Renovations Reserve Account shall be used only for the following types of projects:
(1)	Roof repairs and replacements;
(2)	Structural repairs;
(3)	Repairs and renovations to meet federal and State standards;
(4)	Repairs to electrical, plumbing, and heating, ventilating, and air-conditioning systems;
(5)	Improvements to meet the requirements of the Americans with Disabilities Act, 42 U.S.C. § 12101 et seq., as amended;
(6)	Improvements to meet fire safety needs;
(7)	Improvements to existing facilities for energy efficiency;
(8)	Improvements to remove asbestos, lead paint, and other contaminants, including the removal and replacement of underground storage tanks;
(9)	Improvements and renovations to improve use of existing space;
(10)	Historical restoration;
(11)	Improvements to roads, walks, drives, utilities infrastructure; and
(12)	Drainage and landscape improvements.
Funds from the Repairs and Renovations Reserve Account shall not be used for new construction or the expansion of the footprint of an existing facility unless required in order to comply with federal or State codes or standards.
(c)	The Director of the Budget shall not use funds in the Repairs and Renovations Reserve Account unless the use has been approved by an act of the General Assembly.  As part of the budget presented to the General Assembly, the Governor shall include a statement showing the status of the Repair and Renovations Reserve Account activity."
(d)	This section is effective beginning with the 1995-96 fiscal year so as to apply to the unreserved credit balance at the end of that fiscal year.

PART 8.  GENERAL ASSEMBLY

Requested by:   Representatives Holmes, Creech, Esposito
LEGISLATIVE SERVICES OFFICER POSITION
Sec. 8.  (a)	G.S. 20-79.5(a) reads as rewritten:
"(a)	Plates. – The State government officials listed in this section are eligible for a special registration plate under G.S. 20-79.4. The plate shall bear the number designated in the following table for the position held by the official.

Position	Number on Plate
Governor	1
Lieutenant Governor	2
Speaker of the House of Representatives	3
President Pro Tempore of the Senate	4
Secretary of State	5
State Auditor	6
State Treasurer	7
Superintendent of Public Instruction	8
Attorney General	9
Commissioner of Agriculture	10
Commissioner of Labor	11
Commissioner of Insurance	12
Speaker Pro Tempore of the House	13
	14
Legislative Services Officer
Secretary of Administration	15
Secretary of Environment, Health, and
Natural Resources	16
Secretary of Revenue	17
Secretary of Human Resources	18
Secretary of Commerce	19
Secretary of Correction	20
Secretary of Cultural Resources	21
Secretary of Crime Control and Public
Safety	22
Governor's Staff	23-29
State Budget Officer	30
State Personnel Director	31
Advisory Budget Commission Nonlegislative
Member	32-41
Chair of the State Board of Education	42
President of the U.N.C. System	43
Alcoholic Beverage Control Commission	44-46
Assistant Commissioners of Agriculture	47-48
Deputy Secretary of State	49
Deputy State Treasurer	50
Assistant State Treasurer	51
Deputy Commissioner for the Department of
Labor	52
Chief Deputy for the Department of
Insurance	53
Assistant Commissioner of Insurance	54
Deputies and Assistant to the Attorney
General	55-65
Board of Economic Development
Nonlegislative Member	66-88
State Ports Authority Nonlegislative
Member	89-96
Utilities Commission Member	97-104
Post-Release Supervision and
Parole Commission Member	105-109
State Board Member, Commission Member,
or State Employee Not Named in List	110-200".
(b)	G.S. 120-3.1(a)(3) reads as rewritten:
"(3)	A subsistence allowance for meals and lodging at a daily rate equal to the maximum per diem rate for federal employees traveling to Raleigh, North Carolina, as set out at 58 Federal Register 67959 (December 22, 1993), while the General Assembly is in session and, except as otherwise provided in this subdivision, while the General Assembly is not in session when, with the approval of the Speaker of the House of Representatives in the case of Representatives or the President Pro Tempore of the Senate in case of Senators, the member is:
a.	Traveling as a representative of the General Assembly or of its committees or commissions, or
b.	Otherwise in the service of the State.
		A member who is authorized to travel, whether in or out of session, within the United States outside North Carolina, may elect to receive, in lieu of the amount provided in the preceding paragraph, a subsistence allowance of twenty-six dollars ($26.00) a day for meals, plus actual expenses for lodging when evidenced by a receipt satisfactory to the Legislative Services Officer, the latter not to exceed the maximum per diem rate for federal employees traveling to the same place, as set out at 58 Federal Register 67950-67964 (December 22, 1993) and at 59 Federal Register 23702-23709 (May 6, 1994)."
(c)	G.S. 120-32.1 reads as rewritten:
"§ 120-32.1.  Use and maintenance of buildings and grounds.
(a)	The Legislative Services Commission shall:
(1)	Establish policy for the use of the State legislative buildings and grounds;
(2)	Maintain and care for the State legislative buildings and grounds, but the Commission may delegate the actual work of the maintenance of those buildings and grounds to the Department of Administration, which shall perform the work as delegated;
(3)	Provide security for the State legislative buildings and grounds;
(4)	Allocate space within the State legislative buildings and grounds; and
(5)	Have the exclusive authority to assign parking space in the State legislative buildings and grounds.
(b)	The Legislative Services Officer shall have posted the rules adopted by the Legislative Services Commission under the authority of this section in a conspicuous place in the State Legislative Building and the Legislative Office Building.  The Legislative Services Officer shall have filed a copy of the rules, certified by the chairman of the Legislative Services Commission, in the office of the Secretary of State and in the office of the Clerk of the Superior Court of Wake County.  When so posted and filed, these rules shall constitute notice to all persons of the existence and text of the rules.  Any person, whether on his own behalf or for another, or acting as an agent or representative of any person, firm, corporation, partnership or association, who knowingly violates any of the rules adopted, posted and filed under the authority of this section is guilty of a Class 1 misdemeanor.  Any person, firm, corporation, partnership or association who combines, confederates, conspires, aids, abets, solicits, urges, instigates, counsels, advises, encourages or procures another or others to knowingly violate any of the rules adopted, posted and filed under the authority of this section is guilty of a Class 1 misdemeanor.
(c)	The Legislative Services Commission may cause to be removed at the owner's expense any vehicle parked in the State legislative buildings and grounds in violation of the rules of the Legislative Services Commission and may cause to be removed any vehicle parked in any State-owned parking space leased to an employee of the General Assembly where the vehicle is parked without the consent of the employee to whom the space is leased.
(d)	For the purposes of this section, the term 'State legislative buildings and grounds' means:
(1)	At all times:
a.	The State Legislative Building and the area between outer walls of the State Legislative Building and the near curbline of those sections of Jones, Wilmington, Lane, and Salisbury Streets which border land on which the State Legislative Building is situated;
b.	The Legislative Office Building and the areas between its outer walls and the near curbline of those sections of Lane and Salisbury Streets that border the land on which it is situated;
c.	Any State-owned parking lot which is leased to the General Assembly; and
d.	The bridge between the State Legislative Building and the State Governmental Mall.
(2)	In addition, the surface area to the far curbline of those sections of Jones, Wilmington, Lane, and Salisbury Streets which border the land on which the State Legislative Building is situated:
a.	When the General Assembly is in regular or extra session; and
b.	On other days on which one or more standing committees of either or both houses of the General Assembly are meeting and the Legislative Services Officer determines that additional parking is needed for the functioning of the General Assembly and files notice of the committee's or committees' meetings and his finding that additional parking is needed in the office of the Secretary of State and that of Clerk of the Superior Court of Wake County."
(d)	G.S. 120-36.6 reads as rewritten:
"§ 120-36.6.  Legislative Fiscal Research staff participation.
Legislative fiscal research staff members may attend all meetings of the Advisory Budget Commission and all hearings conducted by or for the Commission, and may accompany the Commission to inspect the facilities of the State.  The Legislative Services Officer shall designate a member of the Fiscal Research staff, and a member of the General Research or Bill Drafting staff who may attend all meetings of the Board of Awards and Council of State, unless the Board or Council has voted to exclude them from the specific meeting, provided that no final action may be taken while they are so excluded.  The Legislative Services Officer and the Director of Fiscal Research shall be notified of all such meetings, hearings and trips in the same manner and at the same time as notice is given to members of the Board, Commission or Council.  The Legislative Services Officer and the Director of Fiscal Research shall be provided with a copy of all reports, memoranda, and other informational material which are distributed to the members of the Board, Commission, or Council; these reports, memoranda and materials shall be delivered to the Legislative Services Officer and the Director of Fiscal Research at the same time that they are distributed to the members of the Board, Commission, or Council."
(e)  G.S. 120-70.36 reads as rewritten:
"§ 120-70.36.  Staffing.
The Legislative Services Officer shall assign as staff to the Joint Select Committee professional employees of the General Assembly, as approved by the Legislative Services Commission.  Clerical staff shall be assigned to the Joint Select Committee through the offices of the Supervisor of Clerks of the Senate and Supervisor of Clerks of the House of Representatives.  The expenses of employment of clerical staff shall be borne by the Joint Select Committee."
(f)  G.S. 120-70.46 reads as rewritten:
"§ 120-70.46.  Staffing.
The Legislative Services Officer shall assign as staff to the Environmental Review Commission professional employees of the General Assembly, as approved by the Legislative Services Commission.  Clerical staff shall be assigned to the Environmental Review Commission through the offices of the Supervisor of Clerks of the Senate and Supervisor of Clerks of the House of Representatives.  The expenses of employment of clerical staff shall be borne by the Environmental Review Commission."
(g)  G.S. 120-70.52(c) reads as rewritten:
"(c)	The Committee shall be funded by appropriations made to the Highway Trust Fund and allocated to the Intrastate System projects.  Members of the Committee receive subsistence and travel expenses as provided in G.S. 120-3.1.  The Committee may contract for consultants or hire employees in accordance with G.S. 120-32.02.  The Legislative Services Commission, through the Legislative Services Officer, shall assign professional staff to assist the Committee in its work.  Upon the direction of the Legislative Services Commission, the Supervisors of Clerks of the Senate and of the House of Representatives shall assign clerical staff to the Committee.  The expenses for clerical employees shall be borne by the Committee."
(h)  G.S. 120-70.65 reads as rewritten:
"§ 120-70.65.  Staffing.
The Legislative Services Officer shall assign as staff to the Commission professional employees of the General Assembly, as approved by the Legislative Services Commission.  Clerical staff shall be assigned to the Commission through the Offices of the Supervisor of Clerks of the Senate and Supervisor of Clerks of the House of Representatives.  The expenses of employment of clerical staff shall be borne by the Commission."
(i)  G.S. 120-70.82(c) reads as rewritten:
"(c)	Members of the Committee receive subsistence and travel expenses as provided in G.S. 120-3.1.  The Committee may contract for consultants or hire employees in accordance with G.S. 120-32.02.  The Legislative Services Commission, through the Legislative Services Officer, shall assign professional staff to assist the Committee in its work.  Upon the direction of the Legislative Services Commission, the Supervisors of Clerks of the Senate and of the House of Representatives shall assign clerical staff to the Committee.  The expenses for clerical employees shall be borne by the Committee."
(j)  G.S. 120-70.92(c) reads as rewritten:
"(c)	Members of the Committee receive subsistence and travel expenses as provided in G.S. 120-3.1. The Legislative Services Commission, through the Legislative Services Officer, shall assign professional staff to assist the Committee in its work.  Upon the direction of the Legislative Services Commission, the Supervisors of Clerks of the Senate and of the House of Representatives shall assign clerical staff to the Committee.  The expenses for clerical employees shall be borne by the Committee."
(k)  G.S. 120-70.95(c) reads as rewritten:
"(c)	Members of the Committee receive subsistence and travel expenses as provided in G.S. 120-3.1.  The Committee may contract for consultants or hire employees in accordance with G.S. 120-32.02.  The Legislative Services Commission, through the Legislative Services Officer, shall assign professional staff to assist the Committee in its work.  Upon the direction of the Legislative Services Commission, the Supervisors of Clerks of the Senate and of the House of Representatives shall assign clerical staff to the Committee.  The expenses for clerical employees shall be borne by the Committee."
(l)  G.S. 120-70.102(c) reads as rewritten:
"(c)	Members of the Committee receive subsistence and travel expenses as provided in G.S. 120-3.1.  The Committee may contract for consultants or hire employees in accordance with G.S. 120-32.02.  The Committee may meet in the Legislative Building or the Legislative Office Building upon the approval of the Legislative Services Commission.  The Legislative Services Commission, through the Legislative Services Officer, shall assign professional staff to assist the Committee in its work.  Upon the direction of the Legislative Services Commission, the Supervisors of Clerks of the Senate and of the House of Representatives shall assign clerical staff to the Committee.  The expenses for clerical employees shall be paid by the Committee."
(m)  G.S. 143-8 reads as rewritten:
"§ 143-8.  Reporting of legislative and judicial expenditures and financial needs.
On or before the first day of September, biennially, in the even-numbered years, the Legislative Services Officer shall furnish the Director a detailed statement of expenditures of the General Assembly for the current fiscal biennium, and an estimate of its financial needs, itemized in accordance with the budget classification adopted by the Director and approved and certified by the President Pro Tempore of the Senate and the Speaker of the House of Representatives for each year of the ensuing biennium, beginning with the first day of July thereafter.  The Administrative Officer of the Courts shall furnish the Director a detailed statement of expenditures of the judiciary, and for each year of the current fiscal biennium an estimate of its financial needs as provided by law, itemized in accordance with the budget classification adopted by the Director and approved and certified by the Chief Justice for each year of the ensuing biennium, beginning with the first day of July thereafter.  The Director shall include these estimates and accompanying explanations in the budget submitted with such recommendations as the Director may desire to make in reference thereto."
(n)  G.S. 147-64.12(b) reads as rewritten:
"(b)	The Auditor shall not conduct an audit on a program or activity for which he had management responsibility or in which he has been employed during the preceding two years.  The General Assembly shall otherwise provide for the necessary audit of programs and activities within the meaning of this subsection.
If the Auditor's hotline receives a report of allegations of improper governmental activities in a program or activity that the Auditor is prohibited by this subsection from auditing, the Hotline Manager shall transmit the report to the Legislative Services Officer or his designee.  The report shall retain the same confidentiality after transmittal to the General Assembly that it had in the possession of the Auditor."
(o)  All powers, duties, and responsibilities assigned to the Legislative Administrative Officer of the Legislative Services Commission, including the assignment of professional and clerical staff to assist in the work of studies and commissions, shall be transferred to the Legislative Services Officer of the Legislative Services Commission.  All rules and policies of the Legislative Services Commission relating to the Legislative Administrative Officer shall apply to the Legislative Services Officer unless otherwise expressly amended or repealed.

PART 9.  OFFICE OF STATE BUDGET AND MANAGEMENT

Requested by:   Representatives Holmes, Creech, Esposito
RESERVE FOR MOVING EXPENSE/STATE AGENCIES
Sec. 9.  Funds appropriated in this act to the Reserve for State Agency Moving Expense shall be used to pay for expenses involved in the relocation of State agencies.  The Office of State Budget and Management shall solicit requests for allocations from this reserve from all agencies moving into the Old Education Building, the New Education Building, the Old Revenue Building, and any other new building for which construction will be completed during the 1996-97 fiscal year.  The Office of State Budget and Management shall first allocate funds needed to pay moving expenses and other costs associated with moving, including telephone lines, data communication lines, and related equipment.  No funds may be expended to furnish new conference rooms, reception areas, open space, and to add centralized filing systems until all agencies scheduled to be moved have been relocated.

PART 10.  DEPARTMENT OF ADMINISTRATION

Requested by:   Representatives Ives, Lemmond
DOA TO EVALUATE UTILIZATION OF "STATE-OWNED SPACE"
Sec. 10.  The Department of Administration shall study and evaluate the utilization of space in the facilities owned by the State.  In its study the Department shall consider the following:  whether prime State office space is being used for storage purposes rather than offices; which uses of State space do not need to be located in the Capitol complex and could be located at other less expensive sites; and the merit, if any, of consolidating agency offices currently sited in various locations into either a single location or locations that are closer to each other in proximity.   The Department shall also develop a priority list that indicates which uses it is most important to locate in State-owned space.  Cost-effectiveness shall be a major criteria in establishing the priorities.
The Department of Administration shall develop a long-term plan to reduce the State's dependency on leased office space and shall report to the General Assembly no later than January 1, 1997, regarding the Department's findings, recommendations, and the proposed long-term plan.  The report shall also include the priority list developed by the Department in accordance with this section.

Requested by:   Representatives Ives, Lemmond
DIRECTOR OF THE BUDGET AND STATE CONSTRUCTION MAY TIME SELECTION OF DESIGNERS AND RELEASE OF DESIGN AND CONSTRUCTION FUNDS TO AVOID INFLATION DUE TO MARKET PRICES BEING INCREASED BY THE NUMBER OF CONTRACTS
Sec. 10.1.  G.S. 143-135.26(1) reads as rewritten:
"(1)	To adopt rules establishing standard procedures and criteria to assure that the designer selected for each State capital improvement project and the consultant selected for planning and studies of an architectural and engineering nature associated with a capital improvement project or a future capital improvement project has the qualifications and experience necessary for that capital improvement project or the proposed planning or study project. The rules shall provide that the State Building Commission, after consulting with the funded agency, is responsible and accountable for the final selection of the designer and the final selection of the consultant except when the General Assembly or The University of North Carolina is the funded agency.  When the General Assembly is the funded agency, the Legislative Services Commission is responsible and accountable for the final selection of the designer and the final selection of the consultant, and when the University is the funded agency, it shall be subject to the rules adopted hereunder, except it is responsible and accountable for the final selection of the designer and the final selection of the consultant.  All designers and consultants shall be selected within 60 days of the date funds are appropriated for a project by the General Assembly or the date of project authorization by the Director of the Budget; provided, however, the State Building Commission may grant an exception to this requirement upon written request of the funded agency if (i) no site was selected for the project before the funds were appropriated or (ii) funds were appropriated for advance planning only; provided, further, the Director of the Budget, after consultation with the State Construction Office, may waive the 60-day requirement for the purpose of minimizing project costs through increased competition and improvements in the market availability of qualified contractors to bid on State capital improvement projects.  The Director of the Budget also may, after consultation with the State Construction Office, schedule the availability of design and construction funds for capital improvement projects for the purpose of minimizing project costs through increased competition and improvements in the market availability of qualified contractors to bid on State capital improvement projects.
		The State Building Commission shall submit a written report to the Joint Legislative Commission on Governmental Operations on the Commission's selection of a designer for a project within 30 days of selecting the designer."

Requested by:   Representatives Ives, Lemmond
REPEAL SUNSET ON THE USE OF FICA SAVINGS TO PAY FOR ADMINISTRATIVE EXPENSES OF THE FLEXIBLE COMPENSATION AND DEPENDENT CARE PROGRAMS SO THAT FICA SAVINGS CAN CONTINUE TO BE USED FOR ADMINISTRATIVE EXPENSES
Sec. 10.2.  Section 14(i) of Chapter 1044 of the 1991 Session Laws, as amended by Section 42 of Chapter 561 of the 1993 Session Laws and Section 7.28A of Chapter 769 of the 1993 Session Laws, reads as rewritten:
"(i)	Subsections (a) through (d) of this section are effective January 1, 1990. Subsections (e) through (h) of this section are effective January 1, 1991.  "

Requested by:   Representatives Ives, Lemmond
MOTOR FLEET MANAGEMENT MODIFICATIONS
Sec. 10.3.  Subsubdivision (8)7a. of G.S. 143-341 reads as rewritten:
"7a.	To adopt with the approval of the Governor and to enforce rules and to coordinate State policy regarding (i) the permanent assignment of state-owned passenger motor vehicles and (ii) the use of and reimbursement for those vehicles for the limited commuting permitted by this subdivision. For the purpose of this subdivision 7a, 'state-owned passenger motor vehicle' includes any state-owned passenger motor vehicle, whether or not owned, maintained or controlled by the Department of Administration, and regardless of the source of the funds used to purchase it. Notwithstanding the provisions of G.S. 20-190 or any other provisions of law, all state-owned passenger motor vehicles are subject to the provisions of this subdivision 7a; no permanent assignment shall be made and no one shall be exempt from payment of reimbursement for commuting or from the other provisions of this subdivision 7a except as provided by this subdivision 7a. Commuting, as defined and regulated by this subdivision, is limited to those specific cases in which the Secretary has received and accepted written justification, verified by historical data. The Department shall not assign any state-owned motor vehicle that may be used for commuting other than those authorized by the procedure prescribed in this subdivision.
		A State-owned passenger motor vehicle shall not be permanently assigned to an individual who is likely to drive it on official business at a rate of less than 3,150 miles per quarter unless (i) the individual's duties are routinely related to public safety or (ii) the individual's duties are likely to expose the individual routinely to life-threatening situations. A State-owned passenger motor vehicle shall also not be permanently assigned to an agency that is likely to drive it on official business at a rate of less than 3,150 miles per quarter unless the agency can justify to the Division of Motor Fleet Management the need for permanent assignment because of the unique use of the vehicle. Each agency, other than the Department of Transportation, that has a vehicle assigned to it or has an employee to whom a vehicle is assigned shall submit a quarterly report to the Division of Motor Fleet Management on the miles driven during the quarter by the assigned vehicle. The Division of Motor Fleet Management shall review the report to verify that each motor vehicle has been driven at the minimum allowable rate. If it has not and if the department by whom the individual to which the car is assigned is employed or the agency to which the car is assigned cannot justify the lower mileage for the quarter, the permanent assignment shall be revoked immediately. The Department of Transportation shall submit an annual report to the Division of Motor Fleet Management on the miles driven during the year by vehicles assigned to the Department or to employees of the Department.  If a vehicle included in this report has not been driven at least 12,600 miles during the year, the Department of Transportation shall review the reasons for the lower mileage and decide whether to terminate the assignment. The Division of Motor Fleet Management may not revoke the assignment of a vehicle to the Department of Transportation or an employee of that Department for failure to meet the minimum mileage requirement unless the Department of Transportation consents to the revocation. 
		Every individual who uses a State-owned passenger motor vehicle, pickup truck, or van to drive between the individual's official work station and his or her home, shall reimburse the State for these trips at a rate computed by the Department. This rate shall approximate the benefit derived from the use of the vehicle as prescribed by federal law. Reimbursement shall be for 20 days per month regardless of how many days the individual uses the vehicle to commute during the month. Reimbursement shall be made by payroll deduction. Funds derived from reimbursement on vehicles owned by the Motor Fleet Management Division shall be deposited to the credit of the Division; funds derived from reimbursements on vehicles initially purchased with appropriations from the Highway Fund and not owned by the Division shall be deposited in a Special Depository Account in the Department of Transportation, which shall revert to the Highway Fund; funds derived from reimbursement on all other vehicles shall be deposited in a Special Depository Account in the Department of Administration which shall revert to the General Fund. Commuting, for purposes of this paragraph, does not include those individuals whose office is in their home, as determined by the Department of Administration, Division of Motor Fleet Management. Also, this paragraph does not apply to the following vehicles: (i) clearly marked police and fire vehicles, (ii) delivery trucks with seating only for the driver, (iii) flatbed trucks, (iv) cargo carriers with over a 14,000 pound capacity, (v) school and passenger buses with over 20 person capacities, (vi) ambulances, (viii) bucket trucks, (ix) cranes and derricks, (x) forklifts, (xi) cement mixers, (xii) dump trucks, (xiii) garbage trucks, (xiv) specialized utility repair trucks (except vans and pickup trucks), (xv) tractors, (xvi) unmarked law-enforcement vehicles that are used in undercover work and are operated by full-time, fully sworn law-enforcement officers whose primary duties include carrying a firearm, executing search warrants, and making arrests, and (xvii) any other vehicle exempted under Section 274(d) of the Internal Revenue Code of 1954, and Federal Internal Revenue Services regulations based thereon. The Department of Administration, Division of Motor Fleet Management, shall report quarterly to the Joint Legislative Commission on Governmental Operations and to the Fiscal Research Division of the Legislative Services Office on individuals who use State-owned passenger motor vehicles, pickup trucks, or vans between their official work stations and their homes, who are not required to reimburse the State for these trips.
		The Department of Administration shall revoke the assignment or require the Department owning the vehicle to revoke the assignment of a State-owned passenger motor vehicle, pickup truck or van to any individual who:
I.	Uses the vehicle for other than official business except in accordance with the commuting rules;
II.	Fails to supply required reports to the Department of Administration, or supplies incomplete reports, or supplies reports in a form unacceptable to the Department of Administration and does not cure the deficiency within 30 days of receiving a request to do so;
III.	Knowingly and willfully supplies false information to the Department of Administration on applications for permanent assignments, commuting reimbursement forms, or other required reports or forms;
IV.	Does not personally sign all reports on forms submitted for vehicles permanently assigned to him or her and does not cure the deficiency within 30 days of receiving a request to do so;
V.	Abuses the vehicle; or
VI.	Violates other rules or policy promulgated by the Department of Administration not in conflict with this act.
		A new requisition shall not be honored until the Secretary of the Department of Administration is assured that the violation for which a vehicle was previously revoked will not recur.
		The Department of Administration, with the approval of the Governor, may delegate, or conditionally delegate, to the respective heads of agencies which own passenger motor vehicles or to which passenger motor vehicles are permanently assigned by the Department, the duty of enforcing all or part of the rules adopted by the Department of Administration pursuant to this subdivision 7a. The Department of Administration, with the approval of the Governor, may revoke this delegation of authority.
		Prior to adopting rules under this paragraph, the Secretary of Administration may consult with the Advisory Budget Commission.
		Notwithstanding the provisions of this section and G.S. 14-247, the Department of Administration may allow the organization sanctioned by the Governor's Council on Physical Fitness to conduct the North Carolina State Games to use State trucks and vans for the State Games of North Carolina. The Department of Administration shall not charge any fees for the use of the vehicles for the State Games. The State shall incur no liability for any damages resulting from the use of vehicles under this provision. The organization that conducts the State Games shall carry liability insurance of not less than one million dollars ($1,000,000) covering such vehicles while in its use and shall be responsible for the full cost of repairs to these vehicles if they are damaged while used for the State Games."

PART 11.  DEPARTMENT OF CULTURAL RESOURCES

Requested by:   Representatives Lemmond, Ives
RESERVE FUNDS MAY BE USED FOR MUSEUM OF THE ALBEMARLE OR OTHER ALBEMARLE AREA HISTORIC SITES
Sec. 11.  Of the funds appropriated in Section 2 of Chapter 324 of the 1995 Session Laws to the Department of Cultural Resources, the sum of forty-seven thousand eight hundred eighty-seven dollars ($47,887) which is in reserve in the budget of the Department of Cultural Resources for the 1996-97 fiscal year may be used either for the Museum of the Albemarle or for other Albemarle area historic sites.

Requested by:   Representative Culpepper
ROANOKE ISLAND HISTORICAL ASSOCIATION
Sec. 11.1  G.S. 143-200 reads as rewritten:
"§ 143-200.  Members of board of directors; terms; appointment.
The governing body of said Association shall be a board of directors consisting of the Governor of the State, the Attorney General and the Secretary of Cultural Resources as ex officio members, and the following 21 members: J. Spencer Love, Greensboro; Miles Clark, Elizabeth City; Mrs. Richard J. Reynolds, Winston-Salem; D. Hiden Ramsey, Asheville; Mrs. Charles A. Cannon, Concord; Dr. Fred Hanes, Durham; Mrs. Frank P. Graham, Chapel Hill; Bishop Thomas C. Darst, Wilmington; W. Dorsey Pruden, Edenton; John A. Buchanan, Durham; William B. Rodman, Jr., Washington; J. Melville Broughton, Raleigh; Melvin R. Daniels, Manteo; Paul Green, Chapel Hill; Samuel Selden, Chapel Hill; R. Bruce Etheridge, Manteo; Theodore S. Meekins, Manteo; Roy L. Davis, Manteo; M. K. Fearing, Manteo; A. R. Newsome, Chapel Hill. The members of said board of directors herein named other than the ex officio members, shall serve for a term of two years and until their successors are appointed. Appointments thereafter shall be made by the membership of the Association in regular annual meeting or special meeting called for such purpose.  In the event the Association through its membership should fail to make such appointments, then the appointments shall be made by the Governor of the State. If a vacancy occurs between annual meetings, the board of directors may fill the vacancy until the next annual meeting.  All vacancies occurring on the board of directors not filled by the board of directors within 30 days of the vacancy shall be filled by the Governor of the State."

Requested by:   Representatives Ives, Lemmond
DEPARTMENT OF CULTURAL RESOURCES TO REVIEW ADMISSION RATES FOR HISTORIC SITES
Sec. 11.2.  The Department of Cultural Resources shall review the admission fees and concession prices charged at each historic site.  The Department shall evaluate on a site-by-site basis whether those charges are competitive with the admission fees and concession prices charged at other historic sites and how an increase in prices would impact visitation of each site.  The Department of Cultural Resources shall report its findings and recommendations to the 1997 General Assembly.

PART 11A.  DEPARTMENT OF INSURANCE

Requested by:  Representatives Ives, Lemmond
BUILDING CODE RECEIPTS
Sec. 11A.  Section 13 of Chapter 324 of the 1995 Session Laws reads as rewritten:
"Sec. 13.  Departmental receipts realized by the Department of Insurance in excess of amounts approved for expenditure by the General Assembly, as adjusted by the Office of State Budget and Management to reflect the distribution of statewide reserves, shall revert to the General Fund at the end of each fiscal year.  This section shall not apply to receipts realized by the Department for the sale of copies of the State building code, except that unspent building code receipts shall revert to the General Fund at the end of each fiscal year."

PART 12.  STATE BOARD OF ELECTIONS

Requested by:   Representatives Lemmond, Ives
COUNTIES PRINT ALL BALLOTS
Sec. 12.  (a)	G.S. 163-108(b) reads as rewritten:
"(b)	No later than 10 days after the time for filing notices of candidacy under the provisions of G.S. 163-106(c) has expired, the chairman of the State Board of Elections shall certify to the chairman of the county board of elections in each county in the appropriate district the names of candidates for nomination to the following offices who have filed the required notice and pledge and paid the required filing fee to the State Board of Elections, so that their names may be printed on the official ballots: United States Senator, Member of the House of Representatives of the United States, Governor, and all other State offices."
(b)	G.S. 163-109 reads as rewritten:
"§ 163-109.  Primary ballots; printing and distribution.
(a)	General. – In primary elections there shall be as many kinds of official State, district, and county ballots as there are legally recognized political parties, members of which have filed notice of their candidacy for nomination. The ballots for each political party shall be printed to conform to the requirements of G.S. 163-140(c) and to show the party's name, the name of each party member who has filed notice of candidacy, and the office for which each aspirant is a candidate.
Only those who have filed the required notice of candidacy and pledge with the proper board of elections, and who have paid the required filing fee, shall have their names printed on the official ballots of the political party with which affiliated.
	(c)	Ballots to Be Furnished by County Board of Elections. – It shall be the duty of the county board of elections to print official ballots for each political party having candidates for the following offices to be voted for in the primary:
United States Senator,
Member of the House of Representatives of the United
States Congress, Governor,
All other State offices,
State Senator,
Member of the House of Representatives of the General Assembly, and
All county offices.
In printing primary ballots, the county board of elections shall be governed by instructions of the State Board of Elections with regard to width, color, kind of paper, form, and size of type.
In its discretion, the county board of elections may print separate primary ballots for the district and county offices listed in this subsection, or it may combine some or all of them on a single ballot. In a primary election, if there shall be 10 or more candidates for nomination to any one office, the county board of elections in its discretion may prepare a separate ballot for said office.
Three days before the primary election, the chairman of the county board of elections shall distribute official State, district, and county ballots to the chief judge of each precinct in his county, and the chief judge shall give him a receipt for the ballots received. On the day of the primary it shall be the chief judge's duty to have all the ballots delivered to him available for use at the precinct voting place.
(d)	Repealed by Session Laws 1977, c. 265, s. 8."
(c)	G.S. 163-114 reads as rewritten:
"§ 163-114.  Filling vacancies among party nominees occurring after nomination and before election.
If any person nominated as a candidate of a political party for one of the offices listed below (either in a primary or convention or by virtue of having no opposition in a primary) dies, resigns, or for any reason becomes ineligible or disqualified before the date of the ensuing general election, the vacancy shall be filled by appointment according to the following instructions:

Position                     	|	Vacancy is to be filled by
	Any elective State office    	|	  appointment of State
	United States Senator        	  executive committee of
                             	|	  political party in which
	                             	|	  vacancy occurs

A district office, including:	|
Member of the United States  	|
  House of Representatives   	|
Judge of superior court	|
Judge of district court      	| 	Appropriate district executive
District Attorney            	|	  committee of political party
State Senator in a multi-    	| 	  in which vacancy occurs
  county senatorial district 	|
Member of State House of     	|
  Representatives in a multi-	|
  county representative      	|
  district                   	|

State Senator in a single-   	| 	County executive committee
  county senatorial district 	| 	  of political party in which
Member of State House of     	|	  vacancy occurs, provided, in
  Representatives in a       	|	  the case of the State
  single-county              	|	  Senator or State
  representative district    	|	  Representative in a
Any elective county office   	|	  single-county district where
	  not all the county is
	  located in that district,
  then in voting, only those
  members of the county
  executive committee who
	  reside within the
  district shall vote

Judge of Superior Court in a	|	County executive committee
  single-county superior    	|	  of political party in
  court district where the 	|	  which vacancy occurs;
  district is the whole  	|	  provided, in the case of
  county or part of the 	  a superior court judge in a
  county	  single-county district where
  not all the county is
  located in that district,
  then in voting, only those
  members of the county
  executive committee who
  reside within the
  district shall vote

Judge of Superior Court in a	|	Appropriate district
  multi-county superior   	|	  executive committee of
  court district             	|	  political party in which
  vacancy occurs.
The party executive making a nomination in accordance with the provisions of this section shall certify the name of its nominee to the chairman of the board of elections, State or county, charged with the duty of certifying notices of candidacy for the office under G.S. 163-108.  If at the time a nomination is made under this section the general election ballots have already been printed, the provisions of G.S. 163-139 shall apply. If any person nominated as a candidate of a political party vacates such nomination and such vacancy arises from a cause other than death and the vacancy in nomination occurs more than 120 days before the general election, the vacancy in nomination may be filled under this section only if the appropriate executive committee certifies the name of the nominee in accordance with this paragraph at least 75 days before the general election.
In a county which is partly in a multi-county superior court district, in choosing that county's member or members of the superior court district executive committee for the multi-county district, only the county convention delegates or county executive committee members who reside within the area of the county which is within that multi-county district may vote.
In a county not all of which is located in one congressional district, in choosing the congressional district executive committee member or members from that area of the county, only the county convention delegates or county executive committee members who reside within the area of the county which is within the congressional district may vote.
In a county which is partly in a multi-county senatorial district or which is partly in a multi-county House of Representatives district, in choosing that county's member or members of the senatorial district executive committee or House of Representatives district executive committee for the multi-county district, only the county convention delegates or county executive committee members who reside within the area of the county which is within that multi-county district may vote."
(d)	G.S. 163-136(b) as amended by Section 14 of Chapter 324 of the Session Laws of 1995 reads as rewritten:
"(b)	Printing and Distribution. – The printing and distribution of ballots shall be arranged, handled, and paid for as follows:
(1)	For municipal elections, primaries, and referenda, by the municipal authorities conducting the election, primary, or referendum, at the expense of the municipality.
(2)	For all elections, primaries, and referenda, not specified in the preceding subdivision, by the responsible county board of elections, at the expense of the county.
		."
(e)  G.S. 163-137(b) is repealed.
(f)  G.S. 163-139(a) reads as rewritten:
"(a)	Before General or Special Election. – After the official ballots for a general or special election have been printed by the county elections board, the death, resignation, or disqualification of a candidate whose name appears on the official ballots shall not require that the ballots be reprinted, although the State Board of Elections may order the ballots reprinted if it desires to do so.
If a candidate dies, resigns, or otherwise becomes disqualified after his name has been printed on an official general or special election ballot, and if a nomination has been made to fill the vacancy as authorized by G.S. 163-114, the name of the substituted nominee shall not appear on the official ballots unless the responsible board of elections decides that it is feasible and advisable to reprint the ballots to show the name of the substituted nominee. If the ballots are not reprinted, a vote cast for the candidate whose name is printed on the ballot shall be counted as a vote for the substituted candidate whose name has been certified to the appropriate board of elections under the provisions of G.S. 163-114."
(g)  G.S. 163-140(a) reads as rewritten:
"(a)	Kinds of General Election Ballots; Right to Combine. – For purposes of general elections, there shall be seven kinds of official ballots entitled:
(1)	Ballot for presidential electors
(2)	Ballot for United States Senator
(3)	Ballot for member of the United States House of Representatives
(4)	State ballot
(5)	County ballot
(6)	Repealed by Session Laws 1973, c. 793, s. 56.
(7)	Ballot for constitutional amendments and other propositions submitted to the people.
Use of official ballots shall be limited to the purposes indicated by their titles. The printing on all ballots shall be plain and legible but, unless large type is specified by this section, type larger than 10-point shall not be used in printing ballots. All general election ballots shall be prepared in such a way as to leave sufficient blank space beneath each name printed thereon in which a voter may conveniently write the name of any person for whom he may desire to vote.
Unless prohibited by this section, the county board of elections charged by law with printing ballots may, in its discretion, combine any two or more official ballots. Whenever two or more ballots are combined, the voting instructions for the State ballot set out in subsection (b)(4) of this section shall be used, except that if the two ballots being combined do not contain a multi-seat race, then the second sentence of instruction b. shall not appear on the ballot.
Contests in the general election for seats in the State House of Representatives and State Senate shall be on ballots that are separate from ballots containing non-legislative contests, except where the voting system used makes separation of ballots impractical. State House and State Senate contests shall be on the same ballot, unless one is a single-seat contest and the other a multi-seat contest.
If the county board of elections divides the State ballot into two or more ballots, all candidates for superior court shall appear on the same ballot except that the county board of elections may divide the election of superior court judges into two ballots either because of length of the ballot or to provide a separate ballot for multi-seat races but only superior court judges shall be on those ballots, and all candidates for the Appellate Division shall appear on the same ballot."
(h)  G.S. 163-140(b)(1) reads as rewritten:
"(1)	Ballot for Presidential Electors: On the ballot for presidential electors there shall be printed, under the titles of the offices, the names of the candidates for President and Vice-President of the United States nominated by each political party qualified under the provisions of G.S. 163-96, and the names of the unaffiliated candidates for President and Vice-President qualified under the provisions of G.S. 163-122 and G.S. 163-209. A separate column shall be assigned to each political party with candidates on the ballot, and a separate column shall be assigned to each pair of unaffiliated candidates for President and Vice-President, if any, and the columns shall be separated by distinct black lines. At the head of each party column the party name shall be printed in large type and below it a circle, one-half inch in diameter, and below the circle the names of the party's candidates for President and Vice-President in that order. At the head of the columns for unaffiliated candidates shall be printed in large type the words 'Unaffiliated Candidates', and below it a circle, one-half inch in diameter, and below the circle the names of a pair of unaffiliated candidates for President and Vice-President. On the face of the ballot, above the party column division, the following instructions shall be printed in heavy black type:
a.	To vote this ballot, make a cross (X) mark in the circle below the name of the political party for whose candidates you wish to vote or below the heading for the unaffiliated candidates for whom you wish to vote.
b.	A vote for the names of a political party's candidates for President and Vice-President is a vote for the electors of that party, and a vote for the names of unaffiliated candidates for President and Vice-President is a vote for electors named by the unaffiliated candidate for President, the names of whom are on file with the Secretary of State.
c.	If you tear or deface or wrongly mark this ballot, return it and get another.
	On the bottom of the ballot shall be printed an identified facsimile of the signature of the chairman of the county board of elections.
		The official ballot for presidential electors shall not be combined with any other official ballots."
(i)  G.S. 163-140(b)(2) reads as rewritten:
"(2)	Ballot for United States Senator: Beneath the title and general instructions set out in this subsection, the ballot for United States Senator shall be divided into parallel columns separated by distinct black lines. The county board of elections shall assign a separate column to each political party having a candidate for the office and one to unaffiliated candidates, if any. At the head of each party column the party's name shall be printed in large type, and at the head of the column for unaffiliated candidates shall be printed in large type the words 'Unaffiliated Candidates.' The name of each political party's candidate for United States Senator shall be printed in the appropriate party column, and the names of unaffiliated candidates for the office shall be printed in the column headed 'Unaffiliated Candidates.' At the left of each name shall be printed a voting square, and in each column all voting squares shall be arranged in a perpendicular line. On the face of the ballot, above the party and unaffiliated column division, the following instructions shall be printed in heavy black type:
'a.	Vote for only one candidate.
b.	If you tear or deface or wrongly mark this ballot, return it and get another.'
		On the bottom of the ballot shall be printed an identified facsimile of the signature of the chairman of the county board of elections.
		When the ballot for United States Senator is combined with a ballot for another office, below the party name in each column shall be printed a circle, one-half inch in diameter, around which shall be plainly printed the following instruction: 'For a straight ticket, mark within this circle.' The following instructions, in lieu of those specified in the preceding paragraph, shall be printed in heavy black type on the face of the combined ballot to the top above the party and unaffiliated column division:
'a.	To vote for all candidates of one party (a straight ticket), make a cross (X) mark in the circle of the party for whose candidates you wish to vote.
b.	You may vote a split ticket by marking a cross (X) mark in the party circle and then making a cross (X) mark in the square opposite the name of the candidate(s) of a different party for whom you wish to vote.
c.	You may also vote a split ticket by not marking a cross (X) mark in the party circle, but by making a cross (X) mark in the square opposite the name of each candidate for whom you wish to vote.
d.	If you tear or deface or wrongly mark this ballot, return it and get another.'"
(j)  G.S. 163-140(b)(3) reads as rewritten:
"(3)	Ballot for Member of the United States House of Representatives: Beneath the title and general instructions set out in this subsection, the congressional district ballot for member of the United States House of Representatives shall be divided into parallel columns separated by distinct black lines. The county board of elections shall assign a separate column to each political party having a candidate for the office and one to unaffiliated candidates, if any. At the head of each party column the party's name shall be printed in large type, and at the head of the column for unaffiliated candidates shall be printed in large type the words 'Unaffiliated Candidates.' The name of each political party's candidate for member of the United States House of Representatives from the congressional district shall be printed in the appropriate party column, and the names of unaffiliated candidates for the office shall be printed in the column headed 'Unaffiliated Candidates.' At the left of each name shall be printed a voting square, and in each column all voting squares shall be arranged in a perpendicular line. On the face of the ballot, above the party and unaffiliated column division, the following instructions shall be printed in heavy black type:
'a.	Vote for only one candidate.
b.	If you tear or deface or wrongly mark this ballot, return it and get another.'
		On the bottom of the ballot shall be printed an identified facsimile of the signature of the chairman of the county board of elections.
		When the ballot for member of the United States House of Representatives is combined with a ballot for another office, below the party name in each column shall be printed a circle, one-half inch in diameter, around which shall be plainly printed the following instruction: 'For a straight ticket, mark within this circle.' The following instructions, in lieu of those specified in the preceding paragraph, shall be printed in heavy black type on the face of the combined ballot at the top above the party and unaffiliated column division:
'a.	To vote for all candidates of one party (a straight ticket), make a cross (X) mark in the circle of the party for whose candidates you wish to vote.
b.	You may vote a split ticket by marking a cross (X) mark in the party circle and then making a cross (X) mark in the square opposite the name of the candidate(s) of a different party for whom you wish to vote.
c.	You may also vote a split ticket by not marking a cross (X) mark in the party circle, but by making a cross (X) mark in the square opposite the name of each candidate for whom you wish to vote.
d.	If you tear or deface or wrongly mark this ballot, return it and get another.'"
(k)  G.S. 163-140(b)(4) reads as rewritten:
"(4)	State Ballot: Beneath the title and general instructions set out in this subsection, the ballot for single-seat contests for State officers, and for all State officers where mechanical voting machines are used (including judges of the superior court) shall be divided into parallel columns separated by distinct black lines. The county board of elections shall assign a separate column to each political party having candidates for State offices and one to unaffiliated candidates, if any. At the head of each party column the party's name shall be printed in large type, and at the head of the column for unaffiliated candidates shall be printed in large type the words 'Unaffiliated Candidates.' Below the party name in each column shall be printed a circle, one-half inch in diameter, around which shall be plainly printed the following instruction: 'For a straight ticket, mark within this circle.' With distinct black lines, the county board of elections shall divide the columns into horizontal sections and, in the customary order of office, assign a separate section to each office or group of offices to be filled. On a single line at the top of each section shall be printed a direction as to the number of candidates for whom a vote may be cast. If candidates are to be chosen for different terms to the same office, the term in each instance shall be printed as part of the title of the office.
		The name or names of each political party's candidate or candidates for each office listed on the ballot shall be printed in the appropriate office section of the proper party column, and the names of unaffiliated candidates shall be printed in the appropriate office section of the column headed 'Unaffiliated Candidates.' At the left of each name shall be printed a voting square, and in each column all voting squares shall be arranged in a perpendicular line.
		On the face of the ballot, above the party and unaffiliated column division, the following instructions shall be printed in heavy black type, and the words 'you must also' in instruction c. shall be underlined:
'a.	To vote for all candidates of one party (a straight ticket), make a cross (X) mark in the circle of the party for whose candidates you wish to vote.
b.	You may vote a split ticket by not marking a cross (X) mark in the party circle, but by making a cross (X) mark in the square opposite the name of each candidate for whom you wish to vote.
c.	You may also vote a split ticket by marking a cross (X) mark in the party circle and then making a cross (X) mark in the square opposite the name of any candidate you choose of a different party. In any multi-seat race where a party circle is marked and you vote for candidates of another party, you must also make a cross (X) mark opposite the name of any candidate you choose of the party for which you marked the party circle to assure your vote will count.
d.	If you tear or deface or wrongly mark this ballot, return it and get another.'
		On the bottom of the ballot shall be printed an identified facsimile of the signature of the chairman of the county board of elections. If the State ballot contains no multi-seat race, then the second sentence of instruction b. shall not appear on the ballot."
(l)  G.S. 163-140(b)(7) reads as rewritten:
"(7)	Ballot for Constitutional Amendments and Other Propositions Submitted to the People: The form of ballot used in submitting a constitutional amendment or other proposition or issue to the voters of the entire State shall be prepared by the State Board of Elections and approved by the Attorney General. The form of ballot used in submitting propositions and issues to the voters of a single county or subdivision shall be prepared by the county board of elections. In a referendum the issue presented to the voters with respect to each constitutional amendment, question, or proposition, shall be printed in the form laid down by the General Assembly or other body submitting it. If more than one amendment, question, or proposition is submitted on a single ballot, each shall be printed in a separate section, and the sections shall be numbered consecutively. On the face of the ballot, above the issue or issues being submitted, shall be printed instructions for marking the voter's choice, in addition to the following instruction: 'If you tear or deface or wrongly mark this ballot, return it and get another.' On the bottom of the ballot shall be printed an identified facsimile of the signature of the chairman of the county board of elections."
(m)  G.S. 163-140(c)(3) reads as rewritten:
"(3)	Rotation of Positions on Ballots Among Candidates: The county board of elections responsible for printing and distributing primary election ballots shall have them printed so that the names of opposing candidates for any office shall, as far as practicable, occupy alternate positions upon the ballot, to the end that the name of each candidate shall occupy with reference to the name of every other candidate for the same office, first position, second position, and every other position, if any, upon an equal number of ballots; and the ballots shall be distributed among the precinct voting places impartially and without discrimination."
(n)  G.S. 163-140(c)(4) reads as rewritten:
"(4)	Facsimile Signatures: On the bottom of each primary ballot shall be printed an identified facsimile of the signature of the chairman of the county board of elections responsible for its preparation."
(o)  G.S. 163-227.3 is repealed.
(p)  This section applies to elections conducted on or after November 1, 1996.

Requested by:  Representatives Ives, Lemmond
FUNDS FOR STATEWIDE COMPUTERIZED VOTER REGISTRATION
Sec. 12.1.  The State Board of Elections shall promulgate rules for a statewide computerized voter registration system following the basic client-server design of Alternative C and D as described in the Needs Assessment and Requirements Analysis report prepared pursuant to Section 16 of Chapter 762 of the 1993 Session Laws, Regular Session 1994. Those rules shall include data format standards, data communication standards, and data content standards. The State Board of Elections shall promulgate those rules, including the standards, no later than March 1, 1997. Counties shall adhere to the rules and standards no later than July 1, 1998. The statewide computerized voter registration system shall utilize current technology and be consistent with State standards. That system shall be developed by the State Board of Elections and processed on the computer/servers of the State Information Processing Services Division of the Office of the State Controller.
(b)	There are established two reserve funds, to be known as the Reserve Fund for Statewide Computerized Voter Registration/Central Server Component and the Reserve Fund for Statewide Computerized Voter Registration/County Grants Component. The reserve funds shall be funded as follows:
(1)	For the 1996-97 fiscal year, of the funds in the amount of one million five hundred thousand dollars ($1,500,000) that were transferred to the Reserve Fund for Statewide Computerized Voter Registration/Central Server Component by Section 13.2(b)(1) of Chapter 507 of the 1995 Session Laws, the State Board of Elections shall use those funds for software development, communications and computer charges, and data conversion charges to implement the central server component of the system designed by the rules promulgated under subsection (a) of this section. The State Board of Elections shall use no more than four hundred forty thousand dollars ($440,000) of those funds to purchase hardware, office furniture, and the services of time-limited computer personnel.
(2)	Of the funds appropriated in this act for the 1996-97 fiscal year to the State Board of Elections, the sum of three million five hundred thousand dollars ($3,500,000) shall be deposited in the Reserve Fund for Statewide Computerized Voter Registration/County Grants Component, to be used by the State Board of Elections for grants-in-aid to counties to purchase computer equipment, data communication charges, data conversion, computer consultants or time-limited personnel at the State Board of Elections, travel, education, and training to ensure that all counties' minimum needs for participation in the statewide computerized voter registration system are met. Any additional needs beyond the minimum required for system participation are the responsibility of the counties. The State Board of Elections shall develop and issue rules related to a grant process for grant applications and grant awards to counties. The rules shall be developed and issued no later than January 1, 1997. Grants-in-aid to county boards of elections shall be awarded no later than March 1, 1997. The rules shall provide that the computerized voter registration system has uniform quality statewide, and the grants shall be issued in such a way as to achieve that goal within available resources. In developing the rules, the State Board of Elections shall consider giving special attention to:
a.	Low-wealth counties;
b.	Counties that have demonstrated a willingness to invest in computer infrastructure; and
c.	Counties that demonstrate a willingness to provide matching funds.
(c)	The State Board of Elections may spend money from the  reserve funds created by subsection (b) of this section only after the State Board of Elections and the Information Resource Management Commission have jointly approved a detailed implementation plan for statewide computerized voter registration. That implementation plan shall include:
(1)	A description of the system being implemented;
(2)	A description of the system's capabilities;
(3)	An itemized estimate of the costs of the system, with a justification for each item;
(4)	A list of the counties to be brought into the system during the fiscal year;
(5)	A project management plan.
(d)	To the extent that this section or action taken under it conflicts with G.S. 163-82.11 through G.S. 163-82.13 or Section 16 of Chapter 769 of the 1993 Session Laws, this section or those actions prevail to the extent of the conflict.  Except to the extent of the conflict, Section 16 of Chapter 769 of the 1993 Session Laws remains in effect.
(e)  Section 13.2 of Chapter 507 of the 1995 Session Laws is repealed.

PART 13.  DEPARTMENT OF SECRETARY OF STATE

Requested by:   Representatives Ives, Lemmond
INVESTOR PROTECTION AND EDUCATION TRUST FUND
Sec. 13.  Article 4 of Chapter 147 of the General Statutes is amended by adding a new section to read:
"§ 147-54.5.  Investor Protection and Education Trust Fund; administration; limitations on use of the Fund.
(a)	The Investor Protection and Education Trust Fund created in the Department of the Secretary of State as an expendable trust account to be used by the Secretary of State only for the purposes set forth in this section.
(b)	The proceeds of the Investor Protection and Education Trust Fund shall be used by the Secretary of State to provide investor protection and education to the general public and to potential securities investors in the State through:
(1)	The use of the media, including television and radio public service announcements and printed materials; and
(2)	The sponsorship of educational seminars, whether live, recorded, or through other electronic means.
(c)	The proceeds of the Investor Protection and Education Trust Fund shall not be used for:
(1)	Travel expenses of the Secretary of State or staff of the Department of the Secretary of State, unless those expenses are directly related to specific investor protection and education activities performed in accordance with this section.
(2)	General operating expenses of the Department of the Secretary of State, or to supplement General Fund appropriations to the Department of the Secretary of State for other than investor education and  protection activities.
(3)	Promoting the Secretary of State or the Department of the Secretary of State.
(d)	Expenditures from the Investor Protection and Education Trust Fund shall be made in compliance with State purchasing and contracting requirements for competitive bidding in accordance with the provisions of Article 3 of Chapter 143 of the General Statutes.
(e)	Revenues derived from consent orders resulting from negotiated settlements of securities investigations by the Secretary of State shall be credited to the Fund.  The State Treasurer shall invest the assets of the Fund according to law.  Any interest or other investment income earned by the Investor Protection and Education Trust Fund shall remain in the Fund.  The balance of the Investor Protection and Education Trust Fund at the end of each fiscal year shall not revert to the General Fund.
(f)	Beginning January 1, 1997, the Department of the Secretary of State shall report annually to the General Assembly's Fiscal Research Division and to the Joint Legislative Commission on Governmental Operations on the expenditures from the Investor Protection and Education Trust Fund and on the effectiveness of investor awareness education efforts of the Department of the Secretary of State."

PART 14.  OFFICE OF STATE CONTROLLER

Requested by:  Representative Creech
NORTH CAROLINA INFORMATION HIGHWAY
Sec. 14.  (a)	The funds appropriated in this act to the Office of the State Controller for the operation of the North Carolina Information Highway shall be used only for costs incurred by the Office of the State Controller related to the operations and support of the North Carolina Information Highway.  No funds appropriated in this act shall be expended to pay Minimum Monthly usage charges for North Carolina Information Highway Services.
(b)	Of the funds appropriated to the Office of the State Controller for the North Carolina Information Highway (NCIH), an amount not to exceed five hundred thousand dollars ($500,000) shall be used to expand the long distance capacity and provide for the establishment of regional hubs in each of the seven LATAS in North Carolina.  The remaining funds shall be used to help defray the costs of existing NCIH sites except those located at university sites other than East Carolina University academic affairs campus.  Savings directly attributable to the development of the North Carolina Information Highway shall be re-invested for the purpose of furthering NCIH development.
(c)	The State Controller shall report quarterly to the Joint Legislative Commission on Governmental Operations regarding the costs incurred by the Office of the State Controller related to the operations and support of the North Carolina Information Highway.

Requested by:   Representatives Ives, Lemmond
RESERVE FOR THE YEAR 2000 CONVERSION OF THE STATE'S COMPUTER SYSTEM
Sec. 14.1.  The Office of the State Controller shall include in its charges for data processing services costs of converting computer applications to operate properly at the turn of the century.  The Office of the State Controller shall develop procedures for managing the year 2000 conversion.

PART 15.  DEPARTMENT OF REVENUE

Requested by:  Representatives Ives, Lemmond
DEPARTMENT OF REVENUE LAW-ENFORCEMENT OFFICERS
Sec. 15.  (a)	Article 9 of Chapter 105 of the General Statutes is amended by adding a new section to read:
"§ 105-236.1.  Enforcement of revenue laws by revenue law-enforcement officers.
(a)	General. – The Secretary may appoint employees of the Criminal Investigations Division to serve as revenue law-enforcement officers having the responsibility and subject-matter jurisdiction to enforce the criminal laws relating to tax administration and enforcement only.  The Secretary may appoint employees of the Controlled Substances Tax Division to serve as revenue law-enforcement officers having the responsibility and subject-matter jurisdiction to enforce the excise tax on controlled substances as provided in Article 2D of this Chapter only.  To be a revenue law-enforcement officer, an employee must be certified as a criminal justice officer under Chapter 17C of the General Statutes.
(b)	Authority. – A revenue law-enforcement officer is a State officer with jurisdiction throughout the State within the officer's subject-matter jurisdiction.  A revenue law-enforcement officer may serve and execute notices, orders, warrants, or demands issued by the Secretary or the General Court of Justice in connection with the enforcement of the officer's subject-matter jurisdiction as set forth in subsection (a) of this section only.  A revenue law-enforcement officer has the full powers of arrest as provided by G.S. 15A-401 while executing the notices, orders, warrants, or demands."
(b)	G.S. 17C-2 reads as rewritten:
"§ 17C-2.  Definitions.
Unless the context clearly otherwise requires, the following definitions apply in this Chapter:
	 "  (1)  Commission. – The North Carolina Criminal Justice Education and Training Standards Commission.
	 "  (2)  Criminal justice agencies. – The State and local law-enforcement agencies, the State correctional agencies, other correctional agencies maintained by local governments, and the juvenile justice agencies, but shall not include deputy sheriffs, special deputy sheriffs, sheriffs' jailers, or other sheriffs' department personnel governed by the provisions of Chapter 17E of these General Statutes.
	 "  (3)  Criminal justice officers. – The administrative and subordinate personnel of all the departments, agencies, units or entities comprising the " criminal justice agencies who are sworn law-enforcement officers, both State and local, with the power of arrest; revenue law-enforcement officers; State correctional officers; State probation/parole officers; officers, supervisory and administrative personnel of local confinement facilities; State youth services officers; State probation/parole intake officers; State probation/parole officers-surveillance; State probation/parole intensive officers; and State parole case analysts.
	 "  (4)  Entry level. – The initial appointment or employment of any person by a criminal justice agency, or any appointment or employment of a person previously employed by a criminal justice agency who has not been employed by a criminal justice agency for the 12-month period preceding this appointment or employment, or any appointment or employment of a previously certified criminal justice officer to a position which requires a different type of certification."
(c)	G.S. 143-166.13(a) is amended by adding a new subdivision to read:
"(18)	Sworn State Law-Enforcement Officers with the power of arrest, Department of Revenue."
(d)	Of the funds appropriated to the Department of Revenue in this act for the 1996-97 fiscal year, the sum of sixty-seven thousand dollars ($67,000) shall be used to implement this section.

PART 16.  COLLEGES AND UNIVERSITIES

Requested by:  Representatives Grady, Preston
AID TO STUDENTS ATTENDING PRIVATE COLLEGES
Sec. 16.  Section 15 of Chapter 324 of the 1995 Session Laws reads as rewritten:
"Sec. 15.  (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 six hundred dollars ($600.00) 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, a sum, not to exceed one thousand three hundred dollars ($1,300) 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 shall 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 tenth 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.  Expenditures made pursuant to this section shall not be used for any student who is incarcerated in a State or federal correctional facility.
(d)	The State Education Assistance Authority shall document the number of full-time equivalent North Carolina undergraduate students that are enrolled in off-campus programs and the State funds collected by each institution pursuant to G.S. 116-19 for those students.  The State Education Assistance Authority shall also document the number of scholarships and the amount of the scholarships that are awarded under G.S. 116-20 to students enrolled in off-campus programs.  An 'off-campus program' is any program offered for degree credit away from the institution's main permanent campus.
The State Education Assistance Authority shall report to the Joint Legislative Commission on Governmental Operations by March 1, 1997, regarding its findings."

Requested by:   Representatives Grady, Preston
DISTANCE LEARNING INITIATIVES
Sec. 16.1.  Of the funds appropriated by this act to The University of North Carolina Board of Governors, the sum of one million two hundred thousand dollars ($1,200,000) in nonrecurring funds and the sum of two hundred forty-five thousand dollars ($245,000) in recurring funds shall be allocated to North Carolina State University to furnish the Engineering Graduate Research Center and to operate the distance learning programs.  An additional appropriation to the Board of Governors of two million two hundred fifty-five thousand dollars ($2,255,000) shall be used for distance learning and capacity enhancing alternatives, including expansion of the "2 + 2" engineering programs offered through North Carolina State University.

Requested by:   Representatives Grady, Preston
UNC EQUITY OF FUNDING
Sec. 16.2  Notwithstanding G.S. 116-30.3, the five constituent institutions (Appalachian State University, East Carolina University, University of North Carolina at Charlotte, University of North Carolina at Greensboro, and University of North Carolina at Wilmington) cited in the study of equity of funding among the constituent institutions of The University of North Carolina as receiving lower than average per pupil funding in several comparisons, shall not be required to revert two percent (2%) of their General Fund appropriations for the 1996-97 fiscal year.  These funds shall be used to improve areas of need that can be addressed with nonrecurring funds.

Requested by:   Representatives Grady, Preston
CENTER FOR THE PREVENTION OF SCHOOL VIOLENCE
Sec. 16.3  The General Assembly recommends that the Governor continue funding the Center for Prevention of School Violence from the current source of grant monies through the 1996-97 fiscal year.

Requested by:   Representatives Grady, Preston
RALEIGH SCHOOL OF NURSE ANESTHESIA
Sec. 16.4  Sec. 15.9 of Chapter 507 of the 1995 Session Laws reads as rewritten:
"Sec. 15.9.  Of the funds provided to the Board of Governors of The University of North Carolina for expansion funding through receipts for University Institutional Programs, the sum of two million dollars ($2,000,000) shall be allocated each year of the biennium for the Area Health Education Centers for initiatives in primary care and training of mid-level practitioners.  Of these additional funds, the sum of fifty thousand dollars ($50,000) shall be used to increase funding for the Raleigh School of Nurse Anesthesia from fifty thousand dollars ($50,000) to one hundred thousand dollars ($100,000) per year."

Requested by:   Representative Barnes
EVALUATE UNIVERSITY RESIDENCES FOR FIRE SAFETY AND REPORT ON ESTIMATED COST TO INSTALL ANY NEEDED FIRE DETECTION AND SAFETY EQUIPMENT.
Sec. 16.5.  (a) The Board of Governors of The University of North Carolina shall survey each constituent institution and the North Carolina School of Science and Math regarding its campus residential facilities and the fire detection and safety equipment currently installed in those facilities.  Each constituent institution shall indicate whether each residential facility on its campus has an adequate fire alarm system including smoke detectors and fire sprinklers, and, if not, the estimated cost to install adequate fire detection and safety equipment.  The Board of Governors shall report as soon as possible to the General Assembly regarding the findings of the survey.
(b)	The Board of Governors of The University of North Carolina shall begin to address fire safety needs in campus residential facilities including the North Carolina School of Science and Math during the 1996-97 fiscal year, using available reserves in institutional housing trust funds, as well as funds allocated to the Board from the Reserve for Repairs and Renovations.  Should the Board of Governors allocate funds from the Reserve for Repairs and Renovations for fire safety improvements in campus residential facilities not supported from the General Fund, it shall first find that sufficient funds are not available from other sources.  Any such finding shall be included in the Board's submission to the Joint Legislative Commission on Governmental Operations on the proposed allocation of funds.
(c) The Board of Governors of The University of North Carolina shall include in its budget requests for the 1997-99 biennium the estimated amount needed to address any remaining fire safety needs of the residential facilities located on its campuses including the North Carolina School of Science and Math.

PART 17.  COMMUNITY COLLEGES

Requested by:  Representative Russell
COMPUTATION OF FTE FOR COURSES TAUGHT IN PRISONS
Sec. 17.  Community colleges shall compute full-time equivalent (FTE) student hours on the bases of both contact hours and student membership hours for curriculum and occupational extension education programs that are taught in prison facilities and that are offered in compliance with the State Board of Community College's correctional course offering matrix.  The State Board of Community Colleges shall report both counts to the General Assembly by January 15, 1997.
The 1997 General Assembly shall consider the question of whether to compute FTE for these courses on the basis of contact hours or on the basis of student membership hours.

Requested by:   Representative Russell
IN-STATE TUITION FOR FAMILIES TRANSFERRED INTO STATE
Sec. 17.1. (a)	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 G.S. 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; provided further, however, a community college may charge in-State tuition to up to one percent (1%) of its out-of-state students, rounded up to the next whole number, to accommodate the families transferred by business and industry into the State.   Notwithstanding these requirements, a refugee who lawfully entered the United States and who is living in this State shall be deemed to qualify as a domiciliary of this State under G.S. 116-143.1(a)(1) and as a State resident for community college tuition purposes as defined in G.S. 116-143.1(a)(2)."
(b)	The State Board of Community Colleges shall adopt rules to implement this section, effective for the fall 1996 quarter.

Requested by:  Representative Grady
INCENTIVES FOR ATTRACTING BACCALAUREATE COMPLETION DEGREE PROGRAMS TO CAMPUS/ELIMINATION OF BARRIERS AMONG PUBLIC SCHOOLS, COMMUNITY COLLEGES, AND UNIVERSITIES/STUDIES
Sec. 17.2.  (a)	The State Board of Community Colleges shall study ways to encourage community colleges to attract baccalaureate completion programs to their campuses, including appropriate financial incentives.  The Board shall report the results of this study to the General Assembly prior to January 31, 1997.
(b) The Education Cabinet shall study ways to eliminate barriers to cooperation among public schools, community colleges, and universities in the area of distant learning.  The Education Cabinet shall develop a plan for sharing registration, credit hours, funding for full-time equivalent students (FTE), counseling and financial aid services, tuition receipts, and administrative responsibilities and shall report to the General Assembly prior to January 31, 1997, on the plan it develops.  The report shall include a list of any statutory or rule changes that are necessary prior to implementation of the plan and an explanation of why each change is necessary and appropriate.

Requested by:  Representative Grady, McMahan
COMMUNITY COLLEGES FUNDING FORMULAS/STUDY
Sec. 17.3.  The State Board of Community Colleges shall undertake a comprehensive study of the funding formula used to distribute funds to local community colleges and shall make any recommendations for changes to the General Assembly by January 31, 1997.  The study shall include, but not be limited to, the development of a plan to increase the level of funding for occupational extension courses to the funding level for curriculum courses and the cost of such a plan.  The State Board of Community Colleges shall use Board Reserve funds to hire an outside, independent consultant to study the funding formula.

Requested by:   Representative Grady
EXPENDITURE FOR NEW AND EXPANDING INDUSTRY/REPORT
Sec. 17.4.  G.S. 115D-5 is amended by adding a new subsection to read:
"( i)	The State Board of Community Colleges shall report to the Joint Legislative Education Oversight Committee on a quarterly basis on expenditures for the New and Expanding Industry Program each fiscal year.  The report shall include, for each company or individual that receives funds for New and Expanding Industry:
(1)	The total amount of funds received by the company or individual;
(2)	The amount of funds per trainee received by the company or individual;
(3)	The amount of funds received per trainee by the community college training the trainee;
(4)	The number of trainees trained, by company and by community college; and
(5)	The number of years the companies or individuals have been funded.
The report for the first quarter of the 1996-97 fiscal year shall include this information for the prior three fiscal years."

PART 18.  PUBLIC SCHOOLS

Requested by:   Representatives Grady, Preston
EXPENDITURES FOR SCHOOL RESOURCE OFFICERS
Sec. 18.  The State Board of Education shall modify the accounting system for State Aid to Local School Administrative Units so that it can account for State funds expended for school resource officers in each local school administrative unit.

Requested by:   Representatives Grady, Preston
EXCEPTIONAL CHILDREN FUNDS
Sec. 18.1.  The funds appropriated for exceptional children in this act shall be allocated as follows:
(1)	Each local school administrative unit shall receive for academically gifted children the sum of $686.38 per child for three and nine-tenths percent (3.9%) of the 1995-96 actual average daily membership in the local school administrative unit, regardless of the number of children identified as academically gifted in the local school administrative unit. The total number of children for which funds shall be allocated pursuant to this subdivision is 45,861 for the 1996-97 school year.
(2)	Each local school administrative unit shall receive for exceptional children other than academically gifted children the sum of $2,059.14 per child for the lesser of (i) all children who are identified as exceptional children other than academically gifted children or (ii) twelve and five-tenths percent (12.5%) of the 1995-96 actual average daily membership in the local school administrative unit. The maximum number of children for which funds shall be allocated pursuant to this subdivision is 137,449 for the 1996-97 school year.
The dollar amounts allocated under this subsection for exceptional children shall also increase in accordance with legislative salary increments for personnel who serve exceptional children.

Requested by:   Representatives Grady, Preston
SUPPLEMENTAL FUNDING IN LOW-WEALTH COUNTIES/SMALL SCHOOL SYSTEM SUPPLEMENTAL FUNDING
Sec. 18.2.  (a)	Funds for supplemental funding. – The General Assembly finds that it is appropriate to provide supplemental funds in low-wealth counties to allow those counties to enhance the instructional program and student achievement; therefore, of the funds appropriated to Aid to Local School Administrative Units, the sum of forty-six million four hundred eighty-three thousand eight hundred nine dollars ($46,483,809) for the 1996-97 fiscal year shall be used for supplemental funds for schools.  These funds shall be allocated and administered as provided in Section 17.1 of Chapter 507 of the 1995 Session Laws.
(b)	Funds for small school systems. – The State Board of Education shall allocate and administer funds appropriated for small school system supplemental funding as provided in Section 17.2 of Chapter 507 of the 1995 Session Laws.
(c)	Reports. – The State Board of Education shall report to the Appropriations Committees of the Senate and the House of Representatives prior to May 1, 1996, on whether counties supplanted local funds with the funds received pursuant to this section.

Requested by:   Representatives Grady, Preston
FUNDS TO REDUCE CLASS SIZE IN GRADE 2
Sec. 18.3.  The funds appropriated in this act to reduce class size in second grade shall be allocated by the State Board of Education to local school administrative units on the basis of one teacher for every 23 students in second grade.  Local school administrative units shall use these funds (i) to reduce class size in second grade to 23 or fewer students or (ii) to hire reading teachers within kindergarten through third grade or otherwise reduce the student-teacher ratio within kindergarten through third grade.
For the purpose of calculating the maximum allowable class size for second grade, the ratio of teachers to students shall be 1 to 26.

Requested by:   Representative Esposito
FUNDS TO IMPLEMENT THE ABC'S OF PUBLIC EDUCATION PROGRAM
Sec. 18.4.  Of the funds appropriated to State Aid to Local School Administrative Units, the State Board of Education may use up to twenty-four million five hundred thousand dollars ($24,500,000) for the 1996-97 fiscal year to provide incentive funding for schools with higher than projected levels of improvement in student performance, in accordance with the ABC's of Public Education Program, if enacted by the General Assembly.  The State Board of Education may allocate up to twenty-one million dollars ($21,000,000) of these funds on a per-teacher basis for each eligible school and up to three million five hundred thousand dollars ($3,500,000) on a per-teacher assistant basis for each eligible school.
It is the intent of the General Assembly to fully fund this program for the 1997-98 and subsequent fiscal years.

PART 19.  DEPARTMENT OF TRANSPORTATION

Requested by:   Representatives Barbee, Bowie
USE OF FUNDS RESULTING FROM THE ELIMINATION OF POSITIONS IN DIVISION OF MOTOR VEHICLES
Sec. 19.  Funds in the amount of one hundred thirty-five thousand three hundred eighty-nine dollars ($135,389)  realized from the elimination of 11 positions in the Division of Motor Vehicles during the 1996-97 fiscal year shall be placed in a reserve and shall be used only to support the implementation of the State Titling and Registration System.  Funds remaining in the reserve at the end of the 1996-97 fiscal year shall revert to the Highway Fund.

Requested by:   Representative McLaughlin
VISITOR CENTERS
Sec. 19.1.  (a)	The Department of Transportation, with the assistance of the Department of Commerce, shall collect the necessary data to accurately estimate the extent and type of use the public makes of the visitor centers on the State highway system.  The Department shall use this data to develop a formula for allocating State resources for the funding of these visitor centers.
(b)	The Department shall study and make a recommendation to the General Assembly about requiring a local match for funds appropriated by the State for the operations of local visitor centers.
(c)	Until the Department reports to the General Assembly no new visitor centers shall be approved for addition to the State highway system.
(d)	The Department shall submit the report required by this section no later than December 31, 1996, to the Joint Legislative Transportation Oversight Commission.
(e)  G.S. 20-79.7(c)(2) as amended by Section 18.7 of Chapter 507 of the 1995 Session Laws reads as rewritten:
"(2)	From the funds remaining in the Special Registration Plate Account after the deductions in accordance with subdivision (1) of this subsection, there is appropriated from the Special Registration Plate Account the sum of five hundred twenty-five thousand dollars ($525,000) for each year of the 1995-97 biennium to provide operating assistance for the Visitor Centers:
a.	on U.S. Highway 17 in Camden County, ($75,000);
b.	on U.S. Highway 17 in Brunswick County, ($75,000);
c.	on U.S. Highway 441 in Macon County, ($75,000);
d.	in the Town of Boone, Watauga County, ($75,000);
e.	on U.S. Highway 29 in Caswell County, ($75,000);
f.	on U.S. Highway 70 in Carteret County, ($75,000); and
g.	on U.S. Highway 64 in Tyrrell County, ($75,000)."

Requested by:   Representatives Barbee, Bowie
DEPARTMENT OF TRANSPORTATION REPORT ON REORGANIZATION OF DIVISION OF MOTOR VEHICLES
Sec. 19.2.  The Department of Transportation shall report to the Joint Legislative Transportation Oversight Committee by December 15, 1996, concerning how it will implement the recommendations for the restructuring of the Division of Motor Vehicles through the elimination of positions, consolidation of offices and functions, and the transfer of functions within and from the Division, which were contained in the performance audit of the Division of Motor Vehicles presented to the Joint Legislative Commission on Governmental Operations in May 1996.  This report shall discuss both short-term and long-term managerial actions necessary to implement the recommendations and contain detailed budgetary analyses of the short-term and long-term effects of these actions.  This report shall also describe how the various proposals fit in a long-range plan for the modernization of the Division of Motor Vehicles and the functions it performs.

Requested by:   Representatives Barbee, Bowie
DEPARTMENT OF TRANSPORTATION REPORTS TO THE JOINT LEGISLATIVE TRANSPORTATION OVERSIGHT COMMITTEE
Sec. 19.3.  The Department of Transportation shall make the following reports to the Joint Legislative Transportation Oversight Committee by the dates specified:
(1)	By November 1, 1996, the Department shall report on any changes needed to be made to the vehicle salvage laws to minimize the number of salvage inspections without compromising the integrity of the salvage process.  This report shall address how reductions in dedicated salvage inspection positions shall be made under the proposed system.
(2)	By October 1, 1996, the Department shall provide plans for the study of the following issues, including a schedule for completion of the studies:
A.	How the process by which licenses are modified, revoked, and suspended can be simplified.
B.	How touch-tone technology and credit cards can be used in the motor vehicle registration process.
C.	How credit cards can be used to increase customer payment options.
D.	How collision reports can be entered directly into an automated system database by law enforcement officers.
(3)	By December 1, 1996, the Department shall report how computer software used to register motor carriers under the International Registration Plan can be reconfigured so that it can be used more efficiently by staff and customers.
(4)	By November 1, 1996, the Department shall:
A.	Develop a formula to determine the number, location, and staffing of drivers license field offices within the state.
B.	Use this formula to develop a five-year plan for changes in the number and sizes of drivers license field offices that recognizes the need for the development of larger, multi-functional drivers license offices that provide a wider range of services at centralized locations and to provide a plan for the renovation of existing drivers license field offices that will be retained.
(5)	By December 1, 1996, the Department shall report on how it will maintain technical support for the vehicle registration and drivers license data systems for the 1997-99 biennium.  This report shall estimate staffing needs for technical support in each year, address whether and how contract personnel will be used, and determine the feasibility of using more permanent personnel instead of contractors.

Requested by:   Representatives Barbee, Bowie
DIVISION OF MOTOR VEHICLES ENFORCEMENT DUTIES
Sec. 19.4.  G.S. 20-4 reads as rewritten:
"§ 20-4. Enforcement duties of the Division.
(a)	Primary duty. – The primary enforcement duty of the Division is the enforcement of the vehicle weight restrictions set forth in G.S. 20-118.  In performing this duty, the Division shall make maximum effective use of permanent weigh stations and portable scales.
(b)	Secondary duties. – The secondary enforcement duties of the Division are as follows and are listed in the order of importance:
(1)	Enforcement of the motor carrier safety regulations.
(2)	Enforcement of the emissions inspection program.
(3)	Inspection of salvage vehicles.
(4)	Provide security at rest areas.
(5)	Other duties set out in this Chapter.
(c)	Restriction. – The Division shall not undertake an enforcement duty that is not listed in this section unless a law specifically authorizes the Division to do so or the duty is undertaken as a condition of receiving federal funds."

Requested by:   Representatives Barbee, Bowie
DEPARTMENT OF TRANSPORTATION–CASH FLOW CONTRACT FUNDING
Sec. 19.5.  (a)	G.S. 136-176(d) reads as rewritten:
"(d)	A contract may be let for projects funded from the Trust Fund in anticipation of revenues pursuant to the cash-flow provisions of G.S. 143-28.1 only for the two bienniums following the year in which the contract is let."
(b)	G.S. 143-28.1 reads as rewritten:
"§ 143-28.1.  Highway Fund appropriation.
Notwithstanding any other provisions of this Article, the appropriations made from the Highway Fund for highway construction and maintenance are subject to the following provisions.
(1)	Cash Flow Funding for Highway Construction and Maintenance. – Highway maintenance and construction funds shall be budgeted, expended and accounted for on a 'cash flow' basis. Pursuant to this end, highway maintenance and construction contracts shall be planned and limited so payments due at any time will not exceed the cash available to pay them.
(2)	Appropriations are for Payments and Contract Commitments to be Made in the Appropriation Fiscal Year. – The appropriations provided for by the Appropriations Act for highway maintenance and construction are for maximum payments estimated to be made during the appropriation fiscal year and for maximum contracting authority for future years. Highway maintenance and construction contracts shall be scheduled so that the total contract payments and other expenditures charged to projects in the fiscal year for each highway maintenance and construction appropriation item will not exceed the current appropriations provided by the General Assembly and unspent prior appropriations made by the General Assembly for the particular appropriation item.
(3)	Payments Subject to Availability of Funds – Retainage Fully  Funded – 5% Cash Balance Required. – The annual appropriations for highway maintenance and construction provided for by the Appropriations Act shall be expended only to the extent that sufficient funds are available in the Highway Fund. The Department of Transportation shall fully fund retainage from maintenance and construction contracts in the year in which the work is performed, and in addition shall maintain an available cash balance at the end of each month equal to at least five percent (5%) of the unpaid balance of the total maintenance and construction contract obligations. In the event this cash position is not maintained, no further construction and maintenance contract commitments shall be entered into until the cash balance has been regained. For the purposes of awarding contracts involving federal-aid, any amount due from the federal government and the Highway Bond Fund as a result of unreimbursed expenditures may be considered as cash for the purposes of this provision.
(4)	Anticipation of Revenues. – In awarding State highway construction and maintenance contracts requiring payments beyond a biennium, the Director of the Budget may anticipate revenues as authorized and certified by the General Assembly, to continue contract payments for up to seventy-five percent (75%) of the revenues which are estimated for the first fiscal year of the succeeding biennium and which are not required for other budget items. Up to fifty percent (50%) of the revenues not required for other budget items may be anticipated for the second fiscal year of the succeeding biennium's contract payments.  Up to forty percent (40%) of the revenues not required for other budget items may be anticipated for the first year of the second succeeding biennium and up to twenty percent (20%) of the revenues not required for other budget items may be anticipated for the second year of the second succeeding biennium.
(5)	Amounts Obligated – Payments Subject to the Availability of Funds – Termination of Contracts. – Highway maintenance and construction appropriations may be obligated in the amount of allotments made to the Department of Transportation by the Office of State Budget and Management for the estimated payments for maintenance and construction contract work to be performed in the appropriation fiscal year. The allotments shall be multi-year allotments and shall be based on estimated revenues and shall be subject to the maximum contract authority contained in subdivision (2) above. Payment for highway maintenance and construction work performed pursuant to contract in any fiscal year other than the current fiscal year will be subject to appropriations by the General Assembly. Highway maintenance and construction contracts shall contain a schedule of estimated completion progress and any acceleration of this progress shall be subject to the approval of the Department of Transportation provided funds are available. The State reserves the right to terminate or suspend any highway maintenance or construction contract and any highway maintenance or construction contract shall be so terminated or suspended if funds will not be available for payment of the work to be performed during that fiscal year pursuant to the contract. In the event of termination of any contract, the contractor shall be given a  written notice of termination at least 60 days before completion of scheduled work for which funds are available. In the event of termination, the contractor shall be paid for the work already performed in accordance with the contract specifications.
(6)	Provision Incorporated in Contracts. – The provisions of subdivision (5) of this section shall be incorporated verbatim in all highway construction and maintenance contracts.
(7)	Existing Contracts Are Not Affected. – The provisions of this section shall not apply to highway construction and maintenance contracts awarded by the Department of Transportation prior to July 15, 1980."
(c)	The Department of Transportation shall report quarterly beginning on October 15, 1996, and then on the fifteenth of the month following the end of the fiscal quarter, to the Joint Legislative Transportation Oversight Committee on all projects to be built with funds obligated using the cash flow provisions of G.S. 143-28.1.  The report shall contain a list of the projects and the amount obligated in anticipation of revenues for each year of the project.

Requested by:   Representatives Barbee, Bowie
CASH FLOW HIGHWAY FUND AND HIGHWAY TRUST FUND APPROPRIATIONS
Sec. 19.6.  Section 18.9 of Chapter 324 of the 1995 Session Laws reads as rewritten:
"Sec. 18.9.  (a)	The General Assembly authorizes and certifies anticipated revenues of the Highway Fund as follows:
For Fiscal Year 1997-98	$1,089.4 Million
For Fiscal Year 1998-99	$1,110.7 Million
For Fiscal Year 1999-00	$1,146.7 Million
For Fiscal Year 2000-01	$1,174.3 Million
(b)	The General Assembly authorizes and certifies anticipated revenues of the Highway Trust Fund as follows:
For Fiscal Year 1997-98	$  788.2 Million
For Fiscal Year 1998-99	$  812.7 Million
For Fiscal Year 1999-00	$839.3 Million
For Fiscal Year 2000-01	$867.2 Million ".

Requested by:   Representatives Barbee, Bowie
RADIO ISLAND RAILROAD TRESTLE
Sec. 19.7.  (a)	Subsection (b) of Section 18.28 of Chapter 324 of the 1995 Session Laws reads as rewritten:
"(b)	The Department of Transportation shall proceed with the planning and construction of the trestle, Project P-3100 in the 1996-2002 Transportation Improvement Program, and shall commence construction of the trestle during calendar year 1996.  The Beaufort and Morehead Railroad Company, owner of the trestle, shall be conveyed to the Department of Transportation by the North Carolina Ports Railway Commission for construction of the replacement trestle and related purposes authorized by G.S. 136-44.36.  The completed bridge shall be owned by the Department of Transportation and shall be added to the State System for maintenance purposes."
(b)	Notwithstanding any other provision of law, the Department of Transportation may award a contract for Project 3100 in the 1996-2002 Transportation Improvement Program on a design-build basis, using any procurement process that the Department of Transportation determines will result in maximum efficiency in constructing this project.
(c)	The Department of Transportation shall file a progress report every six months beginning on December 1, 1996, to the Joint Legislative Transportation Oversight Committee on the construction of this project.

Requested by:   Representative Sexton
SECONDARY ROAD FUNDS ELIGIBILITY MODIFICATION
Sec. 19.9.  Section 169.1 of Chapter 321 of the 1993 Session Laws reads as rewritten:
"Sec. 169.1.  Notwithstanding any other provision of law, the Department of Transportation shall maintain the streets and highways on the State highway system within municipalities that are not eligible for funds under G.S. 136-41.2.  The Department of Transportation shall maintain the streets and highways as part of the State secondary system, and maintain the paving priority for the secondary roads the same as if the municipality were not incorporated, as long as the ineligibility for funds under G.S. 136-41.2 continues.  The provisions of this section apply only to municipalities incorporated between July 1, 1989, and June 30, 1993, and during 1996."

PART 20.  DEPARTMENT OF CORRECTION

Requested by:   Representatives Justus, Thompson
ADDITIONAL PRIVATE PRISON BEDS
Sec. 20.  G.S. 148-37(g) reads as rewritten:
"(g)	The Secretary of Correction may contract with private for-profit or nonprofit firms for the provision and operation of four or more confinement facilities totaling up to 2,000 beds in the State to house State prisoners when to do so would most economically and effectively promote the purposes served by the Department of Correction. This 2,000-bed limitation shall not apply to the 500 beds in private substance abuse treatment centers authorized by the General Assembly prior to July 1, 1995.  Whenever the Department of Correction determines that new prison facilities are required in addition to existing State-owned facilities, the Department may contract for any remaining beds authorized by this section before constructing State-operated facilities.
Contracts entered under the authority of this subsection shall be for a period not to exceed 10 years, shall be renewable from time to time for a period not to exceed 10 years.  The Secretary of Correction shall enter contracts under this subsection only if funds are appropriated for this purpose by the General Assembly. Contracts entered under the authority of this subsection may be subject to any requirements for the location of the confinement facilities set forth by the General Assembly in appropriating those funds.
Once the Department has made a determination to contract for additional private prison beds, it shall issue a request for proposals within 30 days of the decision.  The request for proposals shall require bids to be submitted within three months, and the Department shall award contracts within three months of the submission of bids.  The final award decision shall be made by the Secretary of Correction, in consultation with the Chairs of the Joint Legislative Correction Oversight Committee and the Chairs of the House and Senate Appropriations Subcommittees on Justice and Public Safety, and the contract shall then be subject to the approval of the Council of State after consultation with the Joint Legislative Commission on Governmental Operations.
Contracts made under the authority of this subsection may provide the State with an option to purchase the confinement facility or may provide for the purchase of the confinement facility by the State. Contracts made under the authority of this subsection shall state that plans and specifications for private confinement facilities shall be furnished to and reviewed by the Office of State Construction. The Office of State Construction shall inspect and review each project during construction to ensure that the project is suitable for habitation and to determine whether the project would be suitable for future acquisition by the State. All contracts for the housing of State prisoners in private confinement facilities shall require a minimum of ten million dollars ($10,000,000) of occurrence-based liability insurance and shall hold the State harmless and provide reimbursement for all liability arising out of actions caused by operations and employees of the private confinement facility.
Prisoners housed in private confinement facilities pursuant to this subsection shall remain subject to the rules adopted for the conduct of persons committed to the State prison system. The Secretary of Correction may review and approve the design and construction of private confinement facilities before housing State prisoners in these facilities. The rules regarding good time, gain time, and earned credits, discipline, classification, extension of the limits of confinement, transfers, housing arrangements, and eligibility for parole shall apply to inmates housed in private confinement facilities pursuant to this subsection. The operators of private confinement facilities may adopt any other rules as may be necessary for the operation of those facilities with the written approval of the Secretary of Correction. Custodial officials employed by a private confinement facility are agents of the Secretary of Correction and may use those procedures for use of force authorized by the Secretary of Correction to defend themselves, to enforce the observance of discipline in compliance with confinement facility rules, to secure the person of a prisoner, and to prevent escape. Private firms under this subsection shall employ inmate disciplinary and grievance policies of the North Carolina Department of Correction."

Requested by:   Representatives Justus, Thompson
USE OF FACILITIES CLOSED UNDER GPAC
Sec. 20.1.  In conjunction with the closing of small expensive prison units recommended for consolidation by the Government Performance Audit Committee, the Department of Correction shall consult with the county or municipality in which the unit is located about the possibility of converting that unit to local use.  Consistent with existing law, the Department may provide for the lease or transfer of any of these units to counties or municipalities wishing to convert them to local use.  The Department of Correction may also consider converting some of the units recommended for closing from medium security to minimum security, where that conversion would be cost-effective.

Requested by:   Representatives Justus, Thompson
REIMBURSEMENT TO COUNTIES FOR HOUSING COSTS OF INMATES AWAITING TRANSFER TO STATE PRISON SYSTEM
Sec. 20.2.  (a)	G.S. 148-29 reads as rewritten:
"§ 148-29.  Transportation of convicts to prison; reimbursement to counties; sheriff's expense affidavit.
The sheriff having in charge any prisoner to be taken to the Central Prison at Raleigh shall send him to the Central Prison within five days after the adjournment of the court at which he was sentenced, if no appeal has been taken. Beginning on the sixth day after adjournment of the court in which the prisoner was sentenced and continuing through the day the prisoner is received by the Division of Prisons, the Department of Correction shall pay the county a standard sum set by the General Assembly in its appropriations acts for the cost of providing food, clothing, personal items, supervision, and necessary ordinary medical services to the prisoner awaiting transfer to the State prison system.
The sheriff shall file with the board of commissioners of his county a copy of his affidavit as to necessary guard, together with a copy of his itemized account of expenses, both certified to by him as true copies of those on  file in his office.  "
(b)	The Department of Correction may use funds available for the 1995-96 fiscal year to pay the sum of fourteen dollars and fifty cents ($14.50) per day as reimbursement to counties for the cost of housing inmates convicted and awaiting transfer to the State prison system, as provided in G.S. 148-29.
(c)	Of the funds appropriated to the Department of Correction for the 1996-97 fiscal year, the sum of fourteen million six hundred thousand dollars ($14,600,000) shall be used to raise the per diem reimbursement to counties from fourteen dollars and fifty cents ($14.50) per day to forty dollars ($40.00) per day for the cost of housing inmates convicted and awaiting transfer to the State prison system, as provided in G.S. 148-29.  If these funds are depleted prior to the end of the fiscal year, the Department of Correction may use funds available, other than lapsed salaries and fringe benefits, to reimburse counties pursuant to this section.
(d)	Subsections (a) and (b) of this section become effective January 1, 1996.

Requested by:   Representatives Justus, Thompson
COMBINATION OF PAROLE PROBATION FIELD SERVICES AND PAROLE PRE- AND POST-RELEASE SERVICES PROGRAMS FOR BUDGETING PURPOSES
Sec. 20.3.  Notwithstanding any other provision of law, the Department of Correction may combine Parole Probation Field Services and Parole Pre- and Post-Release Services programs for budgeting purposes in order to reflect the actual operation in the field, since officers from each program are responsible for both parole and probation cases.

Requested by:   Representatives Justus, Thompson
MODIFICATION OF FUNDING FORMULA FROM THE NORTH CAROLINA STATE-COUNTY CRIMINAL JUSTICE PARTNERSHIP ACT
Sec. 20.4.  Notwithstanding the funding formula set forth in G.S. 143B-273.15, grants made through the North Carolina State-County Criminal Justice Partnership Act for the 1996-97 fiscal year shall be distributed to the counties as specified in G.S. 143B-273.15(2) only, and not as discretionary funds.  Appropriations not claimed or expended by counties during the 1996-97 fiscal year shall be distributed pursuant to G.S. 143B-273.15(1).

Requested by:   Representatives Justus, Thompson
PRIVATE PRISON CONTRACTS
Sec. 20.5.  (a) The Department of Correction shall award contracts for the 1,000 private prison beds authorized in G.S. 148-37(g) by June 30, 1996.
(b)	This section is effective upon ratification.

Requested by:   Representatives Justus, Thompson
DART AFTERCARE FUNDS SHALL NOT REVERT
Sec. 20.6. (a) Funds appropriated in this act to the Department of Correction for the 1995-96 fiscal year for a Drug Alcohol Recovery Treatment (DART) aftercare program shall not revert at the end of the fiscal year but shall remain available to the Department during the 1996-97 fiscal year and be used to contract for up to three pilot programs statewide to provide aftercare services, including counseling and job referral services, for DART DWI offenders and other offenders who have completed a DART program in the Division of Prisons.
The Department of Correction shall report on the pilot programs to the Chairs of the Senate and House Appropriations Committees and the Chairs of the Senate and House Appropriations Subcommittees on Justice and Public Safety by March 1, 1997.  The report shall include information on the number of clients served, the quality of services, the cost-effectiveness of the services, and the benefits of the programs to offenders.
(b)	This section becomes effective June 30, 1996.

Requested by:   Representatives Justus, Thompson
DEPARTMENT OF CORRECTION/DEPARTMENT OF HUMAN RESOURCES JOINT PLAN/RESERVE FOR SUBSTANCE ABUSE TREATMENT PILOT PROGRAM FOR PAROLEES AND PROBATIONERS SHALL NOT REVERT
Sec. 20.7.  (a) The balance of the five hundred eighty-three thousand dollars ($583,000) appropriated in Chapter 24 of the Session Laws of the 1994 Extra Session to the Department of Correction for the 1994-95 fiscal year and carried forward to the 1995-96 fiscal year by Section 19.8 of Chapter 507 of the 1995 Session Laws for an intensive out-patient substance abuse treatment pilot program for parolees and probationers with serious substance abuse histories shall not revert at the end of the fiscal year but shall remain available to the Department during the 1996-97 fiscal year to be used for the operation and evaluation of the Department of Correction/Department of Human Resources joint substance abuse program, the Drug Alcohol Recovery Treatment (DART) aftercare pilot program, and other prison-based or community corrections substance abuse programs in the Department of Correction, as determined by the Secretary of Correction.
The Department of Correction shall report quarterly to the Joint Legislative Corrections Oversight Committee on the use of these funds and any benefits realized.  The Department of Human Resources shall participate in these reports as they relate to the joint project.
(b)	This section becomes effective June 30, 1996.

Requested by:   Representatives Justus, Thompson
SALARY CONTINUATION BENEFITS FOR ALL DEPARTMENT OF CORRECTION EMPLOYEES INJURED BY DELIBERATE ACT OR WHILE PERFORMING SUPERVISORY DUTIES
Sec. 20.8. (a)	G.S. 143-166.13(b) reads as rewritten:
"(b)	The following persons are entitled to benefits under this Article regardless of whether they are subject to the Criminal Justice Training and Standards Act:
(1)	Driver License Examiners injured by accident arising out of and in the course of giving a road test, Division of Motor Vehicles, Department of Transportation;
(2)	Employees injured by a direct and deliberate act of an offender supervised by the Department of Correction or an individual acting on behalf of such an offender or while performing supervisory duties over offenders which place the employees at risk of such injury, Department of Correction."
(b)	This section applies to injuries occurring on or after the effective date of this act.

Requested by:   Representatives Justus, Thompson
REPORT ON WOMEN AT RISK
Sec. 20.9.  The Women at Risk program shall report by December 1, 1996, and by May 1, 1997, to the Joint Legislative Commission on Governmental Operations, the Chairs of the House and Senate Appropriations Committees, and the Chairs of the House and Senate Appropriations Subcommittees on Justice and Public Safety 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 had their probation revoked, and the number of clients who have successfully completed the program.

Requested by:   Representatives Justus, Thompson
FEDERAL MATCHING FUNDS
Sec. 20.10.  Section 27.10A of Chapter 507 of the 1995 Session Laws reads as rewritten:
"Sec. 27.10A.  Appropriations made for the 1995-97 biennium to the Office of State Construction of the Department of Administration for construction of new prison beds, are to match federal funds available for prison construction in the 1996 federal fiscal year or subsequent federal fiscal years.  If the federal match is not made available, these State funds shall be made available to the Office of State Construction of the Department of Administration for construction of new prison beds, segregation units, and support buildings and systems.
The Office of State Construction shall report to the Chairs of the Joint Legislative Commission on Governmental Operations, the Joint Legislative Corrections Oversight Committee, the Chairs of the Senate and House Appropriations Committees, and the Chairs of the Senate and House Appropriations Subcommittees on Justice and Public Safety on the availability of federal prison construction matching funds."

Requested by:   Representatives Holmes, Creech, Esposito
USE OF PRISON MATCH FUNDS
Sec. 20.11.  Section 27.10A1 of Chapter 507 of the 1995 Session Laws is repealed.  Any funds appropriated in Chapter 507 of the 1995 Session Laws for construction of new prison beds that are not needed to construct prisons for the 1995-97 fiscal biennium shall be placed in a reserve for appropriation by the 1997 General Assembly.

PART 21.  DEPARTMENT OF CRIME CONTROL AND PUBLIC SAFETY

Requested by:   Representatives Justus, Thompson
REPORT ON STATE HIGHWAY PATROL PROMOTIONAL POLICY
Sec. 21.  The Division of the State Highway Patrol, Department of Crime Control and Public Safety, shall report to the Crime Control and Public Safety Study Commission, the Chairs of the House and Senate Appropriations Committees, and the Chairs of the House and Senate Appropriations Subcommittees on Justice and Public Safety on the promotional system adopted by the State Highway Patrol on May 15, 1996.  The Department shall report on the criteria and qualifications used to rank troopers and supervisors in the system and on the progress of the training process of the system by January 1, 1997.  By July 1, 1997, the Department shall report on the implementation of the promotional system, including the number of troopers and supervisors eligible for promotion, the number of troopers and supervisors promoted, and the criteria used to rank each trooper and supervisor promoted under the system.

PART 22.  JUDICIAL DEPARTMENT

Requested by:   Representatives Justus, Thompson
ADDITIONAL ASSISTANT DISTRICT ATTORNEYS
Sec. 22.  (a)	G.S. 7A-60(a1) reads as rewritten:
"(a1)	The counties of the State are organized into prosecutorial districts, and each district has the counties and the number of full-time assistant district attorneys set forth in the following table:
No. of Full-Time
Prosecutorial	Asst. District
District	Counties	Attorneys
1	Camden, Chowan, Currituck,		9
Dare, Gates, Pasquotank,
Perquimans
2	Beaufort, Hyde, Martin,		5
Tyrrell, Washington
3A	Pitt		8
3B	Carteret, Craven, Pamlico		8
4	Duplin, Jones, Onslow,		12
Sampson
5	New Hanover, Pender		11
6A	Halifax		4
6B	Bertie, Hertford,		4
	Northampton
	7	Edgecombe, Nash, Wilson		13
8	Greene, Lenoir, Wayne		10
9	Franklin, Granville,		9
Vance, Warren
9A	Person, Caswell		3
	10	Wake		24
11	Harnett, Johnston, Lee		11
12	Cumberland		14
13	Bladen, Brunswick, Columbus		7
14	Durham		10
15A	Alamance		7
15B	Orange, Chatham		6
16A	Scotland, Hoke		4
16B	Robeson		8
17A	Rockingham		5
17B	Stokes, Surry		5
18	Guilford		22
19A	Cabarrus	 		5
19B	Montgomery, Randolph		6
19C	Rowan		5
20	Anson, Moore, Richmond,		14
Stanly, Union
21	Forsyth		13
22	Alexander, Davidson, Davie,		14
Iredell
23	Alleghany, Ashe, Wilkes,		5
Yadkin
24	Avery, Madison, Mitchell,		4
Watauga, Yancey
25	Burke, Caldwell, Catawba		12
26	Mecklenburg		28
	27A	Gaston		9
27B	Cleveland,		6
Lincoln
28	Buncombe		9
29	Henderson, McDowell, Polk,		9
Rutherford, Transylvania
30	Cherokee, Clay, Graham,		7
Haywood, Jackson, Macon,
Swain."
(b)	This section becomes effective January 1, 1997.

Requested by:   Representatives Justus, Thompson
ASSISTANT PUBLIC DEFENDERS
Sec. 22.1.  From funds appropriated to the Indigent Persons' Attorney Fee Fund for the 1996-97 fiscal year, the Administrative Office of the Courts may use up to five hundred twenty-eight thousand one hundred ninety-eight dollars ($528,198) for salaries, benefits, and related expenses to establish up to 11 new assistant public defenders.

Requested by:   Representatives Justus, Thompson
RESERVE FOR DRUG TREATMENT COURT PROGRAM
Sec. 22.2.  (a)	Of the funds appropriated to the Judicial Department in the certified budget for the 1995-96 fiscal year to the Reserve for Court/Drug Treatment Program, established by Section 41 of Chapter 24 of the Session Laws of the 1994 Extra Session, as amended by Section 21.6 of Chapter 507 of the 1995 Session Laws, up to the sum of one hundred seventy-five thousand dollars ($175,000) of any balance remaining in the reserve shall not revert, but may be used during the 1996-97 fiscal year for nonrecurring program items.
(b)	This section becomes effective June 30, 1996.

Requested by:  Representatives Justus, Thompson
ANNUAL REPORT ON RECIDIVISM
Sec. 22.3.  The Judicial Department, through the North Carolina Sentencing and Policy Advisory Commission, and the Department of Correction shall jointly prepare an annual report on recidivism among criminal offenders.  The findings of the report shall be based upon methodology similar to that employed in the May 1, 1996, Recidivism Study that was presented to the Chairs of the House and Senate Appropriations Committees and the Chairs of the House and Senate Appropriations Subcommittees on Justice and Public Safety.  This methodology shall include tracking of all offenders assigned to community corrections programs or released from prison by fiscal year, beginning with the 1993-94 fiscal year for the first year's report, and then identifying those offenders rearrested within two years or more after assignment to a program or release from prison.  Community correction programs to be included in the report are the Treatment Alternatives to Street Crime (TASC), the Community Penalties Program, Community Service, all supervised probation and parole programs, and all community correction programs supervised or funded by the Department of Correction.
As part of this joint project, the Department of Correction shall provide the Sentencing and Policy Advisory Commission with a computerized list of offenders released from prison and offenders entering supervised probation during the specified time period.  The list shall include specific offender-identifying information and clearly identify offenders entering community corrections programs supervised or funded by the Department of Correction.  The Sentencing and Policy Advisory Commission shall be responsible for matching offenders to Division of Criminal Information (DCI) criminal records and for the production and printing of the final report.
Data collection and report preparation for the first year shall be funded from the sum of four thousand dollars ($4,000) appropriated to the Judicial Department for the 1996-97 fiscal year for that purpose, and grant funds available to the Department of Correction for the 1996-97 fiscal year, up to the sum of twenty-five thousand dollars ($25,000).  The report shall be due by April 1 of each year.

Requested by:   Representatives Justus, Thompson
AUTHORIZE ADDITIONAL MAGISTRATES
Sec. 22.4.  G.S. 7A-133(c) reads as rewritten:
"(c)	Each county shall have the numbers of magistrates and additional seats of district court, as set forth in the following table:

Additional
Magistrates	Seats of
County	Min.-Max.	Court         

Camden	1	2
Chowan	2	3
Currituck	1	3
Dare	3	8
Gates	2	3
Pasquotank	3	5
Perquimans	2	3
Martin	5	8
Beaufort	4	8
Tyrrell	1	3
Hyde	2	4
Washington	3	4
Pitt	10	12	Farmville
Ayden
Craven	7	10	Havelock
Pamlico	2	3
Carteret	5	8
Sampson	6	8
Duplin	9	11
Jones	2	3
Onslow	8	14
New Hanover	6	11
Pender	4	6
Halifax	9	14	Roanoke
Rapids,
Scotland Neck
Northampton	5	6
Bertie	4	5
Hertford	5	6
Nash	7	10	Rocky Mount
Edgecombe	4	6	Rocky Mount
Wilson	4	6
Wayne	5	11	Mount Olive
Greene	2	4
Lenoir	4	10	La Grange
Granville	3	7
Vance	3	5
Warren	3	4
Franklin	3	6
Person	3	4
Caswell	2	5
Wake	12	20	Apex,
Wendell,
Fuquay-
Varina,
Wake Forest
Harnett	7	11	Dunn
Johnston	10	12	Benson,
Clayton,
Selma
Lee	4	6
Cumberland	10	17
Bladen	4	6
Brunswick	4	7
Columbus	6	8	Tabor City
Durham	8	12
Alamance	7	10	Burlington
Orange	4	11	Chapel Hill
Chatham	3	8	Siler City
Scotland	3	5
Hoke	4	5
Robeson	8	16	Fairmont,
Maxton,
Pembroke,
Red Springs,
Rowland,
St. Pauls
Rockingham	4	9	Reidsville,
Eden,
Madison
Stokes	2	5
Surry	5	9	Mt. Airy
Guilford	20	26	High Point
Cabarrus	5	9	Kannapolis
Montgomery	2	4
Randolph	5	10	Liberty
Rowan	5	10
Stanly	5	6
Union	4	6
Anson	4	5
Richmond	5	6	Hamlet
Moore	5	8	Southern
Pines
Forsyth	3	15	Kernersville
Alexander	2	3
Davidson	7	10	Thomasville
Davie	2	3
Iredell	4	9	Mooresville
Alleghany	1	2
Ashe	3	4
Wilkes	4	6
Yadkin	3	5
Avery	3	4
Madison	4	5
Mitchell	3	4
Watauga	4	6
Yancey	2	4
Burke	4	7
Caldwell	4	7
Catawba	6	10	Hickory
Mecklenburg	15	26
Gaston	11	20
Cleveland	5	8
Lincoln	4	6
Buncombe	6	15
Henderson	4	7
McDowell	3	5
Polk	3	4
Rutherford	6	8
Transylvania	2	4
Cherokee	3	4
Clay	1	2
Graham	2	3
Haywood	5	7	Canton
Jackson	3	4
Macon	3	4
Swain	2	3."

Requested by:   Representatives Justus, Thompson, Grady
CLERK OF SUPERIOR COURT COMPENSATION STUDY
Sec. 22.5.  The Administrative Office of the Courts shall study the position classification and pay plan of the Office of the Clerk of Superior Court.  The study shall provide recommendations on the appropriate qualifications and compensation of deputy and assistant clerks for the proper functioning of the Office of the Clerk of Superior Court, and shall include a review of current job classes and any potential new classes.  The Administrative Office of the Courts shall report the results of this study and its recommendations to the Chairs of the House and Senate Appropriations Committees and the Chairs of the House and Senate Appropriations Subcommittees on Justice and Public Safety by March 1, 1997.

PART 23.  DEPARTMENT OF JUSTICE

Requested by:  Representatives Justus, Thompson
AUTHORIZATION OF FICTITIOUS LICENSES AND REGISTRATION PLATES ON PUBLICLY OWNED MOTOR VEHICLES
Sec. 23.  G.S. 20-39(h) reads as rewritten:
"(h)	The Commissioner, notwithstanding any other provision of this Chapter, may lawfully and to the extent necessary, provide local, State or federal law-enforcement officers on special undercover assignments with motor vehicle drivers licenses and motor vehicle registration plates under assumed names using false or fictitious addresses. Such registration plates shall only be used on publicly owned or leased vehicles. Requests for these licenses and registration plates shall be made to the Commissioner by the head of the local, State or federal law-enforcement agency and be accompanied by approval in writing from the Director of the State Bureau of Investigation upon a specific finding by the Director that the request is justified and necessary.  The Director shall keep a record of all such licenses, registration plates, assumed names, false or fictitious addresses, and law-enforcement officers using the licenses or registration plates, and shall request the immediate return of any license or registration plate that is no longer necessary.  Licenses and registration plates provided under this subsection shall expire six months after initial issuance or subsequent validation after the request for extension has been approved in writing by the Director of the State Bureau of Investigation.  The head of the local, State or federal law-enforcement agency shall be responsible for the use of the licenses and registration plates and shall return them immediately to the Commissioner for cancellation upon either (i) their expiration, (ii) request of the Director of the State Bureau of Investigation, or (iii) request of the Commissioner. Failure to return a license or registration plates issued pursuant to this subsection shall be punished as a Class 2 misdemeanor.  At no time shall the number of valid licenses and registration plates issued under this act exceed one hundred fifty, and those issued shall be strictly monitored by the Director.  All of the private registration plates issued to special agents of the State Bureau of Investigation under the Department of Justice and to alcohol law enforcement agents under the Department of Crime Control and Public Safety, pursuant to G.S. 14-250, may be fictitious plates and shall not be counted in the total number of fictitious plates authorized by this subsection."

Requested by:  Representatives Justus, Thompson
REPAIRS AND RENOVATIONS OF THE WESTERN JUSTICE ACADEMY
Sec. 23.1.  Of the funds allocated to the Repairs and Renovations Reserve Account for the 1995-97 biennium, the sum of six million dollars ($6,000,000) shall be transferred to the Department of Justice for repairs and renovations of the Western Justice Academy located at Edneyville in Henderson County.  The Department of Justice shall let contracts for all repairs and renovations of the Academy as soon as possible, but not later than December 1, 1996.

PART 24.  DEPARTMENT OF HUMAN RESOURCES

Requested by:  Representatives Gardner, Hayes
MEDICAID
Sec. 24.  Section 23.14 of Chapter 324, 1995 Session Laws, reads as rewritten:
"Sec. 23.14.  (a)	Funds appropriated in this act for services provided in accordance with Title XIX of the Social Security Act (Medicaid) are for both the categorically needy and the medically needy.  Funds appropriated for these services shall be expended in accordance with the following schedule of services and payment bases.  All services and payments are subject to the language at the end of this subsection.
Services and payment bases:
(1)	Hospital-Inpatient - Payment for hospital inpatient services will be prescribed in the State Plan as established by the Department of Human Resources.  Administrative days for any period of hospitalization shall be limited to a maximum of three days.
(2)	Hospital-Outpatient - Eighty percent (80%) of allowable costs or a prospective reimbursement plan as established by the Department of Human Resources.
(3)	Nursing Facilities - Payment for nursing facility services will be prescribed in the State Plan as established by the Department of Human Resources.  Nursing facilities providing services to Medicaid recipients who also qualify for Medicare, must be enrolled in the Medicare program as a condition of participation in the Medicaid program.  State facilities are not subject to the requirement to enroll in the Medicare program.
(4)	Intermediate Care Facilities for the Mentally Retarded - As prescribed in the State Plan as established by the Department of Human Resources.
(5)	Drugs - Drug costs as allowed by federal regulations plus a professional services fee per month excluding refills for the same drug or generic equivalent during the same month.  Reimbursement shall be available for up to six prescriptions per recipient, per month, including refills.  Payments for drugs are subject to the provisions of subsection (f) of this section and to the provisions at the end of subsection (a) of this section, or in accordance with the State Plan adopted by the Department of Human Resources consistent with federal reimbursement regulations.  Payment of the professional services fee shall be made in accordance with the Plan adopted by the Department of Human Resources, consistent with federal reimbursement regulations.  The professional services fee shall be five dollars and sixty cents ($5.60) per prescription.  Adjustments to the professional services fee shall be established by the General Assembly.
(6)	Physicians, Chiropractors, Podiatrists, Optometrists, Dentists, Certified Nurse Midwife Services - Fee schedules as developed by the Department of Human Resources.  Payments for dental services are subject to the provisions of subsection (g) of this section.
(7)	Community Alternative Program, EPSDT Screens - Payment to be made in accordance with rate schedule developed by the Department of Human Resources.
(8)	Home Health and Related Services, Private Duty Nursing, Clinic Services, Prepaid Health Plans, Durable Medical Equipment - Payment to be made according to reimbursement plans developed by the Department of Human Resources.
(9)	Medicare Buy-In - Social Security Administration premium.
(10)	Ambulance Services - Uniform fee schedules as developed by the Department of Human Resources.
(11)	Hearing Aids - Actual cost plus a dispensing fee.
(12)	Rural Health Clinic Services - Provider-based - reasonable cost; nonprovider based - single cost reimbursement rate per clinic visit.
(13)	Family Planning - Negotiated rate for local health departments.  For other providers - see specific services, for instance, hospitals, physicians.
(14)	Independent Laboratory and X-Ray Services - Uniform fee schedules as developed by the Department of Human Resources.
(15)	Optical Supplies - One hundred percent (100%) of reasonable wholesale cost of materials.
(16)	Ambulatory Surgical Centers - Payment as prescribed in the reimbursement plan established by the Department of Human Resources.
(17)	Medicare Crossover Claims - An amount up to the actual coinsurance or deductible or both, in accordance with the Plan, as approved by the Department of Human Resources.
(18)	Physical Therapy and Speech Therapy - Services limited to EPSDT eligible children.  Payments are to be made only to qualified providers at rates negotiated by the Department of Human Resources.
(19)	Personal Care Services - Payment in accordance with Plan approved by the Department of Human Resources.
(20)	Case Management Services - Reimbursement in accordance with the availability of funds to be transferred within the Department of Human Resources.
(21)	Hospice - Services may be provided in accordance with Plan developed by the Department of Human Resources.
(22)	Other Mental Health Services - Unless otherwise covered by this section, coverage is limited to agencies meeting the requirements of the rules established by the Commission for Mental Health, Developmental Disabilities, and Substance Abuse Services, and reimbursement is made in accordance with a Plan developed by the Department of Human Resources not to exceed the upper limits established in federal regulations.
(23)	Medically Necessary Prosthetics or Orthotics for EPSDT Eligible Children - Reimbursement in accordance with Plan approved by the Department of Human Resources.
(24)	Health Insurance Premiums - Payments to be made in accordance with the Plan adopted by the Department of Human Resources consistent with federal regulations.
(25)	Medical Care/Other Remedial Care - Services not covered elsewhere in this section include related services in schools; health professional services provided outside the clinic setting to meet maternal and infant health goals; and services to meet federal EPSDT mandates.  Services addressed by this paragraph are limited to those prescribed in the State Plan as established by the Department of Human Resources.  Providers of these services must be certified as meeting program standards of the Department of Environment, Health, and Natural Resources.
(26)	Pregnancy Related Services - Covered services for pregnant women shall include nutritional counseling, psychosocial counseling, and predelivery and postpartum home visits by maternity care coordinators and public health nurses.
Services and payment bases may be changed with the approval of the Director of the Budget.
Reimbursement is available for up to 24 visits per recipient per year to any one or combination of the following: physicians, clinics, hospital outpatient, optometrists, chiropractors, and podiatrists.  Prenatal services, all EPSDT children, and emergency rooms are exempt from the visit limitations contained in this paragraph.  Exceptions may be authorized by the Department of Human Resources where the life of the patient would be threatened without such additional care.  Any person who is determined by the Department to be exempt from the 24-visit limitation may also be exempt from the six-prescription limitation.
(b)	Allocation of Nonfederal Cost of Medicaid.  The State shall pay eighty-five percent (85%); the county shall pay fifteen percent (15%) of the nonfederal costs of all applicable services listed in this section.
(c)	Copayment for Medicaid Services.  The Department of Human Resources may establish copayment up to the maximum permitted by federal law and regulation.
(d)	Medicaid and Aid to Families With Dependent Children Income Eligibility Standards.  The maximum net family annual income eligibility standards for Medicaid and Aid to Families with Dependent Children, and the Standard of Need for Aid to Families with Dependent Children shall be as follows:

	Categorically Needy	Medically Needy
Family	Standard	AFDC Payment
Size	of Need	  Level*	AA, AB, AD*
1	$ 4,344	$ 2,172	  $ 2,900
2	  5,664	  2,832	3,800
3	  6,528	  3,264	4,400
4	  7,128	  3,564	4,800 5   7,776   3,888 5,200
6	  8,376	  4,188	5,600
7	  8,952	  4,476	6,000
8	  9,256	  4,680	6,300
*Aid to Families With Dependent Children (AFDC); Aid to the Aged (AA); Aid to the Blind (AB); and Aid to the Disabled (AD).

The payment level for Aid to Families With Dependent Children shall be fifty percent (50%) of the standard of need.
These standards may be changed with the approval of the Director of the Budget with the advice of the Advisory Budget Commission.
(e)	All Elderly, Blind, and Disabled Persons who receive Supplemental Security Income are eligible for Medicaid coverage.
(f)	ICF and ICF/MR Work Incentive Allowances.  The Department of Human Resources may provide an incentive allowance to Medicaid-eligible recipients of ICF and ICF/MR facilities who are regularly engaged in work activities as part of their developmental plan and for whom retention of additional income contributes to their achievement of independence.  The State funds required to match the federal funds that are required by these allowances shall be provided from savings within the Medicaid budget or from other unbudgeted funds available to the Department.  The incentive allowances may be as follows:

Monthly Net Wages	Monthly Incentive Allowance
$1.00 to $100.99	Up to $50.00
$101.00 - $200.99	$80.00
$201.00 to $300.99	$130.00
$301.00 and greater	$212.00.
(g)	Dental Coverage Limits.  Dental services shall be provided on a restricted basis in accordance with rules adopted by the Department to implement this subsection.
(h)	Dispensing of Generic Drugs.  Notwithstanding G.S. 90-85.27 through G.S. 90-85.31, under the Medical Assistance Program (Title XIX of the Social Security Act) a prescription order for a drug designated by a trade or brand name shall be considered to be an order for the drug by its established or generic name, except when the prescriber personally indicates, either orally or in his own handwriting on the prescription order, 'dispense as written' or words of similar meaning.  Generic drugs, when available in the pharmacy, shall be dispensed at a lower cost to the Medical Assistance Program rather than trade or brand name drugs, subject to the prescriber's 'dispense as written' order as noted above.
As used in this subsection 'brand name' means the proprietary name the manufacturer places upon a drug product or on its container, label, or wrapping at the time of packaging; and 'established name' has the same meaning as in section 502(e)(3) of the Federal Food, Drug, and Cosmetic Act as amended, 21 U.S.C. § 352(e)(3).
(i)	Exceptions to Service Limitations, Eligibility Requirements, and Payments.  Service limitations, eligibility requirements, and payments bases in this section may be waived by the Department of Human Resources, with the approval of the Director of the Budget, to allow the Department to carry out pilot programs for prepaid health plans, managed care plans, or community-based services programs in accordance with plans approved by the United States Department of Health and Human Services, or when the Department determines that such a waiver will result in a reduction in the total Medicaid costs for the recipient.
(j)	Volume Purchase Plans and Single Source Procurement.  The Department of Human Resources, Division of Medical Assistance, may, subject to the approval of a change in the State Medicaid Plan, contract for services, medical equipment, supplies, and appliances by implementation of volume purchase plans, single source procurement, or other similar processes in order to improve cost containment.
(k)	Cost Containment Programs.  The Department of Human Resources, Division of Medical Assistance, may undertake cost containment programs including preadmissions to hospitals and prior approval for certain outpatient surgeries before they may be performed in an inpatient setting.
(l)	For all Medicaid eligibility classifications for which the federal poverty level is used as an income limit for eligibility determination, the income limits will be updated each April 1 immediately following publication of federal poverty guidelines.
(m)	The Department of Human Resources shall provide Medicaid to 19-, 20-, and 21-year olds in accordance with federal rules and regulations.
(n)	The Department of Human Resources shall provide coverage to pregnant women and to children according to the following schedule:
(1)	Pregnant women with incomes equal to or less than one hundred eighty-five percent (185%) of the federal poverty guidelines as revised each April 1 shall be covered for Medicaid benefits.
(2)	Infants under the age of 1 with family incomes equal to or less than one hundred eighty-five percent (185%) of the federal poverty guidelines as revised each April 1 shall be covered for Medicaid benefits.
(3)	Children aged 1 through 5 with family incomes equal to or less than one hundred thirty-three percent (133%) of the federal poverty guidelines as revised each April 1 shall be covered for Medicaid benefits.
(4)	Children aged 6 through 18 with family incomes equal to or less than the federal poverty guidelines as revised each April 1 shall be covered for Medicaid benefits.  
(5)	The Department of Human Resources shall provide Medicaid coverage for adoptive children with special or rehabilitative needs regardless of the adoptive family's income.
Services to pregnant women eligible under this subsection 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 described in subdivisions (3) and (4) of this subsection, no resources test shall be applied.
(o)	The Department of Human Resources may use Medicaid funds budgeted from program services to support the cost of administrative activities to the extent that these administrative activities produce a net savings in services requirements.  Administrative initiatives funded by this section shall be first approved by the Office of State Budget and Management.
(p)	The Department of Human Resources shall submit a monthly status report on expenditures for acute care and long-term care services to the Fiscal Research Division and to the Office of State Budget and Management.  This report shall include an analysis of budgeted versus actual expenditures for eligibles by category and for long-term care beds.  In addition, the Department shall revise the program's projected spending for the current fiscal year and the estimated spending for the subsequent fiscal year on a quarterly basis.  Reports for the preceding month shall be forwarded to the Fiscal Research Division and to the Office of State Budget and Management no later than the third Thursday of the month.
(q)	The Division of Medical Assistance, Department of Human Resources, may provide incentives to counties that successfully recover fraudulently spent Medicaid funds by sharing State savings with counties responsible for the recovery of the fraudulently spent funds.
(r)	If first approved by the Office of State Budget and Management, the Division of Medical Assistance, Department of Human Resources, may use funds that are identified to support the cost of development and acquisition of equipment and software through contractual means to improve and enhance information systems that provide management information and claims processing.
(s)	The Division of Medical Assistance, Department of Human Resources, may administer Medicaid estate recovery mandated by Omnibus Budget Reconciliation Act of 1993, (OBRA 1993), 42 U.S.C. § 1396p(b), and G.S. 108-70.5 using temporary rules pending approval of final rules promulgated pursuant to Chapter 150B of the General Statutes.
(t)	The Department of Human Resources may adopt temporary rules according to the procedures established in G.S. 150B-21.1 when it finds that such rules are necessary to maximize receipt of federal funds to reduce Medicaid expenditures, and to reduce fraud and abuse."

Requested by:   Representatives Gardner, Hayes
NONMEDICAID REIMBURSEMENT CHANGES
Sec. 24.1.  Subsection 23.16 of Chapter 324 of the 1995 Session Laws, as amended by subsection 23.5 of Chapter 507, 1995 Session Laws, reads as rewritten:
"Providers of medical services under the various State programs, other than Medicaid, offering medical care to citizens of the State shall be reimbursed at rates no more than those under the North Carolina Medical Assistance Program.  Hospitals that provide psychiatric inpatient care for Thomas S. class members or adults with mental retardation and mental illness may be paid an additional incentive payment not to exceed fifteen percent (15%) of their regular daily per diem reimbursement.
The Department of Human Resources may reimburse hospitals at the full prospective per diem rates without regard to the Medical Assistance Program's annual limits on hospital days.  When the Medical Assistance Program's per diem rates for inpatient services and its interim rates for outpatient services are used to reimburse providers in non-Medicaid medical service programs, retroactive adjustments to claims already paid shall not be required.
Notwithstanding the provisions of paragraph one, the Department of Human Resources may negotiate with providers of medical services under the various Department of Human Resources programs, other than Medicaid, for rates as close as possible to Medicaid rates for the following purposes:  contracts or agreements for medical services and purchases of medical equipment and other medical supplies.  These negotiated rates are allowable only to meet the medical needs of its non-Medicaid eligible patients, residents, and clients who require such services which cannot be provided when limited to the Medicaid rate.
Maximum net family annual income eligibility standards for services in these programs shall be as follows:

Medical Eye	     All
Family Size	Care Adults	Rehabilitation	Other
	1	$  4,860	$  8,364	$ 4,200
	2	   5,940	  10,944	5,300
	3	   6,204	  13,500	6,400
	4	   7,284	  16,092	7,500
	5	   7,824	  18,648	7,900
	6	   8,220	  21,228	8,300
	7	   8,772	  21,708	8,800
	8	   9,312	  22,220	9,300

The eligibility level for children in the Medical Eye Care Program in the Division of Services for the Blind and for adults in the Atypical Antipsychotic Medication Program in the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services shall be one hundred percent (100%) of the federal poverty guidelines, as revised annually by the United States Department of Health and Human Services and in effect on July 1 of each fiscal year.  Additionally, those adults enrolled in the Atypical Antipsychotic Medication Program who become gainfully employed may continue to be eligible to receive State support, in decreasing amounts, for the purchase of atypical antipsychotic medication and related services up to three hundred percent (300%) of the poverty level.
State financial participation in the Atypical Antipsychotic Medication Program for those enrollees who become gainfully employed is as follows:
Income	State Participation	Client Participation
(% of poverty)

0-100% 	100%	0%
101-120% 	95%	5%
121-140%	85%	15%
141-160%	75%	25%
161-180%	65%	35%
		181-200%	55%	45%
201-220%	45%	55%
221-240%	35%	65%
241-260%	25%	75%
261-280%	15%	85%
281-300%	5%	95%
301%-over	0%	100%.

The Department of Human Resources shall contract at, or as close as possible to, Medicaid rates for medical services provided to residents of State facilities of the Department."

Requested by:   Representatives Gardner, Hayes
SSI/MEDICAID LIMITS
Sec. 24.2.  Aged, blind, or disabled individuals who meet the income and resource requirements for Supplemental Security Income (SSI) shall not qualify for Medicaid assistance as aged, blind, or disabled unless they are determined eligible for both SSI and Medicaid by the Social Security Administration.
Individuals currently financially eligible for SSI but not receiving it as of the effective date of this act shall be given written notice to apply for SSI at least 30 days before losing Medicaid coverage.

Requested by:   Representatives Gardner, Hayes
THOMAS S. 
Sec. 24.4.  Section 23.21 of Chapter 324 of the 1995 Session Laws reads as rewritten:
"Sec. 23.21.  (a)	Funds appropriated to the Department of Human Resources in this act for the 1995-96 fiscal year and the 1996-97 fiscal year for members of the Thomas S. Class as identified in Thomas S., et al. v. Britt, formerly Thomas S., et al. v. Flaherty, shall be expended only for programs serving Thomas S. Class members or for services for those clients who are:
(1)	Adults with mental retardation, or who have been treated as if they had mental retardation, who were admitted to a State psychiatric hospital on or after March 22, 1984, and who are included on the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services' official list of prospective Class members;
(2)	Adults with mental retardation who have a documented history of State psychiatric hospital admissions regardless of admission date and who, without funding support, have a good probability of being readmitted to a State psychiatric hospital;
(3)	Adults with mental retardation who have never been admitted to a State psychiatric hospital but who have a documented history of behavior determined to be of danger to self or others that results in referrals for inpatient psychiatric treatment and who, without funding support, have a good probability of being admitted to a State psychiatric hospital; or
(4)	Adults who are included on the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services' official list of prospective Class members and have yet to be confirmed as Class members, who currently reside in the community, and who have a good probability of being admitted to a facility licensed as a 'home for the aged and disabled'.
No more than five percent (5%) of the funds appropriated in this act for the Thomas S. program shall be used for clients meeting subdivisions (2), (3), or (4) of this subsection.
(b)	To ensure that Thomas S. Class members are appropriately served, no State funds shall be expended on placement and services for Thomas S. Class members except:
(1)	Funds specifically appropriated by the General Assembly for the placement and services of Thomas S. Class members; and
(2)	Funds for placement and services for which Thomas S. Class members are otherwise eligible.
(b1)	Thomas S. funds may be expended to support services for Thomas S. Class members in adult care homes when the service needs of individual Class members in these homes cannot be met via the established maximum adult care home rate.
(c)	The Department of Human Resources shall continue to implement a prospective unit cost reimbursement system and shall ensure that unit cost rates reflect reasonable costs by conducting cost center service type rate comparisons and cost center line item budget reviews as may be necessary.
(d)	Reporting requirements.  The Department of Human Resources shall submit by April 1 of each fiscal year a report to the General Assembly on the progress achieved in serving members and prospective members of the Thomas S. Class.  The report shall include the following:
(1)	The number of Thomas S. clients confirmed as Class members;
		(3a)	The number of individuals identified as prospective Class members;
(4)	The number of Class members or prospective Class members added in the preceding 12 months due to their admission to a State psychiatric hospital;
(5)	A description of the types of treatment services provided to Class members; and
(6)	An analysis of the use of funds appropriated for the Class.
(e)	Notwithstanding any other provision of law, if the Department of Human Resources determines that a local program is not providing minimally adequate services to members of the Class identified in Thomas S., et al. v. Britt, formerly Thomas S., et al. v. Flaherty, or does not show a willingness to do so, the Department may ensure the provision of these services through contracts with public or private agencies or by direct operation by the Department of these programs."

Requested by:   Representatives Gardner, Hayes
EXTENSION OF TASK FORCE TO DETERMINE A MINIMUM REIMBURSEMENT RATE FOR ADULT DEVELOPMENTAL ACTIVITY PROGRAMS (ADAP)
Sec. 24.5.   Section 1 of Chapter 481 of the 1995 Session Laws reads as rewritten:
"Section 1.  The Secretary of the Department of Human Resources shall establish in the Office of the Secretary a special task force to determine a minimum reimbursement rate for Adult Developmental Activity Programs (ADAP).  In addition, this task force shall review the current funding stream to ensure that it is the most effective way possible to provide day services to adults with developmental disabilities, including which division within the Department is most appropriate for this program.  The task force shall report to the Legislative Study Commission on Mental Health, Developmental Disabilities, and Substance Abuse Services, the results of its study in time for these results to be included in the Commission's report to the 1997 General Assembly.  The task force shall terminate after the presentation of its report to the Commission.
At a minimum, the task force shall consist of:
(1)	Two representatives from community rehabilitation programs;
(2)	A representative from the Department of Human Resources;
(3)	A representative from the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services;
(4)	A representative from the Division of Vocational Rehabilitation; and
(5)	A representative from the Association for Retarded Citizens.
This task force shall be funded by funds available to the Department."

Requested by:  Representatives Gardner, Hayes
CONSOLIDATION OF JOHN UMSTEAD HOSPITAL AND THE ADATC-BUTNER OPERATING FUND
Sec. 24.6.  As the administrative and programmatic functions of John Umstead Hospital and the ADATC-Butner (Alcohol and Drug Abuse Treatment Center at Butner) have been consolidated in an effort to streamline administrative costs, the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services may consolidate the operating budget of these two institutions.

Requested by:  Representatives Gardner, Hayes
IMPROVEMENT OF OPERATING EFFICIENCIES IN CO-LOCATED INSTITUTIONS
Sec. 24.7.  The Department of Human Resources' co-located institutions shall create operating efficiencies in support functions through increased service coordination across facilities.  The Department shall ensure that annual savings in salary and supplies of at least one hundred thousand dollars ($100,000) are achieved in the 1996-97 fiscal year and in every fiscal year thereafter.  These institutions' managers shall be included in the process and in the determination of the methods for achieving the required savings.

Requested by:  Representatives Gardner, Hayes, Alexander
LEGISLATIVE STUDY COMMISSION ON MENTAL HEALTH, DEVELOPMENTAL DISABILITIES, AND SUBSTANCE ABUSE SERVICES
Sec. 24.8.  (a)	Chapter 120 of the General Statutes is amended by adding a new Article to read:
"ARTICLE 23.
"The Legislative Study Commission on Mental Health,
Developmental Disabilities, and Substance Abuse Services.
"§ 120-204.  Commission created; purpose.
There is established in the General Assembly a Legislative Study Commission on Mental Health, Developmental Disabilities, and Substance Abuse Services.  This commission shall study systemwide issues affecting the development, administration, and delivery of mental health, developmental disabilities, and substance abuse services, including issues relating to the governance, accountability, and quality of services delivered.

"§ 120-205.  Commission membership; meetings; terms; vacancies.
(a)	This commission shall be composed of 15 members appointed as follows:
(1)	Four members of the House of Representatives at the time of their appointment, appointed by the Speaker of the House of Representatives;
(2)	Four members of the Senate at the time of their appointment, appointed by the President Pro Tempore of the Senate;
(3)	One member who is a representative of Coalition 2001, appointed by the Governor;
(4)	Two members of the public, appointed by the Speaker of the House of Representatives;
(5)	Two members of the public, appointed by the President Pro Tempore of the Senate; and
(6)	Two members of the public, appointed by the Governor.
(b)	The Speaker of the House of Representatives and the President Pro Tempore of the Senate shall each select a legislative member from their appointments to serve as cochair of the commission.  Meetings shall be called at the will of the cochairs.
(c)	All members shall serve at the will of their appointing officer.  Unless removed or unless resigning, members shall serve for two-year terms.  Members may be reappointed.  Vacancies in membership shall be filled by the appropriate appointing officer.
"§ 120-206.  Powers; per diem, subsistence, and travel allowances.
(a)	The commission may contract for consulting services as provided by G.S. 120-32.02.  Upon approval of the Legislative Services Commission, the Legislative Services Officer shall assign professional and clerical staff to assist in the work of the commission.  The professional staff shall include the appropriate staff from the Fiscal Research, Research, and Legislative Drafting Divisions of the Legislative Services Office of the General Assembly.  Clerical staff shall be furnished to the commission through the offices of the House of Representatives and Senate Supervisors of Clerks.  The expenses of employment of the clerical staff shall be borne by the commission.  The commission may meet in the Legislative Building or the Legislative Office Building upon the approval of the Legislative Services Commission.  The commission, while in the discharge of official duties, may exercise all powers provided under the provisions of G.S. 120-19 through G.S. 120-19.4, including the power to request all officers, agents, agencies, and departments of the State to provide any information and any data within their possession or ascertainable from their records, and the power to subpoena witnesses.
(b)	Members of the commission shall receive per diem, subsistence, and travel allowances as follows:
(1)	Commission members who are members of the General Assembly, at the rate established in G.S. 120-3.1;
(2)	Commission members who are officials or employees of the State or of local government agencies, at the rate established in G.S. 138-6; and
(3)	All other commission members, at the rate established in G.S. 138-5.
"§ 120-207.  Reporting.
The commission shall report the results of its study, together with any legislative proposals and costs analyses, to every regular session of the General Assembly within a week of its convening."
(b)	Part XIII, Sections 13.1 through 13.4 of Chapter 542 of the 1995 Session Laws is repealed.

Requested by:   Representatives Gardner, Hayes
AREA MENTAL HEALTH, DEVELOPMENTAL DISABILITIES, AND SUBSTANCE ABUSE SERVICES PROGRAMS REDUCTIONS/SPECIFICATIONS
Sec. 24.9.  The Division of Mental Health, Developmental Disabilities, and Substance Abuse Services shall ensure that reductions in its State appropriations for the 1996-97 fiscal year that are allocated to area mental health, developmental disabilities, and substance abuse programs are applied by the area authorities only to those services and programs in which additional increased federal TITLE IVA-Emergency Assistance and Medicaid revenues are anticipated.

Requested by:   Representatives Gardner, Hayes
CAROLINA ALTERNATIVES EXPANSION LIMITS
Sec. 24.10.  The Department of Human Resources shall not expand Carolina Alternatives beyond the 10 area authorities that currently participate in the Carolina Alternatives/Medicaid Waiver/Managed Care Program prior to the Office of State Budget and Management's report to the 1997 General Assembly identifying the new area authorities selected to participate and projected costs, and prior to approval by the 1997 General Assembly.

Requested by:   Representatives Gardner, Hayes
FOSTER CARE REPORTING REPEALED
Sec. 24.11.  Section 23.22 of Chapter 324 of the 1995 Session Laws is repealed.

Requested by:   Representatives Gardner, Hayes
FOOD STAMP OUTREACH REPEALED 
Sec. 24.12.  Section 23.29 of Chapter 324 of the 1995 Session Laws is repealed.

Requested by:   Representatives Gardner, Hayes
CHILD SUPPORT RESERVE SHALL NOT REVERT
Sec. 24.13.  Any funds appropriated to the Reserve for Child Support Legislation for the 1995-96 fiscal year but not expended as of June 30, 1996, shall not revert but shall remain available for the 1996-97 fiscal year to implement the provisions contained in Chapter 538 of the 1995 Session Laws.

Requested by:   Representatives Gardner, Hayes
AFDC EMERGENCY ASSISTANCE RULES CLARIFIED
Sec. 24.14.  The Social Services Commission shall ensure that Aid to Family With Dependent Child Emergency Assistance (AFDC-EA) cash is provided only to those with verifiable emergencies by:
(1)	Ensuring that the applicant produce documented verification of the emergency for which AFDC-EA cash is requested;
(2)	Ensuring that the documented emergency is one that would threaten the health, safety, or well-being of the child or children in the care or custody of the applicant; and
(3)	Ensuring that the applicant demonstrates that the emergency was unavoidable and not the result of any act or willful omission of the applicant.

Requested by:   Representatives Gardner, Hayes
REVIEW OF AUTOMATED COLLECTION AND TRACKING SYSTEM 
Sec. 24.15.  The Information Resource Management Commission shall conduct a quarterly review of the Automated Collection and Tracking System (ACTS) project being developed by the Department of Human Resources.  The review shall include an analysis of the problems encountered and progress achieved, identify critical issues to be resolved, and estimate the final cost and date of completion.  The review shall be submitted through the Office of the State Controller to the chairs of the House and Senate Appropriations committees, the chairs of the House and Senate Human Resources Appropriations subcommittees, and to the Director of the Fiscal Research Division of the Legislative Services Office of the General Assembly no later than the last day of each quarter.

Requested by:   Representatives Gardner, Hayes
DHR REVIEW OF SOCIAL SERVICES COMMISSION RULES/REPORT 
Sec. 24.16.  The Department of Human Resources shall review all the rules adopted by the Social Services Commission currently in effect to determine which rules to petition the Commission to amend or repeal and shall report on these rules, together with its requested actions, to the 1997 General Assembly.

Requested by:  Representatives Gardner, Hayes
RURAL COMMUNITY AND MIGRANT HEALTH CENTERS' PARTICIPATION IN STATE CONTRACT PURCHASING
Sec. 24.17.  G.S. 143-49(6) reads as rewritten:
"(6)	To make available to nonprofit corporations operating charitable hospitals, to local nonprofit community sheltered workshops or centers that meet standards established by the Division of Vocational Rehabilitation of the Department of Human Resources, to private nonprofit agencies licensed or approved by the Department of Human Resources as child placing agencies, residential child-care facilities, private nonprofit rural, community, and migrant health centers designated by the Office of Rural Health and Resource Development, and to counties, cities, towns, governmental entities and other subdivisions of the State and public agencies thereof in the expenditure of public funds, the services of the Department of Administration in the purchase of materials, supplies and equipment under such rules, regulations and procedures as the Secretary of Administration may adopt. In adopting rules and regulations any or all provisions of this Article may be made applicable to such purchases and contracts made through the Department of Administration, and in addition the rules and regulations shall contain a requirement that payment for all such purchases be made in accordance with the terms of the contract. Prior to adopting rules and regulations under this subdivision, the Secretary of Administration may consult with the Advisory Budget Commission."

Requested by:  Representatives Gardner, Hayes
REDUCE DHR FUNDS IN ANTICIPATION OF RECEIPT OF FEDERAL FUNDS
Sec. 24.18.  Section 23 of Chapter 324 of the 1995 Session Laws reads as rewritten:
"Sec. 23.  (a)	Funds appropriated to the Department of Human Resources for the 1995-96 fiscal year have been reduced by fourteen million thirteen thousand three hundred ninety-six dollars ($14,013,396) in anticipation of the receipt of federal funds from the Title IV A - Emergency Assistance Program and the Social Services Block Grant. If these federal funds are not received or if only a portion of these funds are received, notwithstanding G.S. 143-15.3, the Director of the Budget may use funds available to the Department, not to exceed fourteen million thirteen thousand three hundred ninety-six dollars ($14,013,393). The Director of the Budget shall report to the Joint Legislative Commission on Governmental Operations prior to any such transfer.
(b)	Funds appropriated to the Department of Human Resources for the 1996-97 fiscal year have been reduced by sixteen million six hundred twenty-five thousand fourteen dollars ($16,625,014) in anticipation of the receipt of federal funds from the Title IV A - Emergency Assistance Program. If these federal funds are not received or if only a portion of these funds are received, notwithstanding G.S. 143-15.3, the Director of the Budget may use funds available to the Department, not to exceed sixteen million six hundred twenty-five thousand fourteen dollars ($16,625,014).  The Director of the Budget shall report to the Joint Legislative Commission on Governmental Operations prior to any such transfer."

Requested by:   Representatives Gardner, Hayes
DHR RESOURCE STUDIES EXTENDED
Sec. 24.19.  Section 23.6B of Chapter 324 of the 1995 Session Laws reads as rewritten:
"Sec. 23.6B.  The Department shall study the following two issues and shall report these two issues, together with any recommendations, to the General Assembly by December 1, 1996:
(1)	The average staff vacancy rate by division over the last five fiscal years, to determine its effect on lapsed salaries; and
(2)	An analysis of unbudgeted revenues in excess of revenues in the certified budget as amended by the General Assembly received by the Department in the last two fiscal years, including:
a.	Indirect cost receipts; and
b.	Prior year earned revenue."

Requested by:   Representatives Gardner, Hayes
PLAN FOR REORGANIZATION OF THE DEPARTMENT OF HUMAN RESOURCES
Sec. 24.20. (a)	The General Assembly intends to examine the issue of reorganizing the Department of Human Resources in consultation with the Department of Human Resources to provide an alternative and improved approach to the organization and delivery of human services in North Carolina.
(b)	With funds provided from the Department of Human Resources pursuant to subsection (e) of this section, the Joint Legislative Commission on Governmental Operations, after consultation with the Department of Human Resources, shall contract with an independent management consulting firm to develop a reorganization plan, including an implementation component.  The firm receiving the contract shall present the plan to the Commission by February 1, 1997.
(c)	The contract shall provide that the plan shall be designed to meet the following goals:
(1)	The achievement of family-centered services;
(2)	The identification of gaps in services across special needs groups;
(3)	The improvement of access to and the reduction of fragmentation of services and programs;
(4)	The enhancement of accountability;
(5)	The provision of leadership at the State level for local government; and
(6)	The definition of and delineation between State and local roles and responsibilities.
(d)	The contract shall provide that the plan propose an organizational structure designed around the following guiding principles:
(1)	The facilitation of a holistic approach to the delivery of services and programs;
(2)	The provision of a core set of programs and services common to all special needs groups;
(3)	The effective delivery of programs and services, including:
a.	Coordinated planning;
b.	Evaluation of results;
c.	Independent regulatory and licensing functions;
d.	Centralized administrative support; and
(4)	The inclusion of consideration of funding sources in decision making regarding programs and services.
(d)	The Joint Legislative Commission on Governmental Operations shall provide any additional contract specifications and directives it considers necessary.
(e)  Of the funds appropriated to the Department of Human Resources for the 1996-97 fiscal year in this act, up to three hundred fifty thousand dollars ($350,000) shall be transferred to the General Assembly, Joint Legislative Commission on Governmental Operations, to fund the contract required by this section.

Requested by:  Representatives Gardner, Hayes
DHR REPORT ON PLANS FOR IMPLEMENTING DYS COMPREHENSIVE STUDY RECOMMENDATIONS
Sec. 24.21.  The Department of Human Resources shall report to the Joint Legislative Commission on Governmental Operations by October 1, 1996, on its plans for implementing the recommendations of the Comprehensive Study of the Division of Youth Services.

Requested by:   Representatives Gardner, Hayes
S.O.S. AND FAMILY RESOURCE CENTER GRANT PROGRAMS ADMINISTRATIVE COSTS LIMITS
Sec. 24.22.  Section 23.6 of Chapter 324 of the 1995 Session Laws reads as rewritten:
"Sec. 23.6.  (a)	Of the funds appropriated to the Department of Human Resources in this act, the Department may use up to a total of three hundred fifty thousand dollars ($350,000) for the 1995-96 fiscal year and two hundred fifty thousand dollars ($250,000) for the 1996-97 fiscal year to administer the S.O.S. Program, to provide technical assistance to applicants and to local S.O.S. programs, and to evaluate the local S.O.S. programs.  The Department may contract with appropriate public or nonprofit agencies to provide the technical assistance, including training and related services.
(b)	Of the funds appropriated in this act to the Department of Human Resources for the Family Resource Center Grant Program, the Department may use up to three hundred thousand dollars ($300,000) for the 1995-96 fiscal year and two hundred fifty thousand dollars ($250,000) for the 1996-97 fiscal year to administer the Program."

Requested by:   Representatives Gardner, Hayes
OFFICE OF ECONOMIC OPPORTUNITY, SUPPORT OUR STUDENTS PROGRAMS' LOCATION
Sec. 24.23.  The Department of Human Resources shall ensure that the Office of Economic Opportunity remains in the Office of the Secretary and that the Support Our Students Program remains in the Division of Youth Services.

Requested by:   Representatives Russell, Pate, Pulley, Sherrill
DHR POSITION ELIMINATION SPECIFICATIONS
Sec. 24.24.  (a) The Department of Human Resources shall ensure that the elimination of positions, other than those that are mental health institutionally based, in the 1996-97 fiscal year, targeted by the Department, as referenced in the Current Operations Appropriations Act of 1996, or in the Conference Report incorporated into the Act, be effected as follows:
(1)	All vacant positions targeted for elimination shall be eliminated effective July 1, 1996; and
(2)	All filled positions targeted for elimination shall be eliminated effective October 1, 1996, except for the filled positions targeted for elimination in the Office of the Controller, which positions shall be eliminated on or before December 31, 1996.
The Department of Human Resources shall not eliminate any position prescribed by this subsection that it targeted but that was not referenced as eliminated in the Current Operations Appropriations Act of 1996 or in the Conference Report incorporated into the Act.
(b) The Department of Human Resources shall further ensure that the elimination of the 130.5 mental health institutionally based positions be effected according to the following priority:
(1)	First, from vacant, noncritical positions, which positions shall be eliminated effective July 1, 1996; 
(2)	Then, from vacant, critical positions, which positions shall be eliminated effective July 1, 1996; and
(3)	Then, from filled, noncritical positions, which positions shall be eliminated effective October 1, 1996.
The Department shall not eliminate any mental health institutionally based filled, critical position.  For purposes of this subsection, a critical position is one that provides or is engaged in direct contact with clients on an ongoing basis and a noncritical position is any other position.

Requested by:   Representatives Gardner, Hayes, Howard, Berry
FOOD STAMP ELECTRONIC BENEFITS TRANSFER FUNDS SPECIFICATION 
Sec. 24.25. Funds appropriated to the Controller's Office, Department of Human Resources for the Food Stamp Electronic Benefits Transfer Program (EBT) shall remain in the Controller's Office and shall not be transferred to any other office or division within the Department.
The Controller's Office, Department of Human Resources, may proceed with statewide implementation of the Food Stamp EBT Program.

Requested by:   Representatives Gardner, Hayes
IN-HOME AIDE FUNDS
Sec. 24.26.  Section 23.11D of Chapter 507 of the 1995 Session Laws reads as rewritten:
"Sec. 23.11D.  Of the funds appropriated to the Division of Aging, Department of Human Resources, in this act, the sum of five hundred thousand dollars ($500,000) for the 1995-96 fiscal year and the sum of five million dollars ($5,000,000) for the 1996-97 fiscal year shall be allocated via the Home and Community Care Block Grant for home and community care services for older persons who are not eligible for Medicaid and who are on the waiting list for these services.  Service recipients shall pay for services based on their income in accordance with G.S. 143B-181.1(a)(10)."

Requested by:  Representative Gardner
ALZHEIMER'S ASSOCIATION OF NORTH CAROLINA FUNDS
Sec. 24.26A.  Of the funds allocated to the Division of Aging, Department of Human Resources for home and community care services in Sec. 24.26 of this act, the sum of one hundred thousand dollars ($100,000) for the 1996-97 fiscal year shall be allocated to the Alzheimer's Association of North Carolina for grants-in-aid to support the four regional Alzheimer's Chapters.

Requested by:  Representative Gardner
AUTISM SOCIETY OF NORTH CAROLINA FUNDS
Sec. 24.26B.  Of the funds appropriated to the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, Department of Human Resources, for crisis services, in this act, the sum of one hundred thousand dollars ($100,000) for the 1996-97 fiscal year shall be allocated to the Autism Society of North Carolina, Inc.

Requested by:   Representative Morgan
HEALTH CARE PERSONNEL REGISTRY
Sec. 24.27.  (a) G.S. 131E-111 is recodified as G.S. 131E-255.
(b)	Chapter 131E of the General Statutes is amended by adding a new Article to read:
"ARTICLE 15.
"Health Care Personnel Registry.
"§ 131E-255. Nurse Aide Registry.
(a)	Pursuant to 42 U.S.C. § 1395i-3(e) and 42 U.S.C. § 1396r(e), the Department shall establish and maintain a registry containing the names of all nurse aides working in nursing facilities in North Carolina.  The Department shall include in the nurse aide registry any findings by the Department of neglect of a resident in a nursing facility or abuse of a resident in a nursing facility or misappropriation of the property of a resident in a nursing facility by a nurse aide.
(b)	A nurse aide who wishes to contest a finding of resident neglect, resident abuse, or misappropriation of resident property made against the aide, is entitled to an administrative hearing as provided by the Administrative Procedure Act, Chapter 150B of the General Statutes.  A petition for a contested case shall be filed within 30 days after the nurse aide receives written notice by certified mail of the Department's intent to place findings against the aide in the nurse aide registry.
(c)	'Nursing facility', as used in this section, means a 'combination home' as defined in G.S. 131E-101(1) and a 'nursing home' as defined in G.S. 131E-101(6) and also means 'facility' as that term is defined in G.S. 131E-116(2).
(d)	The Commission shall adopt, amend, and repeal all rules necessary for the implementation of this section.
(e)	No person shall be liable for providing any information for the nurse aide registry if the information is provided in good faith.  Neither an employer, potential employer, nor the Department shall be liable for using any information from the nurse aide registry if the information is used in good faith for the purpose of screening prospective applicants for employment or reviewing the employment status of an employee.
"§ 131E-256. Health Care Personnel Registry.
(a)	The Department shall establish and maintain a health care personnel registry containing the names of all health care personnel working in health care facilities in North Carolina who have:
(1)	Been subject to findings by the Department of:
a.	Neglect or abuse of a resident in a health care facility or abuse of a resident in a health care facility.
b.	Misappropriation of the property of a resident in a health care facility, or in the case of home health care, of the property of any person at the place where home health services are being provided.
c.	Misappropriation of the property of a health care facility.
d.	Diversion of drugs belonging to a health care facility or to a patient or client.
e.	Fraud against a health care facility or against a patient or client for whom the employee is providing services.
(2)	Been accused of any of the acts listed in subdivision (1) of this subsection, but only after the Department has screened the allegation and determined that an investigation is required.
The health care personnel registry shall also contain all findings by the Department of neglect of a resident in a nursing facility or abuse of a resident in a nursing facility or misappropriation of the property of a resident in a nursing facility by a nurse aide that are contained in the nurse aide registry under G.S. 131E-255.
(b)	For the purpose of this section, the following are considered to be 'health care facilities':
(1)	Adult Care Homes as defined in G.S. 131D-2.
(2)	Hospitals as defined in G.S. 131E-76.
(3)	Home Care Agencies as defined in G.S. 131E-176.
(4)	Nursing Pools as defined by G.S. 131E-154.2.
(5)	Hospices as defined by G.S. 131E-201.
(6)	Nursing Facilities as defined by G.S. 131E-255.
(c)	For the purpose of this section, the following are considered to be 'health care personnel':
(1)	In an adult care home, an adult care personal aide, who is any person who either performs, or directly supervises others who perform task functions in activities of daily living, which are personal functions essential for the health and well-being of residents such as bathing, dressing, personal hygiene, ambulation or locomotion, transferring, toileting, and eating.
(2)	A nurse aide.
(3)	An in-home aide who provides hands-on paraprofessional services as defined by rules implementing this section.
(4)	Nonlicensed persons providing direct patient care.
(d)	Health care personnel who wish to contest a finding under subdivision (a)(1) of this section, or the placement of information under subdivision (a)(2) of this section, are entitled to an administrative hearing as provided by the Administrative Procedure Act, Chapter 150B of the General Statutes.  A petition for a contested case shall be filed within 30 days after the person receives written notice by certified mail of the Department's intent to place information about the person in the health care personnel registry.
(e)	The Department shall provide an employer or potential employer of any person listed on the health care personnel registry of the nature of the finding or allegation, and the status of the investigation.
(f)	No person shall be liable for providing any information for the health care personnel registry if the information is provided in good faith.  Neither an employer, potential employer, nor the Department shall be liable for using any information from the health care personnel registry if the information is used in good faith for the purpose of screening prospective applicants for employment or reviewing the employment status of an employee.
(g)	Health care facilities shall promptly report to the Department any accusation that any health care personnel have been accused of any act listed in subdivision (a)(1) of this section.
(h)	The North Carolina Medical Care Commission shall adopt, amend, and repeal all rules necessary for the implementation of this section."
(c) Of the funds appropriated from the General Fund to the Department of Human Resources for fiscal year 1996-97 the sum of one hundred sixty thousand dollars ($160,000) shall be used to implement this section.

Requested by:   Representatives Gardner, Hayes
CONSIDERATION OF PRIVATIZATION OF RICHMOND COUNTY BOUNDOVER DETENTION FACILITY 
Sec. 24.28. The Department of Human Resources may solicit bids to determine whether privatization of the operation of the Richmond County Boundover Unit, designed to serve a small but special population of juveniles being held for trial in superior court as adults, would result in savings to the State.  If the Department considers that it is in the best interest of the State to do so, the Department may proceed with the privatization.
If the Department does proceed with the privatization, the Department shall request that the contractor give priority employment opportunity to the State employees in the current filled 15 positions scheduled to be reassigned to Richmond from the Pitt Detention Center.

Requested by:   Representatives Gardner, Hayes
EARLY CHILDHOOD EDUCATION AND DEVELOPMENT INITIATIVES PROGRAM/1996
Sec. 24.29. (a)	Notwithstanding any provision of Part 10B of Article 3 of Chapter 143B of the General Statutes or any other provision of law or policy, including Part 27A of Chapter 324 of the 1995 Session Laws, the Department of Human Resources and the North Carolina Partnership for Children, Inc., shall jointly ensure that all of the recommendations, together with any specific modification to any recommendations made in this subsection, contained in the State of North Carolina Smart Start Performance Audit prepared pursuant to Section 27A(1)b. of Chapter 324 of the 1995 Session Laws are implemented by July 1, 1997, together with any specific modification to any recommendations made in this subsection.  The Partnership shall report quarterly to the Joint Legislative Commission on Governmental Operations on its progress towards full implementation. The Department shall report to the Commission by January 1, 1997, on any changes that must be made to Part 10B of Article 3 of Chapter 143B of the General Statutes or to any other statutes or rules to make the implementation of the recommendations a permanent part of the law.
The following recommendations of the Smart Start Performance Audit are modified as follows:
(1)	The Needs and Resources Assessments recommended to be performed by the Department of Human Resources every three years shall begin with the 1997-98 fiscal year;
(2)	The recommended administrative start-up cost allowance allowed for local partnerships shall apply only in the first year each partnership provides direct services;
(3)	The recommended regionalization shall be planned for by the Department and by the Partnership in a plan, including incentives for regionalization of existing local partnerships as well as for newly applying partnerships, that shall be submitted to the Joint Legislative Commission on Governmental Operations by January 1, 1997; 
(4)	The recommended transportation study shall be completed by the Department and by the Partnership and presented to the Joint Legislative Commission on Governmental Operations by January 1, 1997; 
(5)	The recommended determination as to whether local partnerships' contractors that receive $25,000 or more have complied with financial audit requirements shall be made by the Partnership rather than the State Auditor; and
(6)	The recommendation that the Director of the Division of Child Development be an ex officio member of the Partnership shall not be implemented.
(b) The funds appropriated for the Early Childhood Education and Development Initiatives for the 1996-97 fiscal year shall be allocated as follows:
(1)	For the 24 partnerships existing as of 1995-96, funds for direct services shall remain at their 1995-96 fiscal year funding levels;
(2)	For the new partnerships planned for as of 1995-96, funding shall remain at the planning level.  No additional direct services funds shall be allocated until the Department of Human Resources jointly with the North Carolina Partnership, Inc., completes satisfactory implementation of the Smart Start Performance Audit recommendations by July 1, 1997, and so reports to the Joint Legislative Commission on Governmental Operations; and
(3)	All remaining appropriated funds shall be allocated to implement the Smart Start Performance Audit recommendations prescribed in subsection (a) of this section.
(c) Section 23.13 of Chapter 324 of the 1995 Session Laws reads as rewritten:
"Sec. 23.13.  Counties participating in the Early Childhood Education and Development Initiatives authorized by Part 10B of Article 3 of Chapter 143B of the General Statutes may use the county's allocation of State and federal child care funds to subsidize child care according to the county's Early Childhood Education and Development Initiatives Plan as approved by the North Carolina Partnership for Children, Inc.  The use of federal funds shall be consistent with the appropriate federal regulations.  Day care providers shall, at a minimum, comply with the applicable requirements for State licensure or registration pursuant to Article 7 of Chapter 110 of the General Statutes, with other applicable requirements of State law or rule, including rules adopted for nonregistered day care by the Social Services Commission, and with applicable federal regulations."
(d) Notwithstanding any policy to the contrary, the Frank Porter Graham Child Development Center may use any method legally available to it to track children who are participating or who have participated in any Early Childhood Education and Development Initiative in order to carry out its on-going evaluation of the Early Childhood Education and Development Initiatives Program.
(e) This section is effective notwithstanding any contrary provisions in any provision of law or policy, including Part 10B of Article 3 of Chapter 143B of the General Statutes and Part 27A of Chapter 324 of the 1995 Session Laws, regardless of whether they are explicitly changed in this subsection.  Section 27A of Chapter 324 of the 1995 Session Laws reads as rewritten:
"Sec. 27A.  Notwithstanding any other provision of law, the Early Childhood Education and Development Initiatives, under Part 10B of Article 3 of Chapter 143B of the General Statutes, are subject to the following terms and conditions for the 1995-97 fiscal biennium:
(1)	Accountability.
		The intent of the General Assembly is to strengthen the accountability of the Department of Human Resources, the North Carolina Partnership for Children, Inc., and the local partnerships in the expenditure of public funds and achievement of Program goals for the Early Childhood Education and Development Initiatives Program, as authorized under Part 10B of Article 3 of Chapter 143B of the General Statutes.  The importance of education as a part of all initiatives in this Program shall be emphasized.
		In order to accomplish this level of accountability, the Joint Legislative Commission on Governmental Operations shall, consistent with current law, be the legislative oversight body for the Program.  The President Pro Tempore of the Senate and the Speaker of the House of Representatives may appoint a subcommittee of the Joint Legislative Commission on Governmental Operations to carry out this function.  This subcommittee may conduct all initial reviews of plans, reports, and budgets relating to the Program and shall make recommendations to the Joint Legislative Commission on Governmental Operations.
a.	Existing Partnerships - Local partnerships receiving State funds shall submit a Certification Annual Report on April 1 of each year to the North Carolina Partnership for Children, Inc., the Joint Legislative Commission on Governmental Operations, or any committee designated by Joint Legislative Commission on Governmental Operations.  Administrative costs pursuant to the Smart Start Performance Audit formula recommendation shall be equivalent to, on an average statewide basis for all local partnerships, not more than eight percent (8%) of the total statewide allocation to all local partnerships.  Quality incentive grants as prescribed in the Smart Start Performance Audit recommendations shall be administered at the partnership level.  A definition of administrative costs shall be determined by the independent firm selected under sub-subdivision b. of this subdivision.
b.	Program Audit - The Joint Legislative Commission on Governmental Operations shall select an independent firm recognized in performance auditing to conduct an independent performance audit of the first two years of operations of the 24 existing partnerships and of the administration of the Program by the Department of Human Resources.  The audit's directives shall be determined by the Joint Legislative Commission on Governmental Operations and the independent firm.  An interim program and performance audit report shall be submitted to the Joint Legislative Commission on Governmental Operations by January 1, 1996, and a final program and performance audit report shall be submitted to the Joint Legislative Commission on Governmental Operations by April 1, 1996.  A definition of administrative costs shall be determined by the independent firm.  Only in-kind contributions that are quantifiable, as determined by the independent firm, may be applied to the in-kind match requirement.  The match requirement in subdivision (3) of this section shall be studied by the independent firm and recommendations for revision, if any, shall be reported to the Joint Legislative Commission on Governmental Operations.
c.	The North Carolina Partnership for Children, Inc., shall continue to make quarterly reports to the Joint Legislative Commission on Governmental Operations as provided for in G.S. 143B-168.13(5), and including progress towards implementation of the Smart Start Performance Audit recommendations.
d.	New partnerships - In subsequent fiscal biennia, any new local partnership, before receiving State funds, shall be required to submit a detailed plan for expenditure of State funds for appropriate programs to the North Carolina Partnership for Children, Inc., and the Joint Legislative Commission on Governmental Operations for approval in April of the fiscal year in which the local partnership received planning funds.  State funds to implement the programs shall not be allocated to the local partnership until the program plan is approved by the North Carolina Partnership for Children, Inc., after consultation with the Joint Legislative Commission on Governmental Operations.  After receipt of initial program funds, local partnerships shall then be required to submit annual Certification Reports as provided for in sub-subdivision a. of this subdivision.
e.	Contracting for Services - The North Carolina Partnership for Children, Inc., and all local Partnerships shall use competitive bidding practices in contracting for goods and services on all contract amounts of $1,500 and above, and where practicable, for amounts of less than $1,500.
f.	Role of North Carolina Partnership for Children, Inc. - The role of the North Carolina Partnership for Children, Inc., shall be expanded to incorporate all the aspects of the new role prescribed for the Partnership in the Smart Start Performance Audit recommendations and to provide technical assistance to local partnerships, assess outcome goals for children and families, ensure that statewide goals and legislative guidelines are being met, help establish policies and outcome measures, obtain non-State resources for early childhood and family services, and document and verify the cumulative contributions received by the partnerships.
(2)	Funding.
a.	Existing partnerships - All 24 local partnerships that received State funds during the 1993-95 biennium shall receive their State funds proposed for the 1995-96 fiscal year.  Existing partnerships shall file budgets and plans for review by the North Carolina Partnership for Children, Inc.  Funds for the 1996-97 fiscal year shall be available after the Joint Legislative Commission on Governmental Operations has reviewed the independent evaluation discussed in sub-subdivision (1)b. of this subdivision, and the Partnership has approved these plans and budgets in consultation with the Joint Legislative Commission on Governmental Operations.  These 24 partnerships shall be required to submit a Certification Annual Report as provided in sub-subdivision a. of subdivision (1) of this subsection beginning in April 1997.  Funds for the 1996-97 fiscal year shall be allocated to provide direct services funding at the 1995-96 level.
b.	New partnerships - Funds for planning, up to a maximum of $3,500,000, may be made available to the new partnerships in the 1995-96 fiscal year out of the continuation monies designated for the program.  If the performance audit report is determined to be satisfactory to the Joint Legislative Commission on Governmental Operations, funding and other recommendations for expansion shall be made to the General Assembly by the Joint Legislative Commission on Governmental Operations for the 1996-97 fiscal year.  Funds for the 1996-97 fiscal year shall be allocated to provide funding at the 1995-96 planning stage.
c.	Department of Human Resources; State-level administrative funding in the 1995-96 fiscal year and the 1996-97 fiscal year - Of the funds appropriated to the Department of Human Resources for Early Childhood Education and Development Initiatives for the 1995-97 fiscal biennium:
1.	No funds shall be used for State education technology;
2.	The Department of Human Resources shall receive $500,000 for the 1995-96 fiscal year and $500,000 for the 1996-97 fiscal year for State administration;
3.	The Joint Legislative Commission on Governmental Operations shall receive $500,000 for the 1995-96 fiscal year for the independent performance audit contract; 
4.	Funding for the North Carolina Partnership for Children, Inc., shall be $700,000 for the 1995-96 fiscal year and shall be $2,700,000 for the 1996-97 fiscal year.  Of the funds appropriated for the 1996-97 fiscal year, $1,000,000 shall be used to provide one-time assistance to the local partnerships in making the transition to centralized administration recommended by the Smart Start Performance Audit; and
5.	Funding for the Frank Porter Graham Child Development Center's evaluation of the Early Childhood Education and Development Initiatives shall be increased to $850,000 for the 1996-97 fiscal year.
(3)	Matching requirement.
		The North Carolina Partnership for Children, Inc., and all local partnerships shall, in the aggregate, be required to match no less than 50% of the total amount budgeted for the Early Childhood Education and Development Initiatives in each fiscal year of the biennium as follows:  contributions of cash equal to at least ten percent (10%) and in-kind donated resources equal to no more than ten percent (10%) for a total match requirement of twenty percent (20%) for each fiscal year.  Only in-kind contributions that are quantifiable, as determined by the independent auditing firm, shall be applied to the in-kind match requirement.
Failure to obtain a twenty percent (20%) match by May 1 of each fiscal year shall result in a proportionate reduction in the appropriation for the Early Childhood Education and Development Initiatives Program for the next fiscal year.  The North Carolina Partnership for Children, Inc.,  shall be responsible for compiling information on the private cash and in-kind contributions into a report that is submitted to the Joint Legislative Commission on Governmental Operations pursuant to G.S. 143B-168.13(5) in a format that allows verification by the Department of Revenue.  The same match requirements shall apply to any expansion funds appropriated by the General Assembly."
(f)  Article 12I of Chapter 120 of the General Statutes is repealed.

PART 25.  DEPARTMENT OF AGRICULTURE

Requested by:  Representatives Mitchell, Weatherly

CATTLE AND LIVESTOCK EXPOSITION FUNDS
Sec. 25.  Section 40 of Chapter 769 of the 1993 Session Laws, as amended by subsection (b) of Section 24 of Chapter 507 of the 1995 Session Laws, reads as rewritten:
"Sec. 40.  Any unencumbered funds that were appropriated to the Department of Agriculture for the 1994-95 fiscal year for planning the construction of the Cattle and Livestock Exposition Center and placed in a reserve in the Department of Agriculture shall be used for land acquisition, planning, and construction of the Cattle and Livestock Exposition Center in Iredell County.  The Center will house livestock shows and exhibits, educational programs, and a laboratory for embryo transfer research, semen evaluation, and livestock blood work."

Requested by:  Representatives Mitchell, Weatherly, Miner
RELEASE THE STATE'S REVERSIONARY INTEREST IN THE PROPERTY OF FUQUAY-VARINA AMERICAN LEGION POST 116
Sec. 25.1.  (a)	The General Assembly finds:
(1)	On April 28, 1941, the United States deeded to the State Board of Education a parcel of land north of Fuquay-Varina in Wake County, that deed being recorded at Book 868, page 171, Wake County Registry, and that deed had a right of termination by the United States if the property was not used for facilities which further the rehabilitation or education of the rural people of North Carolina;
(2)	On April 1, 1949, as approved by the Council of State, the State of North Carolina deeded to trustees for the use and benefit of Fuquay Springs, North Carolina, Post 116 of the American Legion the same parcel, with the same covenant as to the use of the property, that deed being recorded at Book 1019, page 172, Wake County Registry; and
(3)	The Congress of the United States, in Private Law 428, approved by President Eisenhower on June 21, 1954, directed the Secretary of Agriculture to convey to those trustees by quitclaim deed its remaining interest in the property; and
(4)	By deed dated November 30, 1962, and recorded at Book 1533, Page 54, Wake County Registry, the United States conveyed its remaining interest in the property to the North Carolina Rural Development Corporation, an agency of the State of North Carolina under G.S. 137-31.1; and
(5)	American Legion Post 116 of Fuquay-Varina desires to make improvements to the property, but financing such improvements is complicated by the restriction on the property.
(b)	The State of North Carolina and the North Carolina Rural Rehabilitation Corporation shall convey to the grantees of the deed recorded at Book 1019, page 172, Wake County Registry, by quitclaim deed, all of the right, title, and interest they have retained in property deeded by the State of North Carolina, that deed being recorded at Book 1019, page 172, Wake County Registry.

PART 26.  DEPARTMENT OF COMMERCE

Requested by:   Representatives Mitchell, Weatherly, Nichols, Baker
GLOBAL TRANSPARK AUTHORITY/AUDIT BY STATE AUDITOR
Sec. 26.  G.S. 63A-23 reads as rewritten:
"§ 63A-23.  Annual and quarterly reports.
The Authority shall, promptly following the close of each fiscal year, submit an annual report of its activities for the preceding year to the Governor, the General Assembly, and the Local Government Commission. Each report shall be accompanied by an audit of its books and accounts.  The audit shall be conducted by the State Auditor. The costs of all audits shall be paid from funds of the Authority.
The Authority shall submit quarterly reports to the Joint Legislative Commission on Governmental Operations.  The reports shall summarize the Authority's activities during the quarter and contain any information about the Authority's activities that is requested by the Commission."

Requested by: Representatives Mitchell, Weatherly
WORLD TRADE CENTER FUNDS
Sec. 26.1.  Of the funds appropriated in this act to the Department of Commerce, the sum of two hundred fifty thousand dollars ($250,000) for the 1996-97 fiscal year shall be allocated to the World Trade Center North Carolina (WTCNC) to support international trade education programs for small and medium-sized businesses.  The WTCNC shall report to the Joint Legislative Commission on Governmental Operations on the use of these funds on or before March 1 of each fiscal year, and more frequently as requested by the Commission.

Requested by:  Representatives Mitchell, Weatherly
FUNDS FOR ECONOMIC DEVELOPMENT
Sec. 26.2.  Of the funds appropriated in this act to the Department of Commerce, the sum of one million one hundred twenty-five thousand dollars ($1,125,000) for the 1996-97 fiscal year shall be allocated as follows:
(1)	$200,000 to the Land Loss Prevention Project, Inc., to provide free legal representation to low-income, financially distressed small farmers.  The Land Loss Prevention Project, Inc., shall not use these funds to represent farmers who have income and assets that would make them financially ineligible for legal services pursuant to Title 45, Part 1611 of the Code of Federal Regulations.  The Land Loss Prevention Project, Inc., shall report to the Joint Legislative Commission on Governmental Operations on October 1 and March 1 of each fiscal year, and more frequently as requested by the Commission, on the use of these funds;
(2)	$200,000 to the North Carolina Coalition of Farm and Rural Families, Inc., for its Small Farm Economic Development Project.  These funds shall be used to foster economic development within the State's rural farm communities by offering marketing and technical assistance to small and limited resource farmers.  The North Carolina Coalition of Farm and Rural Families, Inc., shall report to the Joint Legislative Commission on Governmental Operations on October 1 and March 1 of each fiscal year, and more frequently as requested by the Commission, on the use of these funds;
(3)	$500,000 to the North Carolina Institute for Minority Economic Development, Inc., to foster minority economic development within the State through policy analysis, information and technical assistance, resource expansion and support of community-based demonstration initiatives.  The North Carolina Institute for Minority Economic Development, Inc., shall report to the Joint Legislative Commission on Governmental Operations on October 1 and March 1 of each fiscal year, and more frequently as requested by the Commission, on the use of these funds; and
(4)	$225,000 to the North Carolina Minority Support Center (formerly known as the Minority Credit Union Support Center) for technical assistance to community-based minority credit unions.  The North Carolina Minority Support Center shall report to the Credit Union Division of the Department of Commerce and to the Joint Legislative Commission on Governmental Operations on October 1 and March 1 of each fiscal year, and more frequently as requested by the Department or the Commission, on the use of these funds.

Requested by:  Representatives Mitchell, Weatherly
MCNC
Sec. 26.3.  Section 25.9 of Chapter 324 of the 1995 Session Laws reads as rewritten:
"Sec. 25.9.  (a)	MCNC shall report on all of its programs including contractual services for Supercomputer and the Research and Education Network to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division on or before March 1 of each fiscal year, and more frequently as requested by the Commission. The reports shall include information on the activities and accomplishments during the past fiscal year, itemized expenditures during the past fiscal year with sources of funding, planned activities, and accomplishments for at least the next 12 months, and itemized anticipated expenditures with sources of funding for the next 12 months.  The report on the activities of the Supercomputer and the Research and Education Network programs shall identify the users, the major projects conducted by the users, and the benefits of the projects.
(b)	MCNC shall provide a report containing detailed budget information to the Office of State Budget and Management in the same manner as State departments and agencies in preparation for biennium budget requests.  Specific salary information will be provided upon written request by the Chairs of the Joint Legislative Commission on Governmental Operations or the Chairs of the House Appropriations Subcommittee on Natural and Economic Resources and the Chairs of the Senate Appropriations Committee on Natural and Economic Resources.
	(c)	The funds appropriated in this act to MCNC shall be used as follows:
	FY 1995-96	FY 1996-97
Microelectronics Program	$5,362,523	$4,966,721
Supercomputer	  9,576,319	 798,275
Telecommunications	  4,826,158	 -0-  
(d)	Of the funds appropriated to MCNC for the Microelectronics Program, four million nine hundred sixty-six thousand seven hundred twenty-one dollars ($4,966,721) for the 1996-97 fiscal year is contingent upon a dollar-for-dollar match in non-State funds.
(e)	If MCNC finds it necessary to make changes in the program allocations specified in subsection (c) of this section, MCNC shall report such changes to the Joint Legislative Commission on Governmental Operations 30 days before the reallocation.
(f)	
			Of the funds appropriated to the Department of Commerce for MCNC in Chapter 324 of the 1995 Session Laws for the 1996-97 fiscal year, the sum of thirteen million dollars ($13,000,000) shall be transferred to the UNC Board of Governors for contracting the purchase of supercomputing and research and education networking services to continue the provision of these services at North Carolina universities and colleges."

Requested by:  Representatives Mitchell, Weatherly
ECONOMIC DEVELOPMENT FUNDS
Sec. 26.4.  Section 25.4 of Chapter 507 of the 1995 Session Laws reads as rewritten:
"Sec. 25.4.  (a)	Definition. – For purposes of this section, the term 'community development corporation' means a nonprofit corporation:
(1)	Chartered pursuant to Chapter 55A of the General Statutes;
(2)	Tax-exempt pursuant to section 501(c)(3) of the Internal Revenue Code of 1986;
(3)	Whose primary mission is to develop and improve low-income communities and neighborhoods through economic and related development;
(4)	Whose activities and decisions are initiated, managed, and controlled by the constituents of those local communities; and 
(5)	Whose primary function is to act as deal-maker and packager of projects and activities that will increase their constituencies' opportunities to become owners, managers, and producers of small businesses, affordable housing, and jobs designed to produce positive cash flow and curb blight in the target community.
(b)	Of the funds appropriated in this act to the Rural Economic Development Center, Inc., the sum of one million twenty-five thousand dollars ($1,025,000) for the 1996-97 fiscal year shall be placed in an Economic and Community Development Program Reserve.  Funds shall be allocated from the Reserve by the Rural Economic Development Center, Inc. as follows:
(1)	$675,000 for community development grants to support community development projects and activities within the State's minority communities.  Any community development corporation as defined in this section is eligible to apply for funds.  The Rural Economic Development Center shall establish performance-based criteria for determining which community development corporations will receive a grant and the grant amount.  Funding will also be allocated to the North Carolina Association of Community Development Corporations, Inc.  The Rural Economic Development Center, Inc., shall allocate these grant funds from the Economic and Community Development Program Reserve as follows:
a.	$450,000 for direct grants to the local community development corporations that have previously received State funds for this purpose to support operations and project activities,
b.	$125,000 for direct grants to local community development organizations that have not previously received State funds,
c.	$75,000 to the North Carolina Association of Community Development Corporations, Inc. to provide training, technical assistance, resource development, project assistance, and support for local community development corporations statewide, and
d.	$25,000 to the Rural Economic Development Center, Inc. to be used to cover expenses in administering this section;
	(3)	$125,000 to the Microenterprise Loan Program to support the loan fund and operations of the Program;
(4)	$25,000 to the Opportunities Industrialization Center of Elizabeth City, Inc.
					(5)	$200,000 shall be used for a program to provide supplemental funding for matching requirements for economic development in economically depressed areas.  The Center shall use the funds to make grants to local governments and nonprofit corporations to provide funds necessary to match federal grants or other grants for necessary economic development projects and activities in economically depressed areas.  The grant recipients shall be selected on the basis of need;
					(c)	The Rural Economic Development Center, Inc. shall report to the Joint Legislative Commission on Governmental Operations on October 1 and March 1 of each fiscal year, and more frequently as requested by the Commission, on the uses of funds allocated pursuant to subdivisions (1), (3), (4), and (5) of subsection (b) of this section."

PART 27.  DEPARTMENT OF ENVIRONMENT, HEALTH, AND NATURAL
	RESOURCES

Requested by:   Representatives Mitchell, Weatherly, Nichols
AGRICULTURE COST SHARE FUNDS FOR ANIMAL OPERATIONS LOCATED IN A RIVER BASIN OTHER THAN THE NEUSE RIVER BASIN
Sec. 27.  Of the funds appropriated in this act to the Department of Environment, Health, and Natural Resources, Division of Soil and Water Conservation, for the Agriculture Cost Share Program for Nonpoint Source Pollution Control, the sum of six million dollars ($6,000,000) for the 1996-97 fiscal year shall be used to assist existing animal operations in obtaining approved animal waste management plans for those animal operations located, in whole or in part, in a county in one of the State's 17 river basins other than the Neuse River Basin and shall be used in accordance with G.S. 143-215.74(b) and any provisions enacted by the 1995 General Assembly regarding the expenditure of funds under this Program.  When implementing this section, the Department shall cooperate with the Cooperative Extension Service, the Natural Resource Conservation Service of the United States Department of Agriculture, and the local Soil and Water Conservation Districts.  Any of these funds remaining at the end of the 1996-97 fiscal year shall not revert, but shall remain available for use pursuant to this section.

Requested by:   Representatives Mitchell, Weatherly, Nichols
AGRICULTURE COST SHARE FUNDS FOR ANIMAL OPERATIONS LOCATED IN THE NEUSE RIVER BASIN
Sec. 27.1.   Of the funds appropriated in this act to the Department of Environment, Health, and Natural Resources, Division of Soil and Water Conservation, for the Agriculture Cost Share Program for Nonpoint Source Pollution Control, the sum of two million dollars ($2,000,000) for the 1996-97 fiscal year shall be used to assist existing animal operations in obtaining approved animal waste management plans for those animal operations located, in whole or in part, in a county in the Neuse River Basin and shall be used in accordance with G.S. 143-215.74(b) and any provisions enacted by the 1995 General Assembly regarding the expenditure of funds under this Program.  When implementing this section, the Department shall cooperate with the Cooperative Extension Service, the Natural Resource Conservation Service of the United States Department of Agriculture, and the local Soil and Water Conservation Districts.  Any of these funds remaining at the end of the 1996-97 fiscal year shall not revert, but shall remain available for use pursuant to this section.

Requested by:   Representatives Mitchell, Weatherly, Nichols, H. Hunter
STATEWIDE TECHNICAL ASSISTANCE FOR ANIMAL WASTE MANAGEMENT PLANS
Sec. 27.2.  (a)	Of the funds appropriated in this act to the Department of Environment, Health, and Natural Resources, Division of Soil and Water Conservation, the sum of one million four hundred seventeen thousand five hundred dollars ($1,417,500) for the 1996-97 fiscal year shall be used to provide technical assistance to operators of animal operations in the process of obtaining approved animal waste management plans.  When implementing this section, the Department shall cooperate with the Cooperative Extension Service, the Natural Resource Conservation Service of the United States Department of Agriculture, and the local Soil and Water Conservation Districts.  Any of these funds remaining at the end of the 1996-97 fiscal year shall not revert, but shall remain available for use pursuant to this section.

Requested by:   Representatives Mitchell, Weatherly, Nichols, H. Hunter
ODOR CONTROL TECHNOLOGY STUDY
Sec. 27.3.  Of the funds appropriated to the Department of Environment, Health, and Natural Resources in this act, the sum of six hundred thousand dollars ($600,000) for the 1996-97 fiscal year shall be allocated to the Board of Governors of The University of North Carolina for the North Carolina Agricultural Research Service at North Carolina State University and for North Carolina Agricultural and Technical State University to conduct research into economically feasible odor control technologies and to provide detailed economic analysis of odor management alternatives; provided these funds are matched with an equal sum from private sources.  No later than January 1, 1997, the Department shall report to the Environmental Review Commission and the Fiscal Research Division on progress under the research, including any findings and recommendations at that time.

Requested by:   Representatives Weatherly, Mitchell, Nichols
WETLANDS RESTORATION PROGRAM/FUNDS
Sec. 27.4.  (a)	Article 21 of Chapter 143 of the General Statues is amended by adding the following new sections to read:
"§ 143-214.8.  Wetlands Restoration Program:  established.
The Wetlands Restoration Program is established within the Department of Environment, Health, and Natural Resources. The Wetlands Restoration Program shall be developed by the Department as a nonregulatory statewide wetlands restoration program for the acquisition, restoration, enhancement, and creation of wetland and riparian resources, including riparian buffers and greenways, that contribute to the protection and improvement of water quality, flood prevention, fisheries, wildlife habitat, and recreational opportunities.  The Wetlands Restoration Program shall consist of the following components:
(1)	Restoration of wetlands.
(2)	Development of restoration plans.
(3)	Landowner contact and land acquisition.
(4)	Evaluation of site plans and engineering studies.
(5)	Oversight of construction and monitoring of restoration sites.
(6)	Land ownership and management.
(7)	Mapping, site identification, and assessment of wetlands functions.
"§ 143-214.9.  Wetlands Restoration Program:  purposes.
The purposes of the program are as follows:
(1)	To restore wetlands functions and values across the State to replace critical functions lost through historic wetlands conversion and through current and future permitted impacts.  It is not the policy of the State to destroy upland habitats unless it would further the purposes of the Wetlands Restoration Program.
(2)	To provide a consistent and simplified approach to address mitigation requirements associated with permits or authorizations issued by the United States Army Corps of Engineers under 33 U.S.C. § 1344.
(3)	To streamline the wetlands permitting process, minimize delays in permit decisions, and decrease the burden of permit applicants of planning and performing compensatory mitigation for wetlands losses.
(4)	To increase the ecological effectiveness of compensatory mitigation.
(5)	To achieve a net increase in wetland acres, functions, and values in each major river basin.
(6)	To foster a comprehensive approach to environmental protection.
"§ 143-214.10.  Wetlands Restoration Program:  development and implementation of basinwide restoration plans.
Develop basinwide restoration plans. – The Department shall develop a basinwide plan for wetlands and riparian area restoration with the goal of protecting and enhancing water quality, flood prevention, fisheries, wildlife habitat, and recreational opportunities within each of the 17 major river basins in the State.  Beginning July 1, 1997, the Department shall develop and begin implementing a basinwide restoration plan for each of the 17 river basins in the State in accordance with the basinwide schedule currently established by the Division of Environmental Management.
"§ 143-214.11.  Wetlands Restoration Program:  compensatory mitigation.
(a)	Definition. – For purposes of this section the term 'compensatory mitigation' means the restoration, creation, enhancement, or preservation of wetlands or other areas required as a condition of a Section 404 permit issued by the United States Army Corps of Engineers.
(b)	Department of Environment, Health, and Natural Resources to coordinate compensatory mitigation. – All compensatory mitigation required by permits or authorizations issued by the United States Army Corps of Engineers under 33 U.S.C. § 1344  shall be coordinated by the Department consistent with the basinwide plans for wetlands restoration and rules developed by the Environmental Management Commission.  All compensatory wetlands mitigation whether performed by the Department or by permit applicants, shall be consistent with the basinwide restoration plans.
(c)	Mitigation emphasis on replacing ecological function within same river basin. – The emphasis of mitigation is on replacing functions within the same river basin unless it is demonstrated that restoration of other areas would be more beneficial to the overall purposes of the Wetlands Restoration Program.
(d)	Compensatory mitigation options available to applicant. – An applicant may satisfy compensatory wetlands mitigation requirements by the following actions, if those actions are consistent with the basinwide restoration plans and also meet or exceed the requirements of the United State Army Corps of Engineers:
(1)	Payment of a fee established by the Department into the Wetlands Restoration Fund established in G.S. 143-214.6.
(2)	Donation of land to the Wetlands Restoration Program or to other public or private non-profit conservation organizations as approved by the Department.
(3)	Participation in a private wetlands mitigation bank.
(4)	Preparing and implementing a wetlands restoration plan.
(e)	Payment schedule. – A standardized schedule of per acre payment amounts shall be established by the Environmental Management Commission.  The monetary payment shall be based on the ecological functions and values of wetlands permitted to be lost and on the cost of restoring or creating wetlands capable of performing the same or similar functions, including directly related costs of wetlands restoration planning, long term-monitoring and maintenance of restored areas.
"§ 143-214.12.  Wetlands Restoration Program:  Wetlands Restoration Fund.
(a)	Wetlands Restoration Fund. – The Wetlands Restoration Fund is established as a nonreverting fund within the Department.  The Fund shall be treated as a special trust fund and shall be credited with interest by the State Treasurer pursuant to G.S. 147-69.2 and G.S. 147-69.3.  The Wetlands Restoration Fund shall provide a repository for monetary contributions and donations or dedications of interests in real property to promote projects for the restoration, enhancement, preservation, or creation of wetlands and riparian areas and for payments made in lieu of compensatory mitigation as described in subsection (b) of this section.  No funds shall be expended from this Fund for any purpose other than those directly contributing to the acquisition, enhancement, restoration, or creation of wetlands and riparian areas in accordance with the basinwide plan as described in subsection (a) of this section.
(b)	Authorized methods of payment. – A person subject to a permit or authorization issued by the United States Army Corps of Engineers under 33 U.S.C. § 1344, may contribute to the Wetlands Restoration Program, to comply with conditions to, or terms of, the permit or authorization, if participation in the Wetlands Restoration Program will meet the mitigation requirements of the United States Army Corps of Engineers.  The Department shall, at the discretion of the applicant, accept payment into the Wetlands Restoration Fund in lieu of other compensatory mitigation requirements of any authorizations issued by the United States Army Corps of Engineers under 33 U.S.C. § 1344 if the contributions will meet the mitigation requirements of the United States Army Corps of Engineers.  Payment may be made in the form of monetary contributions according to a fee schedule established by the Environmental Management Commission or in the form of donations of real property provided that the property is approved by the Department as a suitable site consistent with the basinwide wetlands restoration plan.
"§ 143-214.13.   Wetlands Restoration Program: reporting requirement.
The Department of Environment, Health, and Natural Resources shall report annually to the Environmental Review Commission regarding its progress in implementing the Wetlands Restoration Program and its use of the funds in the Wetlands Restoration Fund.  The report shall document statewide wetlands losses and gains and compensatory mitigation performed under G.S. 143-214.8 through G.S. 143-214.12.  The report shall also provide an accounting of receipts and disbursements of the Wetlands Restoration Fund and analysis of the per acre cost of wetlands restoration.  The Department shall also send a copy of its report to the Fiscal Research Division of the General Assembly."
(b) Of the funds appropriated by this act to the Department of Environment, Health, and Natural Resources  the sum of ten million dollars ($10,000,000) for the 1996-97 fiscal year shall be credited to the Wetlands Restoration Fund and shall be allocated by the Department of Environment, Health, and Natural Resources among each of the State's 17 river basins for wetlands restoration and mitigation in each basin.  The Department shall determine the amount to be allocated for each basin based on the size of the basin and a critical needs determination by the Department.  It is the intent of the General Assembly that the sum of ten million dollars ($10,000,000) for the 1997-98 fiscal year and the sum of ten million dollars ($10,000,000) for the 1998-99 fiscal year be appropriated to the Wetlands Restoration Program to be allocated by the Department of Environment, Health, and Natural Resources among each of the State's 17 river basins for wetlands restoration and mitigation in each basin.
(c)	Of the funds appropriated by this act to the Department of Environment, Health, and Natural Resources for the 1996-97 fiscal year the sum of five hundred thousand dollars ($500,000) in recurring funds shall be used to support eight staff positions and shall also be used for administrative and other expenses to implement the Wetlands Restoration Program.

Requested by:   Representatives Mitchell, Weatherly, Nichols, H. Hunter
STUDY ALTERNATIVE ANIMAL WASTE TECHNOLOGIES
Sec. 27.6.  Of the funds appropriated to the Department of Environment, Health, and Natural Resources in this act, the sum of five hundred thousand dollars ($500,000) for the 1996-97 fiscal year shall be allocated to the Board of Governors of The University of North Carolina for the North Carolina Agricultural Research Service at North Carolina State University and for North Carolina Agricultural and Technical State University to serve as focal points for experimentation with and testing of alternative animal waste disposal technologies for use in agriculture.  No later than January 1, 1997, the Department shall report to the Environmental Review Commission and the Fiscal Research Division on progress under the research, including any findings and recommendations at that time.

Requested by:   Representatives Mitchell, Weatherly, Nichols, H. Hunter
STUDY GROUNDWATER IMPACTS OF LAGOONS
Sec. 27.7.  Of the funds appropriated to the Department of Environment, Health, and Natural Resources in this act, the sum of three hundred seventy-five thousand dollars ($375,000) for the 1996-97 fiscal year shall be allocated to the Board of Governors of The University of North Carolina for the North Carolina Agricultural Research Service at North Carolina State University and for North Carolina Agricultural and Technical State University to design and implement a scientifically based study for the purpose of determining the extent to which animal waste lagoons pose a threat, if any, to the groundwater of the State.  Lagoons that are representative of soil types and hydrologic conditions in North Carolina shall be selected for this study.  No later than January 1, 1997, the Department shall report to the Environmental Review Commission and the Fiscal Research Division on progress under the research, including any findings and recommendations at that time.

Requested by:   Representatives Mitchell, Weatherly, Nichols
FINANCIAL ASSISTANCE TO AID MUNICIPALITIES IN NEUSE RIVER BASIN ACHIEVE REDUCTIONS IN NITROGEN LEVELS
Sec. 27.8.  (a) Of the funds appropriated by this act to the Department of Environment, Health, and Natural Resources for the 1996-97 fiscal year the sum of five million dollars ($5,000,000) shall be allocated by the Department as grants to local government units in the Neuse River Basin.  The grants shall be awarded by the Department for the purpose of reducing the nitrogen level in the Neuse River Basin through improved and more effective wastewater treatment and stormwater control measures.  The criteria established by Chapter 159G of the General Statutes with regard to grants made for wastewater treatment works and wastewater collection system projects shall be the primary consideration in granting funds for those types of projects.  The criteria established by the Department under G.S. 143-214.7 shall be the primary consideration in granting funds to a unit of local government for a project that addresses stormwater measures and controls.  A grant made by the Department under this section to a unit of local government shall not exceed five hundred thousand dollars ($500,000) or ten percent (10%) of the project cost, whichever is less.
(b)	The Department of Environment, Health, and Natural Resources shall report by October 15, 1996, and quarterly thereafter to the Environmental Review Commission regarding the grants awarded and their effectiveness in achieving the goal of reducing the nitrogen level in the Neuse River Basin and shall also send a written copy of its report to the Fiscal Research Division of the General Assembly.

Requested by:   Representatives Mitchell, Weatherly, Nichols
STUDY OF ATMOSPHERIC DEPOSITION OF NITROGEN IN NEUSE ESTUARY
Sec. 27.9.  Of the funds appropriated to the Department of Environment, Health, and Natural Resources in this act, the sum of four hundred fifty thousand dollars ($450,000) for the 1996-97 fiscal year shall be used by the Department to contract with a research institution to research and perform computer modelling to identify the amount of atmospheric nitrogen reaching the Neuse estuary, to enable the development of strategies to reduce the most significant sources of nitrogen, and to improve water quality.  If the expertise required for this research is available at a research institution in the State, the Department shall contract with a research institution in the State.  No later than January 1, 1997, the Department shall report to the Environmental Review Commission and the Fiscal Research Division on progress under the research, including any findings and recommendations at that time.

Requested by:   Representatives Mitchell, Weatherly
TRANSFER THE GEODETIC SURVEY SECTION TO THE OFFICE OF STATE PLANNING
Sec. 27.10.  The twenty-two positions, support, and equipment in the Geodetic Survey Section of the Division of Land Resources, Department of Environment, Health, and Natural Resources, shall be moved to the Office of State Planning in the Office of the Governor.

Requested by:   Representatives Mitchell, Weatherly
HAZARDOUS WASTE REPORTS
Sec. 27.11.  Beginning in 1997, the Department of Environment, Health, and Natural Resources shall report on the generation, storage, treatment, and disposal of hazardous waste in North Carolina no more often than it is required to report under federal law or federal regulation.

Requested by: Representatives Mitchell, Weatherly
DRINKING WATER WAIVER PROGRAM
Sec. 27.12.   The Department of Environment, Health, and Natural Resources, Division of Environmental Health, shall establish a drinking water waiver program that will enable the Division to seek and qualify for additional waivers from the drinking water regulations of the United States Environmental Protection Agency.  The program shall include, but not be limited to, the collection and study of data on the State's drinking water testing program to determine which contaminants do not present a significant health risk and which water systems are not susceptible to particular contaminants.  The Division shall report its progress in establishing and implementing the drinking water waiver program not later than December 15, 1996, to the Fiscal Research Division, the Environmental Review Commission, and the Legislative Research Commission study committee on Water Issues.

Requested by:   Representatives Mitchell, Weatherly, Tolson, Nichols, H. Hunter
STUDY ENVIRONMENTAL IMPACTS OF ABANDONED LAGOONS/ANIMAL FACILITIES
Sec. 27.13.  Of the funds appropriated to the Department of Environment, Health, and Natural Resources in this act, the sum of twenty-five thousand dollars ($25,000) for the 1996-97 fiscal year shall be placed in a reserve in the Department for the General Assembly for a legislative study commission to study the environmental impacts of animal waste lagoons and animal facilities that have been closed or abandoned or are inactive in order to determine the extent and scope of the problems, if any, associated with these structures, to identify potential solutions for any existing problems, to identify scientifically and environmentally effective methods of closure for these structures in the future, and to determine the advisability of providing incentives for the proper management of abandoned animal waste lagoons and abandoned animal facilities.  No later than January 1, 1997, this study commission shall report to the 1997 General Assembly, the Environmental Review Commission, and the Fiscal Research Division on its findings, recommendations, and any legislative proposals.

Requested by:   Representatives Mitchell, Weatherly, Nichols, H. Hunter
RESERVE FOR PERMITTING AND INSPECTING ANIMAL WASTE MANAGEMENT SYSTEMS
Sec. 27.14.  Of the funds appropriated in this act to the Department of Environment, Health, and Natural Resources, the sum of four hundred eighty-four thousand dollars ($484,000) shall be placed in a reserve to be used to establish and support positions in the Division of Environmental Management to conduct permitting, inspection, and enforcement activities for animal waste management systems in the event the 1995 General Assembly (1996 Regular Session) enacts legislation that establishes a permitting or inspection program for animal waste management systems.  When implementing this section, the Department shall cooperate with the Cooperative Extension Service, the Natural Resources Conservation Service of the United States Department of Agriculture, and the local Soil and Water Conservation Districts.  Any funds remaining in the reserve at the end of the 1996-97 fiscal year shall not revert, but shall remain available for use pursuant to this section.

Requested by: Representatives Mitchell, Weatherly, H. Hunter
HEALTHY START FOUNDATION FUNDS
Sec. 27.15.  Section 26.4 of Chapter 507 of the 1995 Session Laws reads as rewritten:
"Sec. 26.4.  Of the funds appropriated in this act to the Department of Environment, Health, and Natural Resources, the sum of six hundred fifty thousand dollars ($650,000) for the 1996-97 fiscal year shall be allocated to the North Carolina Healthy Start Foundation.  Funds allocated pursuant to this section shall be expended first to support statewide planning, promotion, and coordination for the First Step Campaign.  Funds remaining after allocation for First Step shall be used to support other programs and activities aimed at reducing infant mortality. The Healthy Start Foundation shall report on all of its programs to the Joint Legislative Commission on Governmental Operations on or before March 1, 1997.  The report shall include information on the Foundation's activities and accomplishments during the past fiscal year, a list of the groups, organizations, communities, and other recipients of assistance from the Foundation in the last 12 months, itemized expenditures during the past fiscal year with sources of funding, planned activities, and accomplishments for at least the next 12 months, and itemized anticipated expenditures with sources of funding for the next 12 months."

Requested by:  Representatives Mitchell, Weatherly, Culpepper
BEAVER DAMAGE CONTROL FUNDS
Sec. 27.16.  Subsection (b) of Section 69 of Chapter 1044 of the 1991 Session Laws, as amended by Section 111 of Chapter 561 of the 1993 Session Laws, Section 27.3 of Chapter 769 of the 1993 Session Laws, and Section 26.6 of Chapter 507 of the 1995 Session Laws, reads as rewritten:
"(b)	The Beaver Damage Control Advisory Board shall develop a pilot program to control beaver damage on private and public lands.  Bladen, Brunswick, Carteret, Chatham, Chowan, Craven, Columbus, Duplin, Edgecombe, Franklin, Greene, Halifax, Hertford, Johnston, Lincoln, Nash, Onslow, Pamlico, Pender, Pitt, Robeson, Sampson, Scotland, Vance, Warren, Washington, Wayne, and Wilson Counties shall participate in the pilot program.  The Beaver Damage Control Advisory Board shall act in an advisory capacity to the Wildlife Resources Commission in the implementation of the program.  In developing the program, the Board shall:
(1) 	Orient the program primarily toward public health and safety and toward landowner assistance, providing some relief to landowners through beaver control and management rather than eradication;
(2)	Develop a priority system for responding to complaints about beaver damage;
(3)	Develop a system for documenting all activities associated with beaver damage control, so as to facilitate evaluation of the program;
(4)	Provide educational activities as a part of the program, such as printed materials, on-site instructions, and local workshops;
(5)	Provide for the hiring of personnel necessary to implement beaver damage control activities, administer the pilot program, and set salaries of personnel;
(6)	Evaluate the costs and benefits of the program that might be applicable elsewhere in North Carolina.
No later than September 30, 1994 and again upon the conclusion of the pilot program on June 30, 1997, the Board shall issue a report to the Wildlife Resources Commission on the program to date, including recommendations on the feasibility of continuing the program in participating counties and the desirability of expanding the program into other counties.  The Wildlife Resources Commission shall prepare a plan to implement a statewide program to control beaver damage on private and public lands.  No later than January 1, 1995, the Wildlife Resources Commission shall present its plan in a report to the House Appropriations Subcommittee on Natural and Economic Resources and the Senate Appropriations Committee on Natural and Economic Resources."
(b)	Subsection (h) of Section 69 of Chapter 1044 of the 1991 Session Laws, as amended by Section 111 of Chapter 561 of the 1993 Session Laws, Section 27.3 of Chapter 769 of the 1993 Session Laws, and Section 26.6 of Chapter 507 of the 1995 Session Laws, reads as rewritten:
"(h)	Subsections (a) through (d) of this section expire June 30, 1997."
(c)	Subsection (d) of Section 26.6 of Chapter 507 of the 1995 Session Laws reads as rewritten:
"(d)	Of the funds appropriated from the General Fund to the Wildlife Resources Commission for the 1995-96 fiscal year and the 1996-97 fiscal year, there is allocated the sum of three hundred seventy-two thousand six hundred ninety dollars ($372,690) for the 1995-96 fiscal year and the sum of three hundred sixty-three thousand six hundred ninety dollars ($363,690) for the 1996-97 fiscal year to provide the State share necessary to continue the beaver damage control pilot program established by Section 69 of Chapter 1044 of the 1991 Session Laws, as amended by Section 111 of Chapter 561 of the 1993 Session Laws and Section 27.3 of the 1993 Session Laws, in Bladen, Brunswick, Carteret, Chatham, Chowan, Craven, Columbus, Duplin, Edgecombe, Franklin, Greene, Halifax, Hertford, Johnston, Lincoln, Nash, Onslow, Pamlico, Pender, Pitt, Robeson, Sampson, Scotland, Vance, Warren, Washington, Wayne, and Wilson Counties, provided the sum of twenty-five thousand dollars ($25,000) in federal funds is available in each fiscal year to provide the federal share.  These funds shall be matched by four thousand dollars ($4,000) of local funds in each fiscal year from each of the 28 participating counties."

Requested by:   Representatives Mitchell, Weatherly, Nichols
TWO PERCENT RESERVE FOR WETLANDS RESTORATION PROGRAM
Sec. 27.17.  Article 1 of Chapter 143 of the General Statutes is amended by adding a new section to read:
"§ 143-15.3B.  Wetlands Restoration Fund.
	(a)	The Wetlands Restoration Fund is established in G.S. 143-214.12.  Beginning with the 1998-99 fiscal year, the State Controller shall reserve to the Wetlands Restoration Fund two percent (2%) of any unreserved credit balance remaining in the General Fund at the end of each fiscal year.  As used in this section, the term 'unreserved credit balance' means the credit balance amount, as determined on a cash basis, before funds are reserved by the State Controller to the Savings Reserve Account, the Repairs and Renovations Reserve Account, or the Wetlands Restoration Fund pursuant to this section, G.S. 143-15.3, and G.S. 143-15.3A.
(b)	The funds in the Wetlands Restoration Fund shall be used only in accordance with Article 21 of Chapter 143 of the General Statutes."

PART 28. SALARIES AND BENEFITS

Requested by: Representatives Holmes, Creech, Esposito
JUDICIAL BRANCH OFFICIALS
Sec. 28. Section 7.4 of Chapter 507 of the 1995 Session Laws reads as rewritten:
"Sec. 7.4.  (a)	The annual salaries, payable monthly, for specified judicial branch officials for the 1996-97 fiscal year are:

Judicial Branch Officials	Annual Salary

Chief Justice, Supreme Court	$98,576 
Associate Justice, Supreme Court	96,000 
Chief Judge, Court of Appeals	93,600 
Judge, Court of Appeals	92,000 
Judge, Senior Regular Resident Superior Court	89,500 
Judge, Superior Court	87,000 
Chief Judge, District Court	79,000 
Judge, District Court	76,500 
District Attorney	80,600 
Administrative Officer of the Courts	89,500 
Assistant Administrative Officer of the Courts	75,160 
Public Defender	80,600 

(b)	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 fifty-one thousand sixty-seven dollars ($51,067), and the minimum salary of any assistant district attorney or assistant public defender is at least twenty-six thousand seventy-one dollars ($26,071) effective July 1, 1996.
(c)	The salaries in effect for the 1995-96 fiscal year for permanent, full-time employees of the Judicial Department, except for those whose salaries are itemized in this Part, shall be increased by three percent (3%), commencing July 1, 1996.
(d)	The salaries in effect for the 1995-96 fiscal year for all permanent, part-time employees of the Judicial Department shall be increased on and after July 1, 1996, by pro rata amounts of the three percent (3%)."

Requested by:  Representatives Justus, Thompson, Daughtry, Culpepper 
SUPERIOR COURT JUDGES' LONGEVITY
Sec. 28A.  G.S. 7A-44(b) reads as rewritten:
	"(b)	In lieu of merit and other increment raises paid to regular State employees, a judge of the superior court, regular or special, shall receive as longevity pay an annual amount equal to four and eight-tenths percent (4.8%) of the annual salary set forth in the Current Operations Appropriations Act payable monthly after five years of service, nine and six-tenths percent (9.6%) after 10 years of service, fourteen and four-tenths percent (14.4%) after 15 years of service, nineteen and two-tenths percent (19.2%) after 20 years of service, and twenty-four percent (24%) after 25 years of service.  'Service' means service as a justice or judge of the General Court of Justice or as a member of the Utilities Commission or as director or assistant director of the Administrative Office of the Courts. Service shall also mean service as a district attorney or as a clerk of superior court."

Requested by: Representatives Holmes, Creech, Esposito
ASSISTANT AND DEPUTY CLERKS OF SUPERIOR COURT
Sec. 28.1.  G.S. 7A-102(c1) reads as rewritten:
"(c1)	A full-time assistant clerk or a full-time deputy clerk, and up to one full-time deputy clerk serving as head bookkeeper per county, shall be paid an annual salary subject to the following minimum and maximum rates:

Assistant Clerks and Head Bookkeeper	Annual Salary

Minimum 		$22,195
Maximum		 39,299

Deputy Clerks	Annual Salary
Minimum		$17,746
Maximum		30,271."

Requested by: Representatives Holmes, Creech, Esposito
MAGISTRATES' PAY PLAN
Sec. 28.2.  (a)	G.S. 7A-171.1(a)(1) reads as rewritten:
"(1)	A full-time magistrate shall be paid the annual salary indicated in the table set out in this subdivision. A full-time magistrate is a magistrate who is assigned to work an average of not less than 40 hours a week during the term of office. The Administrative Officer of the Courts shall designate whether a magistrate is full-time. Initial appointment shall be at the entry rate.  A magistrate's salary shall increase to the next step every two years on the anniversary of the date the magistrate was originally appointed for increases to Steps 1 through 3, and every four years on the anniversary of the date the magistrate was originally appointed for increases to Steps 4 through 6.

            Table of Salaries of Full-Time Magistrates

Step Level	Annual Salary
Entry Rate		$24,120
Step 1		26,540
Step 2		29,175
Step 3		32,049
Step 4 		35,198
Step 5		38,659
Step 6 		42,465."
(b)	G.S. 7A-171.1(a1)(1) reads as rewritten:
"(1)	The salaries of magistrates who on June 30, 1994, were paid at a salary level of less than five  years of service under the table in effect that date shall be as follows:
	1 or more but less than 3 years of service	  	19,988
3 or more but less than 5 years of service	$21,953."
		Upon completion of five years of service, those magistrates shall receive the salary set as the Entry Rate in the table in subsection (a)."

Requested by: Representatives Holmes, Creech, Esposito
GENERAL ASSEMBLY PRINCIPAL CLERKS
Sec. 28.3. 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 fifty-six thousand seven hundred thirty-two dollars ($56,732) 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: Representatives Holmes, Creech, Esposito
SERGEANT-AT-ARMS AND READING CLERKS
Sec. 28.4.  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 two hundred forty-four dollars ($244.00) per week, 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: Representatives Holmes, Creech, Esposito
LEGISLATIVE EMPLOYEES
Sec. 28.5.  Section 7.11 of Chapter 507 of the 1995 Session Laws reads as rewritten:
"Sec. 7.11.  The Legislative Administrative Officer shall increase the salaries of nonelected employees of the General Assembly in effect for fiscal year 1995-96 by three percent (3%).  Nothing in this act limits any of the provisions of G.S. 120-32."

Requested by: Representatives Holmes, Creech, Esposito
COMMUNITY COLLEGES PERSONNEL
Sec. 28.6. Section 7.12 of Chapter 507 of the 1995 Session Laws reads as rewritten:
"Sec. 7.12.  The Director of the Budget shall transfer from the Reserve for Salary Increases created in this act for fiscal year 1995-96 funds to the Department of Community Colleges necessary to provide an average annual salary increase of three percent (3%), including funds for the employer's retirement and social security contributions, commencing July 1, 1996, for all permanent full-time community college institutional personnel supported by State funds.  The State Board of Community Colleges shall establish guidelines for providing their salary increases to community college institutional personnel to include consideration of increases based on performance. Salary funds shall be used to provide an average annual salary increase of three percent (3%) to all full-time employees and part-time employees on a pro rata basis."

Requested by: Representatives Holmes, Creech, Esposito
UNIVERSITY OF NORTH CAROLINA SYSTEM – EPA SALARY INCREASES
Sec. 28.7. Section 7.13 of Chapter 507 of the 1995 Session Laws reads as rewritten:
"Sec. 7.13.  The Director of the Budget shall transfer to the Board of Governors of The University of North Carolina sufficient funds from the Reserve for Salary Increases created in this act for fiscal year 1996-97 to provide an annual average salary increase of three percent (3%), including funds for the employer's retirement and social security contributions, commencing July 1, 1996, for all employees of The University of North Carolina, as well as employees other than teachers of the North Carolina School of Science and Mathematics, supported by State funds and whose salaries are exempt from the State Personnel Act (EPA).  These funds shall be allocated to individuals according to the 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 salary increases and necessary employer contributions provided by this section.  The Board of Governors shall include consideration of increases based on performance in its adoption of rules for the allocation of funds for salary increases."

Requested by: Representatives Holmes, Creech, Esposito
MOST STATE EMPLOYEES
Sec. 28.8. Section 7.14 of Chapter 507 of the 1995 Session Laws reads as rewritten:
"Sec. 7.14.  (a)	The salaries in effect June 30, 1996, of 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 or after July 1, 1996, unless otherwise provided by this act, by three percent (3%).
(b)	Except as otherwise provided in this act, salaries in effect June 30, 1996, 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 three percent (3%), commencing July 1, 1996.
(c)	The salaries in effect June 30, 1996, for all permanent part-time State employees shall be increased on and after July 1, 1996, by pro rata amounts of the salary increases provided for permanent full-time employees covered under subsection (a) of this section.
(d)	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, 1996, in accordance with subsections (a), (b), or (c) of this section, including funds for the employer's retirement and social security contributions, of the permanent full-time and part-time employees of the agency.
(e)	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 salary increase provided for permanent full-time employees covered by the provisions of subsection (a) of this section, commencing July 1, 1996.
(f)	No person may receive a salary increase under G.S. 126-7 during the 1996-97 fiscal year, and no State employee or officer shall receive a merit increment during the 1996-97 fiscal year except as otherwise provided by this act."

Requested by: Representatives Holmes, Creech, Esposito
ALL STATE-SUPPORTED PERSONNEL
Sec. 28.9.  (a)	Salaries and related benefits 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 act does not affect the status of eligibility for salary increments for which employees may be eligible unless otherwise required by this act.
(c)	The salary increases provided in this Part are to be effective July 1, 1996, 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, 1996, or to employees involved in final written disciplinary procedures.  The employee shall receive the increase on a current basis when the final written disciplinary procedure is resolved.
Payroll checks issued to employees after July 1, 1996, which represent payment of services provided prior to July 1, 1996, 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.
(d)	The Director of the Budget shall transfer from the Reserve for Salary Increases in this act for fiscal year 1996-97 all funds necessary for the salary increases provided by this act, including funds for the employer's retirement and social security contributions.
(e)  Nothing in this act authorizes the transfer of funds between the General Fund and the Highway Fund for salary increases.

Requested by: Representatives Holmes, Creech, Esposito
TEACHER SALARY SCHEDULES
Sec. 28.10.  (a)	The Director of the Budget may transfer from the Reserve for Salary Increases for the 1996-97 fiscal year funds necessary to implement the teacher salary schedule set out in subsection (b) of this section, including funds for the employer's retirement and social security contributions and funds for annual longevity payments at one percent (1%) of base salary for 10 to 14 years of State service, one and one-half percent (1.5%) of base salary for 15 to 19 years of State service, two percent (2%) of base salary for 20 to 24 years of State service, and two and one-half percent (2.5%) of base salary for 25 or more years of State service, commencing July 1, 1996, for all 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.  The longevity payment shall be paid in a lump sum once a year.
(b)(1)	Beginning July 1, 1996, the following monthly salary schedule shall apply to certified personnel of the public schools who are classified as "A"teachers.  The schedule contains 30 steps with each step corresponding to one year of teaching experience.
	Years of	1996-97
	Experience	 Salary
00	$2,082
01	2,124
02	2,166
03	2,253
04	2,298
05	2,344
06	2,391
07	2,439
08	2,487
09	2,536
10	2,587
11	2,639
12	2,692
13	2,745
14	2,800
15	2,856
16	2,913
17	2,971
18	3,030
19	3,091
20	3,153
21	3,216
22	3,280
23	3,346
24	3,413
25	3,481
26	3,551
27	3,622
28	3,694
29	3,768
30+	3,768
(2)	Beginning July 1, 1996, the following monthly salary schedule shall apply to certified personnel of the public schools who are classified as "G"teachers.  The schedule contains 30 steps with each step corresponding to one year of teaching experience.
	Years of	1996-97
	Experience	 Salary
00	$2,212
01	2,257
02	2,302
03	2,394
04	2,442
05	2,491
06	2,540
07	2,591
08	2,642
09	2,695
10	2,748
11	2,803
12	2,859
13	2,916
14	2,975
15	3,035
16	3,096
17	3,158
18	3,221
19	3,285
20	3,351
21	3,418
22	3,486
23	3,556
24	3,627
25	3,700
26	3,774
27	3,849
28	3,926
29	4,005
30+	4,005
(3)	Certified public school teachers with certification based on academic preparation at the six-year degree level shall receive a salary supplement of one hundred twenty-six dollars ($126.00) per month in addition to the compensation provided for certified personnel of the public schools who are classified as "G"teachers.  Certified public school teachers with certification based on academic preparation at the doctoral degree level shall receive a salary supplement of two hundred fifty-three dollars ($253.00) per month in addition to the compensation provided for certified personnel of the public schools who are classified as "G"teachers.  
(c)	The first step of the salary schedule for school psychologists shall be equivalent to Step 5, corresponding to five years of experience, on the salary schedule established in this section for certified personnel of the public schools who are classified as "G"teachers.  Certified psychologists shall be placed on the salary schedule at an appropriate step based on their years of experience.  Certified psychologists shall receive longevity payments based on years of State service in the same manner as teachers.
Certified psychologists with certification based on academic preparation at the six-year degree level shall receive a salary supplement of one hundred twenty-six dollars ($126.00) per month in addition to the compensation provided for certified psychologists.  Certified psychologists with certification based on academic preparation at the doctoral degree level shall receive a salary supplement of two hundred fifty-three dollars ($253.00) per month in addition to the compensation provided for certified psychologists.
(d) Certified personnel of the public schools who are: (i) classified as "A"teachers; (ii) at the maximum of their pay range on June 30, 1996; and (iii) employed as teachers for the first three pay periods of the 1996-97 school year shall receive a one-time bonus of seven hundred fifty-three dollars ($753.00), payable at the third payroll period of the 1996-97 school year.  Certified personnel of the public schools who are: (i) classified as "G"teachers; (ii) at the maximum of their pay range on June 30, 1996; and (iii) employed as teachers for the first three pay periods of the 1996-97 school year, shall receive a one-time bonus of eight hundred one dollars ($801.00), payable at the third payroll period of the 1996-97 school year.  Certified personnel of the public schools who are: (i) certified based on academic preparation at the six-year degree level; (ii) at the maximum of their pay range on June 30, 1996; and (iii) employed as teachers for the first three pay periods of the 1996-97 school year shall receive a one-time bonus of eight hundred twenty-six dollars ($826.00), payable at the third payroll period of the 1996-97 school year.  Certified personnel of the public schools who are: (i) certified based on academic preparation at the doctoral degree level; (ii) at the maximum of their pay range on June 30, 1996; and (iii) employed as teachers for the first three pay periods of the 1996-97 school year shall receive a one-time bonus of eight hundred fifty-one dollars ($851.00), payable at the third payroll period of the 1996-97 school year.
(e) Certified personnel of the public schools who are: (i) classified as psychologists with advanced degrees; (ii) at the maximum of their pay range on June 30, 1996; and (iii) employed as school psychologists for the first three pay periods of the 1996-97 school year, shall receive a one-time bonus of nine hundred ten dollars ($910.00), payable at the third payroll period of the 1996-97 school year.  Certified personnel of the public schools who are: (i) classified as psychologists with doctoral degrees; (ii) at the maximum of their pay range on June 30, 1996; and (iii) employed as school psychologists for the first three pay periods of the 1996-97 school year, shall receive a one-time bonus of nine hundred thirty-seven dollars ($937.00), payable at the third payroll period of the 1996-97 school year.

Requested by: Representatives Holmes, Creech, Esposito
SCHOOL-BASED ADMINISTRATOR SALARIES
Sec. 28.11.  (a)	Funds appropriated to the Reserve for Salary Increases shall be used for the implementation of the salary schedule for school-based administrators as provided in this section.  These funds shall be used for State-paid employees only.
(b)	The salary schedule for school-based administrators shall apply only to principals and assistant principals.  The salary schedule for the 1996-97 fiscal year is as follows:

	Asst.
Step 	Prin.	Prin.I	Prin.II	Prin.III	Prin.IV	Prin.V	Prin.VI	Prin. VII

0	  –  	  –  	  –  	  –  	  –  	  –  	  –  	–
1	  –  	  –  	  –  	  –  	  –  	  –  	  –  	–
2	  –  	  –  	  –  	  –  	  –  	  –  	  –  	–
3	  –  	  –  	  –  	  –  	  –  	  –  	  –  	–
4	$2,516	  –  	  –  	  –  	  –  	  –  	  –  	–
5	2,567	  –  	  –  	  –  	  –  	  –  	  –  	–
6	2,618	  –  	  –  	  –  	  –  	  –  	  –  	–
7	2,670	  –  	  –  	  –  	  –  	  –  	  –  	–
8	2,723	$2,723	  –  	  –  	  –  	  –  	  –  	–
9	2,777	2,777	  –  	  –  	  –  	  –  	  –  	–
10	2,833	2,833	$2,890	  –  	  –  	  –  	  –  	–
11	2,890	2,890	2,948	  –  	  –  	  –  	  –  	–
12	2,948	2,948	3,007	$3,067	  –  	  –  	  –  	–
13	3,007	3,007	3,067	3,128	$3,191	  –  	  –  	–
14	3,067	3,067	3,128	3,191	 3,255	$3,320	  –  	–
15	3,128	3,128	3,191	3,255	 3,320	 3,386	  –  	–
16	3,191	3,191	3,255	3,320	 3,386	 3,454	$3,523 	–
17	3,255	3,255	3,320	3,386	 3,454	 3,523	3,593 	$3,665
18	3,320	3,320	3,386	3,454	 3,523	 3,593	3,665 	3,738
19	3,386	3,386	3,454	3,523	 3,593	 3,665	3,738 	3,813
20	3,454	3,454	3,523	3,593	 3,665	 3,738	3,813 	3,889
21	3,523	3,523	3,593	3,665	 3,738	 3,813	3,889 	3,967
22	3,593	3,593	3,665	3,738	 3,813	 3,889	3,967 	4,046
23	3,665	3,665	3,738	3,813	 3,889	 3,967	4,046 	4,127
24	3,738	3,738	3,813	3,889	 3,967	 4,046	4,127 	4,210
25	3,813	3,813	3,889	3,967	 4,046	 4,127	4,210 	4,294
26	3,889	3,889	3,967	4,046	 4,127	 4,210	4,294 	4,380
27	3,967	3,967	4,046	4,127	 4,210	 4,294	4,380 	4,468
28	4,046	4,046	4,127	4,210	 4,294	 4,380	4,468 	4,557
29	4,127	4,127	4,210	4,294	 4,380	 4,468	4,557 	4,648
30	4,210	4,210	4,294	4,380	 4,468	 4,557	4,648 	4,741
31	4,294	4,294	4,380	4,468	 4,557	 4,648	4,741 	4,836
32 	  –  	4,380	4,468	4,557	 4,648	 4,741	4,836 	4,933
33 	  –  	  – 	4,557	4,648	 4,741	 4,836	4,933 	5,032
34 	  –  	  – 	4,648	4,741	 4,836	 4,933	5,032 	5,133
35 	  –  	  – 	  – 	4,836	 4,933	 5,032	5,133 	5,236
36 	  –  	  – 	  – 	4,933	 5,032	 5,133	5,236 	5,341
37 	  –  	  – 	  – 	  – 	 5,133	 5,236	5,341 	5,448
38 	  –  	  – 	  – 	  – 	   – 	 5,341	5,448 	5,557
39 	  –  	  – 	  – 	  – 	  – 	   – 	5,557 	5,668
40 	  –  	  – 	  – 	  – 	  – 	   – 	5,668 	5,781
41	 –  	  – 	  – 	  – 	 – 	  – 	 – 	 5,897.
(c)	The appropriate classification for placement of principals and assistant principals on the salary schedule shall be determined in accordance with the following schedule:
Number of Teachers
Classification	Supervised
Assistant Principal
Principal I	Less than 11 Teachers
Principal II	11-21 Teachers
Principal III	22-32 Teachers
Principal IV	33-43 Teachers
Principal V	44-54 Teachers
Principal VI	55-65 Teachers
Principal VII	More than 65 Teachers

The number of teachers supervised includes teachers and assistant principals paid from State funds only; it does not include teachers or assistant principals paid from non-State funds or the principal or teacher assistants.
(d)	A principal shall be placed on the step on the salary schedule that reflects total number of years of experience as a certificated employee of the public schools and an additional step for every three years of experience as a principal.
(e)  Principals and assistant principals with certification based on academic preparation at the six-year degree level shall be paid a salary supplement of one hundred twenty-six dollars ($126.00) per month and at the doctoral degree level shall be paid a salary supplement of two hundred fifty-three dollars ($253.00) per month.
(f)  There shall be no State requirement that superintendents in each local school unit shall receive in State-paid salary at least one percent (1%) more than the highest paid principal receives in State salary in that school unit:  Provided, however, the additional State-paid salary a superintendent who was employed by a local school administrative unit for the 1992-93 fiscal year received because of that requirement shall not be reduced because of this subsection for subsequent fiscal years that the superintendent is employed by that local school administrative unit so long as the superintendent is entitled to at least that amount of additional State-paid salary under the rules in effect for the 1992-93 fiscal year.
(g)  Longevity pay for principals and assistant principals shall be as provided for State employees.
(h)	(1)	If a principal is reassigned to a higher job classification because the principal is transferred to a school within a local school administrative unit with a larger number of State-allotted teachers, the principal shall be placed on the salary schedule as if the principal had served the principal's entire career as a principal at the higher job classification.
(2)	If a principal is reassigned to a lower job classification because the principal is transferred to a school within a local school administrative unit with a smaller number of State-allotted teachers, the principal shall be placed on the salary schedule as if the principal had served the principal's entire career as a principal at the lower job classification.
	 	This subdivision applies to all transfers on or after the ratification date of this act, except transfers in school systems that have been created, or will be created, by merging two or more school systems.  Transfers in these merged systems are exempt from the provisions of this subdivision for one calendar year following the date of the merger.
(i)  Except as provided in subsection (h) of this section, the salary of a principal or assistant principal shall not be less for the 1996-97 fiscal year than it was for the 1993-94 fiscal year solely as a result of placement on the salary schedule established in this section.

Requested by: Representatives Holmes, Creech, Esposito
SCHOOL CENTRAL OFFICE SALARIES
Sec. 28.12.  (a) The following monthly salary ranges apply to public school superintendents, assistant superintendents, associate superintendents, directors/coordinators, supervisors, and finance officers for the 1996-97 fiscal year:
(1)	School Administrator I:	$2,778 - $4,468
(2)	School Administrator II:	$2,948 - $4,742
(3)	School Administrator III:	$3,128 - $5,033
(4)	School Administrator IV:	$3,255 - $5,237
(5)	School Administrator V:	$3,386 - $5,449
(6)	School Administrator VI:	$3,593 - $5,782
(7)	School Administrator VII:	$3,738 - $6,016
The local board of education shall determine the appropriate category and placement for each assistant superintendent, associate superintendent, director/coordinator, supervisor, or finance officer, within the salary ranges and within funds appropriated by the General Assembly for central office administrators and superintendents.  The category in which an employee is placed shall be included in the contract of any employee hired on or after July 1, 1996.
(b) The following monthly salary ranges apply to public school superintendents for the 1996-97 fiscal year:
(1)	Superintendent I (Up to 2,500 ADM):	$3,968 - $6,385
(2)	Superintendent II (2,501 - 5,000 ADM):	$4,211 - $6,775
(3)	Superintendent III (5,001 - 10,000 ADM):	$4,468 - $7,190
(4)	Superintendent IV (10,001 - 25,000 ADM):	$4,742 - $7,630
(5)	Superintendent V (Over 25,000 ADM):	$5,033 - $8,097
The local board of education shall determine the appropriate category and placement for the superintendent based on the average daily membership of the local school administrative unit and within funds appropriated by the General Assembly for central office administrators and superintendents.
Notwithstanding the provisions of this subsection, a local board of education may pay an amount in excess of the applicable range to a superintendent who is entitled to receive the higher amount under Section 28.11(f) of this act.
(c) Longevity pay for superintendents, assistant superintendents, associate superintendents, directors/coordinators, supervisors, and finance officers shall be as provided for State employees.
(d) Superintendents, assistant superintendents, associate superintendents, directors/coordinators, supervisors, and finance officers with certification based on academic preparation at the six-year degree level shall receive a salary supplement of one hundred twenty-six dollars ($126.00) per month in addition to the compensation provided for pursuant to this section.  Superintendents, assistant superintendents, associate superintendents, directors/coordinators, supervisors, and finance officers with certification based on academic preparation at the doctoral degree level shall receive a salary supplement of two hundred fifty-three dollars ($253.00) per month in addition to the compensation provided for under this section.
(e)  The State Board shall not permit local school administrative units to transfer State funds from other funding categories for salaries for public school central office administrators.
(f) The Director of the Budget shall transfer from the Reserve for Salary Increases created in this act for fiscal year 1996-97 funds necessary to provide an average annual salary increase of three percent (3%), including funds for the employer's retirement and social security contributions, commencing July 1, 1996, for all permanent full-time personnel paid from the Central Office Allotment. The State Board of Education shall allocate these funds to local school administrative units.   The local boards of education shall establish guidelines for providing their salary increases to these personnel.

Requested by: Representatives Holmes, Creech, Esposito
NONCERTIFIED PUBLIC SCHOOL EMPLOYEES' SALARY INCREASE
Sec. 28.13.  (a)	The Director of the Budget may transfer from the Reserve for Salary Increases created in this act for fiscal year 1996-97 funds necessary to provide a salary increase of three percent (3%), including funds for the employer's retirement and social security contributions, commencing July 1, 1996, for all noncertified public school employees, except school bus drivers, whose salaries are supported from the State's General Fund.  These funds shall not be used for any purpose other than for the salary increases and necessary employer contributions provided by this subsection.
(b)	The fiscal year 1995-96 pay rates adopted by local boards of education for school bus drivers shall be increased by at least three percent (3%) on and after July 1, 1996, 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 1995-96 and who continue their employment for fiscal year 1996-97 by at least three percent (3%) on and after July 1, 1996.  The Director of the Budget may transfer from the salary increase reserve fund created in this act for fiscal year 1996-97 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: Representatives Holmes, Creech, Esposito
STUDY COMMISSION ON THE COMPREHENSIVE COMPENSATION SYSTEM
Sec. 28.14.  (a)	The Study Commission on the Comprehensive Compensation System is created.  The Commission shall consist of nine members: three Representatives appointed by the Speaker of the House of Representatives, three Senators appointed by the President Pro Tempore of the Senate, and three members appointed by the Governor. The Speaker of the House of Representatives shall designate one Representative as cochair and the President Pro Tempore of the Senate shall designate one Senator as cochair.  Vacancies in the membership of the Commission shall be filled by the same appointing officer who made the initial appointment.
(b)	The Commission shall:
(1)	Evaluate the Comprehensive Compensation System established in Article 2 of Chapter 126 of the General Statutes; and
(2)	Determine a methodology for funding the pay plan for State employees at varying levels of appropriations to fund State pay increases.
The Commission shall submit a final report of its findings and recommendations to the General Assembly on or before the first day of the 1997 Session by filing the report with the Speaker of the House of Representatives and the President Pro Tempore of the Senate.  Upon filing its final report, the Commission shall terminate.
	(c)	The Commission, while in the discharge of official duties, may exercise all the powers provided for under the provisions of G.S. 120-19, and G.S. 120-19.1 through G.S. 120-19.4.  The Commission may meet at any time upon the joint call of the cochairs.  The Commission may meet in the Legislative Building or the Legislative Office Building.
(d) Members of the Commission who are legislators shall receive subsistence and travel expenses at the rates set forth in G.S. 120-3.1.  Other members of the Commission shall receive reimbursement for travel expenses at the rates allowed by G.S. 138-6.
(e) The Commission may contract for professional, clerical, or consultant services as provided by G.S. 120-32.02.  The Legislative Services Commission, through the Legislative Administrative Officer, shall assign professional staff to assist in the work of the Commission. The House of Representatives' and the Senate's Supervisors of Clerks shall assign clerical staff to the commission upon the direction of the Legislative Services Commission.  The expenses relating to clerical employees shall be borne by the Commission.
(f)  All State departments and agencies shall furnish the Commission with any information in their possession or available to them.

Requested by: Representatives Holmes, Creech, Esposito
POSTRETIREMENT BENEFIT INCREASES
Sec. 28.15.   (a)	G.S. 135-5 is amended by adding a new subsection to read:
"( bbb)	From and after July 1, 1996, the retirement allowance to or on account of beneficiaries whose retirement commenced on or before July 1, 1995, shall be increased by three percent (3%) of the allowance payable on July 1, 1995, in accordance with G.S. 135-5(o). Furthermore, from and after July 1, 1996, the retirement allowance to or on account of beneficiaries whose retirement commenced after July 1, 1995, but before June 30, 1996, shall be increased by a prorated amount of three percent (3%) 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, 1995, and June 30, 1996."
(b)	G.S. 135-65 is amended by adding a new subsection to read:
"( q)	From and after July 1, 1996, the retirement allowance to or on account of beneficiaries whose retirement commenced on or before July 1, 1995, shall be increased by three percent (3%) of the allowance payable on July 1, 1995.  Furthermore, from and after July 1, 1996, the retirement allowance to or on account of beneficiaries whose retirement commenced after July 1, 1995, but before June 30, 1996, shall be increased by a prorated amount of three percent (3%) 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, 1995, and June 30, 1996."
(c)	G.S. 120-4.22A is amended by adding a new subsection to read:
"( k)	In accordance with subsection (a) of this section, from and after July 1, 1996, the retirement allowance to or on account of beneficiaries whose retirement commenced on or before January 1, 1996, shall be increased by three percent (3%)  of the allowance payable on January 1, 1996.  Furthermore, from and after July 1, 1996, the retirement allowance to or on account of beneficiaries whose retirement commenced after January 1, 1996, but before June 30, 1996, shall be increased by a prorated amount of three percent (3%) of the allowance payable as determined by the Board of Trustees based upon the number of months that a retirement allowance was paid between January 1, 1996, and June 30, 1996."
(d)	G.S. 128-27 is amended by adding a new subsection to read:
"( rr)	From and after July 1, 1996, the retirement allowance to or on account of beneficiaries whose retirement commenced on or before July 1, 1995, shall be increased by three percent (3%) of the allowance payable on July 1, 1995, in accordance with G.S. 128-27(k). Furthermore, from and after July 1, 1996, the retirement allowance to or on account of beneficiaries whose retirement commenced after July 1, 1995, but before June 30, 1996, shall be increased by a prorated amount of three percent (3%) 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, 1995, and June 30, 1996."

Requested by: Representatives Holmes, Creech, Esposito
SALARY-RELATED CONTRIBUTIONS/EMPLOYERS
Sec. 28.16. Section 7.1(b) of Chapter 324 of the 1995 Session Laws, as amended by Section 7.22A of Chapter 507 of the 1995 Session Laws, reads as rewritten:
"(b)	Effective July 1, 1996, the State's employer contribution rates budgeted for retirement and related benefits as a percentage of covered salaries for the 1995-96 fiscal year are (i) ten and eighty-three hundredths percent (10.83%) - Teachers and State Employees; (ii) fifteen and eighty-three hundredths percent (15.83%) - State Law Enforcement Officers; (iii) nine and eighteen hundredths percent (9.18%) - University Employees' Optional Retirement Program; (iv) twenty-two and sixty-five hundredths percent (22.65%) - Consolidated Judicial Retirement System; and (v) twenty-three and eighty-one hundredths percent (23.81%) - Legislative Retirement System.  Each of the foregoing contribution rates includes two percent (2%) 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."

Requested by: Representatives Holmes, Creech, Esposito, Dockham
STATE EMPLOYEE HEALTH BENEFIT PLAN/PREEXISTING HEALTH CONDITIONS
Sec. 28.17.  (a)	G.S. 135-40.1(15) reads as rewritten:
"(15)	Preexisting Condition. – A condition, disease, illness or injury diagnosed and treated within six months prior to the effective date of coverage."
(b)	G.S. 135-40.3(b) is amended by adding a new subdivision to read:
"(5)	To administer the 12-month waiting period for preexisting conditions under this Article, the Plan must give credit against the 12-month period for the time that a person was covered under a previous plan if the previous plan's coverage was continuous to a date not more than 60 days before the effective date of coverage.  As used in this subdivision, a 'previous plan' means any policy, certificate, contract, or any other arrangement provided by any accident and health insurer, any hospital or medical service corporation, any health maintenance organization, any preferred provider organization, any multiple employer welfare arrangement, any self-insured health benefit arrangement, any governmental health benefit or health care plan or program, or any other health benefit arrangement."
(c)	This section is effective July 1, 1995.

PART 29.  MISCELLANEOUS PROVISIONS

Requested by:  Representatives Holmes, Creech, Esposito
EXECUTIVE BUDGET ACT APPLIES
Sec. 29.  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:  Representatives Holmes, Creech, Esposito
COMMITTEE REPORT
Sec. 29.1.  (a)	The House Appropriations Committee Continuation Budget Report, dated May, 23, 1996, together with any accompanying correction sheets, which was distributed in the House of Representatives 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 1995-97 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 House Appropriations Committee Continuation Budget Report, dated May 23, 1996, together with any accompanying correction sheets.
(3)	Transfers of funds supporting programs were made in accordance with the House Appropriations Committee Continuation Budget Report, dated May 23, 1996, together with any 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.

Requested by:  Representatives Holmes, Creech, Esposito
MOST TEXT APPLIES ONLY TO 1996-97
Sec. 29.2.  Except for statutory changes or other provisions that clearly indicate an intention to have effects beyond the 1996-97 fiscal year, the textual provisions of this act apply only to funds appropriated for, and activities occurring during, the 1996-97 fiscal year.

Requested by:  Representatives Holmes, Creech, Esposito
1995-96 APPROPRIATIONS LIMITATIONS AND DIRECTIONS APPLY
Sec. 29.3.  (a)	Except where expressly repealed or amended by this act, the provisions of Chapters 324 and 507 of the 1995 Session Laws remain in effect.
(b)	Notwithstanding any modifications by this act in the amounts appropriated, except where expressly repealed or amended, the limitations and directions for the 1995-96 fiscal year in Chapters 324 and 507 of the 1995 Session Laws that applied to appropriations to particular agencies or for particular purposes apply to the newly enacted appropriations and budget reductions of this act for those same particular purposes.

Requested by:  Representatives Holmes, Creech, Esposito
EFFECT OF HEADINGS
Sec. 29.4.  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:  Representatives Holmes, Creech, Esposito
SEVERABILITY CLAUSE
Sec. 29.5.  If any section or provision of this act is declared unconstitutional or invalid by the courts, it does not affect the validity of this act as a whole or any part other than the part so declared to be unconstitutional or invalid.

Requested by:  Representatives Holmes, Creech, Esposito
EFFECTIVE DATE
Sec. 29.6.  Except as otherwise provided, this act becomes effective July 1, 1996.