GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1995

H	5 

HOUSE BILL 1108
Committee Substitute Favorable 5/23/96
Third Edition Engrossed 5/24/96
Senate Appropriations Committee Substitute Adopted 6/13/96
Fifth Edition Engrossed 6/13/96

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	   	$  (225,000)

Judicial Department	4,580,568

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	4,400,000

Department of Secretary of State	437,048

Department of State Treasurer	2,200,000

Department of Public Education	133,703,616

Department of Justice	1,013,702

Department of Administration	(270,049)

Department of Agriculture	1,028,437

Department of Labor	419,183

Department of Insurance	1,895,364

Department of Environment, Health, and
Natural Resources	28,895,428

Office of Administrative Hearings	262,754

Department of Human Resources
01.	Office of the Secretary	897,466
02.	Division of Aging	5,150,231
03.	Division of Child Development	20,804,765
04.	Division of Services for the
Deaf and Hard of Hearing	(148,984)
05.	Division of Social Services	(5,237,841)
06.	Division of Medical Assistance	(13,609,703)
07.	Division of Services
for the Blind	(36,419)
08.	Division of Mental Health,
Developmental Disabilities, and
Substance Abuse Services	(5,968,927)
09.	Division of Facility Services	431,977
10.	Division of Vocational
Rehabilitation Services	3,181,094
11.	Division of Youth Services	2,315,600
Total Department of Human Resources	7,779,259

Department of Correction	(25,538,471)

Department of Commerce
01.	Commerce	14,501,334
02.	MCNC	(14,000,000)
03.	Rural Economic Development
Center	2,750,000
04.	Biotechnology Center	1,000,000

Department of Revenue	(29,413)

Department of State Auditor	175,000

Department of Cultural Resources	466,303

Department of Crime Control
and Public Safety	382,378

Office of the State Controller	5,739,985

University of North Carolina - Board
of Governors
01.	General Administration	13,000,000
02.	University Institutional
Programs	44,319,013
03.	Related Educational Programs	3,880,160
04.	University of North Carolina
at Chapel Hill
a.  Academic Affairs	(422,425)
b.  Health Affairs	(29,424)
05.	North Carolina State University
at Raleigh
a.  Academic Affairs	(246,316)
06.	University of North Carolina at
Greensboro	(114,556)
07.	University of North Carolina at
Charlotte	(5,000)
08.	University of North Carolina at
Asheville	(4,500)
09.	North Carolina Agricultural and
Technical State University	(438,523)
10.	Western Carolina University	(91,286)
11.	Appalachian State University	(203,487)
12.	University of North Carolina at Pembroke	(3,190)
13.	Winston-Salem State University	(500)
14.	Elizabeth City State
University	(125,503)
15.	Fayetteville State University	(9,000)
16.	North Carolina Central
University	(67,779)
17.	North Carolina School of the
Arts	(317,543)
18.	North Carolina School of
Science and Mathematics	(28,036)
19.	UNC Hospitals at Chapel Hill	-   
Total University of North
Carolina - Board of Governors	59,092,105

Department of Community Colleges	19,676,317

State Board of Elections	175,000

Contingency and Emergency	5,076,466

Salary Adjustment Fund	10,000,000

Reserve for Compensation Increase	338,639,891

Reserve for Military Affairs	200,000

Reserve for Moving Expenses	4,000,000

Reduction in Postage	(300,000)

Retirement Rate Adjustment	(325,600)

Data Processing Reserve	792,631

Criminal Justice Information System	1,000,000

Reserve for Structured Sentencing	1,338,547

GRAND TOTAL CURRENT OPERATIONS –
GENERAL FUND	$610,858,706

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	1,894,190
04.	Reserve for Salary Increases	19,893,435

Department of Public Instruction	1,700,000

GRAND TOTAL CURRENT OPERATIONS/HIGHWAY FUND	$ 26,653,625

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	5,653,388
03.	Division of Motor Vehicles	646,716
04.	Reserve for Capital Projects	1,958,126

GRAND TOTAL CURRENT OPERATIONS/HIGHWAY FUND -
NONRECURRING	$11,039,375

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:  Senators Plyler, Perdue, Odom
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
	by the 1995 General Assembly	$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

	1995-96 Ending Credit Balance	$614.4

d.	Plus: Reserved 1994-95
	Disproportionate Share Funds	1.6
e.	Less: Transfer to Savings Reserve
	Account	77.4
f.	Less:  Transfer to Reserve for Repair
	and Renovations	130.0
g.	Less: Transfer to Clean Water Management
	Trust Fund	39.9
(2)	Beginning Unrestricted Fund Balance,
	July 1, 1996	$368.7

(3)	Authorizations by the 1995 General Assembly
	for 1996-97:
a.	Revenue collections left
	unaddressed	242.1
b.	1996-97 capital authorizations	-47.8	194.3

(4)	Projected revenue collections above 1995
	Session estimates under existing tax 
	structure	109.4

(5)	Disproportionate Share Revenue Estimates
	lowered	-15.7

(6)	Non-tax Revenue
	a. Increase Court Fees	5.8
b.	Local Sales Tax–Local
	Government Commission	1.2

TOTAL AVAILABILITY	$663.7

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:   Senator Martin of Guilford
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:   Senators Perdue, Plyler, Odom
EXPENDITURE OF FUNDS FROM RESERVE FOR REPAIRS AND RENOVATIONS
Sec. 5.3.  (a) 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.
(b) Funds earmarked in the 1995-96 fiscal year for the Repairs and Renovations Reserve but not appropriated are hereby appropriated. The Office of State Budget and Management may allocate these funds for land acquisition, matching federal funds, State grants, and grants-in-aid.

PART 7.  GENERAL PROVISIONS

Requested by:   Senators Plyler, Perdue, Odom
REPAIRS RESERVE ACCOUNT CHANGES
Sec. 7. (a) G.S. 143-15.2 reads as rewritten:
"§ 143-15.2.  Use of General Fund credit balance.
The State Controller shall reserve up to one-fourth of any unreserved credit balance, as determined on a cash basis, remaining in the General Fund at the end of each fiscal year to the Savings Reserve Account as provided in G.S. 143-15.3, unless that would result in the Savings Reserve Account having funds in excess of five percent (5%) of the amount appropriated the preceding year for the General Fund operating budget, including local government tax-sharing funds; in that case, only funds sufficient to reach the five percent (5%) level shall be reserved. The State Controller shall also reserve from the unreserved credit balance, as determined on a cash basis, remaining in the General Fund three percent (3%) of the replacement value of all State buildings supported from the General Fund, at the end of each fiscal year to the Repairs and Renovations Reserve Account as provided in G.S. 143-15.3A. The General Assembly may appropriate that part of the anticipated General Fund credit balance not expected to be reserved to the Savings Reserve Account or the Repairs and Renovations Reserve Account only for capital improvements or other one-time expenditures. 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 Controller to the Savings Reserve Account or the Repairs and Renovations Reserve Account pursuant to G.S. 143-15.3 and G.S. 143-15.3A."
(b)	G.S. 143-15.3A(a) reads as rewritten:
"(a)	There is established a Repairs and Renovations Reserve Account as a restricted reserve in the General Fund. The State Controller shall reserve to the Repairs and Renovations Reserve Account three percent (3%) of the replacement value of all State buildings supported from 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 Controller to the Savings Reserve Account or the Repairs and Renovations Reserve Account pursuant to this section and G.S. 143-15.3."

Requested by:   Senator Odom
WESTERN CAROLINA CENTER FUNDS
Sec. 7.1.  Of the funds allocated in Section 5.3 of this act to the Office of State Budget and Management from the Repairs and Renovations Fund, up to three hundred thirty-nine thousand three hundred fifty-seven dollars ($339,357) may be used for Phase II Retrofit to install a freestanding boiler at the Western Carolina Center.

Requested by:   Senator Ballance
NCCU REPAIRS AND RENOVATIONS FUNDS
Sec. 7.2.  Of the funds allocated in Section 5.3 of this act to the Board of Governors of The University of North Carolina from the Repairs and Renovations Fund, up to six million five hundred thousand dollars ($6,500,000) shall be used to correct OSHA violations at North Carolina Central University.

Requested by:   Senator Plyler
CHANGES IN THE EXECUTION OF THE BUDGET
Sec. 7.3.  (a)	G.S. 120-76 is amended by adding a new subdivision to read:
"(8)	The Joint Legislative Commission on Governmental Operations shall be consulted by the Governor before the Governor does any of the following:
a.	Makes allocations from the Contingency and Emergency Fund.
b.	Overexpends the total requirements of a program as enacted by the General Assembly, except for trust funds as defined in G.S. 116-36.1(g).
c.	Proceeds to reduce programs subsequent to a reduction of ten percent (10%) or more in the federal fund level certified to a department and any subsequent changes in distribution formulas.
d.	Takes extraordinary measures under Article III, Section 5(3) of the Constitution to effect necessary economies in State expenditures required for balancing the budget due to a revenue shortfall, including, but not limited to, the following:  loans among funds, personnel freezes or layoffs, capital project reversions, program eliminations, and use of reserves.  However, if the Committee fails to meet within 10 calendar days of a request by the Governor for its consultation, the Governor may proceed to take the actions he feels are appropriate and necessary and shall then report those actions at the next meeting of the Commission.
e.	Approves a new capital improvement project funded from gifts, grants, receipts, special funds, self-liquidating indebtedness, and other funds or any combination of funds for the project not specifically authorized by the General Assembly.  The budget for each capital project must include projected revenues in an amount not less than projected expenditures.
		Notwithstanding the provisions of this subdivision or any other provision of law requiring prior consultation by the Governor with the Commission, whenever an expenditure is required because of an emergency that poses an imminent threat to public health or public safety, and is either the result of a natural event, such as a hurricane or a flood, or an accident, such as an explosion or a wreck, the Governor may take action under this subsection without consulting the Commission if the action is determined by the Governor to be related to the emergency.  The Governor shall report to the Commission on any expenditures made under this paragraph no later than 30 days after making the expenditure and shall identify in the report the emergency, the type of action taken, and how it was related to the emergency."
(b)	G.S. 143-15.3A is amended by adding a new subsection to read:
"( c)	The Governor shall consult with the Joint Legislative Commission on Governmental Operations before making allocations from the Repairs and Renovations Reserve Account.
Notwithstanding this subsection, whenever an expenditure is required because of an emergency that poses an imminent threat to public health or public safety, and is either the result of a natural event, such as a hurricane or a flood, or an accident, such as an explosion or a wreck, the Governor may take action under this subsection without consulting the Commission if the action is determined by the Governor to be related to the emergency.  The Governor shall report to the Commission on any expenditures made under this paragraph no later than 30 days after making the expenditure and shall identify in the report the emergency, the type of action taken, and how it was related to the emergency."
(c)	G.S. 143-12 reads as rewritten:
"§ 143-12.  Bills containing proposed appropriations.
(a)	The Director shall cause to be prepared and submitted to the General Assembly the following bills:
(1)	A bill containing all proposed current operations appropriations of the budget for each year in the ensuing biennium, which shall be known as the 'Current Operations Appropriations Bill', and a bill containing all proposed capital appropriations of the budget for each year in the ensuing biennium, which shall be known as the 'Capital Improvement Appropriations Bill'.
(2)	If necessary, a bill containing the Director of the Budget's views on revenue for the ensuing biennium, which shall be known as the 'Budget Revenue Bill', and shall provide an amount of revenue for the ensuing biennium sufficient, in the opinion of the Director and the Commission, to meet the appropriations contained in the Current Operations Appropriations Bill and the Capital Improvement Appropriations Bill.
(3)	Repealed by Session Laws 1983 (Regular Session, 1984), c. 1034, s. 153.
(b)	To the end that all expenses of the State may be brought and kept within the budget, the Current Operations Appropriations Bill shall contain a specific sum as a contingent or emergency appropriation, and shall allocate a specific portion of that sum to a special reserve to be used solely for purposes as outlined in G.S. 143-23(a1)(2). Notwithstanding any other provision of law, the manner of the allocation of such contingent or emergency appropriation shall be as follows: Any institution, department, commission, or other agency or activity of the State, or other activity in which the State is interested, desiring an allotment out of such contingent or emergency appropriation, shall upon forms prescribed and furnished by the Director of the Budget, present such request in writing to the Director of the Budget, with such information as he may require, and if the Director of the Budget shall approve such request, in whole or in part, and after consulting with the Joint Legislative Commission on Governmental Operations, he shall forthwith present the same to the Governor and Council of State, and upon their order only shall such allotment be made.  If the Director shall disapprove the request of such an allotment out of the emergency or contingent appropriation, he shall transmit his refusal and his reason therefor to the Governor and Council of State, for their information.
Funds allocated from the contingent or emergency appropriation may be used only for the purpose for which they were allocated and may not be reallocated for another purpose by the Governor.  If the funds are not spent or encumbered for the purpose for which they were allocated by the end of the fiscal biennium and if the Governor and the Council of State do not reallocate them for that same purpose, the funds shall revert to the fund from which the contingent or emergency appropriation was made. Also, if the funds are not needed for the purpose for which they were allocated, the funds shall revert to the fund from which the contingent or emergency appropriation was made.
(c)	The Director of the Budget may, in preparation of the Appropriations and Revenue Bills, seek the advice of the Advisory Budget Commission. If the Director and the Commission shall not agree as to the Appropriations and Revenue Bills in substantial particulars, the Director shall prepare the same, based on his conclusions and judgment, and the Commission or any of its members retain the right to submit separately to the General Assembly such statement of disagreement and the particulars thereof as they shall find proper to submit as representing their own views."
(d)	G.S. 143-15.3A(b) reads as rewritten:
"(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.
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 or, if the General Assembly is not in session, the Director of the Budget has first consulted with the Joint Legislative Commission on Governmental Operations under G.S. 143-15.3A(c)."
(e)  G.S. 143-18.1(c) reads as rewritten:
"(c)	Upon the request of the administration of any State agency or institution, the Director of the Budget may accept funds by gift or grant for the construction of a capital improvement project not specifically provided for or authorized by the General Assembly. These funds shall be placed in a special reserve account to be held by the State Treasurer until the end of the biennium in which the account was established or until the capital improvement project is authorized by the Director of the Budget, whichever occurs first. These funds shall be invested and the interest thereon shall be added to the reserve. If the project is not authorized by the end of that biennium, the State Treasurer shall pay the funds accumulated in the special reserve account to the grantor or donor. Upon the establishment of a special reserve account under this section, the Director of the Budget shall notify the Speaker of the House and President of the Senate of the receipt of the funds and the existence of the reserve account. Upon the request of the administration of any State agency or institution, the Governor may, under G.S. 120-76(8), authorize the construction of a capital improvement project not specifically authorized by the General Assembly if such project is to be fully funded by gifts, grants, receipts, special funds, self-liquidating indebtedness, other funds, or any combination of funds, but not including funds appropriated from the General Fund.  All expenditures under this authorization shall be handled in full compliance with the provisions of the Executive Budget Act.
The agency shall support its request for such capital improvement project, or projects, with the following information: the estimated annual operating costs for (i)	utilities; (ii) maintenance; (iii) repairs; (iv) additional personnel; (v) any and all other expenses to the State resulting from the addition of this facility to the plant of the institution. Prior to taking any action under this section to authorize a project, the Governor or the Director of the Budget may consult with the Advisory Budget Commission and the Capital Planning Commission."
(f) G.S. 143-23 reads as rewritten:
"§ 143-23.  All maintenance funds for itemized purposes; transfers between objects or line items.
(a)	All appropriations now or hereafter made for the maintenance of the various departments, institutions and other spending agencies of the State, are for the (i) purposes or programs and (ii) objects or line items enumerated in the itemized requirements of such departments, institutions and other spending agencies submitted to the General Assembly by the Director of the Budget and the Advisory Budget Commission, as amended by the General Assembly. The function of the Advisory Budget Commission under this subsection applies only if the Director of the Budget consults with the Commission in preparation of the budget.
(a1)	
						Notwithstanding the provisions of subsection (a)	of this section, a department, institution, or other spending agency may, with approval of the Director of the Budget, spend more than was appropriated for:
(1)	An object or line item within a purpose or program so long as the total amount expended for the purpose or program is no more than was appropriated from all sources for the purpose or program for the fiscal period;
(2)	A purpose or program, without consultation with the  Joint Legislative Commission on Governmental Operations, if the overexpenditure of the purpose or program is:
a.	Required by a court, Industrial Commission, or administrative hearing officer's order;
b.	Required to respond to an unanticipated disaster such as a fire, hurricane, or tornado; or
c.	Required to call out the National Guard.
	The Director of the Budget shall report on a monthly basis to the Joint Legislative Commission on Governmental Operations on any overexpenditures under this subdivision; or
(3)	A purpose or program, after consultation with the  Joint Legislative Commission on Governmental Operations in accordance with G.S. 120-76(8), and only if: (i) the overexpenditure is required to continue the purpose or programs due to complications or changes in circumstances that could not have been foreseen when the budget for the fiscal period was enacted and (ii) the scope of the purpose or program is not increased. Total overexpenditures of a purpose or program for a fiscal year under this subdivision shall be limited to the lesser of five hundred thousand dollars ($500,000) or ten percent (10%) of the amount appropriated from all sources for the purpose or program.
(a2)	Funds appropriated for salaries and wages are also subject to the limitation that they may only be used for: 
(1)	Salaries and wages or for premium pay, overtime pay, longevity, unemployment compensation, workers' compensation, temporary wages, moving expenses of employees, payment of accumulated annual leave, certain awards to employees, tort claims, and employer's social security, retirement, and hospitalization payments;
(2)	Contracted personal services if (i) the contract is for temporary services or special project services, (ii) the term of the contract does not extend beyond the fiscal year, (iii) the contract does not impose obligations on the State after the end of the fiscal year; and (iv) the total of all overexpenditures for contracted personal services approved in a program for a fiscal year does not exceed the greater of five hundred thousand dollars ($500,000) or ten percent (10%) of the lapsed salary funds in the program for the fiscal year; and
(3)	Uses for which overexpenditures are permitted by subdivision (2) of subsection (a1) of this section but the Director of the Budget shall include such use and the reason for it in his monthly report to the Joint Legislative Commission on Governmental Operations.
Lapsed salary funds that become available from vacant positions are also subject to the limitation that they may not be used for new permanent employee positions or to raise the salary of existing employees.
		(b)	Repealed by Session Laws 1985, c. 290, s. 8.
(c)	Transfers or changes as between objects or line items in the budget of the Senate may be made by the President Pro Tempore of the Senate.
(d)	Transfers or changes as between objects or line items in the budget of the House of Representatives may be made by the Speaker of the House of Representatives.
(e)	Transfers or changes as between objects or line items in the budget of the General Assembly other than of the Senate and House of Representatives may be made jointly by the President Pro Tempore of the Senate and the Speaker of the House of Representatives.
(f)	As used in this section:
(1)	'Object or line item' means a budgeted expenditure or receipt in the budget enacted by the General Assembly that is designated by (i) a thirteen-digit code in the 1000-object code series or (ii) an eleven-digit code in all other object code series, in accordance with the Budget Code Structure and the State Accounting System Uniform Chart of Accounts set out in the Administrative Policies and Procedures Manual of the Office of the State Controller.
(2)	'Purpose or program' means a group of objects or line items for support of a specific activity outlined in the budget adopted by the General Assembly that is designated by a nine-digit fund code in accordance with the Budget Code Structure and the State Accounting System Uniform Chart of Accounts set out in the Administrative Policies and Procedures Manual of the Office of the State Controller."
(g)  G.S. 143-25 reads as rewritten:
"§ 143-25.  Maintenance appropriations dependent upon adequacy of revenues to support them.
All maintenance appropriations now or hereafter made are hereby declared to be maximum, conditional and proportionate appropriations, the purpose being to make the appropriations payable in full in the amounts named herein if necessary and then only in the event the aggregate revenues collected and available during each fiscal year of the biennium for which such appropriations are made, are sufficient to pay all of the appropriations in full; otherwise, the said appropriations shall be deemed to be payable in such proportion as the total sum of all appropriations bears to the total amount of revenue available in each of said fiscal years. The Director of the Budget is hereby given full power and authority to examine and survey the progress of the collection of the revenue out of which such appropriations are to be made, and to declare and determine the amounts that can be, during each quarter of each of the fiscal years of the biennium properly allocated to each respective appropriation. In making such examination and survey, he shall receive estimates of the prospective collection of revenues from the Secretary of Revenue and every other revenue collecting agency of the State. The Director of the Budget may reduce all of said appropriations pro rata when necessary to prevent an overdraft or deficit to the fiscal period for which such appropriations are made.  The Governor may also reduce all of said appropriations pursuant to Article III, Section 5(3)	of the Constitution after consulting with the Joint Legislative Commission on Governmental Operations under G.S. 120-76(8) if prior consultation is required by that section. The purpose and policy of this Article are to provide and insure that there shall be no overdraft or deficit in the general fund of the State at the end of the fiscal period, growing out of appropriations for maintenance and the Director of the Budget is directed and required to so administer this Article as to prevent any such overdraft or deficit. Prior to taking any action under this section to reduce appropriations pro rata, the Governor may consult with the Advisory Budget Commission."
(h)  G.S. 143-27 reads as rewritten:
"§ 143-27.  Appropriations to educational, charitable and correctional institutions are in addition to receipts by them.
All appropriations now or hereafter made to the educational institutions, and to the charitable and correctional institutions, and to such other departments and agencies of the State as receive moneys available for expenditure by them are declared to be in addition to such receipts of said institutions, departments or agencies, and are to be available as and to the extent that such receipts are insufficient to meet the costs anticipated in the budget authorized by the General Assembly, of maintenance of such institutions, departments, and agencies; Provided, however, that if the receipts, other than gifts and grants that are unanticipated and are for a specific purpose only, collected in a fiscal year by an institution, department, or agency exceed the receipts certified for it in General Fund Codes, Highway Fund Codes, or Special Fund Codes, the Director of the Budget shall decrease the amount he allots to that institution, department, or agency from appropriations from that Fund by the amount of the excess, unless the Director of the Budget has consulted with the Joint Legislative Commission on Governmental Operations and unless the Director of the Budget finds that (i)	the appropriations from that Fund are necessary to maintain the function that generated the receipts at the level anticipated in the certified Budget Codes for that Fund and (ii) the funds may be expended in accordance with G.S. 143-23.  Notwithstanding the foregoing provisions of this section, receipts within The University of North Carolina realized in excess of budgeted levels shall be available, up to a maximum of ten percent (10%) above budgeted levels, for each Budget Code, in addition to appropriations, to support the operations generating such receipts, as approved by the Director of the Budget. 
The Office of State Budget and Management shall report to the Joint Legislative Commission on Governmental Operations and to the Fiscal Research Division of the Legislative Services Office within 30 days after the end of each quarter on expenditures of receipts in excess of the amounts certified in General Fund Codes, Highway Fund Codes, or Special Fund Codes, that did not result in a corresponding reduced allotment from appropriations from that Fund."
(i)  G.S. 116-30.2 reads as rewritten:
"§ 116-30.2.  Appropriations to special responsibility constituent institutions.
All General Fund appropriations made by the General Assembly for continuing operations of a special responsibility constituent institution of The University of North Carolina shall be made in the form of a single sum to each budget code of the institution for each year of the fiscal period for which the appropriations are being made. Notwithstanding G.S. 143-23(a1), G.S. 143-23(a2), and G.S. 143-23(a3) and G.S. 120-76(8), each special responsibility constituent institution may expend the General Fund monies so appropriated to it in the manner deemed by the Chancellor to be calculated to maintain and advance the programs and services of the institutions, consistent with the directives and policies of the Board of Governors. The preparation, presentation, and review of General Fund budget requests of special responsibility constituent institutions shall be conducted in the same manner as are requests of other constituent institutions. The quarterly allotment procedure established pursuant to G.S. 143-17 shall apply to the General Fund appropriations made for the current operations of each special responsibility constituent institution. All General Fund monies so appropriated to each special responsibility constituent institution shall be recorded, reported, and audited in the same manner as are General Fund appropriations to other constituent institutions."
	(j)  G.S. 143-16.3 reads as rewritten:
"§ 143-16.3.  No expenditures for purposes for which the General Assembly has considered but not enacted an appropriation.
Notwithstanding any other provision of law, no funds from any source, except for gifts, grants, and funds allocated from the Contingency and Emergency Fund in accordance with G.S. 143-12(b), may be expended for any purpose, position, or other expenditure for which the General Assembly has considered but not enacted an appropriation of funds for the current fiscal period. For the purpose of this section, the General Assembly has considered a purpose, position, or other expenditure when that purpose is included in a bill, amendment, or petition and when any committee of the Senate or the House of Representatives deliberates on that purpose."
(k)  G.S. 116-30.1 reads as rewritten:
"§ 116-30.1.  Special responsibility constituent institutions.
The Board of Governors of The University of North Carolina, acting on recommendation made by the President of The University of North Carolina after consultation by him with the State Auditor, may designate one or more constituent institutions of The University as special responsibility constituent institutions. That designation shall be based on an express finding by the Board of Governors that each institution to be so designated has the management staff and internal financial controls that will enable it to administer competently and responsibly all additional management authority and discretion to be delegated to it. The Board of Governors, on recommendation of the President, shall adopt rules prescribing management staffing standards and internal financial controls and safeguards, including the lack of any significant exceptions or audit findings in the annual financial audit by the State Auditor's Office, that must be met by a constituent institution before it may be designated a special responsibility constituent institution and must be maintained in order for it to retain that designation. These rules shall not be designed to prohibit participation by a constituent institution because of its size.  These rules shall establish procedures for the President and his staff to review the annual financial audit reports or any other special or performance audit reports issued by the State Auditors Office for each special responsibility constituent institution.  The President shall take immediate action regarding reported weaknesses in the internal control structure, deficiencies in the accounting records, and noncompliance with rules and regulations.  In any instance where such audit exceptions are identified, the President shall notify the Chancellor of the particular special responsibility constituent institution that such exceptions must be resolved to the satisfaction of the State Auditor and the President of The University within a three-month period commencing with the date of receipt of the published financial audit report.  If the exceptions are not satisfactorily resolved within a three-month period, the President of The University shall recommend to the Board of Governors at its next meeting that the designation of the particular institution as a special responsibility constituent institution be terminated until such time as the exceptions are resolved to the satisfaction of the State Auditor and the President of The University of North Carolina.  However, once the designation as a special responsibility constituent institution has been withdrawn by the Board of Governors, reinstatement may not be effective until the beginning of the following fiscal year at the earliest.  Any actions taken by the Board of Governors with respect to withdrawal or reinstatement of an institution's status as a special responsibility constituent institution shall be reported immediately to the Joint Legislative Education Oversight Committee.
The rules established under this section shall include review and consultation with the State Auditor, the Director of the Office of State Personnel, and the Director of the Division of State Purchasing and Contracts in ascertaining whether or not a constituent institution has the management staff and internal financial controls to administer the additional authorities authorized under G.S. 116-30.2, 116-30.4, and 143-53.1.  Such review and consultation must take place no less frequently than once each biennium."

PART 8.  GENERAL ASSEMBLY

Requested by:   Senator Warren
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.

Requested by:   Senator Warren
EXTENSION OF TERRITORIAL JURISDICTION OF LEGISLATIVE SERVICES COMMISSION TO ALL OF LANE STREET
Sec. 8.1.   G.S. 120-32.1(d) reads as rewritten:
"(d)	For the purposes of this section, the term 'State legislative buildings and grounds' means:
(1)	At all times:
a.	The State Legislative Building;
a1.	The areas between the outer walls of the State Legislative Building and the near curbline of those sections of Jones, Wilmington, and Salisbury Streets which border land on which it is situated;
a2.	The area between the outer walls of the State Legislative Building and the far curbline of that section of Lane Street which borders the land on which it 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, 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 Administrative 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."

Requested by:   Senator Warren
ACCESS TO STATE INFORMATION BY LEGISLATIVE SERVICES OFFICE
Sec. 8.2.  G.S. 120-32.01 reads as rewritten:
"§ 120-32.01. Information to be supplied.
(a)	Every State department, State agency, or State institution shall furnish the Legislative Services Office and the Research, Fiscal Research, and Bill Drafting Divisions any information or records requested by them. Except when accessibility is prohibited by a federal statute, federal regulation or State statute, every State department, State agency, or State institution shall give the Legislative Services Office and the Fiscal Research Division access to any data base or stored information maintained by computer, telecommunications, or other electronic data processing equipment, whether stored on tape, disk, or otherwise, and regardless of the medium for storage or transmission.
(b)	Notwithstanding subsection (a) of this section, access to the State Personnel Management Information System by the Research and Bill Drafting Divisions shall only be through the Fiscal Research Division.

PART 9.  OFFICE OF STATE BUDGET AND MANAGEMENT

Requested by:   Senator Warren
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:   Senator Warren
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:   Senator Warren
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:   Senator Warren
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."

Requested by:   Senator Warren
PROCEEDS OF TIMBER SALES MAY BE USED FOR VETERANS HOMES
Sec. 10.4.  Notwithstanding any other provision of law, the net proceeds derived from the sale of timber from land owned by or under the supervision and control of the Department of Administration, Division of Veterans Affairs, shall be deposited in the North Carolina Veterans Home Trust Fund and shall be used for the purposes set out in G.S. 165-48.

PART 11.  DEPARTMENT OF CULTURAL RESOURCES

Requested by:   Senator Warren
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:   Senator Warren
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.

Requested by:   Senator Warren
DEPARTMENT OF CULTURAL RESOURCES RETAIN HISTORICAL PUBLICATIONS RECEIPTS
Sec. 11.3.  The Historical Publications Section, Division of Archives and History, Department of Cultural Resources, may retain the receipts, including over-realized receipts, from the sale of its publications.  The receipts from the sale of those publications retained by the Historical Publications Section, Division of Archives and History, Department of Cultural Resources, shall not revert, but shall be used to reprint the publications.

PART 11A.  DEPARTMENT OF INSURANCE

Requested by:   Senator Warren
CONSTRUCTION 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 from the sale of copies of the State construction code if the receipts are used for the purchase of copies of the code for sale to the public, except that unspent construction code receipts shall revert to the General Fund at the end of each fiscal year."

Requested by:   Senator Warren
USE OF INSURANCE REGULATORY FUND
Sec. 11A.1.  G.S. 58-6-25(d) reads as rewritten:
"(d)	Use of Proceeds. – The Insurance Regulatory Fund is created in the State treasury, under the control of the Office of State Budget and Management. The proceeds of the charge levied in this section and all fees collected under Articles 69 through 71 of this Chapter and under Articles 9 and 9C of Chapter 143 of the General Statutes shall be credited to the Fund. The Fund shall be placed in an interest-bearing account and any interest or other income derived from the Fund shall be credited to the Fund. Moneys in the Fund may be spent only pursuant to appropriation by the General Assembly and in accordance with the line item budget enacted by the General Assembly. The Fund is subject to the provisions of the Executive Budget Act, except that no unexpended surplus of the Fund shall revert to the General Fund. All money credited to the Fund shall be used to reimburse the General Fund for the following:
(1)	Money appropriated to the Department of Insurance to pay its expenses incurred in regulating the insurance industry and other industries in this State.
(2)	Money appropriated to State agencies to pay the expenses incurred in regulating the insurance industry, in certifying statewide data processors under Article 11A of Chapter 131E of the General Statutes, and in purchasing reports of patient data from statewide data processors certified under that Article."

PART 13.  DEPARTMENT OF SECRETARY OF STATE

Requested by:   Senator Warren
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:   Senator Warren
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.  Any savings accrued shall be placed in reserve in the Office of the State Controller for consideration by the 1997 General Assembly.
(c) Beginning October 1, 1996, 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 and the savings placed in reserve in the Office of the State Controller.

Requested by:   Senators Warren and Little
RESERVE FOR THE YEAR 2000 CONVERSION OF THE STATE'S COMPUTER SYSTEM
Sec. 14.1.  (a) 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.
(b)	The Office of the State Controller shall not reduce State Information Processing Services (SIPS) charges for data processing services below budgeted levels for the 1996-97 fiscal year.
(c) The State Controller shall use any excess receipts from the 1996-97 charges for data processing services to fund one time capital and equipment start up requirements at community colleges remaining unconnected to the North Carolina Information Highway.  The balance of these receipts shall be held in reserve by the Office of State Controller to be expended only for costs associated directly with the conversion of the State's computing systems to the year 2000.  Nothing in this section shall obligate the General Assembly to pay monthly usage charges for any connections to the North Carolina Information Highway added under this subsection.
(d) Beginning October 1, 1996, the Office of the State Controller shall report quarterly to the Joint Legislative Commission on Governmental Operations on the use of the receipts and the calculations related to the allocation of State Information Processing Services (SIPS) charges used for the conversion.  The report shall also include the progress made toward accomplishing the conversion goals established for the fiscal year.

PART 15.  DEPARTMENT OF REVENUE

Requested by:   Senator Kerr
REDUCE STATE SALES TAX ON FOOD, REDUCE CORPORATE INCOME TAX RATE, AND REDUCE EXCISE TAX ON SOFT DRINKS
Sec. 15.1.  G.S. 105-164.4(a) is amended by adding a new subdivision to read:
"(5)	The rate of three percent (3%) applies to the sales price of food that is not otherwise exempt pursuant to G.S. 105-164.13 but would be exempt pursuant to G.S. 105-164.13 if it were purchased with coupons issued under the Food Stamp Program, 7 U.S.C. § 51."
Sec. 15.2.  G.S. 105-465 reads as rewritten:
"§ 105-465.  County election as to adoption of local sales and use tax.
The board of elections of any county, upon the written request of the board of county commissioners thereof, or upon receipt of a petition signed by qualified voters of the county equal in number to at least fifteen percent (15%) of the total number of votes cast in the county, at the last preceding election for the office of Governor, shall call a special election for the purpose of submitting to the voters of the county the question of whether a one percent (1%) sales and use tax as hereinafter provided will be levied.
The special election shall be held under the same rules and regulations applicable to the election of members of the General Assembly. No new registration of voters shall be required. All qualified voters in the county who are properly registered not later than 21 days (excluding Saturdays and Sundays) prior to the election shall be entitled to vote at said election. The county board of elections shall give at least 20 days' public notice prior to the closing of the registration books for the special election.
The county board of election shall prepare ballots for the special election.  The question presented on the ballot shall be 'FOR one percent (1%) local sales and use tax on items subject to State sales and use tax at the general State rate and on food' or 'AGAINST one percent (1%) local sales and use tax on items subject to State sales and use tax at the general State rate and on food'.
The county board of elections shall fix the date of the special election; provided, however, that the special election shall not be held on the date of any biennial election for county officers, nor within 60 days thereof, nor within one year from the date of the last preceding special election under this section."
Sec. 15.3.  G.S. 105-467 reads as rewritten:
"§ 105-467.  Scope of sales tax.
The sales tax that may be imposed under this Article is limited to a tax at the rate of one percent (1%) of the following:
(1)	The sales price of tangible personal property subject to the general rate of sales tax imposed by the State under G.S. 105-164.4(a)(1) and (a)(4b).
(2)	The gross receipts derived from the lease or rental of tangible personal property when the lease or rental of the property is subject to the general rate of sales tax imposed by the State under G.S. 105-164.4(a)(2).
(3)	The gross receipts derived from the rental of any room or other accommodations subject to the general rate of sales tax imposed by the State under G.S. 105-164.4(a)(3).
(4)	The gross receipts derived from services rendered by laundries, dry cleaners, and other businesses subject to the general rate of sales tax imposed by the State under G.S. 105-164.4(a)(4).
(5)	The sales price of food subject to three percent (3%) sales tax imposed by the State under G.S. 105-164.4(a)(5).
The sales tax authorized by this Article does not apply to sales that are taxable by the State under G.S. 105-164.4 but are not specifically included in subdivisions (1) through (5) of this section.
The State exemptions and exclusions contained in G.S. 105-164.13 and the State refund provisions contained in G.S. 105-164.14 apply to the local sales and use tax authorized to be levied and imposed under this Article.  A taxing county may not allow an exemption, exclusion, or refund that is not allowed under the State sales and use tax.
The local sales tax authorized to be imposed and levied under this Article applies to taxable transactions by retailers whose place of business is located within the taxing county.  For the purpose of this Article, the situs of a transaction is the location of the retailer's place of business."
Sec. 15.4.  G.S. 105-468 reads as rewritten:
"§ 105-468.  Scope of use tax.
The use tax authorized by this Article is a tax at the rate of one percent (1%) of the cost price of each item or article of tangible personal property that is not sold in the taxing county but is used, consumed, or stored for use or consumption in the taxing county.  The tax applies to the same items that are subject to tax under G.S. 105-467.
Every retailer who is engaged in business in this State and in the taxing county and is required to collect the use tax levied by G.S. 105-164.6 shall collect the one percent (1%) use tax when the property is to be used, consumed, or stored in the taxing county. The use tax contemplated by this section shall be levied against the purchaser, and the purchaser's liability for the use tax shall be extinguished only upon payment of the use tax to the retailer, where the retailer is required to collect the tax, or to the Secretary, where the retailer is not required to collect the tax.
Where a local sales or use tax has been paid with respect to tangible personal property by the purchaser, either in another taxing county within the State, or in a taxing jurisdiction outside the State where the purpose of the tax is similar in purpose and intent to the tax which may be imposed pursuant to this Article, the tax paid may be credited against the tax imposed under this section by a taxing county upon the same property.  If the amount of sales or use tax so paid is less than the amount of the use tax due the taxing county under this section, the purchaser shall pay to the Secretary an amount equal to the difference between the amount so paid in the other taxing county or jurisdiction and the amount due in the taxing county.  The Secretary may require such proof of payment in another taxing county or jurisdiction as is deemed to be necessary.  The use tax levied under this Article is not subject to credit for payment of any State sales or use tax not imposed for the benefit and use of counties and municipalities.  No credit shall be given under this section for sales or use taxes paid in a taxing jurisdiction outside this State if that taxing jurisdiction does not grant similar credit for sales taxes paid under this Article."
Sec. 15.5.  The first paragraph of Section 4 of Chapter 1096 of the 1967 Session Laws, as amended, is amended as follows:
(1)	By deleting the word "and" before subdivision (4).
(2)	By changing the period at the end of subdivision (4) to a semicolon and adding the word "and".
(3)	By adding a new subdivision to read:
"(5)	The sales price of food subject to three percent (3%) sales tax imposed by the State under G.S. 105-164.4(a)(5)."
Sec. 15.6.  The first sentence of Section 5 of Chapter 1096 of the 1967 Session Laws is amended by deleting the first sentence of that section and substituting the following sentences to read:
"The use tax that Mecklenburg County may impose under this division is a tax at the rate of one percent (1%) of the cost price of each item or article of tangible personal property that is not sold but is used, consumed, or stored for use or consumption in Mecklenburg County.  The tax applies to the same items that are subject to tax under Section 4 of this act."
Sec. 15.7.  Approval under Article 39, 40, or 42 of Chapter 105 of the General Statutes, or under the Mecklenburg County Sales and Use Tax Act, Chapter 1096 of the 1967 Session Laws, as amended, of local sales and use taxes on items subject to State sales and use tax at the general State rate constitutes approval of local sales and use taxes on food.
Sec. 15.8.  G.S. 105-130.3 reads as rewritten:
"§ 105-130.3.  Corporations.
A tax is imposed on the State net income of every C Corporation doing business in this State at seven and one-half percent (7.5%) of the corporation's State net income.  An S Corporation is not subject to the tax levied in this section."
Sec. 15.9.  G.S. 115C-546.1(b) reads as rewritten:
"(b)	Each calendar quarter, the Secretary of Revenue shall remit to the State Treasurer for credit to the Public School Building Capital Fund an amount equal to one-fifteenth (1/15) of the net collections received during the previous quarter by the Department of Revenue under G.S. 105-130.3 minus two million five hundred thousand dollars ($2,500,000).  All funds deposited in the Public School Building Capital Fund shall be invested as provided in G.S. 147-69.2 and G.S. 147-69.3."
Sec. 15.10. Effective July 1, 1997, G.S. 105-113.45 reads as rewritten:
"§ 105-113.45. Excise taxes on soft drinks and base products.
(a)	Bottled Soft Drinks. – An excise tax of one-half cent (1/2¢) is levied on each bottled soft drink.
(b)	Repealed by Session Laws 1991, c. 689, s. 276.
(c)	Liquid Base Products. – An excise tax at the rate of fifty cents (50¢) is levied on each individual container of a liquid base product. The tax applies regardless whether the liquid base product is diverted to and used for a purpose other than making a soft drink.
(d)	Dry Base Products. – An excise tax is levied on each individual container of a dry base product at the rate:
(1)	Of one-half cent (1/2¢) an ounce if the dry base product is not converted into a syrup or other liquid base product before it is used to make a soft drink.
(2)	That would apply under subsection (c) to the resulting liquid base product if the dry base product is converted into a liquid base product before it is used to make a soft drink.
(e)	Repealed by Session Laws 1991, c. 689, s. 276."
Sec. 15.11.  Sections 15.1 through 15.7 of this act become effective January 1, 1997, and apply to sales made on or after that date.  Section 15.8 of this act is effective for taxable years beginning on or after January 1, 1997.  Section 15.9 of this act becomes effective October 1, 1997, and applies to remittances made on or after that date.  Section 15.10 of this act becomes effective July 1, 1997.

Requested by:   Senator Rand
CREDIT/REFUND FEDERAL RETIREES
Sec. 15.12.  G.S. 105-151.20 reads as rewritten:
"§ 105-151.20.  Credit or partial refund for tax paid on certain federal retirement benefits.
(a)	Purpose; Definitions. – The purpose of this section is to benefit certain retired federal government workers on account of their public service.  The following definitions apply in this section:
(1)	Federal retirement benefits. – Retirement benefits received from one or more federal government retirement plans.
(2)	Net pension tax. – The amount of tax a taxpayer paid under this Division for the 1985, 1986, 1987, and 1988 tax years on federal retirement benefits, without interest, less any part of the tax for which the taxpayer received a credit under this section before 1998 and any part of the tax refunded to the taxpayer before 1998.
(3)	Tax year. – The taxpayer's taxable year beginning on a day in the applicable calendar year.
(b)	Credit. – A taxpayer who received federal retirement benefits during the 1985, 1986, 1987, or 1988 tax year may claim a credit against the tax imposed by this Division equal to the net pension tax on those benefits.  The 
" " credit allowed under this section shall be taken in equal installments over the taxpayer's first three taxable years beginning on or after January 1, 1997.  The credit allowed under this section may not exceed the amount of tax imposed by this Division reduced by the sum of all credits allowed against the tax, except payments of tax made by or on behalf of the taxpayer.
(c)	Partial Refund Alternative. – If the amount of tax imposed by this Division on the taxpayer for the taxpayer's 1996 tax year, reduced by the sum of all credits allowed against the tax except payments of tax made by or on behalf of the taxpayer, is less than five percent (5%) of the taxpayer's net pension tax for which credit is allowed, the taxpayer is eligible to elect a partial refund under this subsection in lieu of claiming the credit.  The partial refund allowed under this subsection is equal to the lesser of eighty-five percent (85%) of the taxpayer's net pension tax or the reduced amount determined by the Secretary as provided in this subsection.  To elect the partial refund, an eligible taxpayer must file with the Secretary on or before April 15, 1998, a written request for a partial refund of the taxpayer's net pension.  The Secretary shall calculate from these requests eighty-five percent (85%) of the total amount of net pension tax for which partial refunds have been claimed and, if this sum exceeds the amount in the Federal Retiree Refund Account created in this section, shall allocate the amount in the Account among the eligible taxpayers claiming partial refunds by reducing each taxpayer's claimed refund in proportion to the size of the claimed refund.  The Secretary shall remit these partial refunds before January 1, 1999.
(d)	Substantiation. – In order to claim a refund or credit under this section, a taxpayer must provide any information required by the Secretary to establish the taxpayer's eligibility for tax benefit and the amount of the tax benefit.
(e)	Federal Retiree Accounts. – There are created in the Department of Revenue two special accounts to be known as the Federal Retiree Refund Account and the Federal Retiree Administration Account.  Funds in the Federal Retiree Refund Account shall be spent only for partial refunds pursuant to subsection (c) of this section.  The Department of Revenue may use funds in the Federal Retiree Administration Account only for the costs of administering this section.  Funds in the Federal Retiree Refund Account and the Federal Retiree Administration Account shall not revert to the General Fund until the Director of the Budget certifies that the Department of Revenue has completed all duties necessary to implement this section, including processing the escheat of refund checks that have not been cashed."
Sec. 15.13.  Effective January 1, 2004, G.S. 105-151.20 is repealed.
Sec. 15.14.  It is the intent of the General Assembly to appropriate from the General Fund to the Department of Revenue the sum of twenty-five million dollars ($25,000,000) for the 1997-98 fiscal year to the credit of the Federal Retiree Refund Account created in this Part.  It is the intent that these funds be used to make refunds to federal retirees as provided in this Part.  
Sec. 15.15.  It is the intent of the General Assembly to appropriate from the General Fund to the Department of Revenue a sum of money sufficient to cover the Department's cost of administering this Part for the 1997-98 fiscal year.  The money would be credited to the Federal Retiree Administration Account.
Sec. 15.16.  Sections 15.12 through 15.16 of this act become effective July 1, 1997.

Requested by:   Senators Perdue, Warren, Kerr
FEDERAL PENSION WITHHOLDING
Sec. 15.17.  Of the funds appropriated to the Department of Revenue for the 1996-97 fiscal year the sum of one hundred nineteen thousand three hundred eighty-two dollars ($119,382) shall be used for start-up costs for participation in the United States Office of Personnel Management's voluntary program for withholding State income tax from civil service pension benefits.

PART 16.  COLLEGES AND UNIVERSITIES

Requested by:   Senators Plexico, Winner
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.
(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:   Senators Plexico, Winner
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 five hundred thousand dollars ($500,000) in recurring funds shall be allocated to North Carolina State University to furnish the Engineering Graduate Research Center and to operate distance learning programs.  Engineering programs offered through this funding shall be a cooperative effort among North Carolina State University, North Carolina Agricultural and Technical State University, and the University of North Carolina at Charlotte.
An additional amount of two million two hundred fifty-five thousand dollars ($2,255,000) appropriated by this act to the Board of Governors shall be allocated and used for distance learning and capacity enhancing alternatives, including expansion of the "2 + 2" engineering programs offered through North Carolina State University, incentives for summer school enrollments, and other initiatives planned by the Board of Governors.

Requested by:  Senators Plexico, Winner
UNC EQUITY OF FUNDING
Sec. 16.2.  (a) 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.
(b) Of the funds appropriated to the Board of Governors of The University of North Carolina for the 1996-97 fiscal year, the sum of two million two hundred twenty-six thousand dollars ($2,226,000) in nonrecurring funds shall be used to assure that the total funds retained pursuant to subsection (a) of this section and the additional funds from this allocation shall provide a minimum of thirty-seven and one-half percent (37.5%) of the funding needs identified for each of the campuses cited as having funding below an equitable level in the Board of Governors' Phase I final report on "An Analysis of Funding Equity in The University of North Carolina."

Requested by:   Senators Plexico, Winner
CENTER FOR THE PREVENTION OF SCHOOL VIOLENCE
Sec. 16.3.  Of the funds appropriated for the 1996-97 fiscal year to the Board of Governors for The University of North Carolina, the sum of two hundred ninety-seven thousand dollars ($297,000) shall be allocated to North Carolina State University to operate the Center of Prevention of School Violence.  The Center shall assist the Department of Public Instruction in coordinating training for school resource officers in public schools.

Requested by:   Senators Plexico, Winner
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 Mathematics 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 Mathematics during the 1996-97 fiscal year.  The Board of Governors shall give top priority to those fire safety needs that are determined to be the most egregious and shall address those needs first.  The Board of Governors shall use available reserves in institutional housing trust funds, as well as funds allocated to the Board from the Reserve for Repairs and Renovations to comply with this section.  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 Mathematics.

Requested by:  Senators Plexico and Winner 
FACILITATE FINANCING OF FIRE WARNING AND SUPPLEMENTAL FIRE PROTECTION SYSTEMS IN STUDENT HOUSING
Sec. 16.6.  (a) Article 1 of Chapter 116 of the General Statutes is amended by adding a new Part to read:
"Part 7.  Fire Safety.
"§ 116-44.6.  Definitions.
Unless the context clearly requires another meaning, the following definitions apply in this Part:
(1)	Fraternity or sorority. – A social, professional, or educational incorporated organization that, by official recognition, is affiliated or identified with a public or nonpublic institution of higher education in this State and which maintains a living facility that provides accommodations for five or more students enrolled at the recognition-granting institution of higher education.
(2)	Fund. – The Fire Safety Loan Fund authorized by this Part.
(3)	Living facility. – A sleeping facility capable of overnight accommodation and other capabilities which support continuous occupancy.
(4)	Residence hall. – A living facility maintained by a public or nonpublic institution of higher education in North Carolina or by the North Carolina School of Science and Mathematics for use by enrolled students.
(5)	Supplemental fire safety protection system. – A water system capability which is sized to accommodate the added water supply pressure and volume required for building fire protection.
(6)	Water system. –
a.	A city, county, or sanitary district; or
b.	A water and sewer authority, a metropolitan water district, or county water and sewer district, established pursuant to Chapter 162A of the General Statutes.
"§ 116-44.7.  Exemption from certain fees and charges.
No water system serving a residence hall or fraternity or sorority housing shall levy or collect any water-meter fee, water-hydrant fee, tap fee, or similar service fee with respect to supporting a supplemental fire safety protection system.
"§ 116-44.8.  Fire Safety Loan Fund.
(a)	There is established the Fire Safety Loan Fund.  The Fund shall be a revolving loan fund for installing fire safety equipment and systems in fraternity and sorority housing.
(b)	The Fund shall be administered by the Office of the State Treasurer, and that office may establish the policies and procedures that it deems appropriate for the operation of the Fund.  The Office of the State Treasurer may enlist the assistance of other State departments or entities which have expertise that would be useful in administering the Fund, and those State departments or entities shall provide the assistance requested.
(c)	The Fund shall be operated on a revolving basis with proceeds from the repayment of prior loans being made available for subsequent loans.
(d)	Loans from the Fund shall be secured by a first or second mortgage or other pledge.  Loans shall be made for a period not to exceed 10 years.  Interest shall not be charged on loans from the Fund."
(b)	Of the funds allocated by this act to the Board of Governors of The University of North Carolina from the Reserve for Repairs and Renovations, the sum of one million two hundred sixty-three thousand eight hundred three dollars ($1,263,803) for the 1996-97 fiscal year shall be used to add central fire alarm and warning systems to residence halls at the constituent institutions of The University and at the North Carolina School of Science and Mathematics that are not currently so equipped.  The central alarm and warning systems to be installed shall be interconnected with a supervisory campuswide system of reporting into a station that is continuously monitored.
(c)	Of the funds appropriated to the Office of the State Treasurer, the sum of one million dollars ($1,000,000) for the 1996-97 fiscal year shall be used for the purpose of establishing the Fire Safety Loan Fund for installing fire safety equipment and systems in fraternity and sorority housing at public and nonpublic institutions of higher education located in North Carolina as authorized by G.S. 116-44.8.

Requested by:   Senator Perdue
REPORT ON SERVICES PROVIDED BY FACULTY AND STUDENT ADVISORS
Sec. 16.7.  The Board of Governors of The University of North Carolina shall report to the Joint Legislative Education Oversight Committee prior to January 2, 1997, on the implementation by each constituent institution of the recommendations included in the report on "Academic Advising in the University of North Carolina." The report shall include the following information collected from each constituent institution:  (i) the progress of the institution's initiative to improve advising, (ii) the results of the senior survey referenced in the report on "Academic Advising in the University of North Carolina", and (iii) the plans of each constituent institution to address specifically any item of student dissatisfaction on the senior survey that had a score of dissatisfaction above thirty-three percent (33%).

Requested by:   Senators Plexico, Winner
PARENTAL SAVINGS TRUST FUND
Sec. 16.8.  Article 23 of Chapter 116 of the General Statutes is amended by adding a new section to read:
"§ 116-209.25.  Parental Savings Trust Fund.
(a)	Policy. – The General Assembly of North Carolina hereby finds and declares that encouraging parents and other interested parties to save for the postsecondary education expenses of eligible students is fully consistent with and furthers the long-established policy of the State to encourage, promote, and assist education as more fully set forth in G.S. 116-201(a).
(b)	Parental Savings Trust Fund. – There is established a parental savings trust fund to be administered by the State Education Assistance Authority to enable qualified parents to save funds to meet the costs of the postsecondary education expenses of eligible students.
(c)	Contributions to the Trust Fund. – The Authority is authorized to accept, hold, and disburse contributions, and interest earned on such contributions, from qualified parents and other interested parties in the parental savings trust fund.  The contributions to the parental savings trust fund shall be held by the Authority in a separate institutional trust fund and, as such, contributions to the trust fund shall be invested by the State Treasurer as authorized in G.S. 147-69.2(b)(1) through (6) and the applicable provisions of G.S. 147-69.3.  The contributions to the parental savings trust fund shall not be considered State moneys, assets of the State, or State revenue for any purpose.
(d)	Administration of the Trust Fund. – The Authority is authorized to develop and perform all functions necessary and desirable to administer the parental savings trust fund and to provide such other services as the Authority shall deem necessary to facilitate participation in the parental savings trust fund.
(e)	Loan Program. – The Authority is authorized to develop and administer a loan program in conjunction with the parental savings trust fund to provide loan assistance to qualified parents and interested parties in order to facilitate the postsecondary education of eligible students.  All funds appropriated to, or otherwise received by the Authority for loans under this section, all funds received as repayment of such loans and all interest earned on these funds shall be placed in an institutional trust fund.  This institutional trust fund may be used only for loans made to qualified parents and interested parties of funds advanced under this loan program."

Requested by:   Senators Plexico, Winner
SUPERCOMPUTER AND THE RESEARCH AND EDUCATION NETWORK/BOARD OF GOVERNORS TO MAINTAIN FUNDS
Sec. 16.9. The Board of Governors of The University of North Carolina shall maintain the funds transferred by this act for the purchase of the Supercomputer and the Research and Education Network in a central identifiable budget purpose. 

Requested by:   Senators Plyler, Plexico, Winner
AGRICULTURE RESEARCH FUNDS
Sec. 16.10.  Of the funds appropriated to the Board of Governors of The University of North Carolina for the 1996-97 fiscal year the following sums shall be allocated as follows:
(1)	The sum of $1,000,000 in nonrecurring funds shall be allocated for research efforts focused upon eradicating diseases in the State's turkey population.
(2)	The sum of $90,000 in nonrecurring funds shall be allocated to enhance fish hatcheries research and production.
(3)	The sum of $250,000 in nonrecurring funds shall be allocated for turfgrass research.

Requested by:   Senators Plexico, Winner
UNC FUNDING FOR NEW ENROLLMENT POLICY CHANGE
Sec. 16.11.  In requesting funds for additional students, the Board of Governors of The University of North Carolina shall revise its methodology to ensure sufficient funding for support services needed due to enrollment growth.  The policy change shall be implemented for the 1996-97 fiscal year and each fiscal year thereafter.  Funds are provided in this act to implement this policy change for the 1996-97 fiscal year.

Requested by:   Senator Parnell
PEMBROKE STATE UNIVERSITY NAME CHANGE
Sec. 16.12.  (a) G.S. 116-2(4) reads as rewritten:
"(4)	'Constituent institution' or 'institution' means one of the 16 public senior institutions, to wit, the University of North Carolina at Chapel Hill, North Carolina State University at Raleigh, the University of North Carolina at Greensboro, the University of North Carolina at Charlotte, the University of North Carolina at Asheville, the University of North Carolina at Wilmington, Appalachian State University, East Carolina University, Elizabeth City State University, Fayetteville State University, North Carolina Agricultural and Technical State University, North Carolina Central University, North Carolina School of the Arts, Pembroke State University, redesignated effective July 1, 1996, as the 'University of North Carolina at Pembroke', Western Carolina University, and Winston-Salem State University."
(b) G.S. 116-4 reads as rewritten:
"§ 116-4.  Constituent institutions of the University of North Carolina.
On July 1, 1972, the University of North Carolina shall be  composed of the following institutions:  the University of North Carolina at Chapel Hill, North Carolina State University at Raleigh, the University of North Carolina at Greensboro, the University of North Carolina at Charlotte, the University of North Carolina at Asheville, the University of North Carolina at Wilmington, Appalachian State University, East Carolina University, Elizabeth City State University, Fayetteville State University, North Carolina Agricultural and Technical State University, North Carolina Central University, North Carolina School of the Arts, Pembroke State University, redesignated effective July 1, 1996, as the 'University of North Carolina at Pembroke', Western Carolina University and Winston-Salem State University."
(c) G.S. 116-5(a) reads as rewritten:
"(a)	Commencing July 1, 1972, and continuing for the terms hereinafter stated and until their successors are chosen, the Board of Governors shall consist of the following members:
(1)	Three persons elected prior to January 1, 1972, by and from the membership of the Board of Trustees of East Carolina University and two persons elected prior to January 1, 1972, by and from the membership of the board of trustees of each of the following institutions: Appalachian State University, North Carolina Agricultural and Technical State University, North Carolina Central University, and Western Carolina University.
(2)	One person elected prior to January 1, 1972, by and from the  membership of the board of trustees of each of the following  institutions: Elizabeth City State University, Fayetteville State University, North Carolina School of the Arts, Pembroke State University, redesignated effective July 1, 1996, as the 'University of North Carolina at Pembroke', and Winston-Salem State University.
(3)	Sixteen persons elected prior to January 1, 1972, by and from the membership of the Board of Trustees of the University of North Carolina.
(4)	Two persons elected prior to January 1, 1972, by the Board of Higher Education from its eight members-at-large. These shall be nonvoting members whose terms shall expire on June 30, 1973."
(d) G.S. 116-12 reads as rewritten:
"§ 116-12. Property and obligations.
All property of whatsoever kind and all rights and privileges held by the Board of Higher Education and by the Boards of Trustees of Appalachian State University, East Carolina University, Elizabeth City State University, Fayetteville State University, North  Carolina Agricultural and Technical State University, North Carolina Central University, North Carolina School of the Arts, Pembroke State University, redesignated effective July 1, 1996, as the 'University of North Carolina at Pembroke', Western Carolina University and Winston-Salem State University, as said property, rights and privileges may exist immediately prior to July 1, 1972, shall be, and hereby are, effective July 1, 1972, transferred to and vested in the Board of Governors of the University of North Carolina. All obligations of whatsoever kind of the Board of Higher Education and of the Boards of Trustees of Appalachian State University, East Carolina University, Elizabeth City State University, Fayetteville State University, North Carolina Agricultural and Technical State University, North Carolina Central University, North Carolina School of the Arts, Pembroke State University, redesignated effective July 1, 1996, as the 'University of North Carolina at Pembroke', Western Carolina University and Winston-Salem State University, as said obligations may exist immediately prior to July 1, 1972, shall be, and the same hereby are, effective July 1, 1972, transferred to and assumed by the Board of Governors of the University of North Carolina.  Any property, real or personal, held immediately prior to July 1, 1972, by a board of trustees of a constituent institution for the benefit of that institution or by the University of North Carolina for the benefit of any one or more of its six institutions, shall from and after July 1, 1972, be kept separate and distinct from other property held by the Board of Governors, shall continue to be held for the benefit of the institution or institutions that were previously the beneficiaries and shall continue to be held subject to the provisions of the respective instruments, grants or other means or process by which any property right was acquired. In case a conflict arises as to which property, rights or privileges were held for the beneficial interest of a particular institution, or as to the extent to which such property, rights or privileges were so held, the Board of Governors shall determine the issue, and the determination of the Board shall constitute final administrative action. Nothing in this Article shall be deemed to increase or diminish the income, other revenue or specific property which is pledged, or otherwise hypothecated, for the security or liquidation of any obligations, it being the intent that the Board of Governors shall assume said obligations without thereby either enlarging or diminishing the rights of the holders thereof."
(e) G.S. 147-45 reads as rewritten:
"§ 147-45.  Distribution of copies of State publications.
The Secretary of State shall, at the State's expense, as soon as possible after publication, provide such number of copies of the Session Laws and Senate and House Journals to federal, State, and local governmental officials, departments and agencies, and to educational institutions of instruction and exchange use, as is set out in the table below:
Session	Assembly
Agency or Institution	Laws	Journals
Governor, Office of the	3	2
Lieutenant Governor, Office of the	1	1
Secretary of State, Department of the	3	3
Auditor, Department of the State	3	1
Treasurer, Department of the State	3	1
Local Government Commission	2	0
State Board of Education	1	0
Department of Public Instruction	3	1
Controller	1	0
Technical Assistance Centers	1 ea.	0
Department of Community Colleges	3	1
Justice, Department of
Office of the Attorney General	25	3
Budget Bureau (Administration)	1	0
Property Control (Administration)	1	1
State Bureau of Investigation	1	0
Agriculture, Department of	3	1
Labor, Department of	5	1
Insurance, Department of	5	1
Administration, Department of	1	1
Budget Bureau	2	1
Controller	1	0
Property Control	1	0
Purchase and Contract	2	0
Policy and Development	1	0
Veterans Affairs Commission	1	0
Environment, Health, and Natural
Resources, Department of	1	0
Division of Environmental Management	2	0
Board of Environment, Health, and
   Natural Resources	1	0
Soil and Water Conservation Commission	1	0
Wildlife Resources Commission	2	0
Revenue, Department of	5	1
Human Resources, Department of	3	0
Board of Human Resources	1	0
Health Services, Division of	3	0
Mental Health, Developmental
	   Disabilities, and Substance Abuse Services,
   Division of	1	0
Social Services, Division of	3	0
Facilities Services, Division of	1	0
Youth Services, Division of	1	0
Hospitals and Institutions	1 ea.	0
Transportation, Department of	1	0
Board of Transportation	3	0
Motor Vehicles, Division of	1	0
Commerce, Department of	1	0
Economic Development, Division of	2	0
State Ports Authority	1	0
Alcoholic Beverage Control Commission,
   North Carolina	2	0
Banking Commission	2	0
Utilities Commission	8	1
Industrial Commission	7	0
Labor Force Development Council	1	0
Milk Commission	5	0
Employment Security Commission	1	1
Correction, Department of	1	0
Department of Correction	2	0
Parole Commission	2	0
State Prison	1	0
Correctional Institutions	1 ea.	0
Cultural Resources, Department of	1	0
Archives and History, Division of	5	1
State Library	5	5
Publications Division	1	1
Crime Control and Public Safety,
Department of	2	1
North Carolina Crime Commission	1	0
Adjutant General	2	0
Elections, State Board of	2	0
Office of Administrative Hearings	2	0
State Personnel Commission	1	0
Office of State Personnel	1	1
Legislative Branch
State Senators	1 ea.	1 ea.
State Representatives	1 ea.	1 ea.
Principal Clerk – Senate	1	1
Principal Clerk – House	1	1
Reading Clerk – Senate	1	1
Reading Clerk – House	1	1
Sergeant at Arms – House	1	1
Sergeant at Arms – Senate	1	1
Enrolling Clerk	1	0
Engrossing Clerk	1	0
Indexer of the Laws	1	0
Legislative Building Library	35	15
Judicial System
Justices of the Supreme Court	1 ea.	1 ea.
Judges of the Court of Appeals	1 ea.	1 ea.
Judges of the Superior Court	1 ea.	0
Emergency and Special Judges of the
   Superior Court	1 ea.	0
District Court Judges	1 ea.	0
District Attorneys	1 ea.	0
Clerk of the Supreme Court	1	1
Clerk of the Court of Appeals	1	1
Administrative Office of the Courts	4	1
   Supreme Court Library   AS MANY AS REQUESTED
Colleges and Universities
The University of North Carolina System
Administrative Offices	3	0
University of North Carolina, Chapel Hill	65	25
University of North Carolina, Charlotte	3	1
University of North Carolina, Greensboro	3	1
University of North Carolina, Asheville	2	1
University of North Carolina, Wilmington	2	1
North Carolina State University, Raleigh	5	3
Appalachian State University	2	1
East Carolina University	3	2
Elizabeth City State University	2	1
Fayetteville State University	2	1
North Carolina Agricultural and
   Technical University	2	1
North Carolina Central University	5	5
Western Carolina University	2	1
University of
North Carolina, Pembroke	2	1
Winston-Salem State University	2	1
North Carolina School of the Arts	1	1
Private Institutions
Duke University	6	6
Davidson College	3	2
Wake Forest University	5	5
Lenoir Rhyne College	1	1
Elon College	1	1
Guilford College	1	1
Campbell University	5	5
Wingate College	1	1
Pfeiffer College	1	1
Barber Scotia College	1	1
Barton College	1	1
Shaw University	1	1
St. Augustine's College	1	1
J.C. Smith University	1	1
Belmont Abbey College	1	1
Bennett College	1	1
Catawba College	1	1
Gardner-Webb College	1	1
Greensboro College	1	1
High Point College	1	1
Livingstone College	1	1
Mars Hill College	1	1
Meredith College	1	1
Methodist College	1	1
North Carolina Wesleyan College	1	1
Queens College	1	1
Sacred Heart College	1	1
St. Andrews Presbyterian College	1	1
Salem College	1	1
Warren Wilson College	1	1
County and Local Officials
Clerks of the Superior Court	1 ea.	1 ea.
Register of Deeds	1 ea.	1 ea.
Federal, Out-of-State and Foreign
Secretary to the President	1	0
Secretary of State	1	1
Secretary of Defense	1	0
Secretary of Agriculture	1	0
Secretary of the Interior	1	0
Secretary of Labor	1	1
Secretary of Commerce	1	1
Secretary of the Treasury	1	0
Secretary of Health, Education and Welfare	1	0
Secretary of Housing and Urban Development	1	0
Secretary of Transportation	1	0
Attorney General	1	0
Postmaster General	1	0
Bureau of Census	1	0
Bureau of Public Roads	1	0
Department of Justice	1	0
Department of Internal Revenue	1	0
Veterans' Administration	1	0
Farm Credit Administration	1	0
Securities and Exchange Commission	1	0
Social Security Board	1	0
Environmental Protection Agency	1	0
Library of Congress	8	2
Federal Judges resident in North Carolina	1 ea.	0
Federal District Attorneys resident in
   North Carolina	1 ea.	0
Marshal of the United States Supreme Court	1	0
Federal Clerks of Court resident in NC	1 ea.	0
Supreme Court Library exchange list	1 ea.	0

One copy of the Session Laws shall be furnished the head of any department of State government created in the future.
State agencies, institutions, etc., not found in or covered by this list may, upon written request from their respective department head to the Secretary of State, and upon the discretion of the Secretary of State as to need, be issued copies of the Session Laws on a permanent loan basis with the understanding that should said copies be needed they will be recalled."
(f) The General Statutes are further amended by substituting the phrase "University of North Carolina at Pembroke" for the phrase "Pembroke State University" wherever that phrase may appear.
(g) All statutory and other legal authority, powers, duties, functions, records, personnel, property, and unexpended balances of appropriations or other funds of Pembroke State University remain those of the University of North Carolina at Pembroke.
(h) Nothing in this section requires the immediate replacement of any stationery, other supplies, or any emblems or other symbols used by the University of North Carolina at Pembroke as they existed prior to the enactment of this section.
(i) This section shall be funded by funds currently available to the University of North Carolina at Pembroke.  Nothing in this section obligates the General Assembly to appropriate any funds to implement it.

Requested by:  Senators Plexico and Winner
ACADEMIC ENHANCEMENT FUNDS
Sec. 16.13. Of the funds appropriated to The University of North Carolina Board of Governors, the sum of seventeen million eight hundred thousand dollars ($17,800,000) shall be allocated to constituent institutions classified as Research University I campuses in direct proportion to the funds to be raised on each campus for the 1996-97 fiscal year from the tuition increases authorized under Section 15.15 of Chapter 507 of the 1995 Session Laws.  

Requested by:   Senator Plexico
INCENTIVE FUNDING FOR PRIVATE COLLEGES
Sec. 16.4.  The Joint Education Oversight Committee with the assistance of the North Carolina Association of Independent Colleges and Universities, shall study various methods to provide additional incentives for North Carolina residents to attend private colleges in North Carolina in an effort to plan for projected increases in college enrollments over the next 10 years.  The Committee shall take into account the capacity of the physical facilities of the private colleges and universities. The Committee shall complete its study by November 15, 1996, when the Education Cabinet is scheduled to present its comprehensive plan to meet projected increases in higher education enrollments, and the Committee shall consider the results of its study along with the plan as it makes recommendations to the 1997 General Assembly.

PART 17.  COMMUNITY COLLEGES

Requested by:   Senators Plexico, Winner
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:   Senators Plexico, Winner
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:   Senators Plexico, Winner
ELIMINATION OF BARRIERS AMONG PUBLIC SCHOOLS, COMMUNITY COLLEGES, AND UNIVERSITIES/STUDY
Sec. 17.2.  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:   Senators Plexico, Winner
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.  In developing the plan, the State Board shall consider whether one or more colleges receive a disproportionate share of the occupational extension formula funds, the appropriateness of such a distribution, and any recommendations for changes in that distribution.  The State Board of Community Colleges shall use Board Reserve funds to hire an outside, independent consultant to study the funding formula.

Requested by:   Senators Plexico, Winner
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 March 1 and September 1 of each year 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 September 1, 1996, report shall include this information for the prior three fiscal years."

Requested by:   Senators Winner, Plexico, Odom
UNIFORM MEDICAL HISTORY FORM/POSTSECONDARY INSTITUTIONS
Sec. 17.5.  The State Board of Community Colleges and the Board of Governors of The University of North Carolina shall adopt a uniform student medical history form for use by all institutions in the North Carolina Community College System and by all of the constituent institutions of The University of North Carolina.  This form shall be used for all new students enrolling after July 1, 1997, who are required to submit health forms.
The State Board of Community Colleges and the Board of Governors of The University of North Carolina shall report to the Joint Legislative Education Oversight Committee by December 15, 1996, on their progress in implementing the provisions of this section.

Requested by:   Senators Plexico, Winner
DEPARTMENT OF COMMUNITY COLLEGES/BUDGET REALIGNMENT
Sec. 17.6.  The Department of Community Colleges may realign its budget in accordance with the departmental reorganization plan adopted by the State Board of Community Colleges, which is in place June 1, 1996. 

Requested by:   Senators Plexico, Winner
START-UP FUNDS FOR PROGRAMS IN PRISON FACILITIES
Sec. 17.7.  The State Board of Community Colleges shall use five hundred thousand dollars ($500,000) of the funds in the State Board Reserve to provide funds to enable colleges to start new programs in prison facilities.

Requested by:   Senators Plexico, Winner, Little
INFORMATION HIGHWAY SITES/COMMUNITY ACCESS
Sec. 17.8.  It is the policy of the State to make all North Carolina Information Highway sites available to all public agencies for public use.  The Education Cabinet shall adopt guidelines for ensuring public access to the university, community colleges, and public school information highway sites, and shall report these guidelines to the Joint Legislative Education Oversight Committee by January 2, 1997.

PART 18.  PUBLIC SCHOOLS

Requested by:   Senators Winner, Plexico
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 four percent (4.0%) 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 47,038 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:   Senators Winner, Little, Plexico
SUPPLEMENTAL FUNDING IN LOW-WEALTH COUNTIES/SMALL SCHOOL SYSTEM SUPPLEMENTAL FUNDING
Sec. 18.2.  (a)	Supplemental funds for low-wealth counties.– The funds in the continuation budget for the 1996-97 fiscal year to provide supplemental funds in low-wealth counties shall be allocated and administered as provided in Section 17.1 of Chapter 507 of the 1995 Session Laws.  The funds in the expansion budget for the 1996-97 fiscal year to provide supplemental funds in low-wealth counties shall be allocated and administered as provided in Section 17.1 of Chapter 507 of the 1995 Session Laws except that these funds shall be allocated only to the 25 counties with lowest ability to pay rank under the formula contained in that section.
(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, 1997, on whether counties supplanted local funds with the funds received pursuant to this section.

Requested by:   Senators Perdue, Plexico, Winner
SUBSTITUTE PAY FOR TEACHER ASSISTANTS
Sec. 18.3.  G.S. 115C-12(8) reads as rewritten:
"(8)	Power to Make Provisions for Sick Leave and for Substitute Teachers. – The Board shall provide for sick leave with pay for all public school employees in accordance with the provisions of this Chapter and shall promulgate rules and regulations providing for necessary substitutes on account of sick leave and other teacher absences.
		The pay for a substitute shall be fixed by the Board. If a teacher assistant acts as a substitute teacher, the salary of the teacher assistant for the day shall be the same as the daily salary of an entry-level teacher with an "A"certificate.
		The Board may provide to each local school administrative unit not exceeding one percent (1%) of the cost of instructional services for the purpose of providing substitute teachers for those on sick leave as authorized by law or by regulations of the Board, but not exceeding the provisions made for other State employees."

Requested by:   Senators Winner, Plexico
EXEMPTIONS FROM THE COMPUTER SKILLS TEST
Sec. 18.4.  The State Board of Education may exempt a school from the implementation of the computer skills test if the school does not have adequate computer resources to instruct students in computer skills or to administer the test.

Requested by:  Senator Plyler, Winner, Plexico
PURCHASING FLEXIBILITY PILOT PROGRAM FOR SCHOOLS
Sec. 18.5.  (a) The State Board of Education shall develop and implement a two-year pilot program allowing selected local school administrative units to purchase supplies, equipment, and materials from noncertified sources.  In developing the program, the State Board shall collaborate with the Department of Administration on establishing standards, specifications, and any other measures necessary to implement and evaluate the pilot program. The State Board shall select six local school administrative units that are diverse in geography and size to participate in the pilot program.
(b) Local school administrative units participating in the pilot program shall have the authority to purchase the same supplies, equipment, and materials from noncertified sources as are available under State term contracts, subject to the following conditions:
(1)	The purchase price, including the cost of delivery, is less than the cost under the State term contract;
(2)	The cost of the purchase shall not exceed the bid value benchmark established under G.S. 143-53.1;
(3)	The local school administrative unit documents in writing the cost savings; and
(4)	The local school administrative unit shall provide annually by July 1 an itemized report of the cost savings to the State Board of Education.
(c) The requirements listed in subsection (b) of this section shall not apply to purchases from noncertified sources that fall below the economic ordering quantity of a State term contract.
(d) The State Board of Education shall provide to the Department of Administration copies of the itemized annual reports produced by the local school administrative units participating in the pilot programs.  The State Board of Education shall evaluate the information provided by the participating units and make an interim report of its findings and recommendations to the Joint Legislative Education Oversight Committee by September 1, 1997, and a final report by September 1, 1998.
(e)  This section becomes effective July 1, 1996, and applies to State term contracts for which bids or offers are solicited on or after that date.

Requested by:   Senators Winner, Plexico
MINIMUM VACATION LEAVE FOR BUS DRIVERS
Sec. 18.6.  Notwithstanding any other provision of law, all school bus drivers, who have been employed for at least one academic year and who are not entitled to more than one day of paid vacation leave, are entitled to one day of paid vacation leave in each subsequent school year.

Requested by:   Senators Winner, Plexico
ALTERNATIVE LEARNING PROGRAM/GUIDELINES, TECHNICAL ASSISTANCE, EVALUATION
Sec. 18.7. (a)	G.S. 115C-12 is amended by adding a new subdivision to read:
"(24)	Duty to Develop Guidelines for Alternative Learning Programs, Provide Technical Assistance on Implementation of Programs, and Evaluate Programs. –  The State Board of Education shall adopt guidelines for assigning students to alternative learning programs.  These guidelines shall include (i) a description of the programs and services that are recommended to be provided in alternative learning programs and (ii) a process for ensuring that an assignment is appropriate for the student and that the student's parents are involved in the decision.
	The State Board of Education shall provide technical support to local school administrative units to assist them in developing and implementing plans for alternative learning programs.
	The State Board shall evaluate the effectiveness of alternative learning programs and, in its discretion, of any other programs funded from the Alternative Schools/At-Risk Student allotment.  Local school administrative units shall report to the State Board of Education on how funds in the Alternative Schools/At-Risk Student allotment are spent and shall otherwise cooperate with the State Board of Education in evaluating the alternative learning programs."
(b)	The first priority for the use of the expansion budget funds appropriated in this act to the Alternative Schools/At-Risk Student allotment shall be to enable every high school in North Carolina to have a uniformed school resources officer.  If a local board of education determines after conferring with parents, teachers, and students at a high school that the school does not need a uniformed school resources officer, the local board may use these funds for other purposes. Local boards of education may use any remaining funds for other programs to ensure school safety, prevent violence, and provide alternative learning programs.
Local boards of education may use funds from the Alternative Schools/At-Risk Student allotment to form partnerships with the Cities In Schools Program or to contract with the Cities In Schools Program for services.
(c)	State funds in the Alternative Schools/At-Risk Student allotment are intended to be in addition to local funds and local boards of education shall not use these State funds to supplant local funds.
(d)	The State Board of Education may use up to two hundred thousand dollars ($200,000) of the funds in the Alternative Schools/At-Risk Student Allotment to implement G.S. 115C-12(24), as enacted by subsection (a) of this section.

Requested by:   Senator Rand
PILOT PROGRAM TO PERMIT THE USE OF OPERATING FUNDS FOR CAPITAL EXPENDITURES
Sec. 18.8.  The State Board of Education may establish a pilot program to permit one or more local school administrative units to use State operating funds more efficiently.  If a local school administrative unit participating in the pilot program consolidates schools and receives a reduction in funds and positions allotted for school operating expenses as a result of the consolidation, the unit shall continue to receive funds, including funds for positions, in the amount of the reduction in the year of the reduction and in subsequent fiscal years.  The local unit shall also receive any legislative increases in salaries that would have accrued for the positions lost.  The local unit shall use these funds to cover capital expenditures for the consolidation, including debt service requirements.
The State Board of Education shall report to the Joint Legislative Education Oversight Committee on this pilot program prior to March 1, 1997, and March 1, 1998.

Requested by:   Senators Winner, Plexico
SCHOOL PAY DATE FLEXIBILITY PILOT PROGRAM
Sec. 18.9.  The State Board of Education may establish a pilot program to grant no more than four local boards of education additional flexibility in setting the pay dates for their 10-month employees.  Notwithstanding the provisions of G.S. 115C-302(a) and G.S. 115C-316(a), local school administrative units participating in the pilot may pay 10-month employees for a full month of employment when days employed are less than a full month at the beginning or the end of the teachers' contract.  No local school administrative unit shall be required to participate in the pilot.  A local board participating in the pilot shall bear all of the cost of recouping funds prepaid for work never done and the cost of these funds that cannot be recouped.
The State Board of Education shall report to the Joint Legislative Education Oversight Committee on the pilot program prior to September 1, 1998.

Requested by:   Senators Winner, Plexico
FUNDS FOR NATIONAL BOARD FOR PROFESSIONAL TEACHING STANDARDS
Sec. 18.10.  Sec. 17.11 of Chapter 507 of the 1995 Session Laws reads as rewritten:
"Sec. 17.11. The National Board for Professional Teaching Standards (NBPTS)	was established in 1987 as an independent, nonprofit organization to establish high standards for teachers' knowledge and performance and for development and operation of a national voluntary system to assess and certify teachers who meet those standards.  In order to apply for the NBPTS certification process, teachers must have three years or more of teaching experience, be currently teaching, have graduated from an accredited college or university, and hold a valid State teaching license.  Upon successful completion of a year-long process of developing a portfolio of student work and videotapes of teaching/learning activities for NBPTS review and then participating in NBPTS assessment center simulation exercises, including performance-based activities and a content knowledge examination, teachers may become NBPTS-certified.
Of the funds appropriated to the Department of Public Instruction in this act, the sum of:
(1)	Two hundred thirty thousand seven hundred seventy-six dollars ($230,776) for the 1995-96 fiscal year and nine hundred thirty-six five hundred seven thousand dollars ($936,507) for the 1996-97 fiscal year shall be used to pay for the National Board for Professional Teaching Standards (NBPTS) participation fee and for up to three days of approved paid leave for teachers participating in the NBPTS program during the 1995-96 school year and the 1996-97 fiscal year for State-paid teachers who (i) have completed three years of teaching in North Carolina schools operated by local boards of education, the Department of Human Resources, the Department of Correction, or The University of North Carolina, or affiliated with The University of North Carolina, prior to application for NBPTS certification, and (ii) who have not previously received State funds for participating in any certification area in the NBPTS program.  Teachers participating in the program shall take paid leave only with the approval of their supervisors.
	A teacher for whom the State pays the participation fee (i) who does not complete the process or (ii) who completes the process but does not teach in a North Carolina public school for at least one year after completing the process, shall repay the certification fee to the State.   Repayment is not required if the process is not completed or the teacher fails to teach for one year due to the death or disability of the teacher or other extenuating circumstances as may be recognized by the State Board.
(2)	Two hundred forty-five thousand five hundred eighty-two dollars ($245,582) for the 1995-96 fiscal year and two hundred forty-three thousand eighty-seven dollars ($243,087) for the 1996-97 fiscal year shall be used for an annual bonus of four percent (4%) of the teacher's State-paid salary for the 10-month school year for State-paid teachers who (i) completed three years of teaching in North Carolina schools operated by local boards of education, the Department of Human Resources, the Department of Correction, or The University of North Carolina prior to application for NBPTS certification and (ii) received NBPTS certification.  The bonus for each fiscal year shall be paid at the end of each full school year that the teacher teaches full time in a North Carolina school operated by local boards of education, the Department of Human Resources, the Department of Correction, or The University of North Carolina.  Teachers shall continue this bonus only as long as they retain NBPTS certification."

Requested by:   Senators Winner, Plexico
ADDITIONAL EDUCATIONAL AND CAREER OPPORTUNITIES FOR TEACHER ASSISTANTS
Sec. 18.11.  G.S. 115C-468 reads as rewritten:
"§ 115C-468.  Establishment of fund.
(a)	There is established a revolving fund known as the 'Scholarship Loan Fund for Prospective Teachers'.
	(b)	Criteria for awarding scholarship loans from the fund shall include measures of academic performance including grade point averages, scores on standardized tests, class rank, and recommendations of guidance counselors and principals.  To the extent practical, an equal number of scholarships shall be awarded in each of the State's Congressional Districts.
(c)	The Superintendent of Public Instruction may earmark up to twenty percent (20%) of the funds available for scholarship loans each year for awards to applicants who have been employed for at least one year as teacher assistants and who are currently employed as teacher assistants.  Preference for these scholarship loans from funds earmarked for teacher assistants shall be given first to applicants who worked as teacher assistants for at least five years and whose positions as teacher assistants were abolished and then to applicants who already hold a baccalaureate degree or who have already been formally admitted to an approved teacher education program in North Carolina.  The criteria for awarding scholarship loans to applicants who worked as teacher assistants for at least five years and whose positions as teacher assistants were abolished shall include whether the teacher assistant has been admitted to an approved teacher education program in North Carolina.
The Superintendent of Public Instruction may further earmark a portion of these funds each year for two-year awards to applicants who have been employed for at least one year as teacher assistants to  attend community colleges to get other skills of use in public schools or to get an early childhood associate degree.  The provisions of this Article shall apply to these scholarship loans except that a recipient of one of these scholarship loans may receive credit upon the amount due by reason of the loan as provided in G.S. 115C-471(5)	or by working in a nonteaching position in the North Carolina public schools or by working in a licensed day care center in North Carolina."

Requested by:   Senators Lucas, Winner, Plexico
PROFESSIONAL TEACHING STANDARDS COMMISSION
Sec. 18.12. (a)	G.S. 115C-295.1 reads as rewritten:
"§ 115C-295.1.  North Carolina Professional Teaching Standards Commission.
(a)	There is created the North Carolina Professional Teaching Standards Commission (the 'Commission').  The Commission shall be located administratively under the State Board of Education but shall exercise its powers and duties independently of the State Board of Education.
(b)	The purpose of the Commission is to establish high standards for North Carolina teachers and the teaching profession.
(c)	Beginning September 1, 1996, the Commission shall consist of the following 
											15 members:
(1)	The Governor shall appoint four teachers who are certified by the National Board for Professional Teaching Standards; one principal or superintendent; and two representatives of schools of education, one of which is in a constituent institution of The University of North Carolina and one of which is in a private college or university.
(2)	The President Pro Tempore of the Senate shall appoint three teachers who have different areas of expertise or who teach at different grade levels; and one at-large member.
(3)	The Speaker of the House of Representatives shall appoint three teachers who have different areas of expertise or who teach at different grade levels; and one at-large member.
  	In making appointments, the appointing authorities are encouraged to select qualified citizens who are committed to improving the teaching profession and student achievement and who represent the racial, geographic, and gender diversity of the State.  Before their appointment to this Commission, with the exception of the at-large members, the members must have been actively engaged in the profession of teaching, in the education of students in teacher education programs, or in the practice of public school administration for at least three years, at least two of which occurred in this State.  The members shall serve for two-year terms.  Initial terms shall begin September 1, 1994. Vacancies in the membership shall be filled by the original appointing authority using the same criteria as provided in this subsection.
(d)	The Commission shall elect a chair, a vice-chair, and a secretary-treasurer from among its membership. In the absence of the chair, the vice-chair shall preside over the Commission's meetings.  All members are voting members, and a majority of the Commission constitutes a quorum.  The Commission shall adopt rules to govern its proceedings.
(e)	Meetings of the Commission shall be held upon the call of the chair or the vice-chair with the approval of the chair.
(f)	Members of the Commission shall receive compensation for their services and reimbursement for expenses incurred in the performance of their duties required by this Article, at the rate prescribed in G.S. 90B-5.
(g)	The Commission may employ, subject to Chapter 126 of the General Statutes, the necessary personnel for the performance of its functions, and fix compensation within the limits of funds available to the Commission."
(b)	Article 20 of Chapter 115C of the General Statutes is amended by adding the following new sections to read:
"§ 115C-295.2.  Powers and duties of the Commission.
(a)	The North Carolina Teaching Standards Commission shall:
(1)	Develop and recommend to the State Board of Education professional standards or revisions to professional standards for North Carolina teachers.
(2)	Review the areas of teacher certification and recommend to the State Board of Education those areas that should be consolidated, redesigned, eliminated, or enhanced.
(3)	Consider current methods to assess teachers and teaching candidates, including the National Teacher Exam, the assessments of the National Board for Professional Teaching Standards, and alternative methods of assessment and recommend to the State Board of Education the implementation of rigorous and appropriate assessments for initial and continuing certification that are valid and reliable measures of professional practice.
(4)	Evaluate, develop, and recommend to the State Board a procedure for the assessment and recommendation of candidates for initial and continuing teacher certification.
In addition, the Commission may review all current programs related to the areas of teacher certification and may recommend to the State Board of Education those programs that should be eliminated or changed.
For purposes of this subsection, the areas of teacher certification include initial certification, continuing certification, and certification renewal, and do not include teacher education programs.
(b)	The Commission shall submit its recommendations under subsection (a) of this section to the State Board.  The State Board shall adopt or reject the recommendations.  The State Board shall not make any substantive changes to any recommendation that it adopts.  If the State Board rejects the recommendation, it shall state with specificity its reasons for rejection; the Commission then may amend that recommendation and resubmit it to the State Board.  The Board shall adopt or reject the amended recommendation.   If the State Board fails to adopt the Commission's original and amended recommendation concerning the implementation of assessments for certification and the procedure for the assessment and recommendation of candidates for teacher certification, the State Board may develop and adopt its own plan.
Notwithstanding G.S. 115C-284(c), 115C-296, and 115C-315(d), the General Assembly urges the State Board to follow the Commission's recommendations to the maximum extent they are consistent with the State Board's policies.
(c)	The Commission shall submit an annual report by December 1 of each year to the Joint Legislative Education Oversight Committee of its activities during the preceding year, together with any recommendations and findings regarding improvement of the teaching profession.  The State Board shall submit a report by April 15, 1998, to the Joint Legislative Education Oversight Committee on the current status of assessments for certification and any changes to the procedures for assessment and recommendation of candidates for teacher certification.
"§ 115C-295.3.  Professional Practices Board.
The State Board of Education shall establish a Professional Practices Board composed of teachers, school administrators, and representatives of the general public.   The Professional Practices Board shall:
(1)	Develop a code of ethics for the teaching profession and develop procedures to investigate violations of the code.
(2)	Investigate complaints concerning violations of the code of ethics.
(3)	Make recommendations to the State Board of Education concerning the revocation and suspension of teacher certificates as the result of an ethics violation.
The Professional Practices Board shall recommend the code of ethics and the investigation procedures that it develops to the State Board of Education for its approval.  The State Board of Education is the final authority in all decisions under this section, except as provided in the procedures concerning the due process rights of any person subject to an investigation under this section.  The State Board of Education shall adopt rules necessary to implement this section."

Requested by:   Senator Winner
ALLOCATION OF FUNDS FOR SCHOOL TECHNOLOGY
Sec. 18.13.  Funds appropriated in this act to the State School Technology Fund shall be allocated to local school administrative units on the basis of average daily membership.

Requested by:   Senator Winner, Plexico
TEACHER VACATION LEAVE FOR ADOPTIVE PARENTS
Sec. 18.14.  G.S. 115C-302(f) reads as rewritten:
"(f)	A teacher may use annual leave, personal leave, or leave without pay to care for a newborn child or for a child placed with the teacher for adoption or foster care. The leave may be for consecutive workdays during the first 12 months after the date of birth or placement of the child, unless the the teacher and local board of education agree otherwise.
."

Requested by:   Senators Winner, Plexico
COMPONENTS OF THE TESTING PROGRAM
Sec. 18.15.  G.S. 115C-174.11(b) reads as rewritten:
"(b)	Competency Testing Program.
(1)	The State Board of Education shall adopt tests or other measurement devices which may be used to assure that graduates of the public high schools and graduates of nonpublic schools supervised by the State Board of Education pursuant to the provisions of Part 1 of Article 39 of this Chapter possess the skills and knowledge necessary to function independently and successfully in assuming the responsibilities of citizenship.
(2)	The tests shall be administered annually to all tenth grade students in the public schools. Students who fail to attain the required minimum standard for graduation in the tenth grade shall be given remedial instruction and additional opportunities to take the test up to and including the last month of the twelfth grade. Students who fail to pass parts of the test shall be retested on only those parts they fail. Students in the tenth grade who are enrolled in special education programs or who have been officially designated as eligible for participation in such programs may be excluded from the testing programs.
(3)	The State Board of Education may develop and validate alternate means and standards for demonstrating minimum competence. These standards, which must be more difficult than the tests adopted pursuant to subdivision (1) of this subsection, may be passed by students in lieu of the testing requirement of subdivision (2) of this subsection.
	."

Requested by:   Senators Plexico, Winner
GLOBAL CURRICULUM PROGRAM
Sec. 18.16.  The funds appropriated in this act for the Global Curriculum Program shall be used to improve the knowledge and understanding of middle and high school students in the areas of international and cultural studies, by identifying and training  master teachers and providing orientations and materials for school administrators.  The State Board of Education may enter into contracts to implement the Program.

Requested by:   Senators Winner, Plexico
REWARDS FOR TEACHER EXCELLENCE
Sec. 18.17.  The State Board of Education shall study ways to reward excellent teachers and other school personnel by linking some portion of future salary increases to the performance of students.  In the course of the study, the State Board shall take into account the differences in schools, school resources, and student populations, that different teachers and other school personnel encounter.  The State Board shall also consider the types of pay plans used in other states.
The State Board shall report on the study to the Joint Legislative Education Oversight Committee prior to January 15, 1997. 

Requested by:   Senators Hobbs, Winner, Plexico
SCHOOL FACILITIES GUIDELINES
Sec. 18.18.  (a) G.S. 115C-81(b) reads as rewritten:
"(b)	The Basic Education Program shall include course requirements and descriptions similar in format to materials previously contained in the standard course of study and it shall provide:
(1)	A core curriculum for all students that takes into account the special needs of children and includes appropriate modifications for the learning disabled, the academically gifted, and the students with discipline and emotional problems;
(2)	A set of competencies, by grade level, for each curriculum area;
(3)	A list of textbooks for use in providing the curriculum;
(4)	Standards for student performance and promotion based on the mastery of competencies, including standards for graduation, that take into account children with special needs and, in particular, include appropriate modifications;
(5)	A program of remedial education;
(6)	Required support programs;
(7)	A definition of the instructional day;
(8)	Class size recommendations and requirements;
(9)	Prescribed staffing allotment ratios;
(10)	Material and equipment allotment ratios;
(11)	Facilities guidelines that reflect educational program appropriateness, long-term cost efficiency, and safety considerations; and
(12)	Any other information the Board considers appropriate and necessary.
The State Board shall not adopt or enforce any rule that requires Algebra I as a graduation standard or as a requirement for a high school diploma for any student whose individualized education program (i)	identifies the student as learning disabled in the area of mathematics and (ii) states that this learning disability will prevent the student from mastering Algebra I."
(b) G.S. 115C-489.3(c) is repealed.
(c) G.S. 115C-521(c) reads as rewritten:
"(c)	The building of all new school buildings and the repairing of all old school buildings shall be under the control and direction of, and by contract with, the board of education for which the building and repairing is done. If a board of education is considering building a new school building to replace an existing school building, the board shall not invest any construction money in the new building unless it submits to the State Superintendent and the State Superintendent submits to the North Carolina Historical Commission an analysis that compares the costs and feasibility of building the new building and of renovating the existing building and that clearly indicates the desirability of building the new building.  No board of education shall invest any money in any new building until it has (i) developed plans based upon a consideration of the State Board's facilities guidelines, (ii) submitted these plans to the State Board for its review and comments, and (iii) reviewed the plans based upon a consideration of the comments it receives from the State Board.  No local board of education shall contract for more money than is made available for the erection of a new building. However, this subsection shall not be construed so as to prevent boards of education from investing any money in buildings that are being constructed pursuant to a continuing contract of construction as provided for in G.S. 115C-441(c1). All contracts for buildings shall be in writing and all buildings shall be inspected, received, and approved by the local superintendent and the architect before full payment is made therefor.  Nothing in this subsection shall prohibit boards of education from repairing and altering buildings with the help of janitors and other regular employees of the board.
In the design and construction of new school buildings and in the renovation of existing school buildings that are required to be designed by an architect or engineer under G.S. 133-1.1, the local board of education shall participate in the planning and review process of the Energy Guidelines for School Design and Construction that are developed and maintained by the Department of Public Instruction and shall adopt local energy-use goals for building design and operation that take into account local conditions in an effort to reduce the impact of operation costs on local and State budgets. In the design and construction of new school facilities and in the repair and renovation of existing school facilities, the local board of education shall consider the placement and design of windows to use the climate of North Carolina for both light and ventilation in case of power shortages. A local board shall also consider the installation of solar energy systems in the school facilities whenever practicable.
In the case of any school buildings erected, repaired, or equipped with any money loaned or granted by the State to any local school administrative unit, the State Board of Education, under any rules as it may deem advisable, may retain any amount not to exceed fifteen percent (15%) of the loan or grant, until the completed buildings, erected or repaired, in whole or in part, from the loan or grant funds, shall have been approved by a designated agent of the State Board of Education. Upon approval by the State Board of Education, the State Treasurer may pay the balance of the loan or grant to the treasurer of the local school administrative unit for which the loan or grant was made."
(d) G.S. 115C-521 is amended by adding a new subsection to read:
"( e)	The State Board of Education shall establish within the Department of Public Instruction a central clearinghouse for access by local boards of education that may want to use a prototype design in the construction of school facilities.  The State Board shall compile necessary publications and a computer database to distribute information on prototype designs to local school administrative units.  All architects and engineers registered in North Carolina may submit plans for inclusion in the computer database and these plans may be accessed by any person.  The original architect of record or engineer of record shall retain ownership and liability for a prototype design.  The State Board may adopt rules it considers necessary to implement this subsection."
(e) School facilities guidelines and standards adopted by the State Board of Education before the effective date of this act shall remain in effect as guidelines only.
Sec.18.19   The School Facilities Task Force.
(a)	There is created the School Facilities Task Force under the State Board of Education.  The Task Force shall consist of the following members appointed by the State Board:
(1) 	One member of the State Board.
(2)	One architect.
(3)	One representative from a school of architecture within a constituent institution of The University of North Carolina.
(4)	Two local school administrative unit employees with expertise in school facilities.
(5)	One representative of the North Carolina Association of County Commissioners.
(6)	One representative of the North Carolina School Boards Association.
(7)	One engineer.
(8)	Any other members the State Board considers necessary.
All members shall be voting members. The Task Force shall select a member of the Task Force to serve as its chair.
Members of the Task Force shall receive travel and subsistence expenses in accordance with G.S. 138-5 and G.S. 138-6.
The Department of Public Instruction shall, with the approval of the State Board of Education, provide staff, office equipment, supplies, and meeting space to the Task Force.
(b)	The Task Force shall:
(1)	Review the State Board's facilities guidelines for the construction, acquisition, renovation, and replacement of facilities, furniture, equipment, apparatus, and spaces for public schools to ensure they reflect both educational program appropriateness and long-term cost-efficiency.
(2)	Make recommendations to the State Board as to (i) which guidelines should be maintained, revised, or eliminated, and (ii) any new guidelines that it considers appropriate.
(3)	Develop and recommend to the State Board a procedure for the Board to follow when facilities plans are submitted by local school administrative units for the Board's review and comments.
(4)	Develop and recommend to the State Board a proposal in accordance with G.S. 115C-521(e) for the establishment of a central clearinghouse for prototype designs.
(5)	Submit its recommendations under this subsection to the State Board no later than December 1, 1996. 
(c)	Based upon a consideration of the recommendations of the Task Force, the State Board shall adopt (i) revised facilities guidelines to assist local school administrative units in the construction, acquisition, renovation, and replacement of facilities, furniture, equipment, apparatus, and spaces for public schools, (ii) the procedure for local school administrative units to follow when they submit school facilities plans for the State Board's review and comments, and (iii) a plan to establish within the Department of Public Instruction a central clearinghouse for prototype designs.  The State Board shall submit a report by April 15, 1997, to the General Assembly that includes the revised facilities guidelines, the facilities review procedure, and the plan to establish a central clearinghouse for prototype designs.  Upon submission of this report to the General Assembly, the Task Force shall terminate.

Requested by:   Senators Winner, Plexico
FUNDS TO IMPLEMENT THE ABC PLAN
Sec. 18.20.  (a) Section 30 of Senate Bill 1139, Third Edition, if enacted by the 1995 General Assembly, reads as rewritten:
"Sec. 30.  Of the funds appropriated from the General Fund to State Aid to Local School Administrative Units, the State Board of Education shall allocate the sum of twenty-two million nine hundred thirty-two thousand five hundred fifty dollars ($22,932,550) for the 1996-97 fiscal year to local school administrative units for personnel paid with State funds who are identified as eligible for performance recognition awards under G.S. 115C-105.29 as follows:
(1)	$19,754,200 to be distributed on a per capita basis of no less than $500.00 and no more than $1,000 for personnel other than teacher assistants.
(2)	$3,178,350 to be distributed on a per capita basis to teacher assistants in the amount of one-half the amount under subdivision (1) of this section."
(b) Section 31 of Senate Bill 1139, Third Edition, if enacted by the 1995 General Assembly, is repealed.

Requested by:   Senators Plyler, Perdue, Odom
CERTIFIED PUBLIC SCHOOL PERSONNEL COMPENSATION STUDY
Sec. 18.21.  (a) The Joint Legislative Commission on Governmental Operations shall contract with a qualified employee benefits consulting practice or research organization to conduct a comparative analysis of certified public school personnel compensation in North Carolina school systems. As part of the analysis, teachers base pay, the statewide salary schedule, incentives (i.e., local supplements, benefits, etc., if any), and benefits packages in other Southeastern States (in the Southern Regional Education Board region) shall be compared with North Carolina'*s certified public school personnel salary schedule and benefits packages.
The scope of this comparative analysis shall be to determine, in those states who are regional neighbors as defined by Southern Legislative Conference and Southern Regional Education Board,* how North Carolina certified public school personnel salaries and benefits rank within the states in the region, and the recurring cost to offer and maintain them at current levels. Median as well as average salary levels shall be determined for each state.
In addition, this comparative analysis shall identify 5 to 10 other states in the country most like North Carolina in terms of public school demographics (both students and certified personnel), public school funding policy and governing structure, entry, certification, and career requirements for teaching personnel, and other factors or conditions that most affect teachers salary and benefits, and compare and rank those salaries and benefits packages of these states to North Carolina certified public school personnel compensation packages. 
Applying survey research methods considered to be reliable and valid statistically, the contractor shall determine the relative "economic value" of these benefits to the employees.
Finally, the contractor shall produce a "regional compensation survey model" as a product of this study of certified public school personnel that could then be made available for other studies of state employees in the executive and judicial branches of North Carolina state government.  As part of the contractors work, training in conducting these other studies would be provided to legislative staff.
(b)	In order to determine which organizations may be most qualified to conduct such an analysis, the Commission may appoint a subcommittee that shall be responsible for issuing a Request for Qualifications (RFQ).  All firms responding to the RFQ shall be evaluated in accordance with procedures established by the Subcommittee.  Up to five firms may be invited to submit separate technical and cost proposals, in response to the standard Request for Proposals (RFP).
A contract shall be awarded no later than September 13, 1996.  The  study shall begin no later than October 1, 1996.  A progress report shall be issued to the subcommittee for review and approval no later than December 31, 1996, and a final report  no later than April 1, 1997.
The Legislative Services Office shall provide such coordinating staff to the Joint Legislative Commission on Governmental Operations and its subcommittee as necessary.

PART 19.  DEPARTMENT OF TRANSPORTATION

Requested by:   Senator Hoyle
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:   Senator Hoyle
DEPARTMENT OF TRANSPORTATION REPORT ON REORGANIZATION OF DIVISION OF MOTOR VEHICLES
Sec. 19.1.  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:   Senator Hoyle
DEPARTMENT OF TRANSPORTATION REPORTS TO THE JOINT LEGISLATIVE TRANSPORTATION OVERSIGHT COMMITTEE
Sec. 19.2.  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:   Senator Hoyle
DIVISION OF MOTOR VEHICLES ENFORCEMENT DUTIES
Sec. 19.3.  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:   Senator Hoyle
DEPARTMENT OF TRANSPORTATION–CASH FLOW CONTRACT FUNDING
Sec. 19.4.  (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:   Senator Hoyle
CASH FLOW HIGHWAY FUND AND HIGHWAY TRUST FUND APPROPRIATIONS
Sec. 19.5.  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:   Senator Hoyle
RADIO ISLAND RAILROAD TRESTLE
Sec. 19.6.  (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:   Senators Hoyle, Little
UNPAVED SECONDARY ROADS ON STATE LANDS
Sec. 19.7.  Chapter 136 of the General Statutes is amended by adding a new section to read:
"§ 136-44.7A.  Submission of secondary roads construction programs to State agencies.
When the Department of Transportation proposes to pave an unpaved secondary road that crosses land controlled by a State agency, the Department of Transportation shall obtain the approval of that State agency before paving that secondary road."

Requested by:   Senator Hoyle
GREEN ROADS INITIATIVE
Sec. 19.8.  From funds available to the Department of Transportation, the Department of Correction, and the Division of Forest Resources, Department of Environment, Health, and Natural Resources, approximately 700 acres of land shall be planted with trees during the 1996-97 fiscal year as the start of a "Green Roads Initiative" of reforestation along highways across the State.
The Department of Transportation, in conjunction with the Department of Environment, Health, and Natural Resources, shall identify the locations where the reforestation can be accomplished through the use of seedlings provided by the Division of Forest Resources and prisoners allocated to the Department of Transportation by the Department of Correction.
The goals of the initiative are to plant trees that will  provide additional natural habitat for birds and other wildlife, to reduce expensive roadside maintenance by reducing the acreage requiring frequent mowing of grasses, to beautify the State's highways, and to maintain safety for the motoring public.
The Department of Transportation, the Department of Environment, Health, and Natural Resources, and the Department of Correction shall jointly report to the Joint Legislative Transportation Oversight Committee by December 31, 1996, on progress in implementing the Green Roads Initiative.

Requested by:   Senator Hoyle
CLARIFICATION OF POLICY RELATED TO MATERIALS THAT MAY BE DISPLAYED AT WELCOME CENTERS
Sec. 19.9. (a)	G.S. 136-18(9) reads as rewritten:
"(9)	To employ appropriate means for properly selecting, planting and protecting trees, shrubs, vines, grasses or legumes in the highway right-of-way in the promotion of erosion control, landscaping and general protection of said highways; to acquire by gift or otherwise land for and to construct, operate and maintain roadside parks, picnic areas, picnic tables, scenic overlooks and other appropriate turnouts for the safety and convenience of highway users; and to cooperate with municipal or county authorities, federal agencies, civic bodies and individuals in the furtherance of those objectives. None of the roadside parks, picnic areas, picnic tables, scenic overlooks or other turnouts, or any part of the highway right-of-way shall be used for commercial purposes except (i) for materials displayed in welcome centers in accordance with G.S. 136-89.56, and (ii) for vending machines permitted by the Department of Transportation and placed by the Division of Services for the Blind, Department of Human Resources, as the State licensing agency designated pursuant to Section 2(a)(5) of the Randolph-Sheppard Act (20 USC 107a(a)(5)). The Department of Transportation shall regulate the placing of the vending machines in highway rest areas and shall regulate the articles to be dispensed. Every other use or attempted use of any of these areas for commercial purposes shall constitute a Class 1 misdemeanor and each day's use shall constitute a separate offense."
(b)	G.S. 136-89.56 reads as rewritten:
"§ 136-89.56.  Commercial enterprises.
No commercial enterprises or activities shall be authorized or conducted by the Department of Transportation, or the governing body of any city or town, within or on the property acquired for or designated as a controlled-access facility, as defined in this Article, except for:
(1)	Materials displayed at welcome centers which shall be directly related to travel, accommodations, tourist-related activities, tourist-related services, and attractions.  These materials may contain advertisements for real estate; and
(2)	Vending machines permitted by the Department of Transportation and placed by the Division of Services for the Blind, Department of Human Resources, as the State licensing agency designated pursuant to Section 2(a)(5) of the Randolph-Sheppard Act (20 USC 107a(a)(5)). The Department of Transportation shall regulate the placing of the vending machines in highway rest areas and shall regulate the articles to be dispensed. In order to permit the establishment of adequate fuel and other service facilities by private owners or their lessees for the users of a controlled-access facility, the Department of Transportation shall permit access to service or frontage roads within the publicly owned right-of-way of any controlled-access facility established or designated as provided in this Article, at points which, in the opinion of the Department of Transportation, will best serve the public interest. The location of such fuel and other service facilities may be indicated to the users of the controlled-access facilities by appropriate signs, the size, style, and specifications of which shall be determined by the Department of Transportation.
The location of fuel and other service facilities may be indicated to the users of the controlled access facilities by appropriate logos placed on signs owned, controlled, and erected by the Department of Transportation. The owners, operators or lessees of fuel and other service facilities who wish to place a logo identifying their business or service on a sign shall furnish a logo meeting the size, style and specifications determined by the Department of Transportation and shall pay the Department for the costs of initial installation and subsequent maintenance. The fees for logo sign installation and maintenance shall be set by the Board of Transportation based on cost."

Requested by:   Senator Hoyle
RAILROAD DIVIDEND USES
Sec. 19.10.  G.S. 136-16.6(a) reads as rewritten:
"(a)	There is annually credited to the Highway Fund one hundred percent (100%) of the annual dividends anticipated to be received by the State from its ownership of stock in the North Carolina Railroad Company for use by the Department of Transportation for railroad purposes."

Requested by:   Senator Hoyle
DEPARTMENT OF TRANSPORTATION LAND SALES PROCEEDS USED FOR CAPITAL IMPROVEMENTS
Sec. 19.11.  Funds received by the Department of Transportation from the sale of Department-owned land (not right-of-way property) during the 1995-96 fiscal year in the amount of twenty-four thousand three hundred ninety-three dollars ($24,393) shall be used to supplement appropriations for Department of Transportation capital outlays funded in this act.

Requested by:   Senator Hoyle
VISITOR CENTERS
Sec. 19.12.  (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 Committee.
(e)  G.S. 20-79.7(c)(2), as amended by Section 18.17 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 annually appropriated from the Special Registration Plate Account the sum of five hundred twenty-five thousand dollars ($525,000) 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)."

PART 20.  DEPARTMENT OF CORRECTION

Requested by:   Senator Ballance
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 or any private for-profit or nonprofit firm about the possibility of converting that unit to other use.  Consistent with existing law, the Department may provide for the lease of any of these units to counties, municipalities, or private firms wishing to convert them to other 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.
The Department of Correction shall report quarterly to the Joint Legislative Corrections Oversight Committee on the conversion of these units to other use.

Requested by:   Senator Ballance
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:   Senator Ballance
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:   Senator Ballance
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:   Senator Ballance
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:   Senators Ballance, Odom
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 of the Department of Correction injured by a direct and deliberate act of an offender supervised by the Department or while performing supervisory duties over offenders which place the employees at risk of such injury."
(b)	This section applies to injuries occurring on or after the effective date of this act.

Requested by:   Senator Ballance
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:   Senator Ballance
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:   Senator Ballance
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.

Requested by:   Senator Ballance
ALTERNATIVES TO OUT-OF-STATE HOUSING
Sec. 20.12.  The Department of Correction shall investigate methods of housing inmates within the State rather than in out-of-state facilities, including the use of modular units and small units scheduled to be closed as a result of the recommendations made by the Government Performance Audit Committee.  The Department shall report its findings and recommendations quarterly to the Joint Legislative Commission on Governmental Operations and the Joint Legislative Correction Oversight Committee.

Requested by:   Senator Ballance
HARRIET'S HOUSE FUNDS
Sec. 20.13.  (a)	Section 19.7 of Chapter 507 of the 1995 Session Laws reads as rewritten:
"Sec. 19.7.  Of the funds appropriated to the Department of Correction, the sum of two hundred thousand dollars ($200,000) for the 1995-96 fiscal year and the sum of two hundred thousand dollars ($200,000) for the 1996-97 fiscal year shall be used to support the programs of Harriet's House, a transitional home for female ex-offenders and their children.  The funds may be used for program operating costs, the purchase of equipment, and the rental of real property.  Harriet's House shall report quarterly to the Joint Legislative Commission on Governmental Operations on the expenditure of State appropriations and on the effectiveness of the program including information on the number of clients served and the number of clients who successfully complete the Harriet's House program."
(b)	The balance of the two hundred thousand dollars ($200,000) appropriated in Chapter 507 of the 1995 Session Laws to the Department of Correction for the 1995-96 fiscal year to support the programs at Harriet's House 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 program operating costs, the purchase of equipment, and the rental of real property.

Requested by:   Senators Ballance, Cooper
CREATE A NEW FELONY OFFENSE OF ASSAULT INFLICTING SERIOUS BODILY INJURY AS RECOMMENDED BY THE NORTH CAROLINA SENTENCING AND POLICY ADVISORY COMMISSION, TO INCREASE THE PUNISHMENT FOR SALE OF HANDGUNS TO MINORS TO A CLASS H FELONY, AND TO INCREASE THE PUNISHMENT FOR SALE OF CONTROLLED SUBSTANCES TO PERSONS UNDER AGE SIXTEEN OR PREGNANT FEMALES TO A CLASS D FELONY
Sec. 20.14.  (a)	Chapter 14 of the General Statutes is amended by adding a new section to read:
"§ 14-32.4.  Assault inflicting serious bodily injury.
Unless the conduct is covered under some other provision of law providing greater punishment, any person who assaults another person and inflicts serious bodily injury is guilty of a Class F felony.  'Serious bodily injury' is defined as bodily injury that creates a substantial risk of death, or that causes serious permanent disfigurement, coma, a permanent or protracted condition that causes extreme pain, or permanent or protracted loss or impairment of the function of any bodily member or organ, or that results in prolonged hospitalization."
(b)	G.S. 14-315(a1) reads as rewritten:
"(a1)	Sale of Handguns. – If a person sells, offers for sale, gives, or in any way transfers to a minor any handgun as defined in G.S. 14-269.7, the person is guilty of a Class H felony and, in addition, shall forfeit the proceeds of any sale made in violation of this section. This section does not apply in any of the following circumstances:
(1)	The handgun is lent to a minor for temporary use if the minor's possession of the handgun is lawful under G.S. 14-269.7 and G.S. 14-316 and is not otherwise unlawful.
(2)	The handgun is transferred to an adult custodian pursuant to Chapter 33A of the General Statutes, and the minor does not take possession of the handgun except that the adult custodian may allow the minor temporary possession of the handgun in circumstances in which the minor's possession of the handgun is lawful under G.S. 14-269.7 and G.S. 14-316 and is not otherwise unlawful.
(3)	The handgun is a devise or legacy and is distributed to a parent or guardian under G.S. 28A-22-7, and the minor does not take possession of the handgun except that the parent or guardian may allow the minor temporary possession of the handgun in circumstances in which the minor's possession of the handgun is lawful under G.S. 14-269.7 and G.S. 14-316 and is not otherwise unlawful."
(c)	G.S. 90-95(e)(5) reads as rewritten:
"(5)	Any person 18 years of age or over who violates G.S. 90-95(a)(1) by selling or delivering a controlled substance to a person under 16 years of age or a pregnant female shall be punished as a Class D felon.  Mistake of age is not a defense to a prosecution under this section.  It shall not be a defense that the defendant did not know that the recipient was pregnant;".
	(d)	This act becomes effective January 1, 1997, and applies to offenses committed on or after that date.

Requested by:  Senator Ballance
ELIMINATE WAIVER OF PRELIMINARY HEARINGS IN PAROLE AND POST-RELEASE SUPERVISION REVOCATION PROCEEDINGS
Sec. 20.15. (a)	G.S. 15A-1376 reads as rewritten:
"(b)	When and Where Preliminary Hearing on Parole Violation Required. – Unless the hearing required by subsection (e) is first held or a continuance is requested by the parolee, a preliminary hearing on parole violation must be held reasonably near the place of the alleged violation or arrest and within seven working days of the arrest of a parolee to determine whether there is probable cause to believe that he violated a condition of parole.  Otherwise, the parolee must be released seven working days after his arrest to continue on parole pending a hearing.  If the parolee is not within the State, his preliminary hearing is as prescribed by G.S. 148-65.1A."
(b)	G.S. 15A-1368.6 reads as rewritten:
"(b)	When and Where Preliminary Hearing on Post-Release Supervision Violation Required. – Unless the hearing required by subsection (e) of this section is first held or a continuance is requested by the supervisee, a preliminary hearing on supervision violation shall be held reasonably near the place of the alleged violation or arrest and within seven working days of the arrest of a supervisee to determine whether there is probable cause to believe that the supervisee violated a condition of post-release supervision.  Otherwise, the supervisee shall be released seven working days after arrest to continue on supervision pending a hearing.  If the supervisee is not within the State, the preliminary hearing is as prescribed by G.S. 148-65.1A."

PART 21.  DEPARTMENT OF CRIME CONTROL AND PUBLIC SAFETY

Requested by:   Senators Ballance, Parnell
EXTEND DEPARTMENT OF CRIME CONTROL AND PUBLIC SAFETY STUDY COMMISSION
Sec. 21.1. (a)	Section 20.4(d) of Chapter 324 of the 1995 Session Laws reads as rewritten:
"(d)	The Study Commission shall make an interim report to the 1996 Regular Session of the 1995 General Assembly by May 1, 1996, and shall submit a final written report of its findings and recommendations to the 1997 General Assembly.  All reports shall be filed 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."
(b)	This section becomes effective April 30, 1996.

Requested by:   Senator Ballance
STUDY LAW ENFORCEMENT OFFICER COMPENSATION AND SALARY CONTINUATION FOR RESIDENTIAL FACILITY EMPLOYEES
Sec. 21.2. (a) The Office of State Personnel shall study:
(1)	Employee classifications, salary schedules, pay equity, and pay inequities for all sworn law enforcement personnel certified by the North Carolina Criminal Justice Training and Standards Commission in every law enforcement agency in the State.  The study shall consider appropriate factors related to the compensation of law enforcement personnel, including job specifications and qualifications required by the Office of State Personnel, the compensation of personnel in accordance with educational levels and years of experience, and the equity of compensation between all State law enforcement agencies.
(2)	The feasibility and desirability of providing salary continuation pursuant to Article 12B of Chapter 143 of the General Statutes for employees of State-operated residential facilities who have been injured by acts of persons housed at the facilities or who have been injured while performing supervisory duties over persons housed at the facilities.
(3)	Issues related to civilianizing certain State government law enforcement functions and positions, including the appropriate use of nonsworn, noncertified personnel in positions for which sworn status is not cost-effective or required.  This study shall include the recommendations made by the Government Performance Audit Committee on civilianization to the 1993 General Assembly.
(b) The Office of State Personnel shall report to the Criminal Law Study Commission on its findings and recommendations related to the studies mandated by this section no later than November 1, 1996.

PART 22.  JUDICIAL DEPARTMENT

Requested by:   Senator Ballance
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,	8
Dare, Gates, Pasquotank,
Perquimans
2	Beaufort, Hyde, Martin,	4
Tyrrell, Washington
3A	Pitt	7
3B	Carteret, Craven, Pamlico		7
4	Duplin, Jones, Onslow,		11
Sampson
5	New Hanover, Pender		10
6A	Halifax	3
6B	Bertie, Hertford,	  		 4
	Northampton
	7	Edgecombe, Nash, Wilson		11
8	Greene, Lenoir, Wayne		9
9	Franklin, Granville,	8
Vance, Warren
9A	Person, Caswell	2
	10	Wake		22
11	Harnett, Johnston, Lee	10
12	Cumberland		13
13	Bladen, Brunswick, Columbus	6
14	Durham	9
15A	Alamance	6
15B	Orange, Chatham	5
16A	Scotland, Hoke	3
16B	Robeson		8
17A	Rockingham	4
17B	Stokes, Surry	4
18	Guilford		20
19A	Cabarrus	 	4
19B	Montgomery, Randolph	5
19C	Rowan	4
20	Anson, Moore, Richmond,	12
Stanly, Union
21	Forsyth	12
22	Alexander, Davidson, Davie,		12
Iredell
23	Alleghany, Ashe, Wilkes,	4
Yadkin
24	Avery, Madison, Mitchell,	3
Watauga, Yancey
25	Burke, Caldwell, Catawba	11
26	Mecklenburg		27
	27A	Gaston		9
27B	Cleveland,	5
Lincoln
28	Buncombe	8
29	Henderson, McDowell, Polk,	8
Rutherford, Transylvania
30	Cherokee, Clay, Graham,	6
Haywood, Jackson, Macon,
Swain."
(b)	This section becomes effective January 1, 1997.

Requested by:   Senator Ballance
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 three hundred sixty-five thousand three hundred seventy-six dollars ($365,376) for salaries, benefits, and related expenses to establish up to 11 new assistant public defenders.

Requested by:   Senator Ballance
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:   Senator Ballance
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:   Senator Ballance
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	7
Bertie	4	8
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	6
Warren	3	4
Franklin	3	7
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	8	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	6
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:   Senators Ballance, Odom
MAKE SPECIAL SUPERIOR COURT JUDGE TERMS CONSISTENT
Sec. 22.6. (a)	G.S. 7A-45.1 reads as rewritten:
"§ 7A-45.1.  Special judges.
(a)	Effective November 1, 1993, the Governor may appoint two special superior court judges to serve terms expiring September 30, 2000.  Successors to the special superior court judges appointed pursuant to this subsection shall be appointed to five-year terms. A special judge takes the same oath of office and is subject to the same requirements and disabilities as are or may be prescribed by law for regular judges of the superior court, save the requirement of residence in a particular district.
(a1)	Effective October 1, 1995, the Governor may appoint two special superior court judges to serve terms expiring September 30, 2000. Successors to the special superior court judges appointed pursuant to this subsection shall be appointed to five-year terms. A special judge takes the same oath of office and is subject to the same requirements and disabilities as are or may be prescribed by law for regular judges of the superior court, save the requirement of residence in a particular district.
(b)	A special judge is subject to removal from office for the same causes and in the same manner as a regular judge of the superior court, and a vacancy occurring in the office of special judge is filled by the Governor by appointment for the unexpired term.
(c)	A special judge, in any court in which he is duly appointed to hold, has the same power and authority in all matters that a regular judge holding the same court would have. A special judge, duly assigned to hold the court of a particular county, has during the session of court in that county, in open court and in chambers, the same power and authority of a regular judge in all matters arising in the district or set of districts as defined in G.S. 7A-41.1(a) in which that county is located, that could properly be heard or determined by a regular judge holding the same session of court.
(d)	A special judge is authorized to settle cases on appeal and to make all proper orders in regard thereto after the time for which he was commissioned has expired."
(b)	Section 24.7 of Chapter 769 of the 1993 Session Laws reads as rewritten:
"Sec. 24.7.  Notwithstanding G.S. 7A-45, G.S. 7A-45.1, Section 7 of Chapter 509 of the 1987 Session Laws, or any other provision of law, if any special superior court judge who is holding office on the effective date of this act first took office as an appointed or elected regular or special superior court judge in the calendar year 1986, the term of that judge is extended through September 30, 2000."

Requested by:   Senator Ballance
CRIMINAL CASE MANAGEMENT PROGRAM
Sec. 22.8.  Section 21.10 of Chapter 507 of the 1995 Session Laws reads as rewritten:
"Sec. 21.10.  Of the funds appropriated to the Judicial Department for the 1995-97 biennium, the Administrative Office of the Courts shall use the sum of fifty thousand dollars ($50,000) for the 1995-96 fiscal year and the sum of fifty thousand dollars ($50,000) for the 1996-97 fiscal year to establish a criminal case management program in the Twelfth and Thirteenth Judicial Districts to help reduce the backlog of court cases and resolve new court cases quicker.  A case management facilitator position shall be added to the district attorney's office in both of those judicial districts to help implement the program and the positions shall be filled after consultation with the Senior Resident Superior Court Judges in both of those judicial  districts.  Of the funds appropriated to the Judicial Department for the 1996-97 fiscal year, the Administrative Office of the Courts shall use the sum of two hundred forty-one thousand six hundred forty-eight dollars ($241,648) to establish criminal case management programs in eight additional judicial districts.  The case management facilitators to be added in the eight additional districts shall also be filled after consultation with the Senior Resident Superior Court Judge in each of those eight districts.
The Administrative Office of the Courts shall report by March 1, 1997 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 on the implementation of the program."

Requested by:   Senators Ballance, Rand
ADDITIONAL DISTRICT COURT JUDGE
Sec. 22.9. (a)	G.S. 7A-133(a) reads as rewritten:
"(a)	Each district court district shall have the numbers of judges  as set forth in the following table:

District	Judges	County 

	1	4	Camden
	Chowan
Currituck
Dare
Gates
Pasquotank
Perquimans
2	3	Martin
Beaufort
Tyrrell 
Hyde
Washington
3A	4	Pitt
3B	4	Craven
Pamlico
Carteret
4	6	Sampson
Duplin
Jones
Onslow
5	6	New Hanover
Pender
6A	2	Halifax
6B	3	Northampton
Bertie
Hertford
7	6 	Nash
	Edgecombe
Wilson
8	6	Wayne
Greene
Lenoir
9	4	Granville
(part of Vance
see subsection (b))
Franklin
9A	2	Person
Caswell
9B	1	Warren
(part of Vance
see subsection (b))
10	12 	Wake
11	6	Harnett
Johnston
Lee
12	8	Cumberland
13	4	Bladen
Brunswick
Columbus
	14	5	Durham
15A	3	Alamance
15B	3	Orange
Chatham
16A	2	Scotland
Hoke
16B	5	Robeson
17A	2	Rockingham
17B	3	Stokes
Surry
18	11	Guilford
19A	3	Cabarrus
19B	3	Montgomery
Randolph
19C	3	Rowan
20	7	Stanly
Union
Anson
Richmond
Moore
21	7	Forsyth
22	7	Alexander
Davidson
Davie
Iredell
23	3	Alleghany
Ashe
Wilkes
Yadkin
24	3	Avery
Madison
Mitchell
Watauga
Yancey
25	7	Burke
Caldwell
Catawba
26	14 	Mecklenburg
27A	5	Gaston
27B	4	Cleveland
Lincoln
28	5	Buncombe
29	5	Henderson
McDowell
Polk
Rutherford
Transylvania
30	4	Cherokee
Clay
Graham
Haywood
Jackson
Macon
Swain."
(b)	The Governor shall appoint an additional district court judge for District Court District 12 as authorized by subsection (a) of this section.  The judge's successor shall be elected in the 2000 general election for a four-year term commencing on the first Monday in December 2000.
(c)	Subsection (a) of this section becomes effective December 15, 1996, or 15 days after the date upon which that subsection is approved under Section 5 of the Voting Rights Act of 1965, whichever is later.

Requested by:   Senator Ballance
MECKLENBURG DRUG COURT FUNDING
Sec. 22.10.  It is the intent of the General Assembly that the Mecklenburg Drug Court program shall be funded as a recurring item within the continuation budget.

Requested by:   Senator Ballance
FUNDING FOR SUPERIOR COURT REPORTERS
Sec. 22.11. It is the intent of the General Assembly that funding for superior court reporters shall remain a part of the continuation budget.

Requested by:   Senators Ballance, Odom
DISTRICT COURT REPORTER OPTION
Sec. 22.12. G.S. 7A-198 is amended by adding a new subsection to read:
"( g)	A party to a civil trial in district court may request a private agreement from the opposing party or parties to share equally in the cost of a court reporter to be selected from a list provided by the Administrative Office of the Courts.  If the opposing party does not consent to share this cost, the requesting party may nevertheless pay to have a court reporter present to record the trial and, in the event that the opposing party appeals the case, that party shall reimburse the party providing the court reporter in full for the costs incurred for the court reporter's services and transcripts.
In the event that the recording device in a civil trial conducted without a court reporter fails for any reason to provide a reasonably accurate record of the trial for purposes of appeal, then the trial judge shall grant a motion for a new trial made by a losing party whose request pursuant to this section to share the cost of a court reporter was not consented to by the opposing party."

PART 23.  DEPARTMENT OF JUSTICE

Requested by:   Senator Ballance
AUTHORIZATION OF FICTITIOUS LICENSES AND REGISTRATION PLATES ON PUBLICLY OWNED MOTOR VEHICLES
Sec. 23.  (a)	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, 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."
(b)	The Joint Legislative Commission on Governmental Operations shall study the statutory authorization of the use of private license plates on State-owned motor vehicles and the administration and enforcement of the applicable statutes.  The Commission shall report the results of its study to the 1997 General Assembly.
(c)	Subsection (a) of this section expires June 30, 1997.

Requested by:   Senator Ballance
FINGERPRINT AND PHOTOGRAPH DELINQUENT JUVENILES
Sec. 23.2. (a)	Article 48 of Chapter 7A of the General Statutes is amended by adding a new section to read:
"§ 7A-603.  Fingerprinting and photographing delinquent juveniles.
(a)	A juvenile shall be fingerprinted and photographed by a law enforcement officer or agency upon adjudication of the juvenile as a delinquent pursuant to G.S. 7A-637 if the juvenile was 10 years of age or older at the time the juvenile allegedly committed an offense that would be a Class A, B, C, D, or E felony if committed by an adult.  Upon adjudication, the court shall order the juvenile be fingerprinted and photographed unless the juvenile has been fingerprinted and photographed previously and the fingerprints and photographs are in a proper format for transfer to the State Bureau of Investigation.
(b)	Fingerprints obtained pursuant to this section shall be transferred to the State Bureau of Investigation in a format approved by the State Bureau of Investigation and placed in the Automated Fingerprint Identification System (AFIS) to be used for all investigation and comparison purposes. Photographs shall be placed in a format approved by the State Bureau of Investigation and may be used for all investigative or comparison purposes.
(c)	Fingerprints and photographs taken pursuant to this section shall not be included in the clerk's record pursuant to G.S. 7A-675 and shall not be eligible for expunction pursuant to G.S. 7A-676."
(b)	G.S. 15A-502(c) reads as rewritten:
"(c)	This section does not authorize the taking of photographs or fingerprints of a juvenile alleged to be delinquent except under G.S. 7A-596 through 7A-601 and 7A-603."

Requested by:   Senators Ballance, Rand
ESTABLISH CRIMINAL JUSTICE INFORMATION NETWORK GOVERNING BOARD
Sec. 23.3. (a) Chapter 143 of the General Statutes is amended by adding a new Article to read:
"ARTICLE 69.
"Criminal Justice Information Network Governing Board.
"§ 143-660.  Definitions.
As used in this Article:
(1)	'Board' means the Criminal Justice Information Network Governing Board established by G.S. 143-661.
(2)	'Local government user' means a unit of local government of this State having authorized access to the Network.
(3)	'Network' means the Criminal Justice Information Network established by the Board pursuant to this Article.
(4)	'Network user' or 'user' means any person having authorized access to the Network.
(5)	'State agency' means any State department, agency, institution, board, commission, or other unit of State government.
"§ 143-661.  Criminal Justice Information Network Governing Board – Creation; purpose; membership; conflicts of interest.
(a)	The Criminal Justice Information Network Governing Board is established within the Office of State Budget and Management to operate the State's Criminal Justice Information Network, the purpose of which shall be to provide the governmental and technical information systems infrastructure necessary for accomplishing State and local governmental public safety and justice functions in the most effective manner by appropriately and efficiently sharing criminal justice information among law enforcement, judicial, and corrections agencies.  The Board is established within the Office of State Budget and Management for organizational and budgetary purposes only and the Board shall exercise all of its statutory powers in this Article independent of control by the Office of State Budget and Management.
(b)	The Board shall consist of 15 members, appointed as follows:
(1)	Three members appointed by the Governor, including one member who shall be a director or employee of a State correction agency for a term to begin September 1, 1996, and to expire on June 30, 1997, one member who shall be an employee of the North Carolina Department of Crime Control and Public Safety for a term beginning September 1, 1996, and to expire on June 30, 1997, and one member selected from a list of at least three names submitted to the Governor by the North Carolina Association of Chiefs of Police for a term to begin September 1, 1996, and to expire on June 30, 1999.
(2)	Four members appointed by the General Assembly in accordance with G.S. 120-121, as follows:
a.	Two members recommended by the President Pro Tempore of the Senate, including one member of the general public for a term to begin on September 1, 1996, and to expire on June 30, 1997, and one member who shall be selected from a list of at least three names submitted to the President Pro Tempore by the North Carolina League of Municipalities and who shall be a member of or an employee working directly for the governing board of a North Carolina municipality for a term to begin on September 1, 1996, and to expire on June 30, 1999; and
b.	Two members recommended by the Speaker of the House of Representatives, including one member of the general public for a term to begin on September 1, 1996, and to expire on June 30, 1999, and one member selected from a list of at least three names submitted to the Speaker by the North Carolina Association of County Commissioners, and who shall be a member of or an employee working directly for the governing board of a North Carolina county for a term to begin on September 1, 1996, and to expire on June 30, 1997.
(3)	Two members appointed by the Attorney General, including one member who shall be an employee of the Attorney General for a term to begin on September 1, 1996, and to expire on June 30, 1997, and one member from a list of at least three names submitted to the Attorney General by the North Carolina Sheriffs' Association for a term to begin on September 1, 1996, and to expire on June 30, 1999.
(4)	Five members appointed by the Chief Justice of the North Carolina Supreme Court, including the Director or an employee of the Administrative Office of the Courts for a term to begin on September 1, 1996, and to expire on June 30, 1997, one clerk of the superior court for a term to begin on September 1, 1996,  and to expire on June 30, 1997, two judges of the trial division of the General Court of Justice for a term to begin on September 1, 1996, and to expire on June 30, 1999, and one district attorney or employee of a district attorney for a term to begin on September 1, 1996,  and to expire on June 30, 1999.
(5)	One member appointed by the Chair of the Information Resource Management Commission, who shall be the Chair or a member of that Commission for a term to begin on September 1, 1996, and to expire on June 30, 1999.
The respective appointing authorities shall appoint to the Board persons having a background in and familiarity with criminal information systems and networks generally and with the criminal information needs and capacities of the constituency from which the member is appointed.
As the initial terms expire, subsequent members of the Board shall be appointed to serve four-year terms.  At the end of a term, a member shall continue to serve on the Board until a successor is appointed.  A member who is appointed after a term is begun serves only for the remainder of the term and until a successor is appointed.  Any vacancy in the membership of the Board shall be filled by the same appointing authority that made the appointment, except that vacancies among members appointed by the General Assembly shall be filled in accordance with G.S. 120-122.
(c)	Members of the Board shall not be employed by or serve on the board of directors or other corporate governing body of any information systems, computer hardware, computer software, or telecommunications vendor of goods and services to the State or to any unit of local government in the State.  No member of the Board shall vote on an action affecting solely the member's own State agency or local governmental unit or specific judicial office.
"§ 143-662.  Compensation and expenses of Board members; travel reimbursements.
Members of the Board shall serve without compensation but may receive travel and subsistence as follows:
(1)	Board members who are officials or employees of a State agency or unit of local government, in accordance with G.S. 138-6.
(2)	All other Board members, at the rate established in G.S. 138-5.
"§ 143-663.  Powers and duties.
(a)	The Board shall have the following powers and duties:
(1)	To establish and operate the Network as an integrated system of State and local government components for effectively and efficiently storing, communicating, and using criminal justice information at the State and local levels throughout North Carolina's law enforcement, judicial, and corrections agencies, with the components of the Network to include electronic devices, programs, data, and governance and to set the Network's policies and procedures.
(2)	To determine and establish uniform standards, consistent with any applicable standards adopted by the Information Resource Management Commission, for entering, storing, and transmitting information in criminal justice databases.
(3)	To evaluate the capacity of available information technology to meet the present and future needs of the users of the Network and the costs and benefits of adopting any present or prospective information technology for the Network.
(4)	To develop and promulgate technical standards that achieve maximum compatibility among user technologies while assuring maximum user freedom in adopting technologies.
(5)	To identify the funds needed to establish and maintain the Network, identify public and private sources of funding, and secure funding for the Board.
(6)	To receive funds appropriated or granted to the Board and to use those funds to:
a.	Create the Network and to facilitate the sharing of information among users of the Network;
b.	Develop elements of the Network which are the responsibility of the State;
c.	Make grants to local government users to enable them to acquire or improve elements of the Network that lie within the responsibility of their agencies, provided that the elements developed with such funds must be available for use by the State or by local governments without cost; and
d.	Make grants to local government users to enable them to acquire or improve elements of the Network that lie within the responsibility of one or more State agencies, provided that:
1.	The State agencies must join in the request for funding, and
2.	The elements developed with such funds must be available for use by the State or by local governments without cost, if the State agency or agencies certify that the element advances the State's ability to meet its goal of having an integrated criminal justice information network.
(7)	To coordinate and assist the Network users of this State in soliciting bids for information technology hardware, software, and services in order to assure compliance with the Board's technical standards, to gain the most advantageous contracts for the Network users of this State, and to assure financial accountability where State funds are used.
(8)	To provide a liaison among local government users and provide assistance for the financial and systems planning for Network related automation.
(9)	To facilitate the sharing of knowledge about information technologies among users of the Network.
(10)	To be an advocate for the Network and the needs of its users in connection with legislation affecting the Network.
(11)	To take any other appropriate actions to foster the development of the Network.
(b)	All grants or other uses of funds appropriated or granted to the Board shall be conditioned on compliance with the Board's technical and other standards.
"§ 143-664.  Election of officers; meetings; staff; etc.
(a)	The Governor shall call the first meeting of the Board. At the first meeting, the Board shall elect a chair and a vice-chair, each to serve a one-year term, with subsequent officers to be elected for one-year terms.  The Board shall hold at least two regular meetings each year, as provided by policies and procedures adopted by the Board.  The Board may hold additional meetings upon the call of the chair or any three Board members.  A majority of the Board membership constitutes a quorum.
(b)	The Board shall employ a full-time Executive Director who shall have appropriate training and experience to assist the Board in the performance of its duties.  The Executive Director shall be exempt from coverage under the State Personnel Act and shall serve at the pleasure of the Board.  The salary of the Executive Director shall be set by the Governor upon the recommendation of the Board.
(c)	The Executive Director may employ such other full or part-time staff and contract for such services as may be necessary or appropriate to assist the Board in the performance of its duties, as funds permit.  Staff employed by the Executive Director shall be exempt from coverage under the State Personnel Act and shall serve at the pleasure of the Executive Director.  The salaries of such staff shall be set by the Executive Director.
(d)	The Board may meet in an area provided by the Office of State Budget and Management, and the Board's staff shall use space provided by the Office of State Budget and Management."
(b)	G.S. 143B-426.21(a) is amended by adding a new subdivision to read:
"(9)	The Chair of the Criminal Justice Information Network Governing Board."
(c)	The Criminal Justice Information Network Governing Board shall report by April 1, 1997, 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 on the organization, operations, and expenditures of the Board, including the Board's progress in developing data sharing standards, the progress in the coordination and cooperation of State and local agencies in establishing standards, and the estimated time of completion of the standards.  The Board shall also provide a long-term strategic plan and cost analysis for statewide implementation of the Criminal Justice Information Network as well as a report on the State and local law enforcement agencies' implementation of the mobile data network system, including the amount of funds spent on the system as of the date of the report and the long-term costs of implementing the system statewide.
(d)	Of the funds appropriated in this act to the reserve for the Criminal Justice Information Network Governing Board, the sum of three hundred thousand dollars ($300,000) shall be used to support the operation of the Criminal Justice Information Network Governing Board, including staff salaries and benefits and related expenses, and the sum of seven hundred thousand dollars ($700,000) shall be used to fund the development of data standards for the Network. Funds appropriated to the reserve for the Criminal Justice Information Network Governing Board shall not revert.

PART 24.  DEPARTMENT OF HUMAN RESOURCES

Requested by:   Senator Martin of Guilford
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:   Senator Martin of Guilford
NONMEDICAID REIMBURSEMENT CHANGES
Sec. 24.1.  Section 23.16 of Chapter 324 of the 1995 Session Laws, as amended by section 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:  Senator Martin of Guilford
MEDICAID SUBROGATION CHANGE
Sec. 24.1A.  (a) G.S. 108A-57 reads as rewritten:
"§ 108A-57.  Subrogation rights; withholding of information a misdemeanor.
	(a)	Notwithstanding any other provisions of the law, to the extent of payments under this Part, the State, or the county providing medical assistance benefits, shall be subrogated to all rights of recovery, contractual or otherwise, of the beneficiary of this assistance, or of the beneficiary's personal representative, heirs, or the administrator or executor of the estate, against any person.  The county attorney, or an attorney retained by the county or the State or both, or an attorney retained by the beneficiary of the assistance if this attorney has actual notice of payments made under this Part shall enforce this section.  An attorney retained by the county or the State or both shall be compensated for services in accordance with the attorneys' fee arrangements approved by the Department.  Any attorney retained by the beneficiary of the assistance shall distribute proceeds obtained on behalf of the beneficiary by settlement with, judgment against, or otherwise from a third party by reason of the injury or death in accordance with the following schedule and in the following order of priority:
(1)	First to the payment of any court costs taxed by the judgment;
(2)	Second to the payment of the fee of the attorney representing the beneficiary making the settlement or obtaining the judgment, but this fee shall not exceed one-third of the gross amount obtained or recovered;
(3)	Third to the payment to the Department of the amount of assistance received by the beneficiary; and
(4)	Fourth to the payment of any amount remaining to the beneficiary or the beneficiary's personal representative.
The United States and the State is entitled to shares in each net recovery under this section.  Their shares shall be promptly paid under this section and their proportionate parts of the sum shall be determined in accordance with the matching formulas in use during the period for which assistance was paid to the recipient.
(b)	It is a Class 1 misdemeanor for any person seeking or having obtained assistance under this Part for himself or another to willfully fail to disclose to the county department of social services or its attorney the identity of any person or organization against whom the recipient of assistance has a right of recovery, contractual or otherwise."
(b) This section becomes effective October 1, 1996.

Requested by:   Senator Martin of Guilford
VOCATIONAL REHABILITATION SUBROGATION CHANGE
Sec. 24.1B.  (a) G.S. 143-547 reads as rewritten: 
"§ 143-547.  Subrogation rights; withholding of information a misdemeanor.
(a)	Notwithstanding any other provisions of law, to the extent of payments under this Article, the State Vocational Rehabilitation program shall be subrogated to all rights of recovery, contractual or otherwise, of the beneficiary of the assistance, or the beneficiary's personal representative, heirs, or the administrator or executor of the estate, against any person.  Any attorney retained by the beneficiary of the assistance shall distribute proceeds obtained on behalf of the beneficiary by settlement with, judgment against, or otherwise from a third party by reason of injury or death in accordance with the following schedule and in the following order of priority:
(1)	First to the payment of any court costs taxed by the judgment;
(2)	Second to the payment of the fee of the attorney representing the beneficiary making the settlement or obtaining the judgment, but this fee shall not exceed one-third of the gross amount obtained or recovered;
(3)	Third to the payment of the amount of assistance received by the beneficiary as prorated with other claims against the amount obtained or received from the third party for which a right of subrogation applies, but the amount shall not exceed one-third of the amount obtained or recovered; and
(4)	Fourth to the payment of any amount remaining to the beneficiary or the beneficiary's personal representative.
The United States and the State is entitled to shares in each net recovery under this section.  Their shares shall be promptly paid under this section and their proportionate parts of the sum shall be determined in accordance with the matching formulas in use during the period for which assistance was paid to the recipient.
(b)	In furnishing a person rehabilitation services, including medical case services under this Chapter, the Division of Vocational Rehabilitation Services is subrogated to the person's right of recovery from:
(1)	Personal insurance;
(2)	Worker's Compensation;
(3)	Any other person or personal injury caused by the other person's negligence or wrongdoing; or
(4)	Any other source.
(c)	The Division of Vocational Rehabilitation Services' right to subrogation is limited to the cost of the rehabilitation services provided by or through the Division for which a financial needs test is a condition of the service provisions.  Those services that are provided without a financial needs test are excluded from these subrogation rights.
(d)	The Division of Vocational Rehabilitation Services may totally or partially waive subrogation rights when the Division finds that enforcement would tend to defeat the client's process of rehabilitation or when client assets can be used to offset additional Division costs.
(e)	The Division of Vocational Rehabilitation Services may adopt rules for the enforcement of its rights of subrogation.
(f)	It is a Class 1 misdemeanor for a person seeking or having obtained assistance under this Part for himself or another to willfully fail to disclose to the Division of Vocational Rehabilitation Services or its attorney the identity of any person or organization against whom the recipient of assistance has a right of recovery, contractual or otherwise."
(b) This section becomes effective October 1, 1996.

Requested by:   Senator Martin of Guilford
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:   Senator Martin of Guilford
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 Mental Health Study Commission the results of its study in time for these results to be included in the Mental Health Study 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:   Senator Martin of Guilford
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:   Senator Martin of Guilford
IMPROVEMENT OF OPERATING EFFICIENCIES IN COLLOCATED INSTITUTIONS 
Sec. 24.7.  The Department of Human Resources' collocated 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:   Senator Martin of Guilford
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:   Senator Martin of Guilford
CAROLINA ALTERNATIVES EXPANSION LIMITS
Sec. 24.10.  The Department of Human Resources may expand Carolina Alternatives beyond the 10 area authorities that currently participate in the Carolina Alternatives/Medicaid Waiver/Managed Care Program.

Requested by:   Senator Martin of Guilford
CLINICAL SOCIAL WORKER EXEMPTION
Sec. 24.10A.  Section 8 of Chapter 732 of the 1991 Session Laws reads as rewritten:
"Sec. 8.  This act becomes effective January 1, 1992.  G.S. 90B-10(b)(3)a. is repealed effective January 1, 1999.  The term of the additional Board position for clinical social worker created by this act shall commence upon the expiration of the term of the public member whose term expires first."

Requested by:   Senator Martin of Guilford
FOSTER CARE REPORTING REPEALED 
Sec. 24.11.  Section 23.22 of Chapter 324 of the 1995 Session Laws is repealed.

Requested by:   Senator Martin of Guilford
CHILD SUPPORT RESERVE SHALL NOT REVERT
Sec. 24.13.  (a) 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.
(b) This section is effective June 30, 1996.

Requested by:   Senator Martin of Guilford
AFDC EMERGENCY ASSISTANCE RULES CLARIFIED
Sec. 24.14.  The Social Services Commission shall ensure that Aid to Families With Dependent Children 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; except that where it is unreasonable or not feasible to obtain written verification, such verification can be achieved through telephonic or other reliable means of communication; and
(2)	Ensuring that the verified 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.

Requested by:   Senator Martin of Guilford
CLARIFICATION OF AUTHORIZED ADDITIONAL USE OF HIV FOSTER CARE AND ADOPTIVE FAMILY FUNDS
Sec. 24.14A.  Section 23.9 of Chapter 507 of the 1995 Session Laws reads as rewritten:
"Sec. 23.9.  In addition to providing board payments to foster and adoptive families of HIV-infected children as prescribed in Chapter 324 of the 1995 Session Laws, any additional funds remaining that were appropriated in Chapter 324 of the 1995 Session Laws for this purpose shall be used to provide medical training in avoiding HIV transmission in the home. 
					."

Requested by:   Senator Martin of Guilford
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:   Senators Martin of Guilford, Hartsell
EXTEND CABARRUS COUNTY AFDC AND FOOD STAMP WORKFARE PILOT PROGRAM
Sec. 24.16A.  Chapter 368 of the 1995 Session Laws reads as rewritten:
"Section 1.  Notwithstanding any law to the contrary, the Department of Human Resources shall designate Cabarrus County as a pilot county for the purpose of conducting a demonstration Workfare Program for certain Aid to Families with Dependent Children (AFDC)	and Food Stamp recipients.  Immediately upon the ratification of this act, the Department shall seek all federal waivers necessary to allow this demonstration program.  To the extent that this act or the program established pursuant to it conflicts with any State law, the program supersedes that law.
Sec. 2.  (a) The Cabarrus County demonstration Workfare Program for certain AFDC and Food Stamp recipients shall:
(1)	Provide job opportunities to all able-bodied AFDC and Food Stamp recipients who:
a.	 Are not eligible for the JOBS program;
b.	 Are between the ages of 18 and 64;
c.	 Are not caring for a child under one year of age;
d.	 Are working less than 30 hours per week; and
e.	 Are not full-time high school students or the equivalent;
(2)	Create job opportunities in the public, the private, nonprofit, and the private, for-profit sector, primarily in the human services areas by allowing Cabarrus County to use grant diversions, consisting of the AFDC benefits and the cash value of Food Stamps that would be paid to otherwise eligible recipients to match employer funds, to subsidize the employment of these recipients.  Human service area jobs will meet such socially necessary needs as day care work, nursing home aide work, and in-home aide work;
(3)	Allow wages paid to these recipients, which contain grant-diverted funds, to be exempt from income for purposes of determining eligibility for assistance;
(4)	Structure payment of wages to these recipients such that they will be considered income, in order to make recipients eligible for the federal earned income tax credit;
(5)	Create work experience opportunities in the private sector more realistically to reflect the world of work;
(6)	Require these recipients to participate in the development of an opportunity contract, outlining the responsibilities of the recipient and agency, as well as the incentives for compliance and the sanctions for noncompliance;
(7)	Require all these recipients who participate in the program to pursue and accept employment, full or part time, subsidized or unsubsidized, as a condition for continued eligibility for AFDC and Food Stamp assistance;
(8)	Require job search training of all participants;
(9)	Require monitored job search of all participants until employment is found or until other work activities of up to 40 hours per week are in place;
(10)	Provide child care by allowing Cabarrus County to use grant diversions, consisting of the Family Support Act child day care subsidies that would be paid to otherwise eligible recipients, and transportation as required;
(11)	Create a positive work incentive by providing wage incentives to participants who are in compliance with the program, equal to the first thirty dollars ($30.00) and one-third of the remainder of monthly gross income for a period of up to two years;
(12)	Provide enhanced Food Stamp benefits after participants are employed and are in program compliance by using the thirty dollar ($30.00) and one-third of the remainder wage incentive as an income exemption;
(13)	Provide time-limited sanctions, or withholding of benefits for the adult members of the household of all AFDC and Food Stamp benefits for noncompliance, beginning with the first sanction period equal to the time necessary to come into compliance, second sanction period – four months, third and subsequent sanctions – eight months; and
(14)	Provide automatic Medicaid coverage for children and pregnant adults of sanctioned families by transferring the children administratively to the Medicaid for Indigent Children (MIC) Program and by transferring the pregnant adults administratively to the Medicaid for Pregnant Women (MPW) Program.
(b)	An adjunct program to the demonstration program prescribed in subsection (a) of this section shall:
(1)	Require AFDC recipients who are mandated JOBS participants to pursue and accept employment, full or part time, subsidized or unsubsidized, as part of their job plan.  The maximum number of hours delegated to job activities, including employment, shall be 40 hours per week.  AFDC recipients who are JOBS eligible and who are caring for children under five years of age shall, in this program, not be limited to 20 hours per week; 
(2)	Require AFDC recipients who are potential JOBS participants to engage in job search until either employment is found or they become JOBS eligible; and
(3)	Ensure that sanctions for noncompliance and provision of Medicaid coverage shall be as provided in subdivisions (13) and (14) of subsection (a) of this section.
Sec. 3.  This act shall be funded by Cabarrus County using the grant diversions and administrative transfers prescribed in Section 2 of this act, together with federal and State administrative funding allocated to Cabarrus County for the public assistance and JOBS programs.
Sec. 4.  The Department of Human Resources shall evaluate the Cabarrus County Demonstration Project and report to the General Assembly on or before May 1, 1998.
Sec. 5.  This act becomes effective July 1, 1995 and shall expire on January 1, 1999."

Requested by:   Senator Martin of Guilford
MEDICAL DATA PROCESSING FUNDS
Sec. 24.16B.  The sum of one hundred fifty thousand dollars ($150,000) for the 1996-97 fiscal year is transferred from the Insurance Regulatory Fund established pursuant to G.S. 58-6-25 to the Division of Facility Services, Department of Human Resources, to certify statewide data processors pursuant to Article 11A of Chapter 131E of the General Statutes, to purchase data from statewide data processors, and to process and analyze the data.

Requested by:   Senator Martin of Guilford
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:   Senator Martin of Guilford
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 fourteen million five hundred thirty-nine thousand seven hundred two dollars ($14,539,702) 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 fourteen million five hundred thirty-nine thousand seven hundred two dollars ($14,539,702).  The Director of the Budget shall report to the Joint Legislative Commission on Governmental Operations prior to any such transfer."

Requested by:   Senator Martin of Guilford
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:   Senator Martin of Guilford
INDEPENDENT STUDY/PLAN FOR REORGANIZATION OF DEPARTMENT OF HUMAN RESOURCES
Sec. 24.20.  (a)	The General Assembly intends to reorganize the Department of Human Resources to improve service delivery through careful identification of service needs and strategic integration of program planning, implementation, and evaluation.  The General Assembly intends that this program planning, implementation, and evaluation reflect a family-centered policy that lends itself to accessible, nonfragmented service delivery.  To the extent consistent with these goals, the General Assembly intends that the reorganization consolidate and streamline functions, programs, and services.
(b) There is established the Independent Study Commission on the Reorganization of the Department of Human Resources, budgetarily based in the Office of State Budget and Management.  The Commission shall study systemwide issues affecting the administration and delivery of Department of Human Resources' services in North Carolina in order to determine how best to effect the General Assembly's intent prescribed in subsection (a) of this section.
(c) The Commission shall be composed of 15 members, as follows:
(1)	Five members of the House of Representatives at the time of their appointment, two appointed by the Speaker of the House of Representatives, one other a chair of the House Appropriations Subcommittee on Human Resources, one other a member of the House Appropriations Subcommittee on Human Resources, and one other the House of Representatives chair or other member of the Subcommittee on Human Resources of the Joint Legislative Commission on Governmental Operations;
(2)	Five members of the Senate at the time of their appointment, two appointed by the President Pro Tempore of the Senate, one other the chair of the Senate Appropriations Subcommittee on Human Resources, one other a member of the Senate Appropriations Subcommittee on Human Resources, and one other the Senate chair or other member of the Subcommittee on Human Resources of the Joint Legislative Commission on Governmental Operations; and
(3)	Five members appointed by the Governor, including one representative from the Department of Human Resources and four public members.
(d) The Speaker of the House of Representatives and the President Pro Tempore of the Senate shall each select a legislative member from their respective chambers to serve as cochair of the Commission.
	(e)	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.
(f) Members of the Commission shall receive subsistence and travel expenses at the rates set forth in G.S. 120-3.1.
(g) 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 Services Officer, shall assign professional and clerical staff to staff the Commission. The House of Representatives' and the Senate's Supervisors of Clerks shall assign clerical staff to the Commission or committee, upon the direction of the Legislative Services Commission.  The expenses relating to professional and clerical employees supplied through the Legislative Services Commission shall be borne by the Legislative Services Commission.
(h) When a vacancy occurs in the membership of the Commission, the vacancy shall be filled by the same appointing officer who made the initial appointment.
(i) All State departments and agencies and local governments and their subdivisions shall furnish the Commission with any information in their possession or available to them.
(j) The cochairs of the Commission shall appoint five members of the Commission to serve as an advisory council.  In partnership with this council, the Office of State Budget and Management shall contract with an independent management consultant for the development of a plan to effect the General Assembly's intent prescribed in subsection (a) of this section.  This plan shall include an implementation schedule and shall be designed to improve the Department of Human Resources' capacity for:
(1)	Integrated and comprehensive planning and needs assessment;
(2)	Performance-based evaluation of integrated programs and services; and
(3)	Development of policies that encourage, facilitate, and mandate integrated delivery of effective family-centered services at the local level.
Because time is of the essence, if a majority of the advisory council has not been appointed by August 2, 1996, the Office of State Budget and Management may negotiate and enter into a contract with an independent management consultant without the council's involvement.  In this case, the professional legislative staff shall work with the Office of State Budget and Management in the contract negotiations and specifications.
The independent management consultant that is awarded the contract shall report to the Commission as the Commission considers appropriate and shall submit a final report to the Commission by January 10, 1997. While conducting its work, the independent management consultant shall devise a means of obtaining confidential input from managerial and nonmanagerial human services personnel, such as through the establishment of a confidential, temporary hotline.
(k) The Commission shall report its findings and recommendations, including any legislative proposals, to the General Assembly by February 1, 1997, at which time the Commission shall terminate.
(1)  Of the funds appropriated to the Department of Human Resources, the sum of five hundred thousand dollars ($500,000) is transferred to the Office of State Budget and Management to implement this section.

Requested by:   Senator Martin of Guilford
HUMAN SERVICES WORKERS' CRIMINAL RECORD CHECKS LAW CLARIFICATION 
Sec. 24.20A.  G.S. 114-19.3 reads as rewritten:
"§ 114-19.3.  Criminal record checks of providers of treatment for or services to children, the elderly, mental health patients, the sick, and the disabled.
(a)	The Department of Justice may provide a criminal record check, including a criminal record check from the State and National Repositories of Criminal Histories, if requested, to the employer of an individual who is employed by or who has applied for employment with any of the following agencies, facilities, organizations, or corporations listed in this subsection:
(1)	Hospitals licensed under Chapter 131E of the General Statutes;
(2)	Nursing homes licensed under Chapter 131E of the General Statutes;
(3)	Adult care homes licensed under Chapter 131D of the General Statutes;
(4)	Home care agencies or hospices licensed under Chapter 131E of the General Statutes;
(5)	Child placing agencies licensed under Chapter 131D of the General Statutes;
(6)	Residential child care facilities licensed under Chapter 131D of the General Statutes;
(7)	Hospitals licensed under Chapter 122C of the General Statutes;
(8)	Area mental health, developmental disabilities, and substance abuse authorities licensed under Chapter 122C of the General Statutes, including a contract agency of an area authority that is subject to the provisions of Article 4 of Chapter 122C of the General Statutes;
(9)	Licensed child day care facilities and registered and nonregistered child day care homes, regulated by the State; and
(10)	Any other organization or corporation, whether for profit or nonprofit, that provides direct care or services to children, the sick, the disabled, or the elderly.
(b)	A criminal record check shall be provided only if the employee or applicant consents to the record check. The information shall be kept confidential by the employer that receives the information. Upon the disclosure of confidential information under this section by the employer, the Department may refuse to provide further criminal record checks to that employer.
(c)	The Department of Justice, at the request of an agency, facility, organization, or corporation listed in subsection (a) of this section, may provide a criminal record check of a volunteer who provides direct care on behalf of the organization or corporation if the volunteer consents to the record check. The information shall be kept confidential and upon the disclosure of confidential information under this section by the agency, facility, corporation, or organization, the Department may refuse to provide further criminal record checks to that agency, facility, corporation, or organization.
(d)	The Department of Justice, at the request of a child placing agency licensed under Chapter 131D of the General Statutes or a local department of social services, may provide a criminal record check of a prospective foster care or adoptive parent if the prospective parent consents to the record check. The information shall be kept confidential and upon the disclosure of confidential information under this section by the agency or department, the Department may refuse to provide further criminal record checks to that agency or department.
(e)	The Department may charge a fee to offset the cost incurred by it to conduct a criminal record check under this section. The fee may not exceed fourteen dollars ($14.00)."

Requested by:   Senator Martin of Guilford
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:   Senator Martin of Guilford
STUDY COURT-ORDERED COUNTY PAYMENT OF JUVENILE TREATMENT
Sec. 24.21A.  (a)	The Division of Youth Services, Department of Human Resources, and the Administrative Office of the Courts shall study county payment of the cost of medical, surgical, psychiatric, psychological, or other treatment of juveniles ordered pursuant to G.S. 7A-647 when the parents are not able to pay the cost of treatment.  The study shall provide recommendations on the feasibility and desirability of allowing the counties to present evidence of their financial status in each case and of requiring the State to pay the cost of treatment of juveniles in counties that are not able to pay the cost of treatment.
(b)	The Division of Youth Services and 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 the Department of Human Resources and on Justice and Public Safety by December 1, 1996.

Requested by:   Senator Martin of Guilford
S.O.S. AND FAMILY RESOURCE CENTER GRANT PROGRAMS ADMINISTRATIVE COST 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) each fiscal year of the biennium 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:   Senator Martin of Guilford
SUPPORT OUR STUDENTS PROGRAM'S LOCATION
Sec. 24.23.  The Department of Human Resources shall ensure that the Support Our Students Program remains in the Division of Youth Services.

Requested by:   Senator Martin of Guilford
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 November 1, 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.  In order to comply with State Personnel Commission policy and in order to protect filled positions, the Department may substitute vacant positions or filled positions whose incumbents volunteer for discontinued service allowance for filled positions targeted for elimination.
(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 November 1, 1996.

Requested by:   Senator Martin of Guilford
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:   Senators Martin of Guilford, Cochrane
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:   Senator Martin of Guilford
ADULT CARE HOME REIMBURSEMENT RATE/ADULT CARE HOME ALLOCATION OF NONFEDERAL COST OF MEDICAID PAYMENTS
Sec. 24.26C.  Section 23.10 of Chapter 507 of the 1995 Session Laws reads as rewritten:
"Sec. 23.10.  (a)	Effective July 1, 1995, the maximum monthly rate for residents in adult care home facilities shall be nine hundred seventy-five dollars ($975.00) per month for ambulatory residents and one thousand seventeen dollars ($1,017) per month for semiambulatory residents.
(b)	Effective August 1, 1995, the maximum monthly rate for residents in adult care home facilities shall be eight hundred forty-four dollars ($844.00) per month per resident.
(c)	Effective August 1, 1995, the Department of Human Resources may use the remaining funds available from the State/County Special Assistance appropriation to provide:
(1)	Needed Medicaid-covered services, specifically one hour of personal care services per day to all Medicaid-eligible residents and a maximum of 50 additional hours per month of personal care services for residents who require heavy care;
(2)	Funds to the area mental health authorities to provide wraparound services for adult home care residents with mental health conditions; 
(3)	Funds for the implementation of the provisions of G.S. 131D-4.1 and G.S. 131D-4.2, including funds for necessary additional staff.
(d)	The eligibility of Special Assistance recipients residing in adult care homes on August 1, 1995, shall not be affected by an income reduction in the Special Assistance eligibility criteria resulting from adoption of the Rate Setting Methodology Report and Related Services, providing these recipients are otherwise eligible.
(e)	Effective August 1, 1995, the State shall pay fifty percent (50%) and the county shall pay fifty percent (50%) of the nonfederal costs of Medicaid services paid to adult care home facilities.  As Medicaid personal care requirements increase, the county matching share shall be capped until it equals fifteen percent (15%) of the nonfederal Medicaid personal care requirements.
(f)	To maximize Medicaid funding, the Department of Human Resources may take the temporary measures necessary to implement Medicaid funding during the period from August 1, 1995, through September 30, 1995.  This authorization includes authorization to continue payment of State/County Assistance at the July 1995 rates until the Health Care Financing Administration approval of Medicaid personal care services with future recoupment from providers of an amount equal to the difference between the July 1995 rates and the August 1995 rates.
(g)	Effective July 1, 1996, the maximum monthly rate for residents in adult care home facilities shall be eight hundred seventy-four dollars ($874.00) per month per resident."

Requested by:   Senator Martin of Guilford
FIRE PROTECTION REVOLVING LOAN FUND
Sec. 24.26D.  (a) Chapter 122A of the General Statutes is amended by adding a new section to read:
"§ 122A-5.13.  Adult Care Home, Group Home, and Nursing Home Fire Protection Fund authorized; authority.
(a)	The North Carolina Housing Finance Agency shall establish an Adult Care Home, Group Home, and Nursing Home Fire Protection Fund (hereinafter 'Fire Protection Fund') to assist owners of adult care homes, group homes for developmentally disabled adults, and nursing homes with the purchase and installation of fire protection systems in existing and new adult care homes, group homes for developmentally disabled adults, and nursing homes.  The Fire Protection Fund shall be a revolving fund.
(b)	The Agency, in consultation with the Department of Human Resources, shall adopt rules for the management and use of the Fire Protection Fund.  These rules at a minimum shall provide for the following:
(1)	Financial incentives for owners of facilities who utilize Fire Protection Fund monies to install sprinkler systems instead of smoke detection equipment.
(2)	Maximum loan amounts of one dollar and seventy-five cents ($1.75) per square foot for advanced smoke detectors and digital communication equipment, three dollars and seventy-five cents ($3.75) per square foot for residential sprinkler systems, and six dollars ($6.00) per square foot for institutional sprinkler systems.
(3)	Interest rates from three percent (3%) to six percent (6%) for a period not to exceed 20 years for sprinkler systems and 10 years for smoke detection systems.
(4)	Documentary verification that owners of facilities obtain fire protection systems at a reasonable cost.
(5)	Acceleration of a loan when statutory fire protection requirements are not met by the facility for which the loan was made.
(6)	Loan approval priority criteria that considers the frailty level of residents at a facility.
(7)	Loan origination and servicing fees."
(b)	Proceeds from the Fire Protection Fund created in this act may be used to provide staff support to the North Carolina Housing Finance Agency for loan processing and to the Department of Human Resources for review and approval of fire protection plans and inspection of fire protection systems.
(c)	The North Carolina Housing Finance Agency shall, by October 1, 1996, adopt temporary rules to implement this section.
(d)	Of the funds appropriated to the Department of Human Resources in this act, the sum of one million dollars ($1,000,000) shall be transferred to the North Carolina Housing Finance Agency to fund the Fire Protection Fund.

Requested by:   Senator Martin of Guilford
CHILD DAY CARE SUBSIDIES  
Sec. 24.26E.  (a)	The maximum gross annual income for initial eligibility, adjusted biennially, for subsidized child care services shall be seventy-five percent (75%) of the State median income, adjusted for family size.
(b)	Parents who receive child care subsidy to work, look for work, attend work-related training or education activities, or meet the special developmental needs of their child, shall share in the cost of child care.  No fees shall be charged to the client when child day care services are provided to the individuals in the following circumstances:
(1)	When children are receiving day care services in conjunction with protective services as described in 10 NCAC 35E.0106, up to a maximum of 12 months from the time protective services are initiated;
(2)	When day care services are provided as a support to a child receiving Child Welfare Services as described in the North Carolina Division of Social Services Family Services Manual, Volume 1, Chapter II; or
(3)	When a child with no income is living with someone other than the child's biological or adoptive parent or is living with someone who does not have court-ordered financial responsibility.
(c)	The amount of the fees charged to the client shall be in accordance with the fee determination process established schedules adopted by the Social Services Commission and published by the Division of Child Development.  Fees shall be established based on a percent of gross family income and adjusted for family size.  Fees shall be determined as follows:
FAMILY SIZE	PERCENT OF GROSS FAMILY INCOME
1-3	9%
4-5	8%
6 or more	7%
(d) The monthly schedule of payments for the purchase of child day care services for low-income children from providers who have fifty percent (50%) or more children receiving child care subsidized with State or federal funds include:
(1)	Provision of payment rates for child care that are tied to the provider's regulatory status as follows:
a.	Registered homes and "A"licensed centers receive the market rate or the rate they charge their full fee-paying parents, whichever is lower;
b.	"AA"licensed centers receive one hundred ten percent (110%) of the market rate or the rate they charge their full fee-paying parents, whichever is lower; and
c.	Unregistered providers receive fifty percent (50%) of the market rate or the rate they charge their full fee-paying parents, whichever is lower.
(2)	Provision of payment rates for child care providers in counties who do not have at least 75 children in each age group for center-based and home-based care as follows:
a.	Payment rates shall be set at the statewide market rate for registered homes and "A"licensed centers.
b.	If it can be demonstrated that the application of the statewide market rate to a county with fewer than 75 children in each age group is lower than the county market rate and would inhibit the ability of the county to purchase child care for low-income children, then the county market rate may be applied.
(e)  Payment rates described in subdivision (1) of subsection (d) of this section shall be applied to all licensed child care centers, including Head Start, that have more than fifty percent (50%) of enrolled children receiving child care subsidies, and to registered family child care homes and unregulated providers that enroll subsidized children.
(f) The Department may seek the necessary waivers to extend the Family Support Act Transitional Child Care to two-year coverage in order to maximize federal funds.

Requested by:   Senator Martin of Guilford
ALLOCATION OF MENTAL HEALTH, DEVELOPMENTAL DISABILITIES, AND SUBSTANCE ABUSE EXPANSION FUNDS
Sec. 24.26F.  Of the funds appropriated in this act to the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, Department of Human Resources, for expansion of mental health, developmental disabilities, and substance abuse programs and services, those funds needed by area authorities for "catch-up" purposes shall be allocated pursuant to the Incentive Method adopted by the Mental Health Study Commission and presented in the Commission's Report to the 1996 General Assembly.  The Department, in conjunction with all stakeholders, shall work together to develop a needs-based approach for the allocation of future expansion funds.

Requested by:   Senators Martin of Guilford, Cooper
EARLY CHILDHOOD INITIATIVES
Sec. 24.29. (a)	The intent of the General Assembly is to strengthen the accountability and effectiveness of the Early Childhood Education and Development Initiatives Program, as set forth in Part 10B of Article 3 of Chapter 143B of the General Statutes.
In order to accomplish this goal, the General Assembly finds that, to the extent practicable, the findings and recommendations of the independent performance audit prepared pursuant to subdivision (1) of Section 27A of Chapter 324 of the 1995 Session Laws shall be implemented by the North Carolina Partnership for Children, Inc., the Department of Human Resources, and the local partnerships as set forth herein.
(b)	G.S. 143B-168.12(a) reads as rewritten:
"(a)	In order to receive State funds, the following conditions shall be met:
(1)	 The North Carolina Partnership shall have a Board of Directors consisting of the following 39 members:
a.	The Secretary of Human Resources, ex officio;
b.	The Secretary of Environment, Health, and Natural Resources, ex officio;
c.	The Superintendent of Public Instruction, ex officio;
d.	The President of the Department of Community Colleges, ex officio;
e.	One resident from each of the 1st, 3rd, 5th, 7th, 9th, and 11th Congressional Districts, appointed by the President Pro Tempore of the Senate;
f.	One resident from each of the 2nd, 4th, 6th, 8th, 10th, and 12th Congressional Districts, appointed by the Speaker of the House of Representatives;
g.	Seventeen members, of whom four shall be members of the party other than the Governor's party, appointed by the Governor;
h.	The President Pro Tempore of the Senate, or a designee;
i.	The Speaker of the House of Representatives, or a designee;
j.	The Majority Leader of the Senate, or a designee;
k.	The Majority Leader of the House of Representatives, or a designee;
l.	The Minority Leader of the Senate, or a designee; and
m.	The Minority Leader of the House of Representatives, or a designee.
(2)	The North Carolina Partnership shall agree to adopt procedures for its operations that are comparable to those of Article 33C of Chapter 143 of the General Statutes, the Open Meetings Law, and Chapter 132 of the General Statutes, the Public Records Law, and provide for enforcement by the Department.
(3)	The North Carolina Partnership shall oversee the development and implementation of the local demonstration projects as they are selected.
(4)	The North Carolina Partnership shall develop and implement a comprehensive standard fiscal accountability plan to ensure the fiscal integrity and accountability of State funds appropriated to it and to the local partnerships.  The standard fiscal accountability plan shall, at a minimum, include a uniform, standardized system of accounting, internal controls, payroll, fidelity bonding, chart of accounts, and contract management and monitoring.  The North Carolina Partnership may contract with outside firms to develop and implement the standard fiscal accountability plan. All local partnerships shall be required to participate in the standard fiscal accountability plan developed and adopted by the North Carolina Partnership pursuant to this subdivision.
(5)	The North Carolina Partnership shall develop and implement a centralized accounting and contract management system which incorporates features of the required standard fiscal accountability plan described in subdivision (4) of subsection (a) of this section.  The following local partnerships shall be required to participate in the centralized accountability system developed by the North Carolina Partnership pursuant to this subdivision:
a.	Local partnerships which have significant deficiencies in their accounting systems, internal controls, and contract management systems, as determined by the North Carolina Partnership based on the annual financial audits of the local partnerships conducted by the Office of the State Auditor; and
b.	Local partnerships which are in the first two years of operation following their selection.  At the end of this two-year period, local partnerships shall continue to participate in the centralized accounting and contract management system.  With the approval of the North Carolina Partnership, local partnerships may perform accounting and contract management functions at the local level using the standardized and uniform accounting system, internal controls, and contract management systems developed by the North Carolina Partnership.
	Local partnerships which otherwise would not be required to participate in the centralized accounting and contract management system pursuant to this subdivision may voluntarily choose to participate in the system.  Participation or nonparticipation shall be for a minimum of two years, unless, in the event of nonparticipation, the North Carolina Partnership determines that any partnership's annual financial audit reveals serious deficiencies in accounting or contract management.
(6)	The North Carolina Partnership shall develop a formula for allocating direct services funds appropriated for this purpose to local partnerships.  The formula shall incorporate 'full funding' amounts, as described in the performance audit authorized in Section 27A of Chapter 324 of the 1995 Session Laws, for each local partnership as determined by the Department based on its existing funding formula, and shall include a base amount equal to a local partnership's full allocation of direct services funds, or the average allocation for all partnerships when the program is fully funded, whichever is less.  No local partnership, in its first year of receiving direct services funding, shall receive more than seventy-five percent (75%) of its direct services allocation.  The funds remaining after these base allocations are made shall be allocated from all available funds appropriated for direct services in any fiscal year on a pro rata basis to local partnerships which received less than their full allocation.
(7)	The North Carolina Partnership may adjust its allocations on the basis of local partnerships' performance assessments.  In determining whether to adjust its allocations to local partnerships, the North Carolina Partnership shall consider whether the local partnerships are meeting the outcome goals and objectives of the North Carolina Partnership and the goals and objectives set forth by the local partnerships in their approved annual program plans.
   The North Carolina Partnership may use additional factors to determine whether to adjust the local partnerships' allocations. These additional factors shall be developed with input from the local partnerships and shall be communicated to the local partnerships when the additional factors are selected.  These additional factors may include board involvement, family and community outreach, collaboration among public and private service agencies, and family involvement.
		On the basis of performance assessments, local partnerships annually shall be rated 'superior', 'satisfactory', or 'needs improvement'.  Local partnerships rated 'superior' shall receive, to the extent that funds are available, a ten percent (10%) increase in their annual funding allocation.  Local partnerships rated 'satisfactory' shall receive their annual funding allocation.  Local partnerships rated 'needs improvement' shall receive ninety percent (90%) of their annual funding allocation.
		The North Carolina Partnership may contract with outside firms to conduct the performance assessments of local partnerships.
(8)	The North Carolina Partnership shall establish a local partnership advisory committee comprised of 15 members.  Eight of the members shall be chairs of local partnerships' board of directors, and seven shall be staff of local partnerships.  Members shall be chosen by the Chair of the North Carolina Partnership from a pool of candidates nominated by their respective boards of directors.  The local partnership advisory committee shall serve in an advisory capacity to the North Carolina Partnership and shall establish a schedule of regular meetings.  Members shall serve two-year terms and may not serve more than two consecutive terms.  Members shall be chosen from local partnerships on a rotating basis.  The advisory committee shall annually elect a chair from among its members.
(9)	The North Carolina Partnership shall report (i) quarterly to the Joint Legislative Commission on Governmental Operations and (ii) to the General Assembly and the Governor on the ongoing progress of all the local partnerships' work, including all details of the use to which the allocations were put, and on the continuing plans of the North Carolina Partnership and of the Department, together with legislative proposals, including proposals to implement the program statewide."
(c)	G.S. 143B-168.13(a) reads as rewritten:
"(a)	The Department shall:
(1)	Develop a statewide process, in cooperation with the North Carolina Partnership, to select the local demonstration projects. The first 12 local demonstration projects developed and implemented shall be located in the 12 congressional districts, one to a district. The locations of subsequent selections of local demonstration projects shall represent the various geographic areas of the State.
(2)	Develop and conduct a statewide needs and resource assessment every third year, beginning in the 1997-98 fiscal year.  This needs assessment shall be conducted in cooperation with the North Carolina Partnership and with the local partnerships.  The data and findings of this needs assessment shall form the basis for annual program plans developed by local partnerships and approved by the North Carolina Partnership.
(3)	Provide technical and administrative assistance to local partnerships, particularly during the first year after they are selected under this Part to receive State funds. The Department, at any time, may authorize the North Carolina Partnership or a governmental or public entity to do the contracting for one or more local partnerships. After a local partnership's first year, the Department may allow the partnership to contract for itself.
(4)	Adopt, in cooperation with the North Carolina Partnership, any rules necessary to implement this Part, including rules to ensure that State leave policy is not applied to the North Carolina Partnership and the local partnerships.  In order to allow local partnerships to focus on the development of long-range plans in their initial year of funding, the Department may adopt rules that limit the categories of direct services for young children and their families for which funds are made available during the initial year.
	(6)	Annually update its funding formula using the most recent data available.  These amounts shall serve as the basis for determining 'full funding' amounts for each local partnership."
(d)	(1) G.S. 143B-168.14(a) reads as rewritten:
"(a)	In order to receive State funds, the following conditions shall be met:
(1)	Each local demonstration project shall be coordinated by a new local partnership responsible for developing a comprehensive, collaborative, long-range plan of services to children and families in the service-delivery area. The board of directors of each local partnership shall consist of members including representatives of public and private nonprofit health and human service agencies, day care providers, the business community, foundations, county and municipal governments, local education units, and families. The Department, in cooperation with the North Carolina Partnership, may specify in its requests for applications the local agencies that shall be represented on a local board of directors. No existing local, private, nonprofit 501(c)(3) organization, other than one established on or after July 1, 1993, and that meets the guidelines for local partnerships as established under this Part, shall be eligible to apply to serve as the local partnership for the purpose of this Part.
(2)	Each local partnership shall agree to adopt procedures for its operations that are comparable to those of Article 33C of Chapter 143 of the General Statutes, the Open Meetings Law, and Chapter 132 of the General Statutes, the Public Records Law, and provide for enforcement by the Department.
(3)	Each local partnership shall adopt procedures to ensure that all personnel who provide services to young children and their families under this Part know and understand their responsibility to report suspected child abuse, neglect, or dependency, as defined in G.S. 7A-517.
(4)	Each local partnership shall participate in the uniform, standard fiscal accountability plan developed and adopted by the North Carolina Partnership.
(5)	Each local partnership shall have a minimum resident population of 150,000 or represent a minimum of three contiguous counties.  Population estimates of the Office of State Planning shall be used to determine whether the population requirements of this subdivision have been met."
(2)  Multicounty local partnerships existing as of the effective date of this act shall be exempt from the requirements described in subdivision (5) of G.S. 143B-168.14(a).  The North Carolina Partnership shall report to the Joint Legislative Commission on Governmental Operations by January 1, 1997, on its progress towards implementation of regionalization of the local partnerships.  Local partnerships shall be in compliance with this section effective July 1, 1997.
(e)  G.S. 143B-168.15 reads as rewritten:
"§ 143B-168.15.  Use of State funds.
(a)	State funds allocated to local projects for services to children and families shall be used to meet assessed needs, expand coverage, and improve the quality of these services. The local plan shall address the assessed needs of all children to the extent feasible. It is the intent of the General Assembly that the needs of both young children below poverty who remain in the home, as well as the needs of young children below poverty who require services beyond those offered in child care settings, be addressed. Therefore, as local partnerships address the assessed needs of all children, they should devote an appropriate amount of their State allocations, considering these needs and other available resources, to meet the needs of children below poverty and their families.
(b)	Depending on local, regional, or statewide needs, funds may be used to support activities and services that shall be made available and accessible to providers, children, and families on a voluntary basis. Of the funds allocated to local partnerships that are designated by the Secretary for direct services, seventy-five percent (75%) shall be used for any one or more of the following activities and services:
(1)	Child day care services, including:
a.	Child day care subsidies to reduce waiting lists;
b.	Raising the county child day care subsidy rate to the State market rate, if applicable, in return for improvements in the quality of child day care services;
c.	Raising the income eligibility for child day care subsidies to seventy-five percent (75%) of the State median family income;
d.	Start-up funding for child day care providers;
e.	Assistance to enable child day care providers to conform to licensing and building code requirements;
f.	Child day care resources and referral services;
g.	Enhancement of the quality of child day care provided;
h.	Technical assistance for child day care providers;
i.	Quality grants for child day care centers or family child day care homes;
j.	Expanded services or enhanced rates for children with special needs;
k.	Head Start services;
l.	Development of comprehensive child day care services that include child health and family support;
m.	Activities to reduce staff turnover;
n.	Activities to serve children with special needs;
o.	Transportation services related to providing child day care services;
p.	Evaluation of plan implementation of child day care services; and
q.	Needs and resources assessments for child day care services.
(2)	Family- and child-centered services, including early childhood education and child development services, including:
a.	Enhancement of the quality of family- and child-centered services provided;
b.	Technical assistance for family- and child-centered services;
c.	Needs and resource assessments for family- and child-centered services;
d.	Home-centered services; and
e.	Evaluation of plan implementation of family- and child-centered services.
(3)	Other appropriate activities and services for child day care providers and for family- and child-centered services, including:
a.	Staff and organizational development, leadership and administrative development, technology assisted education, and long-range planning; and
b.	Procedures to ensure that infants and young children receive needed health, immunization, and related services.
(c)	Long-term plans for local projects that do not receive their full allocation in the first year, other than those selected in 1993, should consider how to meet the assessed needs of low-income children and families within their neighborhoods or communities. These plans also should reflect a process to meet these needs as additional allocations and other resources are received.
(d)	State funds designated for start-up and related activities may be used for capital expenses or to support activities and services for children, families, and providers. State funds designated to support direct services for children, families, and providers shall not be used for major capital expenses unless the North Carolina Partnership approves this use of State funds based upon a finding that a local partnership has demonstrated that (i) this use is a clear priority need for the local plan, (ii) it is necessary to enable the local partnership to provide services and activities to underserved children and families, and (iii) the local partnership will not otherwise be able to meet this priority need by using State or federal funds available to that local partnership.  The funds approved for capital projects in any two consecutive fiscal years may not exceed ten percent (10%) of the total funds for direct services allocated to a local partnership in those two consecutive fiscal years.
(e)	State funds allocated to local partnerships shall not supplant current expenditures by counties on behalf of young children and their families, and maintenance of current efforts on behalf of these children and families shall be sustained. State funds shall not be applied without the Secretary's approval where State or federal funding sources, such as Head Start, are available or could be made available to that county.
(f)	Local partnerships may carry over funds from one fiscal year to the next, subject to the following conditions:
(1)	Local partnerships in their first year of receiving direct services funding may, on a one-time basis only, carry over any unspent funds to the subsequent fiscal year.
(2)	Any local partnership may carry over any unspent funds to the subsequent fiscal year, subject to the limitation that funds carried over may not exceed the increase in funding the local partnership received during the current fiscal year over the prior fiscal year.
(g)	Not less than thirty percent (30%) of each local partnership's direct services allocation shall be used to expand child day care subsidies.  To the extent practicable, these funds shall be used to enhance the affordability, availability, and quality of child day care services as described in this section.  Notwithstanding any other provision of law, funds allocated for child day care subsidies shall not be considered in calculating the base funding amount for determining the cash and in-kind matching requirements which the North Carolina Partnership or local partnerships may be required to meet."
(f)  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 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 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.
	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 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.
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.
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 $1,700,000 for the 1996-97 fiscal year; 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.  Funds allocated for child day care subsidies are exempt from this matching requirement.  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."
(g)  Article 12I of Chapter 120 of the General Statutes is repealed.
(h)  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."
(i)  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 ongoing evaluation of the Early Childhood Education and Development Initiatives Program.
(j)  In addition to the specific changes set forth in subsections (b) through (i) of this section, the Department of Human Resources, the North Carolina Partnership, and the local partnerships also shall do the following:
(1)	Plan and prepare for effective Early Childhood Initiatives Program implementation in those counties not yet phased into the overall program.
(2)	Maintain the current State level of administrative support for the Early Childhood Initiatives Program.
(3)	Develop a statewide resource and referral database.
(4)	Continue the evaluation of the Early Childhood Initiatives Program by the Frank Porter Graham Child Development Center.
(5)	Conduct a study related to transportation issues as recommended in the independent performance audit and report the results to the Joint Legislative Commission on Governmental Operations by January 1, 1997.
(k) Effective July 1, 1996, there is allocated from the funds appropriated to the Department of Human Resources, Division of Child Development, in this act, the sum of twenty million six hundred fifty thousand dollars ($20,650,000) for the 1996-97 fiscal year to fund this section.  Of these funds, the sum of one hundred seventy-five thousand dollars ($175,000) shall be transferred to the Office of the State Auditor to perform financial and compliance audits of the local partnerships.

PART 25.  DEPARTMENT OF AGRICULTURE

Requested by:   Senator Martin of Pitt
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.

Requested by:   Senators Kerr, Martin of Pitt
REMOVE SUNSET FOR GRAPE GROWERS' EXCISE TAX DISTRIBUTION
Sec. 25.2.  (a)	Section 3 of Chapter 836 of the 1987 Session Laws reads as rewritten:
"Sec. 3.  This act shall become effective August 1, 1987."
(b)	Section 12(b) of Chapter 1036 of the 1987 Session Laws, as amended by Section 176(b) of Chapter 900 of the 1991 Session Laws, is repealed.
(c)	This section is effective upon ratification.

Requested by:   Senator Martin of Pitt
TIMBER RECEIPTS FOR CERTAIN CAPITAL PROJECTS
Sec. 25.3.  The sum of one million three hundred seventy-six thousand dollars ($1,376,000) shall be transferred from the Department of Agriculture's timber sales capital improvement account, established pursuant to G.S. 146-30, to the Department of Agriculture for the 1996-97 fiscal year and shall be used for the following capital improvement projects at research stations and State farms:
(1)	$387,400 for an addition to the swine facility at the Cherry Farm Unit.
(2)	$126,700 for a farm equipment shelter at the Cherry Farm Unit.
(3)	$329,300 for a shop and storage facility at the Upper Coastal Plain Station.
(4)	$106,900 for a dairy milking parlor at the Caswell Farm Unit.
(5)	$132,300 for research plot land at the Upper Mountain Station.
(6)	$150,000 for an irrigation system at the Mountain Station.
(7)	$143,400 for an office building at the Oxford Station.

PART 26.  DEPARTMENT OF COMMERCE

Requested by:   Senator Martin of Pitt
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:   Senator Martin of Pitt
WORLD TRADE CENTER FUNDS
Sec. 26.1.  Of the funds appropriated in this act to the Department of Commerce, the sum of two hundred thousand dollars ($200,000) 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:   Senator Martin of Pitt
FUNDS FOR ECONOMIC DEVELOPMENT
Sec. 26.2.  Of the funds appropriated in this act to the Department of Commerce, the sum of one million five hundred twenty-five thousand dollars ($1,525,000) for the 1996-97 fiscal year shall be allocated as follows:
(1)	$275,000 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)	$245,000 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)	$730,000 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)	$275,000 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:   Senator Martin of Pitt
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:   Senator Martin of Pitt
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 two million seven hundred fifty thousand dollars ($2,750,000) 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)	$1,350,000 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.	$900,000 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.	$250,000 for direct grants to local community development organizations that have not previously received State funds,
c.	$150,000 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.	$50,000 to the Rural Economic Development Center, Inc. to be used to cover expenses in administering this section;
	(3)	$250,000 to the Microenterprise Loan Program to support the loan fund and operations of the Program;
(4)	$150,000 allocated as follows:
a.	$25,000 to the Opportunities Industrialization Center of Wilson, Inc., for its ongoing job training programs;
b.	$25,000 to Opportunities Industrialization Center, Inc., in Rocky Mount, for its ongoing job training programs;
c.	$25,000 to Pitt-Greenville Opportunities Industrialization Center, Inc. for its ongoing job training programs; and
d.	$25,000 to the Opportunities Industrialization Center of Lenoir, Greene, and Jones Counties; and
e.	$50,000 to the Opportunities Industrialization Center of Elizabeth City, Inc.
	Funds allocated pursuant to sub-subdivisions a. through d. of this subdivision shall be in addition to funds allocated pursuant to Section 25.12 of Chapter 324 of the 1995 Session Laws.  Reporting requirements of that section shall apply to all funds allocated under this subdivision; and
(5)	$1,000,000 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.  Of the funds allocated under this subdivision, the sum of up to one hundred thousand dollars ($100,000) shall be used to address potential and actual threats to the public health resulting from wastewater system problems.
					(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."

Requested by:   Senator Martin of Pitt
INDUSTRIAL DEVELOPMENT FUND UTILITY ACCOUNT
Sec. 26.5. (a)	 Of the funds appropriated in this act to the Department of Commerce for the 1996-97 fiscal year, the sum of four million dollars ($4,000,000) shall be deposited to and used for the Utility Account established under subsection (b) of this section.
(b)	There is created within the Industrial Development Fund a special account to be known as the Utility Account to provide funds to assist the local government units of the 10 most severely distressed counties of the State, as determined in accordance with G.S. 105-130.40(c) or G.S. 105-151.17(c), in creating jobs in manufacturing and processing, warehousing and distribution, and data processing, as defined in the Standard Industrial Classification Manual issued by the United States Bureau of the Census.  The Department of Commerce shall adopt rules for the administration of the program.  Except as otherwise provided in this subsection, these rules shall be consistent with the rules adopted with respect to the Industrial Development Fund.  The rules shall provide that the funds in the Utility Account may be used only for construction of or improvements to new or existing water, sewer, gas, or electrical utility distribution lines or equipment for existing or new or proposed industrial buildings to be used for industrial operations in manufacturing or processing, warehousing or distribution, or data processing.  To be eligible for funding, the water, sewer, gas, or electrical utility lines or facilities shall be located on the site of the building or, if not located on the site, shall be directly related to the operation of the specific industrial activity.  There shall be no maximum funding amount per new job to be created or per project.
(c)	In addition to the reporting requirements of G.S. 143B-437A, the Department of Commerce shall report annually to the General Assembly concerning the payments made from the Utility Account and the impact of the payments on job creation in the State. The Department of Commerce shall also report quarterly to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division on the use of the moneys in the Utility Account including information regarding to whom payments were made, in what amounts, and for what purposes.

Requested by:   Senator Martin of Pitt
TECHNOLOGICAL DEVELOPMENT AUTHORITY FUNDS/INVESTMENT
Sec. 26.6.  G.S. 96-5 is amended by adding the following new subsection to read:
"( g)	Notwithstanding subsection (f) of this section, the State Treasurer may invest not more than a total of twenty-five million dollars ($25,000,000) of funds in the Employment Security Commission Reserve Fund established under subsection (f) of this section in securities issued by the North Carolina Technological Development Authority, Inc., the proceeds for which are directed to support investment in venture capital funds. The State Treasurer shall report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division on October 1 and March 1 of each fiscal year on investments made pursuant to this subsection."

Requested by:   Senator Martin of Pitt
CENTER FOR COMMUNITY SELF-HELP FUNDS
Sec. 26.7.  (a)	Of the funds appropriated in this act to the Department of Commerce, the sum of three million dollars ($3,000,000) for the 1996-97 fiscal year shall be allocated to the Center for Community Self-Help to further a statewide program of lending for home ownership throughout North Carolina.  These funds will be leveraged on a ten-to-one basis, generating at least ten dollars ($10.00) of nontraditional home loans for every one dollar ($1.00) of State funds.  Payments of principal shall be available for further loans or loan guarantees.
(b)	The Center for Community Self-Help shall submit, within 180 days after the close of its fiscal year, audited financial statements to the State Auditor.  All records pertaining to the use of State funds shall be made available to the State Auditor upon request.  The Center for Community Self-Help shall make quarterly reports on the use of State funds to the State Auditor, in form and format prescribed by the State Auditor or his designee.  The Center for Community Self-Help shall make a written report by May 1 of each year for the next three years to the General Assembly on the use of the funds allocated under this section.
(c)	The Center for Community Self-Help shall report to the Joint Legislative Commission on Governmental Operations, the House Appropriations Subcommittee on Natural and Economic Resources, the Senate Appropriations Committee on Natural and Economic Resources, and the Department of Commerce on a quarterly basis for the next three years.
(d)	The Office of the State Auditor may conduct an annual end-of-year audit of the revolving fund for economic development lending created by this appropriation for each year of the life of the revolving fund.
(e)  If the Center for Community Self-Help dissolves, the corporation shall transfer the remaining assets of the revolving fund to the State and shall refrain from disposing of the revolving fund assets without approval of the State Treasurer.
(f)  The Department of Commerce shall disburse this appropriation within 15 working days of the receipt of a request for the funds from the Center for Community Self-Help.  The request shall include a commitment of the leveraged funds by the Center for Community Self-Help or its affiliates.

Requested by:   Senator Martin of Pitt
RURAL TOURISM DEVELOPMENT FUNDS
Sec. 26.8. (a) Of the funds appropriated in this act from the General Fund to the Department of Commerce for the 1996-97 fiscal year, the sum of two hundred thousand dollars ($200,000) shall be used for the Rural Tourism Development Grant Program.  The Department shall establish and implement this Program to provide grants to local governments and nonprofit organizations to encourage the development of new tourism projects and activities in rural areas of the State.  Grant funds shall not be allocated for projects or activities eligible to receive funds from the Department's Tourism Promotion Grant Program.  The Secretary shall establish guidelines for eligibility to receive grants under the Rural Tourism Development Grant Program.  No recipient or new tourism project shall receive a total of more than fifty thousand dollars ($50,000) of these grant funds for the 1996-97 fiscal year.
(b)	Of the funds appropriated in this act from the General Fund to the Department of Commerce for the 1996-97 fiscal year, the sum of eight thousand dollars ($8,000) shall be used to fund the Babe Ruth Regional All-Star Games.

Requested by:   Senator Martin of Pitt
FUNDS FROM WORKER TRAINING TRUST FUND
Sec. 26.9.  Notwithstanding G.S. 96-5(f), there is appropriated from the Worker Training Trust Fund to the following agencies the following sums for the 1996-97 fiscal year for the following purposes:
(1)	$218,500 to the Department of Commerce to be used for a computer system upgrade in the Division of Employment and Training in order to meet federal reporting requirements under the Job Training Partnership Act;
(2)	$210,000 to the Department of Labor for a computer upgrade in the apprenticeship tracking system in order to meet federal reporting requirements under the Federal Apprenticeship Program;
(3)	$90,000 to the Department of Labor to establish nationally certified dietary managers pilot projects.  These projects will offer training programs to meet new federal regulations requiring a certified dietary manager on-site at every residential care facility in the State; and
(4)	$100,000 to the Department of Community Colleges for a training program in entrepreneurial skills to be operated by North Carolina REAL Enterprises.  Funds appropriated under this subdivision are in addition to those appropriated for the same purpose under Section 25.9(d)(6) of Chapter 507 of the 1995 Session Laws.

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

Requested by:   Senator Martin of Pitt
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 four million three hundred thousand dollars ($4,300,000) 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:   Senator Martin of Pitt
AGRICULTURE COST SHARE FUNDS FOR AGRICULTURE 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 four million dollars ($4,000,000) for the 1996-97 fiscal year shall be used to assist existing animal operations in obtaining approved animal waste management plans and farm operations in installing best management practices for those agriculture 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:   Senator Martin of Pitt
STATEWIDE TECHNICAL ASSISTANCE FOR ANIMAL WASTE MANAGEMENT PLANS
Sec. 27.2.   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 one hundred sixty-seven thousand five hundred dollars ($1,167,500) for the 1996-97 fiscal year shall be used to provide technical assistance to operators in the process of obtaining approved animal waste management plans for animal operations.  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:   Senator Martin of Pitt
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 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:   Senator Martin of Pitt
WETLANDS RESTORATION PROGRAM/FUNDS
Sec. 27.4. (a)	Article 21 of Chapter 143 of the General Statutes 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, maintenance, restoration, enhancement, and creation of wetland and riparian resources 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 and perpetual maintenance 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.
(8)	Oversight of private wetland mitigation banks to facilitate the components of the Wetlands Restoration Program.
"§ 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 basinwide plans 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 nonprofit 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.
(f)	Mitigation Banks. – State agencies and private mitigation banking companies shall demonstrate that adequate, dedicated financial surety exists to provide for the perpetual land management and hydrological maintenance of lands acquired by the State as mitigation banks, or proposed to the State as privately operated and permitted mitigation banks.
"§ 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, perpetual maintenance, 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.
(c)	Accounting of Payments. – The Department shall provide an itemized statement that accounts for each payment into the Fund.  The statement shall include the expenses and activities financed by the payment.
"§ 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) G.S. 143B-282(a)(1) is amended by adding the following:
"u.	To administer the State's authority under 33 USC § 1341 of the federal Clean Water Act."
(c) The Department of Environment, Health, and Natural Resources is directed to negotiate and enter into a Memorandum of Agreement with the United States Army Corps of Engineers regarding the restoration, creation, enhancement, and preservation of wetlands and the compensatory mitigation required of permit applicants under 33 U.S.C. § 1344.  The purpose of the Memorandum of Agreement is to ensure that the State's implementation of the Wetlands Restoration Program with regard to mitigation of wetlands satisfies the United States Army Corps of Engineers and that the standards developed by the State to which the State's and other mitigation banks must adhere is acceptable to the Corps for purposes of section 404 mitigation requirements.
(d) Of the funds appropriated to the Department of Environment, Health, and Natural Resources for the 1996-97 fiscal year the sum of two million dollars ($2,000,000) in recurring funds shall be credited to the Wetlands Restoration Fund.  
(e) Of the funds appropriated to the Department of Environment, Health, and Natural Resources, the sum of five hundred thousand dollars ($500,000) in recurring funds for the 1996-97 fiscal year shall be allocated to support eight staff positions and for administrative and other expenses to implement the Wetlands Restoration Program.

Requested by:   Senator Martin of Pitt
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 four hundred thousand dollars ($400,000) for the 1996-97 fiscal year shall be used by the Department to contract with the Board of Governors of The University of North Carolina for the North Carolina Agricultural Research Service at North Carolina 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: Senator Martin of Pitt
LOWER NEUSE RIVER BASIN ASSOCIATION FUNDS
Sec. 27.8.  (a)	Of the funds appropriated by this act to the Lower Neuse River Basin Association for the 1996-97 fiscal year, the sum of two million dollars ($2,000,000) shall be allocated as grants to local government units in the Neuse River Basin to assist those local government units in fulfilling their obligations under the Neuse River Nutrient Sensitive Waters Management Strategy plan adopted by the Environmental Management Commission.  The funds are contingent upon the adoption of the  plan by the Environmental Management Commission.  If the Environmental Management Commission fails to adopt the plan by June 30, 1997, then the funds shall revert to the General Fund.
(b)	The Lower Neuse River Basin Association shall report by October 15, 1996, and quarterly thereafter to the Environmental Review Commission regarding the grants awarded and the effectiveness of the projects funded by those grants in reducing the pollution in the Neuse River Basin.  The Lower Neuse River Basin Association shall also send a written copy of its report to the Fiscal Research Division of the General Assembly.

Requested by:   Senator Martin of Pitt
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:   Senator Martin of Pitt
TRANSFER THE GEODETIC SURVEY SECTION TO THE OFFICE OF STATE PLANNING
Sec. 27.10.  The 22 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:   Senator Martin of Pitt
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:   Senator Martin of Pitt
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:   Senator Martin of Pitt
RESERVE FOR PERMITTING AND INSPECTING ANIMAL WASTE MANAGEMENT SYSTEMS
Sec. 27.14.  (a)	Of the funds appropriated in this act to the Department of Environment, Health, and Natural Resources, the sum of one million eight hundred fifty thousand seven hundred sixty-six dollars ($1,850,766) shall be placed in a reserve to be used to establish and support positions to conduct permitting, inspection, and enforcement activities for animal waste management systems in the event the 1995 General Assembly enacts legislation that establishes a permitting or inspection program for animal waste management systems.  These funds shall be used as follows:
(1)	$749,473 in recurring funds and $77,000 in nonrecurring funds shall be used to establish and support 14 positions in the Division of Soil and Water Conservation; and
(2)	$891,293 in recurring funds and $133,000 in nonrecurring funds shall be used to establish and support 18 positions in the Division of Environmental Management.
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.
(b)	No later than October 15, 1996, and quarterly thereafter, the Department of Environment, Health, and Natural Resources shall submit status reports to the Environmental Review Commission and the Fiscal Research Division.  Each report shall include, but not be limited to:
(1)	The number of permits for animal waste management systems, itemized by type of animal subject to such permits, issued since the last report and a total for that calendar year.
(2)	The number of operations reviews of animal waste management systems that the Division of Soil and Water Conservation has conducted since the last report and a total for that calendar year.
(3)	The number of reinspections associated with operations reviews conducted by the Division of Soil and Water Conservation since the last report and a total for that calendar year.
(4)	The number of compliance inspections of animal waste management systems that the Division of Environmental Management has conducted since the last report and a total for that calendar year.
(5)	The number of follow-up inspections associated with compliance inspections conducted by the Division of Environmental Management since the last report and a total for that calendar year.
(6)	The average length of time for each category of reviews and inspections under subdivisions (2) through (4) of this subsection.
(7)	The number of violations found during each category of review and inspection under subdivisions (2) through (4) of this subsection, the status of enforcement actions taken and pending, and the penalties imposed, collected, and in the process of being negotiated for each such violation.
(c)	The information to be included in the reports pursuant to subsection (b) of this section shall be itemized by each regional office of the Department, with totals for the State indicated.

Requested by:   Senator Martin of Pitt
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:   Senator Martin of Pitt
BEAVER DAMAGE CONTROL FUNDS
Sec. 27.16.  (a)	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 program to control beaver damage on private and public lands. Anson, Bladen, Brunswick, Carteret, Chatham, Chowan, Craven, Columbus, Cumberland, Duplin, Edgecombe, Franklin, Granville, Greene, Halifax, Harnett, Hertford, Johnston, Jones, Lee, Lincoln, Martin, Nash, Onslow, Pamlico, Pender, Pitt, Robeson, Sampson, Scotland, Vance, Warren, Washington, Wayne, and Wilson Counties shall participate in the 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 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 January 15, 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 March 15, 1997, the Wildlife Resources Commission shall present its plan in a report to the House Appropriations Subcommittee on Natural and Economic Resources, the Senate Appropriations Committee on Natural and Economic Resources, and the Fiscal Research Division."
(b)	Subsection (c) of Section 69 of Chapter 1044 of the 1991 Session Laws reads as rewritten:
"(c)	The Wildlife Resources Commission shall implement the program, and may enter a cooperative agreement with the Animal Damage Control Division of the Animal and Plant Health Inspection Service, United States Department of Agriculture, to accomplish the program."
(c)	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."
(d)	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 four hundred fifty thousand dollars ($450,000) for the 1996-97 fiscal year to provide the State share necessary to continue the beaver damage control 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 Anson, Bladen, Brunswick, Carteret, Chatham, Chowan, Craven, Columbus, Cumberland, Duplin, Edgecombe, Franklin, Granville, Greene, Halifax, Harnett, Hertford, Johnston, Jones, Lee, Lincoln, Martin, 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 participating counties.  Counties participating in this program shall make a commitment of their local matching funds to the Wildlife Resources Commission no later than September 30 of that fiscal year."

Requested by:   Senator Martin of Pitt
1995-96 BEAVER DAMAGE CONTROL FUNDS REVERT
Sec. 27.16A.  The sum of one hundred fifty thousand dollars ($150,000) that was appropriated to the Wildlife Resources Commission for the 1995-96 fiscal year to provide the State share for beaver damage control pursuant to Section 27.3 of Chapter 769 of the 1993 Session Laws and that was designated as recurring funds shall revert to the General Fund on June 30, 1996.

Requested by:   Senator Martin of Pitt
PILOT PRIVATIZATION PROJECT FOR CONSTRUCTION OF FORESTRY BUILDINGS
Sec. 27.18.  Of the funds appropriated in this act to the Department of Environment, Health, and Natural Resources, the sum of one hundred fifty thousand dollars ($150,000) for the 1996-97 fiscal year shall be used for a pilot project whereby the Department shall enter into a contract for the construction of a forestry headquarters building.  It is the intent of the General Assembly that the General Assembly shall not appropriate additional funds for this pilot project and that the county in which the forestry headquarters building is to be located shall be responsible for all costs related to the construction of this building in excess of one hundred fifty thousand dollars ($150,000).  No later than December 15, 1996, and again no later than April 15, 1997, the Department shall report to the General Assembly and the Fiscal Research Division on the progress of this pilot project and shall include in both reports the Department's findings and recommendations on the desirability and feasibility of expanding this project to the construction of forestry buildings in other counties.

Requested by:   Senator Martin of Pitt
FOREST RESOURCES NURSERY PROGRAM FUNDS
Sec. 27.19.  The Division of Forest Resources, Department of Environment, Health, and Natural Resources, may retain and use any funds derived from the taking of nursery acreage at Claridge State Forest Nursery near Goldsboro in Wayne County due to the construction of the Highway 70 Bypass.  These funds shall remain in a nonreverting fund in the Department to be used to cover the cost associated with relocating nursery fields and seed orchards.

Requested by: Senators Ballance, Kerr
WARREN COUNTY FORESTRY HEADQUARTERS CONSTRUCTION AND EQUIPMENT PURCHASE
Sec. 27.19A.  Notwithstanding any other provision of law, funds remaining the Warren County Forestry Capital Project Code 49216-4630 in the amount of eight thousand two hundred fifty dollars and sixty-nine cents ($8,250.69) and an uncommitted balance of twenty-one thousand one hundred sixty-seven dollars ($21,167) in the 1995 Reserve for Forestry Projects shall be used for construction of a storage building and purchase of equipment at the Warren County Forestry Headquarters.

Requested by:   Senators Perdue, Martin of Pitt
MARINE FISHERIES DOCK MAY BE USED BY OTHER AGENCIES
Sec. 27.20.  The Division of Marine Fisheries' Morehead City Dock Facility shall be available for use by the University of North Carolina Institute of Marine Sciences, the North Carolina Sea Grant College Program, and Carteret Community College for their programs and activities.

Requested by:   Senator Martin of Pitt
ACCOUNTABILITY FOR CERTAIN STATE AGRICULTURE COST SHARE FUNDING/RAISE CAP/ADD ELIGIBLE PROJECTS
Sec. 27.21.  (a)	G.S. 143-215.74(b) reads as rewritten:
	"(b)	The program shall be subject to the following requirements and limitations:
(1)	The purpose of the program shall be to reduce the input of agricultural nonpoint source pollution into the water courses of the State.
(2)	The program shall initially include the present 16 nutrient sensitive watershed counties and 17 additional counties.
(3)	Subject to subdivision (7) of this subsection, priority designations for inclusions in the program shall be under the authority of the Soil and Water Conservation Commission and the Commission.  The Soil and Water Conservation Commission shall retain the authority to allocate the cost share funds.
(4)	Areas shall be included in the program as the funds are appropriated and the technical assistance becomes available from the local Soil and Water Conservation District.
(5)	Funding may be provided to assist practices including conservation tillage, diversions, filter strips, field borders, critical area plantings, sediment control structures, sod-based rotations, grassed waterways, strip-cropping, terraces, cropland conversion to permanent vegetation, grade control structures, water control structures, emergency spillways, riparian buffers or equivalent controls, odor control best management practices, insect control best management practices, and animal waste managements systems and application.
(6)	State funding shall be limited to seventy-five percent (75%) of the average cost for each practice with the assisted farmer providing twenty-five percent (25%) of the cost (which may include in-kind support) with a maximum of seventy-five thousand dollars ($75,000) to each applicant.
(7)	Priority designation for inclusion in the program for State funding shall be given to projects that improve water quality.  To be eligible for cost share funds under this subdivision, a project shall be evaluated before funding is awarded and after the project is completed to determine the impact on water quality."
(b)	G.S. 143-215.74 is amended by adding a new subsection to read:
"( e)	The Soil and Water Conservation Commission shall report no later than January 31, 1997, and annually thereafter to the Environmental Review Commission and the Fiscal Research Division.  This report shall include a list of projects that received State funding pursuant to the program, the results of the evaluations conducted pursuant to subdivision (7) of subsection (b) of this section, findings regarding the effectiveness of each of these projects to accomplish its primary purpose, and any recommendations to assure that State funding is used in the most cost-effective manner and accomplishes the greatest improvement in water quality."
(c)	The Division of Soil and Water Conservation, Department of Environment, Health, and Natural Resources, shall report to the Environmental Review Commission no later than January 1, 1997, regarding the desirability of requiring each applicant for State funding under the Agriculture Cost Share Program for Nonpoint Source Pollution Control under Part 9 of Article 21 of Chapter 143 of the General Statutes to submit a nutrient management plan.
(d)	This section applies to State cost share funds expended on or after the effective date of this act.

Requested by:   Senator Martin of Pitt
PROHIBIT TRANSFER OF POSITIONS FROM SOIL AND WATER CONSERVATION TO ENVIRONMENTAL MANAGEMENT
Sec. 27.22.  The Department of Environment, Health, and Natural Resources shall not transfer any positions established in this act for the Division of Soil and Water Conservation to the Division of Environmental Management.

Requested by:   Senator Martin of Pitt
ADOPT-A-BEACH
Sec. 27.23. (a) Chapter 143 of the General Statutes is amended by adding a new Article to read:
"ARTICLE 69.
"Adopt-A-Beach Program.
"§ 143-660.  Definitions.
The following definitions apply in this Article:
(1)	Department. – The Department of Environment, Health, and Natural Resources.
(2)	Program. – Adopt-A-Beach Program established by this Article.
(3)	Trash. – Debris not natural to the coastal environment such as plastic bags, aluminum, glass, and paper products.  The term does not include indigenous materials such as driftwood and seaweed.
"§ 143-661.  Adopt-A-Beach Program; established; purposes.
The Adopt-A-Beach Program is established within the Department of Environment, Health, and Natural Resources.  The purpose of the Program is twofold:  (i)	to educate citizens and make them more aware of the need to keep the State's coastline clean and free of trash, and (ii) to generate data on the volume and contents of beach pollution.
"§ 143-662.  Adopt-A-Beach Program; pilot program; expansion of program reporting requirement.
(a)	Initially, the Department shall select five improved ocean accesses and two sound-side accesses to be cleaned up and maintained on a monthly basis.  Each access shall be assigned by the Department to an organization or business applying to the Department to participate in the Program.  Participants in the Program shall be recognized at their selected access by the placement of an 8" x10"sign bearing the Adopt-A-Beach Program name, sponsor, and participant.  The Program shall be expanded to accommodate increased participation as appropriate.
(b)	The Department shall report to the Environmental Review Commission by March 15, 1997, and annually thereafter regarding its progress in implementing the Program.
"§ 143-663.  Rule-making authority.
The Department may adopt rules to implement this Article."
(b)	Of the funds appropriated by this act for the 1996-97 fiscal year to the Department of Environment, Health, and Natural Resources, the sum of thirty thousand dollars ($30,000) shall be allocated to implement this section.

Requested by:   Senator Martin of Pitt
CITIZENS MONITORING PROGRAM
Sec. 27.24.  (a)	Article 21 of Chapter 143 of the General Statutes is amended by adding a new section to read:
"§ 143-215A.  Citizen Water Quality Monitoring Program.
The Department shall establish the Citizen Water Quality Monitoring Program to provide an avenue for individuals to play a role in and to take personal responsibility for protecting the State's water quality.  The goals of the Citizen Water Quality Monitoring Program are to coordinate monitoring activities among volunteers by river basins; to provide adequate training of volunteers and quality assurance of all data collected; to establish a comprehensive data collection system that supplements the State's data; to incorporate the data collected by volunteers into the State's overall management of water quality; and to provide access to the data to the public through a centralized database located in the Center for Marine Sciences and Technology."
(b)	Of the funds appropriated in this act to the Department of Environment, Health, and Natural Resources for the 1996-97 fiscal year, the sum of four hundred thousand  dollars ($400,000) in recurring funds shall be allocated by the Department of Environment, Health, and Natural Resources to implement and cover operating costs of the Citizen Water Quality Monitoring Program and to provide three staff positions for the Citizen Water Quality Monitoring Program.

Requested by:   Senator Martin of Pitt
WATER RESOURCES DEVELOPMENT PROJECTS FUNDS
Sec. 27.25.  (a)	Of the funds appropriated in this act to the Department of Environment, Health, and Natural Resources for the 1996-97 fiscal year, the sum of four million five hundred thousand dollars ($4,500,000) shall be used for water resources development projects.  The Department shall allocate funds for the following projects whose estimated costs are as indicated:
(1)	Jordan Lake Water Supply Repayment	$130,000
(2)	Wilmington Harbor Maintenance Dredging	575,000
(3)	Morehead City Harbor Maintenance	50,000
		Dredging
(4)	Wanchese Channel Maintenance Dredging	100,000
(5)	Aquatic Plant Control (statewide,	200,000
	 including Lake Gaston)
(6)	Wilmington Harbor Anchorage Basin Widener	400,000
(7)	Cape Fear - Northeast Cape Fear Deepening	530,000
(8)	North & Manteo Channel Maintenance	400,000
	 Dredging
(9)	State - Local Projects	380,000
(10)	New Hanover County Spoil Disposal	125,000
(11)	Beaufort Harbor	80,000
(12)	Rollinson Channel Maintenance, Dare County	400,000
(13)	Far Creek Channel Maintenance, Hyde County	280,000
(14)	Currituck Sound Flow Study	100,000
(15)	Emergency Flood Control Projects 	75,000
	 (Section 14)
(16)	Corps of Engineers Feasibility Studies	100,000
(17)	Planning Assistance to Communities	75,000
(18)	Walter Slough Dredging	   500,000
        TOTAL	$4,500,000
(b)	Where the actual costs are different from the estimated costs under subsection (a) of this section, the Department may adjust the allocations among projects as needed.  If any projects listed in subsection (a) of this section are delayed and the budgeted State funds cannot be used during the 1996-97 fiscal year, or if the projects listed in subsection (a) of this section are accomplished at a lower cost, the Department may use the resulting fund availability to fund any of the following:
(1)	Corps of Engineers project feasibility studies.
(2)	Corps of Engineers projects whose schedules have advanced and require State matching funds in fiscal year 1996-97.
(3)	State-local Water Resources Development Projects.
Funds not expended or encumbered for these purposes shall revert to the General Fund at the end of the 1997-98 fiscal year.
(c)	The Department shall make quarterly reports on the use of these funds to the Joint Legislative Commission on Governmental Operations, the Fiscal Research Division, and the Office of State Budget and Management.  Each report shall include all of the following:
(1)	All projects listed in this section.
(2)	The estimated cost of each project.
(3)	The date that work on each project began or is expected to begin.
(4)	The date that work on each project was completed or is expected to be completed.
(5)	The actual cost of each project.
The quarterly reports shall also show those projects advanced in schedule, those projects delayed in schedule, and an estimate of the amount of funds expected to revert to the General Fund.

Requested by:   Senator Martin of Pitt
STRAIGHT PIPE ELIMINATION AMNESTY PROGRAM
Sec. 27.26.  (a) The Department of Environment, Health, and Natural Resources shall establish a program for the elimination of domestic sewage or wastewater discharges, both direct (straight pipes) and from overland flow of failing septic systems.  The initial focus of the program shall include three components:  (i) the identification and elimination of domestic sewage discharges into streams proposed to be used or currently used for public water supplies, (ii) an amnesty period to end December 31, 1997, during which violations of State rules and laws regarding domestic sewage and wastewater discharges identified as a result of this program may be reported and addressed without incurring legal consequences, and  (iii) a public education effort regarding the program and the amnesty period.
(b)	Of the funds appropriated in this act to the Department of Environment, Health, and Natural Resources, the sum of one hundred seventeen thousand five hundred dollars ($117,500) in recurring funds and the sum of twelve thousand five hundred dollars ($12,500) in nonrecurring funds shall be allocated for two staff positions with the responsibility for carrying out the program developed by the Department of Environment, Health, and Natural Resources pursuant to this section and for other operating costs of implementing this section.

Requested by:   Senators Odom, Martin of Pitt
DEVELOP RIPARIAN BUFFERS
Sec. 27.27.  (a)	G.S. 143-214.7 reads as rewritten:
"§ 143-214.7.  Stormwater runoff rules and programs.
(a)	Policy, Purpose and Intent. – The Commission shall undertake a continuing planning process to develop and adopt a statewide plan with regard to establishing and enforcing stormwater rules for the purpose of protecting the surface waters of the State.  It is the purpose and intent of this section that, in developing stormwater runoff rules and programs, the Commission may utilize stormwater rules established by the Commission to protect classified shellfish waters, water supply watersheds, and outstanding resource waters; and to control stormwater runoff disposal in coastal counties and other nonpoint sources.  Further, it is the intent of this section that the Commission phase in the stormwater rules on a priority basis for all sources of pollution to the water.  The plan shall be applied evenhandedly throughout the State to address the State's water quality needs.  The Commission shall continually monitor water quality in the State and shall revise stormwater runoff rules as necessary to protect water quality.  As necessary, the stormwater rules shall be modified to comply with federal regulations.
(b)	The Commission shall be authorized and directed to implement stormwater runoff rules and programs for point and nonpoint sources on a phased-in statewide basis.  The Commission shall consider standards and best management practices for the protection of the State's water resources in the following order of priority:
(1)	Classified shellfish waters;
(2)	Water supply watersheds;
(3)	Outstanding resource waters;
(4)	High quality waters; and
(5)	Other waters where the Commission finds control of stormwater is needed to meet the purposes of this Article.  Provided however, that prior to implementation of rules under this subdivision (5), the Commission shall consult with the Environmental Review Commission.
(c)	Chapter 150B of the General Statutes governs adoption of rules by the Commission. 
(d)	For purposes of this subsection, 'nutrient-sensitive waters (NSW)' means any of the waters of the State that have been classified as nutrient sensitive by the Commission in rules adopted pursuant to G.S. 143-214.1.  The Commission shall adopt rules to establish a matrix of minimum forested or equivalent riparian buffers to protect water quality and to restore impaired water quality in nutrient-sensitive waters.  Buffers may be used to filter pollutants such as sediment, nutrients, and pesticides in surface water runoff and subsurface flows.  To the maximum extent practical, existing buffers should be maintained, and where buffers do not exist, a proactive program to restore those buffers should be initiated.  In developing these rules, the Commission shall provide a procedure whereby a landowner may seek a determination on a site-specific basis that alternative buffers or other appropriate water quality management measures will provide an equivalent or greater protection and restoration of water quality than the buffer that would be required by rule.  In developing the matrix of buffers and site-specific alternatives, the Commission shall incorporate regional variations in soil types and in topography and shall be subject to the following considerations:
(1)	Appropriate riparian buffers may be required on both sides of public surface water bodies.
(2)	Riparian buffers may be modified based on impacts on existing development, crop allotments, maintenance of drainage features and diminimus activities which would not otherwise compromise the integrity of the water quality, and may include alternatives such as implementation of best management practices or nutrient management plans designed to reduce water pollution and protect water quality.
(3)	Riparian buffers shall not be required along ditches which do not discharge or overflow into State waters designated as solid blue lines on U.S. Geological Survey Topographic Maps.
(4)	Regional alternatives to the buffer requirement may be developed in cooperation with the Directors of the Division of Environmental Management and the Division of Soil and Water Conservation of the Department, the Cooperative Extension Service, and the Natural Resources Conservation Service to provide options for landowners in lieu of or in conjunction with site-specific riparian buffers."
(b)	A unit of local government may submit a written request to the Department to implement and manage the riparian buffer requirements within their jurisdiction subject to terms provided by the Department.
(c)	Of the funds appropriated by this act to the Department of Environment, Health, and Natural Resources, the sum of twenty-five thousand dollars ($25,000) shall be allocated to the Board of Governors for the Sea Grant College Program of North Carolina State University to be used as matching funds to develop a matrix to determine appropriate buffers to protect water quality.
(d)	The Commission may adopt temporary rules to implement the provisions of this act.

Requested by:   Senator Martin of Pitt
CLEAN WATER MANAGEMENT TRUST FUND
Sec. 27.28.  (a) Chapter 113 of the General Statutes is amended by adding a new Article to read:
"ARTICLE 13A.
"Clean Water Management Trust Fund.
"§ 113-145.1.  Purpose.
The General Assembly recognizes that a critical need exists in this State to clean up pollution in the State's surface waters and to protect and conserve those waters that are not yet polluted.  The task of cleaning up polluted waters and protecting the State's water resources is multifaceted and requires different approaches that take into account the problems, the type of pollution, the geographical area, and the recognition that the hydrological and ecological values of each resource sought to be upgraded, conserved, and protected are unique.
It is the intent of the General Assembly that moneys from the Fund created under this Article shall be used to help finance projects that specifically address water pollution problems and focus on upgrading surface waters, eliminating pollution, and protecting and conserving unpolluted surface waters, including urban drinking water supplies.  It is the further intent of the General Assembly that moneys from the Fund also be used to build a network of riparian buffers and greenways for environmental, educational, and recreational benefits.  While the purpose of this Article is to focus on the cleanup and prevention of pollution of the State's surface waters and the establishment of a network of riparian buffers and greenways, the General Assembly believes that the results of these efforts will also be beneficial to wildlife and marine fisheries habitats.
"§ 113-145.2.  Definitions.
As used in this Article:
(1)	Council. – The advisory council for the Clean Water Management Trust Fund.
(2)	Economically Distressed Units of Local Government. – Counties designated as economically distressed by the Secretary of Commerce under G.S. 143B-437A and any cities located in those counties.
(3)	Fund. – The Clean Water Management Trust Fund created pursuant to this Article.
(4)	Land. – Real property and any interest in, easement in, or restriction on real property.
(5)	Trustees. – The trustees of the Clean Water Management Trust Fund.
"§ 113-145.3.  Clean Water Management Trust Fund:  established.
(a)	Fund Established. – There is established a Clean Water Management Trust Fund in the State Treasurer's Office that shall be used to finance projects to clean up or prevent surface water pollution in accordance with this Article.
(b)	Fund Earnings, Assets, and Balances. – The  State Treasurer shall hold the Fund separate and apart from all other moneys, funds, and accounts.  Investment earnings credited to the assets of the Fund shall become part of the Fund.  Any balance remaining in the Fund at the end of any fiscal year shall be carried forward in the Fund for the next succeeding fiscal year.  Payments from the Fund shall be made on the warrant of the Chair of the Board of Trustees.
(c)	Fund Purposes. – Moneys from the Fund may be used for any of the following purposes:
(1)	To acquire land for riparian buffers for the purposes of providing environmental protection for surface waters and urban drinking water supplies and establishing a network of riparian greenways for environmental, educational, and recreational uses.
(2)	To acquire conservation easements or other interests in real property for the purpose of protecting and conserving surface waters and urban drinking water supplies.
(3)	To coordinate with other public programs involved with lands adjoining water bodies to gain the most public benefit while protecting and improving water quality.
(4)	To restore previously degraded lands to reestablish their ability to protect water quality.
(5)	To repair failing waste treatment systems if: (i)  an application has first been submitted to receive a loan or grant from the Clean Water Revolving Loan and Grant Fund and the application was denied during the latest review cycle; (ii) the repair is a reasonable remedy for resolving an existing waste treatment problem; and (iii) the repair is not for the purpose of expanding the system to accommodate future anticipated growth of a community.  Priority shall be given to economically distressed units of local government.
(6)	To repair and eliminate failing septic tank systems, to eliminate illegal drainage connections, and to expand waste treatment systems if the system is being expanded as a remedy to eliminate failing septic tank systems or illegal drainage connections.  Priority shall be given to economically distressed units of local government.
(7)	To improve stormwater controls and management practices.
(8)	To facilitate planning that targets reductions in surface water pollution.
(9)	To fund operating expenses of the Board of Trustees and its staff.
(d)	Limit on Operating and Administrative Expenses. – No more than two percent (2%) of the annual balance of the Fund on July 1 or a total sum of six hundred thousand dollars ($600,000), whichever is less, may be used each fiscal year for administrative and operating expenses of the Board of Trustees and its staff.
"§ 113-145.4.  Clean Water Management Trust Fund:  eligibility for grants; matching funds or property requirement.
(a)	Eligible Grant Applicants. – Any of the following are eligible to apply for a grant from the Fund for the purpose of protecting and enhancing water quality:
(1)	A State agency.
(2)	A local government or other political subdivision of the State or a combination of such entities.
(3)	A nonprofit corporation whose primary purpose is the conservation, preservation, and restoration of our State's environmental and natural resources.
(b)	Grant Matching Requirement. – The Board of Trustees shall establish matching requirements for grants awarded under this Article.  The Board of Trustees may require a match of up to twenty percent (20%) of the amount of the grant awarded.  This requirement may be satisfied by the donation of land to a public or private nonprofit conservation organization as approved by the Board of Trustees.  The Board of Trustees may also waive the requirement to match a grant pursuant to guidelines adopted by the Board of Trustees.
"§ 113-145.5.  Clean Water Management Trust Fund: Board of Trustees established; membership qualifications; vacancies; meetings and meeting facilities.
(a)	Board of Trustees Established. – There is established the Clean Water Management Trust Fund Board of Trustees.  The Clean Water Management Trust Fund Board of Trustees shall be independent, but for administrative purposes shall be located under the Department of Environment, Health, and Natural Resources.
(b)	Membership. – The Clean Water Management Trust Fund Board of Trustees  shall be composed of 18 members. Six members shall be appointed by the Governor, six by the General Assembly upon the recommendation of the President Pro Tempore of the Senate in accordance with G.S. 120-121, and six by the General Assembly upon the recommendation of the Speaker of the House of Representatives in accordance with G.S. 120-121.  The office of Trustee is declared to be an office that may be held concurrently with any other executive or appointive office, under the authority of Article VI, Section 9, of the North Carolina Constitution.
Persons appointed shall be knowledgeable in one of the following areas:
(1)	Acquisition and management of natural areas.
(2)	Conservation and restoration of water quality.
(3)	Wildlife and fisheries habitats and resources.
(4)	Environmental management.
(c)	Initial Appointments. – Each appointing officer shall designate two of the officer's initial appointments to serve  two-year terms, two to serve four-year terms, and two to serve six-year terms. Thereafter, all appointments shall be for four years, subject to reappointment. All initial appointments shall be made on or before January 1, 1997. The Governor shall appoint one Trustee to serve as Chair of the Board.
(d)	Vacancies. – If a vacancy occurs, other than by the expiration of term, of a member subject to appointment by the General Assembly upon the recommendation of the Speaker of the House of Representatives or the President Pro Tempore of the Senate, the vacancy shall be filled in accordance with G.S. 120-122.  All other vacancies shall be filled by the appointing official in the original manner.
(e)	Frequency of Meetings. – The Trustees shall meet at least twice each year and may hold special meetings at the call of the Chair or a majority of the members.
(f)	Per Diem and Expenses. – The Trustees shall receive per diem and necessary travel and subsistence expenses in accordance with the provisions of G.S. 138-5.  Per diem, subsistence, and travel expenses of the Trustees shall be paid from the Fund.
(g)	Meeting Facilities. – The Secretary of the Department of Environment, Health, and Natural Resources shall provide meeting facilities for the Board of Trustees and its staff as requested by the Chair.
"§ 113-145.6.  Clean Water Management Trust Fund Board of Trustees:  powers and duties.
(a)	Allocate Grant Funds. – The Trustees shall allocate moneys from the Fund as grants.  A grant may be awarded only for a project or activity that satisfies the criteria and furthers the purposes of this Article.
(b)	Develop Grant Criteria. – The Trustees shall develop criteria for awarding grants under this Article.  The criteria developed shall include consideration of the following:
(1)	The significant enhancement and conservation of water quality in the State.
(2)	The objectives of the basinwide management plans for the State's river basins and watersheds.
(3)	The promotion of regional integrated ecological networks insofar as they affect water quality.
(4)	The specific areas targeted as being environmentally sensitive.
(5)	The geographic distribution of funds as appropriate.
(6)	The preservation of water resources with significant recreational or economic value and uses.
(7)	The development of a network of riparian buffer-greenways bordering and connecting the State's waterways that will serve environmental, educational, and recreational uses.
(c)	Develop Additional Guidelines. – The Trustees may develop guidelines in addition to the grant criteria consistent with and as necessary to implement this Article.
(d)	Acquisition of Land. – The Trustees may acquire land by purchase, negotiation, gift, or devise.  Any acquisition of land by the Trustees must be reviewed and approved by the Council of State and the deed for the land subject to approval of the Attorney General before the acquisition can become effective.  In determining whether to acquire land as permitted by this Article, the Trustees shall consider whether the acquisition furthers the purposes of this Article and may also consider recommendations from the Council.  Nothing in this section shall allow the Trustees to acquire land under the right of eminent domain.
(e)	Exchange of Land. – The Trustees may exchange any land they acquire in carrying out the powers conferred on the Trustees by this Article.
(f)	Land Management. – The Trustees may designate managers or managing agencies of the lands acquired under this Article.
(g)	Tax Credit Certification. – The Trustees shall develop guidelines to determine whether land donated for a tax credit under G.S. 105-130.34 or G.S. 105-151.12 are suitable for one of the purposes under this Article and may be certified for a tax credit.
"§ 113-145.7.  Clean Water Management Trust Fund:  Executive Director and staff.
The Clean Water Management Trust Fund Board of Trustees, as soon as practicable after its organization, shall select and appoint a competent person in accordance with this section as Executive Director of the Clean Water Management Trust Fund Board of Trustees.  The Executive Director shall be charged with the supervision of all activities under the jurisdiction of the Trustees and shall serve as the chief administrative officer of the Trustees.  Subject to the approval of the Trustees and the Director of the Budget, the Executive Director may employ such clerical and other assistants as may be deemed necessary.
The person selected as Executive Director shall have had training and experience in conservation, protection, and management of surface water resources. The salary of the Executive Director shall be fixed by the Trustees, and the Executive Director shall be allowed travel and subsistence expenses in accordance with G.S. 138-6.  The Executive Director's salary and expenses shall be paid from the Fund.  The term of office of the Executive Director shall be at the pleasure of the Trustees.
"§ 113-145.8.  Clean Water Management Trust Fund:  Advisory Council.
There is established the Clean Water Management Trust Fund Advisory Council.  The Council shall advise the Trustees with regard to allocations made from the Fund, and other issues as requested by the Trustees.  The Council shall be composed of the following or its designees:
(1)	Commissioner of Agriculture.
(2)	Chair of the Wildlife Resources Commission.
(3)	Secretary of the Department of Environment, Health, and Natural Resources.
(4)	Secretary of the Department of Commerce."
(b) Article 1 of Chapter 143 of the General Statutes is amended by adding a new section to read:
"§ 143-15.3B.  The Clean Water Management Trust Fund.
(a)	The Clean Water Management Trust Fund is established in G.S. 113-145.3.  The State Controller shall reserve to the Clean Water Management Trust Fund six and one-half percent (6.5%) 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 Clean Water Management Trust Fund pursuant to this section, G.S. 143-15.3, and G.S. 143-15.3A.
(b)	The funds in the Clean Water Management Trust Fund shall be used only in accordance with Article 13A of Chapter 113 of the General Statutes."
(c) The Chair of the Board of Trustees of the Clean Water Management Trust Fund shall report to the Environmental Review Commission beginning November 1, 1996, and annually thereafter on implementation of this section.  A written copy of the report shall also be sent to the Fiscal Research Division of the General Assembly beginning November 1, 1996, and annually thereafter on implementation of this section.
(d)	The Board of Trustees may adopt temporary rules to implement this section.
(e)  This section becomes effective June 30, 1996.

PART 28. SALARIES AND BENEFITS

Requested by:   Senators Plyler, Perdue, Odom
GOVERNOR AND COUNCIL OF STATE
Sec. 28.  (a) G.S. 147-11(a) reads as rewritten:
"(a)	The salary of the Governor shall be one hundred three thousand five hundred five dollars ($103,505) annually, payable monthly."
(b)	Section 7.1(b) of Chapter 507 of the 1995 Session Laws reads as rewritten:
"(b)	The annual salaries for the members of the Council of State, payable monthly, for the 1996-97 fiscal year are:

Council of State	Annual Salary  

Lieutenant Governor		$91,350  
Attorney General		91,350  
Secretary of State		91,350  
State Treasurer		91,350  
State Auditor		91,350  
Superintendent of Public Instruction		91,350  
Agriculture Commissioner		91,350  
Insurance Commissioner		91,350  
Labor Commissioner		91,350"

Requested by:  Senators Plyler, Perdue, Odom
NONELECTED DEPARTMENT HEADS
Sec. 28.1.  Section 7.2 of Chapter 507 of the 1995 Session Laws reads as rewritten:
"Sec. 7.2.  In accordance with G.S. 143B-9, the maximum annual salaries, payable monthly, for the nonelected heads of the principal State departments for the 1996-97 fiscal year are:
Nonelected Department Heads	Annual Salary   

Secretary of Administration		$89,250  
Secretary of Correction		89,250  
Secretary of Cultural Resources		89,250  
Secretary of Commerce		89,250  
Secretary of Environment, Health,
  and Natural Resources		89,250  
Secretary of Human Resources		89,250  
Secretary of Revenue		89,250  
Secretary of Transportation		89,250  
Secretary of Crime Control and Public Safety		89,250"

Requested by:  Senators Plyler, Perdue, Odom
CERTAIN EXECUTIVE BRANCH OFFICIALS
Sec. 28.2.  (a) Section 7.3 of Chapter 507 of the 1995 Session Laws reads as rewritten:
"Sec. 7.3.  The annual salaries, payable monthly, for the 1996-97 fiscal year for the following executive branch officials are:

Executive Branch Officials	Annual Salary

Chairman, Alcoholic Beverage Control
  Commission	$81,233
State Controller	113,685
Commissioner of Motor Vehicles	81,233
Commissioner of Banks	81,233
Chairman, Employment Security Commission	81,233
State Personnel Director	89,250
Chairman, Parole Commission	74,175
Members of the Parole Commission	68,481
Chairman, Industrial Commission	72,986
Members of the Industrial Commission	71,208
			
Executive Director, Agency for Public
  Telecommunications	68,481
General Manager, Ports Railway Commission	61,838
Director, Museum of Art	83,238
Executive Director, Wildlife Resources Commission	70,112
Executive Director, North Carolina Housing
  Finance Agency	100,533
Executive Director, North Carolina Agricultural Finance Authority 79,067
Director, Office of Administrative Hearings	80,325"
(b)	G.S. 62-10(h) reads as rewritten:
"(h)	The salary of each commissioner shall be the same as that fixed from time to time for judges of the superior court except that the commissioner designated as chairman shall receive one thousand dollars ($1,000) additional per annum.  In lieu of merit and other increment raises paid to regular State employees, each commissioner, including the commissioner designated as chairman, shall receive as longevity pay an 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, and nine and six-tenths percent (9.6%) after 10 years of service. 'Service' means service as a member of the Utilities Commission."

Requested by:  Senators Plyler, Perdue, Odom
JUDICIAL BRANCH OFFICIALS
Sec. 28.3.  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	$103,505
Associate Justice, Supreme Court	100,800
Chief Judge, Court of Appeals	98,280
Judge, Court of Appeals	96,600
Judge, Senior Regular Resident Superior Court	93,975
Judge, Superior Court	91,350
Chief Judge, District Court	82,950
Judge, District Court	80,325
District Attorney	84,630
Administrative Officer of the Courts	93,975
Assistant Administrative Officer of the Courts	78,918
Public Defender	84,630

(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-two thousand fifty-nine dollars ($52,059) and the minimum salary of any assistant district attorney or assistant public defender is at least twenty-six thousand five hundred seventy-eight dollars ($26,578) 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 five percent (5%), 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 five percent (5%)."

Requested by:  Senators Plyler, Perdue, Odom
CLERKS OF SUPERIOR COURT
Sec. 28.4.  G.S. 7A-101(a) reads as rewritten:
"(a)	The clerk of superior court is a full-time employee of the State and shall receive an annual salary, payable in equal monthly installments, based on the population of the county as determined in subsection (a1) of this section, according to the following schedule:
  Population	Annual Salary  
  Less than 100,000	$60,554
  100,000 to 149,999	68,019
  150,000 to 249,999	75,485
  250,000 and above	82,950.

The salary schedule in this subsection is intended to represent the following percentage of the salary of a chief district court judge:
  Less than 100,000	73%
  100,000 to 149,999	82%
  150,000 to 249,999	91%
  250,000 and above	100%.
When a county changes from one population group to another, the salary of the clerk shall be changed, on July 1 of the fiscal year for which the change is reported, to the salary appropriate for the new population group, except that the salary of an incumbent clerk shall not be decreased by any change in population group during his continuance in office."

Requested by:  Senators Plyler, Perdue, Odom
ASSISTANT AND DEPUTY CLERKS OF SUPERIOR COURT
Sec. 28.5.  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 		$22,626
Maximum		40,062

Deputy Clerks	Annual Salary
Minimum		$18,090
Maximum		30,858."

Requested by:  Senators Plyler, Perdue, Odom
MAGISTRATES' PAY PLAN
Sec. 28.6.  (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 		$24,588
Step 1		27,055
Step 2		29,741
Step 3 		32,672
Step 4		35,882
Step 5		39,410
Step 6		43,289."
(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	  20,376
	3 or more but less than 5 years of service	22,380."
		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:  Senators Plyler, Perdue, Odom
GENERAL ASSEMBLY PRINCIPAL CLERKS
Sec. 28.7.  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-seven thousand eight hundred thirty-four dollars ($57,834) 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:  Senators Plyler, Perdue, Odom
SERGEANT-AT-ARMS AND READING CLERKS
Sec. 28.8.  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-nine dollars ($249.00) 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:  Senators Plyler, Perdue, Odom
LEGISLATIVE EMPLOYEES
Sec. 28.9.  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 five percent (5%).  Nothing in this act limits any of the provisions of G.S. 120-32."

Requested by:  Senators Plyler, Perdue, Odom
COMMUNITY COLLEGES PERSONNEL
Sec. 28.10.  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 1996-97 funds to the Department of Community Colleges necessary to provide an average annual salary increase of five percent (5%), 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.  Salary funds shall be used to provide an average annual salary increase of five percent (5%) to all full-time employees and part-time employees on a pro rata basis."

Requested by:   Senators Winner, Plexico, Plyler, Perdue, Odom
FUNDS TO REWARD EXCELLENCE IN COMMUNITY COLLEGE TEACHING
Sec. 28.11.  The State Board of Community Colleges shall develop policies for the distribution of a one-half percent (1/2%) salary increase for teaching faculty members who have demonstrated excellence in teaching.

Requested by:  Senators Winner, Plexico, Plyler, Perdue, Odom
UNIVERSITY OF NORTH CAROLINA SYSTEM – EPA SALARY INCREASES
Sec. 28.12.  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 five percent (5%), 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."

Requested by:  Senators Winner, Plexico, Plyler, Perdue, Odom
ADDITIONAL SALARY INCREASE FOR OUTSTANDING UNC TEACHING FACULTY
Sec. 28.13.  (a)	Of the funds allocated for the 1996-97 fiscal year to the Board of Governors of The University of North Carolina for faculty salary increases, the Board of Governors shall allocate a sufficient sum that would enable the Board of Governors to award a one-half percent (1/2%) salary increase for teaching faculty.  The Board of Governors shall develop criteria for awarding the additional one-half percent (1/2%) salary increase to those teaching faculty members who are judged to have outstanding teaching performance and shall award the one-half percent (1/2%) salary increase based on those criteria.
(b)	The Board of Trustees of the North Carolina School of Science and Mathematics shall allocate a sufficient sum that would enable the Board of Trustees to award a one-half percent (1/2%) salary increase for teachers.  The Board of Governors shall develop criteria for awarding the additional one-half percent (1/2%) salary increase to those teachers who are judged to have outstanding teaching performance and shall award the one-half percent (1/2%) salary increase based on those criteria.

Requested by:  Senators Plyler, Perdue, Odom
MOST STATE EMPLOYEES
Sec. 28.14. 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, pursuant to the Comprehensive Compensation System set forth in G.S. 126-7, as follows:
(1)	Career growth recognition awards in the amount of two percent (2%);
(2)	A cost-of-living adjustment in the amount of two percent (2%); and
(3)	A one-time performance bonus averaging one percent (1%) for eligible State employees.
(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 five percent (5%).
(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 1995-96 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:  Senators Plyler, Perdue, Odom
ALL STATE-SUPPORTED PERSONNEL
Sec. 28.15.  (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:  Senators Plyler, Perdue, Odom
TEACHER SALARY SCHEDULES
Sec. 28.16.  (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	$2,144
01	2,186
02	2,229
03	2,317
04	2,364
05	2,412
06	2,461
07	2,510
08	2,560
09	2,611
10	2,663
11	2,716
12	2,770
13	2,825
14	2,881
15	2,939
16	2,997
17	3,057
18	3,118
19	3,181
20	3,245
21	3,310
22	3,376
23	3,444
24	3,513
25	3,583
26	3,655
27	3,728
28	3,803
29	3,879
30+	3,879
(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	$2,278
01	2,323
02	2,369
03	2,463
04	2,513
05	2,563
06	2,614
07	2,666
08	2,719
09	2,773
10	2,828
11	2,884
12	2,942
13	3,001
14	3,062
15	3,123
16	3,185
17	3,249
18	3,314
19	3,380
20	3,448
21	3,517
22	3,587
23	3,659
24	3,732
25	3,807
26	3,883
27	3,961
28	4,040
29	4,121
30+	4,121
(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) Speech pathologists who hold masters degrees and who are employed in the public schools as speech and language specialists shall be paid on the school psychologist salary schedule.

Requested by: Senators Plyler, Perdue, Odom
SCHOOL-BASED ADMINISTRATOR SALARIES
Sec. 28.17.  (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	$2,589	  –  	  –  	  –  	  –  	  –  	  –  	–
5	2,641	  –  	  –  	  –  	  –  	  –  	  –  	–
6	2,694	  –  	  –  	  –  	  –  	  –  	  –  	–
7	2,748	  –  	  –  	  –  	  –  	  –  	  –  	–
8	2,803	$2,803	  –  	  –  	  –  	  –  	  –  	–
9	2,859	2,859	  –  	  –  	  –  	  –  	  –  	–
10	2,916	2,916	$2,974	  –  	  –  	  –  	  –  	–
11	2,974	2,974	3,033	  –  	  –  	  –  	  –  	–
12	3,033	3,033	3,094	$3,156	  –  	  –  	  –  	–
13	3,094	3,094	3,156	3,219	$3,283	  –  	  –  	–
14	3,156	3,156	3,219	3,283	 3,349	$3,416	  –  	–
15	3,219	3,219	3,283	3,349	 3,416	 3,484	  –  	–
16	3,283	3,283	3,349	3,416	 3,484	 3,554	$3,625 	–
17	3,349	3,349	3,416	3,484	 3,554	 3,625	3,698 	$3,772
18	3,416	3,416	3,484	3,554	 3,625	 3,698	3,772 	3,847
19	3,484	3,484	3,554	3,625	 3,698	 3,772	3,847 	3,924
20	3,554	3,554	3,625	3,698	 3,772	 3,847	3,924 	4,002
21	3,625	3,625	3,698	3,772	 3,847	 3,924	4,002 	4,082
22	3,698	3,698	3,772	3,847	 3,924	 4,002	4,082 	4,164
23	3,772	3,772	3,847	3,924	 4,002	 4,082	4,164 	4,247
24	3,847	3,847	3,924	4,002	 4,082	 4,164	4,247 	4,332
25	3,924	3,924	4,002	4,082	 4,164	 4,247	4,332 	4,419
26	4,002	4,002	4,082	4,164	 4,247	 4,332	4,419 	4,507
27	4,082	4,082	4,164	4,247	 4,332	 4,419	4,507 	4,597
28	4,164	4,164	4,247	4,332	 4,419	 4,507	4,597 	4,689
29	4,247	4,247	4,332	4,419	 4,507	 4,597	4,689 	4,783
30	4,332	4,332	4,419	4,507	 4,597	 4,689	4,783 	4,879
31	4,419	4,419	4,507	4,597	 4,689	 4,783	4,879 	4,977
32 	  –  	4,507	4,597	4,689	 4,783	 4,879	4,977 	5,077
33 	  –  	  – 	4,689	4,783	 4,879	 4,977	5,077 	5,179
34 	  –  	  – 	4,783	4,879	 4,977	 5,077	5,179 	5,283
35 	  –  	  – 	  – 	4,977	 5,077	 5,179	5,283 	5,389
36 	  –  	  – 	  – 	5,077	 5,179	 5,283	5,389 	5,497
37 	  –  	  – 	  – 	  – 	 5,283	 5,389	5,497 	5,607
38 	  –  	  – 	  – 	  – 	   – 	 5,497	5,607 	5,719
39 	  –  	  – 	  – 	  – 	  – 	   – 	5,719 	5,833
40 	  –  	  – 	  – 	  – 	  – 	   – 	5,833 	5,950
41	 –  	  – 	  – 	  – 	 – 	  – 	 – 	 6,069.
(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: Senators Plyler, Perdue, Odom
SCHOOL CENTRAL OFFICE SALARIES
Sec. 28.18.  (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:	$2,832 - $4,555
(2)	School Administrator II:	$3,005 - $4,834
(3)	School Administrator III:	$3,189 - $5,130
(4)	School Administrator IV:	$3,318 - $5,338
(5)	School Administrator V:	$3,451 - $5,555
(6)	School Administrator VI:	$3,662 - $5,895
(7)	School Administrator VII:	$3,810 - $6,133
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):	$4,045 - $6,509
(2)	Superintendent II (2,501 - 5,000 ADM):	$4,292 - $6,907
(3)	Superintendent III (5,001 - 10,000 ADM):	$4,555 - $7,330
(4)	Superintendent IV (10,001 - 25,000 ADM):	$4,834 - $7,778
(5)	Superintendent V (Over 25,000 ADM):	$5,130 - $8,254
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 five percent (5%), 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.

Requested by: Senators Plyler, Perdue, Odom
NONCERTIFIED PUBLIC SCHOOL EMPLOYEES' SALARY INCREASE
Sec. 28.19.  (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 five percent (5%), 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 five percent (5%) 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 five percent (5%) 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:  Senators Plyler, Perdue, Odom
SALARY ADJUSTMENT FUND
Sec. 28.20.  Any remaining appropriations for legislative salary increases not required for that purpose may be used to supplement the Salary Adjustment Fund.  These funds shall first be used to provide reclassifications of those positions already approved by the Office of State Personnel. The Office of State Budget and Management shall report to the Joint Legislative Commission on Governmental Operations prior to the allocation of these funds.

Requested by:   Senator Perdue
TRAVEL EXPENSE REIMBURSEMENT STUDY
Sec. 28.21.  The Office of State Budget and Management shall study the issue of whether the current system of reimbursement of State employees for job-related travel expenses is flexible enough to allow State employees to recover the actual cost of expenses incurred for lodging and meals, when the total of all such costs does not exceed the maximum statutory amount.  If the Office of State Budget and Management finds that the current system is not flexible enough to allow State employees to recover all such expenses, the Office of State Budget and Management shall consider ways to make the system more flexible.  The Office of State Budget and Management shall report the results of its study, including any proposed policy or statutory changes and the fiscal impact of such changes, to the Joint Legislative Commission on Governmental Operations, prior to February 1, 1997.

Requested by: Senators Plyler, Perdue, Odom, Conder, Soles
POSTRETIREMENT BENEFIT INCREASES
Sec. 28.22.   (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 four and four-tenths percent (4.4%) 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 four and four-tenths percent (4.4%) 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 four and four-tenths percent (4.4%) 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 four and four-tenths percent (4.4%) 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 four and four-tenths percent (4.4%) 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 four and four-tenths percent (4.4%) 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 four and four-tenths percent (4.4%) 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 four and four-tenths percent (4.4%) 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:  Senators Plyler, Perdue, Odom
SALARY-RELATED CONTRIBUTIONS/EMPLOYERS
Sec. 28.23. 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-four and forty-two hundredths percent (24.42%) - 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: Senators Plyler, Perdue, Odom
STATE EMPLOYEE HEALTH BENEFIT PLAN/PREEXISTING HEALTH CONDITIONS
Sec. 28.24.  (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.

Requested by: Senators Plyler, Perdue, Odom
STATE EMPLOYEE HEALTH BENEFIT PLAN/SKILLED NURSING FACILITY BENEFITS IN FACILITIES NOT MEDICARE-QUALIFIED
Sec. 28.25.  G.S. 135-40.6(3) reads as rewritten:
"(3)	Skilled Nursing Facility Benefits. – The Plan will pay benefits in a skilled nursing facility licensed under applicable State laws as follows:
		After discharge from a hospital for which inpatient hospital benefits were provided by this Plan for a period of not less than three days, and treatment consistent with the same illness or condition for which the covered individual was hospitalized, the daily charges will be paid for room and board in a semiprivate room or any multibed unit up to the maximum benefit specified in subsection (1) of this section, less the days of care already provided for the same illness in a hospital. Plan allowances for total daily charges may be negotiated but will not exceed the daily semiprivate hospital room rate as determined by the Plan.
		Credit will be allowed toward private room charges in an amount equal to the facility's most prevalent charge for semiprivate accommodations. Charges will also be paid for general nursing care and other services which would ordinarily be covered in a general hospital. In order to be eligible for these benefits, admission must occur within 14 days of discharge from the hospital.
		In order to qualify for benefits provided by a skilled nursing facility, the following stipulations apply:
a.	The services are medically required to be given on an inpatient basis because of the covered individual's need for skilled nursing care on a continuing basis for any of the conditions for which he or she was receiving inpatient hospital services prior to transfer from a hospital to the skilled nursing facility or for a condition requiring such services which arose after such transfer and while he or she was still in the facility for treatment of the condition or conditions for which he or she was receiving inpatient hospital services,
b.	Only on prior referral by and so long as, the patient remains under the active care of an attending doctor who certifies that continual hospital confinement would be required without the care and treatment of the skilled nursing facility, and
c.	Approved in advance by the Claims Processor.
		For facilities not qualified for delivery of services covered by the benefits of Title XVIII of the Social Security Act (Medicare), neither the Plan nor any of its members shall be billed or held liable by such facilities for charges that otherwise would be covered by Medicare."

Requested by:  Senators Plyler, Perdue, Odom
STATE EMPLOYEE HEALTH BENEFIT PLAN/ACUPUNCTURE COVERAGE
Sec. 28.26. (a) G.S. 135-40.6(8) is amended by adding a new subdivision to read:
"u.	Acupuncture: Allowable charges up to five hundred dollars ($500.00) per covered individual per fiscal year for the practice of acupuncture when performed by a doctor of medicine or an acupuncturist licensed or certified in the state in which the acupuncturist practices."
(b) The Executive Administrator of the North Carolina Teachers' and State Employees' Comprehensive Major Medical Plan shall report the financial impact upon the Plan resulting from this section to the Joint Legislative Commission on Governmental Operations at the end of March 1997 and at the end of May 1997.
(c) This section becomes effective October 1, 1996, but expires September 30, 1998.

Requested by:   Senator Ballance, Rand
REDEFINE SERVICE FOR PURPOSES OF LONGEVITY PAY FOR PUBLIC DEFENDERS
Sec. 28.27.  G.S.  7A-465(b) reads as rewritten:
"(b)	The public defender shall be an attorney licensed to practice law in North Carolina, and shall devote his full time to the duties of his office.
In lieu of merit and other increment raises paid to regular State employees, a public defender shall receive as longevity pay an 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, and nineteen and two-tenths percent (19.2%) after 20 years of service. 'Service' means service as a public defender, assistant public defender, justice or judge of the General Court of Justice, or clerk of superior court."

PART 29.  MISCELLANEOUS PROVISIONS

Requested by:  Senators Plyler, Perdue, Odom
EXECUTIVE BUDGET ACT APPLIES
Sec. 29.  The provisions of the Executive Budget Act, Chapter 143, Article 1 of the General Statutes, as amended by this act, are reenacted and shall remain in full force and effect and are incorporated in this act by reference.

Requested by:  Senators Plyler, Perdue, Odom
COMMITTEE REPORT
Sec. 29.1.  (a)	The Senate Appropriations Committee Budget Modification Report, dated June 13, 1996, together with any accompanying correction sheets, which was distributed in the Senate and used to explain this act, shall indicate action by the General Assembly on this act and shall therefore be used to construe this act, as provided in G.S. 143-15 of the Executive Budget Act, and for 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 Senate Appropriations Committee Budget Modification Report, dated June 13, 1996, together with any accompanying correction sheets.
(3)	Transfers of funds supporting programs were made in accordance with the Senate Appropriations Committee Budget Modification Report, dated June 13, 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:  Senators Plyler, Perdue, Odom
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:  Senators Plyler, Perdue, Odom
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:  Senators Plyler, Perdue, Odom
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:  Senators Plyler, Perdue, Odom
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:  Senators Plyler, Perdue, Odom
EFFECTIVE DATE
Sec. 29.6.  Except as otherwise provided, this act becomes effective July 1, 1996.