GENERAL ASSEMBLY OF NORTH CAROLINA

SECOND EXTRA SESSION 1996

H	1 

HOUSE BILL 52

Short Title:  Budget Changes.	(Public)

─────────────────────────────────────── 
Sponsors: Representatives Holmes, Creech, Esposito; Justus, Morgan, Rayfield, Thompson, and Watson.

─────────────────────────────────────── 
Referred to:  Rules.

─────────────────────────────────────── 

July 10, 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	6,269,844

Office of the Governor
01.	Office of the Governor	(31,388)
02.	Office of State Budget
and Management	(37,689)
03.	Office of State Planning	(5,000)
04.	Housing Finance Agency	3,500,000

Department of Secretary of State	437,048

Department of Public Education	93,280,648

Department of Justice	2,313,094

Department of Administration	(519,403)

Department of Agriculture	278,672

Department of Labor	419,183

Department of Insurance	1,638,839

Department of Environment, Health, and
Natural Resources	17,175,398

Office of Administrative Hearings	262,754

State Board of Elections	175,000

Department of Human Resources
01.	Office of the Secretary	(289,766)
02.	Division of Aging	5,150,231
03.	Division of Child Development	704,765
04.	Division of Services for the
Deaf and Hard of Hearing	(148,984)
05.	Division of Social Services	(5,962,841)
06.	Division of Medical Assistance	(17,991,587)
07.	Division of Services
for the Blind	(36,419)
08.	Division of Mental Health,
Developmental Disabilities, and
Substance Abuse Services	(10,921,695)
09.	Division of Facility Services	(568,023)
10.	Division of Vocational
Rehabilitation Services	568,310
11.	Division of Youth Services	(867,394)
Total Department of Human Resources	(30,363,403)

Department of Correction	(7,242,339)

Department of Commerce
01.	Commerce	4,251,090
02.	MCNC	(14,000,000)
03.	Rural Economic Development
Center	1,025,000

Department of Revenue	3,860,876

Department of Cultural Resources	(365,412)

Department of Crime Control
and Public Safety	771,050

Office of the State Controller	8,935,985

University of North Carolina - Board
of Governors
01.	General Administration	13,000,000
02.	University Institutional
Programs	825,564
03.	Related Educational Programs	3,580,160
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.	Memorial Hospital	(20,000,000)
Total University of North
Carolina - Board of Governors	(4,701,344)

Department of Community Colleges	19,576,317

Contingency and Emergency	5,076,466

Reserve for Compensation Increase	239,120,623

Reserve for Teacher Performance Bonus	20,000,000

Reserve for Moving Expenses	4,000,000

Postage Reserve	(300,000)

Retirement Rate Adjustment	(325,600)

GRAND TOTAL CURRENT OPERATIONS –
GENERAL FUND	$ 374,251,309

Capital Improvements - General Fund  	1996-1997

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

Department of Environment, Health,
and Natural Resources
1.  Water Resources	8,005,000
TOTAL	$23,605,000

PART 3.  CURRENT OPERATIONS/HIGHWAY FUND

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

Current Operations/Highway Fund	1996-97

Department of Transportation
01.	Administration	$    960,000
02.	Construction and Maintenance	2,206,000
03.	Division of Motor Vehicles	1,743,547

Reserve for Salary Increase	14,800,000

GRAND TOTAL CURRENT OPERATIONS/HIGHWAY FUND	$ 19,709,547

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.	Division of Motor Vehicles	646,716
03.	Reserve for Capital Projects	1,958,126
04.	Construction and Maintenance - Contract
Resurfacing (Maintenance)	9,309,466

Appropriations for Other State Agencies
Crime Control and Public Safety	3,288,000

GRAND TOTAL CURRENT OPERATIONS/HIGHWAY FUND -
NONRECURRING	$ 17,983,453

PART 4.  HIGHWAY TRUST FUND

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

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

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

	Subtotal	$616.0

e.	Transfer to Savings Reserve Account	77.4
f.	Transfer to Repairs and
	Renovations Reserve Account	108.7
g.	Transfer to Wetlands Restoration and
	Clean Water Management Trust Fund	18.4

	Ending Fund Balance	$411.5

(2)	Beginning Unrestricted Fund Balance,
	July 1, 1996	$411.5

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

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

(5)	Reserve for Tax Reductions	(91.0)

(6)	Reserve for Intangibles Refunds Tax Credits	(142.9)

TOTAL AVAILABILITY	$465.6

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

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

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

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

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

Requested by:  Representatives Holmes, Creech, Esposito
USE OF FUNDS FROM REPAIRS AND RENOVATIONS RESERVE ACCOUNT/REPORT TO GOVERNMENTAL OPERATIONS
Sec. 5.4.  Notwithstanding G.S. 143-16.3, funds from the Repairs and Renovations Rerseve Account may be used for purposes consistent with G.S. 143-15.3A and reported to the Joint Legislative Commission on Governmental Operations.

PART 6.  BLOCK GRANT APPROPRIATIONS

Requested by:  Representatives Holmes, Creech, Esposito
DHR BLOCK GRANT PROVISIONS
Sec. 6. (a)	Appropriations from federal block grant funds are made for the fiscal year ending June 30, 1997, according to the following schedule:

COMMUNITY SERVICES BLOCK GRANT

01.	Community Action Agencies	$  9,198,794
02.	Limited Purpose Agencies	511,044

03.	Department of Human Resources
to administer and monitor
the activities of the
Community Services Block Grant	511,044

TOTAL COMMUNITY SERVICES BLOCK GRANT	$ 10,220,882

SOCIAL SERVICES BLOCK GRANT

01.	County Departments of Social Services	$ 30,395,663

02.	Allocation for In-Home Services provided
by County Departments of
Social Services	2,101,113

03.	Division of Mental Health, Developmental
Disabilities, and Substance Abuse Services	5,044,687

04.	Division of Services for the Blind	3,205,711

05.	Division of Youth Services	950,674

06.	Division of Facility Services	343,341

07.	Division of Aging - Home and Community
Care Block Grant	1,915,234

08.	Day Care Services	15,694,900

09.	Division of Vocational Rehabilitation - 
United Cerebral Palsy	71,484

10.	State Administration	1,954,237

11.	Child Medical Evaluation Program	238,321

12.	Adult Day Care Services	599,551

13.	County Departments of Social Services for
Child Abuse/Prevention and
Permanency Planning	394,841

14.	Transfer to Preventive Health
Block Grant for Emergency Medical Services	213,128

15.	Allocation to Preventive Health Block
Grant for AIDS Education, Counseling
and Testing	66,939

16.	Transfer to Department of Administration
for the N.C. Commission of Indian Affairs
In Home Services Program for the elderly	203,198

17.	Division of Vocational Rehabilitation-
Easter Seals Society	116,779

18.	UNC-CH CARES Program for training and
consultation services	247,920

TOTAL SOCIAL SERVICES BLOCK GRANT	$ 63,757,721

LOW INCOME ENERGY BLOCK GRANT

01.	Energy Assistance Programs	$ 5,216,233

02.	Crisis Intervention	5,709,258

03.	Administration	1,275,611

04.	Weatherization Program	4,078,042

05.	Indian Affairs	33,022

TOTAL LOW INCOME ENERGY BLOCK GRANT	$ 16,312,166

MENTAL HEALTH SERVICES BLOCK GRANT

01.	Provision of Community-Based
Services in accordance with the
Mental Health Study Commission's
Adult Severe and Persistently
Mentally Ill Plan	$ 3,794,179

02.	Provision of Community-Based
Services in accordance with the
Mental Health Study Commission's
Child Mental Health Plan	1,802,819

03.	Administration	572,897

TOTAL MENTAL HEALTH SERVICES BLOCK GRANT	$ 6,169,895

BLOCK GRANT FOR THE PREVENTION AND 
TREATMENT OF SUBSTANCE ABUSE

01.	Provision of Community-Based
Alcohol and Drug Abuse Services,
Tuberculosis Services, and Services
provided by the Alcohol, Drug Abuse
Treatment Centers	$ 10,935,939

02.	Continuation of Services for
Pregnant Women and Women
with Dependent Children	5,060,076

03.	Continuation and Expansion of
Services to IV Drug Abusers and others
at risk for HIV diseases	4,836,407

04.	Provision of services in accordance with
the Mental Health Study Commission's
Child and Adolescent Alcohol and other
Drug Abuse Plan	5,964,093

05.	Administration	1,841,742

TOTAL BLOCK GRANT FOR PREVENTION
AND TREATMENT OF SUBSTANCE ABUSE	$ 28,638,257

CHILD CARE AND DEVELOPMENT BLOCK GRANT

01.	Child Day Care Services	$ 17,826,641

02.	Administrative Expenses and Quality
and Availability Initiatives	1,980,738

03.	Before and After School Child Care Programs
and Early Childhood Development Programs	4,951,845

04.	Quality Improvement Activities	1,650,614

TOTAL CHILD CARE AND DEVELOPMENT
BLOCK GRANT	$ 26,409,838

(b)	Decreases in Federal Fund Availability
If federal funds are reduced below the amounts specified above after the effective date of this act, then every program in each of the federal block grants listed above, shall be reduced equally to total the reduction in federal funds.
(c)	Increases in Federal Fund Availability
Any block grant funds appropriated by the United States Congress in addition to the funds specified in this act shall be expended by the Department of Human Resources, with the approval of the Office of State Budget and Management, provided the resultant increases are in accordance with federal block grant requirements and are within the scope of the block grant plan approved by the General Assembly.  All these budgeted increases shall be reported to the Joint Legislative Commission on Governmental Operations and to the Fiscal Research Division.
This subsection shall not apply to Job Training Partnership Act funds.
(d)	If funds appropriated through the Child Care and Development Block Grant for any program cannot be obligated or spent in that program within the obligation or liquidation periods allowed by the federal grants, the Department may move funds to other programs, in accordance with the federal requirements of the grant, in order to use the federal funds fully.
(e)  The Division of Vocational Rehabilitation shall evaluate the services currently provided by the United Cerebral Palsy contract and shall report any recommended changes in this funding allocation for the 1997-1998 Social Services Block Grant to the 1997 General Assembly and to the Fiscal Research Division.

NER BLOCK GRANT FUNDS
Sec. 6.1  (a) Appropriations from federal block grant funds are made for the fiscal year ending June 30, 1997, according to the following schedule:

COMMUNITY DEVELOPMENT BLOCK GRANT

01.	State Administration	$  1,000,000

02.	Urgent Needs and Contingency	   2,177,500

03.	Community Empowerment	   2,613,000

04.	Economic Development	   8,710,000

05.	Community Revitalization	  29,178,500

06.	State Technical Assistance	     450,000

07.	Housing Development	871,000

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

TOTAL JOB TRAINING PARTNERSHIP ACT	$ 35,796,741

MATERNAL AND CHILD HEALTH BLOCK GRANT

01.	Healthy Mother/Healthy Children
	Block Grants to Local Health
	Departments	$ 9,838,074

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

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

TOTAL MATERNAL AND CHILD
HEALTH BLOCK GRANT	$ 16,713,517

PREVENTIVE HEALTH SERVICES BLOCK GRANT

01.	Emergency Medical Services	$     213,128

02.	Hypertension Programs	      711,813

03.	Statewide Health Promotion Programs	    2,568,940

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

05.	Rape Prevention and Rape
	Crisis Programs	      187,110

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

07.	AIDS/HIV Education, Counseling,
	and Testing	       66,939

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

09.	Administrative and Indirect Cost	199,048

TOTAL PREVENTIVE HEALTH SERVICES BLOCK GRANT	$   5,667,288

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

PART 7.  GENERAL PROVISIONS

Requested by: Representatives Holmes, Creech, Esposito
CHANGES TO EXECUTIVE BUDGET ACT
Sec. 7.  (a) G.S. 143-15.2 reads as rewritten:
"§ 143-15.2.  Use of General Fund credit balance.
" 	(a) The State Controller shall reserve fifty percent (50%) of any unreserved credit balance, as determined on a cash basis remaining in the General Fund at the end of each fiscal year.
	(b)	Of the fifty percent (50%) reserved in accordance with subsection (a) of this section, one-half or the amount required to reach five percent (5%) of the preceding year's General Fund operating budget, including local government tax-sharing funds if those funds have been directly appropriated, shall be transferred to the Savings Reserve Account as provided in G.S. 143-15.3.  If the transfer of one-half would result in the Savings Reserve Account having funds in excess of five percent (5%) of the amount appropriated the preceding year, the excess shall be available to fund a portion of the Repairs and Renovations Reserve Account as provided in G.S. 143-15.3A, if the fifty percent (50%) reserved for that purpose is insufficient to fund the three percent (3%) of the replacement value of all State buildings supported from the General Fund.  If no portion of these funds are required to provide the three percent (3%) replacement value of State-owned buildings supported by the General Fund, the excess shall be available for capital improvements or other one-time expenditures.
(c)	Of the fifty percent (50%) reserved in accordance with subsection (a) of this section, one-half or the amount required to reach three percent (3%) of the replacement value of all State buildings supported from the General Fund shall be transferred to the Repairs and Renovations Reserve Account as provided in G.S. 143-15.3A.  If the transfer of one-half would result in the Repairs and Renovations Reserve having funds in excess of the three percent (3%) replacement value, the excess shall be available for capital improvements and other one-time expenditures.
(d)	Any funds not reserved by the State Controller in subsection (a) of this section may be appropriated by the General Assembly only for capital improvements or other one-time expenditures."
(b) G.S. 143-15.3 reads as rewritten:
"§ 143-15.3.  Savings Reserve Account.
	" (a)	There is established a Savings Reserve Account as a restricted General Fund reserve.  The Savings Reserve Account shall be funded in accordance with G.S. 143-15.2(a) and (b), and the General Assembly may direct that other unappropriated funds be transferred to this account.
(b)	The Director may not use funds in the Savings Reserve Account unless the use has been approved by an act of the General Assembly. As part of the budget presented to the General Assembly, the Governor shall include a statement showing the transfers into the Savings Reserve Account, the transfers out of the Savings Reserve Account, and the fund balance as of the end of the fiscal year."
(c) G.S. 143-15A reads as rewritten:
"§ 143-15.3A.  Repairs and Renovations Reserve Account.
	" (a)	There is established a Repairs and Renovations Reserve Account as a restricted General Fund reserve.  The Repairs and Renovations Reserve Account shall be funded in accordance with G.S. 143-15.2(b) and (c) and the General Assembly may direct that other funds be transferred to this account.
	(b) Funds in the Repairs and Renovations Reserve Account are appropriated and 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.
."
(d)	This section is effective beginning with the 1995-96 fiscal year so as to apply to the unreserved credit balance at the end of that fiscal year.

Requested by:  Representatives Holmes, Creech, Esposito
CHANGES IN THE EXECUTION OF THE BUDGET
Sec. 7.1  (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."

Requested by:  Representatives Holmes, Creech, Esposito
REPEAL LIMITATION ON PERFORMANCE BUDGETING
Sec. 7.2.  Section 6.5 of Chapter 507 of the 1995 Session Laws is repealed.

Requested by:  Representatives Holmes, Creech, Esposito
HISTORIC PROPERTIES ACQUISITIONS/REPORTING REQUIREMENT
Sec. 7.3.  (a) G.S. 121-9 reads as rewritten:
"§ 121-9.  Historic properties.
(a)	Administration of Properties Acquired by State. – Historic or archaeological properties acquired by the State for administration by the State of North Carolina shall be under the control and administration of the Department of Cultural Resources. Upon approval of the North Carolina Historical Commission and the Secretary of Cultural Resources, the Department of Cultural Resources may, in its discretion, make a contract with any county or municipality within the State or with any nonprofit corporation or organization for the administration of any portion of such property.
(b)	Acquisition of Historic Properties. – For the purpose of protecting or preserving any property of historical, architectural, archaeological, or other cultural importance to the people of North Carolina, and subject to the provisions of Subchapter II of Chapter 146 of the General Statutes, the Department may, with the approval of the North Carolina Historical Commission and after consultation with the Joint Legislative Commission on Governmental Operations, acquire, preserve, restore, hold, maintain, operate, and dispose of such properties, together with such adjacent lands as may be necessary for their protection, preservation, maintenance, and operation. Such property may be real or personal in nature, and in the case of real property, the acquisition may include the fee or any lesser interest therein. Property may be acquired by gift, grant, bequest, devise, lease, purchase, or condemnation pursuant to the provisions of Chapter 40A of the General Statutes, or otherwise. Property may be acquired by the Department, using such funds as may be appropriated for the purpose or moneys available to it from any other source.
(b1)	In the case of real property, the Historical Commission shall report the following information to the Joint Legislative Commission on Governmental Operations before acquiring the property:
(1)	The statewide historical significance of the site.
(2)	The potential uses of the site.
(3)	The capital requirements of the site over a 20-year period of time.
(4)	The annual operating costs of the site.
(5)	The expected levels of visitation at the site.
(6)	Any other information that would assist in determining the full cost of maintaining, operating, and administering the site as State property.  
(c)	Interests Which May Be Acquired. – In the case of real property, the interest acquired shall be limited to that estate, interest, or term deemed by the Department to be reasonably necessary for the continued protection or preservation of the property. The Department may acquire the fee simple title, but where it finds that a lesser interest, including any development right, negative or affirmative easement in gross or appurtenant, covenant, lease, or other contractual right of or to any real property to be the most practical and economical method of protecting and preserving historic property, the lesser interest may be acquired.
(d)	Conveyance of Property for Preservation Purposes. – In appropriate cases, the Department may acquire or dispose of the fee or lesser interest to any such property for the specific purpose of conveying or leasing the property back to its original owner or of conveying or leasing it to such other person, firm, association, corporation, or other organization under such covenants, deed restrictions, lease, or other contractual arrangements as will limit the future use of the property in such a way as to insure its preservation. Where such action is taken, the property may be conveyed or leased by private sale. In all cases where property is conveyed, it shall be subjected by covenant or otherwise to such rights of access, public visitation, and other conditions or restrictions of operation, maintenance, restoration, and repair as the Department may prescribe, or to such conditions as may be agreed upon between the Department and the grantee or lessee to accomplish the purposes of this section.
(e)	Use of Property so Acquired. – Any historic property acquired, whether in fee or otherwise, may be used, maintained, improved, restored, or operated by the Department for any public purpose within its powers and not inconsistent with the purpose of the continued preservation of the property. The property shall not be subject to condemnation by the State of North Carolina or any of its agencies or political subdivisions at any time, unless such method of acquisition is first approved by the Governor and Council of State.
(f)	Emergency Acquisition Where Funds Not Immediately Available. – If funds or contributions for the acquisition of needed historic property are not available, the Governor and Council of State may, upon the recommendation of the Secretary of Cultural Resources and approval of the North Carolina Historical Commission, allocate from the Contingency and Emergency Fund an amount sufficient to acquire an option on the property or properties, which option shall continue until 90 days after the adjournment sine die of the next General Assembly. Upon recommendation of the Secretary and approval of the Historical Commission, the Governor and Council of State may allocate funds from the Contingency and Emergency Fund for the immediate acquisition, preservation, restoration, or operation of historically, archaeologically, architecturally, or culturally important properties. All funds hereinafter appropriated to purchase, restore, maintain, develop, or operate historic or archaeological or other important property shall be administered subject to the provisions of Article 1 of Chapter 143 of the General Statutes unless the statute making the appropriation shall in specific and express terms provide otherwise.
(g)	Power to Acquire Property by Condemnation. – In the event that a property which has been found by the Department of Cultural Resources to be important for public ownership or assistance is in danger of being sold, used, or neglected to such an extent that its historical or cultural importance will be destroyed or seriously impaired, or that the property is otherwise in danger of destruction or serious impairment, the Department of Cultural Resources, after receiving the approval of the North Carolina Historical Commission and of the Governor and Council of State, may acquire the historic property or any interest therein by condemnation under the provisions of Chapter 40A of the General Statutes. The Department of Cultural Resources, upon finding that destruction or serious impairment of the value of the property is imminent, shall file with the Governor and Council of State a report on the importance of the property and the desirability of ownership of the property, or the ownership of an interest therein, by the State of North Carolina. Upon giving their approval, the Governor and Council of State shall cause to have filed such approval with the clerk of the superior court in the county or counties where the property is situated. Until the approval is filed, the power of condemnation may not be exercised. All condemnation proceedings shall be instituted and prosecuted in the name of the State of North Carolina.
(h)	Preservation and Custodial Care of State Capitol. – The rotunda, corridors, and stairways of the first floor of the State Capitol and all portions of the second, third, and loft floors of the said building shall be placed in the custody of the Department of Cultural Resources; and the Department shall, subject to the availability of funds for the purpose, care for and administer these areas for the edification of present and future generations. The aforesaid areas shall be preserved as historic shrines and shall be maintained insofar as practicable as they shall appear following the restoration of the Capitol. The Department of Cultural Resources is authorized to deny the use of the legislative chambers for meetings in order that they, with their historic furnishings, may be better preserved for posterity; provided, however, that the General Assembly may hold therein such sessions as it may by resolution deem proper.
The Department of Cultural Resources is hereby entrusted with the responsibilities herein specified as being the agency with the experience best qualified to preserve and administer historic properties in a suitable manner. However, for the purposes of carrying out the provisions of this section, it is hereby directed that such cooperation and assistance shall be made available to the said Department of Cultural Resources and such labor supplied, as may be feasible, by the Department of Administration.
The offices and working areas of the first floor as well as all washrooms and the exterior of the Capitol shall remain under the jurisdiction of the Department of Administration: Provided, however, that the Department of Administration shall seek the advice of the Department of Cultural Resources in matters relating to any alteration, renovation, and furnishing of said offices and areas."
(b) G.S. 146-26 reads as rewritten:
"§ 146-26. Donations and devises to State.
No devise or donation of land or any interest therein to the State or to any State agency shall be effective to vest title to the land or any interest therein in the State or in any State agency until the devise or donation is accepted by the Governor and Council of State. If the land is devised or donated to the State or to any State agency as an historic property, then title shall not vest until the Historical Commission reports to the Joint Legislative Commission on Governmental Operations as provided in G.S. 121-9.  Upon acceptance by the Governor and Council of State, title to the said land or interest therein shall immediately vest as of the time title would have vested but for the above requirement of reporting to the Joint Legislative Commission on Governmental Operations if an historic property and  acceptance by the Governor and Council of State."

Requested by:   Representatives Ives, Lemmond
TOTAL QUALITY MANAGEMENT
Sec. 7.4.  For the 1996-97 fiscal year only, the provisions of G.S. 143-16.3 do not apply to The Total Quality Management Program which is administered by the Office of the Governor.

PART 7A.  OFFICE OF STATE TREASURER

Requested by:   Representatives Creech, Holmes, Esposito
FORFEITED RESERVATION DEPOSITS DO NOT ESCHEAT
Sec. 7A.  (a)	Article 2 of Chapter 116B of the General Statutes is amended by adding a new section to read:
"§ 116B-23.  Exclusion for forfeited reservation deposits.
Property or funds withheld by a business association as a penalty or forfeiture or as damages in the event a person who has reserved the services of the business association fails to make use of and pay for the services, regardless of any practice or policy of the business association related to the return of withheld funds, is not unclaimed or abandoned property."
(b)	Subsection (a) of this section applies to funds held or collected by business associations on or after July 1, 1996.

PART 8.  GENERAL ASSEMBLY

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

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

Requested by:   Representatives Holmes, Creech, Esposito
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:   Representatives Holmes, Creech, Esposito
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.

Requested by:   Representative Morgan
LEGISLATIVE CONFIRMATION OF CERTAIN APPOINTMENTS/COMPOSITION OF VARIOUS BOARDS
Sec. 8.3.
–LEGISLATIVE CONFIRMATION PROCEDURE
(a)	G.S. 147-12(3c), 147-12(3d), and 147-16.3 are repealed.
(b)	Chapter 147 of the General Statutes is amended by adding the following new section:
"§ 147-16.4. Confirmation of appointments.
(a)	Confirmation. – A person nominated by the Governor to an office requiring confirmation by the General Assembly may take office only after having been confirmed by the General Assembly in accordance with this section, except as otherwise provided in subsections (d) and (e) of this section.
(b)	Nomination. – The Governor shall notify the President of the Senate, the Speaker of the House of Representatives, and the principal clerk of each house of the legislature of the name of the nominee subject to confirmation no later than:
(1)	February 1 of the year in which the appointment is to be made for the office of Commissioner of Banks.
(2)	May 1 of the year in which the appointment is to be made for all other offices with fixed terms.
(3)	Fifteen days following appointment of a member of an office listed in G.S. 143B-6(1) through (9) or any other office for which there is no fixed term.
(c)	Failure to timely nominate. – If the Governor fails to nominate an officer subject to confirmation by the General Assembly or fails to notify the General Assembly in accordance with this section, the General Assembly, upon the recommendation of the President Pro Tempore of the Senate and the Speaker of the House of Representatives, shall jointly nominate a person for the office, to be confirmed in the same manner as if nominated by the Governor.
(d)	Procedure. – The confirmation shall be by joint resolution. The General Assembly shall act upon a nomination by the forty-fifth day of the session or within 45 days of being notified in accordance with subsection (b) of this section, whichever is later, but in any event no later than the last day of the session.  If the General Assembly fails to take action on a confirmation resolution within the prescribed time, the appointee is deemed confirmed, except that an appointee whose name is submitted during the last 15 legislative days of the session is not deemed confirmed and may serve as an unconfirmed appointee no later than the forty-fifth day of the next legislative session.
If the General Assembly takes action and fails to confirm an appointee, it shall notify the Governor, and the Governor shall submit a new nominee within 10 days.  For purposes of this section, the General Assembly has taken action and has failed to confirm if the confirmation resolution has failed second or third reading in either house.  A joint confirmation resolution may be introduced at any time the General Assembly is in session.
(e)	Appointees initially serving without confirmation. – A person appointed to an office that has no fixed term, to a vacant office, or as an acting officer under G.S. 147-12(3) may serve without confirmation until the General Assembly takes action and fails to confirm.  The appointee is deemed confirmed after the forty-fifth calendar day following (i) the date of notification of the appointment by the Governor if the General Assembly is in session at that time or (ii) the forty-fifth day of the next legislative session following the appointment, unless the General Assembly takes action and fails to confirm before that date.
(f)	Failure to confirm. – An appointee who is not confirmed nor deemed confirmed may not be reappointed to the same office by the same Governor.
(g)	The chair of a committee to which a confirmation resolution has been assigned may request the presiding officer of that house to request a background check on an appointee subject to confirmation pursuant to G.S. 120-19.4A.
(h)	State Board of Education. – This section does not apply to appointments to the State Board of Education.
(i)	Session defined. – For purposes of this section, 'session' means a regular session of the General Assembly.  The regular session held in an odd-numbered year is deemed, for purposes of this section, a separate session from the regular session held in an even-numbered year."

–CABINET OFFICERS CONFIRMATION
(c)	G.S. 143B-9 reads as rewritten:
"§ 143B-9.  Appointment of officers and employees.
The head of each principal State department, except those departments headed by popularly elected officers, shall be appointed by the Governor, subject to confirmation by the General Assembly as provided by G.S. 147-16.4 as to those listed in G.S. 143B-6(1)	through (9) and shall serve at the pleasure of the Governor.
The salary of the head of each of the principal State departments and of elected officials shall be as provided by law.
The head of a principal State department shall appoint a chief deputy or chief assistant, and such chief deputy or chief assistant shall not be subject to the State Personnel Act. The salary of such chief deputy or chief assistant shall, upon the recommendation of the Governor, be set by the General Assembly. Unless otherwise provided for in the Executive Organization Act of 1973, and subject to the provisions of the Personnel Act, the head of each principal State department shall designate the administrative head of each transferred agency and all employees of each division, section, or other unit of the principal State department."

–ABC COMMISSION MEMBERS AND CHAIRMAN CONFIRMATION
(d)	G.S. 18B-200 reads as rewritten:
"§ 18B-200.  North Carolina Alcoholic Beverage Control Commission.
(a)	Creation of Commission; compensation. – The North Carolina Alcoholic Beverage Control Commission is created to consist of a chairman and two associate members.  The chairman shall devote his full time to his official duties and receive a salary fixed by the General Assembly in the Current Operations Appropriations Act.  The associate members shall be compensated for per diem, subsistence and travel as provided in Chapter 138 of the General Statutes.
(b)	Appointment of Members. – Members of the Commission shall be appointed by the Governor, subject to confirmation by the General Assembly as provided by G.S. 147-16.4, to serve at the pleasure of the Governor.
(c)	Vacancy. – The Governor shall fill any vacancy on the Commission by appointing a successor, subject to confirmation by the General Assembly as provided by G.S. 147-12(3e), to serve at the Governor's pleasure.  If the chairman's seat becomes vacant, the Governor may designate either the new member or an existing member of the Commission as the chairman, subject to confirmation by the General Assembly as provided by G.S. 147-16.4.
(d)	Employees. – The Commission may authorize the chairman to employ, discharge, and otherwise supervise subordinate personnel of the Commission.  The Commission shall appoint at least one employee to make investigations, hold hearings requested under G.S. 18B-1205, and represent the Commission in contested case hearings or perform any other duties authorized by Chapter 150B."

–INDUSTRIAL COMMISSION MEMBERS AND CHAIRMAN CONFIRMATION
(e)  G.S. 97-77 reads as rewritten:
"§ 97-77.  North Carolina Industrial Commission created; members appointed by Governor; terms of office; chairman.
(a)	There is hereby created a commission to be known as the North Carolina Industrial Commission, consisting of seven commissioners who shall devote their entire time to the duties of the Commission. The Governor shall appoint the members of the Commission, one for a term of two years, one for a term of four years, and one for a term of six years. Of the additional appointments made in 1994, one shall be for a term expiring June 30, 1996, one for a term expiring June 30, 1998, and two for terms expiring June 30, 2000. Upon the expiration of each term as above mentioned, the Governor, subject to confirmation by the General Assembly as provided by G.S. 147-16.4, shall appoint a successor for a term of six years, and thereafter the term of office of each commissioner shall be six years. Not more than three appointees shall be persons who, on account of their previous vocations, employment or affiliations, can be classed as representatives of employers, and not more than three appointees shall be persons who, on account of their previous vocations, employment or affiliations, can be classed as representatives of employees.
(b)	One member, to be designated by the Governor, subject to confirmation by the General Assembly as provided by G.S. 147-16.4, shall act as chairman. The chairman shall be the chief judicial officer and the chief executive officer of the Industrial Commission; such authority shall be exercised pursuant to the provisions of Chapter 126 of the General Statutes and the rules and policies of the State Personnel Commission. Notwithstanding the provisions of this Chapter, the chairman shall have such authority as is necessary to direct and oversee the Commission. The chairman may delegate any duties and responsibilities as may be necessary to ensure the proper management of the Industrial Commission. Notwithstanding the provisions of this Chapter, Chapter 143A, and Chapter 143B of the General Statutes, the chairman may hire or fire personnel and transfer personnel within the Industrial Commission.
The Governor may designate one vice-chairman from the remaining commissioners. The vice-chairman shall assume the powers of the chairman upon request of the chairman or when the chairman is absent for 24 hours or more. The authority delegated to the vice-chairman shall be relinquished immediately upon the return of the chairman or at the request of the chairman."

–POST-RELEASE SUPERVISION AND PAROLE COMMISSION MEMBERS AND CHAIRMAN CONFIRMATION
(f)  G.S. 143B-267, as amended by subsection (aa) of this section, reads as rewritten:
"§ 143B-267.  Post-Release Supervision and Parole Commission – members; selection; removal; chairman; compensation; quorum; services.
The Post-Release Supervision and Parole Commission shall consist of three full-time members.  The three full-time members shall be appointed by the Governor from persons whose recognized ability, training, experience, and character qualify them for service on the Commission.  The terms of office of the five members presently serving on the Commission shall expire on June 30, 1993.  The terms of three members appointed effective July 1, 1993, shall be for three years, but only one successor shall be appointed for terms commencing on or after July 1, 1996.  The terms of two members appointed effective July 1, 1993, shall be for four years.  Thereafter, members shall be appointed, subject to confirmation by the General Assembly as provided by G.S. 147-16.4, for terms of four years or until their successors are appointed and qualify.  Any appointment to fill a vacancy on the Commission created by the resignation, removal, death or disability of a full-time member shall be for the balance of the unexpired term only.
The Governor shall have the authority to remove any member of the Commission from office for misfeasance, malfeasance or nonfeasance, pursuant to the provisions of G.S. 143B-13.  The Governor shall designate a full-time member of the Commission to serve as chairman of the Commission, subject to confirmation by the General Assembly as provided by G.S. 147-16.4, who shall serve at the pleasure of the Governor.
With regard to the transaction of the business of the Commission the following procedure shall be followed: The chairman shall designate panels of two voting Commission members and shall designate a third commissioner to serve as an alternate member of a panel.  Insofar as practicable, the chairman shall assign the members to panels in such fashion that each commissioner sits a substantially equal number of times with each other commissioner.  Whenever any matter of business, such as the granting, denying, revoking or rescinding of parole, or the authorization of work-release privileges to a prisoner, shall come before the Commission for consideration and action, the chairman shall refer such matter to a panel.  Action may be taken by concurring vote of the two sitting panel members.  If there is not a concurring vote of the two panel members, the matter will be referred to the alternate member who shall cast the deciding vote.  However, no person serving a sentence of life imprisonment shall be granted parole or work-release privileges except by majority vote of the full Commission.
The full-time members of the Commission shall receive the salary fixed by the General Assembly in the Current Operations Appropriations Act and shall receive necessary travel and subsistence expenses in accordance with the provisions of G.S. 138-6.
All clerical and other services required by the Commission shall be supplied by the Secretary of Correction."

–BOARD OF TRANSPORTATION CONFIRMATION/SERVE AT GOVERNOR'S PLEASURE
(g)  G.S. 143B-350(c) reads as rewritten:
"(c)	The Board of Transportation shall have 20 members appointed by the Governor, subject to confirmation by the General Assembly as provided by G.S. 147-16.4.  These members shall serve at the pleasure of the Governor.  One member shall be appointed from each of the 14 transportation engineering divisions and six members shall be appointed from the State at large.  One at-large member shall be a registered voter of a political party other than the political party of the Governor.  At least one at-large member shall possess a broad knowledge of public transportation matters.  No more than two members provided for in this subsection shall reside in the same engineering division while serving in office.  "

–STATE BOARD OF ELECTIONS EXECUTIVE SECRETARY-DIRECTOR CONFIRMATION
(h)  G.S. 163-27 reads as rewritten:
"§ 163-27.  Executive Secretary-Director to be appointed by Board.
The appointment of the Executive Secretary-Director of the State Board of Elections is extended to May 15, 1989, unless removed for proper cause, and thereafter the Board shall, subject to confirmation by the General Assembly as provided by G.S. 147-16.4 as if the appointment was made by the Governor, appoint an Executive Secretary-Director for a term of four years with compensation to be determined by the Department of Personnel. He shall serve, unless removed for cause, until his successor is appointed. Such Executive Secretary-Director shall be responsible for staffing, administration, execution of the Board's decisions and orders and shall perform such other responsibilities as may be assigned by the Board. In the event of a vacancy, the vacancy shall be filled for the remainder of the term.  An acting Executive Secretary-Director may be appointed by the State Board of Elections under the same procedures as the Governor may appoint an acting officer under G.S. 147-12(3)	and G.S. 147-16.4."

–ENVIRONMENTAL MANAGEMENT COMMISSION CONFIRMATION
(i)  G.S. 143B-283, as amended by subsection (z) of this act, reads as rewritten:
"§ 143B-283.  Environmental Management Commission – members; selection; removal; compensation; quorum; services.
(a)	The Environmental Management Commission shall consist of 13 members appointed by the Governor, subject to confirmation by the General Assembly as provided by G.S. 147-16.4, and four members appointed by the General Assembly in accordance with subsection (d) of this section.   The Governor shall select the members so that the membership of the Commission shall consist of:
(1)	One who shall be a licensed physician with specialized training and experience in the health effects of environmental pollution;
(2)	One who shall, at the time of appointment, be actively connected with the Commission for Health Services or local board of health or have experience in health sciences;
(3)	One who shall, at the time of appointment, be actively practicing as a farmer;
(4)	One who shall, at the time of appointment, be a registered engineer with specialized training and experience in water supply or water or air pollution control;
(5)	One who shall, at the time of appointment, be actively connected with or have had experience in the fish and wildlife conservation activities of the State;
(6)	One who shall, at the time of appointment, have special training and scientific expertise in hydrogeology or groundwater hydrology;
(7)	Two members interested in water and air pollution control, appointed from the public at large;
(8)	One who shall, at the time of appointment, be actively connected with industrial production or have had experience in the field of industrial air and water pollution control;
(9)	One who shall, at the time of appointment, be actively connected with or have had experience in pollution control problems of municipal or county government;
(9a)	One who shall be an active realtor who is not a developer or builder;
(10)	One who shall, at the time of appointment, have special training and scientific expertise in air pollution control and the effects of air pollution; and
(11)	One who shall, at the time of appointment, have special training and scientific expertise in freshwater, estuarine, marine biological, or ecological sciences.
(b)	Members so appointed shall serve terms of office of six years. Any appointment to fill a vacancy on the Commission created by the resignation, dismissal, death or disability of a member shall be for the balance of the unexpired term, subject to confirmation by the General Assembly as provided by G.S. 147-16.4.  At the expiration of each member's term, the Governor shall replace the member with a new member of like qualifications, subject to confirmation by the General Assembly as provided by G.S. 147-16.4.  The initial members of the Environmental Management Commission shall be those members of the present Board of Water and Air Resources who shall meet the above standards for membership on the Environmental Management Commission and who shall serve on the Environmental Management Commission for a period equal to the remainder of their current terms on the Board of Water and Air Resources, four of whose appointments expire June 30, 1975, five of whose appointments expire June 30, 1977, and four of whose appointments expire June 30, 1979. Any initial appointment to replace a member of the present Board of Water and Air Resources who does not meet the above standards for membership on the Environmental Management Commission shall be for a period equal to the replaced member's unexpired term.  The initial appointment for category (9a) shall be for a four-year term commencing July 1, 1996, and expiring June 30, 2000.  Successors shall be appointed for six-year terms.
The Governor shall have the power to remove any member of the Commission from office for misfeasance, malfeasance, or nonfeasance in accordance with the provisions of G.S. 143B-13 of the Executive Organization Act of 1973.
The members of the Commission shall receive per diem and necessary travel and subsistence expenses in accordance with the provisions of G.S. 138-5.
A majority of the Commission shall constitute a quorum for the transaction of business.
All clerical and other services required by the Commission shall be supplied by the Secretary of Environment, Health, and Natural Resources.
(c)	Nine of the members appointed by the Governor under this section shall be persons who do not derive any significant portion of their income from persons subject to permits or enforcement orders under this Chapter. The Governor shall require adequate disclosure of potential conflicts of interest by members. The Governor, by executive order, shall promulgate criteria regarding conflicts of interest and disclosure thereof for determining the eligibility of persons under this section, giving due regard to the requirements of federal legislation, and for this purpose may promulgate rules, regulations or guidelines in conformance with those established by any federal agency interpreting and applying provisions of federal law.
(d)	In addition to the members designated by subsection (a), the General Assembly shall appoint four members, two upon the recommendation of the Speaker of the House of Representatives, and two upon the recommendation of the President of the Senate. Appointments by the General Assembly shall be made in accordance with G.S. 120-121, and vacancies in those appointments shall be filled in accordance with G.S. 120-122. The terms of initial appointees by the General Assembly shall expire on June 30, 1983. Thereafter, these members shall serve two-year terms."

–HEALTH SERVICES COMMISSION CONFIRMATION
(j)  G.S. 130A-30 reads as rewritten:
"§ 130A-30.  Commission for Health Services – Members; selection; quorum; compensation.
(a)	The Commission for Health Services shall consist of 13 members, four of whom shall be elected by the North Carolina Medical Society and nine of whom shall be appointed by the Governor.  The members appointed by the Governor are subject to confirmation by the General Assembly as provided by G.S. 147-16.4, and the members elected by the North Carolina Medical Society are subject to confirmation by the General Assembly as provided by G.S. 147-16.4 as if those elected had been appointed by the Governor.
(b)	One of the members appointed by the Governor shall be a licensed pharmacist, one a registered engineer experienced in sanitary engineering or a soil scientist, one a licensed veterinarian, one a licensed optometrist, one a licensed dentist, and one a registered nurse. The initial members of the Commission shall be the members of the State Board of Health who shall serve for a period equal to the remainder of their current terms on the State Board of Health, three of whose appointments expire May 1, 1973, and two of whose appointments expire May 1, 1975. At the end of the respective terms of office of initial members of the Commission, their successors shall be appointed for terms of four years and until their successors are appointed and qualify. Any appointment to fill a vacancy on the Commission created by the resignation, dismissal, death, or disability of a member shall be for the balance of the unexpired term, subject to confirmation by the General Assembly as provided by G.S. 147-16.4.
(c)	The North Carolina Medical Society shall have the right to remove any member elected by it for misfeasance, malfeasance, or nonfeasance, and the Governor shall have the right to remove any member appointed by him for misfeasance, malfeasance, or nonfeasance in accordance with the provisions of G.S. 143B-13. Vacancies on said Commission among the membership elected by the North Carolina Medical Society shall be filled by the executive committee of the Medical Society until the next meeting of the Medical Society, when the Medical Society shall fill the vacancy for the unexpired term. Vacancies on said Commission among the membership appointed by the Governor shall be filled by the Governor for the unexpired term. The filling of vacancies is subject to confirmation by the General Assembly as provided by G.S. 147-16.4.
(d)	A majority of the members of the Commission shall constitute a quorum for the transaction of business.
(e)	The members of the Commission shall receive per diem and necessary traveling and subsistence expenses in accordance with the provisions of G.S. 138-5."

–COASTAL RESOURCES COMMISSION CONFIRMATION
(k)  G.S. 113A-104 reads as rewritten:
"§ 113A-104. Coastal Resources Commission.
(a)	Established. – The General Assembly hereby establishes within the Department of Environment, Health, and Natural Resources a commission to be designated the Coastal Resources Commission.
(b)	Composition. – The Coastal Resources Commission shall consist of 15 members appointed by the Governor, subject to confirmation by the General Assembly as provided by G.S. 147-16.4, as follows:
(1)	One who shall at the time of appointment be actively connected with or have experience in commercial fishing.
(2)	One who shall at the time of appointment be actively connected with or have experience in wildlife or sports fishing.
(3)	One who shall at the time of appointment be actively connected with or have experience in marine ecology.
(4)	One who shall at the time of appointment be actively connected with or have experience in coastal agriculture.
(5)	One who shall at the time of appointment be actively connected with or have experience in coastal forestry.
(6)	One who shall at the time of appointment be actively connected with or have experience in coastal land development.
(7)	One who shall at the time of appointment be actively connected with or have experience in marine-related business (other than fishing and wildlife).
(8)	One who shall at the time of appointment be actively connected with or have experience in engineering in the coastal area.
(9)	One who shall at the time of appointment be actively associated with a State or national conservation organization.
(10)	One who shall at the time of appointment be actively connected with or have experience in financing of coastal land development.
(11)	Two who shall at the time of appointment be actively connected with or have experience in local government within the coastal area.
(12)	Three at-large members.
(c)	Appointment of Members. – Appointments to the Commission shall be made to provide knowledge and experience in a diverse range of coastal interests.  The members of the Commission shall serve and act on the Commission solely for the best interests of the public and public trust, and shall bring their particular knowledge and experience to the Commission for that end alone.
The Governor shall appoint in his sole discretion, subject to confirmation by the General Assembly as provided by G.S. 147-16.4, those members of the Commission whose qualifications are described in subdivisions (6)	and (10), and one of the three members described in subdivision (12) of subsection (b) of this section.
The remaining members of the Commission shall be appointed by the Governor, subject to confirmation by the General Assembly as provided by G.S. 147-16.4, after completion of the nominating procedures prescribed by subsection (d)	of this section.  The members of the Commission whose qualifications are described in subdivisions (1) through (5) and subdivision (9) shall be persons who do not derive any significant portion of their income from land development, construction, real estate sales, or lobbying and do not otherwise serve as agents for development-related business activities.  The Governor shall require adequate disclosure of potential conflicts of interest by members.  The Governor, by executive order, shall promulgate criteria regarding conflicts of interest and disclosure thereof for determining the eligibility of persons under this section.
(d)	Nominations for Membership. – On or before May 1 in every even-numbered year the Governor shall designate and transmit to the board of commissioners in each county in the coastal area four nominating categories applicable to that county for that year. Said nominating categories shall be selected by the Governor from among the categories represented, respectively by subdivisions (1), (2), (3), (4), (5), (7), (8), (9), (11) – two persons, and (12) – two persons, of subsection (b) of this section (or so many of the above-listed paragraphs as may correspond to vacancies by expiration of term that are subject to being filled in that year). On or before June 1 in every even-numbered year the board of commissioners of each county in the coastal area shall nominate (and transmit to the Governor the names of) one qualified person in each of the four nominating categories that was designated by the Governor for that county for that year. In designating nominating categories from biennium to biennium, the Governor shall equitably rotate said categories among the several counties of the coastal area as in his judgment he deems best; and he shall assign, as near as may be, an even number of nominees to each nominating category and shall assign in his best judgment any excess above such even number of nominees. On or before June 1 in every even-numbered year the governing body of each incorporated city within the coastal area shall nominate and transmit to the Governor the name of one person as a nominee to the Commission. In making nominations, the boards of county commissioners and city governing bodies shall give due consideration to the nomination of women and minorities. The Governor shall appoint 12 persons from among said city and county nominees to the Commission, subject to confirmation by the General Assembly as provided by G.S. 147-16.4. The several boards of county commissioners and city governing bodies shall transmit the names, addresses, and a brief summary of the qualifications of their nominees to the Governor on or before June 1 in each even-numbered year, beginning in 1974; provided, that the Governor, by registered or certified mail, shall notify the chairman or the mayors of the said local governing boards by May 20 in each such even-numbered year of the duties of local governing boards under this sentence. If any board of commissioners or city governing body fails to transmit its list of nominations to the Governor by June 1, the Governor may add to the nominations a list of qualified nominees in lieu of those that were not transmitted by the board of commissioners or city governing body; Provided however, the Governor may not add to the list a nominee in lieu of one not transmitted by an incorporated city within the coastal area that neither has a population of 2,000 or more nor is contiguous with the Atlantic Ocean. Within the meaning of this section, the 'governing body' is the mayor and council of a city as defined in G.S. 160A-66. The population of cities shall be determined according to the most recent annual estimates of population as certified to the Secretary of Revenue by the Secretary of Administration.
(e)	Residential Qualifications. – All nominees of the several boards of county commissioners and city governing bodies must reside within the coastal area, but need not reside in the county from which they were nominated. No more than one of those members appointed by the Governor from among said nominees may reside in a particular county. No more than two members of the entire Commission, at any time, may reside in a particular county. No more than two members of the entire Commission, at any time, may reside outside the coastal area.
(f)	Office May Be Held Concurrently with Others. – Membership on the Coastal Resources Commission is hereby declared to be an office that may be held concurrently with other elective or appointive offices in addition to the maximum number of offices permitted to be held by one person under G.S. 128-1.1.
(g)	Terms. – The members shall serve staggered terms of office of four years. At the expiration of each member's term, the Governor shall reappoint or replace the member with a new member of like qualification (as specified in subsection (b) of this section), in the manner provided by subsections (c) and (d) of this section, subject to confirmation by the General Assembly as provided by G.S. 147-16.4. The initial term shall be determined by the Governor in accordance with customary practice but eight of the initial members shall be appointed for two years and seven for four years.
(h)	Vacancies. – In the event of a vacancy arising otherwise than by expiration of term, the Governor shall appoint a successor of like qualification (as specified in subsection (b) of this section) who shall then serve the remainder of his predecessor's term, subject to confirmation by the General Assembly as provided by G.S. 147-16.4.  When any such vacancy arises, the Governor shall immediately notify the board of commissioners of each county in the coastal area and the governing body of each incorporated city within the coastal area. Within 30 days after receipt of such notification each such county board and city governing body shall nominate and transmit to the Governor the name and address of one person who is qualified in the category represented by the position to be filled, together with a brief summary of the qualifications of the nominee. The Governor shall make the appointment from among said city and county nominees. If any county board or city governing body fails to make a timely transmittal of its nominee, the Governor may add to the nominations a qualified person in lieu of said nominee; Provided however, the Governor may not add to the list a nominee in lieu of one not transmitted by an incorporated city within the coastal area that neither has a population of 2,000 or more nor is contiguous with the Atlantic Ocean.
(i)	Officers. – The chairman shall be designated by the Governor from among the members of the Commission to serve as chairman at the pleasure of the Governor. The vice-chairman shall be elected by and from the members of the Commission and shall serve for a term of two years or until the expiration of his regularly appointed term.
(j)	Compensation. – The members of the Commission shall receive per diem and necessary travel and subsistence expenses in accordance with the provisions of G.S. 138-5.
(k)	In making appointments to and filling vacancies upon the Commission, the Governor shall give due consideration to securing appropriate representation of women and minorities.
(l)	Regular attendance at Commission meetings is a duty of each member. The Commission shall develop procedures for declaring any seat on the Commission to be vacant upon failure by a member to perform this duty."

–BUILDING CODE COUNCIL CONFIRMATION
(l)  G.S. 143-136 reads as rewritten:
"§ 143-136.  Building Code Council created; membership.
(a)	Creation; Membership; Terms. – There is hereby created a Building Code Council, which shall be composed of 15 members appointed by the Governor, subject to confirmation by the General Assembly as provided by G.S. 147-16.4, consisting of one registered architect, one licensed general contractor, one registered architect or licensed general contractor specializing in residential design or construction, one registered engineer practicing structural engineering, one registered engineer practicing mechanical engineering, one registered engineer practicing electrical engineering, one licensed plumbing and heating contractor, one municipal or county building inspector, one licensed liquid petroleum gas dealer/contractor involved in the design of natural and liquid petroleum gas systems who has expertise and experience in natural and liquid petroleum gas piping, venting and appliances, a representative of the public who is not a member of the building construction industry, a licensed electrical contractor, a registered engineer on the engineering staff of a State agency charged with approval of plans of State-owned buildings, a municipal elected official or city manager, a county commissioner or county manager, and an active member of the North Carolina fire service with expertise in fire safety. In selecting the municipal and county members, preference should be given to members who qualify as either a registered architect, registered engineer, or licensed general contractor. Of the members initially appointed by the Governor, three shall serve for terms of two years each, three shall serve for terms of four years each, and three shall serve for terms of six years each. Thereafter, all appointments shall be for terms of six years. The Governor may remove appointive members at any time. Neither the architect nor any of the above named engineers shall be engaged in the manufacture, promotion or sale of any building material, and any member who shall, during his term, cease to meet the qualifications for original appointment (through ceasing to be a practicing member of the profession indicated or otherwise) shall thereby forfeit his membership on the Council. In making new appointments or filling vacancies, the Governor shall ensure that minorities and women are represented on the Council.
The Governor may make appointments to fill the unexpired portions of any terms vacated by reason of death, resignation, or removal from office, subject to confirmation by the General Assembly as provided by G.S. 147-16.4.  In making such appointment, he shall preserve the composition of the Council required above.
(b)	Compensation. – Members of the Building Code Council other than any who are employees of the State shall receive seven dollars ($7.00) per day, including necessary time spent in traveling to and from their place of residence within the State to any place of meeting or while traveling on official business of the Council. In addition, all members shall receive mileage and subsistence according to State practice while going to and from any place of meeting, or when on official business of the Council."

–BOARD OF AGRICULTURE/NO CONFIRMATION
(m) G.S. 106-2, as amended by subsection (x) of this act, reads as rewritten:
"§ 106-2.  Department of Agriculture, Immigration, and Statistics established; Board of Agriculture, membership, terms of office, etc.
The Department of Agriculture, Immigration, and Statistics is created and established and shall be under the control of the Commissioner of Agriculture, with the consent and advice of a board to be styled 'The Board of Agriculture.' The Board of Agriculture shall consist of the Commissioner of Agriculture, who shall be ex officio a member and chairman thereof and shall preside at all meetings, and 11 other members from the State at large, so distributed as to reasonably represent the different sections and agriculture of the State.  In the appointment of the members of the Board the Governor shall also take into consideration the different agricultural interests of the State, and shall appoint one member who shall be a practical tobacco farmer to represent the tobacco farming interest, one who shall be a practical cotton grower to represent the cotton interest, one who shall be a practical truck farmer or general farmer to represent the truck and general farming interest, one who shall be a practical dairy farmer to represent the dairy and livestock interest of the State, one who shall be a practical poultryman to represent the poultry interest of the State, one who shall be a practical peanut grower to represent the peanut interests,  one who shall be a hog farmer to represent the interest of hog farmers, and one who shall be experienced in marketing to represent the marketing of products of the State. Upon the expiration of each term, the Governor shall appoint a successor. The term of office of these members shall be six years and until their successors are duly appointed and qualified.   The initial appointment of the hog farmer required by this section shall be for a six-year term beginning July 1, 1996.  Vacancies on the Board shall be filled by the Governor for the unexpired term. The Commissioner of Agriculture and the members of the Board of Agriculture shall be practical farmers engaged in their profession."

–ATLANTIC STATES MARINE FISHERIES COMMISSION/NO CONFIRMATION
(n)  G.S. 113-254 reads as rewritten:
"§ 113-254.  North Carolina members of Commission.
In pursuance of Article III of said Compact there shall be three members (hereinafter called commissioners) of the Atlantic States Marine Fisheries Commission (hereinafter called Commission) from the State of North Carolina.  The first commissioner from the State of North Carolina shall be the Fisheries Director of the Division of Marine Fisheries of the Department, ex officio, and the term of such ex officio commissioner shall terminate at the time he ceases to hold such office, and his successor as commissioner shall be his successor as Fisheries Director of the Division of Marine Fisheries.  The second commissioner from the State of North Carolina shall be a legislator and member of the Commission on Interstate Cooperation of the State of North Carolina, ex officio, designated by said Commission on Interstate Cooperation, and the term of any such ex officio commissioner shall terminate at the time he ceases to hold said legislative office or said office as Commissioner on Interstate Cooperation, and his successor as commissioner shall be named in like manner.  The Governor shall appoint a citizen as a third commissioner who shall have a knowledge of and interest in the marine fisheries problem.  The term of said Commissioner shall be three years and he shall hold office until his successor shall be appointed and qualified.  Vacancies occurring in the office of such Commissioner from any reason or cause shall be filled by appointment by the Governor for the unexpired term.  The Fisheries Director of the Division of Marine Fisheries appointed pursuant to Article III as ex officio commissioner may delegate, from time to time, to any deputy or other subordinate of the Fisheries Director, the power to be present and participate, including voting, as his representative or substitute at any meeting of or hearing by or other proceedings of the Commission.  The terms of each of the initial three members shall begin at the date of the appointment of the appointive commissioner, provided the said Compact shall then have gone into effect in accordance with Article II of the Compact; otherwise they shall begin upon the date upon which said Compact shall become effective in accordance with said Article II.
Any commissioner may be removed from office by the Governor upon charges and after a hearing."

–TEACHERS' AND STATE EMPLOYEES' RETIREMENT SYSTEM BOARD OF TRUSTEES/NO CONFIRMATION
(o)  G.S. 135-6(b) reads as rewritten:
"(b)	Membership of Board; Terms. – The Board shall consist of 14 members, as follows:
(1)	The State Treasurer, ex officio;
(2)	The Superintendent of Public Instruction, ex officio;
(3)	Ten members to be appointed by the Governor.  One of the appointive members shall be a member of the teaching profession of the State; one of the appointive members shall be an employee of the Board of Transportation, who shall be appointed by the Governor for a term of four years commencing April 1, 1947, and quadrennially thereafter; one of the appointive members shall be a representative of higher education appointed by the Governor for a term of four years commencing July 1, 1969, and quadrennially thereafter; one of the appointive members shall be a retired teacher who is drawing a retirement allowance, appointed by the Governor for a term of four years commencing July 1, 1969, and quadrennially thereafter; one shall be a retired State employee who is drawing a retirement allowance, appointed by the Governor for a term of four years commencing July 1, 1977, and quadrennially thereafter; one to be a general State employee, and three who are not members of the teaching profession or State employees; two to be appointed for a term of two years, two for a term of three years and one for a term of four years; one appointive member shall be a law-enforcement officer employed by the State, appointed by the Governor, for a term of four years commencing April 1, 1985. At the expiration of these terms of office the appointment shall be for a term of four years;
(4)	Two members appointed by the General Assembly, one appointed upon the recommendation of the Speaker of the House of Representatives, and one appointed upon the recommendation of the President of the Senate in accordance with G.S. 120-121. Neither of these members may be an active or retired teacher or State employee or an employee of a unit of local government. The initial members appointed by the General Assembly shall serve for terms expiring June 30, 1983. Thereafter, their successors shall serve for two-year terms beginning July 1 of odd-numbered years. Vacancies in appointments made by the General Assembly shall be filled in accordance with G.S. 120-122."

–COMMISSIONER OF MOTOR VEHICLES CONFIRMATION
(p) G.S. 20-2 reads as rewritten:
"§ 20-2.  Commissioner of Motor Vehicles; rules.
(a)	Commissioner and Assistants. – The Division of Motor Vehicles shall be administered by the Commissioner of Motor Vehicles, who shall be appointed by and serve at the pleasure of the Secretary of the Department of Transportation; provided that the appointment is subject to confirmation by the General Assembly as provided by G.S. 147-16.4 as if the appointment was made by the Governor.  The Commissioner shall be paid an annual salary to be fixed by the General Assembly in the Current Operations Appropriations Act and allowed his traveling expenses as allowed by law.  An acting Commissioner may be appointed by the Secretary under the same procedures as the Governor may appoint an acting officer under G.S. 147-12(3) and G.S. 147-16.4.
In any action, proceeding, or matter of any kind, to which the Commissioner of Motor Vehicles is a party or in which he may have an interest, all pleadings, legal notices, proof of claim, warrants for collection, certificates of tax liability, executions, and other legal documents, may be signed and verified on behalf of the Commissioner of Motor Vehicles by the Assistant Commissioner of Motor Vehicles or by any director or assistant director of any section of the Division of Motor Vehicles or by any other agent or employee of the Division so authorized by the Commissioner of Motor Vehicles.
(b)	Rules. – The Commissioner may adopt rules to implement this Chapter.  Chapter 150B of the General Statutes governs the adoption of rules by the Commissioner."

– CHAIRMAN OF EMPLOYMENT SECURITY COMMISSION
(q)  G.S. 96-3 reads as rewritten:
"§ 96-3.  Employment Security Commission.
(a)	Organization. – There is hereby created a commission to be known as the Employment Security Commission of North Carolina. The Commission shall consist of seven members to be appointed by the Governor on or before July 1, 1941. The Governor shall have the power to designate the member of said Commission who shall act as the chairman thereof, subject to confirmation by the General Assembly as provided by G.S. 147-16.4.  The chairman of the Commission shall not engage in any other business, vocation or employment. Three members of the Commission shall be appointed by the Governor to serve for a term of two years. Three members shall be appointed to serve for a term of four years, and upon the expiration of the respective terms, the successors of said members shall be appointed for a term of four years each, thereafter, and the member of said Commission designated by the Governor as chairman shall serve at the pleasure of the Governor. Any member appointed to fill a vacancy occurring in any of the appointments made by the Governor prior to the expiration of the term for which his predecessor was appointed shall be appointed for the remainder of such term, provided that the designation of a chairman to fill a vacancy is subject to confirmation by the General Assembly as provided by G.S. 147-16.4.  The Governor may at any time after notice and hearing, remove any Commissioner for gross inefficiency, neglect of duty, malfeasance, misfeasance, or nonfeasance in office.
(b)	Divisions. – The Commission shall establish two coordinate divisions: the North Carolina State Employment Service Division, created pursuant to G.S. 96-20, and the Unemployment Insurance Division. Each division shall be responsible for the discharge of its  distinctive functions. Each division shall be a separate administrative unit with respect to personnel and duties, except insofar as the Commission may find that such separation is impracticable.  Notwithstanding any other provision of this Chapter, administrative organization of the agency shall be in accordance with that which the Commission finds most desirable in order to perform the duties and functions of the agency.
(c)	Salaries. – The chairman of the Employment Security Commission of North Carolina shall be paid from the Employment Security Administration Fund a salary payable on a monthly basis, which salary shall be fixed by the General Assembly in the Current Operations Appropriations Act; and the members of the Commission, other than the chairman, shall each receive the same amount per diem for their services as is provided for the members of other State boards, commissions, and committees who receive compensation for their services as such, including necessary time spent in traveling to and from his place of residence within the State to the place of meeting while engaged in the discharge of the duties of his office and his actual traveling expenses, the same to be paid from the aforesaid fund.
(d)	Quorum. – The chairman or his designee and three members of the Commission shall constitute a quorum."

–BANKING COMMISSIONER (CONFORMING CHANGES)
(r)  G.S. 53-92 reads as rewritten:
"§ 53-92.  Appointment of Commissioner of Banks; State Banking Commission.
On or before April 1, 1983, and quadrennially thereafter, the Governor shall appoint a Commissioner of Banks subject to confirmation by the General Assembly as provided by G.S. 147-16.4.  The term of office for the Commissioner of Banks shall be four years. 
The State Banking Commission, which has heretofore been created, shall consist of the State Treasurer, who shall serve as an ex officio member thereof, 12 members appointed by the Governor, and two members appointed by the General Assembly under G.S. 120-121, one of whom shall be appointed upon the recommendation of the President of the Senate and one of whom shall be appointed upon the recommendation of the Speaker of the House of Representatives. The Governor shall appoint five practical bankers and seven persons selected primarily as representatives of the borrowing public. The person appointed by the General Assembly upon the recommendation of the President of the Senate shall be a practical banker. The person appointed by the General Assembly upon the recommendation of the Speaker of the House shall be a person selected primarily as a representative of the borrowing public. The persons selected primarily as representatives of the borrowing public shall not be employees or directors of any financial institution nor shall they have any interest in any regulated financial institution other than as a result of being a depositor or borrower. Under this section, no person shall be considered to have an interest in a financial institution whose interest in any financial institution does not exceed one-half of one percent (1/2 of 1%) of the capital stock of that financial institution. These members of the Commission shall be selected so as to fully represent the consumer, industrial, manufacturing, professional, business and farming interests of the State. No person shall serve on the Commission for more than two complete consecutive terms. As the terms of office of the appointive members of the Commission expire, their successors shall be appointed by the person appointing them, for terms of four years each. Any vacancy occurring in the membership of the Commission shall be filled by the appropriate appointing officer for the unexpired term, except that vacancies among members appointed by the General Assembly shall be filled in accordance with G.S. 120-122. The appointed members of the Commission shall receive as compensation for their services the same per diem and expenses as is paid to the members of the Advisory Budget Commission.  This compensation shall be paid from the fees collected from the examination of banks as provided by law.
The Banking Commission shall meet at such time or times, and not less than once every three months, as the Commission shall, by resolution, prescribe, and the Commission may be convened in special session at the call of the Governor, or upon the request of the Commissioner of Banks. The State Treasurer shall be chairman of the said Commission.
No member of said Commission shall act in any matter affecting any bank in which he is financially interested, or with which he is in any manner connected. No member of said Commission shall divulge or make use of any information coming into his possession as a result of his service on such Commission, and shall not give out any information with reference to any facts coming into his possession by reason of his services on such Commission in connection with the condition of any State banking institution, unless such information shall be required of him at any hearing at which he is duly subpoenaed, or when required by order of a court of competent jurisdiction.
A quorum shall consist of a majority of the total membership of the Banking Commission. A majority vote of the members qualified with respect to a matter under review present at that meeting shall constitute valid action of the Banking Commission. The State Treasurer and all disqualified members who are present shall be counted to determine whether a quorum is present at a meeting.
The Commissioner of Banks shall act as the executive officer of the Banking Commission, but the Commission shall provide, by rules and regulations, for hearings before the Commission upon any matter or thing which may arise in connection with the banking laws of this State upon the request of any person interested therein, and review any action taken or done by the Commissioner of Banks.
The Banking Commission is hereby vested with full power and authority to supervise, direct and review the exercise by the Commissioner of Banks of all powers, duties, and functions now vested in or exercised by the Commissioner of Banks under the banking laws of this State; any party to a proceeding before the Banking Commission may, within 20 days after final order of said Commission and by written notice to the Commissioner of Banks, appeal to the Superior Court of Wake County for a final determination of any question of law which may be involved. The cause shall be entitled 'State of North Carolina on Relation of the Banking Commission against (here insert name of appellant).' It shall be placed on the civil issue docket of such court and shall have precedence over other civil actions. In the event of an appeal the Commissioner shall certify the record to the Clerk of Superior Court of Wake County within 15 days thereafter."

–STATE CONTROLLER (CONFORMING CHANGES)
(s)  G.S. 143B-426.37 reads as rewritten:
"§ 143B-426.37.  State Controller.
(a)	The Office of the State Controller shall be headed by the State Controller who shall maintain the State accounting system and shall administer the State disbursing system.
(b)	The State Controller shall be a person qualified by education and experience for the office and shall be appointed by the Governor subject to confirmation by the General Assembly as provided by G.S. 147-16.4.  The term of office of the State Controller shall be for seven years; the first full term shall begin July 1, 1987.
(c)	The salary of the State Controller shall be set by the General Assembly in the Current Operations Appropriations Act."

–UTILITIES COMMISSION (CONFORMING CHANGES)
(t)  G.S. 62-10 reads as rewritten:
"§ 62-10. Number; appointment; terms; qualifications; chairman; vacancies; compensation; other employment prohibited.
(a)	The North Carolina Utilities Commission shall consist of seven commissioners who shall be appointed by the Governor subject to confirmation by the General Assembly as provided by G.S. 147-16.4.  This subsection shall be subject to the provisions of subsection (c) of this section.
(b)	The terms of the commissioners now serving shall expire at the conclusion of the term for which they were appointed which shall remain as before with two regular eight-year terms expiring on July 1 of each fourth year after July 1, 1965, and the fifth term expiring on July 1 of each eighth year after July 1, 1963. The terms of office of utilities commissioners thereafter shall be eight years commencing on July 1 of the year in which the predecessor terms expired, and ending on July 1 of the eighth year thereafter.
(c)	In order to increase the number of commissioners to seven, the names of two additional commissioners shall be submitted to the General Assembly on or before May 27, 1975, for confirmation by the General Assembly as provided in G.S. 62-10(a). The commissioners so appointed and confirmed shall serve new terms commencing on July 1, 1975, one of which shall be for a period of two years (with the immediate successor serving for a period of six years), and one of which shall be for a period of two years.
Thereafter, the terms of office of the additional commissioners shall be for eight years as provided in G.S. 62-10(b).
(d)	A commissioner in office shall continue to serve until his successor is duly confirmed and qualified but such holdover shall not affect the expiration date of such succeeding term.
(e)	On July 1, 1965, and every four years thereafter, one of the commissioners shall be designated by the Governor to serve as chairman of the Commission for the succeeding four years and until his successor is duly confirmed and qualifies. Upon death or resignation of the commissioner appointed as chairman, the Governor shall designate the chairman from the remaining commissioners and appoint a successor as hereinafter provided to fill the vacancy on the Commission.
		(h)	The salary of each commissioner and that of the commissioner designated as chairman shall be set by the General Assembly in the Current Operations Appropriations Act. 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.
(i)	The standards of judicial conduct provided for judges in Article 30 Chapter 7A of the General Statutes shall apply to members of the Commission. Members of the Commission shall be liable to impeachment for the causes and in the manner provided for judges of the General Court of Justice in Chapter 123 of the General Statutes. Members of the Commission shall not engage in any other employment, business, profession, or vocation while in office.
(j)	Members of the Commission shall be reimbursed for travel and subsistence expenses at the rates allowed to State officers and employees by G.S. 138-6(a)."

–EXECUTIVE DIRECTOR OF UTILITIES COMMISSION (CONFORMING CHANGES)
(u) G.S. 62-15(a) reads as rewritten:
"(a)	There is established in the Commission the office of executive director, whose salary shall be the same as that fixed for members of the Commission. The executive director shall be appointed by the Governor, subject to confirmation by the General Assembly as provided by G.S. 147-16.4.  The term of office for the executive director shall be six years, and the initial term shall begin July 1, 1977. The executive director may be removed from office by the Governor in the event of his incapacity to serve; and the executive director shall be removed from office by the Governor upon the affirmative recommendation of a majority of the Commission, after consultation with the Joint Legislative Utility Review Committee of the General Assembly. "

–STATE PERSONNEL COMMISSION (CONFORMING CHANGES)
(v)  G.S. 126-2(b), as amended by subsection (cc) of this section, reads as rewritten:
"(b)	The Commission shall consist of seven members who shall be appointed by the Governor, subject to confirmation by the General Assembly as provided by G.S. 147-16.4, as follows:
(1)	Two members shall be chosen from employees of the State subject to the provisions of this Chapter, one of whom shall be a member of the political party having the greatest number of registered voters in the State, and one of whom shall be a member of the political party having the second highest number of registered voters in the State.  At least one of these two members must be knowledgeable of personnel issues but may not be a personnel officer for an agency. 
(2)	Two members shall be appointed from a list of individuals nominated by the North Carolina Association of County Commissioners, one of whom shall be a member of the political party having the greatest number of registered voters in the State, and one of whom shall be a member of the political party having the second highest number of registered voters in the State.  Of these two members, one must also be an employee of a local government subject to this Chapter.
(3)	One member shall be appointed who is actively engaged in the management of a private business or industry.
(4)	Two members shall be appointed from the public at large, one of whom shall be an attorney licensed to practice law in North Carolina who is neither a State nor local government employee.
Of the initial members of the Commission, two shall be appointed to serve for terms of two years, two shall be appointed to serve for terms of four years, and three shall be appointed to serve for terms of six years.  Their successors shall be appointed by the Governor for terms of six years.  Any vacancy occurring prior to the expiration of a term shall be filled by appointment for the unexpired term, subject to confirmation by the General Assembly as provided by G.S. 147-16.4."
(w)  G.S. 126-2(c) is repealed.

–BOARD OF AGRICULTURE
(x)  G.S. 106-2 reads as rewritten:
"§ 106-2.  Department of Agriculture, Immigration, and Statistics established; Board of Agriculture, membership, terms of office, etc.
The Department of Agriculture, Immigration, and Statistics is created and established and shall be under the control of the Commissioner of Agriculture, with the consent and advice of a board to be styled 'The Board of Agriculture.' The Board of Agriculture shall consist of the Commissioner of Agriculture, who shall be ex officio a member and chairman thereof and shall preside at all meetings, and of 11 other members from the State at large, so distributed as to reasonably represent the different sections and agriculture of the State. In the appointment of the members of the Board the Governor shall also take into consideration the different agricultural interests of the State, and shall appoint one member who shall be a practical tobacco farmer to represent the tobacco farming interest, one who shall be a practical cotton grower to represent the cotton interest, one who shall be a practical truck farmer or general farmer to represent the truck and general farming interest, one who shall be a practical dairy farmer to represent the dairy and livestock interest of the State, one who shall be a practical poultryman to represent the poultry interest of the State, one who shall be a practical peanut grower to represent the peanut interests,  one who shall be a hog farmer to represent the interest of hog farmers, one who shall be experienced in marketing to represent the marketing of products of the State. The members of such Board shall be appointed by the Governor by and with the consent of the Senate, when the terms of the incumbents respectively expire. The term of office of such members shall be six years and until their successors are duly appointed and qualified. The terms of office of the five members constituting the present Board of Agriculture shall continue for the time for which they were appointed. In making appointments for the enlarged Board of Agriculture, the Governor shall make the appointments so that the term of three members will be for two years, three for four and four for six years. Thereafter the appointments shall be made for six years.  The initial appointment of the hog farmer required by this section shall be for a term beginning August 1, 1996 and expiring June 30, 2002.  Vacancies on the Board shall be filled by the Governor for the unexpired term. The Commissioner of Agriculture and the members of the Board of Agriculture shall be practical farmers engaged in their profession."

–GOVERNOR'S CRIME COMMISSION
(y) G.S. 143B-478(a)(1) reads as rewritten:
"(1)	The voting members shall be:
a.	The Governor, the Chief Justice of the Supreme Court of North Carolina (or his alternate), the Attorney General, the Director of the Administrative Office of the Courts, the Secretary of the Department of Human Resources, the Secretary of the Department of Correction, and the Superintendent of Public Instruction.
b.	A judge of superior court, a judge of district court specializing in juvenile matters, a chief district court judge, and a district attorney. Of these appointees, two shall be members of the political party having the largest number of registered voters in the State, and two shall be members of the political party having the second largest number of registered voters in the State.
c.	A defense attorney, three sheriffs (one of whom shall be from a 'high crime area'), three police executives (one of whom shall be from a 'high crime area'), six citizens (two with knowledge of juvenile delinquency and the public school system, two of whom shall be under the age of 21 at the time of their appointment, one representative of a "private juvenile delinquency program," and one in the discretion of the Governor), three county commissioners or county officials, and three mayors or municipal officials.
d.	Two members of the North Carolina House of Representatives, one of whom is a member of the political party having the greatest number of members in the House of Representatives and one of whom is a member of the political party having the second highest number of members in the House of Representatives, and two members of the North Carolina Senate, one of whom is a member of the political party having the greatest number of members in the Senate and one of whom is a member of the political party having the second highest number of members in the Senate."
(y1) G.S. 143B-478(b)(3) reads as rewritten:
"(3)	The following members shall be appointed by the Governor from a list submitted by the Chief Justice of the Supreme Court: the judge of superior court, the judge of district court specializing in juvenile matters, and the chief district court judge.  The Chief Justice shall submit a list of at least three nominees for each position within 30 days after a vacancy in the judicial membership. Of the three or more nominees for each position, at least one shall be a member of the political party having the largest number of registered voters in the State, and at least one shall be a member of the political party having the second largest number of registered voters in the State."

–ENVIRONMENTAL MANAGEMENT COMMISSION
(z) G.S. 143B-283 reads as rewritten:
"§ 143B-283.  Environmental Management Commission – members; selection; removal; compensation; quorum; services.
(a)	The Environmental Management Commission shall consist of 13 members appointed by the Governor and four members appointed by the General Assembly in accordance with subsection (d) of this section.   The Governor shall select the members so that the membership of the Commission shall consist of:
(1)	One who shall be a licensed physician with specialized training and experience in the health effects of environmental pollution;
(2)	One who shall, at the time of appointment, be actively connected with the Commission for Health Services or local board of health or have experience in health sciences;
(3)	One who shall, at the time of appointment, be actively practicing as a farmer;
(4)	One who shall, at the time of appointment, be a registered engineer with specialized training and experience in water supply or water or air pollution control;
(5)	One who shall, at the time of appointment, be actively connected with or have had experience in the fish and wildlife conservation activities of the State;
(6)	One who shall, at the time of appointment, have special training and scientific expertise in hydrogeology or groundwater hydrology;
(7)	Two members interested in water and air pollution control, appointed from the public at large;
(8)	One who shall, at the time of appointment, be actively connected with industrial production or have had experience in the field of industrial air and water pollution control;
(9)	One who shall, at the time of appointment, be actively connected with or have had experience in pollution control problems of municipal or county government;
(9a)	One who shall be an active realtor who is not a developer or builder;
(10)	One who shall, at the time of appointment, have special training and scientific expertise in air pollution control and the effects of air pollution; and
(11)	One who shall, at the time of appointment, have special training and scientific expertise in freshwater, estuarine, marine biological, or ecological sciences.
(b)	Members so appointed shall serve terms of office of six years. Any appointment to fill a vacancy on the Commission created by the resignation, dismissal, death or disability of a member shall be for the balance of the unexpired term. At the expiration of each member's term, the Governor shall replace the member with a new member of like qualifications. The initial members of the Environmental Management Commission shall be those members of the present Board of Water and Air Resources who shall meet the above standards for membership on the Environmental Management Commission and who shall serve on the Environmental Management Commission for a period equal to the remainder of their current terms on the Board of Water and Air Resources, four of whose appointments expire June 30, 1975, five of whose appointments expire June 30, 1977, and four of whose appointments expire June 30, 1979. Any initial appointment to replace a member of the present Board of Water and Air Resources who does not meet the above standards for membership on the Environmental Management Commission shall be for a period equal to the replaced member's unexpired term.  The initial appointment for category (9a) shall be for a term commencing August 1, 1996, and expiring June 30, 2000.  Successors shall be appointed for six-year terms.
The Governor shall have the power to remove any member of the Commission from office for misfeasance, malfeasance, or nonfeasance in accordance with the provisions of G.S. 143B-13 of the Executive Organization Act of 1973.
The members of the Commission shall receive per diem and necessary travel and subsistence expenses in accordance with the provisions of G.S. 138-5.
A majority of the Commission shall constitute a quorum for the transaction of business.
All clerical and other services required by the Commission shall be supplied by the Secretary of Environment, Health, and Natural Resources.
(c)	Nine of the members appointed by the Governor under this section shall be persons who do not derive any significant portion of their income from persons subject to permits or enforcement orders under this Chapter. The Governor shall require adequate disclosure of potential conflicts of interest by members. The Governor, by executive order, shall promulgate criteria regarding conflicts of interest and disclosure thereof for determining the eligibility of persons under this section, giving due regard to the requirements of federal legislation, and for this purpose may promulgate rules, regulations or guidelines in conformance with those established by any federal agency interpreting and applying provisions of federal law.
(d)	In addition to the members designated by subsection (a), the General Assembly shall appoint four members, two upon the recommendation of the Speaker of the House of Representatives, and two upon the recommendation of the President of the Senate. Appointments by the General Assembly shall be made in accordance with G.S. 120-121, and vacancies in those appointments shall be filled in accordance with G.S. 120-122. The terms of initial appointees by the General Assembly shall expire on June 30, 1983. Thereafter, these members shall serve two-year terms."

–POST-RELEASE SUPERVISION AND PAROLE COMMISSION
(aa) G.S. 143B-267 reads as rewritten:
"§ 143B-267.  Post-Release Supervision and Parole Commission – members; selection; removal; chairman; compensation; quorum; services.
The Post-Release Supervision and Parole Commission shall consist of three full-time members.  The three full-time members shall be appointed by the Governor from persons whose recognized ability, training, experience, and character qualify them for service on the Commission.  The terms of office of the five members presently serving on the Commission shall expire on June 30, 1993.  The terms of three members appointed effective July 1, 1993, shall be for three years, but only one successor shall be appointed for terms commencing on or after July 1, 1996.  The terms of two members appointed effective July 1, 1993, shall be for four years.  Thereafter, the terms of office of persons appointed by the Governor as members of the Commission shall be for four years or until their successors are appointed and qualify.  Any appointment to fill a vacancy on the Commission created by the resignation, removal, death or disability of a full-time member shall be for the balance of the unexpired term only.
The Governor shall have the authority to remove any member of the Commission from office for misfeasance, malfeasance or nonfeasance, pursuant to the provisions of G.S. 143B-13.  The Governor shall designate a full-time member of the Commission to serve as chairman of the Commission at the pleasure of the Governor.
With regard to the transaction of the business of the Commission the following procedure shall be followed: The chairman shall designate panels of two voting Commission members and shall designate a third commissioner to serve as an alternate member of a panel.  Insofar as practicable, the chairman shall assign the members to panels in such fashion that each commissioner sits a substantially equal number of times with each other commissioner.  Whenever any matter of business, such as the granting, denying, revoking or rescinding of parole, or the authorization of work-release privileges to a prisoner, shall come before the Commission for consideration and action, the chairman shall refer such matter to a panel.  Action may be taken by concurring vote of the two sitting panel members.  If there is not a concurring vote of the two panel members, the matter will be referred to the alternate member who shall cast the deciding vote.  However, no person serving a sentence of life imprisonment shall be granted parole or work-release privileges except by majority vote of the full Commission.
The full-time members of the Commission shall receive the salary fixed by the General Assembly in the Current Operations Appropriations Act and shall receive necessary travel and subsistence expenses in accordance with the provisions of G.S. 138-6.
All clerical and other services required by the Commission shall be supplied by the Secretary of Correction."

–STATE PERSONNEL COMMISSION
(bb) G.S. 126-2(b) reads as rewritten:
"(b)	The Commission shall consist of seven members who shall be appointed by the Governor as follows:
(1)	Two members shall be chosen from employees of the State subject to the provisions of this Chapter, one of whom shall be a member of the political party having the greatest number of registered voters in the State, and one of whom shall be a member of the political party having the second highest number of registered voters in the State.  At least one of these two members must be knowledgeable of personnel issues but may not be a personnel officer for an agency.
(2)	Two members shall be appointed from a list of individuals nominated by the North Carolina Association of County Commissioners, one of whom shall be a member of the political party having the greatest number of registered voters in the State, and one of whom shall be a member of the political party having the second highest number of registered voters in the State.  Of these two members, one must also be an employee of a local government subject to this Chapter.
(3)	One member shall be appointed who is actively engaged in the management of a private business or industry.
(4)	Two members shall be appointed from the public at large, one of whom shall be an attorney licensed to practice law in North Carolina who is neither a State nor local government employee.
Of the initial members of the Commission, two shall be appointed to serve for terms of two years, two shall be appointed to serve for terms of four years, and three shall be appointed to serve for terms of six years.  Their successors shall be appointed by the Governor for terms of six years.  Any vacancy occurring prior to the expiration of a term shall be filled by appointment for the unexpired term."

–ZOOLOGICAL PARK COUNCIL
(cc) G.S. 143B-336 reads as rewritten:
"§ 143B-336. North Carolina Zoological Park Council – members; selection; removal; chairman; compensation; quorum; services.
The North Carolina Zoological Park Council of the Department of Environment, Health, and Natural Resources shall consist of 13 members: four members appointed by the Governor, the Chairman of the Board of Directors of the North Carolina Zoological Society ex officio, four members appointed by the General Assembly upon the recommendation of the Speaker of the House of Representatives in accordance with G.S. 120-121, and four members appointed by the General Assembly upon the recommendation of the President Pro Tempore of the Senate in accordance with G.S. 120-121. The Governor shall appoint four members for terms commencing August 1, 1996 and expiring June 30, 1998.  The General Assembly upon the recommendation of the Speaker of the House of Representatives shall appoint four members for  terms commencing August 1, 1996 and expiring June 30, 2000.  The General Assembly upon the recommendation of the President Pro Tempore of the Senate shall appoint four members for terms commencing August 1, 1996 and expiring June 30, 2000. Thereafter, the appointment of their successors shall be for terms of four years and until their successors are appointed and qualify. Any appointment to fill a vacancy on the Council created by the resignation, dismissal, death or disability of a member shall be for the balance of the unexpired term.
The Governor shall have the power to remove any member of the Council from office in accordance with the provisions of G.S. 143B-16 of the Executive Organization Act of 1973.
The Governor shall designate a member of the Council to serve as chairman at his pleasure.
Members of the Council shall receive per diem and necessary travel and subsistence expenses in accordance with the provisions of G.S. 138-5.
A majority of the Council shall constitute a quorum for the transaction of business.
All clerical and other services required by the Council shall be supplied by the Secretary of Environment, Health, and Natural Resources."
(cc1) The terms of all positions on the North Carolina Zoological Park Council as of the effective date of subsection (cc) of this section expire July 31, 1996.

–UNC HOSPITALS AT CHAPEL HILL/REORGANIZATION
(dd)  G.S. 116-37 reads as rewritten:
"§ 116-37.  University of North Carolina Hospitals at Chapel Hill.
(a)	Composition. –The University of North Carolina Hospitals at Chapel Hill is hereby created.  The Hospitals shall be governed by a board of directors consisting of 12 members of which eight shall be appointed by the General Assembly and one by the Governor.  Of the eight members appointed by the General Assembly, four shall be appointed upon the recommendation of the Speaker of the House of Representatives in accordance with G.S. 120-122 and four shall be appointed upon the recommendation of the President Pro Tempore of the Senate in accordance with G.S. 120-122.  Three members ex officio of said board shall be the University of North Carolina at Chapel Hill Vice-Chancellor for Health Affairs, University of North Carolina at Chapel Hill Vice-Chancellor for Business and Finance, and the Dean of the University of North Carolina at Chapel Hill Medical School, or successors to these offices under other titles with similar responsibilities.  The nine appointed members shall be appointed from the business and professional public-at-large, none of whom shall be Governors of the University, and, thereafter, the nine appointive members shall select one of their number to serve as chairman. Members of this board shall include, but not be limited to, persons with special competence in business management, hospital administration, and medical practice not affiliated with University faculty. Board members, other than ex officio members, shall each receive such per diem and necessary travel and subsistence expenses while engaged in the discharge of their official duties as is provided by law for members of State boards and commissions generally.
(a1)	Appointment to Board. –Members shall be appointed for terms commencing August 1, 1996.  Of the initial four appointees of the General Assembly that are made upon the recommendation of the Speaker of the House of Representatives, two shall serve terms ending June 30, 1998, and two shall serve terms ending June 30, 2000.  Of the initial four appointees of the General Assembly that are made upon the recommendation of the President Pro Tempore of the Senate, two shall serve terms ending June 30, 1998, and two shall serve terms ending June 30, 2000.  The initial appointee of the Governor shall serve a term ending June 30, 1999.  Thereafter, their successors shall serve four-year terms.  No person may be appointed to (i) more than three full four-year terms in succession, or (ii) a four-year term if preceded immediately by 12 years of service. Resignation from a term of office shall not constitute a break in service for the purpose of this subsection. Board member vacancies shall be filled by the appointing authority for the remainder of the unexpired term.
(a2)	Administrative Location. – Effective October 1, 1996, the University of North Carolina Hospitals at Chapel Hill is administratively assigned to the University of North Carolina at Chapel Hill.  The board of directors shall exercise all powers prescribed in this section, subject to the review and approval of the University of North Carolina at Chapel Hill.
(b)	Meetings and Powers of Board. – The board of directors shall meet at least every 60 days and may hold special meetings at any time and place within the State at the call of its chairman. The board of directors shall make rules, regulations, and policies governing the management and operation of the University of North Carolina Hospitals at Chapel Hill, consistent with basic State statutes and procedures, to meet the goals of education, research, patient care, and community service. The board's action on matters within its jurisdiction is final, except that appeals may be made, in writing, to the board of trustees of the University of North Carolina at Chapel Hill with a copy of the appeal to the University of North Carolina at Chapel Hill administration. The board of directors shall elect and may remove the executive director of the University of North Carolina Hospitals at Chapel Hill. The board of directors may enter into formal agreements with the University of North Carolina at Chapel Hill, Division of Health Affairs, with respect to the provision of clinical experience for students and may also enter into formal agreements with the University of North Carolina at Chapel Hill for the provision of maintenance and supporting services.
(c)	Executive Director. – The chief administrative officer of the University of North Carolina Hospitals at Chapel Hill shall be the executive director, who shall be appointed by the board of directors to serve at its pleasure. The executive director shall administer the affairs of the University of North Carolina Hospitals at Chapel Hill subject to the duly adopted policies, rules, and regulations of the board of directors, including the appointment, promotion, demotion, and discharge of all personnel. The executive director shall report to the board of directors quarterly or more often as required. The executive director will serve as secretary to the board of directors.
(d)	Personnel. – The University of North Carolina Hospitals at Chapel Hill shall maintain a personnel office for personnel administration. Notwithstanding the provisions of Chapter 126 of the General Statutes to the contrary, the Board of Directors of the University of North Carolina Hospitals at Chapel Hill shall establish policies and rules governing the study and implementation of competitive position classification and compensation plans for registered and licensed practical nurse positions that have been approved by the Board of Directors.  These plans shall provide for minimum, maximum, and intermediate rates of pay, and may include provisions for range revisions and shift premium pay and for salary adjustments to address internal inequities, job performance, and market conditions. The Office of State Personnel shall review the classification and compensation plans on an annual basis.  All changes in compensation plans for these registered and licensed practical nurse positions shall be submitted to the Office of State Personnel upon implementation.
(e)	Finances. – The University of North Carolina Hospitals at Chapel Hill shall be subject to the provisions of the Executive Budget Act. There shall be maintained a business and budget office to administer the budget and financial affairs of the University of North Carolina Hospitals at Chapel Hill. The executive director, subject to the board of directors, shall be responsible for all aspects of budget preparation, budget execution, and expenditure reporting. Subject to the approval of the Director of the Budget: All operating funds of the University of North Carolina Hospitals at Chapel Hill may be budgeted and disbursed through a special fund code, all receipts of the University of North Carolina Hospitals at Chapel Hill may be deposited directly to the special fund code; and general fund appropriations for support of the University of North Carolina Hospitals at Chapel Hill may be budgeted in a general fund code under a single purpose, 'Contribution to University of North Carolina Hospitals at Chapel Hill Operations' and be transferable to the special fund operating code as receipts. Prior to taking any action under this subsection, the Director of the Budget may consult with the Advisory Budget Commission.
(e1)	Finances – Patient/Hospital Benefit. – The Executive Director of the University of North Carolina Hospitals at Chapel Hill or the Director's designee, may expend operating budget funds, including State funds, of the University of North Carolina Hospitals at Chapel Hill for the direct benefit of a patient, when, in the judgment of the Executive Director or the Director's designee, the expenditure of these funds would result in a financial benefit to the University of North Carolina Hospitals at Chapel Hill. Any such expenditures are declared to result in the provision of medical services and create charges of the University of North Carolina Hospitals at Chapel Hill for which the hospitals may bill and pursue recovery in the same way as allowed by law for recovery of other hospitals' charges for services that are unpaid.
These expenditures shall be limited to no more than seven thousand five hundred dollars ($7,500) per patient per admission and shall be restricted (i) to situations in which a patient is financially unable to afford ambulance or other transportation for discharge; (ii) to afford placement in an after-care facility pending  approval of third party entitlement benefits; (iii) to assure availability of a bed in an after-care facility after discharge from the hospitals; (iv) to secure equipment or other medically appropriate services after discharge; (v) or to pay health insurance premiums. The Executive Director or the Director's designee shall reevaluate at least once a month the cost-effectiveness of any continuing payment on behalf of a patient.
To the extent that the University of North Carolina Hospitals at Chapel Hill advance anticipated government entitlement benefits for a patient's benefit, for which the patient later receives a lump sum 'backpay' award from an agency of the State, whether for the current admission or subsequent admission, the State agency shall withhold from this backpay an amount equal to the sum advanced on the patient's behalf by the University of North Carolina Hospitals at Chapel Hill, if, prior to the disbursement of the backpay, the applicable State program has received notice from the University of North Carolina Hospitals at Chapel Hill of the advancement.
(f)	Purchases. – The University of North Carolina Hospitals at Chapel Hill shall be subject to all provisions of Articles 3 and 3A of Chapter 143 of the General Statutes relating to the Department of Administration, Purchase and Contract Division. There shall be maintained a purchasing office to handle all purchasing requirements of the University of North Carolina Hospitals at Chapel Hill. The Purchase and Contract Division may enter into such arrangements with the board of directors as the Division may deem necessary in consideration of the special requirements of the University of North Carolina Hospitals at Chapel Hill for procurement of certain supplies, materials, equipments and services.
(g)	Property. – The board of directors shall be responsible to the University of North Carolina at Chapel Hill for the maintenance, operation, and control of the University of North Carolina Hospitals at Chapel Hill and grounds.
(h)	Patient Information. – The University of North Carolina Hospitals at Chapel Hill shall, at the earliest possible opportunity, specifically make a verbal and written request to each patient to disclose the patient's Social Security number, if any. If the patient does not disclose that number, the University of North Carolina Hospitals at Chapel Hill shall deny benefits, rights and privileges of the University of North Carolina Hospitals at Chapel Hill to the patient as soon as practical, to the maximum extent permitted by federal law or federal regulations. The University of North Carolina Hospitals at Chapel Hill shall make the disclosure to the patient required by Section 7(b) of P.L. 93-579. This subsection is supplementary to G.S. 105A-3(c)."

–EFFECTIVE DATES AND OTHER CHANGES
(ee) G.S. 120-19.4A reads as rewritten:
"§ 120-19.4A.  Requests to State Bureau of Investigation for background investigation of a person who must be confirmed by legislative action.
The President Pro Tempore of the Senate or the Speaker of the House may request that the State Bureau of Investigation perform a background investigation on a person who must be appointed or confirmed by the General Assembly, the Senate, or the House of Representatives.  The person being investigated shall be given written notice by regular mail at least 10 days prior to the date that the State Bureau of Investigation is requested to perform the background investigation by the officer of the body from which the request originated.  There is a rebuttable presumption that the person being investigated received the notice if the presiding officer has a copy of the notice.  The State Bureau of Investigation shall perform the requested background investigation and shall provide the information, including criminal records, to the officer of the body from which the request originated.  A copy of the information also shall be provided to the person being investigated. The term 'background investigation' shall be limited to an investigation of a person's criminal record, educational background, employment record, records concerning the listing and payment of taxes,  and credit record, and to a requirement that the person provide the information contained in the statements of economic interest required to be filed by persons subject to Executive Order Number 1, filed on January 31, 1985, as contained on pages 1405 through 1419 of the 1985 Session Laws (First Session, 1985)."
(ff) Subsections (a) through (w) of this section shall become effective only if the constitutional amendments proposed in Chapter 5 of the 1995 Session Laws, AN ACT TO PROVIDE FOR A REFERENDUM TO AMEND THE CONSTITUTION TO PROVIDE FOR A GUBERNATORIAL VETO, are approved by the qualified voters of this State in the referendum held pursuant to Chapter 5 of the 1995 Session Laws.  If those constitutional amendments are approved, then those subsections shall become effective upon the certification by the State Board of Elections to the Secretary of State that those amendments have been approved and shall apply to terms of office and vacancies occurring on or after that certification.  The remainder of this act is effective upon ratification, and applies, except as provided in subsections (cc) and (dd) of this section, to terms of office and vacancies occurring on or after that date.

PART 9.  OFFICE OF STATE BUDGET AND MANAGEMENT

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

PART 10.  DEPARTMENT OF ADMINISTRATION

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

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

Requested by:   Representatives Ives, Lemmond
MOTOR FLEET MANAGEMENT MODIFICATIONS
Sec. 10.2.  G.S. 143-341(8)7a.vii is repealed.

Requested by:   Representative Ives
PROCEEDS OF TIMBER SALES MAY BE USED FOR VETERANS HOMES
Sec. 10.3.  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:   Representative Culpepper
ROANOKE ISLAND HISTORICAL ASSOCIATION
Sec. 11.  G.S. 143-200 reads as rewritten:
"§ 143-200.  Members of board of directors; terms; appointment.
The governing body of said Association shall be a board of directors consisting of the Governor of the State, the Attorney General and the Secretary of Cultural Resources as ex officio members, and the following 21 members: J. Spencer Love, Greensboro; Miles Clark, Elizabeth City; Mrs. Richard J. Reynolds, Winston-Salem; D. Hiden Ramsey, Asheville; Mrs. Charles A. Cannon, Concord; Dr. Fred Hanes, Durham; Mrs. Frank P. Graham, Chapel Hill; Bishop Thomas C. Darst, Wilmington; W. Dorsey Pruden, Edenton; John A. Buchanan, Durham; William B. Rodman, Jr., Washington; J. Melville Broughton, Raleigh; Melvin R. Daniels, Manteo; Paul Green, Chapel Hill; Samuel Selden, Chapel Hill; R. Bruce Etheridge, Manteo; Theodore S. Meekins, Manteo; Roy L. Davis, Manteo; M. K. Fearing, Manteo; A. R. Newsome, Chapel Hill. The members of said board of directors herein named other than the ex officio members, shall serve for a term of two years and until their successors are appointed. Appointments thereafter shall be made by the membership of the Association in regular annual meeting or special meeting called for such purpose.  In the event the Association through its membership should fail to make such appointments, then the appointments shall be made by the Governor of the State. If a vacancy occurs between annual meetings, the board of directors may fill the vacancy until the next annual meeting.  All vacancies occurring on the board of directors not filled by the board of directors within 30 days of the vacancy shall be filled by the Governor of the State."

Requested by:   Representatives Ives, Lemmond
DEPARTMENT OF CULTURAL RESOURCES TO REVIEW ADMISSION RATES FOR HISTORIC SITES
Sec. 11.1.  The Department of Cultural Resources shall review the admission fees and concession prices charged at each historic site.  The Department shall evaluate on a site-by-site basis whether those charges are competitive with the admission fees and concession prices charged at other historic sites and how an increase in prices would impact visitation of each site.  The Department of Cultural Resources shall report its findings and recommendations to the 1997 General Assembly.

PART 12.  DEPARTMENT OF INSURANCE

Requested by:   Representative Ives, Lemmond
CONSTRUCTION CODE RECEIPTS
Sec. 12.  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."

PART 13.  DEPARTMENT OF SECRETARY OF STATE

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

PART 13A.  STATE BOARD OF ELECTIONS

Requested by:  Representative Ives
Sec. 13A.  Notwithstanding G.S. 143-16.3, the State Board of Elections may use up to fifty thousand dollars ($50,000) of funds available to purchase a copy machine.

PART 14.  OFFICE OF STATE CONTROLLER

Requested by:   Representative Creech
NORTH CAROLINA INFORMATION HIGHWAY
Sec. 14.  (a)	The funds appropriated in this act to the Office of the State Controller for the operation of the North Carolina Information Highway shall be used only for costs incurred by the Office of the State Controller related to the operations and support of the North Carolina Information Highway.  No funds appropriated in this act shall be expended to pay Minimum Monthly usage charges for North Carolina Information Highway Services.
(b)	Of the funds appropriated to the Office of the State Controller for the North Carolina Information Highway (NCIH), an amount not to exceed five hundred thousand dollars ($500,000) shall be used to expand the long distance capacity and provide for the establishment of regional hubs in each of the seven LATAS in North Carolina.  The remaining funds shall be used to help defray the costs of existing NCIH sites except those located at university sites other than East Carolina University academic affairs campus.  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:   Representatives Ives, Lemmond
RESERVE FOR THE YEAR 2000 CONVERSION OF THE STATE'S COMPUTER SYSTEM
Sec. 14.1.  The Office of the State Controller shall include in its charges for data processing services costs of converting computer applications to operate properly at the turn of the century.  The Office of the State Controller shall develop procedures for managing the year 2000 conversion.

PART 14A.  DEPARTMENT OF REVENUE

Requested by:  Representatives Ives, Lemmond
DEPARTMENT OF REVENUE LAW-ENFORCEMENT OFFICERS
Sec. 14A.  (a)	Article 9 of Chapter 105 of the General Statutes is amended by adding a new section to read:
"§ 105-236.1.  Enforcement of revenue laws by revenue law-enforcement officers.
(a)	General. – The Secretary may appoint employees of the Criminal Investigations Division to serve as revenue law-enforcement officers having the responsibility and subject-matter jurisdiction to enforce the criminal laws relating to tax administration and enforcement only.  The Secretary may appoint employees of the Controlled Substances Tax Division to serve as revenue law-enforcement officers having the responsibility and subject-matter jurisdiction to enforce the excise tax on controlled substances as provided in Article 2D of this Chapter only.  To be a revenue law-enforcement officer, an employee must be certified as a criminal justice officer under Chapter 17C of the General Statutes.
(b)	Authority. – A revenue law-enforcement officer is a State officer with jurisdiction throughout the State within the officer's subject-matter jurisdiction.  A revenue law-enforcement officer may serve and execute notices, orders, warrants, or demands issued by the Secretary or the General Court of Justice in connection with the enforcement of the officer's subject-matter jurisdiction as set forth in subsection (a) of this section only.  A revenue law-enforcement officer has the full powers of arrest as provided by G.S. 15A-401 while executing the notices, orders, warrants, or demands."
(b)	G.S. 17C-2 reads as rewritten:
"§ 17C-2.  Definitions.
Unless the context clearly otherwise requires, the following definitions apply in this Chapter:
	 "  (1)  Commission. – The North Carolina Criminal Justice Education and Training Standards Commission.
	 "  (2)  Criminal justice agencies. – The State and local law-enforcement agencies, the State correctional agencies, other correctional agencies maintained by local governments, and the juvenile justice agencies, but shall not include deputy sheriffs, special deputy sheriffs, sheriffs' jailers, or other sheriffs' department personnel governed by the provisions of Chapter 17E of these General Statutes.
	 "  (3)  Criminal justice officers. – The administrative and subordinate personnel of all the departments, agencies, units or entities comprising the " criminal justice agencies who are sworn law-enforcement officers, both State and local, with the power of arrest; revenue law-enforcement officers; State correctional officers; State probation/parole officers; officers, supervisory and administrative personnel of local confinement facilities; State youth services officers; State probation/parole intake officers; State probation/parole officers-surveillance; State probation/parole intensive officers; and State parole case analysts.
	 "  (4)  Entry level. – The initial appointment or employment of any person by a criminal justice agency, or any appointment or employment of a person previously employed by a criminal justice agency who has not been employed by a criminal justice agency for the 12-month period preceding this appointment or employment, or any appointment or employment of a previously certified criminal justice officer to a position which requires a different type of certification."
(c)	G.S. 143-166.13(a) is amended by adding a new subdivision to read:
"(18)	Sworn State Law-Enforcement Officers with the power of arrest, Department of Revenue."
(d)	Of the funds appropriated to the Department of Revenue in this act for the 1996-97 fiscal year, the sum of sixty-seven thousand dollars ($67,000) shall be used to implement this section.

Requested by:   Representative Ives
ASSESS REVENUE STAFF REQUIREMENTS
Sec. 14A.1.  The State Auditor and the State Budget Office, Management and Productivity Unit, shall work with the Department of Revenue to assess the Department's staff requirements.  Specifically, they shall determine the variety of unit costs related to workload as influenced by existing laws and resulting policies and procedures adopted by the Department of Revenue.
The State Auditor, the State Budget Officer, and the Secretary of Revenue shall make a joint final report to the House and Senate Appropriations Subcommittees on General Government by February 1, 1997, on the results of this assessment.

PART 15.  COLLEGES AND UNIVERSITIES

Requested by:  Representatives Grady, Preston
AID TO STUDENTS ATTENDING PRIVATE COLLEGES
Sec. 15.  Section 15 of Chapter 324 of the 1995 Session Laws reads as rewritten:
"Sec. 15.  (a)	Funds appropriated in this act to the Board of Governors of The University of North Carolina for aid to private colleges shall be disbursed in accordance with the provisions of G.S. 116-19, 116-21, and 116-22.  These funds shall provide up to six hundred dollars ($600.00) per full-time equivalent North Carolina undergraduate student enrolled at a private institution as of October 1 each year.
These funds shall be placed in a separate, identifiable account in each eligible institution's budget or chart of accounts.  All funds in this account shall be provided as scholarship funds for needy North Carolina students during the fiscal year.  Each student awarded a scholarship from this account shall be notified of the source of the funds and of the amount of the award.  Funds not utilized under G.S. 116-19 shall be for the tuition grant program as defined in subsection (b)	of this section.
(b)	In addition to any funds appropriated pursuant to G.S. 116-19 and in addition to all other financial assistance made available to private educational institutions located within the State, or to students attending these institutions, there is granted to each full-time North Carolina undergraduate student attending an approved institution as defined in G.S. 116-22, a sum, not to exceed one thousand three hundred dollars ($1,300) per academic year, which shall be distributed to the student as hereinafter provided.
The tuition grants provided for in this section shall be administered by the State Education Assistance Authority pursuant to rules adopted by the State Education Assistance Authority not inconsistent with this section.  The State Education Assistance Authority shall not approve any grant until it receives proper certification from an approved institution that the student applying for the grant is an eligible student.  Upon receipt of the certification, the State Education Assistance Authority shall remit at such times as it shall prescribe the grant to the approved institution on behalf, and to the credit, of the student.
In the event a student on whose behalf a grant has been paid is not enrolled and carrying a minimum academic load as of the tenth classroom day following the beginning of the school term for which the grant was paid, the institution shall refund the full amount of the grant to the State Education Assistance Authority.  Each approved institution shall be subject to examination by the State Auditor for the purpose of determining whether the institution has properly certified eligibility and enrollment of students and credited grants paid on the behalf of the students.
In the event there are not sufficient funds to provide each eligible student with a full grant:
(1)	The Board of Governors of The University of North Carolina, with the approval of the Office of State Budget and Management, may transfer available funds to meet the needs of the programs provided by subsections (a) and (b) of this section; and
(2)	Each eligible student shall receive a pro rata share of funds then available for the remainder of the academic year within the fiscal period covered by the current appropriation.
Any remaining funds shall revert to the General Fund.
(c)	Expenditures made pursuant to this section may be used only for secular educational purposes at nonprofit institutions of higher learning.  Expenditures made pursuant to this section shall not be used for any student who is incarcerated in a State or federal correctional facility.
(d)	The State Education Assistance Authority shall document the number of full-time equivalent North Carolina undergraduate students that are enrolled in off-campus programs and the State funds collected by each institution pursuant to G.S. 116-19 for those students.  The State Education Assistance Authority shall also document the number of scholarships and the amount of the scholarships that are awarded under G.S. 116-19 to students enrolled in off-campus programs.  An 'off-campus program' is any program offered for degree credit away from the institution's main permanent campus.
The State Education Assistance Authority shall report to the Joint Legislative Commission on Governmental Operations by March 1, 1997, regarding its findings."

Requested by:   Representatives Grady, Preston
DISTANCE LEARNING INITIATIVES
Sec. 15.1.  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:   Representatives Grady, Preston
UNC EQUITY OF FUNDING
Sec. 15.2  Notwithstanding G.S. 116-30.3, the five constituent institutions (Appalachian State University, East Carolina University, University of North Carolina at Charlotte, University of North Carolina at Greensboro, and University of North Carolina at Wilmington) cited in the study of equity of funding among the constituent institutions of The University of North Carolina as receiving lower than average per pupil funding in several comparisons, shall not be required to revert two percent (2%) of their General Fund appropriations for the 1996-97 fiscal year.  These funds shall be used to improve areas of need that can be addressed with nonrecurring funds.

Requested by:   Representatives Grady, Preston
CENTER FOR THE PREVENTION OF SCHOOL VIOLENCE
Sec. 15.3  The General Assembly recommends that the Governor continue funding the Center for Prevention of School Violence from the current source of grant monies through the 1996-97 fiscal year.

Requested by:   Representatives Holmes, Creech, Esposito
EVALUATE UNIVERSITY RESIDENCES FOR FIRE SAFETY AND REPORT ON ESTIMATED COST TO INSTALL ANY NEEDED FIRE DETECTION AND SAFETY EQUIPMENT
Sec. 15.4.  (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:   Representatives Holmes, Creech, Esposito
SUPERCOMPUTER AND THE RESEARCH AND EDUCATION NETWORK/BOARD OF GOVERNORS TO MAINTAIN FUNDS
Sec. 15.5. 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:   Representative Grady
UNC OVERHEAD RECEIPTS
Sec. 15.6.  (a)	The constituent institutions of The University of North Carolina may use overhead receipts collected as indirect costs on contracts and grants to enhance faculty salaries, to increase tuition remission budgets for graduate assistants, and to purchase health insurance for graduate assistants, among other uses.
(b) The Board of Governors of The University of North Carolina may use the portion of overhead receipts that it receives from North Carolina State University at Raleigh and from the University of North Carolina at Chapel Hill to enhance faculty salaries.

PART 16.  COMMUNITY COLLEGES

Requested by:  Representative Russell
COMPUTATION OF FTE FOR COURSES TAUGHT IN PRISONS
Sec. 16.  Community colleges shall compute full-time equivalent (FTE) student hours on the bases of both contact hours and student membership hours for curriculum education programs that are taught in prison facilities and that are offered in compliance with the State Board of Community College's correctional course offering matrix.  The State Board of Community Colleges shall report both counts to the General Assembly by January 15, 1997.
The 1997 General Assembly shall consider the question of whether to compute FTE for these courses on the basis of contact hours or on the basis of student membership hours.

Requested by:   Representative Russell
IN-STATE TUITION FOR FAMILIES TRANSFERRED INTO STATE
Sec. 16.1. (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:   Representatives Grady, Preston
EXPENDITURE FOR NEW AND EXPANDING INDUSTRY/REPORT
Sec. 16.2.  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:   Representatives Grady, Preston
ELIMINATION OF BARRIERS AMONG PUBLIC SCHOOLS, COMMUNITY COLLEGES, AND UNIVERSITIES/STUDY
Sec. 16.3. (a)	The Education Cabinet shall study ways to eliminate barriers to cooperation among public schools, community colleges, and universities in the area of distance 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.
(b)	The State Board of Community Colleges shall examine ways to encourage pilot projects for higher education two plus two programs while continuing to recognize the community college system's statutory role as primary lead agency for providing vocational and technical job training programs.

Requested by:   Representatives Grady, Preston, McMahan
COMMUNITY COLLEGES FUNDING FORMULAS/STUDY
Sec. 16.4.  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:   Representatives Grady, Preston
UNIFORM MEDICAL HISTORY FORM/POSTSECONDARY INSTITUTIONS
Sec. 16.5.  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:   Representatives Grady, Preston
DEPARTMENT OF COMMUNITY COLLEGES/BUDGET REALIGNMENT
Sec. 16.6. (a)	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. 
(b)	The Department of Community Colleges shall prepare a response to the State Auditor's Performance Audit Report of April 1996, on the concern raised about the creation of the new Division of System Affairs and on what steps it has taken to address the issue raised with regard to this Division.  The Department shall present its response to the Senate and House Appropriations Subcommittees on Education prior to February 15, 1997.

Requested by:   Representatives Grady, Preston
START-UP FUNDS FOR PROGRAMS IN PRISON FACILITIES
Sec. 16.7.  (a)	The State Board of Community Colleges shall use four hundred thousand dollars ($400,000) of the funds in the State Board Reserve to provide funds to enable colleges to start new programs in prison facilities.
(b)	The State Board of Community Colleges shall use two hundred thousand dollars ($200,000) of the funds in the State Board Reserve to provide funds to the two community college hosiery technology programs.  These funds shall be equally distributed between the two hosiery technology programs.

Requested by:   Representatives Grady, Preston
INFORMATION HIGHWAY SITES/COMMUNITY ACCESS
Sec. 16.8.  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 17.  PUBLIC SCHOOLS

Requested by:   Representatives Grady, Preston
EXCEPTIONAL CHILDREN FUNDS
Sec. 17.1.  The funds appropriated for exceptional children in this act shall be allocated as follows:
(1)	Each local school administrative unit shall receive for academically gifted children the sum of $686.38 per child for three and nine-tenths percent (3.9%) of the 1995-96 actual average daily membership in the local school administrative unit, regardless of the number of children identified as academically gifted in the local school administrative unit. The total number of children for which funds shall be allocated pursuant to this subdivision is 45,861 for the 1996-97 school year.
(2)	Each local school administrative unit shall receive for exceptional children other than academically gifted children the sum of $2,059.14 per child for the lesser of (i) all children who are identified as exceptional children other than academically gifted children or (ii) twelve and five-tenths percent (12.5%) of the 1995-96 actual average daily membership in the local school administrative unit. The maximum number of children for which funds shall be allocated pursuant to this subdivision is 137,449 for the 1996-97 school year.
The dollar amounts allocated under this subsection for exceptional children shall also increase in accordance with legislative salary increments for personnel who serve exceptional children.

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

Requested by:   Representatives Grady, Preston
FUNDS TO REDUCE CLASS SIZE IN GRADE 2
Sec. 17.3.  The funds appropriated in this act to reduce class size in second grade shall be allocated by the State Board of Education to local school administrative units on the basis of one teacher for every 23 students in second grade.  Local school administrative units shall use these funds (i) to reduce class size in second grade to 23 or fewer students or (ii) to hire reading teachers within kindergarten through third grade or otherwise reduce the student-teacher ratio within kindergarten through third grade.
For the purpose of calculating the maximum allowable class size for second grade, the ratio of teachers to students shall be 1 to 26.

Requested by:   Representative Esposito
FUNDS TO IMPLEMENT THE ABC'S OF PUBLIC EDUCATION PROGRAM
Sec. 17.4.  Of the funds appropriated to State Aid to Local School Administrative Units, the State Board of Education may use up to twenty-four million five hundred thousand dollars ($24,500,000) for the 1996-97 fiscal year to provide incentive funding for schools with higher than projected levels of improvement in student performance, in accordance with the ABC's of Public Education Program, if enacted by the General Assembly.  The State Board of Education may allocate up to twenty-one million dollars ($21,000,000) of these funds on a per-teacher basis for each eligible school and up to three million five hundred thousand dollars ($3,500,000) on a per-teacher assistant basis for each eligible school.
It is the intent of the General Assembly to fully fund this program for the 1997-98 and subsequent fiscal years.

Requested by:   Representative Holmes, Creech, Esposito
ALLOCATION OF FUNDS FOR SCHOOL TECHNOLOGY
Sec. 17.5.  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:   Representatives Grady, Preston
EXPENDITURES FOR SCHOOL RESOURCE OFFICERS
Sec. 17.6  The State Board of Education shall modify the accounting system for State Aid to Local School Administrative Units so that it can account for State funds expended for school resource officers in each local school administrative unit.

Requested by:  Representatives Grady, Preston
PUBLIC SCHOOL TEACHERS/LIABILITY PROTECTION
Sec. 17.7  Of the funds appropriated to the Department of Public Education for the 1996-97 fiscal year, an amount equal to ten dollars ($10.00) for each teacher paid from the General Fund shall be allocated by the State Board of Education to each local school administrative unit to provide comprehensive general liability protection, including coverage for errors and omissions, for teachers employed by the local school administrative unit for the 1996-97 school year.

Requested by:   Representatives Grady, Preston
SUBSTITUTE PAY FOR TEACHER ASSISTANTS
Sec. 17.8.  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."

PART 18.  DEPARTMENT OF TRANSPORTATION

Requested by:   Representatives Barbee, Bowie 
USE OF FUNDS RESULTING FROM THE ELIMINATION OF POSITIONS IN DIVISION OF MOTOR VEHICLES
Sec. 18.  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:   Representatives Barbee, Bowie 
DEPARTMENT OF TRANSPORTATION REPORT ON REORGANIZATION OF DIVISION OF MOTOR VEHICLES
Sec. 18.1.  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:   Representatives Barbee, Bowie 
DEPARTMENT OF TRANSPORTATION REPORTS TO THE JOINT LEGISLATIVE TRANSPORTATION OVERSIGHT COMMITTEE
Sec. 18.2.  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:   Representatives Barbee, Bowie 
DIVISION OF MOTOR VEHICLES ENFORCEMENT DUTIES
Sec. 18.3.  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:   Representatives Barbee, Bowie 
DEPARTMENT OF TRANSPORTATION–CASH FLOW CONTRACT FUNDING
Sec. 18.4.  (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:   Representatives Barbee, Bowie 
CASH FLOW HIGHWAY FUND AND HIGHWAY TRUST FUND APPROPRIATIONS
Sec. 18.5.  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:   Representatives Barbee, Bowie 
RADIO ISLAND RAILROAD TRESTLE
Sec. 18.6.  (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:   Representatives McLaughlin, Bowie
VISITOR CENTERS
Sec. 18.7.  (a)	The Department of Transportation, with the assistance of the Department of Commerce, shall collect the necessary data to accurately estimate the extent and type of use the public makes of the visitor centers on the State highway system.  The Department shall use this data to develop a formula for allocating State resources for the funding of these visitor centers.
(b)	The Department shall study and make a recommendation to the General Assembly about requiring a local match for funds appropriated by the State for the operations of local visitor centers.
(c)	Until the Department reports to the General Assembly no new visitor centers shall be approved for addition to the State highway system.
(d)	The Department shall submit the report required by this section no later than December 31, 1996, to the Joint Legislative Transportation Oversight Commission.
(e)  G.S. 20-79.7(c)(2) as amended by Section 18.7 of Chapter 507 of the 1995 Session Laws reads as rewritten:
"(2)	From the funds remaining in the Special Registration Plate Account after the deductions in accordance with subdivision (1) of this subsection, there is appropriated from the Special Registration Plate Account the sum of five hundred twenty-five thousand dollars ($525,000) for each year of the 1995-97 biennium to provide operating assistance for the Visitor Centers:
a.	on U.S. Highway 17 in Camden County, ($75,000);
b.	on U.S. Highway 17 in Brunswick County, ($75,000);
c.	on U.S. Highway 441 in Macon County, ($75,000);
d.	in the Town of Boone, Watauga County, ($75,000);
e.	on U.S. Highway 29 in Caswell County, ($75,000);
f.	on U.S. Highway 70 in Carteret County, ($75,000); and
g.	on U.S. Highway 64 in Tyrrell County, ($75,000)."

Requested by:   Representatives Barbee, Bowie
GREEN ROADS INITIATIVE
Sec. 18.8.  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.
To the extent possible the acreage identified for reforestation shall be equally distributed in the 14 transportation engineering divisions. 
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.

PART 19.  DEPARTMENT OF CORRECTION

Requested by:   Representatives Holmes, Creech, Esposito
USE OF FACILITIES CLOSED UNDER GPAC
Sec. 19.1.  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:   Representatives Justus, Thompson
REIMBURSEMENT TO COUNTIES FOR HOUSING COSTS OF INMATES AWAITING TRANSFER TO STATE PRISON SYSTEM
Sec. 19.2.  (a)	G.S. 148-29 reads as rewritten:
"§ 148-29.  Transportation of convicts to prison; reimbursement to counties; sheriff's expense affidavit.
The sheriff having in charge any prisoner to be taken to the Central Prison at Raleigh shall send him to the Central Prison within five days after the adjournment of the court at which he was sentenced, if no appeal has been taken. Beginning on the sixth day after adjournment of the court in which the prisoner was sentenced and continuing through the day the prisoner is received by the Division of Prisons, the Department of Correction shall pay the county a standard sum set by the General Assembly in its appropriations acts for the cost of providing food, clothing, personal items, supervision, and necessary ordinary medical services to the prisoner awaiting transfer to the State prison system.
The sheriff shall file with the board of commissioners of his county a copy of his affidavit as to necessary guard, together with a copy of his itemized account of expenses, both certified to by him as true copies of those on  file in his office.  "
(b)	The Department of Correction may use funds available for the 1995-96 fiscal year to pay the sum of fourteen dollars and fifty cents ($14.50) per day as reimbursement to counties for the cost of housing inmates convicted and awaiting transfer to the State prison system, as provided in G.S. 148-29.
(c)	Of the funds appropriated to the Department of Correction for the 1996-97 fiscal year, the sum of fourteen million six hundred thousand dollars ($14,600,000) shall be used to raise the per diem reimbursement to counties from fourteen dollars and fifty cents ($14.50) per day to forty dollars ($40.00) per day for the cost of housing inmates convicted and awaiting transfer to the State prison system, as provided in G.S. 148-29.  If these funds are depleted prior to the end of the fiscal year, the Department of Correction may use funds available, other than lapsed salaries and fringe benefits, to reimburse counties pursuant to this section.
(d)	Subsections (a) and (b) of this section become effective January 1, 1996.

Requested by:   Representatives Justus, Thompson 
COMBINATION OF PAROLE PROBATION FIELD SERVICES AND PAROLE PRE- AND POST-RELEASE SERVICES PROGRAMS FOR BUDGETING PURPOSES
Sec. 19.3.  Notwithstanding any other provision of law, the Department of Correction may combine Parole Probation Field Services and Parole Pre- and Post-Release Services programs for budgeting purposes in order to reflect the actual operation in the field, since officers from each program are responsible for both parole and probation cases.

Requested by:   Representatives Justus, Thompson 
MODIFICATION OF FUNDING FORMULA FROM THE NORTH CAROLINA STATE-COUNTY CRIMINAL JUSTICE PARTNERSHIP ACT
Sec. 19.4.  Notwithstanding the funding formula set forth in G.S. 143B-273.15, grants made through the North Carolina State-County Criminal Justice Partnership Act for the 1996-97 fiscal year shall be distributed to the counties as specified in G.S. 143B-273.15(2) only, and not as discretionary funds.  Appropriations not claimed or expended by counties during the 1996-97 fiscal year shall be distributed pursuant to G.S. 143B-273.15(1).

Requested by:   Representatives Justus, Thompson 
DART AFTERCARE FUNDS SHALL NOT REVERT
Sec. 19.5. (a) Funds appropriated in this act to the Department of Correction for the 1995-96 fiscal year for a Drug Alcohol Recovery Treatment (DART) aftercare program shall not revert at the end of the fiscal year but shall remain available to the Department during the 1996-97 fiscal year and be used to contract for up to three pilot programs statewide to provide aftercare services, including counseling and job referral services, for DART DWI offenders and other offenders who have completed a DART program in the Division of Prisons.
The Department of Correction shall report on the pilot programs to the Chairs of the Senate and House Appropriations Committees and the Chairs of the Senate and House Appropriations Subcommittees on Justice and Public Safety by March 1, 1997.  The report shall include information on the number of clients served, the quality of services, the cost-effectiveness of the services, and the benefits of the programs to offenders.
(b)	This section becomes effective June 30, 1996.

Requested by:   Representatives Justus, Thompson 
DEPARTMENT OF CORRECTION/DEPARTMENT OF HUMAN RESOURCES JOINT PLAN/RESERVE FOR SUBSTANCE ABUSE TREATMENT PILOT PROGRAM FOR PAROLEES AND PROBATIONERS SHALL NOT REVERT
Sec. 19.6.  (a) The balance of the five hundred eighty-three thousand dollars ($583,000) appropriated in Chapter 24 of the Session Laws of the 1994 Extra Session to the Department of Correction for the 1994-95 fiscal year and carried forward to the 1995-96 fiscal year by Section 19.8 of Chapter 507 of the 1995 Session Laws for an intensive out-patient substance abuse treatment pilot program for parolees and probationers with serious substance abuse histories shall not revert at the end of the fiscal year but shall remain available to the Department during the 1996-97 fiscal year to be used for the operation and evaluation of the Department of Correction/Department of Human Resources joint substance abuse program, the Drug Alcohol Recovery Treatment (DART) aftercare pilot program, and other prison-based or community corrections substance abuse programs in the Department of Correction, as determined by the Secretary of Correction.
The Department of Correction shall report quarterly to the Joint Legislative Corrections Oversight Committee on the use of these funds and any benefits realized.  The Department of Human Resources shall participate in these reports as they relate to the joint project.
(b)	This section becomes effective June 30, 1996.

Requested by:   Representatives Holmes, Creech, Esposito
SALARY CONTINUATION BENEFITS FOR ALL DEPARTMENT OF CORRECTION EMPLOYEES INJURED BY DELIBERATE ACT OR WHILE PERFORMING SUPERVISORY DUTIES
Sec. 19.7. (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 section.

Requested by:   Representatives Justus, Thompson
REPORT ON WOMEN AT RISK
Sec. 19.8.  The Women at Risk Program shall report by December 1, 1996, and by May 1, 1997, to the Joint Legislative Commission on Governmental Operations, the Chairs of the House and Senate Appropriations Committees, and the Chairs of the House and Senate Appropriations Subcommittees on Justice and Public Safety on the expenditure of State appropriations and on the effectiveness of the program, including information on the number of clients served, the number of clients who have had their probation revoked, and the number of clients who have successfully completed the program.

Requested by:   Representatives Justus, Thompson 
FEDERAL MATCHING FUNDS
Sec. 19.9.  Section 27.10A of Chapter 507 of the 1995 Session Laws reads as rewritten:
"Sec. 27.10A.  Appropriations made for the 1995-97 biennium to the Office of State Construction of the Department of Administration for construction of new prison beds, are to match federal funds available for prison construction in the 1996 federal fiscal year or subsequent federal fiscal years.  If the federal match is not made available, these State funds shall be made available to the Office of State Construction of the Department of Administration for construction of new prison beds, segregation units, and support buildings and systems.
The Office of State Construction shall report to the Chairs of the Joint Legislative Commission on Governmental Operations, the Joint Legislative Corrections Oversight Committee, the Chairs of the Senate and House Appropriations Committees, and the Chairs of the Senate and House Appropriations Subcommittees on Justice and Public Safety on the availability of federal prison construction matching funds."

Requested by:   Representatives Justus, Thompson 
USE OF PRISON MATCH FUNDS
Sec. 19.10.  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:   Representatives Justus and Thompson
MODULAR HOUSING AT WATAUGA CORRECTIONAL CENTER
Sec. 19.11. Funds appropriated to the Department of Correction for the 1996-97 fiscal year for modular housing units shall be used to place two of those units and the appropriate staff at Watauga Correctional Center.  The Department of Correction shall not reduce the existing 1996-97 operating budget for the Watauga Correctional Center.

Requested by:  Representatives Justus, Thompson
AUDIT OF DIVISION OF ADULT PROBATION AND PAROLE
Sec. 19.12.  The Office of State Auditor shall conduct a performance audit of the Division of Adult Probation and Parole, Department of Correction, and shall report its findings to the Joint Legislative Corrections Oversight Committee and the Chairs of the House and Senate Appropriations Subcommittees on Justice and Public Safety by March 1, 1997.

Requested by:   Representatives Justus, Thompson
ADDITIONAL PRIVATE PRISON BEDS
Sec. 19.13.  G.S. 148-37(g) reads as rewritten:
"(g)	The Secretary of Correction may contract with private for-profit or nonprofit firms for the provision and operation of four or more confinement facilities totaling up to 2,000 beds in the State to house State prisoners when to do so would most economically and effectively promote the purposes served by the Department of Correction. This 2,000-bed limitation shall not apply to the 500 beds in private substance abuse treatment centers authorized by the General Assembly prior to July 1, 1995.  Whenever the Department of Correction determines that new prison facilities are required in addition to existing State-owned facilities, the Department may contract for any remaining beds authorized by this section before constructing State-operated facilities.
Contracts entered under the authority of this subsection shall be for a period not to exceed 10 years, shall be renewable from time to time for a period not to exceed 10 years.  The Secretary of Correction shall enter contracts under this subsection only if funds are appropriated for this purpose by the General Assembly. Contracts entered under the authority of this subsection may be subject to any requirements for the location of the confinement facilities set forth by the General Assembly in appropriating those funds.
Once the Department has made a determination to contract for additional private prison beds, it shall issue a request for proposals within 30 days of the decision.  The request for proposals shall require bids to be submitted within three months, and the Department shall award contracts within three months of the submission of bids.  The final award decision shall be made by the Secretary of Correction, in consultation with the Chairs of the Joint Legislative Correction Oversight Committee and the Chairs of the House and Senate Appropriations Subcommittees on Justice and Public Safety, and the contract shall then be subject to the approval of the Council of State after consultation with the Joint Legislative Commission on Governmental Operations.
Contracts made under the authority of this subsection may provide the State with an option to purchase the confinement facility or may provide for the purchase of the confinement facility by the State. Contracts made under the authority of this subsection shall state that plans and specifications for private confinement facilities shall be furnished to and reviewed by the Office of State Construction. The Office of State Construction shall inspect and review each project during construction to ensure that the project is suitable for habitation and to determine whether the project would be suitable for future acquisition by the State. All contracts for the housing of State prisoners in private confinement facilities shall require a minimum of ten million dollars ($10,000,000) of occurrence-based liability insurance and shall hold the State harmless and provide reimbursement for all liability arising out of actions caused by operations and employees of the private confinement facility.
Prisoners housed in private confinement facilities pursuant to this subsection shall remain subject to the rules adopted for the conduct of persons committed to the State prison system. The Secretary of Correction may review and approve the design and construction of private confinement facilities before housing State prisoners in these facilities. The rules regarding good time, gain time, and earned credits, discipline, classification, extension of the limits of confinement, transfers, housing arrangements, and eligibility for parole shall apply to inmates housed in private confinement facilities pursuant to this subsection. The operators of private confinement facilities may adopt any other rules as may be necessary for the operation of those facilities with the written approval of the Secretary of Correction. Custodial officials employed by a private confinement facility are agents of the Secretary of Correction and may use those procedures for use of force authorized by the Secretary of Correction to defend themselves, to enforce the observance of discipline in compliance with confinement facility rules, to secure the person of a prisoner, and to prevent escape. Private firms under this subsection shall employ inmate disciplinary and grievance policies of the North Carolina Department of Correction."

Requested by:  Representatives Justus, Thompson
PROBATION CONDITIONS
Sec. 19.14.  (a)	G.S. 15A-1343 is amended by adding a new subsection to read:
"( b2)	Special Conditions of Probation for Sex Offenders. – As special conditions of probation, a defendant who has been convicted of an offense which is a reportable conviction as defined in G.S. 14-208.6(4), or which involves the physical, mental, or sexual abuse of a minor, must:
(1)	Register as required by G.S. 14-208.7 if the offense is a reportable conviction as defined by G.S. 14-208.6(4).
(2)	Participate in such evaluation and treatment as is necessary to complete a prescribed course of psychiatric, psychological, or other rehabilitative treatment as ordered by the court.
(3)	Not communicate with, be in the presence of, or found in or on the premises of the victim of the offense.
(4)	Not reside in a household with any minor child if the offense is one in which there is evidence of sexual abuse of a minor.
(5)	Not reside in a household with any minor child if the offense is one in which there is evidence of physical or mental abuse of a minor, unless the court expressly finds that it is unlikely that the defendant's harmful or abusive conduct will recur and that it would be in the minor child's best interest to allow the probationer to reside in the same household with a minor child.
(6)	Satisfy any other conditions determined by the court to be reasonably related to his rehabilitation.
Defendants subject to the provisions of this subsection shall not be placed on unsupervised probation."
(b)	This section becomes effective December 1, 1996. 

PART 19A.  DEPARTMENT OF CRIME CONTROL AND PUBLIC SAFETY

Requested by:   Representatives Justus, Thompson
REPORT ON STATE HIGHWAY PATROL PROMOTIONAL POLICY
Sec. 19A.  The Division of the State Highway Patrol, Department of Crime Control and Public Safety, shall report to the Crime Control and Public Safety Study Commission, the Chairs of the House and Senate Appropriations Committees, and the Chairs of the House and Senate Appropriations Subcommittees on Justice and Public Safety on the promotional system adopted by the State Highway Patrol on May 15, 1996.  The Department shall report on the criteria and qualifications used to rank troopers and supervisors in the system and on the progress of the training process of the system by January 1, 1997.  By July 1, 1997, the Department shall report on the implementation of the promotional system, including the number of troopers and supervisors eligible for promotion, the number of troopers and supervisors promoted, and the criteria used to rank each trooper and supervisor promoted under the system.

Requested by:   Representatives Justus, Thompson
EXTEND DEPARTMENT OF CRIME CONTROL AND PUBLIC SAFETY STUDY COMMISSION
Sec. 19A.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.

PART 20.  JUDICIAL DEPARTMENT

Requested by:   Representatives Justus, Thompson
RESERVE FOR DRUG TREATMENT COURT PROGRAM
Sec. 20.  (a)	Of the funds appropriated to the Judicial Department in the certified budget for the 1995-96 fiscal year to the Reserve for Court/Drug Treatment Program, established by Section 41 of Chapter 24 of the Session Laws of the 1994 Extra Session, as amended by Section 21.6 of Chapter 507 of the 1995 Session Laws, up to the sum of one hundred seventy-five thousand dollars ($175,000) of any balance remaining in the reserve shall not revert, but may be used during the 1996-97 fiscal year for nonrecurring program items.
(b)	This section becomes effective June 30, 1996.

Requested by:   Representatives Justus, Thompson
ANNUAL REPORT ON RECIDIVISM
Sec. 20.1.  The Judicial Department, through the North Carolina Sentencing and Policy Advisory Commission, and the Department of Correction shall jointly prepare an annual report on recidivism among criminal offenders.  The findings of the report shall be based upon methodology similar to that employed in the May 1, 1996, Recidivism Study that was presented to the Chairs of the House and Senate Appropriations Committees and the Chairs of the House and Senate Appropriations Subcommittees on Justice and Public Safety.  This methodology shall include tracking of all offenders assigned to community corrections programs or released from prison by fiscal year, beginning with the 1993-94 fiscal year for the first year's report, and then identifying those offenders rearrested within two years or more after assignment to a program or release from prison.  Community correction programs to be included in the report are the Treatment Alternatives to Street Crime (TASC), the Community Penalties Program, Community Service, all supervised probation and parole programs, and all community correction programs supervised or funded by the Department of Correction.
As part of this joint project, the Department of Correction shall provide the Sentencing and Policy Advisory Commission with a computerized list of offenders released from prison and offenders entering supervised probation during the specified time period.  The list shall include specific offender-identifying information and clearly identify offenders entering community corrections programs supervised or funded by the Department of Correction.  The Sentencing and Policy Advisory Commission shall be responsible for matching offenders to Division of Criminal Information (DCI) criminal records and for the production and printing of the final report.
Data collection and report preparation for the first year shall be funded from the sum of four thousand dollars ($4,000) appropriated to the Judicial Department for the 1996-97 fiscal year for that purpose, and grant funds available to the Department of Correction for the 1996-97 fiscal year, up to the sum of twenty-five thousand dollars ($25,000).  The report shall be due by April 1 of each year.

Requested by:   Representatives Holmes, Creech, Esposito
FUNDING FOR SUPERIOR COURT REPORTERS
Sec. 20.2. It is the intent of the General Assembly that funding for superior court reporters may remain a part of the continuation budget.

Requested by:   Representatives Justus, Thompson
ADDITIONAL ASSISTANT DISTRICT ATTORNEYS
Sec. 20.3  (a)	G.S. 7A-60(a1) reads as rewritten:
"(a1)	The counties of the State are organized into prosecutorial districts, and each district has the counties and the number of full-time assistant district attorneys set forth in the following table:
No. of Full-Time
Prosecutorial	Asst. District
District	Counties	Attorneys
1	Camden, Chowan, Currituck,		9
Dare, Gates, Pasquotank,
Perquimans
2	Beaufort, Hyde, Martin,		5
Tyrrell, Washington
3A	Pitt		8
3B	Carteret, Craven, Pamlico		8
4	Duplin, Jones, Onslow,		12
Sampson
5	New Hanover, Pender		11
6A	Halifax		4
6B	Bertie, Hertford,		4
	Northampton
	7	Edgecombe, Nash, Wilson		12
8	Greene, Lenoir, Wayne		10
9	Franklin, Granville,		9
Vance, Warren
9A	Person, Caswell		3
	10	Wake		24
11	Harnett, Johnston, Lee		11
12	Cumberland		14
13	Bladen, Brunswick, Columbus		7
14	Durham		10
15A	Alamance		7
15B	Orange, Chatham		6
16A	Scotland, Hoke		4
16B	Robeson		8
17A	Rockingham		5
17B	Stokes, Surry		5
18	Guilford		22
19A	Cabarrus	 		5
19B	Montgomery, Randolph	5
19C	Rowan		5
20	Anson, Moore, Richmond,	12
Stanly, Union
21	Forsyth		13
22	Alexander, Davidson, Davie,		14
Iredell
23	Alleghany, Ashe, Wilkes,		5
Yadkin
24	Avery, Madison, Mitchell,		4
Watauga, Yancey
25	Burke, Caldwell, Catawba		12
26	Mecklenburg		28
	27A	Gaston		9
27B	Cleveland,		6
Lincoln
28	Buncombe		9
29	Henderson, McDowell, Polk,		9
Rutherford, Transylvania
30	Cherokee, Clay, Graham,		7
Haywood, Jackson, Macon,
Swain."
(b)	This section becomes effective January 1, 1997.

Requested by:   Representatives Justus, Thompson
ADDITIONAL DISTRICT COURT JUDGES
Sec. 20.4. (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	3	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 additional district court judges for District Court Districts 12 and 16A as authorized by subsection (a) of this section.  Those judges' successors 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 January 15, 1997, 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:   Representatives Justus, Thompson
AUTHORIZE ADDITIONAL MAGISTRATES
Sec. 20.5.  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	6
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	6
Person	3	4
Caswell	2	5
Wake	12	20	Apex,
Wendell,
Fuquay-
Varina,
Wake Forest
Harnett	7	11	Dunn
Johnston	10	12	Benson,
Clayton,
Selma
Lee	4	6
Cumberland	10	17
Bladen	4	6
Brunswick	4	7
Columbus	6	8	Tabor City
Durham	8	12
Alamance	7	10	Burlington
Orange	4	11	Chapel Hill
Chatham	3	8	Siler City
Scotland	3	5
Hoke	4	5
Robeson	8	16	Fairmont,
Maxton,
Pembroke,
Red Springs,
Rowland,
St. Pauls
Rockingham	4	9	Reidsville,
Eden,
Madison
Stokes	2	5
Surry	5	9	Mt. Airy
Guilford	20	26	High Point
Cabarrus	5	9	Kannapolis
Montgomery	2	4
Randolph	5	10	Liberty
Rowan	5	10
Stanly	5	6
Union	4	6
Anson	4	5
Richmond	5	6	Hamlet
Moore	5	8	Southern
Pines
Forsyth	3	15	Kernersville
Alexander	2	3
Davidson	7	10	Thomasville
Davie	2	3
Iredell	4	9	Mooresville
Alleghany	1	2
Ashe	3	4
Wilkes	4	6
Yadkin	3	5
Avery	3	4
Madison	4	5
Mitchell	3	4
Watauga	4	6
Yancey	2	4
Burke	4	7
Caldwell	4	7
Catawba	6	10	Hickory
Mecklenburg	15	26
Gaston	11	20
Cleveland	5	8
Lincoln	4	6
Buncombe	6	15
Henderson	4	7
McDowell	3	5
Polk	3	4
Rutherford	6	8
Transylvania	2	4
Cherokee	3	4
Clay	1	2
Graham	2	3
Haywood	5	7	Canton
Jackson	3	4
Macon	3	4
Swain	2	3."

Requested by:   Representatives Justus, Thompson, Grady
CLERK OF SUPERIOR COURT COMPENSATION STUDY
Sec. 20.6.  The Administrative Office of the Courts shall study the position classification and pay plan of the Office of the Clerk of Superior Court.  The study shall provide recommendations on the appropriate qualifications and compensation of deputy and assistant clerks for the proper functioning of the Office of the Clerk of Superior Court, and shall include a review of current job classes and any potential new classes.  The Administrative Office of the Courts shall report the results of this study and its recommendations to the Chairs of the House and Senate Appropriations Committees and the Chairs of the House and Senate Appropriations Subcommittees on Justice and Public Safety by March 1, 1997.

Requested by:   Representatives Justus, Thompson
NO FUNDS FOR GRANTS-IN-AID TO NORTH CAROLINA STATE BAR
Sec. 20.7. Funds appropriated to the Judicial Department for the 1996-97 fiscal year may not be used to provide grants-in-aid to the North Carolina State Bar.

Requested by:   Representatives Justus, Thompson
ASSISTANT PUBLIC DEFENDERS
Sec. 20.8.  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.

PART 20A.  DEPARTMENT OF JUSTICE

Requested by:   Representatives Justus, Thompson
AUTHORIZATION OF FICTITIOUS LICENSES AND REGISTRATION PLATES ON PUBLICLY OWNED MOTOR VEHICLES
Sec. 20A.  (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:   Representatives Justus, Thompson
REPAIRS AND RENOVATIONS OF THE WESTERN JUSTICE ACADEMY
Sec. 20A.1.  (a)	The Department of Justice, in consultation with the Office of State Construction of the Department of Administration, shall contract for and supervise all aspects of administration, technical assistance, design, construction, or demolition of facilities in order to implement the repairs and renovations of the Western Justice Academy under the provisions of this section without being subject to the following statutes and rules implementing those statutes:  G.S. 143-135.26, 143-128, 143-129, 143-131, 143-132, 113A-1 through 113A-10, 113A-50 through 113A-66, and 133-1.1(g).
The Department of Justice shall have a verifiable ten percent (10%) goal for participation by minority and women-owned businesses.  All contracts for the design, construction, or demolition of prison facilities shall include a penalty for failure to complete the work by a specified date.
(b)	The Department of Justice shall provide quarterly reports 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, the Joint Legislative Commission on Governmental Operations, and the Fiscal Research Division on the repairs and renovations to the Western Justice Academy.  The report shall include information on which contractors have been selected, what contracts have been entered into, and the projected and actual cost of each project.

Requested By:  Representatives Justus, Thompson
JUVENILE DELINQUENT LAW CHANGES
Sec. 20A.2.  (a) G.S. 7A-524 reads as rewritten:
"§ 7A-524. Retention of jurisdiction.
When the court obtains jurisdiction over a juvenile, jurisdiction shall continue until terminated by order of the court or until the juvenile reaches the age of eighteen.   When proceedings cannot be concluded before the juvenile reaches the age of eighteen, the court retains jurisdiction for the sole purpose of transferring the matter to the superior court pursuant to G.S. 7A-608. Any juvenile who is under the jurisdiction of the court and commits a criminal offense after the juvenile's sixteenth birthday is subject to prosecution as an adult. Any juvenile who is transferred to and sentenced by the superior court for a felony offense shall be prosecuted as an adult for all other crimes alleged to have been committed by the juvenile while the juvenile is under the active supervision of the superior court. Nothing herein shall be construed to divest the court of jurisdiction in abuse, neglect, or dependency proceedings."
(b)	G.S. 7A-596 reads as rewritten:
"§ 7A-596.  Authority to issue nontestimonial identification order where juvenile alleged to be delinquent, and to conduct certain procedures without an order.
(a)	Nontestimonial identification procedures shall not be conducted on any juvenile alleged to be delinquent without a court order issued pursuant to this Article unless the juvenile has been transferred to superior court for trial as an adult in which case procedures applicable to adults as set out in Articles 14 and 23 of Chapter 15A shall apply.  A nontestimonial identification order authorized by this Article may be issued by any judge of the district court or of the superior court upon request of a prosecutor.  As used in this Article, 'nontestimonial identification' means identification by fingerprints, palm prints, footprints, measurements, blood specimens, urine specimens, saliva samples, hair samples, or other reasonable physical examination, handwriting exemplars, voice samples, photographs, and lineups or similar identification procedures requiring the presence of a juvenile.
(b)	Notwithstanding the provisions of subsection (a) of this section, a juvenile who is taken into custody for an offense that would be a Class A, B1, B2, C, D, or E felony may be photographed and the juvenile's fingerprints may be taken upon an order of the court."
(c)	G.S. 7A-597 reads as rewritten:
"§ 7A-597.  Time of application for nontestimonial identification order.
A request for a nontestimonial identification order may be made prior to taking a juvenile alleged to be delinquent into custody or after custody and prior to the adjudicatory hearing."
(d)	G.S. 7A-601(3) reads as rewritten:
"(3)	If a juvenile is found to have committed a delinquent act that would be a felony if committed by an adult, all records resulting from nontestimonial identification procedures may be retained in the court file. Special precautions shall be taken to ensure that these records will be maintained in such a manner and under such safeguards as to limit their use to inspection for comparison purposes by law enforcement officers only in the investigation of a crime, except that the name and picture of a juvenile resulting from a nontestimonial identification procedure may be published as provided in G.S. 7A-675(g)."
(e)  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 for an offense that would be a Class A, B1, B2, 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."
(f)  G.S. 7A-649(8) reads as rewritten:
"(8)	Place the juvenile on probation under the supervision of a court counselor. In any case where a juvenile is placed on probation, the court counselor shall have the authority to visit the juvenile where the juvenile resides. The judge shall specify conditions of probation that are related to the needs of the juvenile including any of the following:
a.	That the juvenile shall remain on good behavior and not violate any laws.
b.	That the juvenile attend school regularly.  If the adjudication of delinquency was for an offense involving a threat to the safety of the juvenile or others and school attendance is a condition of probation, the judge shall order that the principal of the juvenile's school be notified.  The juvenile court counselor shall within five days of the judge's order or before the juvenile begins to attend school, whichever occurs first, notify the principal of the juvenile's school in writing of the nature of the offense and the probation requirements related to school attendance.  A principal notified by a juvenile court counselor shall handle the report according to the guidelines and rules adopted by the State Board of Education.
b1.	That the juvenile maintain passing grades in up to four courses during each grading period and meet with the court counselor and a representative of the school to make a plan for how to maintain those passing grades;
c.	That the juvenile not associate with specified persons or be in specified places;
d.	That the juvenile report to a court counselor as often as required by a court counselor;
e.	That the juvenile make specified financial restitution or pay a fine in accordance with subdivisions (2) and (3);
f.	That the juvenile be employed regularly if not attending school.
	An order of probation shall remain in force for a period not to exceed one year from the date entered. Prior to expiration of an order of probation, the judge may extend it for an additional period of one year after a hearing if he finds that the extension is necessary to protect the community or to safeguard the welfare of the juvenile;"
(g)  G.S. 7A-675 reads as rewritten:
"§ 7A-675. Confidentiality of records.
(a)	The clerk of superior court shall maintain a complete record of all juvenile cases filed in the clerk's office to be known as the juvenile record, which shall be withheld from public inspection except as provided in this subsection.  The record shall include the summons, petition, custody order, all court orders, written motions, search warrants and related documents, nontestimonial orders and related documents, discovery documents, written reports, the electronic or mechanical recording of the hearing, and other papers filed in the proceeding.  The recording of the hearing shall be reduced to a written transcript only when notice of appeal has been timely given. After the time for appeal has expired with no appeal having been filed, the recording of the hearing may be erased or destroyed upon the written order of the judge.
The following persons may examine the juvenile's record without an order of the judge:
(1)	The juvenile, the juvenile's parent, guardian, or custodian, or another authorized representative of the juvenile.
	(2)	The prosecutor in a criminal proceeding that involves the juvenile.
(3)	Juvenile court counselors.
	A juvenile's record of an adjudication of delinquency for an offense that would be a Class A, B1, B2, C, D, or E felony if committed by an adult may be used in all subsequent criminal proceedings for any purpose that an adult conviction may be used.
Except as provided in this subsection, a juvenile's court record may be examined only by a written order of the judge.
(a1)	Notwithstanding the provisions of subsection (a) of this section, an adjudication of delinquency shall be indexed by the clerk of superior court in the regular public index to criminal dispositions maintained pursuant to G.S. 7A-109. This subsection shall apply only to an adjudication of delinquency for an offense that, if committed by an adult, would be one of the following:
(1)	Murder under G.S. 14-17;
(2)	A sex offense under Article 7A of Chapter 14;
(3)	Kidnapping under G.S. 14-39;
(4)	Robbery with firearm or other dangerous weapon under G.S. 14-87;
(5)	Assault with a deadly weapon with intent to kill inflicting serious injury under G.S. 14-32(a);
(6)	Assault with a deadly weapon with intent to kill under G.S. 14-32(c).
Upon motion of the juvenile or the district attorney, the judge may order the clerk not to index the juvenile's adjudication of delinquency if the interest of justice requires that the juvenile's adjudication be protected from public inspection.
(b)	The Chief Court Counselor shall maintain a record of the cases of juveniles under supervision by court counselors which shall include family background information; reports of social, medical, psychiatric, or psychological information concerning a juvenile or the juvenile's family; a record of the probation reports of a juvenile; interviews with the juvenile's family; or other information which the judge finds should be protected from public inspection in the best interest of the juvenile.
(c)	The Director of the Department of Social Services shall maintain a record of the cases of juveniles under protective custody by the Department or under placement by the court. This file shall include material similar in nature to that described in subsection of this section.
(d)	The records maintained pursuant to subsections (b) and (c) of this section may be examined only by order of the judge except that the juvenile shall have the right to examine them.
(e)	Law enforcement records and files concerning a juvenile alleged to be delinquent or otherwise alleged to be within the jurisdiction of the juvenile court shall be kept separate from the records and files of adults.  Law enforcement records and files concerning juveniles shall be open only to the inspection of the prosecutor, court counselors, the juvenile, and the juvenile's parent, guardian, and custodian.
(f)	All records and files maintained by the Division of Youth Services shall be withheld from public inspection and shall be open only to the inspection of the juvenile, professionals in that agency who are directly involved in the juvenile's case, and court counselors. The judge authorizing commitment of a juvenile shall have the right to inspect and order the release of records maintained by the Division of Youth Services on that juvenile.
(g)	Disclosure of information concerning any juvenile alleged to be delinquent under investigation or alleged to be within the jurisdiction of the court that would reveal the identity of that juvenile is prohibited except that:
(1)	Publication of names and pictures of runaways is permitted with the permission of the parent, guardian, or legal custodian.
(2)	Upon a determination by the district attorney for the jurisdiction that publication of the name and picture of the juvenile under investigation of an offense that would be a Class A, B1, B2, C, D, or E felony if committed by an adult is necessary to further the investigation, the juvenile's name and picture may be published to appropriate law enforcement agencies.
(3)	Upon a determination by the chief district court judge or a juvenile court judge for the jurisdiction that publication of the name and picture of the juvenile under investigation of an offense that would be a Class A, B1, B2, C, D, or E felony if committed by an adult is necessary to lead to the apprehension of a juvenile, the juvenile's name and picture may be published.
(h)	Nothing in this section shall preclude the necessary sharing of information among authorized agencies.
(i)	In the case of a child victim, a judge may order the sharing of information among the public agencies the judge deems necessary to reduce the trauma to the child victim.
(j)	Notwithstanding subsection (a) of this section, the court's entire record of a proceeding involving consent for an abortion on an unemancipated minor under Article 1A, Part 2 of Chapter 90 of the General Statutes is not a matter of public record, shall be maintained separately from any juvenile record, shall be withheld from public inspection, and may be examined only by order of the court, by the unemancipated minor, or by the unemancipated minor's attorney or guardian ad litem."
(h)  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."
(i)  The provisions of subsection (a) of this section are effective upon ratification and apply to cases pending on that date.  The provisions of the remaining subsections of this section become effective January 1, 1997, and apply to offenses and delinquent acts committed on or after that date.

PART 21.  DEPARTMENT OF HUMAN RESOURCES

Requested by:  Representatives Gardner, Hayes
MEDICAID
Sec. 21.  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.
	(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 the Omnibus Budget Reconciliation Act of 1993, (OBRA 1993), 42 U.S.C. § 1396p(b), and G.S. 108-70.5 using temporary rules pending approval of final rules promulgated pursuant to Chapter 150B of the General Statutes.
(t)	The Department of Human Resources may adopt temporary rules according to the procedures established in G.S. 150B-21.1 when it finds that such rules are necessary to maximize receipt of federal funds, to reduce Medicaid expenditures, and to reduce fraud and abuse."

Requested by:   Representatives Gardner, Hayes 
NONMEDICAID REIMBURSEMENT CHANGES
Sec. 21.1.  Subsection 23.16 of Chapter 324 of the 1995 Session Laws, as amended by subsection 23.5 of Chapter 507, 1995 Session Laws, reads as rewritten:
"Providers of medical services under the various State programs, other than Medicaid, offering medical care to citizens of the State shall be reimbursed at rates no more than those under the North Carolina Medical Assistance Program.  Hospitals that provide psychiatric inpatient care for Thomas S. class members or adults with mental retardation and mental illness may be paid an additional incentive payment not to exceed fifteen percent (15%) of their regular daily per diem reimbursement.
The Department of Human Resources may reimburse hospitals at the full prospective per diem rates without regard to the Medical Assistance Program's annual limits on hospital days.  When the Medical Assistance Program's per diem rates for inpatient services and its interim rates for outpatient services are used to reimburse providers in non-Medicaid medical service programs, retroactive adjustments to claims already paid shall not be required.
Notwithstanding the provisions of paragraph one, the Department of Human Resources may negotiate with providers of medical services under the various Department of Human Resources programs, other than Medicaid, for rates as close as possible to Medicaid rates for the following purposes:  contracts or agreements for medical services and purchases of medical equipment and other medical supplies.  These negotiated rates are allowable only to meet the medical needs of its non-Medicaid eligible patients, residents, and clients who require such services which cannot be provided when limited to the Medicaid rate.
Maximum net family annual income eligibility standards for services in these programs shall be as follows:

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

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

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

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

Requested by:   Representatives Gardner, Hayes
SSI/MEDICAID LIMITS
Sec. 21.2.  Aged, blind, or disabled individuals who meet the income and resource requirements for Supplemental Security Income (SSI) shall not qualify for Medicaid assistance as aged, blind, or disabled unless they are determined eligible for both SSI and Medicaid by the Social Security Administration.
Individuals currently financially eligible for SSI but not receiving it as of the effective date of this act shall be given written notice to apply for SSI at least 30 days before losing Medicaid coverage.

Requested by:   Representatives Gardner, Hayes
THOMAS S.
Sec. 21.2A.  Section 23.21 of Chapter 324 of the 1995 Session Laws reads as rewritten:
"Sec. 23.21.  (a)	Funds appropriated to the Department of Human Resources in this act for the 1995-96 fiscal year and the 1996-97 fiscal year for members of the Thomas S. Class as identified in Thomas S., et al. v. Britt, formerly Thomas S., et al. v. Flaherty, shall be expended only for programs serving Thomas S. Class members or for services for those clients who are:
(1)	Adults with mental retardation, or who have been treated as if they had mental retardation, who were admitted to a State psychiatric hospital on or after March 22, 1984, and who are included on the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services' official list of prospective Class members;
(2)	Adults with mental retardation who have a documented history of State psychiatric hospital admissions regardless of admission date and who, without funding support, have a good probability of being readmitted to a State psychiatric hospital;
(3)	Adults with mental retardation who have never been admitted to a State psychiatric hospital but who have a documented history of behavior determined to be of danger to self or others that results in referrals for inpatient psychiatric treatment and who, without funding support, have a good probability of being admitted to a State psychiatric hospital; or
(4)	Adults who are included on the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services' official list of prospective Class members and have yet to be confirmed as Class members, who currently reside in the community, and who have a good probability of being admitted to a facility licensed as a 'home for the aged and disabled'.
No more than five percent (5%) of the funds appropriated in this act for the Thomas S. program shall be used for clients meeting subdivisions (2), (3), or (4) of this subsection.
(b)	To ensure that Thomas S. Class members are appropriately served, no State funds shall be expended on placement and services for Thomas S. Class members except:
(1)	Funds specifically appropriated by the General Assembly for the placement and services of Thomas S. Class members; and
(2)	Funds for placement and services for which Thomas S. Class members are otherwise eligible.
(b1)	Thomas S. funds may be expended to support services for Thomas S. Class members in adult care homes when the service needs of individual Class members in these homes cannot be met via the established maximum adult care home rate.
(c)	The Department of Human Resources shall continue to implement a prospective unit cost reimbursement system and shall ensure that unit cost rates reflect reasonable costs by conducting cost center service type rate comparisons and cost center line item budget reviews as may be necessary.
(d)	Reporting requirements.  The Department of Human Resources shall submit by April 1 of each fiscal year a report to the General Assembly on the progress achieved in serving members and prospective members of the Thomas S. Class.  The report shall include the following:
(1)	The number of Thomas S. clients confirmed as Class members;
		(3a)	The number of individuals identified as prospective Class members;
(4)	The number of Class members or prospective Class members added in the preceding 12 months due to their admission to a State psychiatric hospital;
(5)	A description of the types of treatment services provided to Class members; and
(6)	An analysis of the use of funds appropriated for the Class.
(e)	Notwithstanding any other provision of law, if the Department of Human Resources determines that a local program is not providing minimally adequate services to members of the Class identified in Thomas S., et al. v. Britt, formerly Thomas S., et al. v. Flaherty, or does not show a willingness to do so, the Department may ensure the provision of these services through contracts with public or private agencies or by direct operation by the Department of these programs."

Requested by:   Representatives Holmes, Creech, Esposito
THOMAS S. FUNDS
Sec. 21.2A.  If Thomas S. funds are not sufficient, then notwithstanding G.S. 143-16.3 and G.S. 143-23, the Director of the Budget may use funds available to the Department in an amount not to exceed twelve million eight hundred thousand dollars ($12,800,000).

Requested by:   Representatives Gardner, Hayes
EXTENSION OF TASK FORCE TO DETERMINE A MINIMUM REIMBURSEMENT RATE FOR ADULT DEVELOPMENTAL ACTIVITY PROGRAMS (ADAP)
Sec. 21.3.  Section 1 of Chapter 481 of the 1995 Session Laws reads as rewritten:
"Section 1.  The Secretary of the Department of Human Resources shall establish in the Office of the Secretary a special task force to determine a minimum reimbursement rate for Adult Developmental Activity Programs (ADAP).  In addition, this task force shall review the current funding stream to ensure that it is the most effective way possible to provide day services to adults with developmental disabilities, including which division within the Department is most appropriate for this program.  The task force shall report to the Legislative Study Commission on Mental Health, Developmental Disabilities, and Substance Abuse Services the results of its study in time for these results to be included in the Commission's report to the 1997 General Assembly.  The task force shall terminate after the presentation of its report to the Commission.
At a minimum, the task force shall consist of:
(1)	Two representatives from community rehabilitation programs;
(2)	A representative from the Department of Human Resources;
(3)	A representative from the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services;
(4)	A representative from the Division of Vocational Rehabilitation; and
(5)	A representative from the Association for Retarded Citizens.
This task force shall be funded by funds available to the Department."

Requested by:   Representatives Gardner, Hayes 
CONSOLIDATION OF JOHN UMSTEAD HOSPITAL AND THE ADATC-BUTNER OPERATING FUND
Sec. 21.4.  As the administrative and programmatic functions of John Umstead Hospital and the ADATC-Butner (Alcohol and Drug Abuse Treatment Center at Butner) have been consolidated in an effort to streamline administrative costs, the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services may consolidate the operating budget of these two institutions.

Requested by:   Representatives Gardner, Hayes 
IMPROVEMENT OF OPERATING EFFICIENCIES IN COLLOCATED INSTITUTIONS 
Sec. 21.5.  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:  Representatives Gardner, Hayes, Alexander
LEGISLATIVE STUDY COMMISSION ON MENTAL HEALTH, DEVELOPMENTAL DISABILITIES, AND SUBSTANCE ABUSE SERVICES
Sec. 21.5A.  (a)	Chapter 120 of the General Statutes is amended by adding a new Article to read:
"ARTICLE 23.
"The Legislative Study Commission on Mental Health,
Developmental Disabilities, and Substance Abuse Services.
"§ 120-204.  Commission created; purpose.
There is established in the General Assembly a Legislative Study Commission on Mental Health, Developmental Disabilities, and Substance Abuse Services.  This commission shall study systemwide issues affecting the development, administration, and delivery of mental health, developmental disabilities, and substance abuse services, including issues relating to the governance, accountability, and quality of services delivered.
"§ 120-205.  Commission membership; meetings; terms; vacancies.
(a)	This commission shall be composed of 15 members appointed as follows:
(1)	Four members of the House of Representatives at the time of their appointment, appointed by the Speaker of the House of Representatives;
(2)	Four members of the Senate at the time of their appointment, appointed by the President Pro Tempore of the Senate;
(3)	One member who is a representative of Coalition 2001, appointed by the Governor;
(4)	Two members of the public, appointed by the Speaker of the House of Representatives;
(5)	Two members of the public, appointed by the President Pro Tempore of the Senate; and
(6)	Two members of the public, appointed by the Governor.
(b)	The Speaker of the House of Representatives and the President Pro Tempore of the Senate shall each select a legislative member from their appointments to serve as cochair of the commission.  Meetings shall be called at the will of the cochairs.
(c)	All members shall serve at the will of their appointing officer.  Unless removed or unless resigning, members shall serve for two-year terms.  Members may be reappointed.  Vacancies in membership shall be filled by the appropriate appointing officer.
"§ 120-206.  Powers; per diem, subsistence, and travel allowances.
(a)	The commission may contract for consulting services as provided by G.S. 120-32.02.  Upon approval of the Legislative Services Commission, the Legislative Services Officer shall assign professional and clerical staff to assist in the work of the commission.  The professional staff shall include the appropriate staff from the Fiscal Research, Research, and Legislative Drafting Divisions of the Legislative Services Office of the General Assembly.  Clerical staff shall be furnished to the commission through the offices of the House of Representatives and Senate Supervisors of Clerks.  The expenses of employment of the clerical staff shall be borne by the commission.  The commission may meet in the Legislative Building or the Legislative Office Building upon the approval of the Legislative Services Commission.  The commission, while in the discharge of official duties, may exercise all powers provided under the provisions of G.S. 120-19 through G.S. 120-19.4, including the power to request all officers, agents, agencies, and departments of the State to provide any information and any data within their possession or ascertainable from their records, and the power to subpoena witnesses.
(b)	Members of the commission shall receive per diem, subsistence, and travel allowances as follows:
(1)	Commission members who are members of the General Assembly, at the rate established in G.S. 120-3.1;
(2)	Commission members who are officials or employees of the State or of local government agencies, at the rate established in G.S. 138-6; and
(3)	All other commission members, at the rate established in G.S. 138-5.
"§ 120-207.  Reporting.
The commission shall report the results of its study, together with any legislative proposals and costs analyses, to every regular session of the General Assembly within a week of its convening."
(b)	Part XIII, Sections 13.1 through 13.4 of Chapter 542 of the 1995 Session Laws, is repealed.

Requested by:   Representatives Gardner, Hayes
AREA MENTAL HEALTH, DEVELOPMENTAL DISABILITIES, AND SUBSTANCE ABUSE SERVICES PROGRAMS REDUCTIONS/SPECIFICATIONS 
Sec. 21.6.  The Division of Mental Health, Developmental Disabilities, and Substance Abuse Services shall ensure that reductions in its State appropriations for the 1996-97 fiscal year that are allocated to area mental health, developmental disabilities, and substance abuse programs are applied by the area authorities only to those services and programs in which additional increased federal TITLE IVA-Emergency Assistance and Medicaid revenues are anticipated.

Requested by:   Representatives Gardner, Hayes
CAROLINA ALTERNATIVES EXPANSION LIMITS
Sec. 21.6A.  The Department of Human Resources shall not expand Carolina Alternatives beyond the 10 area authorities that currently participate in the Carolina Alternatives/Medicaid Waiver/Managed Care Program prior to the Office of State Budget and Management's report to the 1997 General Assembly identifying the new area authorities selected to participate and projected costs, and prior to approval by the 1997 General Assembly.

Requested by:   Representatives Gardner, Hayes
CLINICAL SOCIAL WORKER EXEMPTION
Sec. 21.6B.  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:   Representatives Gardner, Hayes
FOSTER CARE REPORTING REPEALED 
Sec. 21.7.  Section 23.22 of Chapter 324 of the 1995 Session Laws is repealed.

Requested by:   Representatives Holmes, Creech, Esposito, Gardner, Hayes
CHILD SUPPORT RESERVE SHALL NOT REVERT
Sec. 21.8.  (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:   Representatives Gardner, Hayes
AFDC EMERGENCY ASSISTANCE RULES CLARIFIED
Sec. 21.8A.  The Social Services Commission shall ensure that Aid to Families With Dependent Child Emergency Assistance (AFDC-EA) cash is provided only to those with verifiable emergencies by:
(1)	Ensuring that the applicant produce documented verification of the emergency for which AFDC-EA cash is requested;
(2)	Ensuring that the documented emergency is one that would threaten the health, safety, or well-being of the child or children in the care or custody of the applicant; and
(3)	Ensuring that the applicant demonstrates that the emergency was unavoidable and not the result of any act or willful omission of the applicant.

Requested by:   Representatives Gardner, Hayes
REVIEW OF AUTOMATED COLLECTION AND TRACKING SYSTEM 
Sec. 21.8B.  The Information Resource Management Commission shall conduct a quarterly review of the Automated Collection and Tracking System (ACTS) project being developed by the Department of Human Resources.  The review shall include an analysis of the problems encountered and progress achieved, identify critical issues to be resolved, and estimate the final cost and date of completion.  The review shall be submitted through the Office of the State Controller to the chairs of the House and Senate Appropriations committees, the chairs of the House and Senate Human Resources Appropriations subcommittees, and to the Director of the Fiscal Research Division of the Legislative Services Office of the General Assembly no later than the last day of each quarter.

Requested by:   Representatives Gardner, Hayes
EXTEND CABARRUS COUNTY AFDC AND FOOD STAMP WORKFARE PILOT PROGRAM
Sec. 21.8C.  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:   Representatives Gardner, Hayes
MEDICAL DATA PROCESSING FUNDS
Sec. 21.8D.  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:   Representatives Gardner, Hayes, Howard, Berry
AFDC FRAUD CONTROL PROGRAM/DEBT SETOFF
Sec. 21.8E.  (a) The Department of Human Resources, immediately, shall elect the optional Aid to Families with Dependent Children (AFDC) Fraud Control Program pursuant to 45 CFR 235.112.  This program is deemed to apply to Work First Cash Assistance, effective July 1, 1996, as well as to AFDC, pursuant to the federal waivers received by the Department of Human Resources on February 5, 1996.
(b) The Department of Human Resources shall award incentive bonuses to each county for each of the county's AFDC fraud and Work First Cash Assistance claims recouped pursuant to the AFDC Fraud Control Program.  Each incentive bonus shall equal one-half of the State's distributive share of the total AFDC and Work First Cash Assistance benefit amount that was determined fraudulent and recouped pursuant to the AFDC Fraud Control Program.
(c)	The Department of Human Resources, Division of Social Services, shall develop and implement a statewide automated system to track AFDC and Work First Cash Assistance fraud claims and collect such claims by any appropriate method, including debt setoff pursuant to Chapter 105A of the General Statutes.
(d)	G.S. 105A-2(1)(r) reads as rewritten:
"r.	The North Carolina Department of Human Resources when in the performance of its collection duties for intentional program violations and violations due to inadvertent household error under the Food Stamp Program enabled by Chapter 108A, Article 2, Part 5, and any county operating the same Program at the local level, when and only to the extent such a county is in the performance of Food Stamp Program collection functions.
	The North Carolina Department of Human Resources when, in the performance of its duties under the Aid to Families with Dependent Children Program or the Aid to Families with Dependent Children – Emergency Assistance Program provided in Part 2 of Article 2 of Chapter 108A or the Work First Cash Assistance Program established pursuant to the federal waivers received by the department on February 5, 1996, or under the State-County Special Assistance for Adults Program provided in Part 3 of Article 2 of Chapter 108A, it seeks to collect public assistance payments obtained through an intentional false statement, intentional misrepresentation, intentional failure to disclose a material fact, or inadvertent household error;".

Requested by:  Representatives Gardner, Hayes
REDUCE DHR FUNDS IN ANTICIPATION OF RECEIPT OF FEDERAL FUNDS
Sec. 21.9.  Section 23 of Chapter 324 of the 1995 Session Laws reads as rewritten:
"Sec. 23.  (a)	Funds appropriated to the Department of Human Resources for the 1995-96 fiscal year have been reduced by fourteen million thirteen thousand three hundred ninety-six dollars ($14,013,396) in anticipation of the receipt of federal funds from the Title IV A - Emergency Assistance Program and the Social Services Block Grant. If these federal funds are not received or if only a portion of these funds are received, notwithstanding G.S. 143-15.3, the Director of the Budget may use funds available to the Department, not to exceed fourteen million thirteen thousand three hundred ninety-six dollars ($14,013,393). The Director of the Budget shall report to the Joint Legislative Commission on Governmental Operations prior to any such transfer.
(b)	Funds appropriated to the Department of Human Resources for the 1996-97 fiscal year have been reduced by sixteen million six hundred twenty-five thousand fourteen dollars ($16,625,014) in anticipation of the receipt of federal funds from the Title IV A - Emergency Assistance Program. If these federal funds are not received or if only a portion of these funds are received, notwithstanding G.S. 143-15.3, the Director of the Budget may use funds available to the Department, not to exceed sixteen million six hundred twenty-five thousand fourteen dollars ($16,625,014).  The Director of the Budget shall report to the Joint Legislative Commission on Governmental Operations prior to any such transfer."

Requested by:   Representatives Gardner, Hayes 
RURAL COMMUNITY AND MIGRANT HEALTH CENTERS' PARTICIPATION IN STATE CONTRACT PURCHASING
Sec. 21.10.  G.S. 143-49(6) reads as rewritten:
"(6)	To make available to nonprofit corporations operating charitable hospitals, to local nonprofit community sheltered workshops or centers that meet standards established by the Division of Vocational Rehabilitation of the Department of Human Resources, to private nonprofit agencies licensed or approved by the Department of Human Resources as child placing agencies, residential child-care facilities, private nonprofit rural, community, and migrant health centers designated by the Office of Rural Health and Resource Development, and to counties, cities, towns, governmental entities and other subdivisions of the State and public agencies thereof in the expenditure of public funds, the services of the Department of Administration in the purchase of materials, supplies and equipment under such rules, regulations and procedures as the Secretary of Administration may adopt. In adopting rules and regulations any or all provisions of this Article may be made applicable to such purchases and contracts made through the Department of Administration, and in addition the rules and regulations shall contain a requirement that payment for all such purchases be made in accordance with the terms of the contract. Prior to adopting rules and regulations under this subdivision, the Secretary of Administration may consult with the Advisory Budget Commission."

Requested by:   Representatives Gardner, Hayes 
DHR RESOURCE STUDIES EXTENDED 
Sec. 21.11.  Section 23.6B of Chapter 324 of the 1995 Session Laws reads as rewritten:
"Sec. 23.6B.  The Department shall study the following two issues and shall report these two issues, together with any recommendations, to the General Assembly by December 1, 1996:
(1)	The average staff vacancy rate by division over the last five fiscal years, to determine its effect on lapsed salaries; and
(2)	An analysis of unbudgeted revenues in excess of revenues in the certified budget as amended by the General Assembly received by the Department in the last two fiscal years, including:
a.	Indirect cost receipts; and
b.	Prior year earned revenue."

Requested by:   Representatives Gardner, Hayes
PLAN FOR REORGANIZATION OF THE DEPARTMENT OF HUMAN RESOURCES
Sec. 21.12. (a)	The General Assembly intends to examine the issue of reorganizing the Department of Human Resources in consultation with the Department of Human Resources to provide an alternative and improved approach to the organization and delivery of human services in North Carolina.
(b)	With funds provided from the Department of Human Resources pursuant to subsection (e) of this section, the Joint Legislative Commission on Governmental Operations, after consultation with the Department of Human Resources, shall contract with an independent management consulting firm to develop a reorganization plan, including an implementation component.  The firm receiving the contract shall present the plan to the Commission by February 1, 1997.
(c)	The contract shall provide that the plan shall be designed to meet the following goals:
(1)	The achievement of family-centered services;
(2)	The identification of gaps in services across special needs groups;
(3)	The improvement of access to and the reduction of fragmentation of services and programs;
(4)	The enhancement of accountability;
(5)	The provision of leadership at the State level for local government; and
(6)	The definition of and delineation between State and local roles and responsibilities.
(d)	The contract shall provide that the plan propose an organizational structure designed around the following guiding principles:
(1)	The facilitation of a holistic approach to the delivery of services and programs;
(2)	The provision of a core set of programs and services common to all special needs groups;
(3)	The effective delivery of programs and services, including:
a.	Coordinated planning;
b.	Evaluation of results;
c.	Independent regulatory and licensing functions;
d.	Centralized administrative support; and
(4)	The inclusion of consideration of funding sources in decision making regarding programs and services.
(d)	The Joint Legislative Commission on Governmental Operations shall provide any additional contract specifications and directives it considers necessary.
(e)  Of the funds appropriated to the Department of Human Resources for the 1996-97 fiscal year in this act, up to three hundred fifty thousand dollars ($350,000) shall be transferred to the General Assembly, Joint Legislative Commission on Governmental Operations, to fund the contract required by this section.

Requested by:   Representatives Gardner, Hayes 
DHR REPORT ON PLANS FOR IMPLEMENTING DYS COMPREHENSIVE STUDY RECOMMENDATIONS
Sec. 21.13.  The Department of Human Resources shall report to the Joint Legislative Commission on Governmental Operations by October 1, 1996, on its plans for implementing the recommendations of the Comprehensive Study of the Division of Youth Services.

Requested by:   Representatives Gardner, Hayes
S.O.S. AND FAMILY RESOURCE CENTER GRANT PROGRAMS ADMINISTRATIVE COSTS LIMITS
Sec. 21.14.  Section 23.6 of Chapter 324 of the 1995 Session Laws reads as rewritten:
"Sec. 23.6.  (a)	Of the funds appropriated to the Department of Human Resources in this act, the Department may use up to a total of three hundred fifty thousand dollars ($350,000) for the 1995-96 fiscal year and two hundred fifty thousand dollars ($250,000) for the 1996-97 fiscal year to administer the S.O.S. Program, to provide technical assistance to applicants and to local S.O.S. programs, and to evaluate the local S.O.S. programs.  The Department may contract with appropriate public or nonprofit agencies to provide the technical assistance, including training and related services.
(b)	Of the funds appropriated in this act to the Department of Human Resources for the Family Resource Center Grant Program, the Department may use up to three hundred thousand dollars ($300,000) for the 1995-96 fiscal year and two hundred fifty thousand dollars ($250,000) for the 1996-97 fiscal year to administer the Program."

Requested by:   Representatives Gardner, Hayes
OFFICE OF ECONOMIC OPPORTUNITY, SUPPORT OUR STUDENTS PROGRAMS' LOCATION
Sec. 21.14A.  The Department of Human Resources shall ensure that the Office of Economic Opportunity remains in the Office of the Secretary and that the Support Our Students Program remains in the Division of Youth Services.

Requested by:   Representatives Russell, Pate, Pulley, Sherrill
DHR POSITION ELIMINATION SPECIFICATIONS
Sec. 21.15.  (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.
(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.
The Department shall not eliminate any mental health institutionally based filled, critical position.  For purposes of this subsection, a critical position is one that provides or is engaged in direct contact with clients on an ongoing basis and a noncritical position is any other position.

Requested by:   Representatives Gardner, Hayes, Howard, Berry
FOOD STAMP ELECTRONIC BENEFITS TRANSFER FUNDS SPECIFICATION 
Sec. 21.16. Funds appropriated to the Controller's Office, Department of Human Resources for the Food Stamp Electronic Benefits Transfer Program (EBT) shall remain in the Controller's Office and shall not be transferred to any other office or division within the Department.
The Controller's Office, Department of Human Resources, may proceed with statewide implementation of the Food Stamp EBT Program.

Requested by:   Representatives Gardner, Hayes 
IN-HOME AIDE FUNDS
Sec. 21.17.  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 five hundred thousand dollars ($5,500,000) 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:   Representatives Holmes, Creech, Esposito
ADULT CARE HOME REIMBURSEMENT RATE/ADULT CARE HOME ALLOCATION OF NONFEDERAL COST OF MEDICAID PAYMENTS
Sec. 21.18.  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:   Representatives Gardner, Hayes
CONSIDERATION OF PRIVATIZATION OF RICHMOND COUNTY BOUNDOVER DETENTION FACILITY 
Sec. 21.18A. The Department of Human Resources may solicit bids to determine whether privatization of the operation of the Richmond County Boundover Unit, designed to serve a small but special population of juveniles being held for trial in superior court as adults, would result in savings to the State.  If the Department considers that it is in the best interest of the State to do so, the Department may proceed with the privatization.
If the Department does proceed with the privatization, the Department shall request that the contractor give priority employment opportunity to the State employees in the current filled 15 positions scheduled to be reassigned to Richmond from the Pitt Detention Center.

Requested by:   Representatives Gardner, Hayes, Shubert
CHILD DAY CARE SUBSIDIES  
Sec. 21.18B.  (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:   Representatives Gardner, Hayes
EARLY CHILDHOOD EDUCATION AND DEVELOPMENT INITIATIVES PROGRAM/1996
Sec. 21.19. (a)	Notwithstanding any provision of Part 10B of Article 3 of Chapter 143B of the General Statutes or any other provision of law or policy, including Part 27A of Chapter 324 of the 1995 Session Laws, the Department of Human Resources and the North Carolina Partnership for Children, Inc., shall jointly ensure that all of the recommendations, together with any specific modification to any recommendations made in this subsection, contained in the State of North Carolina Smart Start Performance Audit prepared pursuant to Section 27A(1)b. of Chapter 324 of the 1995 Session Laws are implemented by July 1, 1997, together with any specific modification to any recommendations made in this subsection.  The Partnership shall report quarterly to the Joint Legislative Commission on Governmental Operations on its progress towards full implementation. The Department shall report to the Commission by January 1, 1997, on any changes that must be made to Part 10B of Article 3 of Chapter 143B of the General Statutes or to any other statutes or rules to make the implementation of the recommendations a permanent part of the law.
The following recommendations of the Smart Start Performance Audit are modified as follows:
(1)	The Needs and Resources Assessments recommended to be performed by the Department of Human Resources every three years shall begin with the 1997-98 fiscal year;
(2)	The recommended administrative start-up cost allowance allowed for local partnerships shall apply only in the first year each partnership provides direct services;
(3)	The recommended regionalization shall be planned for by the Department and by the Partnership in a plan, including incentives for regionalization of existing local partnerships as well as for newly applying partnerships, that shall be submitted to the Joint Legislative Commission on Governmental Operations by January 1, 1997; 
(4)	The recommended transportation study shall be completed by the Department and by the Partnership and presented to the Joint Legislative Commission on Governmental Operations by January 1, 1997; 
(5)	The recommended determination as to whether local partnerships' contractors that receive $25,000 or more have complied with financial audit requirements shall be made by the Partnership rather than the State Auditor; and
(6)	The recommendation that the Director of the Division of Child Development be an ex officio member of the Partnership shall not be implemented.
(b) The funds appropriated for the Early Childhood Education and Development Initiatives for the 1996-97 fiscal year shall be allocated as follows:
(1)	For the 24 partnerships existing as of 1995-96, funds for direct services shall remain at their 1995-96 fiscal year funding levels;
(2)	For the new partnerships planned for as of 1995-96, funding shall be increased $2,150,000 above the planning level;
(3)	For the new partnerships planned for as of 1996-97, funding shall be $1,350,000 for planning; and
(4)	All remaining appropriated funds shall be allocated to implement the Smart Start Performance Audit recommendations prescribed in subsection (a) of this section.
(c) Section 23.13 of Chapter 324 of the 1995 Session Laws reads as rewritten:
"Sec. 23.13.  Counties participating in the Early Childhood Education and Development Initiatives authorized by Part 10B of Article 3 of Chapter 143B of the General Statutes may use the county's allocation of State and federal child care funds to subsidize child care according to the county's Early Childhood Education and Development Initiatives Plan as approved by the North Carolina Partnership for Children, Inc.  The use of federal funds shall be consistent with the appropriate federal regulations.  Day care providers shall, at a minimum, comply with the applicable requirements for State licensure or registration pursuant to Article 7 of Chapter 110 of the General Statutes, with other applicable requirements of State law or rule, including rules adopted for nonregistered day care by the Social Services Commission, and with applicable federal regulations."
(d) Notwithstanding any policy to the contrary, the Frank Porter Graham Child Development Center may use any method legally available to it to track children who are participating or who have participated in any Early Childhood Education and Development Initiative in order to carry out its on-going evaluation of the Early Childhood Education and Development Initiatives Program.
(e) This section is effective notwithstanding any contrary provisions in any provision of law or policy, including Part 10B of Article 3 of Chapter 143B of the General Statutes and Part 27A of Chapter 324 of the 1995 Session Laws, regardless of whether they are explicitly changed in this subsection.  Section 27A of Chapter 324 of the 1995 Session Laws reads as rewritten:
"Sec. 27A.  Notwithstanding any other provision of law, the Early Childhood Education and Development Initiatives, under Part 10B of Article 3 of Chapter 143B of the General Statutes, are subject to the following terms and conditions for the 1995-97 fiscal biennium:
(1)	Accountability.
		The intent of the General Assembly is to strengthen the accountability of the Department of Human Resources, the North Carolina Partnership for Children, Inc., and the local partnerships in the expenditure of public funds and achievement of Program goals for the Early Childhood Education and Development Initiatives Program, as authorized under Part 10B of Article 3 of Chapter 143B of the General Statutes.  The importance of education as a part of all initiatives in this Program shall be emphasized.
		In order to accomplish this level of accountability, the Joint Legislative Commission on Governmental Operations shall, consistent with current law, be the legislative oversight body for the Program.  The President Pro Tempore of the Senate and the Speaker of the House of Representatives may appoint a subcommittee of the Joint Legislative Commission on Governmental Operations to carry out this function.  This subcommittee may conduct all initial reviews of plans, reports, and budgets relating to the Program and shall make recommendations to the Joint Legislative Commission on Governmental Operations.
a.	Existing Partnerships - Local partnerships receiving State funds shall submit a Certification Annual Report on April 1 of each year to the North Carolina Partnership for Children, Inc., the Joint Legislative Commission on Governmental Operations, or any committee designated by Joint Legislative Commission on Governmental Operations.  Administrative costs pursuant to the Smart Start Performance Audit formula recommendation shall be equivalent to, on an average statewide basis for all local partnerships, not more than eight percent (8%) of the total statewide allocation to all local partnerships.  Quality incentive grants as prescribed in the Smart Start Performance Audit recommendations shall be administered at the partnership level.  A definition of administrative costs shall be determined by the independent firm selected under sub-subdivision b. of this subdivision.
b.	Program Audit - The Joint Legislative Commission on Governmental Operations shall select an independent firm recognized in performance auditing to conduct an independent performance audit of the first two years of operations of the 24 existing partnerships and of the administration of the Program by the Department of Human Resources.  The audit's directives shall be determined by the Joint Legislative Commission on Governmental Operations and the independent firm.  An interim program and performance audit report shall be submitted to the Joint Legislative Commission on Governmental Operations by January 1, 1996, and a final program and performance audit report shall be submitted to the Joint Legislative Commission on Governmental Operations by April 1, 1996.  A definition of administrative costs shall be determined by the independent firm.  Only in-kind contributions that are quantifiable, as determined by the independent firm, may be applied to the in-kind match requirement.  The match requirement in subdivision (3) of this section shall be studied by the independent firm and recommendations for revision, if any, shall be reported to the Joint Legislative Commission on Governmental Operations.
c.	The North Carolina Partnership for Children, Inc., shall continue to make quarterly reports to the Joint Legislative Commission on Governmental Operations as provided for in G.S. 143B-168.13(5), and including progress towards implementation of the Smart Start Performance Audit recommendations.
d.	New partnerships - In subsequent fiscal biennia, any new local partnership, before receiving State funds, shall be required to submit a detailed plan for expenditure of State funds for appropriate programs to the North Carolina Partnership for Children, Inc., and the Joint Legislative Commission on Governmental Operations for approval in April of the fiscal year in which the local partnership received planning funds.  State funds to implement the programs shall not be allocated to the local partnership until the program plan is approved by the North Carolina Partnership for Children, Inc., after consultation with the Joint Legislative Commission on Governmental Operations.  After receipt of initial program funds, local partnerships shall then be required to submit annual Certification Reports as provided for in sub-subdivision a. of this subdivision.
e.	Contracting for Services - The North Carolina Partnership for Children, Inc., and all local Partnerships shall use competitive bidding practices in contracting for goods and services on all contract amounts of $1,500 and above, and where practicable, for amounts of less than $1,500.
f.	Role of North Carolina Partnership for Children, Inc. - The role of the North Carolina Partnership for Children, Inc., shall be expanded to incorporate all the aspects of the new role prescribed for the Partnership in the Smart Start Performance Audit recommendations and to provide technical assistance to local partnerships, assess outcome goals for children and families, ensure that statewide goals and legislative guidelines are being met, help establish policies and outcome measures, obtain non-State resources for early childhood and family services, and document and verify the cumulative contributions received by the partnerships.
(2)	Funding.
a.	Existing partnerships - All 24 local partnerships that received State funds during the 1993-95 biennium shall receive their State funds proposed for the 1995-96 fiscal year.  Existing partnerships shall file budgets and plans for review by the North Carolina Partnership for Children, Inc.  Funds for the 1996-97 fiscal year shall be available after the Joint Legislative Commission on Governmental Operations has reviewed the independent evaluation discussed in sub-subdivision (1)b. of this subdivision, and the Partnership has approved these plans and budgets in consultation with the Joint Legislative Commission on Governmental Operations.  These 24 partnerships shall be required to submit a Certification Annual Report as provided in sub-subdivision a. of subdivision (1) of this subsection beginning in April 1997.  Funds for the 1996-97 fiscal year shall be allocated to provide direct services funding at the 1995-96 level.
b.	New 1995-96 partnerships - Funds for planning, up to a maximum of $3,500,000, may be made available to the new partnerships in the 1995-96 fiscal year out of the continuation monies designated for the program.  If the performance audit report is determined to be satisfactory to the Joint Legislative Commission on Governmental Operations, funding and other recommendations for expansion shall be made to the General Assembly by the Joint Legislative Commission on Governmental Operations for the 1996-97 fiscal year.  Funds for the 1996-97 fiscal year shall be increased to $2,150,000 above the 1995-96 planning level.
b1.	New 1996-97 Partnerships - Funds of $1,350,000 for planning shall be made available.
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 Program shall be increased to $850,000 for the 1996-97 fiscal year.
(3)	Matching requirement.
		The North Carolina Partnership for Children, Inc., and all local partnerships shall, in the aggregate, be required to match no less than 50% of the total amount budgeted for the Early Childhood Education and Development Initiatives in each fiscal year of the biennium as follows:  contributions of cash equal to at least ten percent (10%) and in-kind donated resources equal to no more than ten percent (10%) for a total match requirement of twenty percent (20%) for each fiscal year.  Only in-kind contributions that are quantifiable, as determined by the independent auditing firm, shall be applied to the in-kind match requirement.
Failure to obtain a twenty percent (20%) match by May 1 of each fiscal year shall result in a proportionate reduction in the appropriation for the Early Childhood Education and Development Initiatives Program for the next fiscal year.  The North Carolina Partnership for Children, Inc.,  shall be responsible for compiling information on the private cash and in-kind contributions into a report that is submitted to the Joint Legislative Commission on Governmental Operations pursuant to G.S. 143B-168.13(5) in a format that allows verification by the Department of Revenue.  The same match requirements shall apply to any expansion funds appropriated by the General Assembly."
(f)  Article 12I of Chapter 120 of the General Statutes is repealed.

Requested by:  Representative Esposito
MEDICAID STUDY EXTENSION
Sec. 21.20.  Section 23.5A(d) of Chapter 507 of the 1995 Session Laws reads as rewritten:
"(d)	The task force shall report the results of its study, together with any legislative proposals and cost analyses, to the 1995 General Assembly, Regular Session 1996, within a week of its convening, to a special session of the 1995 General Assembly called to deal with federal block grant funding issues, or to the 1997 General Assembly within a week of its convening."

PART 22.  DEPARTMENT OF AGRICULTURE

Requested by:   Representatives Mitchell, Weatherly, Miner
RELEASE THE STATE'S REVERSIONARY INTEREST IN THE PROPERTY OF FUQUAY-VARINA AMERICAN LEGION POST 116
Sec. 22.  (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:   Representatives Mitchell, Weatherly
REMOVE SUNSET FOR GRAPE GROWERS' EXCISE TAX DISTRIBUTION
Sec. 22.1.  (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:   Representatives Mitchell, Weatherly
TIMBER RECEIPTS FOR CERTAIN CAPITAL PROJECTS
Sec. 22.2.  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.

Requested by:  Representatives Mitchell, Weatherly
CATTLE AND LIVESTOCK EXPOSITION FUNDS
Sec. 22.3.  Section 40 of Chapter 769 of the 1993 Session Laws, as amended by subsection (b) of Section 24 of Chapter 507 of the 1995 Session Laws, reads as rewritten:
"Sec. 40.  Any unencumbered funds that were appropriated to the Department of Agriculture for the 1994-95 fiscal year for planning the construction of the Cattle and Livestock Exposition Center and placed in a reserve in the Department of Agriculture shall be transferred to the Office of State Budget and Management to be used for land acquisition, planning, and construction of the Cattle and Livestock Exposition Center.  The Center will house livestock shows and exhibits, educational programs, and a laboratory for embryo transfer research, semen evaluation, and livestock blood work."

PART 23.  DEPARTMENT OF COMMERCE

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

Requested by:   Representatives Mitchell, Weatherly 
MCNC
Sec. 23.1.  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)	
			Funds transferred in this act from the Department of Commerce to the UNC Board of Governors shall be used for contracting the purchase of supercomputing and research and education networking services to continue the provision of these services at North Carolina universities and colleges."

Requested by: Representatives Mitchell, Weatherly
WORLD TRADE CENTER FUNDS
Sec. 23.2.  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:  Representatives Mitchell, Weatherly
FUNDS FOR ECONOMIC DEVELOPMENT
Sec. 23.3.  Of the funds appropriated in this act to the Department of Commerce, the sum of one million one hundred twenty-five thousand dollars ($1,125,000) for the 1996-97 fiscal year shall be allocated as follows:
(1)	$200,000 to the Land Loss Prevention Project, Inc., to provide free legal representation to low-income, financially distressed small farmers.  The Land Loss Prevention Project, Inc., shall not use these funds to represent farmers who have income and assets that would make them financially ineligible for legal services pursuant to Title 45, Part 1611 of the Code of Federal Regulations.  The Land Loss Prevention Project, Inc., shall report to the Joint Legislative Commission on Governmental Operations on October 1 and March 1 of each fiscal year, and more frequently as requested by the Commission, on the use of these funds;
(2)	$200,000 to the North Carolina Coalition of Farm and Rural Families, Inc., for its Small Farm Economic Development Project.  These funds shall be used to foster economic development within the State's rural farm communities by offering marketing and technical assistance to small and limited resource farmers.  The North Carolina Coalition of Farm and Rural Families, Inc., shall report to the Joint Legislative Commission on Governmental Operations on October 1 and March 1 of each fiscal year, and more frequently as requested by the Commission, on the use of these funds;
(3)	$500,000 to the North Carolina Institute for Minority Economic Development, Inc., to foster minority economic development within the State through policy analysis, information and technical assistance, resource expansion and support of community-based demonstration initiatives.  The North Carolina Institute for Minority Economic Development, Inc., shall report to the Joint Legislative Commission on Governmental Operations on October 1 and March 1 of each fiscal year, and more frequently as requested by the Commission, on the use of these funds; and
(4)	$225,000 to the North Carolina Minority Support Center (formerly known as the Minority Credit Union Support Center) for technical assistance to community-based minority credit unions.  The North Carolina Minority Support Center shall report to the Credit Union Division of the Department of Commerce and to the Joint Legislative Commission on Governmental Operations on October 1 and March 1 of each fiscal year, and more frequently as requested by the Department or the Commission, on the use of these funds.

Requested by:  Representatives Mitchell, Weatherly
ECONOMIC DEVELOPMENT FUNDS
Sec. 23.4.  Section 25.4 of Chapter 507 of the 1995 Session Laws reads as rewritten:
"Sec. 25.4.  (a)	Definition. – For purposes of this section, the term 'community development corporation' means a nonprofit corporation:
(1)	Chartered pursuant to Chapter 55A of the General Statutes;
(2)	Tax-exempt pursuant to section 501(c)(3) of the Internal Revenue Code of 1986;
(3)	Whose primary mission is to develop and improve low-income communities and neighborhoods through economic and related development;
(4)	Whose activities and decisions are initiated, managed, and controlled by the constituents of those local communities; and 
(5)	Whose primary function is to act as deal-maker and packager of projects and activities that will increase their constituencies' opportunities to become owners, managers, and producers of small businesses, affordable housing, and jobs designed to produce positive cash flow and curb blight in the target community.
(b)	Of the funds appropriated in this act to the Rural Economic Development Center, Inc., the sum of one million twenty-five thousand dollars ($1,025,000) for the 1996-97 fiscal year shall be placed in an Economic and Community Development Program Reserve.  Funds shall be allocated from the Reserve by the Rural Economic Development Center, Inc. as follows:
(1)	$675,000 for community development grants to support community development projects and activities within the State's minority communities.  Any community development corporation as defined in this section is eligible to apply for funds.  The Rural Economic Development Center shall establish performance-based criteria for determining which community development corporations will receive a grant and the grant amount.  Funding will also be allocated to the North Carolina Association of Community Development Corporations, Inc.  The Rural Economic Development Center, Inc., shall allocate these grant funds from the Economic and Community Development Program Reserve as follows:
a.	$450,000 for direct grants to the local community development corporations that have previously received State funds for this purpose to support operations and project activities,
b.	$125,000 for direct grants to local community development organizations that have not previously received State funds,
c.	$75,000 to the North Carolina Association of Community Development Corporations, Inc. to provide training, technical assistance, resource development, project assistance, and support for local community development corporations statewide, and
d.	$25,000 to the Rural Economic Development Center, Inc. to be used to cover expenses in administering this section;
	(3)	$125,000 to the Microenterprise Loan Program to support the loan fund and operations of the Program;
(4)	$25,000 to the Opportunities Industrialization Center of Elizabeth City, Inc.
					(5)	$200,000 shall be used for a program to provide supplemental funding for matching requirements for economic development in economically depressed areas.  The Center shall use the funds to make grants to local governments and nonprofit corporations to provide funds necessary to match federal grants or other grants for necessary economic development projects and activities in economically depressed areas.  The grant recipients shall be selected on the basis of need;
					(c)	The Rural Economic Development Center, Inc. shall report to the Joint Legislative Commission on Governmental Operations on October 1 and March 1 of each fiscal year, and more frequently as requested by the Commission, on the uses of funds allocated pursuant to subdivisions (1), (3), (4), and (5) of subsection (b) of this section."

Requested by:   Representatives Mitchell, Weatherly
FUNDS FROM WORKER TRAINING TRUST FUND
Sec. 23.5.  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 24.  DEPARTMENT OF ENVIRONMENT, HEALTH, AND NATURAL RESOURCES

Requested by:   Representatives Mitchell, Weatherly, Nichols
AGRICULTURE COST SHARE FUNDS FOR ANIMAL OPERATIONS LOCATED IN A RIVER BASIN OTHER THAN THE NEUSE RIVER BASIN
Sec. 24.1.  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 six million dollars ($6,000,000) for the 1996-97 fiscal year shall be used to assist existing animal operations in obtaining approved animal waste management plans for those animal operations located, in whole or in part, in a county in one of the State's 17 river basins other than the Neuse River Basin and shall be used in accordance with G.S. 143-215.74(b), as amended by this act.  When implementing this section, the Department shall cooperate with the Cooperative Extension Service, the Natural Resource Conservation Service of the United States Department of Agriculture, and the local Soil and Water Conservation Districts.  Any of these funds remaining at the end of the 1996-97 fiscal year shall not revert, but shall remain available for use pursuant to this section.

Requested by:   Representatives Mitchell, Weatherly, Nichols
AGRICULTURE COST SHARE FUNDS FOR ANIMAL OPERATIONS LOCATED IN THE NEUSE RIVER BASIN
Sec. 24.2.   Of the funds appropriated in this act to the Department of Environment, Health, and Natural Resources, Division of Soil and Water Conservation, for the Agriculture Cost Share Program for Nonpoint Source Pollution Control, the sum of two million dollars ($2,000,000) for the 1996-97 fiscal year shall be used to assist existing animal operations in obtaining approved animal waste management plans 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), as amended by this act.  When implementing this section, the Department shall cooperate with the Cooperative Extension Service, the Natural Resource Conservation Service of the United States Department of Agriculture, and the local Soil and Water Conservation Districts.  Any of these funds remaining at the end of the 1996-97 fiscal year shall not revert, but shall remain available for use pursuant to this section.

Requested by:   Representatives Mitchell, Weatherly, Nichols
STATEWIDE TECHNICAL ASSISTANCE FOR ANIMAL WASTE MANAGEMENT PLANS
Sec. 24.3.  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 three hundred sixty-seven thousand five hundred dollars ($1,367,500) for the 1996-97 fiscal year shall be used to provide technical assistance to operators of animal operations in the process of obtaining approved animal waste management plans.  When implementing this section, the Department shall cooperate with the Cooperative Extension Service, the Natural Resource Conservation Service of the United States Department of Agriculture, and the local Soil and Water Conservation Districts.  Any of these funds remaining at the end of the 1996-97 fiscal year shall not revert, but shall remain available for use pursuant to this section.

Requested by:   Representatives Mitchell, Weatherly, Nichols
ODOR CONTROL TECHNOLOGY STUDY
Sec. 24.4.  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 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 conduct research into economically feasible odor control technologies and to provide detailed economic analysis of odor management alternatives; provided these funds are matched with an equal sum from private sources.  No later than January 1, 1997, the Department shall report to the Environmental Review Commission and the Fiscal Research Division on progress under the research, including any findings and recommendations at that time.

Requested by:   Representatives Holmes, Creech, Esposito, Mitchell, Weatherly, Nichols
WETLANDS RESTORATION PROGRAM/WETLANDS RESTORATION AND CLEAN WATER MANAGEMENT TRUST FUND
Sec. 24.5.  (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, including riparian buffers and greenways, that contribute to the protection and improvement of water quality, flood prevention, fisheries, wildlife habitat, and recreational opportunities.  The Wetlands Restoration Program shall consist of the following components:
(1)	Restoration 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 Water Quality.
"§ 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 Account established in G.S. 113-145.3.
(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)	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 Account of the Wetland Restoration and Clean Water Management Trust 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.
(g)	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.
(h)	Accounting of Payments. – The Department shall provide an itemized statement that accounts for each payment into the Wetlands Restoration Account.  The statement shall include the expenses and activities financed by the payment.
"§ 143-214.12.  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 and Clean Water Management Trust 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 Account, an analysis of the per-acre cost of wetlands restoration, and a cost comparison on a per-acre basis between the State's Wetland Restoration Program and private mitigation banks.  The cost comparison shall include direct and indirect costs on a per-acre basis.  The Department shall also send a copy of its report to the Fiscal Research Division of the General Assembly."
(b)	Chapter 113 of the General Statutes is amended by adding a new Article to read:
"ARTICLE 13A.
"Wetlands Restoration and 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 the Wetlands Restoration Program created in G.S. 143-214.8 and 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.
"§ 113-145.2.  Definitions.
As used in this Article:
(1)	Department. – The Department of Environment, Health, and Natural Resources.
(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 Wetlands Restoration and 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.
"§ 113-145.3.  Wetlands Restoration and Clean Water Management Trust Fund:  established; Wetlands Restoration Account; Clean Water Management Trust Account.
(a)	Wetlands Restoration and Clean Water Management Trust Fund. –  The Wetlands Restoration and Clean Water Management Trust 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 Fund shall be composed of two accounts:  (i) the Wetlands Restoration Account and (ii) the Clean Water Management Trust Account.
(b)	Wetlands Restoration Account. – The Wetlands Restoration Account 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 G.S. 143-214.11.  No funds shall be expended from this Account 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 G.S. 143-214.10.
(c)	Clean Water Management Trust Account. – The Clean Water Management Trust Account shall be used to provide grants to finance projects to clean up or prevent surface water pollution in accordance with this Article.
"§ 113-145.4.  Wetlands Restoration and Clean Water Management Trust Fund:  Purposes.
Fund Purposes. – Moneys from the Fund may be used for any of the following purposes:
(1)	To finance the Wetlands Restoration Program established by G.S. 143-214.8 through G.S. 143-214.13.
(2)	To acquire land for riparian buffers for the purposes of providing environmental protection for surface waters and urban drinking water supplies.
(3)	To acquire conservation easements or other interests in real property for the purpose of protecting and conserving surface waters and urban drinking water supplies.
(4)	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.
(5)	To improve stormwater controls and management practices.
(6)	To facilitate planning that targets reductions in surface water pollution.
(7)	To restore previously degraded lands to reestablish their ability to protect water quality.
"§ 113-145.5.  Clean Water Management Trust Account:  eligibility for grants; matching funds or property requirement; allocation of grant funds; grant criteria; rule-making authority.
(a)	Eligible Grant Applicants. – The Department of Environment, Health, and Natural Resources is not eligible to apply for or to receive a grant from the Clean Water Management Trust Account.  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, other than the Department of Environment, Health, and Natural Resources.
(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 Department shall establish matching requirements for grants awarded under this Article.  The Department 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 Department.  The Department may also waive the requirement to match a grant pursuant to guidelines adopted by the Department.
(c)	Allocate Grant Funds. – The Department shall allocate moneys from the Clean Water Management Trust Account as grants.  A grant may be awarded only for a project or activity that satisfies the criteria and furthers the purposes of this Article.
(d)	Develop Grant Criteria. – The Department 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.
(e)	Adopt Rules. – The Department may adopt rules in addition to the grant criteria consistent with and as necessary to implement this Article."
(c) Article 1 of Chapter 143 of the General Statutes is amended by adding a new section to read:
"§ 143-15.3B.  The Wetlands Restoration and Clean Water Management Trust Fund.
(a)	The Wetlands Restoration and Clean Water Management Trust Fund is established in G.S. 113-145.3.  The State Controller shall reserve to the Wetlands Restoration and Clean Water Management Trust Fund three percent (3%) of any unreserved credit balance remaining in the General Fund at the end of each fiscal year; fifty percent (50%) of that balance shall be allocated to the Wetlands Restoration Account and fifty percent (50%) of that balance shall be allocated to the Clean Water Management Trust Account.  As used in this section, the term 'unreserved credit balance' means the credit balance amount, as determined on a cash basis, before funds are reserved by the State Controller to the Savings Reserve Account, the Repairs and Renovations Reserve Account, or the Wetlands Restoration and 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 Wetlands Restoration and Clean Water Management Trust Fund shall be used only in accordance with Article 13A of Chapter 113 of the General Statutes."
(d) G.S. 143B-282(a)(1) is amended by adding the following:
"u.	To administer the State's authority under 33 U.S.C. § 1341 of the federal Clean Water Act."
(e) 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.
(f) The Department of Environment, Health, and Natural Resources shall report to the Environmental Review Commission beginning November 1, 1996, and annually thereafter on the implementation of this section and shall provide an accounting of the Clean Water Management Trust Account.  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.
(g)  This section becomes effective June 30, 1996.

Requested by:   Representatives Mitchell, Weatherly, Nichols
STUDY ALTERNATIVE ANIMAL WASTE TECHNOLOGIES
Sec. 24.6.  Of the funds appropriated to the Department of Environment, Health, and Natural Resources in this act, the sum of five hundred thousand dollars ($500,000) for the 1996-97 fiscal year shall be 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 serve as focal points for experimentation with and testing of alternative animal waste disposal technologies for use in agriculture.  No later than January 1, 1997, the Department shall report to the Environmental Review Commission and the Fiscal Research Division on progress under the research, including any findings and recommendations at that time.

Requested by:   Representatives Mitchell, Weatherly, Nichols
STUDY GROUNDWATER IMPACTS OF LAGOONS
Sec. 24.7.  Of the funds appropriated to the Department of Environment, Health, and Natural Resources in this act, the sum of three hundred seventy-five thousand dollars ($375,000) for the 1996-97 fiscal year shall be 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:   Representatives Mitchell, Weatherly, Nichols
FINANCIAL ASSISTANCE TO AID MUNICIPALITIES IN NEUSE RIVER BASIN ACHIEVE REDUCTIONS IN NITROGEN LEVELS
Sec. 24.8.  (a) Of the funds appropriated by this act to the Department of Environment, Health, and Natural Resources for the 1996-97 fiscal year, the sum of two million dollars ($2,000,000) shall be allocated by the Department as grants to local government units in the Neuse River Basin.  The grants shall be awarded by the Department for the purpose of reducing the nitrogen level in the Neuse River Basin through improved and more effective wastewater treatment and stormwater control measures.  The criteria established by Chapter 159G of the General Statutes with regard to grants made for wastewater treatment works and wastewater collection system projects shall be the primary consideration in granting funds for those types of projects.  The criteria established by the Department under G.S. 143-214.7 shall be the primary consideration in granting funds to a unit of local government for a project that addresses stormwater measures and controls.  A grant made by the Department under this section to a unit of local government shall not exceed five hundred thousand dollars ($500,000) or ten percent (10%) of the project cost, whichever is less.
(b)	The Department of Environment, Health, and Natural Resources shall report by October 15, 1996, and quarterly thereafter to the Environmental Review Commission regarding the grants awarded and their effectiveness in achieving the goal of reducing the nitrogen level in the Neuse River Basin and shall also send a written copy of its report to the Fiscal Research Division of the General Assembly.

Requested by:   Representatives Mitchell, Weatherly, Nichols
STUDY OF ATMOSPHERIC DEPOSITION OF NITROGEN IN NEUSE ESTUARY
Sec. 24.9.  Of the funds appropriated to the Department of Environment, Health, and Natural Resources in this act, the sum of four hundred fifty thousand dollars ($450,000) for the 1996-97 fiscal year shall be used by the Department to contract with a research institution to research and perform computer modelling to identify the amount of atmospheric nitrogen reaching the Neuse estuary, to enable the development of strategies to reduce the most significant sources of nitrogen, and to improve water quality.  If the expertise required for this research is available at a research institution in the State, the Department shall contract with a research institution in the State.  No later than January 1, 1997, the Department shall report to the Environmental Review Commission and the Fiscal Research Division on progress under the research, including any findings and recommendations at that time.

Requested by:   Representatives Mitchell, Weatherly
TRANSFER THE GEODETIC SURVEY SECTION TO THE OFFICE OF STATE PLANNING
Sec. 24.10.  The twenty-two positions, support, and equipment in the Geodetic Survey Section of the Division of Land Resources, Department of Environment, Health, and Natural Resources, shall be moved to the Office of State Planning in the Office of the Governor.

Requested by:   Representatives Mitchell, Weatherly
HAZARDOUS WASTE REPORTS
Sec. 24.11.  Beginning in 1997, the Department of Environment, Health, and Natural Resources shall report on the generation, storage, treatment, and disposal of hazardous waste in North Carolina no more often than it is required to report under federal law or federal regulation.

Requested by: Representatives Mitchell, Weatherly
DRINKING WATER WAIVER PROGRAM
Sec. 24.12.   The Department of Environment, Health, and Natural Resources, Division of Environmental Health, shall establish a drinking water waiver program that will enable the Division to seek and qualify for additional waivers from the drinking water regulations of the United States Environmental Protection Agency.  The program shall include, but not be limited to, the collection and study of data on the State's drinking water testing program to determine which contaminants do not present a significant health risk and which water systems are not susceptible to particular contaminants.  The Division shall report its progress in establishing and implementing the drinking water waiver program not later than December 15, 1996, to the Fiscal Research Division, the Environmental Review Commission, and the Legislative Research Commission study committee on Water Issues.

Requested by:   Representatives Mitchell, Weatherly, Tolson, Nichols, H. Hunter
STUDY ENVIRONMENTAL IMPACTS OF ABANDONED LAGOONS/ANIMAL FACILITIES
Sec. 24.13.  Of the funds appropriated to the Department of Environment, Health, and Natural Resources in this act, the sum of twenty-five thousand dollars ($25,000) for the 1996-97 fiscal year shall be placed in a reserve in the Department for the General Assembly for a legislative study commission to study the environmental impacts of animal waste lagoons and animal facilities that have been closed or abandoned or are inactive in order to determine the extent and scope of the problems, if any, associated with these structures, to identify potential solutions for any existing problems, to identify scientifically and environmentally effective methods of closure for these structures in the future, and to determine the advisability of providing incentives for the proper management of abandoned animal waste lagoons and abandoned animal facilities.  No later than January 1, 1997, this study commission shall report to the 1997 General Assembly, the Environmental Review Commission, and the Fiscal Research Division on its findings, recommendations, and any legislative proposals.

Requested by:   Representatives Mitchell, Weatherly, Nichols
RESERVE FOR PERMITTING AND INSPECTING ANIMAL WASTE MANAGEMENT SYSTEMS
Sec. 24.14.  Of the funds appropriated in this act to the Department of Environment, Health, and Natural Resources, the sum of four hundred eighty-four thousand dollars ($484,000) shall be placed in a reserve to be used to establish and support 16 positions in the Division of Water Quality to conduct permitting, inspection, and enforcement activities for animal waste management systems.  When implementing this section, the Department shall cooperate with the Cooperative Extension Service, the Natural Resources Conservation Service of the United States Department of Agriculture, and the local Soil and Water Conservation Districts.  Any funds remaining in the reserve at the end of the 1996-97 fiscal year shall not revert, but shall remain available for use pursuant to this section.  In addition to funds appropriated under this section, fees collected pursuant to G.S. 143-215.10G shall be used by the Department to cover costs to implement this section.

Requested by:   Representatives Mitchell, Weatherly
ACCOUNTABILITY FOR CERTAIN STATE AGRICULTURE COST SHARE FUNDING
Sec. 24.15.  (a)	G.S. 143-215.74(b), as amended by Sections 9 and 10 of Chapter 626 of the 1995 Session Laws, 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, closure of lagoons, emergency spillways, riparian buffers or equivalent controls, odor control best management practices, insect control best management practices, and animal waste management systems and application.  Funding for animal waste management shall be allocated for practices in river basins such that the funds will have the greatest impact in improving water quality.
(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) per year 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 projects that receive State cost share funds on or after the effective date of this act.

Requested by:   Representatives Mitchell, Weatherly, H. Hunter 
HEALTHY START FOUNDATION FUNDS
Sec. 24.16.  Section 26.4 of Chapter 507 of the 1995 Session Laws reads as rewritten:
"Sec. 26.4.  Of the funds appropriated in this act to the Department of Environment, Health, and Natural Resources, the sum of six hundred fifty thousand dollars ($650,000) for the 1996-97 fiscal year shall be allocated to the North Carolina Healthy Start Foundation.  Funds allocated pursuant to this section shall be expended first to support statewide planning, promotion, and coordination for the First Step Campaign.  Funds remaining after allocation for First Step shall be used to support other programs and activities aimed at reducing infant mortality. The Healthy Start Foundation shall report on all of its programs to the Joint Legislative Commission on Governmental Operations on or before March 1, 1997.  The report shall include information on the Foundation's activities and accomplishments during the past fiscal year, a list of the groups, organizations, communities, and other recipients of assistance from the Foundation in the last 12 months, itemized expenditures during the past fiscal year with sources of funding, planned activities, and accomplishments for at least the next 12 months, and itemized anticipated expenditures with sources of funding for the next 12 months."

Requested by:   Representatives Holmes, Creech, Esposito
PROHIBIT TRANSFER OF POSITIONS FROM SOIL AND WATER CONSERVATION TO DIVISION OF WATER QUALITY
Sec. 24.17.  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 Water Quality.

Requested by:   Representatives Holmes, Creech, Esposito
WATER RESOURCES DEVELOPMENT PROJECTS FUNDS
Sec. 24.18.  (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 eight million five thousand dollars ($8,005,000) 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)	Whittaker Creek Canal Dredging	   425,000
(19)	Carolina Beach South (Kure Beach)
	Beach Protection	3,580,000
        TOTAL	$8,005,000
(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:  Representatives Mitchell, Weatherly
1995-96 BEAVER DAMAGE CONTROL FUNDS REVERT
Sec. 24.19.  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:   Representatives Mitchell, Weatherly, Culpepper
BEAVER DAMAGE CONTROL FUNDS
Sec. 24.19A.  (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:   Representatives Mitchell, Weatherly
FOREST RESOURCES NURSERY PROGRAM FUNDS
Sec. 24.20.  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:   Representatives Mitchell, Weatherly, Nichols
NEUSE RIVER ISOTOPE STUDY
Sec. 24.21.  Of the funds appropriated to the Department of Environment, Health, and Natural Resources in this act, the sum of eighty-six thousand dollars ($86,000) for the 1996-97 fiscal year shall be used as matching funds to design and implement a scientifically valid study that uses available technology to identify the nonpoint sources of nitrogen in the surface waters of the Neuse River Basin.  No later than January 1, 1997, the Department shall report to the Environmental Review Commission and the Fiscal Research Division on the progress of the research, including any findings and recommendations at that time.

PART 25.  SALARIES AND BENEFITS

Requested by: Representatives Holmes, Creech, Esposito
JUDICIAL BRANCH OFFICIALS
Sec. 25.1 Section 7.4 of Chapter 507 of the 1995 Session Laws reads as rewritten:
"Sec. 7.4.  (a)	The annual salaries, payable monthly, for specified judicial branch officials for the 1996-97 fiscal year are:

Judicial Branch Officials	Annual Salary

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

(b)	The district attorney or public defender of a judicial district, with the approval of the Administrative Officer of the Courts, shall set the salaries of assistant district attorneys or assistant public defenders, respectively, in that district such that the average salaries of assistant district attorneys or assistant public defenders in that district do not exceed fifty-one thousand five hundred sixty-three dollars ($51,563), and the minimum salary of any assistant district attorney or assistant public defender is at least twenty-six thousand three hundred twenty-four dollars ($26,324) 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 four percent (4%), 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 four percent (4%)."

Requested by: Representatives Holmes, Creech, Esposito
ASSISTANT AND DEPUTY CLERKS OF SUPERIOR COURT
Sec. 25.2.  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 		$22,411
Maximum		 39,680

Deputy Clerks	Annual Salary
Minimum		$17,918
Maximum		30,565."

Requested by: Representatives Holmes, Creech, Esposito
MAGISTRATES' PAY PLAN
Sec. 25.3.  (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		$24,354
Step 1		26,798
Step 2		29,458
Step 3		32,361
Step 4 		35,540
Step 5		39,034
Step 6 		42,877."
(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	  	20,182
3 or more but less than 5 years of service	$22,167."
		Upon completion of five years of service, those magistrates shall receive the salary set as the Entry Rate in the table in subsection (a)."

Requested by: Representatives Holmes, Creech, Esposito
GENERAL ASSEMBLY PRINCIPAL CLERKS
Sec. 25.4. 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 two hundred eighty-three dollars ($57,283) payable monthly.  The Legislative Services Commission shall review the salary of the principal clerks prior to submission of the proposed operating budget of the General Assembly to the Governor and Advisory Budget Commission and shall make appropriate recommendations for changes in those salaries.  Any changes enacted by the General Assembly shall be by amendment to this paragraph."

Requested by: Representatives Holmes, Creech, Esposito
SERGEANT-AT-ARMS AND READING CLERKS
Sec. 25.5.  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-six dollars ($246.00) per week, plus subsistence at the same daily rate provided for members of the General Assembly, plus mileage at the rate provided for members of the General Assembly for one round trip only from their homes to Raleigh and return.  The sergeants-at-arms shall serve during sessions of the General Assembly and at such time prior to the convening of, and subsequent to adjournment or recess of, sessions as may be authorized by the Legislative Services Commission.  The reading clerks shall serve during sessions only."

Requested by: Representatives Holmes, Creech, Esposito
LEGISLATIVE EMPLOYEES
Sec. 25.6.  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 four percent (4%).  Nothing in this act limits any of the provisions of G.S. 120-32."

Requested by: Representatives Holmes, Creech, Esposito
COMMUNITY COLLEGES PERSONNEL
Sec. 25.7. Section 7.12 of Chapter 507 of the 1995 Session Laws reads as rewritten:
"Sec. 7.12.  The Director of the Budget shall transfer from the Reserve for Salary Increases created in this act for fiscal year 1995-96 funds to the Department of Community Colleges necessary to provide an average annual salary increase of four percent (4%), including funds for the employer's retirement and social security contributions, commencing July 1, 1996, for all permanent full-time community college institutional personnel supported by State funds.  The State Board of Community Colleges shall establish guidelines for providing their salary increases to community college institutional personnel to include consideration of increases based on performance. Salary funds shall be used to provide an average annual salary increase of four percent (4%) to all full-time employees and part-time employees on a pro rata basis."

Requested by: Representatives Holmes, Creech, Esposito
UNIVERSITY OF NORTH CAROLINA SYSTEM – EPA SALARY INCREASES
Sec. 25.8. 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 four percent (4%), including funds for the employer's retirement and social security contributions, commencing July 1, 1996, for all employees of The University of North Carolina, as well as employees other than teachers of the North Carolina School of Science and Mathematics, supported by State funds and whose salaries are exempt from the State Personnel Act (EPA).  These funds shall be allocated to individuals according to the rules adopted by the Board of Governors, or the Board of Trustees of the North Carolina School of Science and Mathematics, as appropriate, and may not be used for any purpose other than for salary increases and necessary employer contributions provided by this section.  The Board of Governors shall include consideration of increases based on performance in its adoption of rules for the allocation of funds for salary increases."

Requested by: Representatives Holmes, Creech, Esposito
MOST STATE EMPLOYEES
Sec. 25.9. 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%); and
(2)	A cost-of-living adjustment in the amount of two percent (2%).
(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 four percent (4%), commencing July 1, 1996.
(c)	The salaries in effect June 30, 1996, for all permanent part-time State employees shall be increased on and after July 1, 1996, by pro rata amounts of the salary increases provided for permanent full-time employees covered under subsection (a) of this section.
(d)	The Director of the Budget may allocate out of special operating funds or from other sources of the employing agency, except tax revenues, sufficient funds to allow a salary increase on and after July 1, 1996, in accordance with subsections (a), (b), or (c) of this section, including funds for the employer's retirement and social security contributions, of the permanent full-time and part-time employees of the agency.
(e)	Within regular Executive Budget Act procedures as limited by this act, all State agencies and departments may increase on an equitable basis the rate of pay of temporary and permanent hourly State employees, subject to availability of funds in the particular agency or department, by pro rata amounts salary increase provided for permanent full-time employees covered by the provisions of subsection (a) of this section, commencing July 1, 1996.
(f)	Except as provided by subsection (a) of this section, no person may receive a salary increase under G.S. 126-7 during the 1996-97 fiscal year, and no State employee or officer shall receive a merit increment during the 1996-97 fiscal year except as otherwise provided by this act."

Requested by: Representatives Holmes, Creech, Esposito
ALL STATE-SUPPORTED PERSONNEL
Sec. 25.10.  (a)	Salaries and related benefits for positions that are funded partially from the General Fund or Highway Fund and partially from sources other than the General Fund or Highway Fund shall be increased from the General Fund or Highway Fund appropriation only to the extent of the proportionate part of the salaries paid from the General Fund or Highway Fund.
(b)	The granting of the salary increases under this act does not affect the status of eligibility for salary increments for which employees may be eligible unless otherwise required by this act.
(c)	The salary increases provided in this Part are to be effective July 1, 1996, do not apply to persons separated from State service due to resignation, dismissal, reduction in force, death, or retirement, whose last workday is prior to July 1, 1996, or to employees involved in final written disciplinary procedures.  The employee shall receive the increase on a current basis when the final written disciplinary procedure is resolved.
Payroll checks issued to employees after July 1, 1996, which represent payment of services provided prior to July 1, 1996, shall not be eligible for salary increases provided for in this act.  This subsection shall apply to all employees, subject to or exempt from the State Personnel Act, paid from State funds, including public schools, community colleges, and The University of North Carolina.
(d)	The Director of the Budget shall transfer from the Reserve for Salary Increases in this act for fiscal year 1996-97 all funds necessary for the salary increases provided by this act, including funds for the employer's retirement and social security contributions.
(e)  Nothing in this act authorizes the transfer of funds between the General Fund and the Highway Fund for salary increases.

Requested by: Representatives Holmes, Creech, Esposito
TEACHER SALARY SCHEDULES
Sec. 25.11.  (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	$2,103
01	2,145
02	2,187
03	2,274
04	2,320
05	2,367
06	2,415
07	2,463
08	2,512
09	2,562
10	2,613
11	2,665
12	2,718
13	2,772
14	2,827
15	2,883
16	2,940
17	2,999
18	3,059
19	3,121
20	3,183
21	3,247
22	3,312
23	3,378
24	3,446
25	3,515
26	3,585
27	3,657
28	3,730
29	3,805
30+	3,805
(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	$2,234
01	2,279
02	2,324
03	2,417
04	2,466
05	2,515
06	2,565
07	2,616
08	2,668
09	2,721
10	2,775
11	2,830
12	2,887
13	2,945
14	3,004
15	3,064
16	3,125
17	3,188
18	3,252
19	3,317
20	3,383
21	3,451
22	3,520
23	3,590
24	3,662
25	3,735
26	3,810
27	3,886
28	3,964
29	4,043
30+	4,043
(3)	Certified public school teachers with certification based on academic preparation at the six-year degree level shall receive a salary supplement of one hundred twenty-six dollars ($126.00) per month in addition to the compensation provided for certified personnel of the public schools who are classified as "G"teachers.  Certified public school teachers with certification based on academic preparation at the doctoral degree level shall receive a salary supplement of two hundred fifty-three dollars ($253.00) per month in addition to the compensation provided for certified personnel of the public schools who are classified as "G"teachers.  
(c)	The first step of the salary schedule for school psychologists shall be equivalent to Step 5, corresponding to five years of experience, on the salary schedule established in this section for certified personnel of the public schools who are classified as "G"teachers.  Certified psychologists shall be placed on the salary schedule at an appropriate step based on their years of experience.  Certified psychologists shall receive longevity payments based on years of State service in the same manner as teachers.
Certified psychologists with certification based on academic preparation at the six-year degree level shall receive a salary supplement of one hundred twenty-six dollars ($126.00) per month in addition to the compensation provided for certified psychologists.  Certified psychologists with certification based on academic preparation at the doctoral degree level shall receive a salary supplement of two hundred fifty-three dollars ($253.00) per month in addition to the compensation provided for certified psychologists.
(d) Certified personnel of the public schools who are: (i) classified as "A"teachers; (ii) at the maximum of their pay range on June 30, 1996; and (iii) employed as teachers for the first three pay periods of the 1996-97 school year shall receive a one-time bonus of seven hundred fifty-three dollars ($753.00), payable at the third payroll period of the 1996-97 school year.  Certified personnel of the public schools who are: (i) classified as "G"teachers; (ii) at the maximum of their pay range on June 30, 1996; and (iii) employed as teachers for the first three pay periods of the 1996-97 school year, shall receive a one-time bonus of eight hundred one dollars ($801.00), payable at the third payroll period of the 1996-97 school year.  Certified personnel of the public schools who are: (i) certified based on academic preparation at the six-year degree level; (ii) at the maximum of their pay range on June 30, 1996; and (iii) employed as teachers for the first three pay periods of the 1996-97 school year shall receive a one-time bonus of eight hundred twenty-six dollars ($826.00), payable at the third payroll period of the 1996-97 school year.  Certified personnel of the public schools who are: (i) certified based on academic preparation at the doctoral degree level; (ii) at the maximum of their pay range on June 30, 1996; and (iii) employed as teachers for the first three pay periods of the 1996-97 school year shall receive a one-time bonus of eight hundred fifty-one dollars ($851.00), payable at the third payroll period of the 1996-97 school year.
(e) Certified personnel of the public schools who are: (i) classified as psychologists with advanced degrees; (ii) at the maximum of their pay range on June 30, 1996; and (iii) employed as school psychologists for the first three pay periods of the 1996-97 school year, shall receive a one-time bonus of nine hundred ten dollars ($910.00), payable at the third payroll period of the 1996-97 school year.  Certified personnel of the public schools who are: (i) classified as psychologists with doctoral degrees; (ii) at the maximum of their pay range on June 30, 1996; and (iii) employed as school psychologists for the first three pay periods of the 1996-97 school year, shall receive a one-time bonus of nine hundred thirty-seven dollars ($937.00), payable at the third payroll period of the 1996-97 school year.
(f)  The Director of the Budget may transfer from the Reserve for Salary Increases for the 1996-97 fiscal year, funds necessary to provide a ten percent (10%) performance award to be paid monthly to twenty-five percent (25%) of public school teachers who have achieved career status.  The award shall become effective April 1, 1997.  The State Board of Education shall develop a plan for determining which career teachers shall receive a performance award.  Future cost of living increases for teachers who receive a performance award under this section shall be based upon the performance award.

Requested by: Representatives Holmes, Creech, Esposito
SCHOOL-BASED ADMINISTRATOR SALARIES
Sec. 25.12.  (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	$2,540	  –  	  –  	  –  	  –  	  –  	  –  	–
5	2,591	  –  	  –  	  –  	  –  	  –  	  –  	–
6	2,643	  –  	  –  	  –  	  –  	  –  	  –  	–
7	2,696	  –  	  –  	  –  	  –  	  –  	  –  	–
8	2,750	$2,750	  –  	  –  	  –  	  –  	  –  	–
9	2,805	2,805	  –  	  –  	  –  	  –  	  –  	–
10	2,861	2,861	$2,918	  –  	  –  	  –  	  –  	–
11	2,918	2,918	2,976	  –  	  –  	  –  	  –  	–
12	2,976	2,976	3,036	$3,097	  –  	  –  	  –  	–
13	3,036	3,036	3,097	3,159	$3,222	  –  	  –  	–
14	3,097	3,097	3,159	3,222	 3,286	$3,352	  –  	–
15	3,159	3,159	3,222	3,286	 3,352	 3,419	  –  	–
16	3,222	3,222	3,286	3,352	 3,419	 3,487	$3,557 	–
17	3,286	3,286	3,352	3,419	 3,487	 3,557	3,628 	$3,701
18	3,352	3,352	3,419	3,487	 3,557	 3,628	3,701 	3,775
19	3,419	3,419	3,487	3,557	 3,628	 3,701	3,775 	3,851
20	3,487	3,487	3,557	3,628	 3,701	 3,775	3,851 	3,928
21	3,557	3,557	3,628	3,701	 3,775	 3,851	3,928 	4,007
22	3,628	3,628	3,701	3,775	 3,851	 3,928	4,007 	4,087
23	3,701	3,701	3,775	3,851	 3,928	 4,007	4,087 	4,169
24	3,775	3,775	3,851	3,928	 4,007	 4,087	4,169 	4,252
25	3,851	3,851	3,928	4,007	 4,087	 4,169	4,252 	4,337
26	3,928	3,928	4,007	4,087	 4,169	 4,252	4,337 	4,424
27	4,007	4,007	4,087	4,169	 4,252	 4,337	4,424 	4,512
28	4,087	4,087	4,169	4,252	 4,337	 4,424	4,512 	4,602
29	4,169	4,169	4,252	4,337	 4,424	 4,512	4,602 	4,694
30	4,252	4,252	4,337	4,424	 4,512	 4,602	4,694 	4,788
31	4,337	4,337	4,424	4,512	 4,602	 4,694	4,788 	4,884
32 	  –  	4,424	4,512	4,602	 4,694	 4,788	4,884 	4,982
33 	  –  	  – 	4,602	4,694	 4,788	 4,884	4,982 	5,082
34 	  –  	  – 	4,694	4,788	 4,884	 4,982	5,082 	5,184
35 	  –  	  – 	  – 	4,884	 4,982	 5,082	5,184 	5,288
36 	  –  	  – 	  – 	4,982	 5,082	 5,184	5,288 	5,394
37 	  –  	  – 	  – 	  – 	 5,184	 5,288	5,394 	5,502
38 	  –  	  – 	  – 	  – 	   – 	 5,394	5,502 	5,612
39 	  –  	  – 	  – 	  – 	  – 	   – 	5,612 	5,724
40 	  –  	  – 	  – 	  – 	  – 	   – 	5,724 	5,838
41	 –  	  – 	  – 	  – 	 – 	  – 	 – 	 5,955.
(c)	The appropriate classification for placement of principals and assistant principals on the salary schedule shall be determined in accordance with the following schedule:
Number of Teachers
Classification	Supervised
Assistant Principal
Principal I	Less than 11 Teachers
Principal II	11-21 Teachers
Principal III	22-32 Teachers
Principal IV	33-43 Teachers
Principal V	44-54 Teachers
Principal VI	55-65 Teachers
Principal VII	More than 65 Teachers

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

Requested by: Representatives Holmes, Creech, Esposito
SCHOOL CENTRAL OFFICE SALARIES
Sec. 25.13.  (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:	$2,804 - $4,511
(2)	School Administrator II:	$2,976 - $4,788
(3)	School Administrator III:	$3,158 - $5,081
(4)	School Administrator IV:	$3,286 - $5,287
(5)	School Administrator V:	$3,418 - $5,501
(6)	School Administrator VI:	$3,627 - $5,838
(7)	School Administrator VII:	$3,774 - $6,074
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):	$4,006 - $6,446
(2)	Superintendent II (2,501 - 5,000 ADM):	$4,251 - $6,840
(3)	Superintendent III (5,001 - 10,000 ADM):	$4,511 - $7,259
(4)	Superintendent IV (10,001 - 25,000 ADM):	$4,788 - $7,704
(5)	Superintendent V (Over 25,000 ADM):	$5,081 - $8,175
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 for fiscal year 1996-97 funds necessary to provide an average annual salary increase of four percent (4%), including funds for the employer's retirement and social security contributions, commencing July 1, 1996, for all permanent full-time personnel paid from the Central Office Allotment. The State Board of Education shall allocate these funds to local school administrative units.   The local boards of education shall establish guidelines for providing their salary increases to these personnel.

Requested by: Representatives Holmes, Creech, Esposito
NONCERTIFIED PUBLIC SCHOOL EMPLOYEES' SALARY INCREASE
Sec. 25.14.  (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 four percent (4%), 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 four percent (4%) 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 four percent (4%) on and after July 1, 1996.  The Director of the Budget may transfer from the salary increase reserve fund created in this act for fiscal year 1996-97 funds necessary to provide the salary increases for school bus drivers whose salaries are supported from the State's General Fund in accordance with the provisions of this subsection.

Requested by: Representatives Holmes, Creech, Esposito
STUDY COMMISSION ON THE COMPREHENSIVE COMPENSATION SYSTEM
Sec. 25.15.  (a)	The Study Commission on the Comprehensive Compensation System is created.  The Commission shall consist of nine members: three Representatives appointed by the Speaker of the House of Representatives, three Senators appointed by the President Pro Tempore of the Senate, and three members appointed by the Governor. The Speaker of the House of Representatives shall designate one Representative as cochair and the President Pro Tempore of the Senate shall designate one Senator as cochair.  Vacancies in the membership of the Commission shall be filled by the same appointing officer who made the initial appointment.
(b)	The Commission shall:
(1)	Evaluate the Comprehensive Compensation System established in Article 2 of Chapter 126 of the General Statutes; and
(2)	Determine a methodology for funding the pay plan for State employees at varying levels of appropriations to fund State pay increases.
The Commission shall submit a final report of its findings and recommendations to the General Assembly on or before the first day of the 1997 Session by filing the report with the Speaker of the House of Representatives and the President Pro Tempore of the Senate.  Upon filing its final report, the Commission shall terminate.
	(c)	The Commission, while in the discharge of official duties, may exercise all the powers provided for under the provisions of G.S. 120-19, and G.S. 120-19.1 through G.S. 120-19.4.  The Commission may meet at any time upon the joint call of the cochairs.  The Commission may meet in the Legislative Building or the Legislative Office Building.
(d) Members of the Commission who are legislators shall receive subsistence and travel expenses at the rates set forth in G.S. 120-3.1.  Other members of the Commission shall receive reimbursement for travel expenses at the rates allowed by G.S. 138-6.
(e) The Commission may contract for professional, clerical, or consultant services as provided by G.S. 120-32.02.  The Legislative Services Commission, through the Legislative Services Officer, shall assign professional staff to assist in the work of the Commission. The House of Representatives' and the Senate's Supervisors of Clerks shall assign clerical staff to the commission upon the direction of the Legislative Services Commission.  The expenses relating to clerical employees shall be borne by the Commission.
(f)  All State departments and agencies shall furnish the Commission with any information in their possession or available to them.

Requested by: Representatives Holmes, Creech, Esposito
POSTRETIREMENT BENEFIT INCREASES
Sec. 25.16.   (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 percent (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 percent (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 percent (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 percent (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 percent (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 percent (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 percent (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 percent (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: Representatives Holmes, Creech, Esposito
SALARY-RELATED CONTRIBUTIONS/EMPLOYERS
Sec. 25.17. 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-three hundredths percent (24.43%) - Legislative Retirement System.  Each of the foregoing contribution rates includes two percent (2%) for hospital and medical benefits.  The rate for State Law Enforcement Officers includes five percent (5%) for the Supplemental Retirement Income Plan.  The rates for Teachers and State Employees, State Law Enforcement Officers, and for the University Employees' Optional Retirement Program includes fifty-two hundredths percent (0.52%) for the Disability Income Plan."

Requested by: Representatives Holmes, Creech, Esposito, Dockham
STATE EMPLOYEE HEALTH BENEFIT PLAN/PREEXISTING HEALTH CONDITIONS
Sec. 25.18.  (a)	G.S. 135-40.1(15) reads as rewritten:
"(15)	Preexisting Condition. – A condition, disease, illness or injury diagnosed and treated within six months prior to the effective date of coverage."
(b)	G.S. 135-40.3(b) is amended by adding a new subdivision to read:
"(5)	To administer the 12-month waiting period for preexisting conditions under this Article, the Plan must give credit against the 12-month period for the time that a person was covered under a previous plan if the previous plan's coverage was continuous to a date not more than 60 days before the effective date of coverage.  As used in this subdivision, a 'previous plan' means any policy, certificate, contract, or any other arrangement provided by any accident and health insurer, any hospital or medical service corporation, any health maintenance organization, any preferred provider organization, any multiple employer welfare arrangement, any self-insured health benefit arrangement, any governmental health benefit or health care plan or program, or any other health benefit arrangement."
(c)	This section is effective July 1, 1995.

PART 26.  SCHOOL BONDS TECHNICAL CORRECTION

Requested by:  Representatives Holmes, Creech, Esposito
SCHOOL BONDS TECHNICAL CORRECTION
Sec. 26.  Section 4 of Chapter 631 of the 1995 Session Laws reads as rewritten:
"Sec. 4.  Authorization of Bonds and Notes. – Subject to a favorable vote of a majority of the qualified voters of the State who vote on the question of issuing Public School Building Bonds in the election held as provided in this act, the State Treasurer is authorized, by and with the consent of the Council of State, to issue and sell, at one time or from time to time, general obligation bonds of the State to be designated "State of North Carolina Public School Building Bonds", with any additional designations as may be determined to indicate the issuance of bonds from time to time, or notes of the State as provided in this act, in the aggregate principal amount not exceeding one billion eight hundred million dollars ($1,800,000,000) for the purposes authorized in this act.  The principal amounts of bonds or notes issued in any 12-month period shall not exceed four hundred fifty million dollars ($450,000,000).  In determining whether this limit has been reached, the issuance of a note or bond to pay an outstanding note or bond is not considered an issuance."
Sec. 26.1.  Section 6(d) of Chapter 631 of the 1995 Session Laws reads as rewritten:
"(d)	Match. – A county is not required to match bond proceeds allocated under subsection (b) of this section.  A county is not required to match the Low-Wealth Allocation of bond proceeds under subsection (c) of this section.  A county must match both the ADM Allocation and the Growth Allocation of bond proceeds under subsection (c) of this section.  These two allocations must be matched at the rate of matching funds equal to three cents (3¢) times the county's ability to pay rank for every one dollar ($1.00) of allocated bond proceeds.  A county's ability to pay rank is its rank in the ranking of counties from lowest to highest county wealth as a percentage of State average wealth made by the State Board of Education for the 1995-96 fiscal year pursuant to Section 17.1 of Chapter 507 of the 1995 Session Laws.  The match requirement may be satisfied by non-State expenditures for public school facilities made on or after January 1, 1992.  Non-state expenditures are defined as follows:
(1)	With respect to debt authorized for public school facilities before January 1, 1992, non-State expenditures include amounts expended on or after January 1, 1992, for debt service for the debt.
(2)	With respect to debt authorized for public school facilities on or after January 1, 1992, non-State expenditures include only the face amount of the debt.
(3)	With respect to expenditures other than for debt service, non-State expenditures include funds budgeted, earmarked, or committed on or after January 1, 1992, for the general purpose of public school facilities.
As counties satisfy the match requirements of this section, they shall document the extent to which they have done so in periodic reports to the State Board of Education.  These reports shall include any information and documentation required by the State Board of Education.  The State Board of Education shall certify to the State Treasurer from time to time the extent to which the match requirements of this section have been met with respect to each county; this certification shall be binding and conclusive.  Bond proceeds shall be distributed for expenditure only as, and to the extent, the matching requirements of this section are satisfied, as certified by the State Board of Education.  The State Board of Education shall also require counties to report annually on the impact of funds provided under this act on the property tax rate for that year.  These reports shall be public documents and shall be furnished to any citizen upon request."

PART 27.  MISCELLANEOUS PROVISIONS

Requested by:  Representatives Holmes, Creech, Esposito
EXECUTIVE BUDGET ACT APPLIES
Sec. 27.  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:  Representatives Holmes, Creech, Esposito
COMMITTEE REPORT
Sec. 27.1.  (a)	The House Appropriations Committee Proposed Report on House Draft Bill DRH5276 Budget Modifications, dated July 10, 1996, together with any accompanying correction sheets, which was distributed in the House of Representatives and used to explain this act, shall indicate action by the General Assembly on this act and shall therefore be used to construe this act, as provided in G.S. 143-15 of the Executive Budget Act, and for these purposes shall be considered a part of this act.
(b)	The budget enacted by the General Assembly for the maintenance of the various departments, institutions, and other spending agencies of the State for the 1995-97 fiscal biennium is a line item budget, in accordance with the Budget Code Structure and the State Accounting System Uniform Chart of Accounts set out in the Administrative Policies and Procedures Manual of the Office of the State Controller.  This budget includes the appropriations made from all sources including the General Fund, Highway Fund, special funds, cash balances, federal receipts, and departmental receipts.
The General Assembly amended the itemized budget requests submitted to the General Assembly by the Director of the Budget and the Advisory Budget Commission, in accordance with the steps that follow and the line item detail in the budget enacted by the General Assembly may be derived accordingly:
(1)	Negative reserves set out in the submitted budget were deleted and the totals were increased accordingly.
(2)	The base budget was adjusted in accordance with the base budget cuts and additions that were set out in the House Appropriations Committee Proposed Report on House Draft Bill DRH5276 Budget Modifications, dated July 10, 1996, together with any accompanying correction sheets.
(3)	Transfers of funds supporting programs were made in accordance with the House Appropriations Committee Proposed Report on House Draft Bill DRH5276 Budget Modifications, dated July 10, 1996, together with any accompanying correction sheets.
The budget enacted by the General Assembly shall also be interpreted in accordance with the special provisions in this act and in accordance with other appropriate legislation.
In the event that there is a conflict between the line item budget certified by the Director of the Budget and the budget enacted by the General Assembly, the budget enacted by the General Assembly shall prevail.

Requested by:  Representatives Holmes, Creech, Esposito
MOST TEXT APPLIES ONLY TO 1996-97
Sec. 27.2.  Except for statutory changes or other provisions that clearly indicate an intention to have effects beyond the 1996-97 fiscal year, the textual provisions of this act apply only to funds appropriated for, and activities occurring during, the 1996-97 fiscal year.

Requested by:  Representatives Holmes, Creech, Esposito
1995-96 APPROPRIATIONS LIMITATIONS AND DIRECTIONS APPLY
Sec. 27.3.  (a)	Except where expressly repealed or amended by this act, the provisions of Chapters 324 and 507 of the 1995 Session Laws remain in effect.
(b)	Notwithstanding any modifications by this act in the amounts appropriated, except where expressly repealed or amended, the limitations and directions for the 1995-96 fiscal year in Chapters 324 and 507 of the 1995 Session Laws that applied to appropriations to particular agencies or for particular purposes apply to the newly enacted appropriations and budget reductions of this act for those same particular purposes.

Requested by:  Representatives Holmes, Creech, Esposito
EFFECT OF HEADINGS
Sec. 27.4.  The headings to the parts and sections of this act are a convenience to the reader and are for reference only.  The headings do not expand, limit, or define the text of this act.

Requested by:  Representatives Holmes, Creech, Esposito
SEVERABILITY CLAUSE
Sec. 27.5.  If any section or provision of this act is declared unconstitutional or invalid by the courts, it does not affect the validity of this act as a whole or any part other than the part so declared to be unconstitutional or invalid.

Requested by:  Representatives Holmes, Creech, Esposito
EFFECTIVE DATE
Sec. 27.6.  Except as otherwise provided, this act becomes effective July 1, 1996.