GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1997

S	2 

SENATE BILL 1366
Appropriations Committee Substitute With Amendments Adopted 6/30/98

Short Title:  Appropriations Act of 1998.	(Public)

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Sponsors:

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Referred to:  

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May 27, 1998

A BILL TO BE ENTITLED
AN ACT TO MODIFY THE CURRENT OPERATIONS AND CAPITAL IMPROVEMENTS APPROPRIATIONS ACT OF 1997 AND TO MAKE OTHER CHANGES IN THE BUDGET OPERATION OF THE STATE.
The General Assembly of North Carolina enacts:

PART I.  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
Section 1.1.  This act shall be known as the "Current Operations Appropriations and Capital Improvement Appropriations  Act of 1998".

PART II.  CURRENT OPERATIONS/GENERAL FUND
Section 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 fiscal year ending June 30, 1999, according to the schedule that follows.   Amounts set out in brackets are reductions from General Fund appropriations for the 1998-99 fiscal year.

Current Operations - General Fund	1998-99

General Assembly	$         -0-

Judicial Department	6,743,529

Office of the Governor
01.	Office of the Governor	30,704
02.	Office of State Budget
and Management	1,000,737
03.	Office of State Planning	1,293,882
04.	Housing Finance Agency	2,000,000

Office of the Lieutenant Governor	25,000

Department of Secretary of State	2,037,719

Department of State Auditor	1,583,258

Department of State Treasurer	1,417,525

Department of Public Education	131,388,109

Department of Justice	1,562,081

Department of Administration	988,641

Department of Agriculture and 
Consumer Services	1,955,296

Department of Labor	190,000

Department of Insurance	2,518,893

Department of Transportation	-

Department of Environment and
Natural Resources	24,983,448

Office of Administrative Hearings	277,641

Rules Review Commission	-

Department of Health and Human Services
01.	Office of the Secretary	11,088,375
02.	Division of Aging	4,000,000
03.	Division of Child Development	55,603,289
04.	Division of Services for the
Deaf and Hard of Hearing	185,000
05.	Division of Social Services	(16,371,926)
06.	Division of Health Services	9,824,000
07.	Division of Medical Assistance	(64,710,957)
08.	Division of Services
for the Blind	300,000
09.	Division of Mental Health,
Developmental Disabilities, and
Substance Abuse Services	52,905,001
10.	Division of Facility Services	300,000
11.	Division of Vocational
Rehabilitation Services	1,200,000
12.	Division of Youth Services	(200,000)
Total Department of Health and Human Services	54,122,782

Department of Correction	(17,343,097)

Department of Commerce
01.	Commerce	17,885,092
02.	Biotechnology Center	2,474,517
03.	MCNC	2,000,000
04.	Rural Economic Development
Center	4,012,338
05.	State Aid to non-State
Entities	12,750,000
06.	State Information Processing Services	5,871,630

Department of Revenue	11,946,050

Department of Cultural Resources	22,653,814

Department of Crime Control
and Public Safety	2,577,226

Office of the State Controller	2,146,988

University of North Carolina - Board
of Governors
01.	General Administration	(38,720)
02.	University Institutional
Programs	79,797,910
03.	Related Educational Programs	7,177,770
04.	University of North Carolina
at Chapel Hill
a.  Academic Affairs	(665,108)
b.  Health Affairs	(702,514)
c.  Area Health Education
    Centers	(39,753)
05.	North Carolina State University
at Raleigh
a.  Academic Affairs	(355,191)
b.  Agricultural Research Service	(42,451)
c.  Cooperative Extension Service	(33,652)
06.	University of North Carolina at
Greensboro	(232,914)
07.	University of North Carolina at
Charlotte	(111,070)
08.	University of North Carolina at
Asheville	(20,866)
09.	University of North Carolina at
Wilmington	(40,663)
10.	East Carolina University
a.  Academic Affairs	(191,207)
b.  Division of Health Affairs	(42,480)
11.	North Carolina Agricultural and
Technical State University	(51,643)
12.	Western Carolina University	(70,087)
13.	Appalachian State University	(151,650)
14.	The University of North
Carolina at Pembroke	(19,141)
15.	Winston-Salem State University	(20,759)
16.	Elizabeth City State
University	(58,252)
17.	Fayetteville State University	(24,605)
18.	North Carolina Central
University	(3,525)
19.	North Carolina School of the
Arts	(12,280)
20.	North Carolina School of
Science and Mathematics.	(9,897)
UNC Hospitals at Chapel Hill	(36,783)
Total University of North
Carolina - Board of Governors	84,000,469

Department of Community Colleges	44,776,373

State Board of Elections	1,741,168

Contingency and Emergency	-

Reserve for Compensation Increase	385,042,966

Retirement Rate Adjustment	 (44,381,870)

Reserve for Salary Adjustments	-

Debt Service	(14,179,574)

Debt Service - Federal	-

Postage Reduction	-
Reserve for Juvenile Justice Initiatives	17,347,487
Reserve for Travel Rate Increase
for State Employees	1,000,000
Reserve for Global TransPark	5,325,000

GRAND TOTAL CURRENT OPERATIONS –
GENERAL FUND	$781,765,822

PART III.  CURRENT OPERATIONS AND EXPANSION/HIGHWAY FUND
Section 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 fiscal year ending June 30, 1999, according to the schedule that follows.   Amounts set out in brackets are reductions from Highway Fund appropriations for the 1998-99 fiscal year.

Current Operations - Highway Fund	1998-99      

Department of Transportation
01.	Administration  	$   14,219,314
02.	Operations	-    
03.	Construction and Maintenance
a.	Construction
(01)	Primary Construction    	-    
(02)	Secondary Construction	(2,050,000)
(03)	Urban Construction	-    
(04)	Access and Public
Service Roads	-    
(05)	Discretionary Fund	-    
(06)	Spot Safety Construction	-    
b.	State Funds to Match Federal
Highway Aid	(33,153,153)
c.	State Maintenance	37,707,354
d.	Ferry Operations	-    
e.	Capital Improvements	4,070,348
f.	State Aid to Municipalities	(2,050,000)
g.	State Aid for Public
Transportation and Railroads	12,400,000
h.	OSHA - State	-   
04.	Governor's Highway Safety Program	-   
05.	Division of Motor Vehicles	881,140
06.	Reserves and Transfers	   (25,641,370)
GRAND TOTAL CURRENT OPERATIONS/
  HIGHWAY FUND 	$    6,383,633

PART IV.  HIGHWAY TRUST FUND
Section 4.  Appropriations from the Highway Trust Fund are made for the fiscal year ending June 30, 1999, according to the schedule that follows.   Amounts set out in brackets are reductions from Highway Trust Fund appropriations for the 1998-99 fiscal year.

Highway Trust Fund	1998-99

01.	Intrastate System	($ 20,194,558)
02.	Secondary Roads Construction	(393,452)
03.	Urban Loops	(8,165,838)
04.	State Aid - Municipalities	(2,118,880)
05.	Program Administration	        143,380
GRAND TOTAL/HIGHWAY TRUST FUND	($ 30,729,348)

PART V. BLOCK GRANT FUNDS
Requested by:   Senator Martin of Guilford
DHHS BLOCK GRANT PROVISIONS
Section 5. (a)	Appropriations from federal block grant funds are made for the fiscal year ending June 30, 1999, according to the following schedule:

COMMUNITY SERVICES BLOCK GRANT

01.	Community Action Agencies	$ 11,573,346

02.	Limited Purpose Agencies	642,964

03.	Department of Health and Human Services
to administer and monitor
the activities of the
Community Services Block Grant	642,964

TOTAL COMMUNITY SERVICES BLOCK GRANT	$ 12,859,274

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	4,764,124

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	13,853,152

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	2,255,301

13.	County departments of social services for
child abuse/prevention and
permanency planning	394,841

14.	Transfer to Preventive Health
Block Services Grant for
emergency medical services	213,128

15.	Transfer to Preventive Health Block
Services Grant for AIDS education, counseling,
and testing	66,939

16.	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

19.	Allocation to the Adolescent
Pregnancy Prevention Program	239,261

20.	Office of the Secretary - Office of Economic
Opportunity for N.C. Senior Citizens'
Federation for outreach services to
low-income elderly persons	41,302

21.	County departments of social services
for child welfare improvements	2,211,687

22.	Transfer from TANF -  Division of
Mental Health, Developmental
Disabilities, and Substance Abuse
Services for juvenile offenders	1,182,280

23.	Transfer from TANF - Enhanced
Employee Assistance Program	1,000,000

24.	Transfer from TANF - Teen Pregnancy
Prevention	2,000,000

TOTAL SOCIAL SERVICES BLOCK GRANT	$ 69,965,690

LOW-INCOME ENERGY BLOCK GRANT

01.	Energy Assistance Programs	$ 6,350,240

02.	Crisis Intervention	6,461,000

03.	Administration	1,443,572

04.	Department of Commerce - 
Weatherization Program	4,171,960

05.	Department of Administration - 
N.C. Commission of Indian Affairs	33,228

TOTAL LOW-INCOME ENERGY BLOCK GRANT	$ 18,460,000

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	1,819,931

03.	Administration	624,231

TOTAL MENTAL HEALTH SERVICES BLOCK GRANT	$ 6,238,341

SUBSTANCE ABUSE PREVENTION
AND TREATMENT BLOCK GRANT

01.	Provision of community-based
alcohol and drug abuse services,
tuberculosis services, and services
provided by the Alcohol, Drug Abuse
Treatment Centers	$ 11,502,939

02.	Continuation of services for
pregnant women and women
with dependent children	5,065,766

03.	Continuation and expansion of
services to IV drug abusers and others
at risk for HIV diseases	4,843,456

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.	Services for former SSI recipients	1,123,757

06.	Juvenile Services - Family Focus	893,811

07.	Juvenile offender services and substance
abuse pilot	300,000

08.	Administration	2,171,228

TOTAL SUBSTANCE ABUSE PREVENTION 
AND TREATMENT BLOCK GRANT	$ 31,865,050

CHILD CARE AND DEVELOPMENT BLOCK GRANT

01.	Before and After School Child Care Programs
and Early Childhood Development Programs	$845,598

02.	Quality improvement activities	752,281

TOTAL CHILD CARE AND DEVELOPMENT
BLOCK GRANT	$ 1,597,879

CHILD CARE AND DEVELOPMENT FUND BLOCK GRANT

01.	Child care subsidies	$108,625,251

02.	Quality and availability initiatives	4,774,736

03.	Administrative expenses	5,968,420

04.	Transfer from TANF Block Grant for 
child care subsidies and support	55,075,185

05.	Transfer from TANF Block Grant for three
child care centers at community colleges	500,000

TOTAL CHILD CARE AND DEVELOPMENT FUND
BLOCK GRANT	$174,943,592

TEMPORARY ASSISTANCE TO NEEDY FAMILIES
(TANF) BLOCK GRANT 

01.	Work First Cash Assistance:
   Standard Counties	$160,230,540
   Electing Counties	43,084,638

02.	Work First County Block Grants	50,174,419

03.	Transfer to Child Care and Development
Fund Block Grant for three child
care centers at community colleges	500,000

04.	Transfer to the Child Care and 
Development Fund Block Grant
for child care subsidies	55,075,185

05.	Allocation to the Division of Mental
Health, Developmental Disabilities, and
Substance Abuse Services for Work First
substance abuse treatment services
and drug testing 	2,000,000

06.	Allocation to the Division of Social
Services for evaluation	1,000,000

07.	Allocation to the Division of Social
Services for State and county
staff development	500,000

08.	Reduction of out-of-wedlock births	1,600,000

09.	Allocation to the Division of Mental
Health, Developmental Disabilities, and
Substance Abuse Services for screening,
diagnostic, and counseling services
related to substance abuse services
for Work First participants	2,300,000

10.	Transfer to the Social Services Block Grant
for substance abuse services for juveniles	1,182,280

11.	Transfer to the Social Services Block Grant
to establish the Special Children 
Adoption Fund	300,000

12.	Department of Commerce - 
First Stop/Employment Security Commission	750,000

13.	Transfer to Social Services Block Grant - 
Enhanced Employee Assistance Program	1,000,000

14.	Specialized Vocational
	 	Rehabilitation Staff for Work First	477,529

15.	Planning for "Next Step" for TANF
children and families	150,000

16.	Work First Substance Abuse Coordinator
in Division of Mental Health, Developmental
Disabilities, and Substance Abuse Services	75,000

17.	Work First Job Retention and Follow-up
Initiatives	2,600,000

18.	Work First Substance Abuse Model
Programs	900,000

19.	Transfer to Social Services Block Grant
for Teen Pregnancy Prevention	2,000,000

TOTAL TEMPORARY ASSISTANCE TO NEEDY FAMILIES
(TANF) BLOCK GRANT	$325,899,591

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, 
	Childhood Injury Prevention,
	Public Information and Education, and
	Technical Assistance to Local Health
	Departments	1,722,869

03.	Services to Children With Special Health
	Care Needs	4,969,002

TOTAL MATERNAL AND CHILD
HEALTH BLOCK GRANT	$ 16,529,945

PREVENTIVE HEALTH SERVICES BLOCK GRANT

01.	Transfer from Social Services
	Block Grant - 
	Emergency Medical Services	$     213,128

02.	Hypertension and Statewide
	Health Promotion Programs	    3,320,637

03.	Dental Health for Fluoridation
	of Water Supplies	      213,308

04.	Rape Prevention and Rape
	Crisis Programs	      190,134

05.	Rape Prevention and Rape Education	1,144,957

06.	Transfer from Social Services
	Block Grant - 
	AIDS/HIV Education, Counseling,
	and Testing	       66,939

07.	Office of Minority Health and
	Minority Health Council	      177,442

08.	Administrative and Indirect Cost	207,210

TOTAL PREVENTIVE HEALTH SERVICES BLOCK GRANT	$   5,533,755

(b)	Decreases in Federal Fund Availability - 
Decreases in federal fund availability in all Block Grants except the TANF Block Grant, the Maternal and Child Health Block Grant, and the Preventive Health Services Block Grant shall be reduced as follows: 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 by equal percentages to total the reduction in federal funds.
The Department of Health and Human Services shall cooperate with all other State and local agencies and public and private entities (i) that are impacted by the Social Services or the TANF Block Grant and (ii) that will be affected by future reductions in the Social Services Block Grant in the preparation of a State/local report, setting out concrete plans for dealing with future cuts in the Social Services Block Grant.  The Department shall present this report to the members of the Senate Appropriations Committee on Human Resources and the House of Representatives Appropriations Subcommittee on Human Resources within a week of the convening of the 1999 General Assembly. 
If the United States Congress reduces the amount of TANF funds below the amounts specified above after the effective date of this act, then the Department shall reduce every item in the TANF Block Grant section listed above pro rata.  Any TANF funds appropriated by the United States Congress in addition to the funds specified in this act shall not be expended until appropriated by the General Assembly.  Any TANF Block Grant fund changes shall be reported to the members of the Senate Appropriations Committee on Human Resources and the House of Representatives Appropriations Subcommittee on Human Resources
and to the Fiscal Research Division.
Decreases in federal fund availability shall be allocated for the Maternal and Child Health and Preventive Health Services federal block grant as follows:  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 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 and the Preventive Health Services Block Grants the Department of Health and Human Services shall allocate the decrease in funds after considering the effectiveness of the current level of services.
(c)	Increases in Federal Fund Availability -
Any increases in the Community Services Block Grant and the Low-Income Energy Block Grant Funds Grant shall be expended as follows:  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 Health and Human Services, provided that the resultant increases are in accordance with federal block grant requirements, by allocating the additional funds for direct services only among the programs funded in this section.
Any block grant funds appropriated by the United States Congress for the Social Services Block Grant in addition to the funds specified in this act shall be expended by the Department of Health and Human Services, provided the resultant increases are in accordance with federal block grant requirements, as follows:
(1)	Fifty percent (50%) of the funds shall be allocated to the county departments of social services for mandatory services; and
(2)	The remaining fifty percent (50%) shall be allocated for direct services only among the programs funded in this section.
The Child Care and Development Fund 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 Health and Human Services, 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.
Any block grant funds appropriated by the Congress of the United States for the Maternal and Child Health Block Grant and the Preventive Health Services Block Grant in addition to the funds specified in this act shall be expended as follows:
(1)	For the Maternal and Child Health 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.
(2)	For the Preventive Health Services Block Grants –  These additional funds may be budgeted by the appropriate department, with the approval of the Office of State Budget and Management, after considering the effectiveness of the current level of services and the effectiveness of services to be funded by the increase, 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 the budgeted allocations to the Block Grants appropriated in this act due to decreases or increases in federal funds shall be reported to the Joint Legislative Commission on Governmental Operations, the members of the  Senate Appropriations Committee on Human Resources and the House of Representatives Appropriations Subcommittee on Human Resources and to the Fiscal Research Division.
(e) Limitations on Preventive Health Services Block Grant Funds
Twenty-five percent (25%) of funds allocated for Rape Prevention and Rape Education shall be allocated as grants to nonprofit organizations to provide rape prevention and education programs targeted for middle, junior high, and high school students.  
If federal funds are received under the Maternal and Child Health Block Grant for abstinence education, pursuant to section 912 of Public Law 104-193 (42 U.S.C. § 710), for the 1998-99 fiscal year, then those funds shall be transferred to the State Board of Education to be administered by the Department of Public Instruction.  The Department shall use the funds to establish an Abstinence Until Marriage Education Program and shall delegate to one or more persons the responsibility of implementing the program and G.S. 115C-81(e1)(4).  The Department shall carefully and strictly follow federal guidelines in implementing and administering the abstinence education grant funds.
(f) The sum of one million dollars ($1,000,000) appropriated in this section to the Department of Health and Human Services in the TANF Block Grant for the 1998-99 fiscal year for evaluation  shall be used:
(1)	To evaluate the Work First Program to assess the success of the current waiver program in effect until the General Assembly's approval of the new TANF State Plan in order to determine the impact on TANF recipients and their children.  The Department shall contract with an independent consultant to develop an evaluation design that shall ensure that the evaluation includes an assessment of the impact of the Program on the economic security and health of children and families, child abuse and neglect, caseloads for child protective services and foster care, school attendance, and academic and behavioral performance.  The Department shall report the results of this evaluation study, together with any recommendations, to the Senate Appropriations Committee on Human Resources and the House of Representatives Appropriations Subcommittee on Human Resources by March 1, 1999; and
(2)	To contract with an independent consultant with expertise in evaluating large social programs to plan and design an evaluation of the Work First Program established by Part 2 of Article 2 of Chapter 108A of the General Statutes that will come into full effect upon the approval of the new TANF State Plan.  The evaluation plan and design shall ensure that the evaluation includes an assessment of the impact of the Program on the economic security and health of children and families, child abuse and neglect, caseloads for child protective services and foster care, school attendance, and academic and behavioral performance.  The independent consultant shall report on the evaluation plan and design to the Senate Appropriations Committee on Human Resources and the House of Representatives Appropriations Subcommittee on Human Resources by December 1, 1998.
(g)  The sum of one hundred fifty thousand dollars ($150,000) appropriated to the Department of Health and Human Services in this section in the TANF Block Grant for the 1998-99 fiscal year for "Next Step" shall be used to develop a substance abuse program plan that meets the specialized substance abuse services needs of TANF children and their families.  This plan shall include a strong evaluation model/design to assess services' effectiveness in order to facilitate decision making regarding expansion of the program.  The Department shall report on this plan, together with any recommendations, to the Senate Appropriations Committee on Human Resources and the House of Representatives Appropriations Subcommittee on Human Resources no later than January 1, 1999.
(h) The sum of two million six hundred thousand dollars ($2,600,000) appropriated to the Department of Health and Human Services in this section in the TANF BLock Grant in the 1998-99 fiscal year for the Work First job retention and follow-up model programs shall be used to implement pilots and strategies that support TANF recipients in attaining and maintaining self-sufficiency through job retention, family support services, pre-and post-TANF follow-up.  The pilots and strategies shall be developed with a strong evaluation component that looks at outcomes such as child/family well-being, family economic progress, and in consultation with local departments of social services, area mental health programs, the Employment Security Commission, work force development boards, businesses, institutions of higher education, advocacy groups, and faith communities.  The Department shall report on its progress in developing and implementing these pilots and strategies to the Senate Appropriations Committee on Human Resources and the House of Representatives Appropriations Subcommittee on Human Resources by January 15, 1999.
(i) The Department of Health and Human Services shall develop a plan for implementation of a specialized vocational rehabilitation counseling component for certain TANF recipients with substance abuse services needs. The Department shall coordinate with the Division of Vocational Rehabilitation and the Department of Commerce, Employment Security Commission, and collaborate with local human services agencies and the business community to develop the plan.  The Department shall report on this plan to the Senate Appropriations Committee on Human Resources and the House of Representatives Appropriations Subcommittee on Human Resources by November 15, 1998.
(j) If, during the 1998-99 fiscal year, the Department of Health and Human Services determines that a child care subsidy waiting list for prior or current TANF recipients is detrimental to the continued success of the Work First Program, the Office of State Budget and Management may make additional allocations from the TANF Block Grant to the Child Care Development Fund Block Grant.  Prior to making these allocations, the Office of State Budget and Management shall report to the Senate Appropriations Committee on Human Resources and the House of Representatives Appropriations Subcommittee on Human Resources or to the Joint Legislative Commission on Governmental Operations, whichever meets earlier.
(k) The sum of two million dollars ($2,000,000) appropriated to the Department of Health and Human Services in this section in the TANF Block Grant for the 1998-99 fiscal year and transferred to the Social Services Block Grant for Teen Pregnancy Prevention shall be used to develop and implement local programs and initiatives aimed at reducing teen pregnancy.  The programs developed with these funds shall be based on model programs that have been proven successful by extensive evaluation.  The programs and initiatives shall include:
(1)	Adolescent parenting programs;
(2)	Adolescent pregnancy prevention programs;
(3)	Local coalition programs combining adolescent parenting and adolescent pregnancy prevention components;
(4)	Teen care coordination projects;
(5)	A media campaign, to raise awareness of teens and their parents. 
(l)  The sum of one million three hundred thousand dollars ($1,300,000) appropriated in this section in the Social Services Block Grant to the Department of Health and Human Services, Division of Social Services, for the 1998-99 fiscal year shall be allocated to county departments of social services for hiring or contracting for additional child protective services, foster care, and adoption worker and supervisor positions created after this act becomes law based upon a formula which takes into consideration the number of child protective services, foster care, and adoption cases, and child protective services, foster care, and adoption workers and supervisors necessary to meet recommended standards adopted by the North Carolina Association of County Directors of Social Services.  No local match shall be required as a condition for receipt of these funds.
(m) The sum of nine hundred eleven thousand six hundred eighty-seven dollars ($911,687) appropriated in this section in (i) the Social Services Block Grant and (ii) in the TANF Block Grant transferred to the Social Services Block Grant to the Department of Health and Human Services, Special Children Adoption Fund, for the 1998-99 fiscal year shall be used to implement this subsection.  Of the monies in the Special Children Adoption Fund, the Department shall award a minimum of four hundred thousand dollars ($400,000) to licensed private adoption agencies.  The Department of Health and Human Services, Division of Social Services, in consultation with the North Carolina Association of County Directors of Social Services and representatives of licensed private adoption agencies, shall develop guidelines for the awarding of funds to licensed public and private adoption agencies upon successful placement for adoption of children described in G.S. 108A-50 and in foster care.  No local match shall be required as a condition for receipt of these funds. 
The Department of Health and Human Services, Division of Social Services, shall evaluate the cost-effectiveness of county departments of social services and licensed public and private adoption agencies in placing children who are in the custody of the department of social services and report the results of this evaluation by May 1, 1999, to the Senate Appropriations Committee on Human Resources and the House of Representatives Appropriations Subcommittee on Human Resources.
(n)  If funds appropriated through the Child Care and Development Fund, which includes 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 federal requirements of the grant, in order to use the federal funds fully.
(o)  The sum of five hundred thousand dollars ($500,000) appropriated in this section in the TANF Block Grant to the Department of Health and Human Services for the 1998-99 fiscal year and transferred to the Child Care and Development Fund Block Grant for transfer to the Department of Community Colleges shall be used to continue the three model early childhood education centers in three community colleges, one in the eastern part of the State, one in the western part of the State, and one in the Piedmont.
(p)  Notwithstanding the amounts specified in this section for the components of the Temporary Assistance for Needy Families (TANF) Block Grant, the Department may expend TANF Block Grant funds during the first quarter of the 1998-99 fiscal year for the same purposes for which those funds were expended during the last quarter of the fiscal year ending June 30, 1998.

Requested by:   Senator Martin of Pitt
NER BLOCK GRANT FUNDS
Section 5.1.  (a) Appropriations from federal block grant funds are made for the fiscal year ending June 30, 1999, according to the following schedule:

WELFARE-TO-WORK BLOCK GRANT	$25,000,000

COMMUNITY DEVELOPMENT BLOCK GRANT

01.	State Administration	$    980,000

02.	Urgent Needs and Contingency	   1,277,400

03.	Community Empowerment	   2,767,700

04.	Economic Development	   8,516,000

05.	Community Revitalization	  28,528,600

06.	State Technical Assistance	     440,000

07.	Housing Development	1,490,300

TOTAL COMMUNITY DEVELOPMENT
BLOCK GRANT - 1999 Program Year	$ 44,000,000

(b)	Decreases in Federal Fund Availability
Decreases in federal fund availability for the 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.
(c)	Increases in Federal Fund Availability for Community Development Block Grant
Any block grant funds appropriated by the Congress of the United States in addition to the funds specified in this section shall be expended as follows: – Each program category under the Community Development Block Grant shall be increased by the same percentage as the increase in federal funds.
(d)	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 nine hundred thousand dollars ($900,000) may be used for State administration; up to one million two hundred seventy-seven thousand four hundred dollars ($1,277,400) may be used for Urgent Needs and Contingency; up to two million seven hundred sixty-seven thousand seven hundred dollars ($2,767,700) may be used for Community Empowerment; up to eight million five hundred sixteen thousand dollars ($8,516,000) may be used for Economic Development; not less than twenty-eight million five hundred twenty-eight thousand six hundred dollars ($28,528,600) shall be used for Community Revitalization; up to four hundred forty thousand dollars ($440,000) may be used for State Technical Assistance; up to one million four hundred ninety thousand three hundred dollars ($1,490,300) 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.
(e) Scattered Sites Program Improvements – The Department shall implement improvements to the system for distributing Scattered Sites awards in the Community Revitalization category to maximize funding opportunities. The Department shall make changes in the funding cycle for Scattered Sites projects, shall reduce the cap on grants for these projects to three hundred fifty thousand dollars ($350,000), and shall increase funding allocations by up to fifteen percent (15%) to address outhouses and other critical on-site water/wastewater needs.  The Department may adopt temporary rules to implement these changes.
(f) Welfare-to-Work Block Grant –  The Office of State Budget and Management may identify in the budgets of the Department of Commerce, the Employment Security Commission, and the Department of Health and Human Services, potential sources of State funds which may be used as match for the federal Welfare-to-Work Block Grant.  If funds are not sufficient from these sources, the Office of State Budget and Management may identify potential sources from other State agencies and departments.

PART VI.  GENERAL FUND AND HIGHWAY FUND AVAILABILITY STATEMENTS
GENERAL FUND AVAILABILITY STATEMENTS
Section 6.  The General Fund and availability used in developing the 1998-99 budget is shown below:
	($ Millions)
01.	Composition of the 1998-99 beginning availability:
a.	Revenue collections unaddressed in 1997-98	$ 121.5
b.	Revenue collections in 1997-98 in excess of
authorized estimates	614.4
c.	Unexpended appropriations during 1997-98 (reversions)	100.0
d.	Adjustment for Emergency Appro./Yr. 2000 Conversion	(20.5)
Beginning Credit Balance	815.4

02.	Earmarked Transfers from Credit Balance:
a.	Transfer to Savings Reserve	(21.6)
b.	Transfer for Reserve for Repairs & Renovations	(145.0)
c.	Transfer to Clean Water Management Reserve	(53.0)
d.	Transfer to Reserve for Bailey/Emory/Patton Cases Refunds (400.0)
Total Transfers	(619.6)

03.	Beginning Unrestricted Fund Balance	195.8

04.	Revenues Based on Existing Tax Structure:
a.	Tax Revenues Originally Projected	11,547.7
Additional Projected Tax Revenue	152.5
Total Tax Revenues	11,700.2
b.	Tax Changes:
01.	Repeal Food Tax Effective Nov. 1	(53.9)
02.	Repeal Income Tax on Retired Gov't. Emp. (Bailey Case)	(128.6)
03.	Continue Earmarked Refund for Federal Retirees	(35.5)
Total Tax Changes	(218.0)

c.	Non-Tax Revenues	472.4
Additional Non-Tax Revenue:
Treasurer's Banking Division	1.1
Secretary of State Fees	0.5
DHHS-Certificate of Need Fees	1.5
Fed. Retiree Refund Program-Administration	0.7
Intangibles Tax Reserve Balance	7.4
Fed. Retiree Refund Reserve Balance	9.7
Transfer from Insurance Regulatory Fund	3.1
Total Non-Tax Revenues	496.4

d.	Disproportionate Share Receipts	85.0
1997-98 Reserved DSH Receipts	35.4
Total DSH Receipts	120.4

e.	Highway Trust Fund Transfer	170.0

TOTAL GENERAL FUND AVAILABILITY	$ 12,464.8

TOTAL 1998-99 APPROPRIATIONS
BY 1997 AND 1998 EXTRA SESSION	$ 11,547.6

REMAINING GENERAL FUND AVAILABILITY	$ 917.2

HIGHWAY FUND AVAILABILITY
Section 6.1.  The Highway Fund appropriations availability used in developing modifications to the 1998-99 Highway Fund budget contained in this act is shown below:

	1998-99
Beginning Credit Balance	$ 5,159,370
Estimated Revenue	   1,224,263
TOTAL HIGHWAY FUND AVAILABILITY	$ 6,383,633

PART VII.  GENERAL PROVISIONS
Requested by:  Senators Odom, Plyler, Perdue
CONTINGENCY AND EMERGENCY FUND ALLOCATIONS
Section 7.  Section 7.2(a) of S.L. 1997-43 reads as rewritten:
"(a)	Of the funds appropriated in this act to the Contingency and Emergency Fund, the sum of nine hundred thousand dollars ($900,000) for the 1997-98 fiscal year and the sum of nine hundred thousand dollars ($900,000) for the 1998-99 fiscal year shall be designated for emergency allocations, which are for expenditures:
(1)	Required by a court, Industrial Commission, or administrative hearing officer's order or award or to match unanticipated federal funds;
(2)	Required to respond to an unanticipated disaster such as a fire, hurricane, or tornado; or
(3)	Required to call out the National Guard.
Two hundred twenty-five thousand dollars ($225,000) for the 1997-98 fiscal year and two hundred twenty-five thousand dollars ($225,000) for the 1998-99 fiscal year shall be designated for other allocations from the Contingency and Emergency Fund."

PART VIII. RESERVES
BAILEY/EMORY/PATTON CASES REFUNDS RESERVE
Section 8.  There is established in the Office of State Treasurer a Reserve Fund for the Bailey/Emory/Patton Cases Refunds.
There is transferred from General Fund overcollections for the 1997-98 fiscal year to the Office of State Treasurer, Reserve for the Bailey/Emory/Patton Cases Refunds, the sum of four hundred million dollars ($400,000,000).  These funds shall be held in reserve and allocated pursuant to the Consent Order entered in the Bailey/Emory/Patton cases, 92 CVS 10221, 94 CVS 06904, 95 CVS 06625, 95 CVS 08230, 98 CVS 00738, and 95 CVS 04346, in Wake County Superior Court on 10 June 1998.

JUVENILE JUSTICE RESERVE
Section 8.1. (a) There is established in the Office of State Budget and Management a reserve fund entitled the "Juvenile Justice Reserve Fund" to provide funds to implement the recommendations of the Governor's Commission on Juvenile Crime and Justice, which are set forth in Senate Bill 1260 and House Bill 1373 of the 1998 Regular Session of the 1997 General Assembly and entitled "Juvenile Justice Reform Act". There is appropriated from the General Fund to the Office of State Budget and Management the sum of seventeen million three hundred forty-seven thousand four hundred eighty-seven dollars ($17,347,487) for the 1998-99 fiscal year for the Juvenile Justice Reserve Fund.  The Director of the Budget shall allocate funds from the Juvenile Justice Reserve Fund as follows:
(1)	$1,000,000 nonrecurring to the Department of Health and Human Services for planning and design of 208 new training school beds.
(2)	$32,980 nonrecurring and $726,666 recurring to the Department of Health and Human Services to make 32 beds at Umstead Detention Center permanent effective October 1, 1998.
(3)	$4,800,000 nonrecurring to the Department of Health and Human Services for renovation of two existing GPAC units and construction at those units to provide 24 detention beds at each unit, if practicable. Any funds remaining after allocation of funds for renovation of the two GPAC units shall be used for planning and design of four additional 24-bed detention units, for which the General Assembly intends to appropriate construction funds.
(4)	$930,427 recurring and $563,298 nonrecurring to the Administrative Office of the Courts for court counselors and support staff (100 counselors, 6 counselor supervisors, and 20 support staff effective April 1, 1999, and June 1, 1999).
(5)	$506,776 nonrecurring to the Administrative Office of the Courts for three family court pilots beginning December 1, 1998, and expiring December 1, 2000, pursuant to Section 16.17 of this act.
(6)	$25,000 nonrecurring to the Department of Crime Control and Public Safety for an external study of the Tarheel Challenge Project pursuant to Section 19.1 of this act.
(7)	$700,000 nonrecurring to the Department of Public Instruction for the Communities in Schools Program, a public/private partnership working with at-risk students.
(8)	$500,000 nonrecurring to the Board of Governors of The University of North Carolina for the Center for the Prevention of School Violence for operating support of this research, training, and information center at North Carolina State University.
(b) The Director of the Budget shall allocate funds for the following purposes only if Senate Bill 1260 or House Bill 1373 becomes law during the 1998 Regular Session of the 1997 General Assembly:
(1)	$5,435,000 for local grant funds as follows:
a.	$1,425,000 nonrecurring for local home-based family services programs.
b.	$750,000 nonrecurring for local substance abuse programs established in enacted Senate Bill 1260 or House Bill 1373.
c.	$1,500,000 nonrecurring and $1,760,000 recurring to be distributed as provided in enacted Senate Bill 1260 or House Bill 1373.
(2)	$200,000 recurring for house arrest as defined in enacted Senate Bill 1260 or House Bill 1373.
(3)	$33,000 nonrecurring and $200,000 recurring for contractual services for three sites for the Guard Response Alternate Sentencing Program as established in enacted Senate Bill 1260 or House Bill 1373.
(4)	$8,626 nonrecurring and $21,206 recurring for two counselors for the On Track Program as established in enacted Senate Bill 1260 or House Bill 1373.  The positions will become effective April 1, 1999.
(5)	$1,100,000 nonrecurring and $200,000 recurring for the juvenile information system, including a project coordinator and two business system analysts effective October 1, 1998, as established in enacted Senate Bill 1260 or House Bill 1373.
(6)	$100,000 nonrecurring to study the At-Risk Assessment System established in enacted Senate Bill 1260 or House Bill 1373.
(7)	$50,000 nonrecurring for the Substance Abuse Prevention Plan established in enacted Senate Bill 1260 or House Bill 1373.
(8)	$119,512 nonrecurring for contractual services and $94,996 recurring for two positions for the Sentencing Commission, effective October 1, 1998.
Prior to awarding local grants, the department administering the grants pursuant to enacted Senate Bill 1260 or House Bill 1373 shall submit to the Joint Legislative Commission on Governmental Operations and the Appropriations Committees of the Senate and House of Representatives a list of the proposed recipients of the grants awarded from the Juvenile Justice Reserve Fund.  The list shall include for each recipient the amount of the grant awarded, the membership of the local committee or council administering the award funds on the local level, and a description of the local services, programs, or projects that will receive funds.  A written copy of the list and other information regarding the projects shall also be sent to the Fiscal Research Division of the General Assembly. 
(c)	The Department of Health and Human Services shall review the membership of local Community-Based Alternatives Youth Services Advisory Committees established pursuant to G.S. 7A-289.13 and the proposed membership of the local committees or councils established pursuant to enacted Senate Bill 1260 or House Bill 1373.  In its deliberations, the Department shall consider and make recommendations regarding the membership of local committees or councils administering grant funds for the purpose of ensuring that the funds are distributed in an appropriate manner.  The Department shall report its recommendations to the 1999 General Assembly on or before March 1, 1999.  In addition, prior to any notification of proposed grant awards to local Community-Based Alternatives Youth Services Advisory Committees, the Department of Health and Human Services shall report to the Joint Legislative Commission on Governmental Operations for its review of the proposed grant awards.
(d)	If North Carolina receives Juvenile Accountability Incentive Block Grants, or a notice of funds to be awarded, the Office of State Budget and Management and the Governor's Crime Commission of the Department of Crime Control and Public Safety shall report to the Appropriations Committees of the Senate and House of Representatives and the Joint Legislative Commission on Governmental Operations prior to allocation of these funds.  The report shall identify the amount of funds to be received for the 1998-99 fiscal year, the amount of funds anticipated for the 1999-2000 fiscal year, and the allocation of funds by program and purpose.
(e) The Department of Health and Human Services shall report to the Joint Legislative Commission on Governmental Operations prior to finalizing site selection for training school beds and detention beds authorized pursuant to this section.

PART IX.  PUBLIC SCHOOLS
Requested by:  Senators Plyler, Perdue, Odom
ALLOCATIONS FOR PUBLIC SCHOOLS
Section 9. (a) There is allocated from unexpended 1997-98 General Fund appropriations the sum of fifty-five million twenty-seven thousand six hundred eighty dollars ($55,027,680) which shall be used as follows:
(1)	$17,118,003 to fulfill the State's obligations to  public school employees who qualified for performance bonuses for the 1997-98 school year under the ABC's of Public Education Program;
(2)	$9,010,274 to fulfill the State's obligations to public school teachers who qualified for longevity payments for the 1997-98 school year;
(3)	$24,199,403 to permit the State Board of Education to order school buses needed for the 1998-99 school year; and
(4)	$4,700,000 for the State School Technology Fund to provide additional school technology funds prior to the beginning of the 1998-99 school year.
(b)	This section shall not become effective if the allocations in subsection (a) of this section are enacted in other legislation by the 1997 General Assembly.

Requested by:  Senators Winner, Lee, Plyler, Perdue, Odom
TEACHER SALARY SCHEDULES
Section 9.1. (a)	Effective for the 1998-99 school year, the Director of the Budget may transfer from the Reserve for Compensation Increase for the 1998-99 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 four and one-half percent (4.5%) of base salary for 25 or more years of State service, commencing July 1, 1998, 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)	For the 1998-99 school year, the following monthly salary schedules shall apply to certified personnel of the public schools who are classified as teachers.  The schedule contains 30 steps with each step corresponding to one year of teaching experience.

1998-99 Monthly Salary Schedule
"A"Teachers

	Years of	 "A"	  NBPTS   
Experience	Teachers	 Certification

	0	2,310	N/A
	1	2,352	N/A
	2	2,395	N/A
	3	2,551	2,857
	4	2,678	2,999
	5	2,779	3,112
	6	2,826	3,165
	7	2,874	3,218
	8	2,923	3,273
	9	2,972	3,328
	10	3,021	3,383
	11	3,071	3,439
	12	3,123	3,497
	13	3,176	3,557
	14	3,230	3,617
	15	3,285	3,679
	16	3,341	3,741
	17	3,398	3,805
	18	3,456	3,870
	19	3,516	3,937
	20	3,577	4,006
	21	3,640	4,076
	22	3,703	4,147
	23	3,767	4,219
	24	3,832	4,291
	25	3,899	4,366
	26	3,968	4,444
	27	4,038	4,522
	28	4,109	4,602
	29+ 	4,182	4,683

1998-99 Monthly Salary Schedule
"G"Teachers

	Years of	 "G" 	  NBPTS   
	Experience	Teachers	 Certification

	0	2,454	N/A
	1	2,499	N/A
	2	2,545	N/A
	3	2,710	3,035
	4	2,845	3,186
	5	2,953	3,307
	6	3,003	3,363
	7	3,054	3,420
	8	3,106	3,478
	9	3,158	3,536
	10	3,210	3,595
	11	3,263	3,654
	12	3,318	3,716
	13	3,375	3,780
	14	3,432	3,843
	15	3,490	3,908
	16	3,550	3,976
	17	3,610	4,043
	18	3,672	4,112
	19	3,736	4,184
	20	3,801	4,257
	21	3,868	4,332
	22	3,934	4,406
	23	4,002	4,482
	24	4,072	4,560
	25	4,143	4,640
	26	4,216	4,721
	27	4,290	4,804
	28	4,366	4,889
	29+ 	4,443	4,976
(2)	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)	Effective for the 1998-99 school year, 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) Effective for the 1998-99 school year, speech pathologists who are certified as speech pathologists at the masters degree level and audiologists who are certified as audiologists at the masters degree level and who are employed in the public schools as speech and language specialists and audiologists shall be paid on the school psychologist salary schedule.
Speech pathologists and audiologists 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 speech pathologists and audiologists.  Speech pathologists and audiologists 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 speech pathologists and audiologists.
(e) Effective for the 1998-99 school year, certified school nurses who are employed in the public schools as nurses shall be paid on the "G"salary schedule.

Requested by:  Senators Winner, Lee, Perdue
FUNDS TO IMPLEMENT THE ABC'S OF PUBLIC EDUCATION PROGRAM
Section 9.2. Section 8.36 of S.L. 1997-443 reads as rewritten:
"Section 8.36.  (a)	Of the funds appropriated to State Aid to Local School Administrative Units, the State Board of Education shall  provide incentive funding for schools that meet or exceed the projected levels of improvement in student performance, in accordance with the ABC's of Public Education Program.  In accordance with State Board of Education policy, incentive awards in schools that achieve higher than expected improvements may be up to: (i)	one thousand five hundred dollars ($1,500) for each teacher and for certified personnel; and (ii) five hundred dollars ($500.00) for each teacher assistant.  In accordance with State Board of Education policy, incentive awards in schools that meet the expected improvements may be up to: (i) seven hundred fifty dollars ($750.00) for each teacher and for certified personnel; and (ii) three hundred seventy-five dollars ($375.00) for each teacher assistant.
(b)	The State Board of Education may use funds appropriated to State Aid to Local School Administrative Units for assistance teams to low-performing schools."

Requested by:  Senators Winner, Lee
EXTRA PAY FOR MENTOR TEACHERS
Section 9.3. (a) Funds appropriated to State Aid to Local School Administrative Units, shall be used to provide qualified and well-trained mentors for newly certified teachers, teachers who had mentors during the 1997-98 school year, and entry-level instructional support personnel who have not previously been teachers.  These funds shall be used to compensate each mentor at the rate of (i) one hundred dollars ($100.00) per month for a maximum of 10 months for serving as a mentor for a first or second year teacher during the school year, and (ii) one hundred dollars ($100.00) for serving as a mentor for a first-year teacher for one day prior to the beginning of the school year.
(b)	The State Board of Education may use funds for the mentor program to evaluate the program.  The State Board shall report the results of its evaluation to the Joint Legislative Education Oversight Committee prior to March 5, 2000.

Requested by:  Senators Winner, Lee, Perdue
AID TO LOW-PERFORMING AND AT-RISK SCHOOLS
Section 9.4. (a) Funds appropriated for the 1998-99 fiscal year for aid to low-performing and at-risk schools shall be used to provide services to:
(1)	Elementary schools at which fifty percent (50%) of the students are below grade level on previous year's end-of-grade test, during the 1997-98 school year or the 1998-99 school year;
(2)	Middle schools at which fifty percent (50%) of the students in the sixth grade were below grade level on their end-of-grade fifth grade tests during the 1997-98 school year or the 1998-99 school year; and
(3)	The five percent (5%) of high schools in the State that have the lowest composite scores on the ABC's accountability measures.
(b) Funds for salary-related items in the amounts of twelve million four hundred five thousand five hundred sixty-one dollars ($12,405,561) in recurring funds and three million one hundred sixty thousand four hundred fifty-four dollars ($3,160,454) in nonrecurring funds shall be used as follows:
(1)	Up to ten percent (10%) of the nonrecurring funds on a statewide basis may be used for salary supplements for teachers assigned to local assessment teams;
(2)	The remainder of the funds shall be used for extra pay for extra duties for teachers for such activities as Saturday academies and after school tutoring, for professional development,  and for additional days of work outside of the 220 paid days in the school calendar.  These days should be cooperatively planned by the principal and the faculty.
These funds shall be allocated by the State Board based on the average daily membership of the school.
The Director of the Budget is encouraged to include these funds in the continuation budget for the 1999-2001 fiscal biennium. 
(c) Funds for nonsalary items in the amount of two million dollars ($2,000,000) shall be used only for staff development costs, and for textbooks, instructional supplies, materials, and equipment.
(d)	The principal of a low-performing or at-risk school, in consultation with the faculty and the site-based management team, shall develop an initial plan for improving the school. The plan shall include whole-staff training.  The plan shall be submitted to the local superintendent and approved by the local board prior to submission to the State Board of Education. The plan shall be revised annually.
The plan shall be reviewed and accepted or rejected by the State Board of Education within 30 days after receipt of the plan.  The State Board may delegate to the State Superintendent the responsibility for accepting or rejecting the plan.
The local board shall receive the money for each school for which a plan is approved.  The local board shall receive for each school for which a plan is approved a minimum of ten thousand dollars ($10,000) from the funds in subsection (c) of this section; the remainder of these funds shall be allocated on the basis of average daily membership.  The State Board of Education shall allocate funds in subsection (b) of this section on the basis of on teacher days based on average daily membership of the school.
(e)  The State Board of Education is encouraged to use federal funds such as Goals 2000 and Comprehensive School Reform Demonstration Grants to assist low-performing and at-risk schools.
(f)  Funds allocated in subsections (b) and (c) of this section shall revert on August 31, 1999.
(g)  The State Board of Education shall report to the Joint Legislative Education Oversight Committee prior to December 1, 1998, on the plans and on the use of funds for Aid to Low-Performing and At-Risk Schools.

Requested by:  Senators Winner, Lee, Perdue
ABC'S HIGH SCHOOL ACCOUNTABILITY MODEL
Section 9.5. The State Board of Education shall continue its efforts to improve the standards for determining whether high schools meet or exceed their projected levels of improvement in student performance in accordance with the ABC's of Public Education Program.  The General Assembly urges the State Board to consider including in the standards (i) a measurement of improvement in individual students' performance, (ii) dropout rates, and (iii) a measurement of student enrollment and achievement in courses required for graduation, advanced placement courses, or other upper level courses.

Requested by:  Senators Winner, Lee, Perdue
SCHOOL-BASED ADMINISTRATOR SALARIES
Section 9.6. (a)	Funds appropriated to the Reserve for Compensation Increase 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 1998-99 fiscal year, commencing July 1, 1998, is as follows:
Assistant Principals	Principal I
Step	Base	Base	Base	Base	Base	Base
	+ 1%	+ 2%	+ 1%	+ 2%

4	$2,873	$2,902	$2,930	–  	–  	–  
5	2,983	3,013	3,043	–  	–  	–  
6	3,033	3,063	3,094	–  	–  	–  
7	3,085	3,116	3,147	–  	–  	–  
8	3,137	3,168	3,200	$3,137	$3,168	$3,200
9	3,190	3,222	3,254	3,190	3,222	3,254
10	3,242	3,274	3,307	3,242	3,274	3,307
11	3,296	3,329	3,362	3,296	3,329	3,362
12	3,351	3,385	3,418	3,351	3,385	3,418
13	3,409	3,443	3,477	3,409	3,443	3,477
14	3,466	3,501	3,535	3,466	3,501	3,535
15	3,525	3,560	3,596	3,525	3,560	3,596
16	3,586	3,622	3,658	3,586	3,622	3,658
17	3,646	3,682	3,719	3,646	3,682	3,719
18	3,709	3,746	3,783	3,709	3,746	3,783
19	3,773	3,811	3,848	3,773	3,811	3,848
20	3,839	3,877	3,916	3,839	3,877	3,916
21	3,907	3,946	3,985	3,907	3,946	3,985
22	3,973	4,013	4,052	3,973	4,013	4,052
23	4,042	4,082	4,123	4,042	4,082	4,123
24	4,113	4,154	4,195	4,113	4,154	4,195
25	4,184	4,226	4,268	4,184	4,226	4,268
26	4,258	4,301	4,343	4,258	4,301	4,343
27	4,333	4,376	4,420	4,333	4,376	4,420
28	4,410	4,454	4,498	4,410	4,454	4,498
29	4,487	4,532	4,577	4,487	4,532	4,577
30	4,577	4,623	4,669	4,577	4,623	4,669
31	4,669	4,716	4,762	4,669	4,716	4,762
32	–  	–  	–  	4,762	4,810	4,857

Principal II	Principal III
Step	Base	Base	Base	Base	Base	Base
	+ 1%	+ 2%	+ 1%	+ 2%

4	–  	–  	–  	–  	–  	–  
5	–  	–  	–  	–  	–  	–  
6	–  	–  	–  	–  	–  	–  
7	–  	–  	–  	–  	–  	–  
8	–  	–  	–  	–  	–  	–  
9	–  	–  	–  	–  	–  	–  
10	$3,296	$3,329	$3,362	–  	–  	–  
11	3,351	3,385	3,418	–  	–  	–  
12	3,409	3,443	3,477	$3,466	$3,501	$3,535
13	3,466	3,501	3,535	3,525	3,560	3,596
14	3,525	3,560	3,596	3,586	3,622	3,658
15	3,586	3,622	3,658	3,646	3,682	3,719
16	3,646	3,682	3,719	3,709	3,746	3,783
17	3,709	3,746	3,783	3,773	3,811	3,848
18	3,773	3,811	3,848	3,839	3,877	3,916
19	3,839	3,877	3,916	3,907	3,946	3,985
20	3,907	3,946	3,985	3,973	4,013	4,052
21	3,973	4,013	4,052	4,042	4,082	4,123
22	4,042	4,082	4,123	4,113	4,154	4,195
23	4,113	4,154	4,195	4,184	4,226	4,268
24	4,184	4,226	4,268	4,258	4,301	4,343
25	4,258	4,301	4,343	4,333	4,376	4,420
26	4,333	4,376	4,420	4,410	4,454	4,498
27	4,410	4,454	4,498	4,487	4,532	4,577
28	4,487	4,532	4,577	4,577	4,623	4,669
29	4,577	4,623	4,669	4,669	4,716	4,762
30	4,669	4,716	4,762	4,762	4,810	4,857
31	4,762	4,810	4,857	4,857	4,906	4,954
32	4,857	4,906	4,954	4,954	5,004	5,053
33	4,954	5,004	5,053	5,053	5,104	5,154
34	5,053	5,104	5,154	5,154	5,206	5,257
35	–  	–  	–  	5,257	5,310	5,362
36	–  	–  	–  	5,362	5,416	5,469

	Principal IV	Principal V
Step	Base	Base	Base	Base	Base	Base
	+ 1%	+ 2%	+ 1%	+ 2%

4	–	–	–	–	–	–
5	–	–	–	–	–	–
6	–	–	–	–	–	–
7	–	–	–	–	–	–
8	–	–	–	–	–	–
9	–	–	–	–	–	–
10	–	–	–	–	–	–
11	–	–	–	–	–	–
12	–	–	–	–	–	–
13	$3,586	$3,622	$3,658	–	–	–
14	3,646	3,682	3,719	$3,709	$3,746	$3,783
15	3,709	3,746	3,783	3,773	3,811	3,848
16	3,773	3,811	3,848	3,839	3,877	3,916
17	3,839	3,877	3,916	3,907	3,946	3,985
18	3,907	3,946	3,985	3,973	4,013	4,052
19	3,973	4,013	4,052	4,042	4,082	4,123
20	4,042	4,082	4,123	4,113	4,154	4,195
21	4,113	4,154	4,195	4,184	4,226	4,268
22	4,184	4,226	4,268	4,258	4,301	4,343
23	4,258	4,301	4,343	4,333	4,376	4,420
24	4,333	4,376	4,420	4,410	4,454	4,498
25	4,410	4,454	4,498	4,487	4,532	4,577
26	4,487	4,532	4,577	4,577	4,623	4,669
27	4,577	4,623	4,669	4,669	4,716	4,762
28	4,669	4,716	4,762	4,762	4,810	4,857
29	4,762	4,810	4,857	4,857	4,906	4,954
30	4,857	4,906	4,954	4,954	5,004	5,053
31	4,954	5,004	5,053	5,053	5,104	5,154
32	5,053	5,104	5,154	5,154	5,206	5,257
33	5,154	5,206	5,257	5,257	5,310	5,362
34	5,257	5,310	5,362	5,362	5,416	5,469
35	5,362	5,416	5,469	5,469	5,524	5,578
36	5,469	5,524	5,578	5,578	5,634	5,690
37	5,578	5,634	5,690	5,689	5,746	5,803
38	–	–	–	5,803	5,861	5,919
39	–	–	–	–	–	–
40	–	–	–	–	–	–
41	–	–	–	–	–	–

Principal VI	Principal VII
Step	Base	Base	Base	Base	Base	Base
	+ 1%	+ 2%	+ 1%	+ 2%

4	–	–	–	–	–	–
5	–	–	–	–	–	–
6	–	–	–	–	–	–
7	–	–	–	–	–	–
8	–	–	–	–	–	–
9	–	–	–	–	–	–
10	–	–	–	–	–	–
11	–	–	–	–	–	–
12	–	–	–	–	–	–
13	–	–	–	–	–	–
14	–	–	–	–	–	–
15	–	–	–	–	–	–
16	$3,907	$3,946	$3,985	–	–	–
17	3,973	4,013	4,052	$4,113	$4,154	$4,195
18	4,042	4,082	4,123	4,184	4,226	4,268
19	4,113	4,154	4,195	4,258	4,301	4,343
20	4,184	4,226	4,268	4,333	4,376	4,420
21	4,258	4,301	4,343	4,410	4,454	4,498
22	4,333	4,376	4,420	4,487	4,532	4,577
23	4,410	4,454	4,498	4,577	4,623	4,669
24	4,487	4,532	4,577	4,669	4,716	4,762
25	4,577	4,623	4,669	4,762	4,810	4,857
26	4,669	4,716	4,762	4,857	4,906	4,954
27	4,762	4,810	4,857	4,954	5,004	5,053
28	4,857	4,906	4,954	5,053	5,104	5,154
29	4,954	5,004	5,053	5,154	5,206	5,257
30	5,053	5,104	5,154	5,257	5,310	5,362
31	5,154	5,206	5,257	5,362	5,416	5,469
32	5,257	5,310	5,362	5,469	5,524	5,578
33	5,362	5,416	5,469	5,578	5,634	5,690
34	5,469	5,524	5,578	5,689	5,746	5,803
35	5,578	5,634	5,690	5,803	5,861	5,919
36	5,689	5,746	5,803	5,920	5,979	6,038
37	5,803	5,861	5,919	6,038	6,098	6,159
38	5,920	5,979	6,038	6,159	6,221	6,282
39	6,038	6,098	6,159	6,282	6,345	6,408
40	6,159	6,221	6,282	6,407	6,471	6,535
41	–	–	–	6,536	6,601	6,667

Principal VIII
Step	Base	Base	Base
	+ 1%	+ 2%

4	–	–	–
5	–	–	–
6	–	–	–
7	–	–	–
8	–	–	–
9	–	–	–
10	–	–	–
11	–	–	–
12	–	–	–
13	–	–	–
14	–	–	–
15	–	–	–
16	–	–	–
17	–	–	–
18	$4,258	$4,301	$4,343
19	4,333	4,376	4,420
20	4,410	4,454	4,498
21	4,487	4,532	4,577
22	4,577	4,623	4,669
23	4,669	4,716	4,762
24	4,762	4,810	4,857
25	4,857	4,906	4,954
26	4,954	5,004	5,053
27	5,053	5,104	5,154
28	5,154	5,206	5,257
29	5,257	5,310	5,362
30	5,362	5,416	5,469
31	5,469	5,524	5,578
32	5,578	5,634	5,690
33	5,689	5,746	5,803
34	5,803	5,861	5,919
35	5,920	5,979	6,038
36	6,038	6,098	6,159
37	6,159	6,221	6,282
38	6,282	6,345	6,408
39	6,407	6,471	6,535
40	6,536	6,601	6,667
41	6,667	6,734	6,800

(c)	The appropriate classification for placement of principals and assistant principals on the salary schedule, except for principals in alternative schools, shall be determined in accordance with the following schedule:
Number of Teachers
Classification	Supervised
Assistant Principal
Principal I	Fewer 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	66-100 Teachers
Principal VIII	More than 100 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.
The beginning classification for principals in alternative schools shall be the Principal III level.  Principals in alternative schools who supervise 33 or more teachers shall be classified according to the number of teachers supervised. 
(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) For the 1998-99 fiscal year, a principal or assistant principal shall be placed on the appropriate step plus one percent (1%) if:
(1)	The employee's school met or exceeded the projected levels of improvement in student performance for the 1997-98 fiscal year, in accordance with the ABCs of Public Education Program; or
(2)	The local board of education found in 1997-98 that the employee's school met objectively measurable goals set by the local board of education for maintaining a safe and orderly school.
The principal or assistant principal shall be placed on the appropriate step plus two percent (2%) if the conditions set out in both subdivisions (1) and (2) are satisfied.  The principal or assistant principal shall receive a lump-sum payment for the 1998-99 fiscal year service if the conditions set out in subdivision (1) or (2) or both are satisfied.   The lump sum shall be paid as determined by guidelines adopted by the State Board.  Placement on the salary schedule in the following year shall be based upon these increases.
(f) For the 1998-99 fiscal year, a principal or assistant principal shall receive a lump sum payment of:
(1)	One percent (1%) of his or her State-paid salary if the employee's school meets or exceeds the projected levels of improvement in student performance for the 1998-99 fiscal year, in accordance with the ABCs of Public Education Program; or
(2)	One percent (1%) of his or her State-paid salary if the local board of education finds that the employee's school has met the goals of the local plan for maintaining a safe and orderly school.
The principal or assistant principal shall receive a lump-sum payment of two percent (2%) if the conditions set out in both subdivisions (1) and (2) are satisfied.  The lump sum shall be paid as determined by guidelines adopted by the State Board.  Placement on the salary schedule in the following year shall be based upon these increases.
(g)  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.
(h)  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.
(i)  Longevity pay for principals and assistant principals shall be as provided for State employees.
(j)(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 effective date of this section, 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.
(k)  Participants in an approved full-time masters in school administration program shall receive up to a 10-month stipend at the beginning salary of an assistant principal during this internship period.  Certification of eligible full-time interns shall be supplied to the Department of Public Instruction by the Principal's Fellow Program or a school of education where the intern participates in a full-time masters in school administration language.

Requested by:  Senators Winner, Lee, Perdue
PRINCIPAL SALARY STUDIES
Section 9.7. Section 8.43(d) of S.L. 1997-443 reads as rewritten:
"(d)	The State Board of Education may use up to fifty thousand dollars ($50,000) of funds appropriated by this act to State Aid to Local School Administrative Units for the 1998-99 fiscal year to study principals' salaries including:
(1)	The relationship of principals' salaries to the salaries of teachers and other certified school personnel;
(2)	Whether the current relationship between the teacher and principal salary schedules should be increased to a three percent (3%) differential;
(3)	Whether assistant principals should be given additional steps for years of experience; and
(4)	The appropriate relationship of principal's salary to size of school.
  The State Board of Education shall report the results of the study to the Joint Legislative Education Oversight Committee prior to December 15, 1998."

Requested by:  Senators Cooper, Winner, Lee
COMMUNITIES IN SCHOOLS FUNDS/DO NOT REVERT
Section 9.8. (a)	Funds allocated to Communities in Schools of the Rocky Mount Region, Inc., for the 1997-98 fiscal year shall not revert at the end of the fiscal year but shall remain available for expenditure during the 1998-99 fiscal year.
(b)	This section becomes effective June 30, 1998.

Requested by:  Senators Winner, Lee, Perdue
SCHOOL ACTIVITY BUS USAGE AUTHORIZED UNDER CERTAIN CIRCUMSTANCES
Section 9.9.  G.S. 66-58(c) is amended by adding a new subdivision to read:
"(9b)	The use of a public school activity bus by a nonprofit corporation or a unit of local government to provide transportation services to school-aged and preschool-aged children and their caretakers and instructors."

Requested by:  Senators Winner, Lee
SCHOOL BOARD QUICK TAKE
Section 9.10. G.S. 40A-42(a) reads as rewritten:
"(a)	When a local public condemnor is acquiring property by condemnation for a purpose set out in G.S. 40A-3(b)(1), (4) or (7), or when a city is acquiring property for a purpose set out in G.S. 160A-311(1), (2), (3), (4), (6), or (7), or when a county is acquiring property for a purpose set out in G.S. 153A-274(1), (2) or (3), or when a local board of education or any combination of local boards is acquiring property for any purpose set forth in G.S. 115C-517, or when a condemnor is acquiring property by condemnation as authorized by G.S. 40A-3(c)(8), (9), (10) or (12), title to the property and the right to immediate possession shall vest pursuant to this subsection. Unless an action for injunctive relief has been initiated, title to the property specified in the complaint, together with the right to immediate possession thereof, shall vest in the condemnor upon the filing of the complaint and the making of the deposit in accordance with G.S. 40A-41."

Requested by:  Senators Winner, Lee
LITIGATION RESERVE
Section 9.11. (a) Funds in the State Board of Education's Litigation Reserve that are not expended or encumbered on June 30, 1998, shall not revert on July 1, 1998, but shall remain available for expenditure until June 30, 1999.
(b) The State Board of Education may expend up to five hundred thousand dollars ($500,000) for the 1998-99 fiscal year from unexpended funds for certified employees' salaries to pay expenses related to pending litigation.
(c) Subsection (a) of this section becomes effective June 30, 1998.

Requested by:  Senators Winner, Lee
EXCEPTIONAL CHILDREN FUNDS
Section 9.12. (a) 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 seven hundred forty-six dollars and ninety-five cents ($746.95) per child for four percent (4%) of the 1998-99 allocated 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 49,828 for the 1998-99 school year.
(2)	Each local school administrative unit shall receive for exceptional children other than academically gifted children the sum of two thousand two hundred forty-eight dollars and thirty-nine cents ($2,248.39) 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 1998-99 allocated 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 147,334 for the 1998-99 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.
(b)	To the extent that funds appropriated for exceptional children other than academically gifted children are adequate to do so, the State Board of Education may allocate these funds to provide services for severely disabled children in school units and in group homes.

Requested by:  Senators Winner, Lee
ALTERNATIVE SCHOOLS/AT-RISK STUDENTS
Section 9.13. The State Board of Education may use up to two hundred thousand dollars ($200,000) of the funds in the Alternative Schools/At-Risk Student allotment for the 1998-99 fiscal year to:
(1)	Implement G.S. 115C-12(24), and
(2)	Conduct studies of alternative schools and access to alternative schools, as required by Senate Bill 1260 or House Bill 1373, if enacted by the 1998 Regular Session of the 1997 General Assembly.

Requested by:  Senators Winner, Lee
CHARTER SCHOOLS
Section 9.14.  (a) If the projected average daily membership of schools other than charter schools in a county school administrative unit with 3,000 or fewer students is decreased by more than four percent (4%) due to projected shifts of enrollment to charter schools, the State Board of Education may use funds appropriated to State Aid to Local School Administrative Units for the 1998-99 fiscal year to reduce the loss of funds to the schools other than charter schools in the unit to a maximum of four percent (4%).  This subsection applies to the 1998-99 fiscal year only.
(b)	G.S. 115C-238.29D reads as rewritten:
"§ 115C-238.29D.  Final approval of applications for charter schools.
(a)	The State Board shall grant final approval of an application if it finds that the application meets the requirements set out in this Part or adopted by the State Board of Education and that granting the application would achieve one or more of the purposes set out in G.S. 115C-238.29A. The State Board shall act by March 15 of a calendar year on all applications and appeals it receives prior to February 15 of that calendar year.
(b)	The State Board shall authorize no more than five charter schools per year in one local school administrative unit. The State Board shall authorize no more than 100 charter schools statewide.  If more than five charter schools in one local school administrative unit or more than 100 schools statewide meet the standards for final approval, the State Board shall give priority to applications that are most likely to further State education policies and to strengthen the educational program offered in the local school administrative units in which they are located.
(c)	The State Board of Education may authorize a school before the applicant has secured its space, equipment, facilities, and personnel if the applicant indicates the authority is necessary for it to raise working capital. The State Board shall not allocate any funds to the school until the school has obtained space.
(d)	The State Board of Education may grant the initial charter for a period not to exceed five years and may renew the charter upon the request of the chartering entity for subsequent periods not to exceed five years each. A material revision of the provisions of a charter application shall be made only upon the approval of the State Board of Education. Beginning with the charter school's second year of operation and annually thereafter, the State Board shall allow a charter school to increase its enrollment by ten percent (10%) of the school's previous year's enrollment or as is otherwise provided in the charter. This enrollment growth shall not be considered a material revision of the charter application and shall not require the prior approval of the State Board.
(e)	The State Board of Education shall not grant an initial charter to a school or approve a material change to a charter that is projected to result in a decrease in one school year, due to shifts of enrollment to charter schools, of more than four percent (4%) of the average daily membership of schools other than charter schools in a local school administrative unit."
(c)	G.S. 115C-238.29F(d) reads as rewritten:
"(d)	Instructional Program. – 
(1)	The school shall provide instruction each year for at least 180 days.
(2)	The school shall design its programs to at least meet the student performance standards adopted by the State Board of Education and the student performance standards contained in the charter.
(3)	A charter school shall conduct the student assessments required for charter schools by the State Board of Education.  In conducting these assessments, the school shall be subject to the State Board's policies and guidelines on testing ethics.
(4)	A charter school is a local educational agency for the purpose of G.S. 115C-110.  The school shall comply with policies adopted by the State Board of Education for charter schools relating to the education of children with special needs.
(5)	The school is subject to and shall comply with Article 27 of Chapter 115C of the General Statutes, except that a charter school may also exclude a student from the charter school and return that student to another school in the local school administrative unit in accordance with the terms of its charter."
(d) G.S. 115C-238.29F(e)(3) reads as rewritten:
"(3)	If a teacher employed by a local school administrative unit makes a written request for an extended leave of absence to teach at a charter school, the local school administrative unit shall grant the leave. The local school administrative unit is required to grant a leave of absence for any number of years requested by the teacher up to four years and to extend the leave of absence for any number of years requested by the teacher, so long as the total number of years requested does not exceed four. The local school administrative unit is authorized to grant a leave of absence or an extension of a leave of absence for a total of more than four years if it finds it is in the best interest of the unit to do so.  For the initial year of a charter school's operation, the local school administrative unit may require that the request for a leave or extension of leave be made up to 45 days before the teacher would otherwise have to report for duty. For subsequent years, the local school administrative unit may require that the request for a leave or extension of leave be made up to 90 days before the teacher would otherwise have to report for duty. A teacher who has career status under G.S. 115C-325 prior to receiving an extended leave of absence to teach at a charter school may return to a public school in the local school administrative unit with career status at the end of the leave of absence or upon the end of employment at the charter school if an appropriate position is available. If an appropriate position is unavailable, the teacher's name shall be placed on a list of available teachers and that teacher shall have priority on all positions for which that teacher is qualified in accordance with G.S. 115C-325(e)(2)."
(e)  The State Board of Education may spend up to fifty thousand dollars ($50,000) from State Aid to Local School Administrative Units for the 1998-99 fiscal year to establish a charter school advisory committee.
(f) G.S. 115C-238.29F(f) reads as rewritten:
"(f)	Accountability. – 
(1)	The school is subject to the financial audits, the audit procedures, and the audit requirements adopted by the State Board of Education for charter schools. These audit requirements may include the requirements of the School Budget and Fiscal Control Act.
(2)	The school shall comply with the reporting requirements established by the State Board of Education in the Uniform Education Reporting System.
(3)	The school shall report at least annually to the chartering entity and the State Board of Education the information required by the chartering entity or the State Board.
(4)	The school shall report electronically to the local board of education on students enrolled in the school and on students who withdraw or drop out of the school.  The State Board of Education shall determine the content, format, and timing of this report."
(g) The State Board of Education shall examine the funding formula for charter schools and its impact on public schools, giving special attention to the impact of the formula on instructional programs, school-building administration, and school transportation.
The State Board shall report electronically its findings to the Joint Legislative Education Oversight Committee prior to December 15, 1998.

Requested by:  Senators Winner, Lee
TESTING
Section 9.15. (a) Of the funds appropriated for State Aid to Local School Administrative Units, the State Board of Education may use up to two million dollars ($2,000,000) for the 1998-99 fiscal year to:
(1)	Cover cost increases in end-of-grade, end-of-course, and other tests previously authorized by the SBE and the General Assembly, that are caused by increases in average daily membership;
(2)	Reestablish high school end-of-course tests previously established by the State Board of Education in accordance with Section 8.27 of S.L. 1997-443;
(3)	Develop new end-of-course tests required for high school, in accordance with Section 8.27 of S.L. 1997-443; and
(4)	Begin the development of alternative assessments for children with special needs.
The  General Assembly encourages the Director of the Budget to include these funds in the continuation budget request for the 1999-2000 fiscal year and subsequent fiscal years.
(b) G.S. 115C-174.11(c)(1) reads as rewritten:
"(1)	The State Board of Education shall adopt a system of annual testing for grades three through 12. These tests shall be designed to measure progress toward reading, communication skills, and mathematics for grades three through eight, and toward competencies designated by the State Board for grades nine through 12.  Notwithstanding subsection (a) of this section, the State Board shall develop and implement a study allowing selected local school administrative units that volunteer to administer a standardized test in May, 12 months prior to the third grade end-of-grade test, in order to establish a baseline that will be used to measure academic growth at the end of third grade.  Initially, the State Board shall select 12 volunteer local school administrative units that are diverse in geography and size to participate in the study.  If the State Board determines that a standardized test administered in May, 12 months prior to the third grade end-of-grade test, is more reliable than a standardized test administered at the beginning of third grade for the purpose of measuring academic growth, the State Board may change the test date for additional local school units.  The State Board shall report the results of the study to the Joint Legislative Education Oversight Committee by October 15, 2000.
		Baseline measurements administered in May, 12 months prior to the third grade end-of-grade test, are not public records as provided in Chapter 132 of the General Statutes."

Requested by:  Senators Winner, Lee
SUBSTITUTE TEACHERS
Section 9.16. (a) 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 minimum pay for a substitute teacher who holds a teaching certificate shall be fifty-four percent (54%) of the daily pay rate of an entry-level teacher with an 'A' certificate.  The minimum pay for a substitute teacher who does not hold a teaching certificate shall be thirty-eight percent (38%) of the daily pay rate of an entry-level teacher with an 'A' certificate.  The pay for noncertified substitutes shall not exceed the pay of certified substitutes.
		Local boards may use State funds allocated for substitute teachers to hire full-time substitute teachers.
		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.
		."
(b)	If the average number of substitute teacher days taken by teachers in a local school administrative unit is higher than the statewide average, the local board of education shall determine the reasons unit average is high and shall develop a plan for decreasing the unit average.

Requested by:  Senators Winner, Lee
TORT CLAIM LIABILITY/SCHOOL BUSES
Section 9.17. (a) G.S. 115C-257 reads as rewritten:
"§ 115C-257.  Attorney General to pay claims.
The Attorney General is hereby authorized to pay reasonable medical expenses, not to exceed three thousand dollars ($3,000), incurred within one year from the date of accident to or for each pupil who sustains bodily injury or death caused by accident, while boarding, riding on, or alighting from a school bus operated by any local school administrative unit."
(b)	G.S. 143-300.1 reads as rewritten:
"§ 143-300.1.  Claims against county and city boards of education for accidents involving school buses or school transportation service vehicles.
(a)	The North Carolina Industrial Commission shall have jurisdiction to hear and determine tort claims against any county board of education or any city board of education, which claims arise as a result of any alleged mechanical defects or other defects which may affect the safe operation of a public school bus or school transportation service vehicle resulting from an alleged negligent act of maintenance personnel or as a result of any alleged negligent act or omission of the driver, volunteer, or monitor of a public school bus or school transportation service vehicle when:
(1)	The salary of that driver is paid or authorized to be paid from the State Public School Fund, and the driver is an employee of the county or city administrative unit of which that board is the governing body,
(1a)	The monitor was appointed and acting in accordance with G.S. 115C-245(d),
(1b)	The volunteer was aboard the bus with the permission of the principal or was assisting a student in entering or leaving the bus, or
(2)	The driver is an unpaid school bus driver trainee under the supervision of an authorized employee of the Department of Transportation, Division of Motor Vehicles, or an authorized employee of that board or a county or city administrative unit thereof,
and which driver was at the time of the alleged negligent act or omission operating a public school bus or school transportation service vehicle in the course of his employment by or training for that administrative unit or board, which monitor was acting as such in the course of serving under G.S. 115C-245(d), or which volunteer was aboard the bus with the permission of the principal or was assisting a student in entering or leaving the bus.  The liability of such county or city board of education, the defenses which may be asserted against such claim by such board, the amount of damages which may be awarded to the claimant, and the procedure for filing, hearing and determining such claim, the right of appeal from such determination, the effect of such appeal, and the procedure for taking, hearing and determining such appeal shall be the same in all respects as is provided in this Article with respect to tort claims against the State Board of Education except as hereinafter provided. Any claim filed against any county or city board of education pursuant to this section shall state the name and address of such board, the name of the employee upon whose alleged negligent act or omission the claim is based, and all other information required by G.S. 143-297 in the case of a claim against the State Board of Education. Immediately upon the docketing of a claim, the Industrial Commission shall forward one copy of the plaintiff's affidavit to the superintendent of the schools of the county or city administrative unit against the governing board of which such claim is made, one copy of the plaintiff's affidavit to the State Board of Education and one copy of the plaintiff's affidavit to the office of the Attorney General of North Carolina. All notices with respect to tort claims against any such county or city board of education shall be given to the superintendent of schools of the county or city administrative unit of which such board is a governing board, to the State Board of Education and also to the office of the Attorney General of North Carolina.
(b)	The Attorney General shall be charged with the duty of representing the city or county board of education in connection with claims asserted against them pursuant to this section where the amount of the claim, in the opinion of the Attorney General, is of sufficient import to require and justify such appearance.
(c)	In the event that the Industrial Commission shall make award of damages against any county or city board of education pursuant to this section, the Attorney General shall draw a voucher for the amount required to pay such award. The funds necessary to cover vouchers written by the Attorney General for claims against county and city boards of education for accidents involving school buses and school transportation service vehicles shall be made available from funds appropriated to the Department of Public Instruction. Neither the county or city boards of education, or the county or city administrative unit shall be liable for the payment of any award made  pursuant to the provisions of this section in excess of the amount paid upon such voucher by the Attorney General. Settlement and payment may be made by the Attorney General as provided in G.S. 143-295.
(d)	The Attorney General may defend any civil action which may be brought against the driver, volunteer, or monitor of a public school bus or school transportation service vehicle or school bus maintenance mechanic when such driver or mechanic is paid or authorized to be paid from the State Public School Fund, when the monitor is acting in accordance with G.S. 115C-245(d), when the volunteer was aboard the bus with the permission of the principal or was assisting a student in entering or leaving the bus, or when the driver is an unpaid school bus driver trainee under the supervision of an authorized employee of the Department of Transportation, Division of Motor Vehicles, or an authorized employee of a county or city board of education or administrative unit thereof. The Attorney General may afford this defense through the use of a member of his staff or, in his discretion, employ private counsel. The Attorney General is authorized to pay any judgment rendered in such civil action not to exceed the limit provided under the Tort Claims Act. The Attorney General may compromise and settle any claim covered by this section to the extent  that he finds the same to be valid, up to the limit provided in the Tort Claims Act, provided that the authority granted in this subsection shall be limited to only those claims which would be within the jurisdiction of the Industrial Commission under the Tort Claims Act."
(c) This section applies as to claims arising on or after July 1, 1998.

Requested by:  Senators Winner, Lee
EXTRA PAY FOR FORFEITED VACATION DAYS
Section 9.18. (a)	Of the funds appropriated to State Aid to Local School Administrative Units, the sum of four million two hundred fifty thousand dollars ($4,250,000) for the 1998-99 fiscal year shall be used by local boards of education to pay teachers for working on, and thereby forfeiting, vacation days, in accordance with G.S. 115C-302.1(c).  The State Board of Education shall make available to each local school administrative unit sufficient funds to provide pay for a maximum of six days for each teacher who is qualified to receive additional pay for forfeited vacation days under G.S. 115C-302.1(c).  For the 1998-99 fiscal year, the funds allotted under this subsection shall be available for days scheduled by local boards and individual schools as follows: two for days scheduled by the local board of education under G.S. 115C-84.2(a)(4); and four for days scheduled by school principals in consultation with school improvement teams under G.S. 115C-84.2(a)(5).
(b)	G.S. 115C-84.2 reads as rewritten:
"§ 115C-84.2.  School calendar.
(a)	School Calendar. – Each local board of education shall adopt a school calendar consisting of 220 days all of which shall fall within the fiscal year. A school calendar shall include the following:
(1)	A minimum of 180 days and 1,000 hours of instruction covering at least nine calendar months. The local board shall designate when the 180 instructional days shall occur. The number of instructional hours in an instructional day may vary according to local board policy and does not have to be uniform among the schools in the administrative unit. Local boards may approve school improvement plans that include days with varying amounts of instructional time. If school is closed early due to inclement weather, the day and the scheduled amount of instructional hours may count towards the required minimum to the extent allowed by State Board policy. The school calendar shall include a plan for making up days and instructional hours missed when schools are not opened due to inclement weather.
(2)	A minimum of 10 annual vacation leave days.
(3)	The same or an equivalent number of legal holidays occurring within the school calendar as those designated by the State Personnel Commission for State employees.
(4)	Ten days, as designated by the local board, for use as teacher workdays, additional instructional days, or other lawful purposes. A local board may delegate to the individual schools some or all of the 10 days to schedule under subdivision (5) of this subsection. A local board may schedule different purposes for different personnel on any given day and is not required to schedule the same dates for all personnel.
(5)	The remaining days shall be scheduled by each individual school by the school's principal in consultation with the school improvement team. Days may be scheduled for any of the purposes allowed under subdivision (4) of this subsection. Days may be scheduled for different purposes for different personnel and there is no requirement to schedule the same dates for all personnel.
Local boards and individual schools are encouraged to use the calendar flexibility in order to meet the annual performance standards set by the State Board. Local boards of education shall consult with parents and the employed public school personnel in the development of the school calendar.
Local boards and individual schools shall give teachers at least 14 calendar days' notice before requiring a teacher to work instead of taking vacation leave on days scheduled in accordance with subdivision (4)	or (5) of this subsection.  A teacher may elect to waive this notice requirement for one or more such days.
(b)	Limitations. – The following limitations apply when developing the school calendar:
(1)	The total number of teacher workdays for teachers employed for a 10 month term shall not exceed 200 days.
(2)	The calendar shall include at least 42 consecutive days when teacher attendance is not required unless: (i) the school is a year-round school; or (ii) the teacher is employed for a term in excess of 10 months.  At the request of the local board of education or of the principal of a school, a teacher may elect to work on one of the 42 days when teacher attendance is not required in lieu of another scheduled workday.
(3)	School shall not be held on Sundays.
(4)	Veteran's Day shall be a holiday for all students enrolled in the public schools.
(c)	Emergency Conditions. – 
(1)	During any period of emergency in any section of the State where emergency conditions make it necessary, the State Board of Education may order general, and if necessary, extended recesses or adjournment of the public schools.
(2)	The State Board of Education may adopt rules to allow a local board to request that the State Board suspend one or more days from the school calendar for an individual school.  In order to suspend days under this subdivision a local board shall show and the State Board shall find that extraordinary circumstances that could not have been reasonably predicted justify the action.
(d)	Opening and Closing Dates. – Local boards of education shall determine the dates of opening and closing the public schools under subdivision (a)(1) of this section. A local board may revise the scheduled closing date if necessary in order to comply with the minimum requirements for instructional days or instructional time. Different opening and closing dates may be fixed for schools in the same administrative unit."
(c)	The amendments to G.S. 115C-84.2(b)(2) set out in subsection (b) of this section apply to school years beginning with the 1999-2000 school year.

Requested by:  Senators Winner, Lee, Perdue
TEACHING FELLOWS PROGRAM
Section 9.19. (a)	G.S. 115C-363.23A(a) reads as rewritten:
"(a)	A Teaching Fellows Program shall be administered by the North Carolina Teaching Fellows Commission.  The Teaching Fellows Program shall be used to provide a four-year scholarship loan of six thousand five hundred dollars ($6,500) per year to North Carolina high school seniors interested in preparing to teach in the public schools of the State.  The Commission shall adopt very stringent standards, including minimum grade point average and scholastic aptitude test scores, for awarding these scholarship loans to ensure that only the best high school seniors receive them."
(b)	Notwithstanding the provisions of G.S. 115C-363.23A(f), the Public School Forum, as administrator for the North Carolina Teaching Fellows Program, may spend, in addition to funds required for collection costs related to loan repayments, up to one hundred fifty thousand dollars ($150,000) for the 1998-99 fiscal year from the fund balance for the Program for costs associated with administration of the Program.

Requested by:  Senators Winner, Lee
LIMITED ENGLISH PROFICIENCY
Section 9.20.  (a)	The State Board of Education shall develop guidelines for identifying and providing services to students with limited proficiency in the English language.
The State Board shall allocate the funds to local school administrative units on the basis of the number of students they serve with limited English proficiency, with a minimum of 20 students per unit and a maximum of ten and six-tenths percent (10.6%) of the average daily membership of the unit.
Local school administrative units shall use funds allocated to them to pay for classroom teachers, textbooks, classroom materials/instructional supplies/equipment, and staff development for students with limited English proficiency.  A unit may use the funds for a  program like the Bilingual Teacher Assistant Demonstration Project.
A county in which a local school administrative unit receives funds under this section shall use the funds to supplement local current expense funds and shall not supplant local current expense funds.
(b)	G.S. 115C-105.25(b)(4) reads as rewritten:
"(4)	Funds allocated for children with special needs, for students with limited English proficiency, and for driver's education shall not be transferred."
(c)	The State Board of Education shall review its certification requirements for English as a Second Language (ESL) and determine whether the requirements should be revised in order to assist local school administrative units to quickly obtain adequate numbers of qualified teachers.  The State Board and the Board of Governors of The University of North Carolina shall coordinate efforts to provide ESL certification programs that are geographically disbursed throughout the State.  The Board of Governors shall examine providing ESL certification programs through distance learning methods and off-campus programs.
(d) The State Board of Education shall identify existing or develop new programs that provide instructional personnel with in-service, noncertificate training for assisting students with limited English proficiency in the regular classroom.  The Board of Governors of The University of North Carolina and the State Board of Community Colleges shall collaborate with the State Board of Education in order to deliver these programs to geographically diverse locations.
(e) The State Board of Education shall survey local school administrative units to determine whether schools are able to recruit and retain ESL certified teachers.  The State Board shall provide the results of this survey to the Joint Legislative Education Oversight Committee prior to December 15, 1999.

Requested by:  Senators Winner, Lee
DRIVERS EDUCATION FUNDS DO NOT REVERT
Section 9.21. (a) Of the funds appropriated for drivers education for the 1997-98 fiscal year, but not expended for that purpose, up to thirty-five thousand dollars ($35,000) shall not revert at the end of the fiscal year.  The State Board of Education may use these funds during the 1998-99 fiscal year for forms to implement S.L. 1997-507, AN ACT TO PROVIDE THAT CERTAIN STUDENTS WHO DROP OUT OF SCHOOL OR DO NOT MAKE PROGRESS TOWARD GRADUATION SHALL NOT BE ELIGIBLE FOR DRIVERS PERMITS OR LICENSES.
(b)	The State Board of Education may use funds appropriated for drivers education for the 1998-99 fiscal year to implement S.L. 1997-507.
(c)	Subsection (a) of this section becomes effective June 30, 1998.

Requested by:  Senators Winner, Lee
ADDITIONAL TEACHERS FOR MIDDLE SCHOOL CHILDREN WHO ARE ACADEMICALLY BELOW GRADE LEVEL
Section 9.22. Section 8.29(c) of S.L. 1997-443 reads as rewritten:
"(c)	Of the funds appropriated to State Aid to Local School Administrative Units, the sum of three million two hundred thousand dollars ($3,200,000) for the 1997-98 fiscal year and the sum of three million two hundred thousand dollars ($3,200,000) for the 1998-99 fiscal year shall be used to provide additional teachers for middle school children who are academically below grade level.   Middle school children are children in a school that serves grades six, seven, and eight, and no other grades.
(1)	The State Board of Education shall allocate these teacher positions to pilot middle schools on the basis of the number of students in grade six who scored at proficiency Level I on the end-of-grade test in mathematics, on the end-of-grade test in reading, or on both, at the end of their last school year.  The funds shall be used in schools at a ratio of one teacher to every 50 students.  Positions shall be rounded to the nearest one-half position.
(2)	The purpose of these funds is to improve the academic performance and the behavior of these students during the first school year after elementary school by placing them in classes with a low student-to-teacher ratio for either all of their core academic subjects or for the subject or subjects in which they are below grade level.  In order to accomplish this purpose, local school administrative units shall use (i) the teachers allocated for these students pursuant to the regular teacher allotment and (ii) the teachers allocated for these students under this section only to improve the academic performance and the behavior of these students. Local boards of education shall adopt rules to ensure that each student for whom funds for additional teacher positions are allocated under this section shall be assigned a teacher who is responsible for monitoring the academic progress of the student.
(3)	Of the funds appropriated in this section, the State Board of Education may use up to twenty-five thousand dollars ($25,000) to evaluate the effectiveness of these smaller classes in improving academic performance and discipline in middle schools."

Requested by:  Senators Winner, Lee
UNIFORM EDUCATION REPORTING SYSTEMS FUNDS/BUILDING LEVEL REPORTS ON SCHOOL FUNDING
Section 9.23.  Section 8.25(b) of S.L. 1997-443 reads as rewritten:
"(b)	The State Board of Education shall modify the Uniform Education Reporting System to provide clear, accurate, and standard information on the use of funds at the unit and school level.  The plan shall provide information that will enable the General Assembly to determine State, local, and federal expenditures for personnel at the unit and school level.  The plan also shall allow the tracking of expenditures for textbooks, educational supplies and equipment, capital outlay, at-risk students, and other purposes.  The revised Uniform Education Reporting System shall be implemented beginning with the 1999-2000 school year."

Requested by:  Senators Reeves, Perdue
DUES DEDUCTION FOR RETIREES
Section 9.24.  (a) Article 1 of Chapter 135 of the General Statutes is amended by adding a new section to read:
"§ 135-18.8. Deduction for payments to certain employees' associations allowed.
Any member who is a member of a domiciled employees' association that has at least 2,000 members, the majority of whom are employees of the State or public school employees, may authorize, in writing, the periodic deduction from the member's retirement benefits a designated lump sum to be paid to the employees' association.  The authorization shall remain in effect until revoked by the member.  A plan of deductions pursuant to this section shall become void if the employees' association engages in collective bargaining with the State, any political subdivision of the State, or any local school administrative unit."
(b) This section becomes effective July 1, 1998, and applies to retirement benefits paid on or after that date.

Requested by:  Senators Winner, Lee, Odom
SCHOOL BUS ALLOCATION
Section 9.25. If funds for school bus replacement are insufficient for the full scheduled allocation of school buses for all local school administrative units, the reductions to allocations should be spread proportionally among the local school administrative units.

Requested by:  Senators Winner, Lee
UNIFORM EDUCATION REPORTING SYSTEM (UERS)/STUDENT INFORMATION MANAGEMENT SYSTEM (SIMS) FUNDS
Section 9.26. (a) The State Board of Education shall use funds appropriated for the Uniform Education Reporting System and the Student Information Management System for the 1998-99 fiscal year to begin the development of a replacement for the existing Student Information System.  In developing the new system, the State Board shall give priority to the development of applications that maintain student records,  maintain ABC accountability data, allow for the transfer of student records between local school administrative units, and facilitate the transfer of transcripts to institutions of higher education.
In designing the new system, the State Board shall develop a model for statewide implementation that maximizes the economies of scale with respect to operations, personnel, and hardware.  The State Board's goal shall be to develop a new system that provides information to local schools, local school boards, and the State Board in the most cost-efficient manner.
The new system shall follow guidelines established by the Information Resources Management System.
The State Board may develop pilots of the new system.
(b) The State Board shall provide periodic reports to the Joint Legislative Education Oversight Committee on the development of the new system and shall report to the 1999 General Assembly on implementation of the pilot projects.
(c)	Funds appropriated for the Uniform Education Reporting System and the Student Information Management System shall not revert at the end of the fiscal year but shall remain available until expended on the project.

Requested by:  Senators Winner, Lee
SMALL SCHOOL SYSTEM SUPPLEMENTAL FUNDING
Section 9.27. (a)	Funds for small school systems. – Except as provided in subsection (b) of this section, the State Board of Education shall allocate funds appropriated for small school system supplemental funding (i) to each county school administrative unit with an average daily membership of less than 3,150 students and (ii) to each county school administrative unit with an average daily membership of from 3,150 to 4,000 students if the county in which the local school administrative unit is located has a county adjusted property tax base per student that is below the State adjusted property tax base per student and if the total average daily membership of all local school administrative units located within the county is from 3,150 to 4,000 students.  The allocation formula shall:
(1)	Round all fractions of positions to the next whole position.
(2)	Provide five and one-half additional regular classroom teachers in counties in which the average daily membership per square mile is greater than four, and seven additional regular classroom teachers in counties in which the average daily membership per square mile is four or less.
(3)	Provide additional program enhancement teachers adequate to offer the standard course of study.
(4)	Change the duty-free period allocation to one teacher assistant per 400 average daily membership.
(5)	Provide a base for the consolidated funds allotment of at least $355,000, excluding textbooks.
(6)	Allot vocational education funds for grade 6 as well as for grades 7-12.
If funds appropriated for each fiscal year for small school system supplemental funding are not adequate to fund fully the program, the State Board of Education shall reduce the amount allocated to each county school administrative unit on a pro rata basis.  This formula is solely a basis for distribution of supplemental funding for certain county school administrative units and is not intended to reflect any measure of the adequacy of the educational program or funding for public schools.  The formula is also not intended to reflect any commitment by the General Assembly to appropriate any additional supplemental funds for such county administrative units.
(b)	Nonsupplant requirement. – A county in which a local school administrative unit receives funds under this section shall use the funds to supplement local current expense funds and shall not supplant local current expense funds. For the 1997-99 fiscal biennium, the State Board of Education shall not allocate funds under this section to a county found to have used these funds to supplant local per student current expense funds.  The State Board of Education shall make a finding that a county has used these funds to supplant local current expense funds in the prior year, or the year for which the most recent data are available, if:
(1)	The current expense appropriation per student of the county for the current year is less than ninety-five percent (95%) of the average of the local current expense appropriations per student for the three prior fiscal years; and
(2)	The county cannot show (i) that it has remedied the deficiency in funding, or (ii) that extraordinary circumstances caused the county to supplant local current expense funds with funds allocated under this section.
The State Board of Education shall adopt rules to implement this section.
(c)	Phase-out provision. – If a local school administrative unit becomes ineligible for funding under this formula solely because of an increase in population or an increase in the county adjusted property tax base per student of the county in which the local school administrative unit is located, funding for that unit shall be phased out over a two-year period.  For the first year of ineligibility, the unit shall receive the same amount it received for the prior fiscal year.  For the second year of ineligibility, it shall receive half of that amount.
(d)	Definitions. – As used in this section:
(1)	"Average daily membership" means within two percent (2%) of the average daily membership as defined in the North Carolina Public Schools Allotment Policy Manual, adopted by the State Board of Education.
(2)	" County adjusted property tax base per student" means the total assessed property valuation for each county, adjusted using a weighted average of the three most recent annual sales assessment ratio studies, divided by the total number of students in average daily membership who reside within the county.
(2a)	" Local current expense funds" means the most recent county current expense appropriations to public schools, as reported by local boards of education in the audit report filed with the Secretary of the Local Government Commission pursuant to G.S. 115C-447.
(3)	" Sales assessment ratio studies" means sales assessment ratio studies performed by the Department of Revenue under G.S. 105-289(h).
(4)	" State adjusted property tax base per student" means the sum of all county adjusted property tax bases divided by the total number of students in average daily membership who reside within the State.
(4a)	" Supplant" means to decrease local per student current expense appropriations from one fiscal year to the next fiscal year.
(5)	" Weighted average of the three most recent annual sales assessment ratio studies" means the weighted average of the three most recent annual sales assessment ratio studies in the most recent years for which county current expense appropriations and adjusted property tax valuations are available.  If real property in a county has been revalued one year prior to the most recent sales assessment ratio study, a weighted average of the two most recent sales assessment ratios shall be used.  If property has been revalued the year of the most recent sales assessment ratio study, the sales assessment ratio for the year of revaluation shall be used.
(e)  Reports. – The State Board of Education shall report to the Joint Legislative Education Oversight Committee prior to May 1, 1999, on the results of its analysis of whether counties supplanted funds.

PART X.  COMMUNITY COLLEGES
Requested by:   Senators Plyler, Purcell, Lee, Winner
EXTEND FOR ONE YEAR THE DEADLINE FOR MATCHING COMMUNITY COLLEGE BOND FUNDS
Section 10. (a) Section 6(b)IV of Chapter 542 of the 1993 Session Laws, as added by Section 4 of Chapter 515 of the 1995 Session Laws, reads as rewritten:
"IV. If the State Board of Community Colleges determines that a community college has not met the matching requirements of G.S. 115D-31(a)(1) by July 1, 1999, with respect to a capital improvement project for which bond proceeds are allocated in subdivision I or pursuant to subdivision II of this subsection, the Board shall certify that fact to the State Treasurer by October 1, 1999.  All of these bond proceeds with respect to which the Board certifies that the matching requirement has not been met by July 1, 1999, shall be placed by the State Treasurer in a special account within the Community Colleges Bond Fund and shall be used for making grants to community colleges.  Bond proceeds in the special account shall be allocated among the community colleges in accordance with the following conditions:
(1)	The State Board of Community Colleges shall generate, by October 1, 1999, a priority ranking of legitimate community college capital improvement needs using a formula based on objective meaningful factors relevant to capital needs, including space to population ratio, population served ratio, capacity enrollment ratio, local to State and vocational education ratios, type of project, and readiness to implement.
(2)	The State Board of Community Colleges shall provide the State Treasurer a projected allocation of the proceeds in the special account in accordance with this priority ranking, except that:
a.	No projected allocation shall be made for a community college that the Board certified in accordance with this subdivision IV had failed to meet a matching requirement.
b.	No more than four million dollars ($4,000,000) shall be allocated to a single community college.
c.	Funds shall not be allocated for more than one project per community college.
(3)	The proceeds of grants made from bond proceeds in the special account shall be allocated and expended for paying the cost of community college capital improvements in accordance with this allocation by the State Board of Community Colleges, to the extent and as provided in this act.  The Director of the Budget is empowered, when the Director of the Budget determines it is in the best interest of the State and the North Carolina Community College System to do so, and if the cost of a particular project is less than the projected allocation, to use the excess funds to increase the size of that project or increase the size of any other project itemized in this section, or to increase the amount allocated to a particular community college within the aggregate amount of funds available under this section.  The Director of the Budget shall consult with the Advisory Budget Commission and the Joint Legislative Commission on Governmental Operations before making these changes."
(b)	This section becomes effective June 30, 1998.

Requested by:   Senators Lee, Winner
INDEPENDENT STUDY OF CAPITAL BUDGET AND OPERATING BUDGET FUND ALLOCATIONS
Section 10.1.  The State Board of Community Colleges shall contract with an outside consultant to:
(1)	Review the community college capital allocation process and to recommend modifications to the process necessary to make the process more equitable; and
(2)	Study performance budget measures and recommend options for allocating community college funds on a performance budgeting basis.
The State Board may use funds from the State Board Reserve to implement this section.
The State Board shall report to the Joint Legislative Appropriations Subcommittees on Education and the Fiscal Research Division prior to February 1, 1999, on the implementation of this section.

Requested by:   Senators Lee, Winner, Dalton
COMMUNITY COLLEGE EQUIPMENT RESERVE FUND
Section 10.2.  (a) G.S. 115D-31 reads as rewritten:
"§ 115D-31.  State financial support of institutions.
(a)	The State Board of Community Colleges shall be responsible for providing, from sources available to the State Board, funds to meet the financial needs of institutions, as determined by policies and regulations of the State Board, for the following budget items:
(1)	Plant Fund. – Furniture and equipment for administrative and instructional purposes, library books, and other items of capital outlay approved by the State Board. Provided, the State Board may, on an equal matching-fund basis from appropriations made by the State for the purpose, grant funds to individual institutions for the purchase of land, construction and remodeling of institutional buildings determined by the State Board to be necessary for the instructional programs or administration of such institutions. For the purpose of determining amount of matching State funds, local funds shall include expenditures made prior to the enactment of this Chapter or prior to an institution becoming a community college pursuant to the provisions of this Chapter, when such expenditures were made for the purchase of land, construction, and remodeling of institutional buildings subsequently determined by the State Board to be necessary as herein specified, and provided such local expenditures have not previously been used as the basis for obtaining matching State funds under the provisions of this Chapter or any other laws of the State. Notwithstanding the provisions of this subdivision, G.S. 116-53(b), or G.S. 143-31.4, appropriations by the State of North Carolina for capital or permanent improvements for community colleges may be matched with any prior expenditure of non-State funds for capital construction or land acquisition not already used for matching purposes.
(2)	Current Operating Expenses:
a.	General administration. – Salaries and other costs as determined by the State Board necessary to carry out the functions of general administration.
b.	Instructional services. – Salaries and other costs as determined by the State Board necessary to carry out the functions of instructional services.
c.	Support services. – Salaries and other costs as determined by the State Board necessary to carry out the functions of support services.
(3)	Additional Support for Regional Institutions as Defined in G.S. 115D-2(4). – Matching funds to be used with local funds to meet the financial needs of the regional institutions for the items set out in G.S. 115D-32(a)(2)a. Amount of matching funds to be provided by the State under this section shall be determined as follows: The population of the administrative area in which the regional institution is located shall be called the 'local factor,' the combined populations of all other counties served by the institution shall be called the 'State factor.' When the budget for the items listed in G.S. 115D-32(a)(2)a has been approved under the procedures set out in G.S. 115D-45, the administrative area in which the regional institution is located shall provide a percentage to be determined by dividing the local factor by the sum of the local factor and the State factor. The State shall provide a percentage of the necessary funds to meet this budget, the percentage to be determined by dividing the State factor by the sum of the local factor and the State factor. If the local administrative area provides less than its proportionate share, the amount of State funds provided shall be reduced by the same proportion as were the administrative area funds.
		Wherever the word 'population' is used in this subdivision, it shall mean the population of the particular area in accordance with the latest United States census.
(b)	The State Board is authorized to accept, receive, use, or reallocate to the institutions any federal funds or aids that have been or may be appropriated by the government of the United States for the encouragement and improvement of any phase of the programs of the institutions.
(c)	State funds appropriated to the State Board of Community Colleges for equipment and library books, except for funds appropriated to the Equipment Reserve Fund, shall revert to the General Fund 12 months after the close of the fiscal year for which they were appropriated. Encumbered balances outstanding at the end of each period shall be handled in accordance with existing State budget policies. The Department shall identify to the Office of State Budget and Management the funds that revert at the end of the 12 months after the close of the fiscal year.
(d)	State funds appropriated to the State Board of Community Colleges for the Equipment Reserve Fund shall be allocated to institutions in accordance with the equipment allocation formula for the fiscal period.  An institution to which these funds are allocated shall spend the funds only in accordance with an equipment acquisition plan developed by the institution and approved by the State Board.
These funds shall not revert and shall remain available until expended in accordance with an approved plan."
(b) The State Board of Community Colleges shall allocate equipment funds appropriated for the 1998-99 fiscal year, including funds appropriated to the Equipment Reserve Fund, in accordance with the formula proposed to the General Assembly by the Board at its May 1998 meeting.

Requested by:   Senators Lee, Winner
BUDGET REALIGNMENT TO IMPLEMENT REORGANIZATION AUTHORIZED
Section 10.3.  Notwithstanding G.S. 143-23 or any other provision of law, the State Board of Community Colleges may transfer funds within the budget of the Department of Community Colleges to the extent necessary to implement the departmental reorganization plan recommended by the President of the North Carolina Community College System and adopted by the State Board.

Requested by:   Senators Lee, Winner
CONTINUING BUDGET CONCEPT
Section 10.4. (a)	The State Board of Community Colleges shall implement the continuing budget concept for full-time equivalent students (FTE) earned for the 1998-99 fiscal year as follows:
(1)	Community colleges that experience a decline in enrollment shall not receive a decrease in full-time equivalent student (FTE) enrollment funds until their enrollment declines more than three percent (3%).  At that time, they shall experience a decline of only the amount over three percent (3%);
(2)	Community colleges that experience an increase in enrollment shall not receive an increase in full-time equivalent student (FTE) enrollment funds until their enrollment increases more than two percent (2%).  At that time, they shall experience an increase of only the amount over two percent (2%).
(b) The State Board of Community Colleges shall implement the continuing budget concept for subsequent fiscal years by funding (i) the average earned full-time equivalent student (FTE) enrollment for the prior three fiscal years, or (ii) the earned full-time equivalent student (FTE) enrollment for the prior fiscal year, whichever is greater.

Requested by:   Senators Lee, Winner
ANNUAL REVIEW ACCOUNTABILITY ENHANCED
Section 10.5.  The General Assembly finds that the current annual program review standards are not adequate to ensure that programs are meeting the needs of students, employers, and the general public; therefore, the State Board of Community Colleges shall review the current standard to ensure a higher degree of program accountability and shall establish appropriate levels of performance for each measure based on sound methodological practices.
The State Board shall make an interim report to the Joint Legislative Education Oversight Committee and to the Fiscal Research Division on its improved accountability measures prior to  November 1, 1998, and a final report prior to February 1, 1999.

Requested by:   Senators Lee, Winner
DEVELOPMENT OF MANAGEMENT INFORMATION SYSTEM
Section 10.6.The State Board of Community Colleges shall develop a plan for an efficient and effective technology and management information system.  The system shall be  designed to support the Community College System's  planning, evaluation, communication, resource management, full-time equivalent student (FTE) reporting, and decision-making processes.  The plan shall identify the technology and management information needs of the local colleges and the Department of Community Colleges, the costs of meeting these needs, and the benefits of meeting them.
The State Board shall report to the Joint Legislative Education Oversight Committee prior to February 1, 1999, on the plan it develops.

Requested by:   Senators Lee, Winner
COOPERATIVE HIGH SCHOOL EDUCATION PROGRAM ACCOUNTABILITY
Section 10.7.  (a)	It is the goal of the General Assembly to increase the number of qualified high school students participating in cooperative high school education programs that are provided by local community colleges through cost-effective programs that do not duplicate high school Advanced Placement courses that are currently being offered or that could feasibly be offered.  These programs shall provide additional higher education opportunities for qualified high school students while minimizing overlapping costs to the State for public schools and community colleges.
(b)	The State Board of Community Colleges and the State Board of Education shall create a joint task force to study the existing policies for cooperative high school education programs and to recommend changes necessary to improve the programs' success and accountability.  The Boards shall report their findings and recommendations to the Joint Legislative Education Oversight Committee and the Fiscal Research Division prior to March 1, 1999.

Requested by:   Senators Lee, Winner
REPORTING REQUIREMENTS
Section 10.8.  The local institutions of the North Carolina Community College System shall comply with annual reporting requirements established by the State Board of Community Colleges; therefore, the State Board of Community Colleges shall develop an action plan to improve the timeliness and accuracy of the data that are required to be reported to the State Board by each institution.  This plan may include withholding State funds from the institution if an institution is not in compliance.
The plan shall be approved and implemented by October 30, 1998.

Requested by:   Senators Lee, Winner
COMMUNITY COLLEGE TUITION STUDY
Section 10.9. The Joint Legislative Education Oversight Committee shall study community college tuition in light of (i) recent proposals intended to maximize the opportunities of North Carolina residents to continue their education after high school and (ii) federal "Hope Scholarships".  The Committee shall report the results of its study to the Appropriations Subcommittees on Education of the Senate and the House of Representatives prior to January 15, 1999.

Requested by:   Senators Hoyle, Lee, Winner
HOSPITALITY AND TOURISM JOB TRAINING PROGRAMS
Section 10.10. (a) The State Board of Community Colleges shall study hospitality and tourism job training programs offered by the local institutions of the North Carolina Community College System.  The State Board of Community Colleges shall collaborate with the Board of Governors of The University of North Carolina, the State Board of Education, and the Department of Commerce to improve articulation between institutions with regard to hospitality and tourism job training programs.  The efforts to improve articulations shall be considered a joint venture of these educational institutions that are participating members of the Culinary, Hospitality, Tourism Education Alliance (CHTEA), and of the Department of Commerce and the travel and tourism industry.
(b)	The State Board of Community Colleges, the State Board of Education, the Board of Governors of The University of North Carolina, and the Department of Commerce  shall report jointly to the Joint Legislative Education Oversight Committee on the following:
(1)	An inventory of all curriculum, continuing education, and job training programs offered in the State that support the travel, tourism, and hospitality industries;
(2)	Recommendations for improvements to the programs and a system of program accountability; and
(3)	Recommendations on ways to improve communication between the industry and the Boards and to enhance efforts to promote the programs.

Requested by:  Senators Lee, Winner
ROANOKE-CHOWAN COMMUNITY COLLEGE/SHELTERED WORKSHOP
Section 10.11.  Roanoke-Chowan Community College may use proceeds derived from the lease of buildings associated with the sheltered workshop to phase out the sheltered workshop operation.

Requested by:  Senators Rand, Lee
COMMUNITY COLLEGE TUITION WAIVER
Section 10.12.  It is the intent of the General Assembly to provide a tuition waiver for up to two years, to the extent that funds are appropriated expressly for that purpose, to deserving students who graduate from a North Carolina high school and are enrolled full-time in a North Carolina community college within six months of graduation.

PART XI. UNIVERSITIES
Requested by:  Senators Lee, Winner
UNC INCENTIVE FUNDING
Section 11. (a) G.S. 116-30.3(d) reads as rewritten:
"(d)	For fiscal year 1997-98 and fiscal year 1998-99, one-half of the reversions required in subsections (a) and (b) of this section shall be available to each special responsibility constituent institution of The University of North Carolina. Those funds shall be used by the institution at the campus level for any of the following: the nonrecurring costs of technology, including the installation of technology infrastructure for academic facilities on the campus of the special responsibility constituent institution, the implementation by the constituent institution of its campus technology plan as approved by the Board of Governors, or for libraries. The funds shall not be used to support positions. Each special responsibility constituent institution shall report annually to the Board of Governors regarding how the institution spent the funds made available under this section."
(b) Effective July 1, 1999, G.S. 116-30.3 as amended by subsection (a) of this section reads as rewritten:
"§ 116-30.3.  Reversions.
	Of the General Fund current operations appropriations credit balance remaining at the end of each fiscal year in each budget code of a special responsibility constituent institution, except for the budget code of the Area Health Education Centers of the University of North Carolina at Chapel Hill, any amount of the General Fund appropriation for that fiscal year may be carried forward by the institution to the next fiscal year and may be used for one-time expenditures that will not impose additional financial obligations on the State.  Of the General Fund current operations appropriations credit balance remaining in the budget code of the Area Health Education Centers of the University of North Carolina at Chapel Hill, any amount of the General Fund appropriation for that fiscal year may be carried forward in that budget code to the next fiscal year and may be used for one-time expenditures that will not impose additional financial obligations on the State.  However, the amount carried forward under this section shall not exceed two and one-half percent (2 1/2%) of the General Fund appropriation.  The Director of the Budget, under the authority set forth in G.S. 143-25, shall establish the General Fund current operations credit balance remaining in each budget code of each institution.
					."

Requested by:  Senators Lee, Winner
NATURAL RESOURCES LEADERSHIP INSTITUTE
Section 11.1.  For the 1998-99 fiscal year, the requirement for reversion of General Fund appropriations as required by G.S. 116-30.3 for the Cooperative Extension Service budget code at North Carolina State University is reduced by one hundred seventy thousand dollars ($170,000) in order to provide funding for the Natural Resource Leadership Institute sponsored by the Cooperative Extension Service.

Requested by:   Senators Lee, Winner
INCENTIVE SCHOLARSHIP PROGRAM FOR NATIVE AMERICANS
Section 11.2.  Section 17.3(a) of Chapter 769, 1993 Session Laws, reads as rewritten:
"Sec. 17.3.  (a)	The Board of Governors of The University of North Carolina shall establish the Incentive Scholarship Program for Native Americans to provide opportunities for Native Americans who are residents of North Carolina to attend constituent institutions of The University of North Carolina under rules adopted by the Board of Governors.  Scholarships awarded under the program shall carry a maximum value of three thousand dollars ($3,000) per recipient per academic year, to be awarded after all other need-based grants for which the recipient is eligible have been included in the student's financial aid package.  The maximum amount of the award shall not exceed the cost of attendance budget used to calculate financial aid less other need-based aid received, and in no case shall the award exceed three thousand dollars ($3,000).  To be eligible for such a scholarship, a student shall be a Native American, defined as an individual who maintains cultural identification as a Native American through membership in an Indian tribe recognized by the United States or by the State of North Carolina or through other tribal affiliation or community recognition."

Requested by:   Senators Lee, Winner, Plyler
AID TO STUDENTS ATTENDING PRIVATE COLLEGES PROCEDURE
Section 11.3.  Section 10.4 of S.L. 1997-443 reads as rewritten:
"Section 10.4.  (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 nine hundred dollars ($900.00) 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 available 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 six hundred dollars ($1,600) 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:
(1)	Is incarcerated in a State or federal correctional facility for committing a Class A, B, B1, or B2 felony; or
(2)	Is  incarcerated in a State or federal correctional facility for committing a Class C through I felony and is not eligible for parole or release within 10 years.
(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 include in its annual report to the Joint Legislative Education Oversight Committee the information it has compiled and its findings regarding this program."

Requested by:   Senators Lee, Winner    
UNC EQUITY FUNDS/CAPITAL FACILITIES STUDY
Section 11.4.  Section 10.1 of S.L. 1997-443 reads as rewritten:
"Section 10.1.  (a)	The funds appropriated to the Board of Governors of The University of North Carolina for equity funds are to address relative inequities in State operating funding revealed through a study of the constituent institutions in the university system.  The General Assembly notes that the study dealt with equity based upon current funding from State appropriations and tuition for operations and did not consider historical equity in funding for physical facilities or funding from non-State sources.  Therefore, in making this appropriation, the General Assembly does not conclude that the total funding of any institution, including specifically the historically black universities, is adequate in light of all considerations.
(b)	Based on findings of the Legislative Study Commission on the Status of Education at The University of North Carolina, the General Assembly is still  concerned about perceived differences in the quality of capital facilities on the different campuses, which may impact the ability of some campuses to attract students and faculty.  Since the Board of Governors has recently completed studies of equity of funding for operating costs among the constituent institutions and of the Board of Governors' capital improvements request process, it is timely that the question of equity of facilities be addressed.
The Board of Governors of The University of North Carolina shall study the relative equity and adequacy of the physical facilities of its constituent institutions.  The study shall consider the condition of the facilities, whether or not facilities are comparable among the campuses given the different missions of the institutions, comparable adequacy of the physical facilities given the size and projected growth of the school, and such other factors deemed appropriate by the Board of Governors.  The study shall include all facilities contributing to the accomplishment of the campuses' missions.  First, the Board of Governors shall study those facilities considered central to the academic missions of the campuses that are generally supported from General Fund appropriations.  Secondly, the Board of Governors shall study those facilities that contribute to the overall missions of the campuses, including residential, dining, research, and other facilities regardless of the sources of funding.  The Board of Governors shall consider its policies on funding of self-liquidating projects and whether those policies contribute to any inequities among the campuses, including the overall costs to the students.
(c)	The Board of Governors shall contract with a private consulting firm with expertise in higher education matters to assess the additional capital needs of the constituent institutions of The University of North Carolina.  The needs assessment shall project the needs for capital funding for a 10-year period, and shall include a detailed plan for making funding allocations based on the priorities of needs.
The plan shall provide a detailed capital spending plan for the next 10 years to assist the General Assembly in making funding decisions relating to The University of North Carolina, as the State plans for major increases in enrollment in higher education and prepares its citizens to compete in a global economy.  The plan shall include considerations of the costs and changes in capital needs caused by new technologies and alternative systems for delivery of higher education services.
The consultant shall visit each campus in The University of North Carolina system to understand the needs of each campus based on their assigned missions, physical needs, and plans.
The Board and its consultant shall provide interim progress reports to the General Assembly on a periodic basis.  The Board of Governors shall report to the General Assembly by April 15, 1999, with the results of its study and plan.
Of the funds appropriated to the Board of Governors for fiscal year 1998-99, up to two hundred fifty thousand dollars ($250,000) may be reallocated for the purposes of this section, including funds that would normally revert to the General Fund at the end of the fiscal year."

Requested by:   Senators Lee, Winner
MANUFACTURING EXTENSION PARTNERSHIP
Section 11.5.  Section 10.7 of S.L. 1997-443 reads as rewritten:
"Section 10.7.  Of the funds appropriated to the Board of Governors of The University of North Carolina, the sum of nine hundred thousand dollars ($900,000) for the 1998-99 fiscal year shall be allocated to North Carolina State University to match additional federal funds for the Manufacturing Extension Partnership Program."

Requested by:   Senators Lee, Winner, Warren, Perdue
EAST CAROLINA DOCTORAL II CLASSIFICATION
Section 11.6.  Of the funds appropriated to the Board of Governors of The University of North Carolina for the 1998-99 fiscal year, the sum of two million dollars ($2,000,000) shall be allocated to East Carolina University in recognition of the designation of that institution as a Doctoral II University. The funds may be used for additional faculty, increases in faculty salaries, increases in the number of graduate student  tuition remissions, and other enhancements required to meet the needs of a Doctoral II institution. The use of these funds shall be in accord with the plan developed for the Board of Governors for adjusting the funding for East Carolina University to a level appropriate for Doctoral II University status. East Carolina University shall report to the Board of Governors, the Office of State Budget and Management, and the Fiscal Research Division on the allocation of these funds within its budgets.

Requested by:   Senators Lee, Winner
UNC DISTANCE EDUCATION
Section 11.7.  This act provides funding to The University of North Carolina Board of Governors for degree-related courses provided away from the campus sites of the constituent institutions of The University of North Carolina. The intent of this commitment is to provide expanded opportunities for higher education to more North Carolina residents, including nontraditional students, and to increase the number of North Carolina residents who earn post-secondary degrees. 
These funds shall be used for the provision of off-campus higher education programs, including the costs for the development or adaptation of programs for this purpose, and the funds may be used for the costs of providing space and services at the off-campus sites. 
Prior to approving funding for off-campus programs in nursing, the Board shall consult with the central office of the Area Health Education Centers (AHEC) to obtain information about regional needs and priorities and to coordinate funding with AHEC efforts in nursing education.
The Board of Governors shall track these funds separately in order to provide data on the costs of providing these programs, including the different costs for various methods of delivery of educational programs. The Board of Governors shall provide for evaluation of these off-campus programs, including comparisons to the costs and quality of on-campus delivery of similar programs, as well as the impact on access to higher education and the educational attainment levels of North Carolina residents. The Board shall provide a preliminary report to the General Assembly by May 1, 2000, and subsequent evaluations, including recommendations for changes, shall be made at least biennially to the Joint Legislative Education Oversight Committee.

Requested by:   Senators Winner, Rand
UNC HOSPITALS/MANAGEMENT FLEXIBILITY
Section 11.8. (a)	G.S. 116-37 reads as rewritten:
"§ 116-37.  University of North Carolina Hospitals at Chapel Hill.
(a)	Composition. – The Board of Governors of the University of North Carolina is hereby directed to create a board of directors for the University of North Carolina Hospitals at Chapel Hill consisting of 12 members of which nine shall be appointed by the Board of Governors. 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. Nine 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. The Governors may remove any member for cause. 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. – Each of the nine persons who, as of June 30, 1989, is serving as an appointed member of the Board shall be reassigned by the Governors, each to a different term, ending June 30, 1989, June 30, 1990, June 30, 1991, June 30, 1992, June 30, 1993, June 30, 1994, June 30, 1995, June 30, 1996, or June 30, 1997. After July 1, 1989, the term of office for new appointments shall commence on July 1, and all members shall serve for four-year terms; provided, however, that 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 Governors for the remainder of the unexpired term.
(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 Governors with a copy of the appeal to the University 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. All employees of the University of North Carolina Hospitals at Chapel Hill shall be deemed to be employees of the State and shall be subject to all provisions of State law relevant thereto; provided, however, that except as to the provisions of Articles 5, 6, and 7 of Chapter 126 of the General Statutes, the provisions of Chapter 126 shall not apply to employees of the University of North Carolina Hospitals at Chapel Hill, and the policies and procedures governing the terms and conditions of employment of such employees shall be adopted by the Board of Directors.
(1)	The Board of Directors shall fix or approve the schedules of pay, expense allowances, and other compensation and adopt position classification plans for all employees of the University of North Carolina Hospitals at Chapel Hill.
(2)	The Board of Directors shall adopt or provide for rules and regulations concerning, but not limited to, annual leave, sick leave, special leave with full pay or with partial pay supplementing workers' compensation payments for employees injured in accidents arising out of and in the course of employment, working conditions, service awards, and incentive award programs, grounds for dismissal, demotion, or discipline, other personnel policies, and any other measures that promote the hiring and retention of capable, diligent, and effective career employees.  However, an employee who has achieved career State employee status as defined by G.S. 126-1.1 by October 31, 1998, shall not have his or her compensation reduced as a result of this subdivision.  Further, an employee who has achieved career State employee status as defined by G.S. 126-1.1 by October 31, 1998, shall be subject to the rules regarding discipline or discharge that were effective on October 31, 1998, and shall not be subject to the rules regarding discipline or discharge adopted after October 31, 1998.
(3)	The Board of Directors may prescribe the office hours, workdays, and holidays to be observed by the various offices and departments of the University of North Carolina Hospitals at Chapel Hill.
(4)	The Board of Directors shall establish boards, committees, or councils to conduct hearings upon the appeal of employees who have been suspended, demoted, otherwise disciplined, or discharged, to hear employee grievances, or to undertake any other duties relating to personnel administration that the Board of Directors may direct.
(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. –There shall be maintained a purchasing office to handle all purchasing requirements of the University of North Carolina Hospitals at Chapel Hill. Notwithstanding the provisions of Articles 3 and 3A of Chapter 143 of the General Statutes to the contrary, the Board of Directors shall establish policies and regulations governing the purchasing requirements of the University of North Carolina Hospitals at Chapel Hill.  These policies and regulations shall provide for requests for proposals, competitive bidding or purchasing by means other than competitive bidding, contract negotiations and contract awards for purchasing supplies, materials, equipment, and services which are necessary and appropriate to fulfill the clinical, educational, research, and community service missions of the University of North Carolina Hospitals at Chapel Hill.  The Board of Directors shall seek the advice of the Director of the Purchase and Contract Division on an annual basis  concerning the adequacy of the University of  North Carolina Hospitals at Chapel Hill  management staff and internal controls to administer the additional authorities authorized under this section.
(g)	Property. –Notwithstanding the provisions of Article 6 of Chapter 146 of the General Statutes to the contrary, the Board of Directors shall establish rules and regulations to perform the functions otherwise prescribed for the Department of Administration in acquiring or disposing of any interest in real property by the University of North Carolina Hospitals at Chapel Hill.  These rules and regulations shall include provisions for development of specifications, advertisement, and negotiations with owners for acquisition by purchase, gift, lease, or rental, but not by condemnation or exercise of eminent domain, on behalf of the University of North Carolina Hospitals at Chapel Hill.  This section does not authorize the Board of Directors to encumber real property.  The Board of Directors shall seek the advice of the State Property Office on an annual basis concerning the adequacy of the University of North Carolina Hospitals at Chapel Hill management staff and internal controls to administer the additional authorities permitted by this section.  After review by the Attorney General as to form and after the consummation of any such acquisition, the University of North Carolina Hospitals at Chapel Hill shall promptly file a report concerning the acquisition or disposition with the Governor and Council of State.
(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).
(i)	Property Construction. – Notwithstanding G.S. 143-341(3) and G.S. 143-135.1, the Board of Directors shall, with respect to the design, construction, and renovation of buildings, utilities, and other property developments of the University of North Carolina Hospitals at Chapel Hill requiring the expenditure of public money:
(1)	Conduct the fee negotiations for all design contracts and supervise the letting of all construction and design contracts.
(2)	Develop procedures governing the responsibilities of the University of North Carolina Hospitals at Chapel Hill to perform the duties of the Department of Administration, the Office of State Construction, and the State Building Commission under G.S. 133-1.1(d), Article 8 of Chapter 143 of the General Statutes, and G.S. 143-341(3).
(3)	Develop procedures and limitations governing the use of open-end design agreements.
(4)	As appropriate, submit construction documents for review and approval by the Department of Insurance and the Division of Facility Services of the Department of Human Resources.
(5)	Use the standard contracts for design and construction currently in use for State capital improvement projects by the Office of State Construction of the Department of Administration.
(6)	Seek the advice of the Director of the Office of State Construction on an annual basis concerning the adequacy of the University of North Carolina Hospitals at Chapel Hill management staff and internal controls to administer the additional authorities authorized by this section."
	(b)	G.S. 126-5 is amended by adding a new subsection to read:
"( c8)	Except as to the provisions of Articles 5, 6, and 7 of this Chapter, the provisions of this Chapter shall not apply to:
(1)	Employees of the University of North Carolina Hospitals at Chapel Hill.
(2)	Employees of the Medical Faculty Practice Plan, a Division of the School of Medicine of East Carolina University.
(3)	Employees of UNC Physicians and Associates, a Division of the School of Medicine of the University of North Carolina at Chapel Hill."
(c)	G.S. 143-56 reads as rewritten:
"§ 143-56.  Certain purchases excepted from provisions of Article.
Unless as may otherwise be ordered by the Secretary of Administration, the purchase of supplies, materials and equipment through the Secretary of Administration shall be mandatory in the following cases:
(1)	Published books, manuscripts, maps, pamphlets and periodicals.
(2)	Perishable articles such as fresh vegetables, fresh fish, fresh meat, eggs, and others as may be classified by the Secretary of Administration.
Purchase through the Secretary of Administration shall not be mandatory for a purchase of supplies, materials or equipment for the General Assembly if the total expenditures is less than the expenditure benchmark established under the provisions of G.S. 143-53.1, for group purchases made by hospitals through a competitive bidding purchasing program, as defined in G.S. 143-129, by the University of North Carolina Hospitals at Chapel Hill pursuant to G.S. 116-37(f), by the University of North Carolina at Chapel Hill on behalf of UNC Physicians and Associates pursuant to G.S. 116-37.2(c), or  by East Carolina University on behalf of the Medical Faculty Practice Plan pursuant to G.S. 116-40.6(c).
All purchases of the above articles made directly by the departments, institutions and agencies of the State government shall, whenever possible, be based on competitive bids.  Whenever an order is placed or contract awarded for such articles by any of the departments, institutions and agencies of the State government, a copy of such order or contract shall be forwarded to the Secretary of Administration and a record of the competitive bids upon which it was based shall be retained for inspection and review."
(d)	G.S. 146-22 reads as rewritten:
"§ 146-22. All acquisitions to be made by Department of Administration.
Every acquisition of land on behalf of the State or any State agency, whether by purchase, condemnation, lease, or rental, shall be made by the Department of Administration and approved by the  Governor and Council of State; provided that if the proposed acquisition is a purchase of land with an appraised value of at least  twenty-five thousand dollars ($25,000), and the acquisition is for other than a transportation purpose, the acquisition may only be made after consultation with the Joint Legislative Commission on Governmental Operations; and provided further, that acquisitions on behalf of the University of North Carolina Hospitals at Chapel Hill shall be made in accordance with G.S. 116-37(g), acquisitions on behalf of the UNC Physicians and Associates shall be made in accordance with G.S. 116-37.2(d), and acquisitions on behalf of the Medical Faculty Practice Plan made in accordance with G.S. 116-40.6(d).   In determining whether the appraised value is at least twenty-five thousand dollars ($25,000), the value of the property in fee simple shall be used. The State may not purchase land as a tenant-in-common without consultation with the Joint Legislative Commission on Governmental Operations if the appraised value of the property in fee simple is at least twenty-five thousand dollars ($25,000)."
(e)  G.S. 133-1.1(d) reads as rewritten:
"(d)	On projects on which no registered architect or engineer is required pursuant to the provisions of this section, the governing board or awarding authority shall require a certificate of compliance with the State Building Code from the city or county inspector for the specific trade or trades involved or from a registered architect or engineer, except that the provisions of this subsection shall not apply on projects (i) wherein plans and specifications are approved by the Department of Administration, Division of State Construction, and the completed project is inspected by the Division of State Construction and the State Electrical Inspector, (ii) that are exempt from the State Building Code, or (iii) that are subject to G.S. 116-31.11 and the completed project is inspected by the State Electrical Inspector and by The University of North Carolina or its constituent or affiliated institution, (iv) that are subject to G.S. 116-37(i) and the completed project is inspected by the State Electrical Inspector and by the University of North Carolina Hospitals at Chapel Hill, (v) that are subject to G.S. 116-37.2(e) and the completed project is inspected by the State Electrical Inspector and by the University of North Carolina at Chapel Hill on behalf of the UNC Physicians and Associates, or (vi) that are subject to G.S. 116-40.6(e) and the completed project is inspected by the State Electrical Inspector and by East Carolina University on behalf of the Medical Faculty Practice Plan."
(f)  Chapter 116 of the General Statutes is amended by adding the following:
"§ 116-37.2.  The University of North Carolina Physicians and Associates.
(a)	UNC Physicians and Associates. – "UNC Physicians and Associates," a division of the School of Medicine of the University of North Carolina at Chapel Hill, operates clinical programs and facilities for the purpose of providing medical care to the general public and training physicians and other health care professionals.
(b)	Personnel. – All employees of UNC Physicians and Associates shall be deemed to be employees of the State and shall be subject to all provisions of State law relevant thereto; provided, however, that except as to the provisions of Articles 5, 6, and 7 of Chapter 126 of the General Statutes, the provisions of Chapter 126 shall not apply to employees of UNC Physicians and Associates, and the policies and procedures governing the terms and conditions of employment of such employees shall be adopted by the Board of Trustees of the University of North Carolina at Chapel Hill; provided, that with respect to such employees as may be members of the faculty of the University of North Carolina at Chapel Hill, no such policies and procedures may be inconsistent with policies established by, or adopted pursuant to delegation from, the Board of Governors of the University of North Carolina.  Such policies and procedures shall be implemented on behalf of UNC Physicians and Associates by a personnel office maintained by the University of North Carolina at Chapel Hill.
(1)	The Board of Trustees shall fix or approve the schedules of pay, expense allowances, and other compensation and adopt position classification plans for employees of UNC Physicians and Associates.
(2)	The Board of Trustees may adopt or provide for rules and regulations concerning, but not limited to, annual leave, sick leave, special leave with full pay or with partial pay supplementing workers' compensation payments for employees injured in accidents arising out of and in the course of employment, working conditions, service awards, and incentive award programs, grounds for dismissal, demotion, or discipline, other personnel policies, and any other measures that promote the hiring and retention of capable, diligent, and effective career employees.  However, an employee who has achieved career State employee status as defined by G.S. 126-1.1 by October 31, 1998, shall not have his or her compensation  reduced as a result of this subdivision.  Further, an employee who has achieved career State employee status as defined by G.S. 126-1.1 by October 31, 1998, shall be subject to the rules regarding discipline or discharge that were effective on October 31, 1998, and shall not be subject to the rules regarding discipline or discharge adopted after October 31, 1998.
(3)	The Board of Trustees may prescribe the office hours, workdays, and holidays to be observed by the various offices and departments of UNC Physicians and Associates.
(4)	The Board of Trustees shall establish boards, committees, or councils to conduct hearings upon the appeal of employees who have been suspended, demoted, otherwise disciplined, or discharged, to hear employee grievances, or to undertake any other duties relating to personnel administration that the Board of Trustees may direct.
(c)	Purchases. – Notwithstanding the provisions of Articles 3 and 3A of Chapter 143 of the General Statutes to the contrary, the Board of Trustees of the University of North Carolina at Chapel Hill shall establish policies and regulations governing the purchasing requirements of UNC Physicians and Associates.  These policies and regulations shall provide for requests for proposals, competitive bidding or purchasing by means other than competitive bidding, contract negotiations and contract awards for purchasing supplies, materials, equipment, and services which are necessary and appropriate to fulfill the clinical and educational missions of UNC Physicians and Associates.  Pursuant to such policies and regulations, purchases for UNC Physicians and Associates shall be effected by a purchasing office maintained by the University of North Carolina at Chapel Hill.  The Board of Trustees shall seek the advice of the Director of the Purchase and Contract Division on an annual basis concerning the adequacy of the University of North Carolina at Chapel Hill management staff and internal controls to administer the additional authorities authorized under this section.
(d)	Property. – Notwithstanding the provisions of Article 6 of Chapter 146 of the General Statutes to the contrary, the Board of Trustees shall establish rules and regulations to perform the functions otherwise prescribed for the Department of Administration in acquiring or disposing of any interest in real property for the use of UNC Physicians and Associates.  These rules and regulations shall include provisions for development of specifications, advertisement, and negotiations with owners for acquisition by purchase, gift, lease, or rental, but not by condemnation or exercise of eminent domain, on behalf of UNC Physicians and Associates.  This section does not authorize the Board of Trustees to encumber real property.  Such rules and regulations shall be implemented by a property office maintained by the University of North Carolina at Chapel Hill.  The Board of Trustees shall seek the advice of the State Property Office on an annual basis concerning the adequacy of the University of North Carolina at Chapel Hill management staff and internal controls to administer the additional authorities permitted by this section.  After review by the Attorney General as to form and after the consummation of any such acquisition, the University of North Carolina at Chapel Hill shall promptly file, on behalf of UNC Physicians and Associates, a report concerning the acquisition or disposition with the Governor and Council of State.
(e)	Property  Construction. – Notwithstanding G.S. 143-341(3) and G.S. 143-135.1, the Board of Trustees shall adopt policies and procedures to be implemented by the administration of the University of North Carolina at Chapel Hill, with respect to the design, construction, and renovation of buildings, utilities, and other property developments for the use of UNC Physicians and Associates, requiring the expenditure of public money for:
(1)	Conducting the fee negotiations for all design contracts and supervising the letting of all construction and design contracts.
(2)	Performing the duties of the Department of Administration, the Office of State Construction, and the State Building Commission under G.S. 133-1.1(d), Article 8 of Chapter 143 of the General Statutes, and G.S. 143-341(3).
(3)	Using open-end design agreements.
(4)	As appropriate, submitting construction documents for review and approval by the Department of Insurance and the Division of Facility Services of the Department of Human Resources.
(5)	Using the standard contracts for design and construction currently in use for State capital improvement projects by the Office of State Construction of the Department of Administration.
The Board of Trustees shall seek the advice of the Director of the Office of State Construction on an annual basis concerning the adequacy of the University of North Carolina at Chapel Hill management staff and internal controls to administer the additional authorities authorized by this section.
"§ 116-40.6. East Carolina University Medical Faculty Practice Plan.
(a)	Medical Faculty Practice Plan. – The "Medical Faculty Practice Plan," a division of the School of Medicine of East Carolina University, operates clinical programs and facilities for the purpose of providing medical care to the general public and training physicians and other health care professionals.
(b)	Personnel. – Employees of the Medical Faculty Practice Plan shall be deemed to be employees of the State and shall be subject to all provisions of State law relevant thereto; provided, however, that except as to the provisions of Articles 5, 6, and 7 of Chapter 126 of the General Statutes, the provisions of Chapter 126 shall not apply to employees of the Medical Faculty Practice Plan, and the policies and procedures governing the terms and conditions of employment of such employees shall be adopted by the Board of Trustees of East Carolina University; provided, that with respect to such employees as may be members of the faculty of East Carolina University, no such policies and procedures may be inconsistent with policies established by, or adopted pursuant to delegation from, the Board of Governors of the University of North Carolina.  Such policies and procedures shall be implemented on behalf of the Medical Faculty Practice Plan by a personnel office maintained by East Carolina University.
(1)	The Board of Trustees shall fix or approve the schedules  of pay, expense allowances, and other compensation and adopt position classification plans for employees of the Medical Faculty Practice Plan.
(2)	The Board of Trustees may adopt or provide for rules and regulations concerning, but not limited to, annual leave, sick leave, special leave with full pay or with partial pay supplementing workers' compensation payments for employees injured in accidents arising out of and in the course of employment, working conditions, service awards, and incentive award programs, grounds for dismissal, demotion, or discipline, other personnel policies, and any other measures that promote the hiring and retention of capable, diligent, and effective career employees. However, an employee who has achieved career State employee status as defined by G.S. 126-1.1 by October 31, 1998, shall not have his or her compensation reduced as a result of this subdivision.  Further, an employee who has achieved career State employee status as defined by G.S. 126-1.1 by October 31, 1998, shall be subject to the rules regarding discipline or discharge that were effective on October 31, 1998, and shall not be subject to the rules regarding discipline or discharge adopted after October 31, 1998.
(3)	The Board of Trustees may prescribe the office hours, workdays, and holidays to be observed by the various offices and departments of the Medical Faculty Practice Plan.
(4)	The Board of Trustees shall establish boards, committees or councils to conduct hearings upon the appeal of employees who have been suspended, demoted, otherwise disciplined, or discharged, to hear employee grievances, or to undertake any other duties relating to personnel administration that the Board of Trustees may direct.
(c)	Purchases. – Notwithstanding the provisions of Articles 3 and 3A of Chapter 143 of the General Statutes to the contrary, the Board of Trustees of East Carolina University shall establish policies and regulations governing the purchasing requirements of the Medical Faculty Practice Plan.  These policies and regulations shall provide for requests for proposals, competitive bidding or purchasing by means other than competitive bidding, contract negotiations and contract awards for purchasing supplies, materials, equipment, and services which are necessary and appropriate to fulfill the clinical and educational missions of the Medical Faculty Practice Plan.  Pursuant to such policies and regulations, purchases for the Medical Faculty Practice Plan shall be effected by a purchasing office maintained by East Carolina University.  The Board of Trustees shall seek the advice of the Director of the Purchase and Contract Division on an annual basis  concerning the adequacy of the East Carolina University management staff and internal controls to administer the additional authorities authorized under this section.
(d)	Property. – Notwithstanding the provisions of Article 6 of Chapter 146 of the General Statutes to the contrary, the Board of Trustees shall establish rules and regulations to perform the functions otherwise prescribed for the Department of Administration in acquiring or disposing of any interest in real  property for the use of the Medical Faculty Practice Plan.  These rules and regulations shall include provisions for development of specifications, advertisement, and negotiations with owners for acquisition by purchase, gift, lease, or rental, but not by condemnation or exercise of eminent domain, on behalf of the Medical Faculty Practice Plan.  This section does not authorize the Board of Trustees to encumber real property.  Such rules and regulations shall be implemented by a property office maintained by East Carolina University.  The Board of Trustees shall seek the advice of the State Property Office on an annual basis concerning the adequacy of the East Carolina University management staff and internal controls to administer the additional authorities permitted by this section.  After review by the Attorney General as to form and after the consummation of any such acquisition, East Carolina University shall promptly file, on behalf of the Medical Faculty Practice Plan, a report concerning the acquisition or disposition with the Governor and Council of State.
(e)	Property Construction. – Notwithstanding G.S. 143-341(3) and G.S. 143-135.1, the Board of Trustees shall adopt policies and procedures, to be implemented by the administration of East Carolina University, with respect to the design, construction, and renovation of buildings, utilities, and other property developments for the use of the Medical Faculty Practice Plan, requiring the expenditure of public money for:
(1)	Conducting the fee negotiations for all design contracts and supervising the letting of all construction and design contracts.
(2) 	Performing the duties of the Department of Administration, the Office of State Construction, and the State Building Commission under G.S. 133-1.1(d), Article 8 of Chapter 143 of the General Statutes, and G.S. 143-341(3).
(3) 	Using open-end design agreements.
(4) 	As appropriate, submitting construction documents for review and approval by the Department of Insurance and the Division of Facility Services of the Department of Human Resources.
(5) 	Using the standard contracts for design and construction currently in use for State capital improvement projects by the Office of State Construction of the Department of Administration.
The Board of Trustees shall seek the advice of the Director of the Office of State Construction on an annual basis concerning the adequacy of East Carolina University management staff and internal controls to administer the additional authorities authorized by this section."
(g) This section becomes effective November 1, 1998.

Requested by:   Senators Lee, Winner
UNC APPLICATIONS POOL
Section 11.9.  The Board of Governors of The University of North Carolina shall create a system that provides for the sharing of selected applications for admissions from North Carolina residents among the constituent institutions. The intent of the system shall be to increase the number of qualified North Carolina high school graduates who participate in higher education by providing information about applicants to other schools as well as providing information to applicants about alternative higher education opportunities in North Carolina. The Board of Governors may cooperate with the State Board of Community Colleges and with the private colleges and universities in North Carolina in creating such a system.
The Board of Governors shall report on its progress in developing such a system to the Joint Legislative Education Oversight Committee by January 15, 1999.

Requested by:   Senators Lee, Winner, Plyler
PRIVATE COLLEGES/INCENTIVE FUNDS
Section 11.10.  G.S. 116-20 reads as rewritten:
"§116-20. Scholarship and contract terms; base period.
In order to encourage and assist private institutions to educate additional numbers of North Carolinians, the Board of Governors of the University of North Carolina is hereby authorized to enter into contracts within the institutions under the terms of which an institution receiving any funds that may be appropriated pursuant to this section would agree that, during any fiscal year in which such funds were received, the institution would provide and administer scholarship funds for needy North Carolina students in an amount at least equal to the amount paid to the institution, pursuant to this section, during the fiscal year. Under the terms of the contracts the  Board of Governors of the University of North Carolina would agree to pay to the institutions, subject to the availability of funds, a fixed sum of money for each North Carolina student enrolled as of October 1 of any year for which appropriated funds may be available, over and above the number of North Carolina students enrolled in that institution as of October 1, 1997, which shall be the base date for the purpose of this calculation. Funds appropriated pursuant to this section shall be paid by the State Education Assistance Authority to an institution upon recommendation of the Board of Governors of the University of North Carolina and on certification of the institution showing the number of North Carolina students enrolled at the institution as of October 1 of any year for which funds may be appropriated over the number enrolled on the base date. In the event funds are appropriated for expenditure pursuant to this section and funds are also appropriated, for the same fiscal year, for expenditure pursuant to G.S. 116-19, students who are enrolled at an institution in excess of the number enrolled on the base date may be counted under this section for the purpose of calculating the amount to be paid to the institution, but the same students may also be counted under G.S. 116-19, for the purpose of calculating payment to be made under that section."

Requested by:   Senators Lee, Winner, Odom, Plyler
SUSTAINABLE OYSTER AQUACULTURE STUDY
Section 11.11.  (a)	Of the funds appropriated in this act to the Board of Governors of The University of North Carolina for fiscal year 1998-99, the sum of three hundred thousand dollars ($300,000) shall be allocated to the Institute of Marine Sciences at the University of North Carolina at Chapel Hill to study the potential for sustainable oyster aquaculture of triploid Crassostrea sikamea (Kumamoto), triploid Crassostrea ariakensis (Suminoe), triploid Crassostrea gigas (Pacific), and triploid Ostrea edulis (European flat).  Testing shall be carried out under a variety of environmental conditions, including, but not limited to, the evaluation of oyster growth of each type of oyster in polluted waters and the ability of each type of oyster to purify polluted waters.
(b)	The Primary Investigator or Researcher receiving funding pursuant to subsection (a) of this section shall provide progress reports to the Joint Legislative Commission on Seafood and Aquaculture, the Environmental Review Commission, the Marine Fisheries Commission, and the Fiscal Research Division on January 1 and July 1 of each year until the project or study is complete.  Upon completion of the project or study, the Primary Investigator or Researcher shall provide a final report of its findings and recommendations to the above entities.

PART XII.  DEPARTMENT OF HEALTH AND HUMAN SERVICES
SUBPART 1. ADMINISTRATION
Requested by:   Senator Martin of Guilford
STANDARDS FOR HEALTH CARE QUALITY AND ACCESS/EXTEND REPORTING DATE
Section 12.  Section 11.5(a) of S.L. 1997-443 reads as rewritten:
"(a)	The Secretary of the Department of Health and Human Services shall prepare proposed standards to ensure that the citizens of the State have access to quality and affordable health care with special emphasis on health care for children.  The proposed standards shall be presented to the General Assembly on or before May 1, 1999."

Requested by:   Senator Martin of Guilford
HOSPITAL FACILITY AUDITED COST REPORT DUE DATE
Section 12.1.  G.S. 131D-4.2(e) reads as rewritten:
"(e)	The annual reporting period for facilities licensed pursuant to this Chapter or Chapter 131E of the General Statutes other than facilities owned and operated by a hospital shall be October 1 through September 30, with the annual report due by the following December 31, unless the Department determines there is good cause for delay. The annual report for facilities owned and operated by a hospital shall be due 15 days after the hospital's Medicare cost report is due.  The annual reporting period for facilities licensed pursuant to Chapter 122C of the General Statutes shall be July 1 through June 30, with the annual report due by the following December 31, unless the Department determines there is good cause for delay. Under this subsection, good cause is an action that is uncontrollable by the provider. If the Department finds good cause for delay, it may extend the deadline for filing a report for up to an additional 30 days."

Requested by:   Senator Martin of Guilford
OFFICE OF STRATEGIC PLANNING
Section 12.2.  It is the intent of the General Assembly that the Department of Health and Human Services provide coordinated and strategic planning for the State's health and human services.  The Department shall study the advisability of creating an Office of Strategic Planning in the Office of the Secretary of Health and Human Services. The Director of the Office of Strategic Planning would report directly to the Secretary and would have the following responsibilities:
(1)	Implementing ongoing strategic planning that integrates budget, personnel and resources with the mission and operational goals of the Department;
(2)	Improving program functioning and performance within the agency, across agency lines, and with non-State agencies; and
(3)	Reviewing, disseminating, monitoring, and evaluating best practice models.
The Department shall report its findings and recommendations, which shall include the advantages and disadvantages of creating an Office of Strategic Planning and projected costs of implementation. The report shall be made to the members of the Senate Appropriations Committee on Human Resources and the House of Representatives Appropriations Subcommittee on Human Resources and shall be submitted not later than February 1, 1999.

Requested by:   Senators Plyler, Perdue, Odom
HUMAN SERVICES GRANTS
Section 12.3. Of the funds appropriated in this act to the Department of Health and Human Services, the sum of two million dollars ($2,000,000) for the 1998-99 fiscal year shall be used for grants for programs that provide services to older adults, adults with disabilities, at-risk children, and youth and families.  The Secretary of the Department of Health and Human Services shall continue the process for the review, evaluation, and consideration of applications for these grants.
In awarding grants, the Secretary shall consider the merits of the program, the benefit to the State and local communities of the program, and the cost of the program.  

Requested by:   Senators Martin of Guilford, Plyler, Perdue, Odom
AREA MENTAL HEALTH/ELDERLY HOUSING NONRECURRING PROJECT FUNDS
Section 12.4. (a) Notwithstanding G.S. 143-15.3C, of the funds in the Work First Reserve Fund, nine million five hundred thousand dollars ($9,500,000) shall be appropriated pursuant to G.S. 108A-27.16 to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, for the 1998-99 fiscal year for capital and nonrecurring projects for area mental health authorities as follows:
(1)	$500,000 for Developmental Disabilities Services, for wait list management;
(2)	$3,500,000 for Developmental Disabilities Services, for distribution to individual facilities, with priority given to the greatest and most justifiable needs.  None of these funds shall be distributed for items not historically funded by the State;
(3)	$2,500,000 for Substance Abuse Services, for distribution to individual facilities, with priority given to the greatest and most justifiable needs.  None of these funds shall be distributed for items not historically funded by the State; and
(4)	$3,000,000 for Mental Health Services, for distribution to individual facilities to meet the Developmental Day Inclusion Goal, with priority given to the greatest and most justifiable needs.  None of these funds shall be distributed for items not historically funded by the State.
(b)	Notwithstanding G.S. 143-15.3C, of the funds in the Work First Reserve Funds, the sum of two million dollars ($2,000,000) is appropriated to the Housing Trust Fund for affordable housing for the elderly.

SUBPART 2. MEDICAL ASSISTANCE

Requested by:   Senator Martin of Guilford
MEDICAID GROWTH REDUCTION
Section 12.5. Section 11.10 of S.L. 1997-443 reads as rewritten:
"Section 11.10. (a)	The Department of Health and Human Services shall develop and implement a plan that is designed to reduce the growth of Medicaid to eight percent (8%) by the year 2001.  However, the Department shall not eliminate categories of eligibles or categories of services to achieve this reduction unless the General Assembly identifies specific categories of eligibles or categories of services that it wants eliminated.
(b)	The Division of Medical Assistance, Department of Health and Human Services, shall consider the following actions in developing the plan to reduce Medicaid growth:
(1)	Changes in the methods of reimbursement;
(2)	Changes in the method of determining or limiting inflation factors or both;
(3)	Recalibration of existing methods of reimbursement;
(4)	Develop more specific criteria for determining medical necessity of services;
(5)	Contracting for services;
(6)	Application of limits on specific numbers of slots or expenditure levels for certain services or both;
(7)	Expansion of managed care; and
(8)	Recommend changes in statutes to enhance the ability of the Department to manage the program.
(c)	In considering the actions listed in subsection (b) of this section and in the development of the Medicaid growth reduction plan, the Division of Medical Assistance, Department of Health and Human Services, shall not adjust reimbursement rates to levels which would cause Medicaid providers of service to be out of compliance with certification requirements, licensure rules, or other mandated quality or safety standards.
(d)	The Division of Medical Assistance, Department of Health and Human Services, may make periodic progress reports to the members of the Senate Appropriations Committee on Human Resources and the House of Representatives Appropriations Subcommittee on Human Resources and shall make a final report no later than September 1, 1997, on any actions the Department intends to take to meet the required reductions for 1998-99.  The Division of Medical Assistance shall not implement any of these actions until after the intended actions have been reported to the members.
(e)	The Division of Medical Assistance, Department of Health and Human Services, shall report to the members of the Senate Appropriations Committee on Human Resources and the House of Representatives Appropriations Subcommittee on Human Resources by February 1, 1999, on the final plan to reduce Medicaid growth to eight percent (8%) by the year 2001."

Requested by:   Senator Martin of Guilford
RULES GOVERNING TRANSFER OF MEDICAID BENEFITS BETWEEN COUNTIES
Section 12.6.  Chapter 108A of the General Statutes is amended by inserting a new section to read:
"§ 108A-57.1.  Rules governing transfer of medical assistance benefits between counties.
Any recipient of medical assistance who moves from one county to another county of this State shall continue to receive medical assistance if eligible.  The county director of social services of the county from which the recipient has moved shall transfer all necessary records relating to the recipient to the county director of social services of the county to which the recipient has moved.  The county from which the recipient has moved shall pay the county portion of the nonfederal share of medical assistance payments paid for services provided to the recipient during the month following the recipient's move.  Thereafter, the county to which the recipient has moved shall pay the county portion of the nonfederal share of medical assistance payments paid for the services provided to the recipient."

Requested by:   Senator Martin of Guilford
CONTINUOUS MEDICAID COVERAGE FOR CATEGORICALLY NEEDY FAMILIES WITH CHILDREN
Section 12.7.  (a) Section 11.11 of S.L. 1997-443 is amended by inserting a new subsection to read:
"( n1)	Medicaid enrollment of categorically needy families with children shall be continuous for one year without regard to changes in income or assets."
(b) The Department of Health and Human Services shall study the effect of this section on both the Medicaid Program and on the Health Insurance Program for Children.  The Department shall make an interim report on the results of this study to the members of the Senate Appropriations Committee on Human Resources and the House of Representatives Appropriations Subcommittee on Human Resources by October 1, 1999, and shall make a final report by January 1, 2000.
(c) This section becomes effective October 1, 1998.

Requested by:   Senator Martin of Guilford
ALLOCATION OF G.S. 143-23.2 MEDICAID FUNDS
Section 12.8.  Of the funds transferred to the Department of Health and Human Services for Medicaid programs pursuant to G.S. 143-23.2, thirteen million dollars ($13,000,000) shall be allocated as prescribed by G.S. 143-23.2(b) for Medicaid programs.  Notwithstanding the prescription in G.S. 143-23.2(b) that these funds not reduce State general revenue funding, these funds shall replace the thirteen million dollar ($13,000,000) reduction in general revenue funding effected in this act.

Requested by:   Senators Plyler, Perdue, Odom, Martin of Guilford, Lucas, Cochrane
PRIORITY STUDY OF MEDICAID BENEFITS FOR CERTAIN AGED AND DISABLED PERSONS
Section 12.9.  (a) The Department of Health and Human Services shall make it a priority to study ways to meet the medical needs of aged and disabled persons whose annual income is equal to or less than one hundred percent (100%) of the federal poverty level, including  ways to provide the State match for Medicaid benefits for these persons.
(b) The Department of Health and Human Services shall report the results of this study to the members of the Senate Appropriations Committee on Human Resources and the House of Representatives Appropriations Subcommittee on Human Resources
by March 1, 1999.

Requested by:   Senator Martin of Guilford
DISPOSITION OF DISPROPORTIONATE SHARE RECEIPT CHANGE
Section 12.10. (a)	Disproportionate share receipts reserved at the end of the 1997-98 fiscal year shall be deposited with the Department of State Treasurer as a nontax revenue for the 1998-99 fiscal year.
(b)	For the 1998-99 fiscal year, as it receives funds associated with Disproportionate Share Payments from the State hospitals, the Department of Health and Human Services, Division of Medical Assistance, shall deposit up to eighty-five million dollars ($85,000,000) of these Disproportionate Share Payments to the Department of State Treasurer for deposit as nontax revenues.  Any Disproportionate Share Payments collected in excess of the eighty-five million dollars ($85,000,000) shall be reserved by the State Treasurer for future appropriations.

Requested by:   Senator Martin of Guilford
CHILD HEALTH INSURANCE TECHNICAL CHANGES
Section 12.11.  G.S. 108A-70.18(8), as enacted by Section 1 of S.L. 1998-1 Extra Session, reads as rewritten:
"(8)	'Uninsured' means the applicant for Program benefits was not covered under any private or employer-sponsored comprehensive health insurance plan for the six-month period immediately preceding the date of application for Program benefits.  Effective April 1, 1999, 'uninsured' means the applicant is and was not covered under any private or employer-sponsored comprehensive health insurance plan for 60 days immediately preceding the date of application. The waiting periods required under this subdivision shall be waived if the child has been enrolled in Medicaid and has lost Medicaid eligibility, has lost health care benefits due to cessation of a nonprofit organization program that provides health care benefits to low-income children, or has lost employer-sponsored comprehensive health care coverage due to termination of employment, cessation by the employer of employer-sponsored health coverage, or cessation of the employer's business."

Requested by:   Senator Martin of Guilford
CHILD HEALTH INSURANCE STUDY/OTHER CHANGES
Section 12.12. (a) The Department of Health and Human Services shall conduct a study to identify Department programs where savings in State funds could be realized because some or all of the services provided by the programs are now provided under the Health Insurance Program for Children.  The Department shall report its findings to members of the Senate Appropriations Committee on Human Resources and the House of Representatives Appropriations Subcommittee on Human Resources not later than March 1, 1999.
(b) The Office of State Budget and Management shall examine the expenditures and services of State agencies other than the Department of Health and Human Services to determine whether the expenditures and services could be covered under the State Health Insurance Program for Children.  The study shall also examine services provided by non-State agencies and funded in whole or in part with State funds.  The Office of State Budget and Management shall report its findings to members of the Senate Appropriations Committee on Human Resources and the House of Representatives Appropriations Subcommittee on Human Resources not later than March 1, 1999. 
(c) Section 8 of S.L. 1998-1 Extra Session is repealed.
(d) G.S. 143-682, as enacted by Section 3 of S.L. 1998-1 Extra Session, reads as rewritten:
"§ 143-682.  Commission established.
(a)	There is established the Commission on Children With Special Health Care Needs.  The Department of Health and Human Services shall provide staff services and space for Commission meetings.  The purpose of the Commission is to monitor and evaluate the availability and provision of health services to special needs children in this State, and to monitor and evaluate services provided to special needs children under the Health Insurance Program for Children established under Part 8 of Article 2 of Chapter 108A of the General Statutes.
(b)	The Commission shall consist of eight members appointed by the Governor, as follows:
(1)	Two parents, not of the same family, each of whom has a special needs child.  In appointing parents, the Governor shall consider appointing one parent of a child with chronic illness and one parent of a child with a developmental disability or behavioral disorder.
(2)	A licensed psychiatrist recommended by the North Carolina Psychiatric Association;
(3)	A licensed psychologist recommended by the North Carolina Psychological Association;
(4)	A licensed pediatrician whose practice includes services for special needs children, recommended by the Pediatric Society of North Carolina;
(5)	A representative of one of the children's hospitals in the State, recommended by the Pediatric Society of North Carolina;
(6)	A local public health director recommended by the Association of Local Health Directors; and
(7)	An educator providing education services to special needs children, recommended by the North Carolina Council of Administrators of Special Education.
(c)	The Governor shall appoint from among Commission members the person who shall serve as chair of the Commission.  Of the initial appointments, two shall serve one-year terms, three shall serve two-year terms, and three shall serve three-year terms.  Thereafter, terms shall be for two years.  Vacancies occurring before expiration of a term shall be filled from the same appointment category in accordance with subsection (b) of this section."

Requested by:   Senators Perdue, Martin of Guilford
STUDY OF ADDITIONAL DENTAL COVERAGE FOR THE HEALTH INSURANCE PROGRAM FOR CHILDREN
Section 12.13.  The Department of Health and Human Services shall study the issue of adding dental sealants coverage, additional fluoride treatment, and simple extractions to the dental coverage currently available in the Health Insurance Program for Children.
The Department shall report the results of this study, together with any recommendations, to the Senate Appropriations Committee on Human Resources and the House of Representatives Appropriations Subcommittee on Human Resources and to the Joint Legislative Health Oversight Committee by February 1, 1999.

SUBPART 3. FACILITY SERVICES
Requested by:   Senator Martin of Guilford
TRANSFER OF CHARITABLE SOLICITATION PROGRAM TO THE SECRETARY OF STATE
Section 12.14.  (a)	All functions, powers, duties, and obligations previously vested in the Department of Health and Human Services under Chapter 131F of the General Statutes are transferred to and vested in the Department of the Secretary of State as if by a Type I transfer defined in G.S. 143A-6.  All statutory authority, powers, duties, functions, records, personnel, property, and unexpended balances of appropriations or other funds of the program transferred pursuant to this section shall be transferred in their entirety.
(b)	G.S. 131F-2(7) reads as rewritten:
"(7) 	'Department' means the Department of the Secretary of State."
(c)	G.S. 147-36 reads as rewritten:
"§ 147-36.  Duties of Secretary of State.
It is the duty of the Secretary of State:
(1)	To perform such duties as may then be devolved upon the Secretary by resolution of the two houses of the General Assembly or either of them;
(2)	To attend the Governor, whenever required by the Governor, for the purpose of receiving documents which have passed the great seal;
(3)	To receive and keep all conveyances and mortgages belonging to the State;
(4)	To distribute annually the statutes and the legislative journals;
(5)	To distribute the acts of Congress received at the Secretary's office in the manner prescribed for the statutes of the State;
(6)	To keep a receipt book, in which the Secretary shall take from every person to whom a grant shall be delivered, a receipt for the same; but may inclose grants by mail in a registered letter at the expense of the grantee, unless otherwise directed, first entering the same upon the receipt book;
(7)	To issue charters and all necessary certificates for the incorporation, domestication, suspension, reinstatement, cancellation and dissolution of corporations as may be required by the corporation laws of the State and maintain a record thereof;
(8)	To issue certificates of registration of trademarks, labels and designs as may be required by law and maintain a record thereof;
(9)	To maintain a Division of Publications to compile data on the State's several governmental agencies and for legislative reference;
(10)	To receive, enroll and safely preserve the Constitution of the State and all amendments thereto;
(11)	To serve as a member of such boards and commissions as the Constitution and laws of the State may designate;
(12)	To administer the Securities Law of the State, regulating the issuance and sale of securities, as is now or may be directed;
(13)	To receive and keep all oaths of public officials required by law to be filed in the Secretary's office, and as Secretary of State, is fully empowered to administer official oaths to any public official of whom an oath is required; 
(14)	To receive and maintain a journal of all appointments made to any State board, agency, commission, council or authority which is filed in the office of the Secretary of State; and
(15)	To regulate the solicitation of contributions pursuant to Chapter 131F of the General Statutes."
(d)	This section becomes effective January 1, 1999.

Requested by:   Senators Plyler, Perdue, Odom, Kinnaird, Martin of Guilford
ADULT CARE HOMES STAFF RATIO STUDY
Section 12.15.  The North Carolina Study Commission on Aging shall study staffing ratios at adult care homes to determine if adequate staffing is being provided on all shifts to ensure quality of care and safety of residents.  In conducting the study, the Commission shall consider the changes in staffing ratios proposed and other matters contained in Senate Bill 1492, first edition, 1997 General Assembly, Regular Session 1998.

Requested by:  Senator Martin of Guilford
ADULT CARE HOMES REIMBURSEMENT RATE INCREASE
Section 12.16.  Section 11.70(d) of S.L. 1997-443 reads as rewritten:
"(d)	Effective October 1, 1998, the maximum monthly rate for residents in adult care home facilities shall be nine hundred fifty-six dollars ($956.00) per month per resident."

SUBPART 4. AGING
Requested by:   Senators Martin of Guilford, Perdue, Plyler, Odom
PRESCRIPTION DRUG ASSISTANCE PROGRAM STUDY
Section 12.17. (a) The Department of Health and Human Services shall work with the Fiscal Research Division of the Legislative Services Office to develop a proposal for a prescription drug assistance program.  The purpose of the program shall be to serve low-income elderly and disabled persons who are not eligible for Medicaid and who need prescription drugs to treat a condition which, if left untreated, could result in the person's admission to a nursing facility or otherwise qualifying for Medicaid.  The Department shall utilize the expertise of the Prescription Drug Work Group which authored "A Study of Options for Making Prescription Drugs More Affordable for Older Adults" to complete the analysis necessary for developing the proposal.  In developing the proposal the Department shall do the following:
(1)	Identify health conditions that need prescription drug treatment and, if not treated, that can lead to nursing home admission or otherwise qualifying the person for Medicaid;
(2)	Identify the group of low-income elderly and disabled persons in most need of assistance;
(3)	Estimate the number of persons potentially eligible for assistance under the program;
(4)	Identify appropriate limitations on levels of assistance;
(5)	Estimate the cost of providing drug assistance and the cost of administering the program;
(6)	Review similar programs in other states;
(7)	Develop a simple and cost-effective system for administering a drug assistance program;
(8)	Develop a timetable for program implementation; and
(9)	Conduct other activities that will assist in the development of the proposal.
(b) Not later than February 1, 1999, the Department shall report to the 1999 General Assembly with a complete proposal for a prescription drug assistance program.  The report shall include several options for consideration by the General Assembly.

Requested by:   Senators Martin of Guilford, Plyler, Perdue, Odom
SENIOR CENTER FUNDS
Section 12.18.  Section 11.17 of S.L. 1997-443 reads as rewritten:
"Section 11.17.  Of the funds appropriated in this act to the Department of Health and Human Services, the sum of one million dollars ($1,000,000) for the 1998-99 fiscal year shall be used to support existing senior centers and to assist in the development of new senior centers.  The Department shall allocate funds equally among senior centers throughout the State as determined by the Division of Aging.  Expenditures of State funds for senior centers shall not exceed ninety percent (90%) of all funds expended for this purpose."

Requested by:   Senators Martin of Guilford, Plyler, Perdue, Odom
IN-HOME AND CAREGIVER SUPPORT FUNDS
Section 12.19.  Section 11.18 of S.L. 1997-443 reads as rewritten:
"Section 11.18.  Of the funds appropriated in this act to the Department of Health and Human Services, Division of Aging, the sum of five million dollars ($5,000,000) for the 1997-98 fiscal year and the sum of eight million dollars ($8,000,000) for the 1998-99 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.  These funds shall be used only for direct services.  Service recipients shall pay for services based on their income in accordance with G.S. 143B-181.1(a)(10)."

Requested by:   Senator Martin of Guilford
FUNDS FOR ALZHEIMER'S ASSOCIATION CHAPTERS IN NC
Section 12.20.  Of the funds appropriated in this act to the Department of Health and Human Services, Division of Aging, the sum of one hundred thousand dollars ($100,000) for the 1998-99 fiscal year shall be allocated among the three chapters of the Alzheimer's Association, as follows:
(1)	$25,000 for the Western Alzheimer's Chapter;
(2)	$50,000 for the Southern Piedmont Alzheimer's Chapter; and
(3)	$25,000 for the Eastern Alzheimer's Chapter.
Before funds may be allocated to any Chapter under this section, the Chapter shall submit to the Division of Aging, for its approval, a plan for the use of these funds.

SUBPART 5. SOCIAL SERVICES

Requested by:   Senators Martin of Guilford, Kinnaird, Lucas
AUTHORIZED ADDITIONAL USE OF HIV FOSTER CARE AND ADOPTIVE FAMILY FUNDS
Section 12.21. Section 11.23 of S.L. 1997-443 reads as rewritten: 
"Section 11.23.  (a)	In addition to providing board payments to foster and adoptive families of HIV-infected children, as prescribed in Chapter 324 of the 1995 Session Laws, any additional funds remaining that were appropriated for this purpose shall be used as follows:
(1) 	To provide medical training in avoiding HIV transmission in the home; and
(2) 	To provide funds to support three social work positions created within the Department of Health and Human Services, for the eastern part of North Carolina to enable the case managing of families with HIV-infected children so that the children and the parents get access to medical care and so that child protective services issues are addressed rapidly and effectively.  The three positions shall be medically based and located:
a. 	One in the northeast, covering Northampton, Hertford, Halifax, Gates, Chowan, Perquimans, Pasquotank, Camden, Currituck, Bertie, Wilson, Edgecombe, and Nash Counties;
b. 	One in the central east, covering Martin, Pitt, Washington, Tyrrell, Dare, Hyde, Beaufort, Jones, Greene, Craven, and Pamlico Counties; and
c. 	One in the southeast, covering New Hanover, Robeson, Brunswick, Carteret, Onslow, Lenoir, Pender, Duplin, Bladen, and Columbus Counties.
(b)	The maximum rates for State participation in HIV foster care and adoptions assistance are established on a graduated scale as follows:
(1)	$800.00 per month per child with indeterminate HIV status;
(2)	$1,000 per month per child confirmed HIV-infected, asymptomatic;
(3)	$1,200 per month per child confirmed HIV-infected, symptomatic; and
(4)	$1,600 per month per child terminally ill with complex care needs."

Requested by:   Senator Martin of Guilford
CHILD WELFARE SYSTEM IMPROVEMENTS
Section 12.22. Section 11.57 of S.L. 1997-443 reads as rewritten:
"Section 11.57.  (a)	Of the funds appropriated in this act to the Department of Health and Human Services, Division of Social Services, the sum of two million two hundred sixty-nine thousand seven hundred fifty-two dollars ($2,269,752) for the 1997-98 fiscal year and the sum of two million two hundred sixty-nine thousand seven hundred fifty-two dollars ($2,269,752) for the 1998-99 fiscal year shall be allocated to county departments of social services for hiring or contracting for additional foster care and adoption worker and supervisor positions created after July 1, 1997, based upon a formula which takes into consideration the number of cases and the number of workers and supervisors necessary to meet recommended standards adopted by the North Carolina Association of County Directors of Social Services.  County departments of social services shall make diligent efforts to hire staff with a professional social work degree from an accredited social work program.
(b)	Of the funds appropriated in this act to the Department of Health and Human Services, Division of Social Services, the sum of one hundred fifty-nine thousand dollars ($159,000) for the 1997-98 fiscal year and the sum of one hundred sixty-three thousand dollars ($163,000) for the 1998-99 fiscal year shall be used to provide funds for the State Child Fatality Review Team established and maintained pursuant to Part 4B of Article 3 of Chapter 143B of the General Statutes. 
	Funds allocated under this subsection shall be used as follows:
(1)	To contract as needed with a statewide prevention organization and a statewide medical organization to identify and orient prevention specialists and medical professionals with experience in reviewing child fatalities to serve on the State Child Fatality Review Team; and
(2)	To pay per diem expenses as needed for the five participants in each review who are not employed by the Division of Social Services or county departments of social services.
The Division of Social Services, Department of Health and Human Services, shall report quarterly to the members of the Senate Appropriations Committee on Human Resources and the House of Representatives Appropriations Subcommittee on Human Resources and the Fiscal Research Division on the activities of the State Child Fatality Review Team and shall provide a final report to the Senate Appropriations Committee on Human Resources and the House of Representatives Appropriations Subcommittee on Human Resources within one week of the convening of the 1997 General Assembly, Regular Session 1998, including recommendations for changes in the statewide child protection system.
(c)	Counties shall not use State funds appropriated for child welfare services to supplant county funds or reduce county expenditures for child welfare services.
(d)	Notwithstanding G.S. 131D-10.6A, the Division of Social Services shall establish training requirements for child welfare services staff initially hired on and after January 1, 1998.  The minimum training requirements established by the Division shall be as follows:
(1)	Child welfare services workers must complete a minimum of 72 hours of preservice training before assuming direct client contact responsibilities;
(2)	Child protective services workers must complete a minimum of 18 hours of additional training that the Division determines is necessary to adequately meet training needs;
(3)	Foster care and adoption social workers must complete a minimum of 39 hours of additional training that the Division determines is necessary to adequately meet training needs;
(4)	Child Welfare Services supervisors must complete a minimum of 72 hours of preservice training before assuming supervisory responsibilities, and a minimum of 54 hours of additional training that the Division determines is necessary to adequately meet training needs; and
(5)	Child welfare services staff must complete 24 hours of continuing education annually thereafter.
The Division of Social Services shall ensure that training opportunities are available for county departments of social services and consolidated human services agencies to meet the training requirements of this subsection.
This subsection shall continue in effect until explicitly repealed.
(e)	Article 3 of Chapter 143B of the General Statutes is amended by inserting a new Part to read:
'Part 4B. State Child Fatality Review Team.
"§ 143B-150.20.  State Child Fatality Review Team; establishment, purpose; powers; duties.
There is established in the Department of Health and Human Services, Division of Social Services, a State Child Fatality Review Team to conduct in-depth reviews of any child fatalities which have occurred involving children and families involved with local departments of social services child protective services in the 12 months preceding the fatality.  Steps in this in-depth review shall include interviews with any individuals determined to have pertinent information as well as examination of any written materials containing pertinent information.
The purpose of these reviews shall be to implement a team approach to identifying factors which may have contributed to conditions leading to the fatality and to develop recommendations for improving coordination between local and State entities which might have avoided the threat of injury or fatality and to identify appropriate remedies.  The Division of Social Services shall make public the findings and recommendations developed for each fatality reviewed relating to improving coordination between local and State entities.  The State Child Fatality Review Team shall consult with the appropriate district attorney in accordance with G.S. 7A-675(d)	prior to the public release of the findings and recommendations.
The State Child Fatality Review Team shall include representatives of the local departments of social services and the Division of Social Services, a member of the local Community Child Protection Team, a member of the local child fatality prevention team, a representative from local law enforcement, a prevention specialist, and a medical professional.
The State Child Fatality Review Team shall have access to all medical records, hospital records, and records maintained by this State, any county, or any local agency as necessary to carry out the purposes of this subsection, including police investigative data, medical examiner investigative data, health records, mental health records, and social services records. The State Child Fatality Review Team may receive a copy of any reviewed materials necessary to the conduct of the fatality review. Any member of the State Child Fatality Review Team may share, only in an official meeting of the State Child Fatality Review Team, any information available to that member that the State Child Fatality Review Team needs to carry out its duties.
Meetings of the State Child Fatality Review Team are not subject to the provisions of Article 33C of Chapter 143 of the General Statutes.  However, the State Child Fatality Review Team may hold periodic public meetings to discuss, in a general manner not revealing confidential information about children and families, the findings of their reviews and their recommendations for preventive actions.  Minutes of all public meetings, excluding those of closed sessions, shall be kept in compliance with Article 33C of Chapter 143 of the General Statutes.  Any minutes or any other information generated during any executive session shall be sealed from public inspection.
All otherwise confidential information and records acquired by the State Child Fatality Review Team, in the exercise of its duties are confidential; are not subject to discovery or introduction into evidence in any proceedings except pursuant to an order of the court; and may only be disclosed as necessary to carry out the purposes of the State Child Fatality Review Team.  In addition, all otherwise confidential information and records created by the State Child Fatality Review Team in the exercise of its duties are confidential; are not subject to discovery or introduction into evidence in any proceedings; and may only be disclosed as necessary to carry out the purposes of the State Child Fatality Review Team.  No member of the State Child Fatality Review Team, nor any person who attends a meeting of the State Child Fatality Review Team, may testify in any proceeding about what transpired at the meeting, about information presented at the meeting, or about opinions formed by the person as a result of the meetings.  This subsection shall not, however, prohibit a person from testifying in a civil or criminal action about matters within that person's independent knowledge.
Each member of the State Child Fatality Review Team and invited participant shall sign a statement indicating an understanding of and adherence to confidentiality requirements, including the possible civil or criminal consequences of any breach of confidentiality.'"

Requested by:   Senator Martin of Guilford
CHILD PROTECTIVE SERVICES
Section 12.23.  Section 11.25 of S.L. 1997-443 reads as rewritten:
"Section 11.25.  (a)	The funds appropriated in this act to the Department of Health and Human Services, Division of Social Services, for the 1997-99 fiscal biennium for Child Protective Services shall be allocated to county departments of social services based upon a formula which takes into consideration the number of Child Protective Services cases and the number of Child Protective Services workers and supervisors necessary to meet recommended standards adopted by the North Carolina Association of County Directors of Social Services.
(b)	Funds allocated under subsection (a) of this section shall be used by county departments of social services for carrying out investigative assessments of child abuse or neglect or for providing protective or preventive services in which the department confirms abuse, neglect, or dependency."

Requested by:   Senators Plyler, Perdue, Odom, Martin of Guilford
FOOD BANKS FUNDS
Section 12.24. (a) Of the funds appropriated to the Department of Health and Human Services, Division of Social Services, for food banks in this act, the sum of two million four hundred thousand dollars ($2,400,000) for the 1998-99 fiscal year shall be allocated as grants-in-aid as follows:
(1)	Albemarle Food Bank/Food Pantry, Inc.	$400,000
(2)	MANNA Food Bank, Inc.	$400,000
(3)	The Food Bank of Northwest, NC., Inc.	$400,000
(4)	Cumberland County Action/Cape Fear
	Community Food Bank	$400,000
(5)	Second Harvest Food Bank of Metrolina, Inc.	$400,000
(6)	Food Bank, Inc.	$400,000.
(b) Of the remaining funds appropriated to the Department of Health and Human Services, Division of Social Services, for food banks in this act, the sum of one hundred thousand dollars ($100,000) shall be used in the 1998-99 fiscal year to provide start-up costs for a food bank in Eastern North Carolina.

Requested by:   Senator Martin of Guilford
REPORT ON PROGRESS TOWARDS AUTOMATED APPLICATION SYSTEM
Section 12.25. The Department of Health and Human Services shall make an interim report by November 1, 1998, and a final report within a week of the convening of the 1999 General Assembly to the members of the Senate Appropriations Committee on Human Resources and the House of Representatives Appropriations Subcommittee on Human Resources on its progress in developing and implementing a single statewide automated application system for all means-tested public assistance benefit programs. 

Requested by:   Senator Martin of Guilford
BIOMETRICS LAW CHANGES
Section 12.26.  (a) G.S. 108A-25.1 reads as rewritten:
"§ 108A-25.1.  Recipient identification system.
(a)	The Department shall establish and maintain a uniform system in the Department and in all counties of identifying all Work First recipients, except those who are children under the age of 18. This system shall provide security and portability throughout the State and between the departments within the State involved in means-tested public assistance programs and shall have the capability of identifying recipients of assistance from all means-tested programs administered or funded through the Department.
(b)	The identification system established in this section shall use multiple biometrics to ensure greater than ninety-nine percent (99%) accuracy for interdepartmental identification.
(c)	The Department shall ensure that the biometric identification system will be compatible with any existing departmental biometric identification system.
(d)	The Department shall make biometric identification a condition of eligibility for the Work First assistance program for all recipients described in subsection (a) of this section. If any recipient is denied assistance on the basis of the identification system established in this section, the recipient's whole case, or group of recipients whose eligibility for public assistance is dependent on all the other group members' financial and nonfinancial situation, shall be denied assistance."
(b)	Section 12.35 of S.L. 1997-443 reads as rewritten:
"Section 12.35.  The Department of Health and Human Services shall have the uniform system of recipient identification established in G.S. 108A-25.1 in place and operating as soon as possible after federal approval of the phase-in process.  The Department shall implement the start of the phase-in process no later than October 1, 1999. The phase-in process shall begin with a pilot program in which no more than six applicant counties selected by the Department shall  participate.  The Department shall select those counties that the Department considers most likely to produce cost reductions and other results that meet federal criteria and that lead to the probability of broader statewide and regional implementation.  The Department shall report on this pilot to the members of the Senate Appropriations Committee on Human Resources and the House of Representatives Appropriations Subcommittee on Human Resources and to the Joint Legislative Commission on Governmental Operations by April 1, 2000, together with any recommendations.  Except as otherwise provided in this Part, this Part is effective when it becomes law."
(c) This section is effective when it becomes law.

Requested by:   Senator Martin of Guilford
APPROVAL OF TANF STATE PLAN AS MODIFIED/ WELFARE LAW CHANGES
Section 12.27. (a) The General Assembly approves the plan titled "North Carolina's Temporary Assistance for Needy Families State Plan FY 1998-2000", prepared by the Department of Health and Human Services and presented to the General Assembly on May 15, 1998, as amended by changes to the welfare law required by this section and any other act of the General Assembly.
(b) G.S. 108A-27(a) reads as rewritten:
"(a)	The Department shall establish, supervise and monitor the Work First Program. The purpose of the Work First Program is to provide eligible families with short-term assistance to facilitate their movement to long-term self-sufficiency through gainful employment, not the mere reduction of the welfare roles.  The Department shall ensure that the Work First Program focus on this purpose of long-term self-sufficiency. The ultimate goal of the Work First Program is the gradual elimination of generational poverty and the Department shall ensure that all evaluations of the Work First Program, whether performed at the State or the county level, maintain this purpose and this goal of the Work First Program and effect an on-going determination of whether the Work First Program is successful in facilitating families to move to long-term self-sufficiency and in gradually eliminating generational poverty."
(c) G.S. 108A-27.1 reads as rewritten:
"§ 108A-27.1.  Time limitations on assistance.
(a)	Under the Standard Work First Program, unless an extension or an exemption is provided pursuant to the provisions of the Part or the State Plan, any cash assistance provided to a person or family in the employment program shall only be provided for a cumulative total of 24 months. After having received cash assistance for 24 months, the person or the family may reapply for cash assistance, but not until after 12 months from the last month the person or the family received cash assistance. This subsection shall not apply to child-only cases.
(b)	Electing Counties may set any time limitations on assistance it finds appropriate, so long as the time limitations do not conflict or exceed any federal time limitations."
(d) G.S. 108A-27.2 reads as rewritten:
"§ 108A-27.2.  General duties of the Department.
The Department shall have the following general duties with respect to the Work First Program:
(1)	Ensure that eligibility criteria across the State  include the Medicaid Standard of Need for the Categorically Needy;
(1a)	Ensure that the specifications of the general provisions of the State Plan regarding the procedures required when recipients are sanctioned, prescribed in G.S. 108A-27.9(c), are uniformly developed and implemented across the State;
(1b)	Ensure that qualified two-parent families receive assistance prior to meeting work requirements for three months after qualifying for assistance, in order to encourage families to stay together and to overcome barriers to self-sufficiency and gainful employment;
	(1c)	Provide technical assistance to counties developing and implementing their County Plans, including providing information concerning applicable federal law and regulations and changes to federal law and regulations that affect the permissible use of federal funds and scope of the Work First Program in a county;
(2)	Describe authorized federal and State work activities;
(3)	Define requirements for assignment of child support income and compliance with child support activities;
(4)	Establish a schedule for counties to submit their County Plans to ensure that all Standard County Plans are adopted by the Standard Program Counties by January 15 of each even-numbered year and all Electing County Plans are adopted by Electing Counties by February 1 of each even-numbered year and review and then recommend a State Plan to the General Assembly;
(5)	Ensure that the County Plans comply with federal and State laws, rules, and regulations, are consistent with the overall purposes and goals of the Work First Program, and maximize federal receipts for the Work First Program;
(6)	Prepare the State Plan in accordance with G.S. 108A-27.9 and federal laws and regulations and submit it to the Budget Director for approval;
(7)	Submit the State Plan, as approved by the Budget Director, to the General Assembly for approval;
(8)	Report monthly to the Joint Legislative Public Assistance Commission on the monthly progress reports submitted by the counties to the Department;
(9)	Develop and implement a system to monitor and evaluate the impact of the Work First Program on children and families, including the impact of the Work First Program on the economic security and health of children and families, child abuse and neglect, caseloads for child protective services and foster care, school attendance, and academic and behavioral performance. State and county agencies shall cooperate in providing information needed to conduct these evaluations, sharing data and information except where prohibited specifically by federal law or regulation;
(10)	Monitor the performance of counties relative to their County Plans and the overall goals of the Work First Program and report every six months to the Director of the Budget and the Joint Legislative Public Assistance Commission and annually to the General Assembly on the counties' attainment of the outcomes and goals;
(11)	Provide quarterly progress reports to the county departments of social services, the county boards of commissioners, and the Joint Legislative Public Assistance Commission on the performance of counties in achieving Work First Program expectations;
(12)	Report to the Joint Legislative Public Assistance Commission and the members of the Senate Appropriations Committee on Human Resources and the House of Representatives Appropriations Subcommittee on Human Resources the counties which have requested Electing status, provide copies of the proposed Electing County Plans to the Joint Legislative Public Assistance Commission and the members of the Senate Appropriations Committee on Human Resources and the House of Representatives Appropriations Subcommittee on Human Resources and make recommendations to the Joint Legislative Public Assistance Commission, the members of the Senate Appropriations Committee on Human Resources and the House of Representatives Appropriations Subcommittee on Human Resources, and the General Assembly on which of the proposed Electing County Plans ensure compliance with federal and State laws, rules, and regulations and are consistent with the overall purposes and goals for the Work First Program; and
(13)	Make recommendations to the General Assembly for approval of counties to become Electing Counties which represent, in aggregate, no more than fifteen and one-half percent (15.5%) of the total Work First caseload at October 1 of each year and, for each county submitting a plan, the reasons individual counties were or were not recommended."
(d) G.S. 108A-27.9(c) reads as rewritten:
"(c)	The State Plan shall include the following generally applicable provisions:
(1)	Provisions to ensure that eligibility criteria across the State include the Medicaid Eligibility Standard of Need for the categorically needy;
(1a)	Provisions to ensure that recipients who are sanctioned are provided a clear explanation of the sanction, and that all recipients, including those under sanction or termination for rules infractions, are fully informed of their right to legal counsel and any other representatives they choose at their own cost;
(1b)	Provisions to ensure that qualified two-parent families receive assistance prior to meeting work requirements for three months after qualifying for assistance, in order to encourage families to stay together and to overcome barriers to self-sufficiency and gainful employment;
 (1c) Provisions to ensure that no Work First
	Program recipients, required to participate in work activities, shall be employed or assigned when:
a.	Any regular employee is on layoff from the same or substantially equivalent job;
b.	An employer terminates any regular employee or otherwise causes an involuntary reduction in the employer's workforce in order to hire Work First recipients; or
c.	An employer otherwise causes the displacement of any currently employed worker or positions, including partial displacements such as reductions in hours of nonovertime work, wages, or employment benefits, in order to hire Work First recipients;
(2)	Provisions to ensure the establishment and maintenance of grievance procedures to resolve complaints by regular employees who allege that the employment or assignment of a Work First Program recipient is in violation of subdivision (1c) of this subsection, and grievance procedures to resolve complaints by Work First Participants made pursuant to subdivision (3) of this subsection;
(3)	Provisions to ensure that Work First Program participants, required to participate in work activities, shall be subject to and have the same rights under federal, State, or local laws applicable to non-Work First Program employees in similarly situated work activities, including, but not limited to, wage and hour laws, health and safety standards, and nondiscrimination laws, provided that nothing in this subdivision shall be construed to prohibit Work First Program participants from receiving additional State or county services designed to assist Work First Program participants achieve job stability and self-sufficiency;
(4)	A description of eligible federal and State work activities;
(5)	Requirements for assignment of child support income and compliance with child support activities;
(6)	Incentives for high-performing counties, contingency plans for counties unable to meet financial commitments during the term of the State Plan, and sanctions against counties failing to meet performance expectations, including allocation of any federal penalties that may be assessed against the State as a result of a county's failure to perform; and
(7)	Anything else required by federal or State law, rule, or regulation to be included in the State Plan."
(e) G.S. 108A-27.3(a) reads as rewritten:
"§ 108A-27.3.  Electing Counties – Duties of county boards of commissioners.
(a)	The duties of the county boards of commissioners in Electing Counties under the Work First Program are as follows:
(1)	Establish county outcome and performance goals based on county economic, educational, and employment factors and adopt criteria for determining the progress of the county in moving persons and families to self-sufficiency;
(2)	Establish eligibility criteria for recipients except for those criteria related to sanctioning procedures mandated across the State pursuant to G.S. 108A-27.9(c);
(3)	Prescribe the method of calculating benefits for recipients;
(4)	Determine and list persons and families eligible for the Work First Program;
(5)	If made a part of the county's Work First Program, develop and enter into Mutual Responsibility Agreements with Work First Program recipients and ensure that the services and resources that are needed to assist participants to comply with the obligations under their Mutual Responsibility Agreements are available;
(6)	Ensure that participants engage in the minimum hours of work activities required by Title IV-A;
(7)	Provide community service work for any recipient who cannot find employment;
(8)	Make payments of Work First Diversion Assistance and Work First Family Assistance to recipients having MRAs;
(9)	Monitor compliance with Mutual Responsibility Agreements and enforce the agreement provisions;
(10)	Monitor and evaluate the impact of the Work First Program on economic security and health of children and families, child abuse and neglect, caseloads for child protective services and foster care, school attendance, and academic and behavioral performance, and report the findings to the Department quarterly;
(11)	Ensure compliance with applicable State and federal laws, rules, and regulations for the Work First Program;
(12)	Develop, adopt, and submit to the Department a biennial County Plan;
(13)	Provide monthly progress reports to the Department in a format to be determined by the Department;
(14)	Develop and implement an appeals process for the county's Work First Program that substantially complies with G.S. 108A-79 and comply with the procedures related to sanctioning by the Department for all counties in the State pursuant to G.S. 108A-27.2 and prescribed as general provisions in the State Plan pursuant to G.S. 108A-27.9(c)(1)."
(f)	G.S. 108A-27.4(e) reads as rewritten:
"(e)	Each county shall include in its County Plan the following:
(1)	The number of MRAs entered into by the county;
(2)	A description of the county's plans for serving families who need child care, transportation, substance abuse services, and employment support based on the needs of the community and the availability of services and funding;
(3)	A list of the community service programs equivalent to full-time employment that are being offered to Work First Program recipients who are unable to find full-time employment;
(4)	A description of the county's eligibility criteria, benefit calculation, and any other policies adopted by the county relating to eligibility, terms, and conditions for receiving Work First Program assistance, including asset and income requirements, time limits and extensions, rewards, exemptions, and exceptions to requirements. If an Electing County Plan proposes to change eligibility requirements, benefits levels, or reduce maintenance of effort, the county shall describe the reasons for these changes and how the county intends to utilize the maintenance of effort savings;
(5)	A description of how the county plans to utilize public and private resources to assist in moving persons and families to self-sufficiency; and
(6)	Any request to the Department for waivers to rules or any proposals for statutory changes to remove any impediments to implementation of the County's Plan."
(g) G.S. 108A-27.11 reads as rewritten:
"§ 108A-27.11.  Work First Program funding.
(a)	County block grants, except funds for Work First Family Assistance, shall be computed based on the percentage of each county's total AFDC (including AFDC-EA) and JOBS expenditures, except expenditures for cash assistance, to statewide actual expenditures for those programs in fiscal year 1995-96. The resulting percentage shall be applied to the State's total certified budget for the current fiscal year, except funds budgeted for Work First Family Assistance, for Work First Program expenditures at the county level.
(b)	The following shall apply to funding for Standard Program Counties:
(1)	The Department shall make payments of Work First Family Assistance and Work First Diversion Assistance subject to the availability of federal, State, and county funds.
(2)	The Department shall reimburse counties for county expenditures under the Work First Program subject to the availability of federal, State, and county funds.
(c)	Each Electing County's allocation for Work First Family Assistance shall be computed based on the percentage of each Electing County's total expenditures for cash assistance to statewide actual expenditures for cash assistance in 1995-96. The resulting percentage shall be applied to the State's total certified budget for Work First Family Assistance for the current fiscal year. The Department shall transmit the federal funds contained in the county block grants to Electing Counties as soon as practicable after they become available to the State and in accordance with federal cash management laws and regulations. The Department shall transmit one-fourth of the State funds contained in county block grants to Electing Counties at the beginning of each quarter. Once paid, the county block grant funds shall not revert."
(h) G.S. 108A-27.12 reads as rewritten:
"§ 108A-27.12.  Maintenance of effort.
(a)	The Department shall define in the State Plan or by rule the term "maintenance of effort" based on that term as defined in Title IV-A and shall provide to counties a list of activities that qualify for federal maintenance of effort requirements.
(b)	If a county fails to comply with the maintenance of effort requirement in subsection (a) of this section, the Director of the Budget may withhold State moneys appropriated to the county pursuant to G.S. 108A-93.
(c)	The Department shall maintain the State's maintenance of effort at one hundred percent (100%) of the the State certified budget for programs under this Part during fiscal year 1996-97.  At no time shall the Department reduce State or county funds previously obligated or appropriated for child welfare services.
(d)	For Standard Program Counties, using the 1996-97 fiscal year as the base year, counties shall maintain a financial commitment to the Work First Program equal to the proportion of State funds allocated to the Work First Program. At no time shall a Standard Program County reduce State or county funds previously obligated or appropriated for child welfare services.
(e)	During the first year a county operates as an Electing County, the county's maintenance of effort shall be no less than ninety percent (90%) of the amount the county budgeted for programs under this Part during fiscal year 1996-97. If during the first year of operation as Electing the Electing County achieves one hundred percent (100%) of its goals as set forth in its Electing County Plan, then the Electing County may reduce its maintenance of effort to eighty percent (80%) of the amount the county budgeted for programs under this Part during fiscal year 1996-97 for the second year of the Electing County's operation and for all years thereafter that the county maintains Electing Status."
(i) G.S. 108A-27.16 reads as rewritten:
"§ 108A-27.16.  Use of Work First Reserve Fund.
(a)	By the fifteenth of each month, the Secretary shall certify to the Director of the Budget and the Fiscal Research Division of the General Assembly the actual expenditures for Work First Family Assistance for the fiscal year up until the beginning of that month and the projected expenditures for the remainder of the fiscal year. If the Director of the Budget declares that the State, an individual county, or an individual region is in a state of economic emergency with regard to lack of funds available for Work First Family Assistance through events beyond their control, then the Director of the Budget shall direct the Secretary to attempt to access any available federal funds. If federal funds are unavailable and the General Assembly is not in session, the Director of the Budget may, in the order below:
(1)	Use funds available from the Work First Reserve Fund established pursuant to G.S. 143-15.3C to provide Work First Family Assistance funds for the State, the individual counties, or the individual region;
(2)	Use funds available to the Department to provide Work First Family Assistance funds for the State, the individual counties, or the individual region; or
(3)	Notwithstanding G.S. 143-23, use funds available from other departments, institutions, or other spending agencies of the State to provide Work First Family Assistance funds for the State, the individual counties, or the individual region.
(b)	The Director of the Budget shall report to the Joint Legislative Commission on Governmental Operations, the Joint Legislative Public Assistance Commission, and the Senate Appropriations Committee on Human Resources and the House of Representatives Appropriations Subcommittee on Human Resources prior to making any transfer pursuant to this section.
(c)	Except as provided in this section, funds from the Work First Reserve Fund established pursuant to G.S. 143-15.3C shall not be expended until appropriated by the General Assembly."
(j) G.S. 108A-27.9(a) reads as rewritten:
"(a)	The Department shall prepare and submit to the Director of the Budget a biennial State Plan that proposes the goals and requirements for the State and the terms of the Work First Program for each fiscal year. Prior to submitting a State Plan to the General Assembly, the Department shall submit the State Plan to the Joint Legislative Public Assistance Commission for its review and then consult with local governments and private sector organizations regarding the design of the State Plan and allow 45 days to receive comments from them."
(k) Section 12.20(b) of S.L. 1997-443 reads as rewritten:
"(b)	The requirement that the Department prepare and submit the State Plan to the General Assembly for approval as prescribed in G.S. 108A-27.9(a) shall not be applicable for fiscal year 1997-98.  Until the counties have prepared their county plans and the State has prepared the State Plan in accordance with this Part and that State Plan has been enacted by the General Assembly and it becomes law, the provisions of the State Plan submitted to the federal government on October 16, 1996, shall remain in effect.  State Plans submitted after the 1997-98 fiscal year shall be enacted by the General Assembly and become law in order to be effective."
(l)	Section 12.36(a)	of S.L. 1997-443 reads as rewritten:
"Section 12.36.  (a)	Of the funds appropriated in this act to the Office of State Budget and Management, the sum of five million seventy-five thousand two hundred two dollars ($5,075,202) for the 1997-98 fiscal year and the sum of three million nine hundred thousand dollars ($3,900,000) for the 1998-99 fiscal year shall be placed in a Restrictive Reserve to Implement Welfare Reform.  These funds shall be allocated from the Reserve as follows:
(1)	$275,000 for the 1997-98 fiscal year and $400,000 for the 1998-99 fiscal year to support the establishment of a uniform system of public assistance programs as authorized under G.S. 108A-25.1, and to provide counties with workstations for biometric imaging:
(2)	$2,500,000 in each fiscal year to fund program integrity activities in each county.  These funds shall be given to the counties in a lump sum and unexpended funds shall revert to the General Fund;
(3)	$500,000 for the 1997-98 fiscal year to establish and support an Office of Inspector General in the Department of Justice;
(4)	$300,000 in each fiscal year to establish a pilot project in the Department of Labor for creation of Individual Development Accounts;
(5)	$1,500,202 for the 1997-98 fiscal year for the following purposes:
a.	To establish First Stop Employment Assistance in the Department of Commerce;
b.	To expand the Labor Market Information System in the Employment Security Commission; and
c.	To assist the Job Service Employer Committees or the Workforce Development Boards in their completion of the study of the working poor.
	Funds shall not be allocated under this subdivision unless and until the Office of State Budget and Management has certified that federal funds are not available to the Department of Commerce for these purposes; and
(6)	$700,000 for the 1998-99 fiscal year for the continued support of the Office of Inspector General in the Department of Justice, and for the First Stop Employment Assistance in the Department of Commerce.  These funds shall be allocated by the Office of State Budget and Management on the basis of need."
(m) G.S. 114-41(a)(2) reads as rewritten:
"(2)	Establish policies and standards for the investigation, detection, and elimination of fraud, abuse, waste, and mismanagement in the means-tested public assistance programs.  The Inspector General shall provide each of the county directors of social services with a copy of the policies and standards for investigation established pursuant to this subdivision, including any amendments.  When the Inspector General determines that a county social services agency has not complied with these policies and standards, the Inspector General shall notify the director of that agency of the agency's noncompliance and recommend appropriate corrective action;".
(n) Subsection (l) of this section becomes effective June 30, 1998.

Requested by:   Senator Martin of Guilford
WELFARE REFORM AUTOMATION FUNDING CARRY FORWARD
Section 12.28.  Of the funds appropriated in S.L. 1997-443 to the Department of Health and Human Services for the 1997-98 fiscal year to implement welfare reform automation specified in the Work First Business Plan, the sum of seven million dollars ($7,000,000) may be carried forward to the 1998-99 fiscal year to be used for the same purposes.

Requested by:   Senators Martin of Guilford, Phillips
CHILD PLACING AGENCIES' RATE STUDY
Section 12.29. From funds appropriated to the Department of Health and Human Services in this act, the Department shall contract with an independent consultant to conduct a study of the rate setting of the State's licensed child placing agencies.  This study shall:
(1)	Review the agencies' current rate-setting process; and
(2)	Determine whether this process is resulting in adequate reimbursement.
The Department shall report the results of this study, together with any recommendations, to the members of the Senate Appropriations Committee on Human Resources and the House of Representatives Appropriations Subcommittee on Human Resources by November 1, 1998.

SUBPART 6. MENTAL HEALTH, DEVELOPMENTAL DISABILITIES, AND SUBSTANCE ABUSE SERVICES

Requested by:   Senator Martin of Guilford
THOMAS S. COST CONTAINMENT REPORT EXTENSION
Section 12.30.  Section 11.37 of S.L. 1997-443 reads as rewritten:
"Section 11.37. 	
	(a) The Department of Health and Human Services, in conjunction with area mental health programs, shall develop and implement cost containment measures to reduce the cost of direct services.  The Department shall develop these strategies to emphasize positive client outcomes through developmental disability long-term managed supports rather than to emphasize process.  These measures shall include, but not be limited to, the following:
(1)	Reduction of those process-oriented tasks required by the State, including, but not limited to, tasks required by the Divisions of: Medical Assistance, Vocational Rehabilitation Services, Social Services, Facilities Services, and Mental Health, Developmental Disabilities, and Substance Abuse Services;
(2)	Single stream funding from all available sources;
(3)	Waivers of federal requirements in order to comply with the federal court order; and
(4)	Review and, if necessary, amendment or repeal of rules that conflict or otherwise interfere with cost containment measures.
	(b) The Department shall provide to the members of the House and Senate Appropriations Subcommittees on Human Resources, and to the Fiscal Research Division a detailed report of the status of development and implementation of cost containment measures required under this section. The report shall address each of the measures listed in subsection (b) of this section, and any other related cost containment measures developed by the Department.  The Department shall provide the report on May 1, 1999."

Requested by:   Senators Martin of Guilford, Plyler, Perdue, Odom  
MENTAL HEALTH RESERVE FOR MEDICAID MATCH
Section 12.31.  Of the funds appropriated in this act to the Department of Health and Human Services, the sum of thirty-eight million dollars ($38,000,000) for the 1998-99 fiscal year shall be placed in a Mental Health Restricted Reserve in the Office of State Budget and Management.  In addition to these funds, the Office of State Budget and Management shall transfer to the Mental Health Restricted Reserve from the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, the total amount of funds in the Division's budget allocated as matching funds for Medicaid payments to area mental health authorities.  Funds placed in the Reserve may only be used as a State match for Medicaid payments to area mental health authorities for the 1998-99 fiscal year.  Funds in the Reserve that are unexpended and unencumbered as of June 30, 1999, shall revert to the General Fund.

Requested by:   Senator Martin of Guilford
EARLY INTERVENTION SERVICES/REFERRALS/STUDY
Section 12.32. (a) Section 11.43 of S.L. 1997-443 reads as rewritten:
"Section 11.43.  Of the funds appropriated in this act to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, the sum of five million dollars ($5,000,000) for the 1997-98 fiscal year and the sum of five million dollars ($5,000,000) for the 1998-99 fiscal year shall be allocated based on a plan developed in consultation with the affected divisions within the Department and the North Carolina Interagency Coordinating Council to meet the needs of those children who are on the waiting list for early intervention services.  The Department may create up to 41 new positions, as needed, in the Division of Services for the Blind and the Division of Services for the Deaf and the Hard of Hearing to expand early intervention-related preschool services for children from birth through five years of age.
The North Carolina Schools for the Deaf and other agencies providing early intervention services to children from birth through five years of age shall ensure that Beginnings for Parents of Hearing-Impaired Children, Inc., is the first agency notified of children newly identified with hearing loss and determined to be eligible for services. The North Carolina Schools for the Deaf and other agencies providing early intervention services to hearing-impaired children from birth through five years of age shall, immediately upon receipt of referral from audiologists and other private practice providers, notify Beginnings for Parents of Hearing-Impaired Children, Inc., of the children newly identified with hearing loss and determined to be eligible for services.  The Department of Health and Human Services and the Department of Public Instruction shall include among the agencies named in the  Departments' Interagency Agreement Beginnings for Parents of Hearing-Impaired Children, Inc."
(b) The North Carolina Interagency Coordinating Council, with the assistance of the Department of Health and Human Services and the State Board of Education, shall conduct a comprehensive review of North Carolina's system for delivering early intervention services to children ages birth through five years.  This study shall identify and recommend solutions to the following:
(1)	Issues related to eligibility for services,
(2)	Quality, availability, and timeliness of services,
(3)	Improving transition from the infant-toddler program to the school-age program, and
(4)	Matters pertaining to interagency coordination, and to funding.
The ICC shall report its findings and recommendations to the members of the Senate Appropriations Committee on Human Resources and the House of Representatives Appropriations Subcommittee on Human Resources, the Education Oversight Committee, and the Fiscal Research Division not later than March 1, 1999.
(c) The Department of Health and Human Services shall develop an organizational mechanism for consolidating and improving the management of early intervention programs and services within the Department.  The Department shall report its recommendations to the Senate Appropriations Committee on Human Resources and the House of Representatives Appropriations Subcommittee on Human Resources not later than March 1, 1999.

Requested by:   Senator Martin of Guilford
NONMEDICAID REIMBURSEMENT CHANGES
Section 12.33.  Section 11.12 of S.L. 1997-443 reads as rewritten:
"Section 11.12.  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 Health and Human Services 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 Health and Human Services may negotiate with providers of medical services under the various Department of Health and Human Services 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 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.  The eligibility level for people in the Atypical Antipsychotic Medication Program in the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services shall be one hundred fifteen percent (115%) 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 Health and Human Services 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:   Senators Martin of Guilford, Plyler, Perdue, Odom
FUNDS TO REDUCE WAITING LIST FOR SERVICES FOR DEVELOPMENTALLY DISABLED PERSONS
Section 12.34. Of the funds appropriated in this act to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, the sum of four million seven hundred thousand dollars ($4,700,000) for the 1998-99 fiscal year shall be used to provide family support services to developmentally disabled individuals who are not eligible for Medicaid and who are on the Department's waiting list for services.  In addition to providing these services, the Department shall do all of the following:
(1)	Immediately pursue approval from the Health Care Financing Administration to implement aggregate funding under the CAP-MR/DD Waiver as soon as possible;
(2)	Study the feasibility of providing new or additional services as part of the regular Medicaid program which are aimed at keeping developmentally disabled individuals in their homes rather than the current criterion used in the Medicaid CAP-MR/DD Waiver Program.  The study shall include a projected cost-benefit analysis;
(3)	Work with area mental health authorities to determine why Medicaid-eligible individuals are waiting for services in the area mental health programs;
(4)	Establish goals for the State and area mental health programs that require not more than a six-month wait for services for developmentally disabled individuals; 
(5)	Collaborate with area mental health programs to maximize the use of existing funds to increase services to the developmentally disabled, non-Medicaid eligible population; and
(6)	Pursue additional Medicaid waivers which emphasize family support services for developmentally disabled individuals.
The Department shall report the results of its compliance with this section to the members of the Senate Appropriations Committee on Human Resources and the House of Representatives Appropriations Subcommittee on Human Resources not later than November 1, 1998.  The report shall also include the impact of expansion funds on the waiting list for services for developmentally disabled individuals.

Requested by:   Senator Martin of Guilford
FUNDS FOR DOROTHEA DIX DESIGN/CONTINUE STUDY OF STATE PSYCHIATRIC HOSPITALS
Section 12.35.  (a) Of the funds appropriated in this act to the Department of Health and Human Services, the sum of two million dollars ($2,000,000) for the 1998-99 fiscal year shall be allocated for the design of a new Dorothea Dix Hospital.  The Department shall make an interim progress report on the status of the design to the members of the Senate Appropriations Committee on Human Resources and the House of Representatives Appropriations Subcommittee on Human Resources not later than February 1, 1999.
(b) Of the funds appropriated in this act to the Department of Health and Human Services, the sum of seven hundred fifty thousand dollars ($750,000) for the 1998-99 fiscal year shall be used to continue to study the State psychiatric hospitals.  The study shall build upon results of the MGT, Inc., study and shall assess:
(1)	How many and what type of beds are needed statewide;
(2)	The area program capacity and ability to efficiently and effectively absorb specific services now provided within the existing State hospital system; and
(3)	The nonpublic system's capacity to absorb specific services identified by MGT as being inappropriately provided by the current State hospital system.
The study shall also make recommendations for other system changes as identified in order to appropriately downsize the State hospital system while maintaining existing service levels and ultimately increasing services to clients in the community.  The Department shall solicit proposals to conduct the study.
(c) The Department shall make an interim report to the members of the Senate Appropriations Committee on Human Resources and the House of Representatives Appropriations Subcommittee on Human Resources not later than February 1, 1999, and shall make a final report not later than May 1, 1999.

Requested by:   Senator Martin of Guilford
CHILD MENTAL HEALTH CULTURAL DIVERSITY CURRICULUM
Section 12.36.  Of the funds appropriated in this act to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, the sum of seventy-five thousand dollars ($75,000) for the 1998-99 fiscal year shall be used for the direct purchase of computer software or printed materials for training curricula that will enhance the promotion of cultural diversity and cultural competencies in services to children, families, and communities.  These funds may be used only for the direct purchase of software or printed informational materials and any funds not used for this purpose shall revert on June 30, 1999.

SUBPART 7. CHILD DEVELOPMENT

Requested by:   Senator Martin of Guilford
EARLY CHILDHOOD EDUCATION AND DEVELOPMENT INITIATIVES EXPANSION FUNDS
Section 12.37. In addition to the funds allocated for Early Childhood Education and Development Initiatives in Section 11.55(p) of S.L. 1997-443, of the funds appropriated to the Department of Health and Human Services, Division of Child Development, for Early Childhood Education and Development Initiatives, the sum of fifty-six million six hundred thirty-four thousand seven hundred forty-three dollars ($56,634,743) shall be used to administer and deliver direct services in all 100 counties.  Of this amount, the North Carolina Partnership for Children, Inc., may use up to two million dollars ($2,000,000) for State level administration of the program.

Requested by:   Senators Martin of Guilford, Plyler, Perdue, Odom
TEACH PROGRAM
Section 12.38.  Of the funds appropriated in this act to the Department of Health and Human Services for the Teacher Education and Compensation Helps (TEACH) Program, the sum of one hundred thousand dollars ($100,000) for the 1998-99 fiscal year shall be used to establish a capital fund for TEACH, provided that these funds are matched by expenditures of private funds at a ratio of two private dollars for every one dollar expended from these funds, and provided further that expenses related to office space are not included in the costs charged to the State for the administration of the Program.

SUBPART 8. YOUTH SERVICES
Requested by:   Senator Martin of Guilford
DYS TRAINING SCHOOLS EVALUATION
Section 12.39. (a) Of the funds appropriated in this act to the Department of Health and Human Services, the sum of four hundred seventy-five thousand dollars ($475,000) shall be used to ensure that multidisciplinary diagnoses and evaluations, as provided for in G.S. 115C-113, are made on all students in training schools operated by the Division of Youth Services and that the requisite resources and services are provided for all DYS training school students who are identified as children with special needs. The Department shall use these funds to provide evaluations, resources, and services, but shall not reduce current DYS services.  Lapsed salary funds shall not be used to create new permanent positions.
(b) Within 30 days of adjournment sine die of the 1997 General Assembly, the Department shall report to the members of the Senate Appropriations Committee on Human Resources and the House of Representatives Appropriations Subcommittee on Human Resources and the Fiscal Research Division the line items in the Department's budget from which funds allocated under this section will be taken.

SUBPART 9. HEALTH SERVICES
Requested by:   Senator Martin of Guilford
NC HEALTHY START FOUNDATION/REPORTING
Section 12.40.  Section 15.29 of S.L. 1997-443 reads as rewritten:
"Section 15.29.  The North Carolina Healthy Start Foundation shall:
(1)	By January 15, 1999, and more frequently as requested, report to the Senate Appropriations Committee on Human Resources and the House of Representatives Appropriations Subcommittee on Human Resources and the Fiscal Research Division the following information:
a.	State fiscal year 1997-98 program activities, objectives, and accomplishments;
b.	State fiscal year 1997-98 itemized expenditures and fund sources;
c.	State fiscal year 1998-99 planned activities, objectives, and accomplishments including actual results through December 31, 1998; and
d.	State fiscal year 1998-99 estimated itemized expenditures and fund sources including actual  expenditures and fund sources through December 31, 1998.
(2)	Provide to the Fiscal Research Division a copy of the Foundation's annual audited financial statement within 30 days of issuance of the statement."

Requested by:   Senator Martin of Guilford
PREVENT BLINDNESS, INC./REPORTING
Section 12.41.  Section 15.33 of S.L. 1997-443 reads as rewritten:
"Section 15.33.  Prevent Blindness, Inc., shall:
(1)	By January 15, 1999, and more frequently as requested, report to the Senate Appropriations Committee on Human Resources and the House of Representatives Appropriations Subcommittee on Human Resources and the Fiscal Research Division the following information:
a.	State fiscal year 1997-98 program activities, objectives, and accomplishments;
b.	State fiscal year 1997-98 itemized expenditures and fund sources;
c.	State fiscal year 1998-99 planned activities, objectives, and accomplishments including actual results through December 31, 1998; and
d.	State fiscal year 1998-99 estimated itemized expenditures and fund sources including actual  expenditures and fund sources through December 31, 1998.
(2)	Provide to the Fiscal Research Division a copy of the Prevent Blindness, Inc., annual audited financial statement within 30 days of issuance of the statement."

Requested by:   Senator Martin of Guilford
WIC PROGRAM FUNDS
Section 12.42.  Section 15.27 of S.L. 1997-443 reads as rewritten:
"Section 15.27.  Of the funds appropriated to the Department of Health and Human Services for the Women, Infants, and Children (WIC)	Program, the sum of one million two hundred eighty thousand dollars ($1,280,000) for the 1997-98 fiscal year and the sum of one million two hundred eighty thousand dollars ($1,280,000) for the 1998-99  fiscal year shall, if sufficient federal food funds are available, be used for the WIC Program as follows:
(1)	Not more than $500,000 in each fiscal year shall be used to establish new WIC Programs in Head Start or other private or public nonprofit agencies to serve additional mothers, infants, and children.  The Department shall utilize these funds for local program operations including staff to provide eligibility determination, nutrition education, and health care referrals.  In selecting the new WIC Programs, the Department shall consider accessibility to the target population including location and hours of operation.
(2)	Not more than $250,000 in each fiscal year shall be used to renovate facilities of existing programs where space constraints limit program expansion, and to fund rental costs in areas where accessible donated space is not available.  In selecting the facilities the Department shall consider accessibility to the target population including location and extended hours of operation.  In determining whether to fund rental of space, the Department shall ensure that options for using donated accessible space have been considered.  Not more than $75,000 of funds allocated under this subdivision for each fiscal year shall be used for rental of space.
(3)	Not more than $300,000 in each fiscal year shall be used to purchase physician-prescribed special formulas and nutritional supplements for infants, children, and women.
(4)	Not more than $180,000 in the 1998-99 fiscal year shall be used to provide the required State match to the WIC farmers' market project.
(5)	Not more than $50,000 in the 1998-99 fiscal year shall be used for the purpose of establishing and maintaining a Public Health Nutritionist Internship Program.
If sufficient federal food funds are not available then funds appropriated for the WIC Program under this section shall be used to supplement federal food funds and any balance in funds remaining after the supplemental use shall be used in accordance with subdivisions (1) through (5) of this section."

Requested by:   Senator Martin of Guilford
HEALTHY MOTHERS/HEALTHY CHILDREN PILOT PROGRAM
Section 12.43. (a) The Department of Health and Human Services may initiate a Healthy Mothers/Healthy Children Grant Program in up to six local health departments.  The Department may consolidate federal Maternal and Child Health Block Grant funds and State funds appropriated for the Maternal Health, Women's Preventive Health, Child Health, Child Service Coordination and Immunization programs into a Healthy Mothers/Healthy Children Grant Program for each participating local health department.  Local health departments participating in the Healthy Mothers/Healthy Children Grant Program may use grant funds to do any of the following:
(1)	Improve the health status of women of childbearing age by expanding preventive health services and reducing and/or controlling health risk factors.
(2)	Reduce infant mortality and morbidity by preventing high-risk pregnancies, improving the health status of women before pregnancy, improving access to prenatal care, reducing prematurity, and improving survival rates of pre-term and other high-risk infants.
(3)	Reduce mortality and morbidity among children and youth by reducing the incidence of communicable disease and other preventable conditions, the occurrence and severity of injuries, the incidence of genetic disorders, and the incidence of chronic illnesses and developmental disabilities.
(4)	Enhance the health and functional status of children and youth with chronic handicapping conditions by reducing the severity of such conditions through the provision of early identification, diagnosis, treatment, and care coordination services.
(b) The Department shall not include federal categorical funds, competitive special project funds, and funds for regionalized services in grant funds awarded to local health departments under the Healthy Mothers/Healthy Children Grant Program.
(c) The Department shall require participating local health departments to identify and report expenditures by program in order to monitor and track the use of Healthy Mothers/Healthy Children Grant Program funds to meet federal and State reporting requirements.  In addition, the Department shall require local health departments to report on the administrative, programmatic, and health outcome benefits which are realized by providing localities greater flexibility.
(d) The Department shall report to members of the Senate Appropriations Committee on Human Resources and the House of Representatives Appropriations Subcommittee on Human Resources on the implementation of the Healthy Mothers/Healthy Children Grant Program not later than April 1, 1999.

Requested by:   Senator Martin of Guilford
CHILD FATALITY TASK FORCE
Section 12.44.  (a) Subsections (b), (c), and (d) of Section 285 of Chapter 321 of the 1993 Session Laws are repealed.
(b) G.S. 143-573(c) reads as rewritten:
"(c)	All members of the Task Force are voting members. Vacancies in the appointed membership shall be filled by the appointing officer who made the initial appointment. Terms shall be two years.  The members shall elect a chair who shall preside for the duration of the chair's term as member.  In the event a vacancy occurs in the chair before the expiration of the chair's term, the members shall elect an acting chair to serve for the remainder of the unexpired term."
(c) G.S. 143-574 reads as rewritten:
"§ 143-574.  Task Force – duties.
The Task Force shall:
(1)	Undertake a statistical study of the incidence and causes of child deaths in this State and establish a profile of child deaths.  The study shall include (i) an analysis of all community and private and public agency involvement with the decedents and their families prior to death, and (ii) an analysis of child deaths by age, cause, and geographic distribution;
(2)	Develop a system for multidisciplinary review of child deaths.  In developing such a system, the Task Force shall study the operation of existing local teams.  The Task Force shall also consider the feasibility and desirability of local or regional review teams and, should it determine such teams to be feasible and desirable, develop guidelines for the operation of the teams.  The Task Force shall also examine the laws, rules, and policies relating to confidentiality of and access to information that affect those agencies with responsibilities for children, including State and local health, mental health, social services, education, and law enforcement agencies, to determine whether those laws, rules, and policies inappropriately impede the exchange of information necessary to protect children from preventable deaths, and, if so, recommend changes to them;
(3)	Receive and consider reports from the State Team; and
(4)	Perform any other studies, evaluations, or determinations the Task Force considers necessary to carry out its mandate."
(d) G.S. 143-577 reads as rewritten:
"§ 143-577.  Task Force – reports.
	The Task Force shall report annually to the Governor and General Assembly, within the first week of the convening or reconvening of the General Assembly.  The report shall contain at least a summary of the conclusions and recommendations for each of the Task Force's duties, as well as any other recommendations for changes to any law, rule, and policy that it has determined will promote the safety and well-being of children.  Any recommendations of changes to law, rule, or policy shall be accompanied by specific legislative or policy proposals and detailed fiscal notes setting forth the costs to the State.
		."

Requested by:   Senator Martin of Guilford
MATERNAL OUTREACH
Section 12.45. (a) The Department of Health and Human Services shall ensure that local communities who receive State funds for intensive home visiting programs, including the Olds and Healthy Families America models, collect and report data to the Department which will allow a valid and reliable evaluation of the long-term effectiveness of this intervention in improving maternal and child outcomes.  The Department shall design a standard reporting system for local programs to use in supplying this data.  At a minimum, the data should provide information on the effect of prenatal and infancy home visits by nurses on all of the following:
(1)	Preterm delivery, low-birth weight, and infant morbidity/mortality.
(2)	Childhood injuries.
(3)	Childhood maltreatment.
(4)	Immunizations.
(5)	Mental development and behavioral problems.
The data shall also provide information on maternal life course, as measured by:
(6)	Subsequent pregnancy.
(7)	Educational achievement.
(8)	Labor force participation.
(9)	Use of public assistance programs.
(b) The Department shall report on its plans for developing and implementing a scientifically sound methodology for evaluating these programs by February 1, 1999, to the members of the Senate Appropriations Committee on Human Resources and the House of Representatives Appropriations Subcommittee on Human Resources and to the Fiscal Research Division. 

Requested by:   Senators Martin of Guilford, Kinnaird
AIDS DRUG ASSISTANCE PROGRAM (ADAP)
Section 12.46.  (a)	The Department of Health and Human Services shall develop and implement a cost-containment plan for the purpose of serving additional clients of the HIV Medications Program.  In developing the Plan, the Department shall do the following:
(1)	Explore the feasibility of obtaining a Medicaid expansion waiver;
(2)	Estimate the potential cost savings to the State of participating in the 340B Drug Pricing Program by studying various ways of adhering to program requirements while also realizing cost savings;
(3)	Examine, for possible adoption, ADAP and other similar program cost-saving strategies in other states, including, but not limited to, restrictive formularies, prescription limitations, insurance continuity, and insurance purchasing programs, and biannual or quarterly reauthorizations; and
(4)	Conduct other activities that will assist in the development of a viable plan.
(b) The Department shall implement cost-containment programs or mechanisms, other than pharmaceutical rebates, by October 1, 1998, and shall report to the members of the Senate Appropriations Committee on Human Resources and the House of Representatives Appropriations Subcommittee on Human Resources
not later than December 15, 1998, on the following:
(1)	The realized and projected savings,
(2)	Findings from subdivisions (1), (2), and (3) of subsection (a) of this section; and
(3)	Recommendations for legislative action.
(c) Savings realized through cost-containment measures shall be used to serve additional ADAP participants in fiscal year 1998-99.  Funds not expended for authorized program costs shall revert to the General Fund.
(d) The Department shall also develop a comprehensive information system on AIDS/HIV clients receiving services from the State.  This system shall include information on program usage patterns of ADAP participants, including, but not limited to, frequency of prescription purchases, types of medications prescribed, and patient compliance with physician treatment recommendations.

Requested by:   Senator Martin of Guilford
OSTEOPOROSIS TASK FORCE/CHANGE REPORT DATE
Section 12.47.  Section 15.32 of S.L. 1997-443 reads as rewritten:
"Section 15.32.  (a)	Of the funds appropriated in this act to the Department of Health and Human Services, Division of Community Health, the sum of two hundred  thousand dollars ($200,000) for the 1997-98 fiscal year shall be allocated for the Osteoporosis Prevention Task Force created under this section.
(b)	The North Carolina Osteoporosis Prevention Task Force is created in the Division of Community Health, Department of Health and Human Services.
(c)	The Task Force shall have 25 members.  The Governor shall appoint the Chair, and the Vice-Chair shall be elected by the Task Force.  The Director of the Division of Community Health, Department of Health and Human Services, the Director of the Division of Medical Assistance in the Department of Health and Human Services, and the Director of the Division of Aging in the Department of Health and Human Services, or their designees, shall be members of the Task Force.  Appointments to the Task Force shall be made as follows:
(1)	By the President Pro Tempore of the Senate, as follows:
a.	Two members of the Senate;
b.	A representative of a women's health organization;
c.	A local health director;
d.	A certified health educator;
e.	A representative of the North Carolina Association of Area Agencies on Aging; and
f.	A person with osteoporosis.
(2)	By the Speaker of the House of Representatives, as follows:
a.	Two members of the House of Representatives;
b.	A county commissioner;
c.	A licensed dietitian/nutritionist;
d.	A pharmacist;
e.	A registered nurse; and
f.	A person with osteoporosis.
(3)	By the Governor, as follows:
a.	A practicing family physician, rheumatologist, or endocrinologist;
b.	A president or chief executive officer of a business upon recommendation of a North Carolina wellness council which is a member of the Wellness Councils of America;
c.	A news director of a newspaper or television or radio station;
d.	A representative of a North Carolina affiliate of the National Osteoporosis Foundation;
e.	A representative from the North Carolina Cooperative Extension Service;
f.	A representative of the Governor's Council on Physical Fitness and Health; and
g.	Two members at large.
(d)	Each appointing authority shall assure insofar as possible that its appointees to the Task Force reflect the composition of the North Carolina population with regard to ethnic, racial, age, gender, and religious composition.
(e)	The General Assembly and the Governor shall make their appointments to the Task Force not later than 30 days after the adjournment of the 1997 General Assembly, Regular Session 1998.  A vacancy on the Task Force shall be filled by the original appointing authority, using the criteria set out in this section for the original appointment.
(f)	The Task Force shall meet at least quarterly or more frequently at the call of the Chair.
(g)	The Task Force Chair may establish committees for the purpose of making special studies pursuant to its duties and may appoint non-Task Force members to serve on each committee as resource persons.  Resource persons shall be voting members of the committees and shall receive subsistence and travel expenses in accordance with G.S. 138-5 and G.S. 138-6.  Committees may meet with the frequency needed to accomplish the purposes of this section.
(h)	Members of the Task Force shall receive per diem and necessary travel and subsistence expenses in accordance with G.S. 120-3.1, 138-5, and 138-6, as applicable.
(i)	A majority of the Task Force shall constitute a quorum for the transaction of its business.
(j)	The Task Force may use funds allocated to it to establish one full-time limited position and for other expenditures needed to assist the Task Force in carrying out its duties.
(k)	The Osteoporosis Prevention Task Force has the following duties:
(1)	To undertake a statistical and qualitative examination of the incidence of and causes of osteoporosis deaths and risks, including identification of subpopulations at highest risk for developing osteoporosis, and establish a profile of the osteoporosis burden in North Carolina.
(2)	To raise public awareness on the causes and nature of osteoporosis, personal risk factors, value of prevention and early detection, and options for diagnosing and treating the disease.
(3)	To identify priority strategies which are effective in preventing and controlling risks for osteoporosis, and in diagnosing and treating osteoporosis.
(4)	To identify, examine limitations of, and recommend to the Governor and the General Assembly changes to existing laws, regulations, programs, services, and policies to enhance osteoporosis prevention, diagnosis, and treatment for the people of North Carolina.
(5)	To determine and recommend to the Governor and the General Assembly the funding and strategies needed to enact new or to modify existing laws, regulations, programs, services, and policies to enhance osteoporosis prevention, diagnosis, and treatment for the people of North Carolina.
(6)	To develop a statewide comprehensive Osteoporosis Prevention Plan, and strategies for Plan implementation and for promoting the Plan to the general public, State and local elected officials, various public and private organizations and associations, businesses and industries, agencies, potential funding sources, and other community resources.
(7)	To identify strategies to facilitate specific commitments to help implement the Plan from the entities listed in subdivision (6) above.
(8)	To facilitate coordination of and communication among State and local agencies and organizations regarding current or future involvement in achieving the aims of the Osteoporosis Prevention Plan.
(9)	To receive and consider reports and testimony from individuals, local health departments, community-based organizations, voluntary health organizations, and other public and private organizations statewide, to learn more about their contributions to osteoporosis diagnosis, prevention, and treatment, and their ideas for improving osteoporosis prevention, diagnosis, and treatment in North Carolina.
(l)	The Task Force shall submit a progress report to the Joint Legislative Commission on Governmental Operations, the Governor, and the Fiscal Research Division not later than April 1, 1998. The progress report shall address:
(1)	Progress being made in fulfilling the duties of the Task Force and in developing the Osteoporosis Prevention Plan,
(2)	The anticipated time frame for completion of the Prevention Plan, and
(3)	Recommended strategies or actions to reduce the occurrence of and burdens suffered from osteoporosis by citizens of this State.
The Task Force shall submit its final report to the 1999 General Assembly, the Governor, and the Fiscal Research Division not later than February 15, 1999.
(m)	Upon submission of its final report to the Governor and the 1999 General Assembly, the Task Force shall expire."

Requested by:   Senators Odom, Martin of Guilford
CANCER CONTROL ADVISORY COMMITTEE/ADDITI0NAL MEMBERS
Section 12.48.  (a) G.S. 130A-33.50 reads as rewritten:
"§ 130A-33.50.  Advisory Committee on Cancer Coordination and Control established; membership, compensation.
(a)	The Advisory Committee on Cancer Coordination and Control is established in the Department.
(b)	The Committee shall have up to 34 members, including the Secretary of the Department or the Secretary's designee. The members of the Committee shall elect a chair and vice-chair from among the Committee membership. The Committee shall meet at the call of the chair. Six of the members shall be legislators, three of whom shall be appointed by the Speaker of the House of Representatives, and three of whom shall be appointed by the President Pro Tempore of the Senate. Four of the members shall be cancer survivors, two of whom shall be appointed by the Speaker of the House of Representatives, and two of whom shall be appointed by the President Pro Tempore of the Senate. The remainder of the members shall be appointed by the Governor as follows:
(1)	One member from the Department of Environment and Natural Resources;
(2)	Three members, one from each of the following: the Department, the Department of Public Instruction, and the North Carolina Community College System;
(3)	Four members representing the cancer control programs at North Carolina medical schools, one from each of the following: the University of North Carolina at Chapel Hill School of Medicine, the Bowman Gray School of Medicine, the Duke University School of Medicine, and the East Carolina University School of Medicine;
(4)	One member who is an oncology nurse representing the North Carolina Nurses Association;
(5)	One member representing the Cancer Committee of the North Carolina Medical Society;
(6)	One member representing the Old North State Medical Society;
(7)	One member representing the American Cancer Society, North Carolina Division, Inc.;
(8)	One member representing the North Carolina Hospital Association;
(9)	One member representing the North Carolina Association of Local Health Directors;
(10)	One member who is a primary care physician licensed to practice medicine in North Carolina;
(11)	One member representing the American College of Surgeons;
(12)	One member representing the North Carolina Oncology Society;
(13)	One member representing the Association of North Carolina Cancer Registrars;
(14)	One member representing the Medical Directors of the North Carolina Association of Health Plans; and
(15)	Up to four additional members at large.
Except for the Secretary, the members shall be appointed for staggered four-year terms and until their successors are appointed and qualify. The Governor may remove any member of the Committee from office in accordance with the provisions of G.S. 143B-13. Members may succeed themselves for one term and may be appointed again after being off the Committee for one term.
(c)	The Speaker of the House of Representatives, the President Pro Tempore of the Senate, and the Governor shall make their appointments to the Committee not later than 30 days after the adjournment of the 1993 Regular Session of the General Assembly. A vacancy on the Committee shall be filled by the original appointing authority, using the criteria set out in this section for the original appointment.
(d)	To the extent that funds are made available, members of the Committee shall receive per diem and necessary travel and subsistence expenses in accordance with G.S. 138-5.
(e)	A majority of the Committee shall constitute a quorum for the transaction of its business.
(f)	The Committee may use funds allocated to it to employ an administrative staff person to assist the Committee in carrying out its duties. The Secretary shall provide clerical and other support staff services needed by the Committee."
(b) The following members appointed to the Committee under subsection (a) of this section shall serve initial two-year terms: the member representing the American College of Surgeons; the member representing the Medical Directors of the North Carolina Association of Health Plans; the additional cancer survivor appointed by the Speaker of the House of Representatives; and two of the four additional members at large.

Requested by:   Senators Warren, Martin of Guilford, Plyler, Perdue, Odom
HEART DISEASE/STROKE PREVENTION FUNDS
Section 12.49. Of the funds appropriated in this act to the Department of Health and Human Services, Division of Community Health, the sum of three hundred thousand dollars ($300,000) for the 1998-99 fiscal year shall be used for one or more of the following purposes:
(1)	To establish the Be Active North Carolina (BANC) Initiative in the Governor's Council on Physical Fitness and Health as recommended by the Heart Disease and Stroke Prevention Task Force and proposed in Senate Bill 1309, first edition, 1997 General Assembly, Regular Session 1998.
(2)	To establish a Cardiovascular Health Data Unit (CVD) in the Department of Health and Human Services as recommended by the Heart Disease and Stroke Prevention Task Force and proposed in Senate Bill 1310, first edition, 1997 General Assembly, Regular Session 1998.
(3)	To establish and implement the North Carolina Strike Out Stroke Project as recommended by the Heart Disease and Stroke Prevention Task Force and  proposed in Senate Bill 1308, first edition, 1997 General Assembly, Regular Session 1998.

PART XIII. DEPARTMENT OF AGRICULTURE AND CONSUMER SERVICES
Requested by:   Senators Weinstein, Albertson, Phillips, Purcell, Dalton
FARMLAND PRESERVATION PILOT PROGRAM
Section 13.  The five hundred thousand dollars ($500,000) appropriated in this act to the North Carolina Farmland Preservation Trust Fund, established in G.S. 106-744 and administered by the Commissioner of Agriculture and Consumer Services, for the 1998-99 fiscal year shall be used for a farmland preservation pilot program, whereby these funds shall be used to purchase agricultural conservation easements pursuant to The Farmland Preservation Enabling Act, Article 61 of Chapter 106 of the General Statutes.  These funds may also be used for the reasonable costs of administering this pilot program.  No later than March 15, 1999, the Department of Agriculture and Consumer Services shall report the results of this pilot program to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division.  This report shall include an itemized list of agricultural conservation easements purchased under the pilot program, the location of the farmland subject to the easement, and the acreage protected by the easement.

Requested by:   Senators Martin of Pitt, Albertson
DUPLIN FAIR AND EXHIBITION CENTER FUNDS
Section 13.1.  The one million dollars ($1,000,000) appropriated to the Department of Agriculture and Consumer Services for the 1997-98 fiscal year in S.L. 1997-443 for a Fair and Exhibition Center in Duplin County may be used for an agricultural center that includes fairgrounds, livestock exhibition facilities, multipurpose meeting facilities, and offices for allied federal and local agencies and may be used for professional services related to designing, financing, and procuring these facilities.

Requested by:   Senators Martin of Pitt, Weinstein
SPECIAL RESERVE FUNDS FOR CERTAIN AGRICULTURAL CENTERS
Section 13.2.  Article 1 of Chapter 106 of the General Statutes is amended by adding a new section to read:
"§ 106-6.2.  Create special revenue funds for certain agricultural centers.
(a)	The Eastern North Carolina Agricultural Center Fund is created within the Department of Agriculture and Consumer Services as a special revenue fund.  This Fund shall consist of receipts from the sale of naming rights to any facility located at the Eastern North Carolina Agricultural Center at Williamston, investments earnings on these moneys, and any gifts, bequests, or grants from any source for the benefit of the Eastern North Carolina Agricultural Center.  All interest that accrues to this Fund shall be credited to this Fund. Any balance remaining in this Fund at the end of any fiscal year shall not revert.  The Department may use this Fund only to promote, improve, repair, maintain, or operate the Eastern North Carolina Agricultural Center.
(b)	The Southeastern North Carolina Agricultural Center Fund is created within the Department of Agriculture and Consumer Services as a special revenue fund.  This Fund shall consist of receipts from the sale of naming rights to any facility located at the Southeastern North Carolina Agricultural Center at Lumberton, investments earnings on these moneys, and any gifts, bequests, or grants from any source for the benefit of the Southeastern North Carolina Agricultural Center.  All interest that accrues to this Fund shall be credited to this Fund. Any balance remaining in this Fund at the end of any fiscal year shall not revert.  The Department may use this Fund only to promote, improve, repair, maintain, or operate the Southeastern North Carolina Agricultural Center."

Requested by:   Senator Martin of Pitt
UMSTEAD ACT EXEMPTION FOR DEPARTMENT AGRICULTURAL CENTERS AND LIVESTOCK FACILITIES
Section 13.3.  G.S. 66-58(b) is amended by inserting the following subdivision:
"(13d)	Agricultural centers or livestock facilities operated by the Department of Agriculture and Consumer Services."

PART XIV.  DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES
Requested by:   Senator Martin of Pitt 
CONSERVATION TAX CREDIT PROGRAM/REPORT REQUIREMENT
Section 14.  Article 16 of Chapter 113A of the General Statutes is amended by adding a new section to read:
"§ 113A-236.  Report requirement.
The Department shall report no later than January 15 of each year to the Joint Legislative Commission on Governmental Operations, the Fiscal Research Division, and the Environmental Review Commission.  This report shall include the following information:
(1)	An itemized list of all grants distributed since the last report, including the grant recipient, the grant amount, and the use of the grant funds under G.S. 113A-233.
(2)	The total amount of grant funds distributed since the last report for each allowable use of grant funds listed under G.S. 113A-233(a).
(3)	The program activities and accomplishments since the last report, including efforts by the Department to promote the program by providing information or educational offerings that explain conservation tax credits and conservation easements to landowners and land-related professionals.
(4)	The number of interests in real property donated under the program and the total acreage donated under the program since the last report."

Requested by:   Senator Soles
NORTH CAROLINA MUSEUM OF FORESTRY
Section 14.1.  Part 29 of Article 7 of Chapter 143B of the General Statutes is amended by adding a new section to read:
"§ 143B-344.22.  North Carolina Museum of Forestry; satellite museum.
The Department of Environment and Natural Resources shall establish and administer the North Carolina Museum of Forestry in Columbus County as a satellite museum of the North Carolina State Museum of Natural Sciences."

Requested by:   Senators Martin of Pitt, Perdue
MARINE FISHERIES APPEALS PANEL/ROTATE MEETING LOCATIONS
Section 14.2.  Section 3(a) of Chapter 576 of the 1993 Session Laws, Regular Session 1994, as amended by Section 3 of Chapter 675 of the 1993 Session Laws, Regular Session 1994; subsection (a) of Section 26.5 of Chapter  507 of the 1995 Session Laws; Section 7 of S.L. 1997-256; Section 3 of S.L. 1997-347; and Section 6.1 of S.L. 1997-400, reads as rewritten:
"(d)	During the moratorium, there shall be an Appeals Panel to consider license applications for new licenses.
(1)	The Appeals Panel shall consist of the Fisheries Director, the Chairman of the Marine Fisheries Commission, and one other person selected by the Cochairs of the Joint Legislative Commission on Seafood and Aquaculture to review hardship or emergency license cases.
(2)	The Marine Fisheries Commission shall adopt temporary rules to govern the operation of the Appeals Panel.  The Appeals Panel is exempt from the provisions of Article 3 of Chapter 150B of the General Statutes.  Decisions of the Appeals Panel shall be subject to judicial review under the provisions of Article 4 of Chapter 150B of the General Statutes.
(3)	The Appeals Panel may grant a license if it finds that the denial of the license application would create an emergency or hardship on the individual or the State.  In no event shall the Appeals Panel grant a license when the total number of licenses in the specific category would exceed the number of licenses in effect on June 30, 1994.
(4)	The Appeals Panel may grant an emergency temporary license due to death, illness, or incapacity, for a period not to exceed 30 days.  Emergency temporary licenses shall be limited to vessel crab licenses authorized under G.S. 113-153.1(d).
(5)	Beginning in July 1998, the Appeals Panel shall rotate the location of its meetings among the three districts of the State in the following order:   Northeastern district, Central district, Southern district, Central district, Northeastern district, Central district, Southern district.  The order of rotation is arranged so that the meeting location for every other meeting is in the Central district of the State. The meeting location for July 1998 shall be in the Northeastern district of the State and the rotation of the meeting locations shall continue as provided by this subdivision.
		If an applicant who is appealing a licensing decision in accordance with this section requests in writing that the Appeals Panel schedule the person's hearing when it meets in that person's home district, the Appeals Panel shall calendar that person's hearing for his or her home district as requested."

Requested by:  Senator Perdue
FISHERY MANAGEMENT PLANS/REGIONAL ADVISORY COMMITTEE
Section 14.3.  G.S. 113-182.1(c) reads as rewritten:
"(c)	The Chair of the Marine Fisheries Commission shall appoint a fishery management plan advisory committee for each Fishery Management Plan that is being developed.  Each fishery management plan advisory committee shall be composed of commercial fishermen, recreational fishermen, and scientists, all with expertise in the fishery for which the Fishery Management Plan is being developed.  The fishery management plan advisory committees, along with the regional advisory committees established under G.S. 143B-289.57, shall assist the Department and the Marine Fisheries Commission in the development of all aspects of the Fishery Management Plans, including the development of preservation management measures."

Requested by:   Senators Plyler, Perdue, Odom
GRASSROOTS SCIENCE PROGRAM
Section 14.4.  Section 15.1 of S.L. 1997-443 reads as rewritten:
"Section 15.1.  Funds appropriated in this act for the Grassroots Science Program shall be allocated as grants-in-aid as follows:
  1997-98	 1998-99

Iredell County Children's
   Museum	$56,500		$58,271
Museum of Coastal Carolina	$66,750		$69,994
Rocky Mount Children's Museum	$109,750		$122,327
Imagination Station	$111,000		$130,444
Western North Carolina Nature
	   Center	$130,750		$157,861
The Health Adventure Museum
  of Pack Place Education,
  Arts and Science Center, Inc.	$162,500		$184,881
Cape Fear Museum	$188,500		$221,984
Catawba Science Center	$190,500		$187,900
Sci Works Science Center and
   Environmental Park of 
   Forsyth County	$231,000		$273,692
Natural Science 
  Center of Greensboro	$333,000		$386,759
Schiele Museum of Natural
  History	$383,750		$472,046
North Carolina Museum of
  Life and Science	$398,750		$521,559
Discovery Place	$887,250		$1,062,282

                        TOTAL	$3,250,000		$3,850,000
Discovery Place may use up to one hundred thousand dollars ($100,000) of the funds allocated to it in the 1997-98 fiscal year and up to one hundred thousand dollars ($100,000) of the funds allocated to it in the 1998-99 fiscal year to study the feasibility of an expansion of Discovery Place."

Requested by:   Senators Martin of Pitt, Perdue
ENVIRONMENTAL EDUCATION GRANTS
Section 14.5.  (a)	Of the two hundred thousand dollars ($200,000) appropriated in this act to the Department of Environment and Natural Resources for the 1998-99 fiscal year for environmental education grants, up to fifty thousand dollars ($50,000) may be used by the Department for the 1998-99 fiscal year for the costs of administering the environmental education grants.  The remainder of these funds shall be used to provide grants to promote environmental education throughout the State.  Grants under this section may be awarded to:
(1)	Schools, community organizations, and environmental education centers for the development of environmental education library collections; or
(2)	School groups for field trips to environmental education centers across the State, provided the activities of the field trip are correlated with the Department of Public Instruction's curriculum objectives.
(b)	The Department shall report to the Joint Legislative Commission on Governmental Operations, the Environmental Review Commission, and the Fiscal Research Division by January 1, 1999, and again by July 1, 1999, on the grant program.  The report shall include a list of amounts awarded and project descriptions for each grant recipient.

Requested by:   Senators Plyler, Perdue, Odom
PARKS AND RECREATION/NATURAL HERITAGE TRUST FUNDS REPORTING REQUIREMENTS
Section 14.6.  (a)	G.S. 113-44.15(c) reads as rewritten:
"(c)	The North Carolina Parks and Recreation Authority shall report no later than October 1 of each year to the Joint Legislative Commission on Governmental Operations, the House and Senate Appropriations Subcommittees on Natural and Economic Resources, the Fiscal Research Division, and the Environmental Review Commission on allocations from the Trust Fund from the prior fiscal year.  The Authority also shall provide a progress report no later than March 15 of each year to the same recipients on the activities of and the expenditures from the Trust Fund for the current fiscal year."
(b)	G.S. 113-77.9(e) reads as rewritten:
"(e)	The Secretary shall maintain and revise twice each year a list of acquisitions made pursuant to this Article. The list shall include the acreage of each tract, the county in which the tract is located, the amount paid from the Fund to acquire the tract, and the State department or division responsible for managing the tract. The Secretary shall furnish a copy of the list to each Trustee, the Joint Legislative Commission on Governmental Operations, the House and Senate Appropriations Subcommittees on Natural and Economic Resources, the Fiscal Research Division, and the Environmental Review Commission within 30 days after each revision."

Requested by:   Senators Plyler, Perdue, Odom
LAND ACQUISITION PARITY FOR PARKS AND RECREATION/NATURAL HERITAGE TRUST FUNDS
Section 14.7.  (a)	G.S. 113-77.9(b1) reads as rewritten:
"(b1)	In authorizing expenditures from the Fund to acquire land pursuant to this Article, the first priority shall be the protection of land with outstanding natural or cultural heritage values. Land with outstanding natural heritage values is land that is identified by the North Carolina Natural Heritage Program as having State or national significance. Land with outstanding cultural heritage values is land that is identified, inventoried, or evaluated by the Department of Cultural Resources. The Trustees shall be guided by any priorities established by the Secretary, the Chairman of the Wildlife Resources Commission, the Commissioner of Agriculture, and the Secretary of Cultural Resources in their proposals made pursuant to subsection (a) of this section.  In authorizing expenditures from the Fund to acquire land pursuant to this Article, the Trustees shall  consider geographic distribution across the State."
(b)	G.S. 113-44.15(b) reads as rewritten:
"(b)	Funds in the Trust Fund are annually appropriated to the North Carolina Parks and Recreation Authority and, unless otherwise specified by the General Assembly or the terms or conditions of a gift or grant, shall be allocated and used as follows:
(1)	Sixty-five percent (65%) for the State Parks System for capital projects, repairs and renovations of park facilities, and land acquisition.
(2)	Thirty percent (30%) to provide matching funds to local governmental units on a dollar-for-dollar basis for local park and recreation purposes. These funds shall be allocated by the North Carolina Parks and Recreation Authority based on criteria patterned after the Open Project Selection Process established for the Land and Water Conservation Fund administered by the National Park Service of the United States Department of the Interior.
(3)	Five percent (5%) for the Coastal and Estuarine Water Beach Access Program.
In allocating funds in the Trust Fund under this subsection, the North Carolina Parks and Recreation Authority shall consider geographic distribution across the State to the extent practicable.  Of the funds appropriated to the North Carolina Parks and Recreation Authority from the Trust Fund each year, no more than three percent (3%) may be used by the Department for operating expenses associated with managing capital improvements projects, acquiring land, and administration of local grants programs."

Requested by:   Senator Jenkins
CULLASAJA RIVER STUDY FUNDS
Section 14.8.  The Department of Environment and Natural Resources shall study the feasibility of including that portion of the Cullasaja River that borders Nantahala National Forest in the North Carolina natural and scenic river system pursuant to Article 3 of Chapter 113A of the General Statutes.  No later than March 15, 1999, the Department shall report the results of this study and its recommendations to the Joint Legislative Commission on Governmental Operations, the Fiscal Research Division, and the Environmental Review Commission.

Requested by:   Senator Perdue
EXTEND AND EXPAND ENVIRONMENTAL HEALTH PROGRAMS STUDY
Section 14.9.  (a)	Section 11A.127 of S.L. 1997-443 reads as rewritten:
"Section 11A.127.  Pending action by the General Assembly on the recommendations of the Environmental Review Commission resulting from the study to be undertaken by the Environmental Review Commission as provided in this Part, on-site wastewater functions, public drinking water programs, and environmental health programs shall remain in the Department of Environment and Natural Resources, the Division of Environmental Health, shall remain intact in the Department of Environment and Natural Resources, and the Department of Environment and Natural Resources shall not consolidate on-site wastewater functions or drinking water programs in the Division of Water Quality."
(b)	Section 11A.128 of S.L. 1997-443 reads as rewritten:
"Section 11A.128.  The Environmental Review Commission shall study the following issues and report its findings to the 1999 General Assembly, along with any legislation it proposes to address these issues:
(1)	The appropriate roles and financing of local and state agencies in reviewing, permitting, inspecting, and monitoring private wells, community wells, municipal wells, and municipal surface water supplies;
(2)	The appropriate roles and financing of local and State agencies in reviewing, permitting, inspecting, monitoring, and maintaining septic tanks, package wastewater treatment plants, municipal wastewater treatment plants, industrial treatment plants, and animal waste operations;
(3)	The appropriate roles and financing of local and State agencies in administering the various environmental health programs;
(4)	The integration of State's review of the financial integrity of applicants for drinking water and wastewater discharge permits;
(5)	Policies to monitor the quality and prevent and reduce pollution of groundwaters;
(6)	Consistent State policies for cleaning up contaminated groundwater and soils;
(7)	Coordination of adoption and development of policies by the Coastal Resources Commission, Environmental Management Commission, Commission on Health Services, Marine Fisheries Commission, and other commissions having roles in water quality or wastewater issues;
(8)	Policies to monitor the quality and prevent and reduce pollution of surface waters;
(9)	Organization of the State's water planning agencies;
(10)	Technical and financial assistance to business, industry, local governments, and citizens;
(11)	Policies to encourage water conservation;
(12)	Policies to encourage regional water supply and wastewater treatment planning; 
(13)	The role of the North Carolina Cooperative Extension Services, North Carolina Department of Agriculture, and the North Carolina Department of Transportation in the protection of water supplies; and
(14)	The organization, functions, powers, and duties of the various boards, commissions, and councils having jurisdiction over environmental, public health, and natural resources programs, including whether those functions, powers, and duties should be consolidated in a single commission."
(c)	Section 11A.129 of S.L. 1997-443 reads as rewritten:
"Section 11A.129.  The Secretary of Health and Human Services may reorganize the Department of Health and Human Services in accordance with G.S. 143B-10 and shall report as required by that section.  In addition, the Department of Health and Human Services shall do the following:
(1)	Report to the Joint Legislative Commission on Governmental Operations by December 31, 1997, on the Department's progress in incorporating health functions and agencies into the Department;
(2)	Report to the General Assembly by 1 February 1999 on additional changes, including proposed legislation necessary to effectuate the purposes of this Part including the findings of the Environmental Review Commission's study;
(3)	Report to the Joint Legislative Commission on Governmental Operations by 1 February 1999 on any proposed changes in the Department's structure of boards and commissions not already implemented as a result of the Environmental Review Commission's study or necessary to effectuate the purposes of this Part and to deliver services more efficiently; and
(4)	Report to the General Assembly by February 1, 1999, on the Department's progress in adopting any rule changes necessary to effectuate the purposes of this Part and any proposed legislation necessary to change the structure of any boards and commissions as reported to the Joint Legislative Commission on Governmental Operations."

Requested by:  Senators Martin of Pitt, Perdue
TAR-PAMLICO AND NEUSE RIVERS RAPID RESPONSE TEAM
Section 14.10.  The Department of Environment and Natural Resources shall direct members of the "Rapid Response Teams" for the Tar-Pamlico River Basin and the Neuse River Basin to assist other departmental personnel in routine water monitoring activities in the Tar-Pamlico River Basin or Neuse River Basin when the members of the "Rapid Response Teams" are not needed to respond to water quality emergencies or citizen complaints.  The Department may also direct that personnel performing water quality monitoring activities assist with water quality monitoring in river basins to which the person has not been assigned if the person is not needed in the assigned basin.
The Department shall evaluate its use and assignment of the "Rapid Response Teams" and water quality monitoring personnel for the Tar-Pamlico River Basin and the Neuse River Basin to determine whether the most efficient use is being made of those personnel and resources.  If the Department determines that assistance is needed in river basins other than those to which the "Rapid Response Teams" and water quality monitoring personnel have been assigned, the Department may direct that any appropriate member from the "Rapid Response Teams" or the water quality monitoring personnel assist in those basins where assistance is needed.

Requested by:   Senator Martin of Pitt
TAR-PAMLICO RIVER BASIN/RULE CORRECTION
Section 14.11.  The Environmental Management Commission may adopt a temporary rule pursuant to G.S. 150B-21.1 to provide that the boundaries of a WS-IV watershed protected area are measured by linear miles rather than "river miles" (as the river flows) if the Environmental Management Commission finds that the permanent rule being amended was approved by the Rules Review Commission in the 1997-98 fiscal year, the local governments affected by the rule inadvertently chose "river miles" rather than linear miles based on a misunderstanding of the different effects of the two measurement choices, and the public interest would be served by changing the method of measurement.  The temporary rule shall become effective at the same time as the rule it amends.

Requested by:   Senator Perdue
PARTNERSHIP FOR THE SOUNDS FUNDS
Section 14.12.  Partnership for the Sounds, Inc., shall use a portion of the funds appropriated in this act to the Department of Environment and Natural Resources for the 1998-99 fiscal year for Partnership for the Sounds, Inc., to expand their programs to include activities to promote nature-based tourism and environmental stewardship and education in Pamlico County. 

Requested by:   Senator Martin of Pitt
PROGRESS REPORTS/ALTERNATIVE ANIMAL WASTE TECHNOLOGIES STUDY
Section 14.13.   The Primary Investigator or Researcher receiving funding from funds appropriated in this act to the Department of Environment and Natural Resources for the 1998-99 fiscal year for the study of alternative animal waste technologies shall satisfy the same reporting requirements as those set forth in Section 15.10 of S.L. 1997-443 for all the agriculture waste research reports.

Requested by:   Senator Martin of Pitt
PROGRESS REPORTS/NEUSE MODELING PROJECT FUNDS
Section 14.14.  (a)	The funds appropriated in this act to the Department of Environment and Natural Resources for the 1998-99 fiscal year for the Neuse River Modeling and Monitoring Project shall be transferred to the Board of Governors of The University of North Carolina for the Water Resources Research Institute and shall be used to monitor and model the Neuse River and the Neuse estuary under the Modeling and Monitoring (MODMON) Project, to develop a hydrodynamic model of the Neuse watershed, and to link these models in order to provide the data needed to determine the effectiveness of current nutrient management strategies for the Neuse River Basin.
(b)	The Primary Investigator or Researcher receiving funding pursuant to subsection (a) of this section shall provide progress reports to the Environmental Review Commission, the Joint Legislative Commission on Governmental Operations, the Scientific Advisory Council on Water Resources and Coastal Fisheries Management, and the Fiscal Research Division on January 1 and July 1 of each year until the project or study is complete.  Upon completion of the project or study, the Primary Investigator or Researcher shall provide a final report. 

Requested by:   Senators Martin of Pitt, Perdue, Lucas, Kinnaird, Gulley
UPPER NEUSE RIVER BASIN FUNDS/MODEL WATERSHED MANAGEMENT PLAN
Section 14.15. (a) The General Assembly finds that:
(1)	The water resources of the Upper Neuse River Basin provide an essential and high quality supply of water needed to meet municipal, industrial, and agricultural needs.
(2)	The water resources of the Upper Neuse River Basin are essential for wildlife habitat protection, water quality management, recreational activities, and other purposes.
(3)	Management and protection of the quality and quantity of water in the Upper Neuse River Basin are essential to the future economic vitality of the several counties and municipalities that have planning and zoning jurisdiction in the Upper Neuse River Basin.
(4)	As provided for under Part 1 of Article 21 of Chapter 143 of the General Statutes, comprehensive and coordinated State-local efforts are needed to develop and implement plans that provide adequate, long-term management and protection of water resources in river basins and segments of river basins, including the Upper Neuse River Basin.
(5)	It would be beneficial for the State to support development of a model State-local watershed management approach in North Carolina, as envisioned in Part 1 of Article 21 of Chapter 143 of the General Statutes, enacted during the 1997 Session.  The Upper Neuse River Basin Association proposes to develop such a model approach.
(b) Of the funds appropriated by this act to the Department of Environment and Natural Resources for the 1998-99 fiscal year the sum of three hundred thousand dollars ($300,000) shall be allocated to the Upper Neuse River Basin Association, Inc., to develop  a cooperative, comprehensive, and integrated State-local watershed management plan for the Upper Neuse River Basin to serve as a model watershed management approach for river basins and subbasins in North Carolina.
(c) The Upper Neuse Watershed Management Plan shall comply with the requirements of G.S. 143-214.14(g).
The Department of Environment and Natural Resources and other appropriate State agencies shall provide technical assistance to the Association during the development of the Association's plan.  The Association shall actively solicit the input and assistance of the agencies during the identification of goals and objectives, development of performance indicators and benchmarks, and preparation of the plan.
(d) The funds allocated by this section are not adequate for the actual implementation of all or part of the recommendations included in the final watershed management plan.  The Association and its member governments shall work with State and federal agencies and private and nonprofit organizations and individuals to obtain funding support for implementation of the plan.
(e) The Association shall report on all of its activities and programs to the Environmental Review Commission, the Joint Legislative Commission on Governmental Operations, and the Fiscal Research Division on or before March 1 of each fiscal year, beginning in 1999, through completion of the final plan.  The report shall include information on the Association's activities and accomplishments during the current fiscal year, itemized expenditures for development of the plan, major planned activities and accomplishments for at least the next 12 months, and anticipated expenditures with sources of funding for the next 12 months.
(f) For purposes of this section, "Upper Neuse River Basin" means all of the watershed area that drains that part of the Neuse River Basin and its tributary streams that are located above or terminate at the Falls Lake Reservoir Dam.  The Upper Neuse River Basin is approximately 770 square miles in area and comprises all or part of six counties and eight municipalities.  It comprises about thirteen percent (13%) of the entire Neuse River Basin.

Requested by:   Senator Martin of Pitt
STATEWIDE BEAVER DAMAGE CONTROL PROGRAM FUNDS
Section 14.16.  (a) Subsections (e) through (h) of Section 69 of Chapter 1044 of the 1991 Session Laws, as amended, are repealed.
(b) 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, Section 26.6 of Chapter 507 of the 1995 Session Laws, Section 27.15 of Chapter 18 of the Session Laws of the 1996 Second Extra Session, Section 15.44 of S.L. 1997-443, and subsection (a) of this section reads as rewritten:
"Sec. 69.  (a)	There is established the Beaver Damage Control Advisory Board.  The Board shall consist of nine members, as follows:
(1)	The Executive Director of the North Carolina Wildlife Resources Commission, or his designee, who shall serve as chair;
(2)	The Commissioner of Agriculture and Consumer Services, or a designee;
(3)	The Director of the Division of Forest Resources of the Department of Environment and Natural Resources, or a designee;
(4)	The Director of the Soil and Water Conservation Division of the Department of Environment and Natural Resources, or a designee;
(5)	The Director of the North Carolina Cooperative Extension Service, or a designee;
(6) 	The Secretary of Transportation, or a designee;
(7) 	The State Director of the Animal Damage Control Division of the Animal and Plant Health Inspection Service, U.S. Department of Agriculture, or a designee;
(8)	The President of the North Carolina Farm Bureau Federation, Inc., or a designee, representing private landowners; and
(9) 	A representative of the North Carolina Forestry Association.
(b)	The Beaver Damage Control Advisory Board shall develop a statewide program to control beaver damage on private and public lands. 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; and
(5)	Provide for the hiring of personnel necessary to implement beaver damage control activities, administer the program, and set salaries of 
	personnel.
No later than March 15 of each year, the Board shall issue a report to the Wildlife Resources Commission, the Senate and House Appropriations Subcommittees on Natural and Economic Resources, and the Fiscal Research Division on the results of the program during the preceding year. 
(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.
(d)	Notwithstanding G.S. 113-291.6(d) or any other law, it is lawful to use snares when trapping beaver pursuant to the beaver damage control program developed pursuant to this section.  The provisions of Chapter 218 of the 1975 Session Laws; Chapter 492 of the 1951 Session Laws, as amended by Chapter 506 of the 1955 Session Laws; and Chapter 1011 of the 1983 Session Laws do not apply to trapping carried out in implementing the beaver damage control program developed pursuant to this section.
(d1)	In case of any conflict between G.S. 113-291.6(a) and G.S. 113-291.6(b) and this section, this section prevails.
(d2)	Each county that volunteers to participate in this program for a given fiscal year shall provide written notification of its wish to participate no later than September 30 of that year and shall commit the sum of four thousand dollars ($4,000) in local funds no later than September 30 of that year."
(c) The Revisor of Statutes shall codify in Chapter 113 of the General Statutes Section 69 of Chapter 1044 of the 1991 Session Laws as amended.
(d)	Of the funds appropriated in this act to the Wildlife Resources Commission for the 1998-99 fiscal year, up to the sum of five hundred thousand dollars ($500,000) shall be used to provide the State share necessary to support the beaver damage control program as revised in this section, provided the sum of twenty-five thousand dollars ($25,000) in federal funds is available for the 1998-99 fiscal year to provide the federal share.

Requested by:   Senators Lee, Kinnaird, Plyler, Perdue, Odom
CHATHAM FUNDS FOR LOW-LEVEL RADIOACTIVE WASTE SITING
Section 14.17.  Of the funds appropriated to the Department of Environment and Natural Resources in this act, the sum of one hundred thousand dollars ($100,000) shall be used to reimburse Chatham County for the unreimbursed costs to Chatham County for providing technical assistance regarding the site selection of a low-level radioactive waste facility pursuant to Chapter 104G of the General Statutes and for other expenses incurred by Chatham County related to licensing and siting a low-level radioactive waste facility.

PART XV.  DEPARTMENT OF COMMERCE
Requested by:   Senator Martin of Pitt
REGIONAL ECONOMIC DEVELOPMENT COMMISSION ALLOCATIONS
Section 15. Section 16.11 of S.L. 1997-443 reads as rewritten:
"Section 16.11.  (a)	Funds appropriated in this act to the Department of Commerce for regional economic development commissions shall be allocated to the following commissions in accordance with subsection (b) of this section: Western North Carolina Regional Economic Development Commission, Research Triangle Regional Commission, Southeastern North Carolina Regional Economic Development Commission, Piedmont Triad Partnership, Northeastern North Carolina Regional Economic Development Commission, Global TransPark Development Commission, and Carolinas Partnership, Inc.
(b)	Funds appropriated pursuant to subsection (a) of this section shall be allocated to each regional economic development commission as follows:
(1)	First, the Department shall establish each commission's allocation by determining the sum of allocations to each county that is a member of that commission.  Each county's allocation shall be determined by dividing the county's enterprise factor by the sum of the enterprise factors for eligible counties and multiplying the resulting percentage by the amount of the appropriation.  As used in this subdivision, the term "enterprise factor" means a county's enterprise factor as calculated under G.S. 105-129.3;
(2)	Next, the Department shall subtract from funds allocated to the Global TransPark Development Zone the sum of two hundred eighty thousand five hundred two dollars ($280,502) in the 1998-99 fiscal year, which sum represents the interest earnings in each fiscal year on the estimated balance of seven million five hundred thousand dollars ($7,500,000) appropriated to the Global TransPark Development Zone in Section 6 of Chapter 561 of the 1993 Session Laws; and
(3)	Next, the Department shall redistribute the sum of two hundred eighty thousand five hundred two dollars ($280,502) in the 1998-99 fiscal year to the seven regional economic development commissions named in subsection (a) of this section.  Each commission's share of this redistribution shall be determined according to the enterprise factor formula set out in subdivision (1) of this subsection.  This redistribution shall be in addition to each commission's allocation determined under subdivision (1) of this subsection.
(4)	In addition to the funds allocated under subdivisions (1) through (3) of this subsection, the Department shall allocate to each of the seven economic development commissions the sum of fifty thousand dollars ($50,000) for the 1998-99 fiscal year."

Requested by:   Senators Cooper, Ballance
INDUSTRIAL RECRUITMENT COMPETITIVE FUND
Section 15.1.  Of the funds appropriated in this act to the Department of Commerce for the Industrial Recruitment Competitive Fund, the sum of up to two million dollars ($2,000,000) for the 1998-99 fiscal year shall be used to recruit a large recycling facility, as defined in G.S. 105-129.25, that meets all of the requirements of G.S. 105-129.26(b), as provided for in Senate Bill 1569, 1997 General Assembly.

Requested by:   Senators Plyler, Perdue, Odom
MARKETING OF GLOBAL TRANSPARK BY DEPARTMENT OF COMMERCE
Section 15.2.  The Division of Business and Industry of the Department of Commerce shall assume responsibility for the marketing of the North Carolina Global TransPark.  Funds designated in the Department's budget for marketing of the North Carolina Global TransPark shall remain in the Department and shall be used by the Division to carry out this purpose.

Requested by:   Senator Jenkins
RURAL TOURISM DEVELOPMENT GRANT PROGRAM
Section 15.3.  Of the funds appropriated in this act to the Department of Commerce, the sum of three hundred thousand dollars ($300,000) for the 1998-99 fiscal year shall be allocated for the Rural Tourism Development Grant Program.  The Department shall establish and implement this Program to provide grants to local governments and nonprofit organizations to encourage the development of new tourism projects and activities in rural areas of the State.  The Department shall develop procedures for the administration and distribution of funds allocated to the Rural Tourism Development Program under the following guidelines:
(1)	Eligible organizations shall make application under procedures established by the Department;
(2)	Eligible organizations shall be nonprofit tourism-related organizations located in the State's rural regions;
(3)	Priority shall be given to eligible organizations that have significant involvement of travel- and tourism-related businesses;
(4)	Priority shall be given to eligible organizations serving economically distressed rural counties;
(5)	Priority shall be given to eligible organizations that match funds; and
(6)	Funds shall not be used for renting or purchasing land or buildings or for financing debt.
No recipient or new tourism project shall receive a total of more than fifty thousand dollars ($50,000) of these grant funds for the 1998-99 fiscal year.

Requested by:   Senator Jenkins
GREAT SMOKY MOUNTAINS SPECIAL LICENSE PLATE
Section 15.4.  (a) G.S. 20-63(b) reads as rewritten:
"(b)	Every license plate shall have displayed upon it the registration number assigned to the vehicle for which it is issued, the name of the State of North Carolina, which may be abbreviated, and the year number for which it is issued or the date of expiration. A plate issued for a commercial vehicle, as defined in G.S. 20-4.2(1), must bear the word "commercial,"unless the plate is a special registration plate authorized in G.S. 20-79.4 or the commercial vehicle is a trailer or is licensed for 6,000 pounds or less.
A registration plate issued by the Division for a private passenger vehicle or for a private hauler vehicle licensed for 6,000 pounds or less, other than a Friends of the Great Smoky Mountains National Park special registration plate, shall be a "First in Flight" plate. A "First in Flight" plate shall have the words "First in Flight" printed at the top of the plate above all other letters and numerals. The background of the plate shall depict the Wright Brothers biplane flying over Kitty Hawk Beach, with the plane flying slightly upward and to the right."
(b) The Great Smoky Mountains National Park special registration plate shall have the words "First in Flight" printed at the top of the plate above all other letters and numerals. The background of the plate shall be the full art, three-color design submitted to the Division by Friends of the Great Smoky Mountains National Park in camera-ready format.  The background color and design shall allow numbers on the face of the plate to be readily distinguished.  Submission to the Division of the background design authorized under this subsection shall be the final design and, upon acceptance by the Division, no further changes in the background design shall be made.

Requested by:   Senators Plyler, Odom, Perdue, Lee, Martin of Pitt
NC SEAFOOD INDUSTRIAL PARK AUTHORITY REVISIONS
Section 15.5. (a) G.S. 113-315.28 reads as rewritten:
"§ 113-315.28.  Purposes of Authority.
Through the Authority hereinbefore created, the State of North Carolina may engage in promoting, developing, constructing, equipping, maintaining and operating the seafood industrial parks within the State, or within the jurisdiction of the State, and works of internal improvements incident thereto, including the acquisition or construction, maintenance and operation as such seafood industrial parks of watercraft and facilities thereon or essential for the proper operation thereof.  Said Authority is created as an instrumentality of the State of North Carolina for the accomplishment of the following general purposes:
(1)	To develop and improve the Wanchese Seafood Industrial Park, and such other places, including inland ports and facilities, as may be deemed feasible for a more expeditious and efficient handling of seafood commerce from and to any place or places in the State of North Carolina and other states and foreign countries;
(2)	To acquire, construct, equip, maintain, develop and improve the port facilities at said parks and to improve such portions of the waterways thereat as are within the jurisdiction of the federal government and the waterways connecting the Wanchese Seafood Industrial Park with the channels of commerce of the Atlantic Ocean, consistent with the project designed by the United States Army Corps of Engineers pursuant to the Manteo (Shallowbag) Bay navigation project as authorized in the Rivers and Harbors Act of 1970 (P.L. 91-611);
(3)	To foster and stimulate the shipment of seafood commerce through said ports, whether originating within or without the State of North Carolina, including the investigation and handling of matters pertaining to all transportation rates and rate structures affecting the same;
(4)	To cooperate with the United States of America and any agency, department, corporation or instrumentality thereof in the maintenance, development, improvement and use of said seafood harbors and the waterways connecting the parks with the channels of commerce of the Atlantic Ocean;
(5)	To accept funds from any of said counties or cities wherein said ports are located and to use the same in such manner, within the purposes of said Authority, as shall be stipulated by the said county or city, and to act as agent or instrumentality, of any of said counties or cities in any matter coming within the general purposes of said Authority;
(5a)	To encourage and develop the general maritime and marine-related industries and activities at or in the vicinity of the seafood industrial parks;
(6)	And in general to do and perform any act or function which may tend to be useful toward the development and improvement of seafood industrial parks of the State of North Carolina, and to increase the movement of waterborne seafood commerce, foreign and domestic, to, through, and from said seafood industrial parks.
The enumeration of the above purposes shall not limit or circumscribe the broad objective of developing to the utmost the seafood possibilities of the State of North Carolina."
(b) G.S. 113-315.32 reads as rewritten:
"§ 113-315.32. Power of eminent domain.
For the acquiring of rights-of-way and property necessary for the construction of wharves, piers, ships, docks, quays, elevators, compresses, refrigerator storage plants, warehouses and other riparian and littoral terminals and structures and approaches thereto, including the navigation stabilization structures recommended by the United States Army Corps of Engineers pursuant to the authorization in United States Public Law 91-611, and transportation facilities needful for the convenient use of same, the Authority shall have the right and power to acquire the same by purchase, by negotiation, or by condemnation, and should it elect to exercise the right of eminent domain, condemnation proceedings shall be maintained by and in the name of the Authority, and it may proceed in the manner provided for the Board of Transportation by Article 9 of Chapter 136 of the General Statutes. The power of eminent domain shall not apply to property of persons, State agency or corporations already devoted to public use, other than lands subject to the power of eminent domain by the State of North Carolina in the reservation clauses of a deed recorded in the Dare County Registry at Book 79 Page 548."

Requested by:   Senator Martin of Pitt
WORKER TRAINING TRUST FUND APPROPRIATIONS
Section 15.6.  Section 16(a) of Chapter 443 of the 1997 Session Laws reads as rewritten:
"Section 16. (a)	There is appropriated from the Worker Training Trust Fund to the Employment Security Commission of North Carolina the sum of six million six hundred eighty-nine thousand nine hundred sixty-four dollars ($6,689,964) for the 1997-98 fiscal year and the sum of seven million twenty-one thousand three hundred seventy-four dollars ($7,021,374) for the 1998-99 fiscal year for the operation of local offices."

Requested by:   Senators Martin of Pitt, Plyler, Perdue, Odom
YEAR 2000 CLARIFICATIONS
Section 15.7.  Section 28.1 of S.L. 1997-443 reads as rewritten:
"Section 28.1.  (a)	The Department of Commerce shall not reduce rates for data processing services for the first six months of the 1998-99 fiscal year.  If at the end of the first six months the Department determines that additional Year 2000 funds for the 1998-99 fiscal year are not needed from data processing services reserve funds, then the Department may reduce data processing services rates upon approval of the reduction by the Information Resources Management Commission. The Department shall develop and maintain procedures for managing the year 2000 conversion.
(b)	The Department of Commerce shall analyze the needs of State agencies for funds to convert their systems. In the course of the analysis, the Department shall consider an agency's need for each system it wishes to convert and the most cost-effective manner in which to manage conversion.  The Department shall certify to the Office of State Budget and Management the cost of each State agency for the year 2000 conversion.
		."

Requested by:   Senator Martin of Pitt
NORTH CAROLINA INFORMATION HIGHWAY
Section 15.8.  Section 28 of S.L. 1997-443 reads as rewritten:
"Section 28.  (a)	The funds appropriated in this act to the Department of Commerce for the operation of the North Carolina Information Highway shall be used only for costs incurred by the Department 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)	
			The Department of Commerce shall develop a Migration Plan for converting existing and proposed North Carolina Information Highway sites to the H.320 international telecommunications standard for delivering audio and video services to participating sites.  The Department shall include at a minimum the following information in the Plan:
(1)	A list of sites categorized by institutional purpose to be converted under the Plan;
(2)	A timeline for converting each site;
(3)	The cost of conversion for each site;
(4)	The estimated operating cost savings for each site post conversion;
(5)	The estimated monthly and annual operating cost subsidy for each site post conversion;
(6)	The estimated total recurring dollar impact to the State's budget upon full implementation of the Plan; and
(7)	A detailed plan for providing connectivity or bridging between the current DV-45 proprietary standard sites and the converted H.320 international standard sites.
The Plan shall also identify any participating information highway sites that utilize telecommunication standards other than the H.320 international standard offered by the Department along with the estimated costs for providing connectivity or bridging among these sites and between these sites and the converted H.320 international standard sites.  The Plan shall be submitted by October 1, 1998, to the House and Senate Appropriations Subcommittees on Natural and Economic Resources, the Joint Legislative Commission on Governmental Operations, and the Fiscal Research Division."

Requested by:   Senator Martin of Pitt
FUNDS FOR TECHNOLOGICAL DEVELOPMENT AUTHORITY WET LAB AND OFFICE SPACE CONSTRUCTION
Section 15.9.  Of the funds appropriated in this act to the Department of Commerce for the North Carolina Technological Development Authority, Inc., the sum of five hundred thousand dollars ($500,000) for the 1998-99 fiscal year shall be used to cover part of the cost of constructing a wet lab and office space.  The Department shall place these funds in a reserve and shall not allocate any funds until the North Carolina Technological Development Authority, Inc., has secured all financing necessary to cover the total cost of constructing the wet lab and office space.

Requested by:   Senator Martin of Pitt
NORTH CAROLINA GLOBAL CENTER REPORT
Section 15.10.  The North Carolina Global Center shall:
(1)	By January 15, 1999, and more frequently as requested, report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division the following information:
a.	State fiscal year 1997-98 program activities, objectives, and accomplishments;
b.	State fiscal year 1997-98 itemized expenditures and fund sources;
c.	State fiscal year 1998-99 planned activities, objectives, and accomplishments including actual results through December 31, 1998; and
d.	State fiscal year 1998-99 estimated itemized expenditures and fund sources including actual  expenditures and fund sources through December 31, 1998.
(2)	Provide to the Fiscal Research Division a copy of the organization's annual audited financial statement within 30 days of issuance of the statement.

Requested by:   Senator Martin of Pitt
NORTH CAROLINA INSTITUTE OF MINORITY ECONOMIC DEVELOPMENT, INC., REPORT
Section 15.11.  The North Carolina Institute of Minority Economic Development, Inc., shall:
(1)	By January 15, 1999, and more frequently as requested, report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division the following information:
a.	State fiscal year 1997-98 program activities, objectives, and accomplishments;
b.	State fiscal year 1997-98 itemized expenditures and fund sources;
c.	State fiscal year 1998-99 planned activities, objectives, and accomplishments including actual results through December 31, 1998; and
d.	State fiscal year 1998-99 estimated itemized expenditures and fund sources including actual  expenditures and fund sources through December 31, 1998.
(2)	Provide to the Fiscal Research Division a copy of the organization's annual audited financial statement within 30 days of issuance of the statement.

Requested by:   Senator Martin of Pitt
LAND LOSS PREVENTION PROJECT, INC., REPORT
Section 15.12.  The Land Loss Prevention Project, Inc.,  shall:
(1)	By January 15, 1999, and more frequently as requested, report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division the following information:
a.	State fiscal year 1997-98 program activities, objectives, and accomplishments;
b.	State fiscal year 1997-98 itemized expenditures and fund sources;
c.	State fiscal year 1998-99 planned activities, objectives, and accomplishments including actual results through December 31, 1998; and
d.	State fiscal year 1998-99 estimated itemized expenditures and fund sources including actual  expenditures and fund sources through December 31, 1998.
(2)	Provide to the Fiscal Research Division a copy of the organization's annual audited financial statement within 30 days of issuance of the statement.

Requested by:   Senator Martin of Pitt
NORTH CAROLINA COALITION OF FARM AND RURAL FAMILIES, INC., REPORT 
Section 15.13.  The North Carolina Coalition of Farm and Rural Families, Inc., shall:
(1)	By January 15, 1999, and more frequently as requested, report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division the following information:
a.	State fiscal year 1997-98 program activities, objectives, and accomplishments;
b.	State fiscal year 1997-98 itemized expenditures and fund sources;
c.	State fiscal year 1998-99 planned activities, objectives, and accomplishments including actual results through December 31, 1998; and
d.	State fiscal year 1998-99 estimated itemized expenditures and fund sources including actual  expenditures and fund sources through December 31, 1998.
(2)	Provide to the Fiscal Research Division a copy of the organization's annual audited financial statement within 30 days of issuance of the statement.

Requested by:   Senator Martin of Pitt
NORTH CAROLINA MINORITY SUPPORT CENTER REPORT
Section 15.14.  The North Carolina Minority Support Center  shall:
(1)	By January 15, 1999, and more frequently as requested, report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division the following information:
a.	State fiscal year 1997-98 program activities, objectives, and accomplishments;
b.	State fiscal year 1997-98 itemized expenditures and fund sources;
c.	State fiscal year 1998-99 planned activities, objectives, and accomplishments including actual results through December 31, 1998; and
d.	State fiscal year 1998-99 estimated itemized expenditures and fund sources including actual  expenditures and fund sources through December 31, 1998.
(2)	Provide to the Fiscal Research Division a copy of the organization's annual audited financial statement within 30 days of issuance of the statement.

Requested by:   Senators Martin of Pitt, Dannelly
COMMUNITY DEVELOPMENT INITIATIVE
Section 15.15.  Of the funds appropriated in this act to the North Carolina Community Development Initiative, Inc., the sum of two hundred fifty thousand dollars ($250,000) for the 1998-99 fiscal year shall be allocated to the Northwest Corridor CDC.

Requested by:   Senators Martin of Pitt, Dannelly
CENTER FOR COMMUNITY SELF-HELP FUNDS
Section 15.16.  (a)	Of the funds appropriated in this act to the Department of Commerce, the sum of one million dollars ($1,000,000) for the 1998-99 fiscal year shall be allocated to the Center for Community Self-Help to further a statewide program of lending for home ownership throughout North Carolina.  These funds will be leveraged on a ten-to-one basis, generating at least ten dollars ($10.00) of nontraditional home loans for every one dollar ($1.00) of State funds.  Payments of principal shall be available for further loans or loan guarantees.
(b)	The Center for Community Self-Help shall submit, within 180 days after the close of its fiscal year, audited financial statements to the State Auditor.  All records pertaining to the use of State funds shall be made available to the State Auditor upon request.  The Center for Community Self-Help shall make quarterly reports on the use of State funds to the State Auditor in form and format prescribed by the State Auditor or his designee.  The Center for Community Self-Help shall make a written report by May 1 of each year for the next three years to the General Assembly on the use of the funds allocated under this section.
(c)	The Center for Community Self-Help shall report to the Joint Legislative Commission on Governmental Operations, the House Appropriations Subcommittee on Natural and Economic Resources, the Senate Appropriations Committee on Natural and Economic Resources, and the Department of Commerce on a quarterly basis for the next three years.
(d)	The Office of the State Auditor may conduct an annual end-of-year audit of the revolving fund for economic development lending created by this appropriation for each year of the life of the revolving fund.
(e)  If the Center for Community Self-Help dissolves, the corporation shall transfer the remaining assets of the revolving fund to the State and shall refrain from disposing of the revolving fund assets without approval of the State Treasurer.
(f)  The Department of Commerce shall disburse this appropriation within 15 working days of the receipt of a request for the funds from the Center for Community Self-Help.  The request shall include a commitment of the leveraged funds by the Center for Community Self-Help or its affiliates.

Requested by:   Senator Martin of Pitt
MCNC
Section 15.17. Section 16.21 of S.L. 1997-443 reads as rewritten:
"Section 16.21.  (a)	MCNC shall report on all of its programs including contractual services for the Supercomputer and the Research and Education Network.  The reports shall:
(1)	By January 15, 1998, and more frequently as requested, report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division the following information:
a.	State fiscal year 1996-97 program activities, objectives, and accomplishments;
b.	State fiscal year 1996-97 itemized expenditures and fund sources;
c.	State fiscal year 1997-98 planned activities, objectives, and accomplishments including actual results through December 31, 1997;
d.	State fiscal year 1997-98 estimated itemized expenditures and fund sources including actual expenditures and fund sources through December 31, 1997.
e.	The users, major projects and benefits resulting from the activities of the Supercomputer and the Research and Education Network.
f.	The organization's progress toward achieving self-sufficiency by July 1, 1999.
(2)	By January 15, 1999, and more frequently as requested, report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division the following information:
a.	State fiscal year 1997-98 program activities, objectives, and accomplishments;
b.	State fiscal year 1997-98 itemized expenditures and fund sources;
c.	State fiscal year 1998-99 planned activities, objectives, and accomplishments including actual results through December 31, 1998;
d.	State fiscal year 1998-99 estimated itemized expenditures and fund sources including actual expenditures and fund sources through December 31, 1998.
e.	The users, major projects and benefits resulting from the activities of the Supercomputer and the Research and Education Network.
f.	The organization's progress toward achieving self-sufficiency by July 1, 1999.
(3)	Provide to the Fiscal Research Division a copy of MCNC's annual audited financial statement within 30 days of issuance of the statement.
(b)	The funds appropriated in this act to MCNC shall be used as follows:
	FY 1997-98	FY 1998-99
Electronic and Information
Technologies Programs	$4,500,000	$4,500,000
(c)	Of the funds appropriated for the Electronic and Information Technologies Programs, four million five hundred thousand dollars ($4,500,000) for the 1997-98 fiscal year and four million five hundred thousand dollars ($4,500,00) for the 1998-99 fiscal year is contingent upon a dollar-for-dollar match in non-State funds.
(d)	It is the intent of the General Assembly that State funds shall not be appropriated for MCNC in fiscal years 1999-2000 and beyond."

Requested by:   Senator Martin of Pitt
RURAL ECONOMIC DEVELOPMENT CENTER
Section 15.18.  Section 16.24 of S.L. 1997-443 reads as rewritten:
"Section 16.24.  (a)	Of the funds appropriated in this act to the Rural Economic Development Center, Inc., the sum of one million two hundred seventy thousand dollars ($1,270,000) for the 1997-98 fiscal year and the sum of one million two hundred seventy thousand dollars ($1,270,000) for the 1998-99 fiscal year shall be allocated as follows:
1997-98 FY	1998-99 FY
Research and Demonstration Grants	$475,864	$475,864
Technical Assistance and Center
  Administration of Research
  and Demonstration Grants	444,136	444,136
Center Administration, Oversight,
  and Other Programs	350,000	350,000
(b) The Rural Economic Development Center, Inc., shall provide a report containing detailed budget, personnel, and salary information to the Office of State Budget and Management in the same manner as State departments and agencies in preparation for biennium budget requests.
(c) Not more than fifty percent (50%) of the interest earned on State funds appropriated to the Rural Economic Development Center, Inc., may be used by the Center for administrative purposes, including salaries and fringe benefits.
(d) 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 targeted community.
(e) Of the funds appropriated in this act to the Rural Economic Development Center, Inc., the sum of five million seven hundred fifty thousand dollars ($5,750,000) for the 1997-98 fiscal year and the sum of six million four hundred twenty-five thousand dollars ($6,425,000) for the 1998-99 fiscal year shall be allocated as follows:
(1)	$1,400,000 in fiscal year 1997-98 and $1,400,000 in fiscal year 1998-99 for community development grants to support 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, Inc., shall establish performance-based criteria for determining which community development corporation will receive a grant and the grant amount.  Funding shall also be allocated to the North Carolina Association of Community Development Corporations, Inc.  The Rural Economic Development Center, Inc., shall allocate these funds as follows:
a.	$900,000 in each fiscal year for direct grants to the local community development corporations that have previously received State funds for this purpose to support operations and project activities;
b.	$250,000 in each fiscal year for direct grants to local community development corporations that have not previously received State funds;
c.	$200,000 in fiscal year 1998-99 to the North Carolina Association of Community Development Corporations, Inc., to provide training, technical assistance, resource development, and support for local community development corporations statewide; and
d.	$50,000 in each fiscal year to the Rural Economic Development Center, Inc., to be used to cover expenses in administering this section.
(2)	$250,000 in each fiscal year to the Microenterprise Loan Program to support the loan fund and operations of the Program; and
(3)	
			$4,515,000 for the 1998-99 fiscal year to the Supplemental Grants Program for grants to local governments for necessary water and sewer projects in economically distressed communities. These funds shall supplement other project funding and shall not represent more than fifty percent (50%) of the project's total cost.
(4)	$200,000 in the 1998-99 fiscal year to the Capacity Building Grants Program.  Grants shall be awarded to units of local government to pay all or a portion of the cost associated with the planning and writing of a grant or loan application, a capital improvement plan, or other efforts that support growth and development of rural areas.
(5)	$60,000 for the 1998-99 fiscal year to the Rural Economic Development Center, Inc., to be used for administration of the Supplemental Grants Program and the Capacity Building Grants Program.
(f) The Rural Economic Development Center, Inc., shall:
(1)	By January 15, 1998, and more frequently as requested, report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division the following information:
a.	State fiscal year 1996-97 program activities, objectives, and accomplishments;
b.	State fiscal year 1996-97 itemized expenditures and fund sources;
c.	State fiscal year 1997-98 planned activities, objectives, and accomplishments including actual results through December 31, 1997; and
d.	State fiscal year 1997-98 estimated itemized expenditures and fund sources including actual  expenditures and fund sources through December 31, 1997.
(2)	By January 15, 1999, and more frequently as requested, report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division the following information:
a.	State fiscal year 1997-98 program activities, objectives, and accomplishments;
b.	State fiscal year 1997-98 itemized expenditures and fund sources;
c.	State fiscal year 1998-99 planned activities, objectives, and accomplishments including actual results through December 31, 1998; and
d.	State fiscal year 1998-99 estimated itemized expenditures and fund sources including actual expenditures and fund sources through December 31, 1998.
(3)	Provide to the Fiscal Research Division a copy of each grant recipient's annual audited financial statement within 30 days of issuance of the statement."

PART XVI.  JUDICIAL DEPARTMENT
Requested by:   Senator Gulley
IRMC REVIEW OF AOC INFORMATION TECHNOLOGY PLANS/LONG-RANGE REPORT
Section 16.  (a)	G.S. 143B-472.41 reads as rewritten:
"§ 143B-472.41.  Information Resource Management Commission.
(a)	Creation; Membership. – The Information Resource Management Commission is created in the Department of Commerce. The Commission consists of the following members:
(1)	Four members of the Council of State, appointed by the Governor.
(1a)	The Secretary of State.
(2)	The Secretary of Administration.
(3)	The State Budget Officer.
(4)	Two members of the Governor's cabinet, appointed by the Governor.
(5)	One citizen of the State of North Carolina with a background in and familiarity with information systems or telecommunications, appointed by the General Assembly upon the recommendation of the President Pro Tempore of the Senate in accordance with G.S. 120-121.
(6)	One citizen of the State of North Carolina with a background in and familiarity with information systems or telecommunications, appointed by the General Assembly upon the recommendation of the Speaker of the House of Representatives in accordance with G.S. 120-121.
(7)	The Chair of the Governor's Committee on Data Processing and Information Systems.
(8)	The Chair of the State Information Processing Services Advisory Board.
(9)	The Chair of the Criminal Justice Information Network Governing Board.
(10)	The State Controller.
(11)	The Director of the Administrative Office of the Courts or the Director's designee.
Members of the Commission shall not be employed by or serve on the board of directors or other corporate governing body of any information systems, computer hardware, computer software, or telecommunications vendor of goods and services to the State of North Carolina.
The two initial cabinet members appointed by the Governor and the two initial citizen members appointed by the General Assembly shall each serve a term beginning September 1, 1992, and expiring on June 30, 1995. Thereafter, their successors shall be appointed for four-year terms, commencing July 1. Members of the Governor's cabinet shall be disqualified from completing a term of service of the Commission if they are no longer cabinet members.
The appointees by the Governor from the Council of State shall each serve a term beginning on September 1, 1992, and expiring on June 30, 1993. Thereafter, their successors shall be appointed for four-year terms, commencing July 1. Members of the Council of State shall be disqualified from completing a term of service on the Commission if they are no longer members of the Council of State.
Vacancies in the two legislative appointments shall be filled as provided in G.S. 120-122.
The Commission chair shall be elected in the first meeting of each calendar year from among the appointees of the Governor from the Council of State and shall serve a term of one year. The Secretary of Commerce shall be secretary to the Commission.
No member of the Information Resource Management Commission shall vote on an action affecting solely his or her own State agency.
(b)	Powers and Duties. – The Commission has the following powers and duties:
(1)	To develop, approve, and publish a statewide information technology strategy covering the current and following biennium that shall be updated annually and shall be submitted to the General Assembly on the first day of each regular session.
(2)	To develop, approve, and sponsor statewide technology initiatives and to report on those initiatives in the annual update of the statewide information technology strategy.
(3)	To review and approve biennially the information technology plans of the executive agencies and the Administrative Office of the Courts. This review shall include plans for the procurement and use of personal computers and workstations.
(4)	To recommend to the Governor and the Office of State Budget and Management the relative priorities across executive agency information technology plans.
(5)	To establish a quality assurance policy for all agency information technology projects, information systems training programs, and information systems documentation.
(6)	To establish and enforce a quality review and expenditure review procedure for major agency information technology projects.
(7)	To review and approve expenditures from appropriations made to the Office of State Budget and Management for the purpose of creating a Computer Reserve Fund.
(8)	To develop and promote a policy and procedures for the fair and competitive procurement of information technology consistent with the rules of the Department of Administration and consistent with published industry standards for open systems that provide agencies with a vendor-neutral operating environment where different information technology hardware, software, and networks operate together easily and reliably.
(c)	Meetings. – The Information Resources Management Commission shall adopt bylaws containing rules governing its meeting procedures. The Information Resources Management Commission shall meet at least monthly."
(b)	The Administrative Office of the Courts shall develop a strategic information systems and technology plan to both serve the courts in the present and assist the courts in adapting to future changes.  The plan shall:
(1)	Identify and document the information technology goals and objectives of the Judicial Department;
(2)	Review and evaluate the findings and recommendations outlined in the Maddox and Ferguson report completed in September 1996;
(3)	Provide an inventory of existing hardware and software in the court system statewide, including the age of and proposed replacement schedules, for personal computers, laptop computers, mainframe and midrange computers, servers, terminals, printers, and communications infrastructure devices;
(4)	Assess the effectiveness of existing computer-based applications, including the district attorney and public defender case management system, courtroom automation, the civil case processing system, and the financial management system, and outline any changes that may be needed to meet the future needs of the court system;
(5)	Develop an architectural strategy and quality assurance review that is consistent with existing State standards;
(6)	Identify areas where the use of information technology would improve the efficiency and effectiveness of the court system in providing services to the public;
(7)	Develop a long-term implementation plan and cost analysis for the new Magistrates Criminal Information System; and
(8)	Recommend alternative five-year proposals for implementing the court system's technology plan, including a cost analysis of each alternative that specifies the order of priority in which various projects should be implemented.
The Administrative Office of the Courts shall report on the strategic information systems and technology plan developed pursuant to this section 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 Administrative Office of the Courts shall make an interim report by April 1, 1999, and a final report by May 1, 1999.
(c)	The Judicial Department may use up to the sum of five hundred thousand dollars ($500,000) in funds appropriated to the Department for the 1998-99 fiscal year to contract for consultant services in the development of the strategic information systems and technology plan required by this section.  Prior to expending these funds, the Department shall report to the Joint Legislative Commission on Governmental Operations, the Chairs of the Senate and House Appropriations Committees, and the Chairs of the Senate and House Subcommittees on Justice and Public Safety on the consultant selected and the proposed uses of these funds.

Requested by:   Senator Gulley
STUDY OF PUBLIC DEFENDER PROGRAMS
Section 16.1.  The Administrative Office of the Courts shall study the efficiency and cost-effectiveness of the public defender programs established in 11 judicial districts.  The report shall include:
(1)	A comparison outlining the number of defendants in each district represented by public defenders and privately assigned counsel by type of offense;
(2)	An analysis of the average cost per defendant or case for each public defender program and a comparison of that average to payments made to privately assigned counsel in those districts;
(3)	An implementation plan for potential expansion of public defender programs to additional districts, including possible locations, a cost analysis of necessary personnel and equipment to operate the programs, and the estimate of savings to be realized in using those programs rather than providing for privately assigned counsel. 
The Administrative Office of the Courts shall report the results of its study to the Chairs of the Senate and House Appropriations Committees, the Chairs of the Senate and House Appropriations Subcommittees on Justice and Public Safety, and the Indigent Fund Study Commission established in Section 16.5 of this act by January 1, 1999.

Requested by:   Senator Gulley
REVISE RECIDIVISM REPORTING DATE
Section 16.2.  G.S. 7A-675.3 reads as rewritten:
"§ 7A-675.3.  Juvenile recidivism rates.
(a)	On an annual basis, the Administrative Office of the Courts shall compute the recidivism rate of juveniles who are adjudicated delinquent for offenses that would be Class A, B1, B2, C, D, or E felonies if committed by adults and who subsequently are adjudicated delinquent or convicted and shall report the statistics to the Joint Legislative Commission on Governmental Operations by February 15 each year. 
(b)	The Chief Court Counselor of each judicial district shall forward to the Administrative Office of the Courts relevant information, as determined by the Administrative Office of the Courts, regarding every juvenile who is adjudicated delinquent for an offense that would be a Class A, B1, B2, C, D, or E felony if committed by an adult for the purpose of computing the statistics required by this section."

Requested by:   Senator Gulley
EXTEND SUNSET ON BAD CHECK PROGRAM
Section 16.3. (a) Subsection (e) of Section 18.22 of S.L. 1997-443 reads as rewritten:
"(e)	This section becomes effective October 1, 1997, and expires June 30, 1999."
(b)	Subsection (c) of Section 18.22 of S.L. 1997-443 reads as rewritten:
"(c)	Of the funds appropriated to the Judicial Department for the 1997-98 fiscal year, the sum of one hundred fifty thousand dollars ($150,000) shall be used to establish bad check collection pilot programs in Columbus, Durham, and Rockingham Counties.
The Administrative Office of the Courts shall report by April 1, 1999, to the Chairs of the Senate and House Appropriations Committees and the Chairs of the Senate and House Appropriations Subcommittees on Justice and Public Safety on the implementation of the programs, including their effectiveness in assisting the recipients of worthless checks in obtaining restitution and the amount of time saved in prosecuting worthless check cases."
(c)	Subsection (a) of this section becomes effective June 30, 1998.

Requested by:  Senator Gulley
TEEN COURT FUNDS DO NOT REVERT
Section 16.4.  (a) The funds appropriated in S.L. 1997-443 to the Judicial Department for teen court programs throughout the State shall not revert at the end of the 1997-98 fiscal year and shall remain available to the Department for the 1998-99 fiscal year to be used for teen court programs. 
(b) This section becomes effective June 30, 1998.

Requested by:   Senator Gulley
INDIGENT FUND STUDY COMMISSION
Section 16.5. (a)	The Administrative Office of the Courts shall establish a Study Commission on the Indigent Persons' Attorney Fee Fund.  The Commission shall consist of seven voting members as follows:
(1)	One member appointed by the Speaker of the House of Representatives;
(2)	One member appointed by the President Pro Tempore of the Senate;
(3)	One member appointed by the Chief Justice of the Supreme Court;
(4)	One member appointed by the North Carolina Association of Public Defenders;
(5)	One member appointed by the North Carolina State Bar;
(6)	One member appointed by the North Carolina Bar Association; and
(7)	One member appointed by the North Carolina Academy of Trial Lawyers.
The Commission shall elect a chair upon being convened at the call of the Chief Justice's appointee.
(b)	The Commission shall study methods for improving the management and accountability of funds being expended to provide counsel to indigent defendants without compromising the quality of legal representation mandated by State and federal law.  In conducting its study, the Commission shall:
(1)	Evaluate the current procedures for determining the indigency of defendants and recommend any possible improvements in those procedures;
(2)	Determine whether sufficient information is available when evaluating compensation requests from assigned private counsel and expert witnesses;
(3)	Assess the effectiveness of the current management structure for the Indigent Persons' Attorney Fee Fund and outline any additional standards or guidelines that could be implemented to allow for greater accountability of the funds being expended;
(4)	Evaluate whether establishing an Indigent Defense Council to oversee the State's expenditure of funds on a district, regional, or Statewide basis would make the functioning of the Indigent Persons' Attorney Fee Fund more efficient and economical;
(5)	Evaluate the effectiveness of existing methods of providing legal representation to indigent defendants, including the use of public defenders, appointed counsel, and contract lawyers;
(6)	Review methods used by other states to provide legal representation to indigent defendants;
(7)	Assess the potential effectiveness of distributing funds in other ways, including the hiring of contract attorneys on a retainer basis and the expansion of public defender programs; and
(8)	Outline additional suggestions that would improve the provision of legal representation to indigent defendants.
The Administrative Office of the Courts shall assign professional and clerical staff to assist in the work of the Commission.  The Commission shall report its findings and recommendations 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 no later than May 1, 1999.  The report shall include a cost analysis demonstrating the additional personnel and equipment necessary to implement the Commission's recommendations.  The report shall also include any legislation necessary to implement the Commission's recommendations.
(c)	The Administrative Office of the Courts may use up to the sum of one hundred thousand dollars ($100,000) from the Indigent Persons' Attorney Fee Fund to contract for consultant services to assist in meeting the Commission's responsibilities.

Requested by:   Senator Rand
CUMBERLAND JUVENILE ASSESSMENT CENTER
Section 16.6. (a)	Section 18.21 of S.L. 1997-443 reads as rewritten:
"Section 18.21.  (a)	Of the funds appropriated in this act to the Administrative Office of the Courts for the 1997-98 fiscal year, the sum of one hundred fifty thousand dollars ($150,000) shall be used to fund the Juvenile Assessment Project authorized by this section. These funds shall be matched by local funds on the basis of one dollar ($1.00) of local funds for every three dollars ($3.00) of State funds.  These funds shall not revert at the end of the 1997-98 fiscal year, but shall remain in the Department during the 1998-99 fiscal year to implement this section.
(b)	The Administrative Office of the Courts, in collaboration with the Chief Court Counselor of District Court District 12, the Cumberland County Department of Social Services, and the appropriate local school administrative units, shall develop and implement a Juvenile Assessment Center Project in District Court District 12 to operate from the effective date of this act to June 30, 1999.  The purpose of the Project is to facilitate efficient prevention and intervention service delivery to juveniles who are (i) alleged to be delinquent or undisciplined and have been taken into custody or (ii) at risk of becoming delinquent or undisciplined because they have behavioral problems and have committed delinquent acts even though they have not been taken into custody.  The Project shall assist these juveniles by providing a centralized point of intake and assessment for the juveniles, by addressing the educational, emotional, and physical needs of the juveniles, and by providing juveniles with an atmosphere for learning personal responsibility, self-respect, and respect for others.  The Administrative Office of the Courts shall consider the recommendations of the Juvenile Assessment Advisory Board in developing and implementing the Project.
(c)	The Project shall be modeled after the Juvenile Assessment Center in Hillsborough County, Florida, and shall:
(1)	Identify those juveniles who are alleged to be delinquent or undisciplined or are at risk of becoming delinquent or undisciplined;
(2)	Evaluate the educational, emotional, and physical needs of the juveniles identified and determine whether the juveniles have problems related to substance abuse, depression, or other emotional conditions;
(3)	Develop in-depth and comprehensive assessment plans for the juveniles identified that recommend appropriate treatment, counseling, and disposition of the juveniles; and
(4)	Provide services to juveniles identified and their families through collaboration with public and private resources, including local law enforcement, parents' organizations, the Fayetteville Chamber of Commerce, and county and community programs and organizations that provide substance abuse treatment and child and family counseling.
(d)	There is established the Juvenile Assessment Advisory Board to make recommendations to the Administrative Office of the Courts regarding the development and operations of the Project.  The Board shall consist of 13 members, including:
(1)	The director of the Department of Social Services of Cumberland County, or the director's designee.
(2)	A representative from the local mental health area authority of Cumberland County.
(3)	A member of the Cumberland County Board of Education.
(4)	The sheriff of Cumberland County, or the sheriff's designee.
(5)	The chief of police of the Fayetteville Police Department, or the designee of the chief of police.
(6)	A judge of District Court District 12.
(7)	A juvenile court counselor from District Court District 12.
(8)	The director of the Guardian Ad Litem program in Cumberland County, or the director's designee.
(9)	The director of the Health Department of Cumberland County, or the director's designee.
(10)	Two public members appointed by the Fayetteville City Council.
(11)	Two public members appointed by the Board of County Commissioners of Cumberland County.
The members of the Board shall, within 30 days after the initial appointment is made, meet and elect one member as chair.  The Board shall meet at least once a month at the call of the chair, and a quorum of the Board shall consist of a majority of its members. The Board of County Commissioners of Cumberland County shall provide necessary clerical and professional assistance to the Board.
Initial appointments shall be made by October 1, 1997, and all terms shall expire June 30, 1999.
(e)	The Administrative Office of the Courts, in consultation with the Department of Health and Human Services, shall evaluate the Project and report to the Chairs of the House and Senate Appropriations Committees, the Chairs of the House and Senate Appropriations Subcommittees on Justice and Public Safety and Health and Human Services and the Fiscal Research Division of the General Assembly by May 1, 1999, on the progress of the development and implementation of the Project.  In the report, the Administrative Office of the Courts, in consultation with the Department of Health and Human Services, shall evaluate the effectiveness of the Project, including the number of juveniles served or expected to be served, and shall recommend whether the Project should be continued.  If the report recommends that the Project be continued, it shall also provide a cost analysis outlining the long-term staffing and operating needs of the Project."
(b)	This section becomes effective June 30, 1998.

Requested by:   Senator Gulley
N.C. STATE BAR FUNDS
Section 16.7.  Of the nonrecurring funds appropriated in the expansion budget as a grant-in-aid to the North Carolina State Bar for the 1998-99 fiscal year, the North Carolina State Bar may in its discretion use up to the sum of five hundred thousand dollars ($500,000) for the 1998-99 fiscal year to contract with the Center for Death Penalty Litigation to provide training, consultation, brief banking, and other assistance to attorneys representing indigent capital defendants.

Requested by:   Senator Gulley
COMMUNITY PENALTIES PROGRAMS
Section 16.8.  Subsection (a) of Section 18.4 of S.L. 1997-443 reads as rewritten:
"(a)	Of the funds appropriated from the General Fund to the Judicial Department for the 1997-99 biennium to conduct the Community Penalties Program, the sum of four million three hundred fifty-five thousand three hundred eighty-two dollars ($4,355,382) for the 1997-98 fiscal year and the sum of four million four hundred sixty-four thousand five hundred twenty-one dollars ($4,464,521) for the 1998-99 fiscal year may be allocated by the Judicial Department in each year of the biennium in any amount among existing community penalties programs, including any State-operated programs, or may be used to establish new community penalties programs."

Requested by:   Senator Gulley
DISTRICT COURT CIVIL CASE MANAGEMENT
Section 16.9.  Section 18.23 of S.L. 1997-443 reads as rewritten:
"Section 18.23.  The Administrative Office of the Courts shall report by April 1, 1999, to the Chairs of the Senate and House Appropriations Committees and the Chairs of the Senate and House Appropriations Subcommittees on Justice and Public Safety on the civil case management pilot programs established in District Court Districts 13, 18, and 30. The report shall assess the success of these programs in reducing the backlog of civil court cases and in resolving new cases more quickly."

Requested by:   Senator Gulley
CAPITAL CASE PILOT PROGRAM
Section 16.10.  (a) The Administrative Office of the Courts shall establish a capital case pilot program to be incorporated into the Office of the Appellate Defender to provide assistance to districts experiencing difficulty in locating qualified private counsel to handle capital cases.
(b)	The Administrative Office of the Courts may use up to the sum of one hundred eighty thousand forty dollars ($180,040) from the Indigent Persons' Attorney Fee Fund for the 1998-99 fiscal year for salaries, benefits, and related expenses to establish two new assistant public defender positions, one legal assistant position, and one investigator to work specifically on capital cases.
(c) The Administrative Office of the Courts shall report 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 May 1, 1999, on the effectiveness of the program, including information on which districts have received assistance, the average cost per defendant served, and an estimate of the savings to be realized in using this program rather than privately assigned counsel.

Requested by:   Senator Gulley
AUTHORIZE ADDITIONAL MAGISTRATES
Section 16.11.  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	4
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	4
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	7	Rocky Mount
Wilson	4	7
Wayne	5	12	Mount Olive
Greene	2	4
Lenoir	4	10	La Grange
Granville	3	7
Vance	3	6
Warren	3	4
Franklin	3	7
Person	3	4
Caswell	2	5
Wake	12	21	Apex,
Wendell,
Fuquay-
Varina,
Wake Forest
Harnett	7	11	Dunn
Johnston	10	12	Benson,
Clayton,
Selma
Lee	4	6
Cumberland	10	18
Bladen	4	6
Brunswick	4	7
Columbus	6	9	Tabor City
Durham	8	13
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	28
Gaston	11	21
Cleveland	5	8
Lincoln	4	7
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:   Senator Gulley
ASSISTANT PUBLIC DEFENDERS
Section 16.12.  From funds appropriated to the Indigent Persons' Attorney Fee Fund for the 1998-99 fiscal year, the Administrative Office of the Courts may use up to one hundred seventy-nine thousand two hundred twenty dollars ($179,220) for salaries, benefits, equipment, and related expenses to establish up to four new assistant public defender positions.

Requested by:   Senator Gulley
ELIMINATE REQUIREMENT OF CERTIFIED MAIL NOTICE IN BAIL BOND FORFEITURE CASES
Section 16.13.  G.S. 15A-544(b) reads as rewritten:
"(b)	If the principal does not comply with the conditions of the bail bond, the court having jurisdiction must enter an order declaring the bail to be forfeited. If forfeiture is ordered by the court, a copy of the order of forfeiture and notice that judgment will be entered upon the order after 60 days must be served on each obligor. Service is to be made by the clerk mailing by first-class mail a copy of the order of forfeiture and notice to each obligor at each obligor's address as noted on the bond and note on the original the date of mailing. Service is complete three days after the mailing."

Requested by:   Senator Gulley
PROVIDE THAT THE CLERK OF SUPERIOR COURT DOES NOT HAVE TO INVENTORY A DECEDENT'S SAFE-DEPOSIT BOX IF A QUALIFIED PERSON IS PRESENT AT THE OPENING OF THE BOX
Section 16.14.  (a) Article 15 of Chapter 28A of the General Statutes is amended by adding a new section to read:
"§ 28A-15-13. Opening and inventory of decedent's safe-deposit box.
(a)	Definitions. – The following definitions apply to this section:
(1)	Institution. – Any entity or person having supervision or possession of a safe-deposit box to which a decedent had access.
(2)	Letter of authority. – Letters of administration, letters testamentary, an affidavit of collection of personal property, an order of summary administration, or a letter directed to the institution designating a person entitled to receive the contents of a safe-deposit box to which the decedent had access.  The letter of authority must be signed by the clerk of superior court or by the clerk's representative.
(3)	Qualified person. – A person possessing a letter of authority or a person named as a lessee or cotenant of the safe-deposit box to which the decedent had access.
(b)	Presence of Clerk Required. – Any safe-deposit box to which a decedent had access shall be sealed by the institution having supervision or possession of the box.  Except as provided in subsection (c) of this section, the presence of the clerk of superior court of the county where the safe-deposit box is located or the presence of the clerk's representative is required before the box may be opened.  The clerk or the clerk's representative shall open the safe-deposit box in the presence of the person possessing a key to the box and a representative of the institution having supervision or possession of the box.  The clerk shall make an inventory of the contents of the box and furnish a copy to the institution and to the person possessing a key to the box.
(c)	An Inventory and the Presence of Clerk Not Required. – Neither an inventory nor the presence of the clerk of superior court or the clerk's representative is required when the person requesting the opening of the decedent's safe-deposit box is a qualified person.
(d)	Testamentary Instrument in Box. – If the safe-deposit box contains any writing that appears to be a will, codicil, or any other instrument of a testamentary nature, then the clerk of superior court or the qualified person shall file the instrument in the office of the clerk of superior court.
(e)	Release of Contents. – Except as provided in subsection (d) for testamentary instruments, the institution shall not release any contents of the safe-deposit box to anyone other than a qualified person.
(f)	No Tax Waiver Required. – Notwithstanding the provisions in G.S. 105-24(a), no tax waiver is required for the release of the contents of the decedent's safe-deposit box."
(b)	G.S. 105-24(b), (c), and (e) are repealed.
(c)	This section becomes effective October 1, 1998, and applies to estates of decedents who die on or after that date.

Requested by:   Senator Gulley
CONTINUE DRUG TREATMENT COURT
Section 16.15. (a)	Section 21.6(c) of Chapter 507 of the 1995 Session Laws reads as rewritten:
"(c)	Subsection (a) of this section becomes effective July 1, 1995.  The remainder of this section becomes effective October 1, 1995."
(b)	G.S. 7A-791 reads as rewritten:
"§ 7A-791. Purpose.
The General Assembly recognizes that a critical need exists in this State for criminal justice system programs that will reduce the incidence of drug use and drug addiction and crimes committed as a result of drug use and drug addiction. It is the intent of the General Assembly by this Article to create a program to facilitate the creation of local drug treatment court programs."
(c)	G.S. 7A-793 reads as rewritten:
"§ 7A-793. Establishment of Program.
The North Carolina Drug Treatment Court Program is established in the Administrative Office of the Courts to facilitate the creation and funding of local drug treatment court programs.  The Director of the Administrative Office of the Courts shall provide any necessary staff for planning, organizing, and administering the program.  Local drug treatment court programs funded pursuant to this Article shall be operated consistently with the guidelines adopted pursuant to G.S. 7A-795."
(d)	G.S. 7A-794 reads as rewritten:
"§ 7A-794. Fund administration.
The Drug Treatment Court Program Fund is created in the Administrative Office of the Courts and is administered by the Director of the Administrative Office of the Courts in consultation with the State Drug Treatment Court Advisory Committee. The Director of the Administrative Office of the Courts shall award grants from this Fund and implement local  drug treatment court programs.  Grants shall be awarded based upon the general guidelines set forth by the Director of the Administrative Office of the Courts and the State Drug Treatment Court Advisory Committee."
(e)  G.S. 7A-795 reads as rewritten:
"§ 7A-795. State Drug Treatment Court Advisory Committee.
The State Drug Treatment Court Advisory Committee is established to develop and recommend to the Director of the Administrative Office of the Courts guidelines for the drug treatment court program and to monitor local programs wherever they are implemented. The Committee shall be chaired by the Director or the Director's designee and shall consist of not less than seven members appointed by the Director and broadly representative of the courts, law enforcement, corrections, and substance abuse treatment communities.  In developing guidelines, the Advisory Committee shall consider the Substance Abuse and the Courts Action Plan and other recommendations of the Substance Abuse and the Courts State Task Force."
(f)  G.S. 7A-796 reads as rewritten:
"§ 7A-796. Local drug treatment court management committee.
Each judicial district choosing to establish a drug treatment court shall form a local drug treatment court management committee, consisting of the following persons, appointed by the senior resident superior court judge with the concurrence of the district attorney for that district:
(1)	A judge of the superior court;
(2)	A judge of the district court;
(3)	A district attorney or assistant district attorney;
(4)	A public defender or assistant public defender in judicial districts served by a public defender;
(5)	A member of the private criminal defense bar;
(6)	A clerk of superior court;
(7)	The trial court administrator in judicial districts served by a trial court administrator;
(8)	A probation officer;
(9)	A local law enforcement officer;
(10)	A representative of the local community college;
(11)	A representative of the treatment providers;
(12)	The local program director provided for in G.S. 7A-798; and
(13)	Any other persons selected by the local management committee.
The local drug treatment court management committee shall develop local guidelines and procedures, not inconsistent with the State guidelines, that are necessary for the operation and evaluation of the local drug treatment court."
(g)  G.S. 7A-798 reads as rewritten:
"§ 7A-798. Drug treatment court grant application; local program director.
(a)	Applications for funding to develop or implement local drug treatment court programs shall be submitted to the Director of the Administrative Office of the Courts, in such form and with such information as the Director may require consistent with the provisions of this Article. The Director shall award and administer grants in accordance with any laws made for that purpose, including appropriations acts and provisions in appropriations acts, and may adopt rules for the implementation, operation, and monitoring of grant-funded programs.
(b)	Grant applications shall specify a local program administrator who shall be responsible for the local program.  Grant funds may be used to fund a full-time or part-time local program director position and other necessary staff.  The staff may be employees of the grant recipient, employees of the court, or grant-established positions under the senior resident superior court judge or chief district court judge."
(h)  G.S. 7A-800 reads as rewritten:
"§ 7A-800. Payment of costs of treatment program.
Each defendant or offender  shall contribute to the cost of the substance abuse treatment received in the drug treatment court program, based upon guidelines developed by the local drug treatment court management committee."
(i)  G.S. 7A-801 reads as rewritten:
"§ 7A-801. Plan for evaluation.
The Administrative Office of the Courts shall develop a statewide model and conduct ongoing evaluations of all local drug treatment court programs.  A report of these evaluations shall be submitted to the General Assembly by March 1 of each year. Each local drug treatment court program shall submit evaluation reports to the Administrative Office of the Courts as requested.."
(j)  Subsection (a) of this section becomes effective June 30, 1998.

Requested by:   Senator Gulley
ADDITIONAL DISTRICT COURT JUDGES
Section 16.16.  (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	5	Craven
Pamlico
Carteret
4	7	Sampson
Duplin
Jones
Onslow
5	6	New Hanover
Pender
6A	2	Halifax
6B	3	Northampton
Bertie
Hertford
7	7	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	13	Wake
11	7	Harnett
Johnston
Lee
12	9	Cumberland
13	5	Bladen
Brunswick
Columbus
	14	6	Durham
15A	3	Alamance
15B	4	Orange
Chatham
16A	3	Scotland
Hoke
16B	5	Robeson
17A	2	Rockingham
17B	3	Stokes
Surry
18	11	Guilford
19A	3	Cabarrus
19B	5	Montgomery
Moore
Randolph
19C	4	Rowan
20	7	Stanly
Union
Anson
Richmond
21	7	Forsyth
22	8	Alexander
Davidson
Davie
Iredell
23	4	Alleghany
Ashe
Wilkes
Yadkin
24	4	Avery
Madison
Mitchell
Watauga
Yancey
25	7	Burke
Caldwell
Catawba
26	15	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 4, 7, 10, 11, 12, 14, 19C, and 26 as authorized by subsection (a) of this section.  Those judges' successors shall be elected in the 2002 election for four-year terms commencing on the first Monday in December 2002.
(c)	Subsection (a) of this section becomes effective December 15, 1998, as to any district where no county is subject to section 5 of the Voting Rights Act of 1965.  As to any district where any county is subject to section 5 of the Voting Rights Act of 1965, subsection (a) of this section becomes effective December 15, 1998, or 15 days after the date upon which that subsection is approved under section 5 of the Voting Rights Act.

Requested by:   Senators Gulley, Odom
FAMILY COURT PILOT PROGRAMS
Section 16.17.  (a)	The Administrative Office of the Courts shall establish pilot programs for the holding of family court in District Court Districts 12, 14, and 26.  Each pilot program shall be conducted following the guidelines for the establishment of family courts contained in the report of the Commission for the Future of Justice and the Courts in North Carolina and shall be assigned to hear all matters involving intrafamily rights, relationships, and obligations, and all juvenile justice matters, including:
(1)	Child abuse, neglect, and dependency;
(2)	Delinquent and undisciplined juvenile matters;
(3)	Emancipation of minors and termination of parental rights;
(4)	Divorce;
(5)	Annulment;
(6)	Equitable distribution;
(7)	Alimony and postseparation support;
(8)	Child custody;
(9)	Child support;
(10)	Paternity;
(11)	Adoption;
(12)	Domestic violence civil restraining orders;
(13)	Abortion consent waivers; and
(14)	Adult protective services.
(b)	The Administrative Office of the Courts shall report 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 April 1, 1999, on the implementation of these pilot programs, including the number of families served, the success in reducing the backlog of family cases and resolving new cases more quickly and efficiently, and the success in bringing consistency and fairness to the resolution of family matters.
(c)	Of the funds appropriated to the Juvenile Justice Reserve Fund established in Section 8.1 of this act, up to the sum of five hundred six thousand seven hundred seventy-six dollars ($506,776) shall be used to establish the necessary personnel and operating support to implement these programs.

Requested by:   Senator Gulley
EVALUATION OF CORRECTIONAL PROGRAMS
Section 16.18. (a)	The Judicial Department, through the North Carolina Sentencing and Policy Advisory Commission, and the Department of Correction shall jointly conduct ongoing evaluations of community corrections programs and in-prison treatment programs and make a biennial report to the General Assembly.  The report shall include composite measures of program effectiveness based on recidivism rates, other outcome measures, and costs of the programs.
During the 1998-99 fiscal year, the Sentencing and Policy Advisory Commission shall coordinate the collection of all data necessary to create an expanded database containing offender information on prior convictions, current conviction and sentence, program participation, and outcome measures.  Each program to be evaluated shall assist the Commission in the development of systems and collection of data necessary to complete the evaluation process.  The first evaluation report shall be presented 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 April 15, 2000, and future reports shall be made by April 15 of each even-numbered year.
The Judicial Department may use the sum of fifty thousand dollars ($50,000) in funds appropriated for the 1998-99 fiscal year to conduct the study provided for in this section.
(b)	Section 22.3 of Chapter 18 of the Session Laws of the 1996 Second Extra Session is repealed.

Requested by:   Senator Gulley
ESTABLISH PILOT PROGRAM OF SETTLEMENT PROCEDURES IN DISTRICT COURT ACTIONS INVOLVING FAMILY ISSUES
Section 16.19.  (a)	G.S. 7A-38.4 reads as rewritten:
"§ 7A-38.4. Settlement procedures in district court actions.
(a)	The purpose of this section is to authorize the design, implementation, and evaluation of a pilot program in which parties to district court actions involving equitable distribution, alimony, and support may be required to attend a pretrial mediated settlement conference or other settlement procedure.
	(c)	The Supreme Court may adopt rules to implement this section. The definitions in G.S. 7A-38.1(b)(2) and (b)(3) apply to this section.
(d)	District court judges of any participating district may order a mediated settlement conference or another settlement procedure for any action pending in the district involving issues of equitable distribution, alimony, or child or spousal support, pursuant to rules adopted by the Supreme Court.  The chief district court judge may by local rule order all such cases, not otherwise exempted by Supreme Court rule, to mediated settlement conference.
(e)	The parties to a district court action in which a mediated settlement conference is ordered, their attorneys, and other persons or entities with authority, by law or by contract, to settle the parties' claims shall attend the mediated settlement conference, or other settlement procedure ordered by a district court judge pursuant to rules of the Supreme Court, unless excused by those rules.  Nothing in this section shall require any party or other participant in the conference to make a settlement offer or demand which it deems is contrary to its best interests.
(f)	Any person required to attend a mediated settlement conference or other settlement procedure ordered by the court who, without good cause, fails to attend in compliance with this section and the rules adopted under this section, shall be subject to any appropriate monetary sanction imposed by a district court judge pursuant to rules of the Supreme Court, including the payment of attorneys' fees, mediator fees, and expenses incurred in attending the settlement procedure.  If the court imposes sanctions, it shall do so, after notice and hearing, in a written order, making findings of fact and conclusions of law. An order imposing sanctions shall be reviewable upon appeal where the entire record as submitted shall be reviewed to determine whether the order is supported by substantial evidence.
(g)	The parties to a district court action in which a mediated settlement conference is to be held pursuant to this section shall have the right to designate a mediator. Upon failure of the parties to designate within the time established by the rules of the Supreme Court, a mediator shall be appointed by a district court judge pursuant to rules of the Supreme Court.
(h)	Pursuant to rules of the Supreme Court, a chief district court judge, at the request of a party and with the consent of all parties, may order the parties to attend and participate in any other settlement procedure authorized by rules adopted by the Supreme Court or adopted by local district court rules, in lieu of attending a mediated settlement conference.  Neutrals acting pursuant to this section shall be selected and compensated in accordance with rules of the Supreme Court or pursuant to agreement of the parties. Nothing herein shall prohibit the parties from participating in other dispute resolution procedures, including arbitration, to the extent authorized under State or federal law.
(i)	Mediators and other neutrals acting pursuant to this section shall have judicial immunity in the same manner and to the same extent as a judge of the General Court of Justice, except that mediators and other neutrals may be disciplined in accordance with enforcement procedures adopted by the Supreme Court pursuant to G.S. 7A-38.2.
(j)	Costs of mediated settlement conferences and other settlement procedures shall be borne by the parties. Unless otherwise ordered by the court or agreed to by the parties, the mediator's fees shall be paid in equal shares by the parties. The rules adopted by the Supreme Court implementing this section shall set out a method whereby parties found by the court to be unable to pay the costs of settlement procedures are afforded an opportunity to participate without cost to an indigent party and without expenditure of State funds.
(k)	Evidence of statements made and conduct occurring in a settlement proceeding conducted pursuant to this section shall not be subject to discovery and shall be inadmissible in any proceeding in the action or other actions on the same claim. However, no evidence otherwise discoverable shall be inadmissible merely because it is presented or discussed in a settlement proceeding.
No mediator, or other neutral conducting a settlement procedure pursuant to this section, shall be compelled to testify or produce evidence concerning statements made and conduct occurring in a mediated settlement conference or other settlement procedure in any civil proceeding for any purpose, except proceedings for sanctions under this section, disciplinary hearings before the State Bar or any agency established to enforce standards of conduct for mediators, and proceedings to enforce laws concerning juvenile or elder abuse.
(l)	The Supreme Court may adopt standards for the certification and conduct of mediators and other neutrals who participate settlement procedures conducted pursuant to this section.  The standards may also regulate mediator training programs.  The Supreme Court may adopt procedures for the enforcement of those standards.  The administration of mediator certification, regulation of mediator conduct, and decertification shall be conducted through the Dispute Resolution Commission.
(m)	An administrative fee not to exceed two hundred dollars ($200.00) may be charged by the Administrative Office of the Courts to applicants for certification and annual renewal of certification for mediators and mediator training programs operation under this section.  The fees collected may be used by the Director of the Administrative Office of the Courts to establish and maintain the operations of the Commission and its staff.  The administrative fee shall be set by the Director of the Administrative Office of the Courts in consultation with the Dispute Resolution Commission.
(n)	The Administrative Office of the Courts, in consultation with the Dispute Resolution Commission, may require the chief district court judge of any participating district to report statistical data about settlement procedures conducted pursuant to this section for administrative purposes.
	(o)	Nothing in this section or rules adopted pursuant to it shall restrict the right to jury trial."
(b)	G.S. 7A-38.2(c) reads as rewritten:
"(c)	The Dispute Resolution Commission shall consist of 14 members: five judges appointed by the Chief Justice of the Supreme Court, at least two of whom shall be superior court judges, and at least two of whom shall be district court judges; two mediators certified to conduct superior court mediated settlement conferences and two mediators certified to conduct equitable distribution mediated settlement conferences appointed by the Chief Justice of the Supreme Court; two practicing attorneys who are not certified as mediators appointed by the President of the North Carolina State Bar, one of whom shall be a certified family law specialist; and three citizens knowledgeable about mediation, one of whom shall be appointed by the Governor, one by the General Assembly upon the recommendation of the Speaker of the House of Representatives in accordance with G.S. 120-121, and one by the General Assembly upon the recommendation of the President Pro Tempore of the Senate in accordance with G.S. 120-121. Members shall initially serve four-year terms, except that one judge, one mediator, one attorney, and the citizen member appointed by the Governor, shall be appointed for an initial term of two years. The Chief Justice shall designate one of the judge members to serve as chair for a two-year term. Members of the Commission shall be compensated pursuant to G.S. 138-5.
Vacancies shall be filled for unexpired terms and full terms in the same manner as incumbents were appointed.  Appointing authorities may receive and consider suggestions and recommendations of persons for appointment from the Dispute Resolution Commission, the Family Law, Litigation, and Dispute Resolution Sections of the North Carolina Bar Association, the North Carolina Association of Professional Family Mediators, the North Carolina Association of Clerks of Superior Court, the North Carolina Conference of Court Administrators, the Mediation Network of North Carolina, the Dispute Resolution Committee of the Supreme Court, the Conference of Chief District Court Judges, the Conference of Superior Court Judges, the Director of the Administrative Office of the Courts, and the Child Custody Mediation Advisory Committee of the Administrative Office of the Courts."
(c)	The Administrative Office of the Courts may solicit and accept funds from private sources to evaluate the pilot program conducted pursuant to this section.  The Administrative Office of the Courts shall report its findings and 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 April 1, 2001.
(d)	Of the funds appropriated to the Judicial Department for the 1998-99 fiscal year, the sum of fifty thousand dollars ($50,000) shall be used to fund the activities of the Dispute Resolution Commission in association with the pilot program authorized by this section.  No such funds shall be expended for the payment of mediator fees.

Requested by:   Senator Gulley
ADDITIONAL ASSISTANT DISTRICT ATTORNEY
Section 16.20.  (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	9
3B	Carteret, Craven, Pamlico	10
4	Duplin, Jones, Onslow,	14
Sampson
5	New Hanover, Pender	13
6A	Halifax	4
6B	Bertie, Hertford,	4
	Northampton
	7	Edgecombe, Nash, Wilson	15
8	Greene, Lenoir, Wayne	11
9	Franklin, Granville,	10
Vance, Warren
9A	Person, Caswell	4
	10	Wake	28
11	Harnett, Johnston, Lee	14
12	Cumberland	17
13	Bladen, Brunswick, Columbus	9
14	Durham	12
15A	Alamance	7
15B	Orange, Chatham	7
16A	Scotland, Hoke	5
16B	Robeson	9
17A	Rockingham	5
17B	Stokes, Surry	5
18	Guilford	26
19A	Cabarrus	 	5
19B	Montgomery, Moore, Randolph	11
19C	Rowan	5
20	Anson, Richmond,	14
Stanly, Union
21	Forsyth	15
22	Alexander, Davidson, Davie,	16
Iredell
23	Alleghany, Ashe, Wilkes,	5
Yadkin
24	Avery, Madison, Mitchell,	4
Watauga, Yancey
25	Burke, Caldwell, Catawba	14
26	Mecklenburg	32
	27A	Gaston	12
27B	Cleveland,	8
Lincoln
28	Buncombe	10
29	Henderson, McDowell, Polk,	11
Rutherford, Transylvania
30	Cherokee, Clay, Graham,	8
Haywood, Jackson, Macon,
Swain."
(b)	This section becomes effective December 1, 1998.

PART XVII.  DEPARTMENT OF CORRECTION
Requested by:   Senator Gulley
REALLOCATE LAND TO NC STATE UNIVERSITY
Section 17.  (a)	The 17.4-acre tract of State-owned land adjacent to Schenck Forest that is described in the Memorandum of Agreement made in October 1992, by and between the North Carolina Department of Correction and North Carolina State University, is reallocated to North Carolina State University.  The land shall be used for the purpose of teaching, research, and extension, including timber management practices, and forestry demonstration purposes associated with the North Carolina State University College of Forest Resources.  North Carolina State University shall maintain this land in good condition according to current timber management practices, excluding commercial timber harvesting.
(b)	The provisions of G.S. 143-341(4)g. do not apply to the reallocation of land set out in this section.

Requested by:   Senators Gulley, Ballance
REPORT ON BOOT CAMPS
Section 17.1.  Subsection (c) of Section 19 of Chapter 24 of the Session Laws of the 1994 Extra Session, as amended by Section 19.3 of Chapter 324 of the 1995 Session Laws, reads as rewritten:
"(c)	The Department of Correction shall evaluate the IMPACT program and the post-Boot Camp probation program funded under this section and report by March 1 of each year to the Joint Legislative Commission on Governmental Operations, the Joint Legislative Corrections and Crime Control Oversight Committee, and the Fiscal Research Division.  The evaluation of the IMPACT program and the post-Boot Camp probation program shall focus on the performance, behavior, and attitudes of the offenders while in the program.  Specific topics shall include measures of participation and completion, data on completion of educational, substance abuse treatment, and community service programs, drug testing and probation revocation statistics, and the current status of IMPACT graduates.  The evaluation shall also include any available information on the difference in outcome among offenders who attend the IMPACT program only, offenders who attend both the IMPACT program and aftercare, and similar offenders who receive other intermediate sanctions."

Requested by:   Senator Gulley
REIMBURSE COUNTIES FOR HOUSING AND EXTRAORDINARY MEDICAL COSTS FOR INMATES, PAROLEES, AND POST-RELEASE SUPERVISEES AWAITING TRANSFER TO STATE PRISON SYSTEM
Section 17.2.   Section 19(b) of S.L. 1997-443 reads as rewritten:
"(b)	The Department of Correction may use funds appropriated to the Department for the 1997-99 biennium to pay the sum of forty dollars ($40.00) per day as reimbursement to counties for the cost of housing convicted inmates and parolees and post-release supervisees awaiting transfer to the State prison system, as provided in G.S. 148-29.  The Department shall report quarterly to 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 expenditure of funds to reimburse counties for prisoners awaiting transfer and on its progress in reducing the jail backlog.
Prior to the expenditure of more than the sum of six million five hundred thousand dollars ($6,500,000) for the 1997-98 fiscal year or more than the sum of two million dollars ($2,000,000) for the 1998-99 fiscal year to reimburse counties for prisoners awaiting transfer, the Department of Correction and the Office of State Budget and Management shall report to the Joint Legislative Commission on Governmental Operations, 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 necessity of that expenditure."

Requested by:   Senator Gulley
INMATE HOUSING FUNDS
Section 17.3.  (a)	The Department of Correction may use funds available to the Department for the 1998-99 fiscal year to contract for prison beds to house inmates in local jails.  Prior to the expenditure of more than the sum of three million dollars ($3,000,000) in additional funds authorized by this section to contract for local jail beds, the Department of Correction and the Office of State Budget and Management shall report to the Chairs of the Senate and House Appropriations Committees and the Chairs of the Senate and House Appropriations Subcommittees on Justice and Public Safety on the necessity of that expenditure.  
(b)	The Department of Correction and the Office of State Budget and Management shall report by December 1, 1998, to the Chairs of the Senate and House Appropriations Committee and the Chairs of the Senate and House Appropriations Subcommittees on Justice and Public Safety on the status of contracts to house inmates in local jails, including the amount expended to date, the anticipated amount to be expended, and the dates each contract is expected to terminate.

Requested by:   Senator Gulley
USE OF FACILITIES CLOSED UNDER GPAC
Section 17.4.  Subsection (a) of Section 19.4 of S.L. 1997-443 reads as rewritten:
"(a)	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, with the elected State and local officials, and with State agencies about the possibility of converting that unit to other use.  The Department may also consult with any private for-profit or nonprofit firm about the possibility of converting the unit to other use.  Consistent with existing law and the future needs of the Department of Correction, the State may provide for the transfer or the lease of any of these units to counties, municipalities, State agencies, 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.  A prison unit under lease to a county pursuant to the provisions of this section for use as a jail is exempt for the period of the lease from any of the minimum standards adopted by the Secretary of Human Resources pursuant to G.S. 153A-221 for the housing of adult prisoners that would subject the unit to greater standards than those required of a unit of the State prison system.
Prior to any transfer or lease of these units, the Department of Correction shall report on the terms of the proposed transfer or lease to the Joint Legislative Commission on Governmental Operations and the Joint Legislative Corrections Oversight Committee.  The Department of Correction shall also provide quarterly summary reports to the Joint Legislative Commission on Governmental Operations and the Joint Legislative Corrections Oversight Committee on the conversion of these units to other use and on all leases or transfers entered into pursuant to this section."

Requested by:   Senator Gulley
MODIFICATION OF FUNDING FORMULA FOR THE NORTH CAROLINA STATE-COUNTY CRIMINAL JUSTICE PARTNERSHIP ACT
Section 17.5. Subsection (a) of Section 19.8 of S.L. 1997-443 reads as rewritten:
"(a)	Notwithstanding the funding formula set forth in G.S. 143B-273.15, appropriations made to the Department of Correction through the North Carolina State-County Criminal Justice Partnership Act for the 1997-99 biennium shall be distributed to the counties as specified in G.S. 143B-273.15(2) only, and not as discretionary funds.  The Department may also use funds from the State-County Criminal Justice Partnership Account in order to maintain the counties' allocations of nine million six hundred thousand dollars ($9,600,000) as provided in previous fiscal years.  Appropriations not claimed or expended by the counties during the 1997-99 biennium shall be distributed as specified in G.S. 143B-273.15(1)."

Requested by:   Senator Gulley
PROGRESS REPORT/PERFORMANCE AUDIT OF DIVISION OF ADULT PROBATION AND PAROLE
Section 17.6.  The Division of Adult Probation and Parole shall report to the Chairs of the Senate and House Appropriations Subcommittees on Justice and Public Safety and the Fiscal Research Division by January 1, 1999, on any actions taken or planned in response to the June 1, 1998, performance audit of the Division.  The report shall include details on any changes in funding, classification, staffing levels, or organization structure that have occurred since the June 1 audit and should highlight those changes that are directly related to issues raised in the audit.

Requested by:   Senator Gulley
FUNDING OF PRISON ROAD SQUADS
Section 17.7.  In preparing the continuation budget, the Office of State Budget and Management shall adjust the estimated receipts from the Highway Fund to the Department of Correction for the use of prison road squads to reflect only those costs authorized for reimbursement by G.S. 148-26.5.

Requested by:   Senator Gulley
INMATE COSTS
Section 17.8.  Section 19.20 of S.L. 1997-443 reads as rewritten:
"Section 19.20.  The Department of Correction may use funds available to the Department for the 1997-99 biennium to pay the cost of providing food and health care to inmates housed in the Division of Prisons 
	if the cost of providing food and health care to inmates is anticipated to exceed the continuation budget amounts provided for that purpose in this act.
Prior to making any expenditure authorized by this section, the Department of Correction shall report on its need to use these additional funds 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.
	The Office of State Budget and Management, in consultation with the Department of Correction, shall (i) analyze the basis for increases in the cost of providing food service and health care to inmates since the 1994-95 fiscal year, including an analysis of the major areas of expenditure growth, and an identification of major areas where cost-efficient actions have been taken, and (ii) determine future actions that will improve efficiency in the delivery of food service and health care to inmates.  The Office of State Budget and Management shall report on the results of this study 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 February 15, 1999."

Requested by:   Senator Gulley
TITLE VII FUNDS/REPORT
Section 17.9.  Section 19.18 of S.L. 1997-443 reads as rewritten:
"Section 19.18. The Department of Correction may use funds available to the Department during the 1997-99 biennium for payment to claimants as part of the settlement of the Title VII lawsuit over the recruitment, hiring, and promotion of females in the Department.  Prior to final settlement of the lawsuit, the Department shall report on the proposed settlement to the Joint Legislative Commission on Governmental Operations, the Joint Legislative Corrections Oversight Committee, and the Chairs of the Senate and House Appropriations Subcommittees on Justice and Public Safety."

Requested by:   Senator Gulley
DIRECT CRIMINAL JUSTICE EDUCATION AND TRAINING STANDARDS COMMISSION TO REVISE HIRING AND RECORD-KEEPING PROCEDURES FOR EMPLOYEES OF DEPARTMENT OF CORRECTION
Section 17.10.  (a) Section 19.28 of S.L. 1997-443 reads as rewritten:
"Section 19.28.  No later than October 1, 1998, the Criminal Justice Education and Training Standards Commission shall reestablish the hiring and record-keeping procedures for the employment of certified positions in the Department of Correction."
(b)	The Criminal Justice Education and Training Standards Commission shall report by October 1, 1998, to the Joint Legislative Corrections and Crime Control 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 its progress in complying with the provisions of this section.
(c)	This section becomes effective June 30, 1998.

Requested by:   Senator Gulley
FEDERAL GRANT MATCHING FUNDS
Section 17.11.  Notwithstanding the provisions of G.S. 148-2, the Department of Correction may use up to the sum of eight hundred seventy-five thousand dollars ($875,000) from funds remaining in the Corrections Enterprises Fund, after the application of capital and operating expenditures and the credit to the Crime Victims' Compensation Fund, to provide the State match needed in order to receive federal grant funds.

Requested by:   Senators Plyler, Kerr, Gulley, Ballance
SUBSTANCE ABUSE FUNDS
Section 17.12.  (a) The balance of the four hundred sixty-seven thousand eight hundred six dollars ($467,806) appropriated in S.L. 1997-443 to the Department of Correction for the 1997-98 fiscal year to be allocated to the DART/DWI aftercare program at Cherry Hospital shall not revert at the end of the fiscal year but shall remain available to the Department during the 1998-99 fiscal year to be used as authorized in this section.
(b)	Of the funds appropriated to the Department of Correction for the 1998-99 fiscal year and the funds available pursuant to subsection (a) of this section:
(1)	The Department may use up to the sum of four hundred thousand dollars ($400,000) for DART/DWI aftercare;
(2)	The Department may use up to the sum of one hundred twenty-five thousand dollars ($125,000) for contractual services for the Substance Abuse Program (i) to assist in identifying the type of program and management information that should be collected to allow for offender and inmate tracking and program evaluation; (ii) for staff training related to the tracking and evaluation system described in this subsection; and (iii) for other staff training, with priority given to training in proper screening and assessment procedures for identifying inmates with substance abuse problems.
(3)	The sum of one hundred thousand dollars ($100,000) shall be placed in a reserve for the purchase of hardware and software needed to implement the offender and inmate tracking and program evaluation system for the Substance Abuse Program developed pursuant to subdivision (b)(2) of this section.
The Department shall report by September 15, 1998, to the Chairs of the Senate and House Appropriations Committees and the Chairs of the Senate and House Appropriations Subcommittees on Justice and Public Safety on their progress in identifying and retaining consultants to assist in developing a plan for an offender and inmate tracking and program evaluation system.  Funds in the reserve established in subdivision (3) of this section may not be allocated for this purpose until the Department has submitted a plan for an offender and inmate tracking and program evaluation system.  If the Department has presented its final plan in writing 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 the convening of the 1999 General Assembly, funds in the reserve may be allocated for implementation of the plan.  If the Department has not submitted its plan by the convening of the 1999 General Assembly, the funds shall be allocated by the 1999 General Assembly.
(c)	Any funds remaining after the Department of Correction has used the authorized funds for the purposes provided by subsection (b) of this section may be used for innovative pilot projects for offenders with substance abuse problems and for the expansion of program evaluation of the Substance Abuse Program.
(d)	 The Department of Correction shall report by March 1 of each year to the Chairs of the Senate and House Appropriations Committees and the Chairs of the Senate and House Appropriations Subcommittees on Justice and Public Safety on their efforts to provide effective treatment to offenders with substance abuse problems.  The report shall include:
(1)	Details of any new initiatives and expansion or reduction of programs;
(2)	Details on any treatment efforts conducted in conjunction with other departments;
(3)	Utilization of the DART/DWI program, including its aftercare program;
(4)	Progress in the development of an offender and inmate tracking and program evaluation system; and
(5)	A report on the number of current inmates with substance abuse problems, the numbers currently receiving treatment, and the numbers who have completed treatment.

Requested by:   Senator Gulley
POST-RELEASE SUPERVISION AND PAROLE COMMISSION/REPORT ON STAFFING REORGANIZATION AND REDUCTION
Section 17.13.  The Post-Release Supervision and Parole Commission shall report by March 1, 1999, to the Chairs of the Senate and House Appropriations Subcommittees on Justice and Public Safety on:
(1)	The Commission's progress in reviewing cases requiring review in light of the decision of the North Carolina Supreme Court in Robbins v. Freeman; and
(2)	An updated transition plan for implementing staff reductions through the 2002-2003 fiscal year, including a minimum ten percent (10%) reduction in staff positions in the 1999-2000 fiscal year over the 1998-99 fiscal year.

Requested by:   Senator Gulley
PRIVATE PRISON CONTRACTS
Section 17.14.  If the Department of Correction determines, in consultation with the Attorney General's Office, the Office of State Budget and Management, and the Corrections Corporation of America, that it is appropriate to modify the terms of the contracts for the leasing and operation of one or both of the two private confinement facilities in Pamlico and Avery/Mitchell, the Department may use funds available to the Department for the 1998-99 fiscal year to modify the lease contract and the operating agreement as necessary.  Prior to taking actions or obligating funds as authorized by this section, the Department of Correction shall report to the Joint Legislative Commission on Governmental Operations, 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 justification for modifying the contracts.

Requested by:   Senator Gulley
STUDY SPECIAL EDUCATION OBLIGATIONS OF DEPARTMENT OF CORRECTION
Section 17.15.  The Joint Legislative Education Oversight Committee shall study the issue of limiting the obligations of the Department of Correction to provide special education and related services to incarcerated youth ages 18 through 21.  The Committee shall consider the recent amendment to the federal Individuals with Disabilities Education Act (IDEA) that allows states to reduce the responsibility of their prisons to identify and serve inmates not previously identified and served in the public schools.  The Committee shall report its findings and recommendations to the 1999 General Assembly.

Requested by:   Senators Gulley, Cooper
ADDITIONAL PRISON BEDS/PROVIDE THAT A SENTENCE OF LIFE IMPRISONMENT WITHOUT PAROLE SHALL BE IMPOSED FOR A SECOND OR SUBSEQUENT CONVICTION OF A CLASS B1 FELONY IF THERE ARE NO MITIGATING CIRCUMSTANCES AND THE VICTIM IS THIRTEEN YEARS OF AGE OR YOUNGER/ENHANCE THE PUNISHMENT IMPOSED FOR INJURING A PREGNANT WOMAN IN THE COMMISSION OF A FELONY OR ACT OF DOMESTIC VIOLENCE, CAUSING A MISCARRIAGE OR STILLBIRTH/INCREASE THE PENALTY FOR CRUELTY TO ANIMALS AND PROHIBIT GREYHOUND RACING IN NORTH CAROLINA/CLARIFY A LANDLORD'S OBLIGATION TO INSTALL SMOKE DETECTORS, REQUIRE A TENANT TO NOTIFY A LANDLORD IN WRITING IF A SMOKE DETECTOR NEEDS TO BE REPLACED OR REPAIRED, IMPOSE A CIVIL PENALTY IF A LANDLORD FAILS TO PROVIDE, INSTALL, REPLACE, OR REPAIR A SMOKE DETECTOR IN A RESIDENTIAL RENTAL DWELLING, AND  IMPOSE A CIVIL PENALTY IF A TENANT INTERFERES OR MAKES INOPERATIVE A SMOKE DETECTOR IN A RESIDENTIAL RENTAL DWELLING
Section 17.16.  (a)	Article 81B of Chapter 15A of the General Statutes is amended by adding a new section to read:
"§ 15A-1340.16B.  Life imprisonment without parole for a second or subsequent conviction of a Class B1 felony.
(a)	Notwithstanding the sentencing dispositions in G.S. 15A-1340.17, a person convicted of a Class B1 felony shall be sentenced to life imprisonment without parole if:
(1)	The offense was committed against a victim who was 13 years of age or younger at the time of the offense;
(2)	The person has one or more prior convictions of a Class B1 felony; and
(3)	The court finds that there are no mitigating factors in accordance with G.S. 15A-1340.16(e).
(b)	If the sentencing court finds that there are mitigating circumstances, then the court shall sentence the person in accordance with G.S. 15A-1340.17.
(c)	A prior conviction of a Class B1 felony shall be proved in accordance with G.S. 15A-1340.14."
(b)	Article 6 of Chapter 14 of the General Statutes is amended by adding a new section to read:
"§ 14-18.2.  Injury to pregnant woman.
(a)	Definitions. – The following definitions shall apply in this section:
(1)	Miscarriage. – The interruption of the normal development of the fetus, other than by a live birth, and which is not a procedure performed in accordance with G.S. 14-45.1 or other provisions of law, resulting in the complete expulsion or extraction of the fetus from a pregnant woman.
(2)	Stillbirth. – The death of a fetus prior to the complete expulsion or extraction from a woman irrespective of the duration of pregnancy and which is not a procedure performed in accordance with G.S. 14-45.1 or other provisions of law.
(b)	A person who in the commission of a felony causes injury to a woman, knowing the woman to be pregnant, which injury results in a miscarriage or stillbirth by the woman is guilty of a felony that is one class higher than the felony committed.
(c)	A person who in the commission of a misdemeanor that is an act of domestic violence as defined in Chapter 50B of the General Statutes causes injury to a woman, knowing the woman to be pregnant, which results in miscarriage or stillbirth by the woman is guilty of a misdemeanor that is one class higher than the misdemeanor committed. If the offense was a Class A1 misdemeanor, the defendant is guilty of a Class I felony.
(d)	This section shall not apply to acts committed by a pregnant woman which result in a miscarriage or stillbirth by the woman herself."
(c)	G.S. 14-360 reads as rewritten:  
"§ 14-360.  Cruelty to animals; construction of section.
(a)	If any person shall willfully overdrive, overload, wound, injure, torture, torment, deprive of necessary sustenance, cruelly beat, needlessly mutilate or kill or cause or procure to be overdriven, overloaded, wounded, injured, tortured, tormented, deprived of necessary sustenance, cruelly beaten, needlessly mutilated or killed as aforesaid, any animal, every such offender shall for every such offense be guilty of a Class 1 misdemeanor.  In this section, and in every law which may be enacted relating to animals, the words "animal" and "dumb animal" shall be held to include every living creature; the words "torture," "torment" or "cruelty"shall be held to include every act, omission or neglect whereby unjustifiable physical pain, suffering or death is caused or permitted. 
	(b)	If any person shall maliciously torture, torment, mutilate, maim, cruelly beat, disfigure, poison or kill, or cause to be tortured, tormented, mutilated, maimed, cruelly beaten, disfigured, poisoned, or killed, any equine animal, bovine animal, sheep, goat, swine or other livestock, dogs, cats, and other animals kept as pets or mascots, every such offender shall for every such offense be guilty of a Class I felony. The word 'maliciously' as used in this subsection, shall mean an act done with bad motive, without justifiable excuse, and with the intent to cause physical pain, suffering, or death.
(c)	This section does not apply to the lawful taking of animals under the jurisdiction and regulation of the Wildlife Resources Commission."
(d)	Article 37 of Chapter 14 of the General Statutes is amended by adding a new Part to read:
"Part 3.  Greyhound Racing.
"§ 14-309.20.  Greyhound racing prohibited.
(a)	No person shall hold, conduct, or operate any greyhound races for public exhibition in this State for monetary remuneration.
(b)	No person shall transmit or receive interstate or intrastate simulcasting of greyhound races for commercial purposes in this State.
(c)	Any person who violates this section shall be guilty of a Class 1 misdemeanor."
(e)  G.S. 42-42(a) reads as rewritten:
"(a)	The landlord shall:
(1)	Comply with the current applicable building and housing codes, whether enacted before or after October 1, 1977, to the extent required by the operation of such codes; no new requirement is imposed by this subdivision (a)(1) if a structure is exempt from a current building code.
(2)	Make all repairs and do whatever is necessary to put and keep the premises in a fit and habitable condition.
(3)	Keep all common areas of the premises in safe condition.
(4)	Maintain in good and safe working order and promptly repair all electrical, plumbing, sanitary, heating, ventilating, air conditioning, and other facilities and appliances supplied or required to be supplied by the landlord provided that notification of needed repairs is made to the landlord in writing by the tenant, except in emergency situations.
(5)	Provide operable smoke detectors, either battery-operated or electrical, having an Underwriters' Laboratories, Inc., listing or other equivalent national testing laboratory approval, and install the smoke detectors in accordance with either the standards of the National Fire Protection Association or the minimum protection designated in the manufacturer's instructions, which the landlord shall retain or provide as proof of compliance. The landlord shall replace or repair the smoke detectors within 15 days of receipt of notification if the landlord is notified of needed replacement or repairs in writing by the tenant. The landlord shall ensure that a smoke detector is operable and in good repair at the beginning of each tenancy.  Unless the landlord and the tenant have a written agreement to the contrary, the landlord shall place new batteries in a battery-operated smoke detector at the beginning of a tenancy and the tenant shall replace the batteries as needed during the tenancy. Failure of the tenant to replace the batteries as needed shall not be considered as negligence on the part of the tenant or the landlord."
(f)  G.S. 42-43(a) reads as rewritten:
"(a)	The tenant shall:
(1)	Keep that part of the premises that the tenant occupies and uses as clean and safe as the conditions of the premises permit and cause no unsafe or unsanitary conditions in the common areas and remainder of the premises that the tenant uses.
(2)	Dispose of all ashes, rubbish, garbage, and other waste in a clean and safe manner.
(3)	Keep all plumbing fixtures in the dwelling unit or used by the tenant as clean as their condition permits.
(4)	Not deliberately or negligently destroy, deface, damage, or remove any part of the premises, nor render inoperable the smoke detector provided by the landlord, or knowingly permit any person to do so.
(5)	Comply with any and all obligations imposed upon the tenant by current applicable building and housing codes.
(6)	Be responsible for all damage, defacement, or removal of any property inside a dwelling unit in the tenant's exclusive control unless the damage, defacement or removal was due to ordinary wear and tear, acts of the landlord or the landlord's agent, defective products supplied or repairs authorized by the landlord, acts of third parties not invitees of the tenant, or natural forces.
(7)	Notify the landlord, in writing, of the need for replacement of or repairs to a smoke detector. The landlord shall ensure that a smoke detector is operable and in good repair at the beginning of each tenancy.  Unless the landlord and the tenant have a written agreement to the contrary, the landlord shall place new batteries in a battery-operated smoke detector at the beginning of a tenancy and the tenant shall replace the batteries as needed during the tenancy. Failure of the tenant to replace the batteries as needed shall not be considered as negligence on the part of the tenant or the landlord."
(g)  G.S. 42-44 reads as rewritten:
"§ 42-44. General remedies, penalties, and limitations.
(a)	Any right or obligation declared by this Chapter is enforceable by civil action, in addition to other remedies of law and in equity.
(a1)	If a landlord fails to provide, install, replace, or repair a smoke detector under the provisions of G.S. 42-42(a)(5) within 30 days of having received written notice from the tenant or any agent of State or local government of the landlord's failure to do so, the landlord shall be responsible for an infraction and shall be subject to a fine of not more than two hundred fifty dollars ($250.00) for each violation.  The landlord may temporarily disconnect a smoke detector in a dwelling unit or common area for construction or rehabilitation activities, when such activities are likely to activate the smoke detector or make it inactive.
(a2)	If a smoke detector is disabled or damaged, other than through actions of the landlord, the landlord's agents, or acts of God, the tenant shall reimburse the landlord ten dollars ($10.00) for repairing or replacing the smoke detector within 30 days of having received written notice from the landlord or any agent of State or local government of the need for the tenant to make such reimbursement.  If the tenant fails to make reimbursement within 30 days, the tenant shall be responsible for an infraction and subject to a fine of not more than one hundred dollars ($100.00) for each violation.  The tenant may temporarily disconnect a smoke detector in a dwelling unit to replace the batteries or when it has been inadvertently activated.
(b)	Repealed by Session Laws 1979, c. 820, s. 8.
(c)	The tenant may not unilaterally withhold rent prior to a judicial determination of a right to do so.
(d)	A violation of this Article shall not constitute negligence per se."
(h) This section becomes effective December 1, 1998, and applies to offenses committed on or after that date.

Requested by:   Senators Gulley, Martin of Guilford, Miller, Reeves, Dannelly, Winner, Odom
SUMMIT HOUSE FUNDS
Section 17.17.  Of the funds appropriated to the Department of Correction, the sum of six hundred twenty-five thousand dollars ($625,000) shall be used for Summit House as follows:
(1)	$235,000 for renovations at the three residential facilities to meet safety requirements for licensure;
(2)	$385,000 to pay off existing mortgages for the Charlotte and Wake County facilities; and
(3)	$5,000 for repairs to the Guilford County facility.

Requested by:   Senators Gulley, Plyler, Odom
USE OF FEDERAL PRISON CONSTRUCTION GRANT FUNDS
Section 17.18.  Section 19.22 of S.L. 1997-443 reads as rewritten:
"Section 19.22.  The Department of Correction shall use federal grant funds received from the U.S. Justice Department as part of the Violent Offender Incarceration Program and the Truth-In-Sentencing Incentive Grant Program  and any State funds appropriated for the further planning and design and construction of the following State prison facilities, provided that the project meets the criteria of the federal grant program:

Facility	Location	Number of Beds	Custody
Central Prison 	Wake	196	Close
Diagnostic Center
Warren Correctional	Warren 	168	Med/Close
Institution
Improvements to	Wake	208	Med/Close
NCCIW
Scotland Facility	Scotland	712	Close
Alexander Facility	Alexander	520	Close
(or replacement site)
Metro Facility	Charlotte	520	Close
Area
If the Department of Correction identifies a replacement for the Alexander Facility, the Department of Correction shall report on the site selected to the Chairs of the Senate and House Appropriations Committees, the Senate and House Appropriations Subcommittees on Justice and Public Safety, and the Joint Legislative Corrections and Crime Control Oversight Committee.
Prior to major redesign or expansion of plans for Scotland, Alexander, and Metro, the Department of Correction shall report to the Chairs of the Senate and House Appropriations Committees, the Senate and House Appropriations Subcommittees on Justice and Public Safety, and the Joint Legislative Corrections and Crime Control Oversight Committee.
The Department of Correction shall not initiate further construction on any of the projects listed in this section until the Department reports to the Chairs of the Senate and House Appropriations Committees, the Senate and House Appropriations Subcommittees on Justice and Public Safety, and the Joint Legislative Corrections and Crime Control Oversight Committee on the proposed construction plans and the short-term and long-term costs of the projects.
The Department of Correction shall report by November 1, 1998, to the Chairs of the Senate and House Appropriations Committees, the Senate and House Appropriations Subcommittees on Justice and Public Safety, the Joint Legislative Corrections and Crime Control Oversight Committee on the allocation of any federal funds received and of anticipated future federal grant funds."

PART XVIII.  DEPARTMENT OF JUSTICE
Requested by:   Senator Gulley
SALARY EQUITY FOR SBI LAW ENFORCEMENT
Section 18.  Subsection (a) of Section 20.9 of S.L. 1997-443 reads as rewritten:
"(a)	Of the funds appropriated in this act to the Department of Justice for the State Bureau of Investigation, the sum of two million seven hundred thousand dollars ($2,700,000) for the 1997-98 fiscal year and the sum of two million six hundred sixty-six thousand dollars ($2,666,000) for the 1998-99 fiscal year shall be used to adjust the salaries of law enforcement positions in the State Bureau of Investigation.  These adjustments shall be based on factors, such as employee salary, position class title, position grade, and credible years of sworn service with the State Bureau of Investigation.  No salary adjustment shall result in an increase beyond the maximum salary set for an officer's pay grade.  If an officer's salary is near or at the top of the officer's pay grade, the officer shall be eligible to receive a salary adjustment up to the top of the officer's pay grade.  If an officer is at the top of the officer's pay grade, then the officer is not eligible to receive a salary adjustment.  Sworn officers holding the following management positions are not eligible to receive the salary adjustment:  SBI Director, SBI Assistant Directors of Support Services, SBI Assistant Director, SBI Assistant Directors of Field Services, SBI Assistant Director of Crime Laboratory, Deputy Director of Medicaid Fraud."

Requested by:   Senator Gulley
LIMITS ON COMPUTER SYSTEM UPGRADE
Section 18.1. Section 20.4 of S.L. 1997-443 reads as rewritten:
"Section 20.4.  Any major new computer system or major computer system upgrade for the Judicial Department, the Department of Correction, the Department of Justice, or the Department of Crime Control and Public Safety, to be funded all or in part from the Continuation Budget, shall be reported to the Joint Legislative Commission on Governmental Operations, to the Chairs of the Senate and House of Representatives Appropriations Committees, and to the Chairs of the Senate and House Appropriations Subcommittees on Justice and Public Safety before the department enters into any contractual agreement.  A major computer system upgrade includes any proposed enhancement, modification, or capacity increase to the computing and telecommunications infrastructure or to program applications where the total cost is anticipated to exceed five hundred thousand dollars ($500,000).  This report is to be made jointly by the Information Resource Management Commission, the Office of State Budget and Management, and the requesting department."

Requested by:   Senator Gulley
CRIMINAL JUSTICE INFORMATION NETWORK REPORT
Section 18.2.  (a) The Criminal Justice Information Network Governing Board created pursuant to Section 23.3 of Chapter 18 of the Session Laws of the 1996 Second Extra Session shall report by March 1, 1999, to the Chairs of the Senate and House Appropriations Committees, the Chairs of the Senate and House Appropriations Subcommittees on Justice and Public Safety, and the Fiscal Research Division of the General Assembly on:
(1)	The operations of the Board, including the Board's progress in developing data-sharing standards in cooperation with State and local agencies and the estimated time of completion of the standards.
(2)	The operating budget of the Board, the expenditures of the Board as of the date of the report, and the amount of funds in reserve for the operation of the Board. 
(3)	A long-term strategic plan and cost analysis for statewide implementation of the Criminal Justice Information Network.  For each component of the Network, the initial cost estimate of the component, the amount of funds spent to date on the component, the source of funds for expenditures to date, and a timetable for completion of that component, including additional resources needed at each point.
(b)	G.S. 143-661(b) reads as rewritten:
"(b)	The Board shall consist of 19 members, appointed as follows:
(1)	Three members appointed by the Governor, including one member who is a director or employee of a State correction agency for a term to begin September 1, 1996 and to expire on June 30, 1997, one member who is an employee of the North Carolina Department of Crime Control and Public Safety for a term beginning September 1, 1996 and to expire on June 30, 1997, and one member selected from the North Carolina Association of Chiefs of Police for a term to begin September 1, 1996 and to expire on June 30, 1999.
(2)	Six members appointed by the General Assembly in accordance with G.S. 120-121, as follows:
a.	Three members recommended by the President Pro Tempore of the Senate, including two members of the general public for terms to begin on September 1, 1996 and to expire on June 30, 1997, and one member selected from the North Carolina League of Municipalities who is a member of, or an employee working directly for, the governing board of a North Carolina municipality for a term to begin on September 1, 1996 and to expire on June 30, 1999; and
b.	Three members recommended by the Speaker of the House of Representatives, including two members of the general public for terms to begin on September 1, 1996 and to expire on June 30, 1999, and one member selected from the North Carolina Association of County Commissioners who is a member of, or an employee working directly for, the governing board of a North Carolina county for a term to begin on September 1, 1996 and to expire on June 30, 1997.
(3)	Two members appointed by the Attorney General, including one member who is an employee of the Attorney General for a term to begin on September 1, 1996 and to expire on June 30, 1997, and one member from the North Carolina Sheriffs' Association for a term to begin on September 1, 1996 and to expire on June 30, 1999.
(4)	Six members appointed by the Chief Justice of the North Carolina Supreme Court, as follows:
a.	The Director of the Administrative Office of the Courts, or an employee of the Administrative Office of the Courts, for a term beginning July 1, 1997, and expiring June 30, 2001.
b.	One member who is a district attorney or an assistant district attorney, for a term beginning July 1, 1998, and expiring June 30, 1999.
c.	Two members who are superior court or district court judges for terms beginning July 1, 1998, and expiring June 30, 2001.
d.	One member who is a magistrate for a term beginning July 1, 1998, and expiring June 30, 1999.
e.	One member who is a clerk of superior court for a term beginning July 1, 1998, and expiring June 30, 1999.
(5)	One member appointed by the Chair of the Information Resource Management Commission, who is the Chair or a member of that Commission, for a term to begin on September 1, 1996 and to expire on June 30, 1999.
(6)	One member appointed by the President of the North Carolina Chapter of the Association of Public Communications Officials International, who is an active member of the Association, for a term to begin on September 1, 1996 and to expire on June 30, 1999.
The respective appointing authorities are encouraged to appoint persons having a background in and familiarity with criminal information systems and networks generally and with the criminal information needs and capacities of the constituency from which the member is appointed.
As the initial terms expire, subsequent members of the Board shall be appointed to serve four-year terms.  At the end of a term, a member shall continue to serve on the Board until a successor is appointed.  A member who is appointed after a term is begun serves only for the remainder of the term and until a successor is appointed.  Any vacancy in the membership of the Board shall be filled by the same appointing authority that made the appointment, except that vacancies among members appointed by the General Assembly shall be filled in accordance with G.S. 120-122."

Requested by:   Senator Gulley
STUDY FEE ADJUSTMENT FOR CRIMINAL RECORDS CHECKS
Section 18.3.  The Office of State Budget and Management, in consultation with the Department of Justice, shall study the feasibility of adjusting the fees charged for criminal records checks conducted by the Division of Criminal Information of the Department of Justice as a result of the increase in receipts from criminal records checks.  The study shall include an assessment of the Division's operational, personnel, and overhead costs related to providing criminal records checks and how those costs have changed since the 1995-96 fiscal year. The Office of State Budget and Management shall report its findings and recommendations to the Chairs of the Senate and House Appropriations Committees, the Chairs of the Senate and House Appropriations Subcommittees on Justice and Public Safety, and the Fiscal Research Division of the General Assembly on or before March 1, 1999.

Requested by:   Senators Plyler, Odom
STUDY RECIPROCITY OF CONCEALED HANDGUN PERMITS
Section 18.4.  (a) The Joint Legislative Corrections and Crime Control Oversight Committee shall study the issue of providing that a nonresident who has been issued a valid handgun permit in a reciprocal state may carry a concealed handgun in accordance with Article 54B of Chapter 14 of the General Statutes as if the permit were issued by this State.  The Committee shall report its findings and recommendations to the 1999 General Assembly.
(b)	The Attorney General shall prepare a list of those states that provide for concealed handgun permits that are equal to or more stringent than those required by North Carolina in order to assist the Joint Legislative Corrections and Crime Control Oversight Committee in its study.

Requested by:   Senator Gulley
USE OF SEIZED AND FORFEITED PROPERTY TRANSFERRED TO STATE LAW ENFORCEMENT AGENCIES BY THE FEDERAL GOVERNMENT
Section 18.5.  Section 20.7(a) of S.L. 1997-443 reads as rewritten:
"(a)	Assets transferred to the Department of Justice during the 1997-99 biennium pursuant to 19 U.S.C. § 1616a shall be credited to the budget of the Department and shall result in an increase of law enforcement resources for the Department.  Assets transferred to the Department of Crime Control and Public Safety during the 1997-99 biennium pursuant to 19 U.S.C. § 1616a shall be credited to the budget of the Department and shall result in an increase of law enforcement resources for the Department.  The Departments of Justice and Crime Control and Public Safety shall report to the Joint Legislative Commission on Governmental Operations upon receipt of the assets and, before using the assets, shall report on the intended use of the assets and the departmental priorities on which the assets may be expended.
	The General Assembly finds that the use of assets transferred pursuant to 19 U.S.C. § 1616a for new personnel positions, new projects, the acquisition of real property, repair of buildings where the repair includes structural change, and construction of or additions to buildings may result in additional expenses for the State in future fiscal periods.  Therefore, the Department of Justice and the Department of Crime Control and Public Safety are prohibited from using these assets for such purposes without the prior approval of the General Assembly, except during the 1998-99 fiscal year, the Department of Justice may:
(1)	Use an amount not to exceed the sum of twenty-five thousand dollars ($25,000) of the funds to extend the lease of space in the Town of Salemburg for SBI training; and
(2)	Use an amount not to exceed fifty thousand dollars ($50,000) of the funds to lease space for its technical operations unit, storage of its equipment and vehicles, and command post vehicle."

PART XIX.  DEPARTMENT OF CRIME CONTROL AND PUBLIC SAFETY
Requested by:   Senator Gulley
ACTIVATION OF NATIONAL GUARD FOR SPECIAL OLYMPICS
Section 19. With funds available, the Governor may place units or portions of units of the North Carolina National Guard on State Active Duty during the period from January 1, 1999, to September 30, 1999, to assist with the planning, support, and execution of events associated with the International Special Olympic Games.

Requested by:   Senator Gulley
STUDY TARHEEL CHALLENGE PROGRAM
Section 19.1.  From the Juvenile Justice Reserve Fund established in Section 8.1 of this act, the Department of Crime Control and Public Safety shall use up to twenty-five thousand dollars ($25,000) for the 1998-99 fiscal year to contract with an external consultant to study the effectiveness of the National Guard Tarheel Challenge Program as an intervention method for preventing delinquent or criminal behavior and improving individual skills and employment potential of the participants in the Program. The consultant selected shall have substantial professional experience in program evaluation, but shall have no current or prior association, direct or indirect, with the Department of Crime Control and Public Safety, the National Guard Tarheel Challenge Program, or the staff of either.  The study shall include:
(1)	An evaluation of the goals of the Program and long-term effects of participation in the Program;
(2)	A comparison of the Program to (i) other similar programs that offer job training and behavior modification and (ii) a control group of students not participating in intervention programs; and
(3)	A cost-benefit analysis of the Program.
The Department shall report the results of the study, including any recommendations, to the Chairs of the Appropriations Subcommittees on Justice and Public Safety of the Senate and House of Representatives by March 1, 1999.

Requested by:   Senator Gulley
VICTIMS ASSISTANCE NETWORK REPORT
Section 19.2.   The Department of Crime Control and Public Safety shall report on the expenditure of funds allocated in Section 21.1 of S.L. 1997-443 for the Victims Assistance Network.  The Department shall also report on the Network's efforts to gather data on crime victims and their needs, act as a clearinghouse for crime victims' services, provide an automated crime victims' bulletin board for subscribers, coordinate and support activities of other crime victims' advocacy groups, identify the training needs of crime victims' services providers and criminal justice personnel, and coordinate training for these personnel.  The Department shall submit its report to the Chairs of the Appropriations Subcommittees on Justice and Public Safety of the Senate and House of Representatives by October 1, 1998.  

Requested by:   Senator Plyler
HIGHWAY PATROL SALARIES
Section 19.3.  There is appropriated from the Highway Fund to the Reserve for Compensation Increases the sum of one hundred sixty-two thousand nine hundred fifty-six dollars ($162,956) for the 1998-99 fiscal year to implement a salary range revision for the State Highway Patrol that makes the difference between the salary of a first sergeant and a lieutenant ten percent (10%) instead of five percent (5%).  In implementing this range revision, the State Highway Patrol shall, to the extent that funds are available to do so, consider individual salary increases in any amount up to a total amount that does not exceed the difference between the maximum salaries of the old range and the new range.

Requested by:  Senators Wellons, Plyler, Perdue, Odom, Gulley, Lucas, Cooper
VICTIMS' RIGHTS ACT SHALL INCLUDE VICTIMS OF CERTAIN DOMESTIC VIOLENCE MISDEMEANORS
Section 19.4.   House Bill 665, Senate Bill 763, or any other legislation enacted by the 1997 General Assembly to implement the Victims' Rights Amendment, Section 37 of Article I of the North Carolina Constitution, shall include within the definition of "victim", effective no later than July 1, 1999, a person against whom there is probable cause to believe that an offense has been committed that is a violation of G.S. 14-33(c)(1), 14-33(c)(2), 14-33(a), 14-34, 14-134.3, or 14-277.3, if that offense constitutes domestic violence.

Requested by:   Senators Plyler, Perdue, Odom, Gulley
CRIME COMMISSION GRANTS/REPORT TO GOVERNMENTAL OPERATIONS
Section 19.5. G.S. 143B-476 is amended by adding a new subsection to read:
"( h)	Prior to any notification of proposed grant awards to State agencies for use in pursuing the objectives of the Governor's Crime Commission pursuant to subsection (a) of this section, the Secretary shall report to the Joint Legislative Commission on Governmental Operations for its review of the proposed grant awards."

Requested by:   Senators Gulley, Plyler, Odom
USE OF HIGHWAY PATROL AIRCRAFT
Section 19.6. (a)	G.S. 20-196.1 is repealed.
(b)	G.S. 20-196.2 reads as rewritten:
"§ 20-196.2. Use of aircraft to discover certain motor vehicle àviolations; declaration of policy.
The State Highway Patrol is hereby permitted the use of aircraft to discover violations of Part 10 of Article 3 of Chapter 20 of the General Statutes relating to operation of motor vehicles and rules of the road.  It is hereby declared the public policy of North Carolina that the aircraft should be used primarily for accident prevention and should also be used incident to the issuance of warning citations in accordance with the provisions of G.S. 20-183."

Requested by:   Senators Plyler, Perdue, Odom
STUDY EMERGENCY MANAGEMENT POSITIONS
Section 19.7.  (a) The Joint Legislative Corrections and Crime Control Oversight Committee shall study the State and local assistance funding eligibility criteria of the Division of Emergency Management of the Department of Crime Control and Public Safety that requires local governments to have a full-time or part-time Emergency Program Manager.  In its deliberations, the Committee shall consider:
(1)	The burden placed on local governments to maintain a full-time or part-time position pursuant to the funding eligibility requirements.
(2)	The feasibility and advisability of revising the funding eligibility criteria of the Division of Emergency Management to allow small local governments to meet the requirements of the Division in alternative ways, including sharing an Emergency Program Manager or adding the responsibilities of an Emergency Program Manager to an appropriate official or employee of the local government.
(b)	The Committee shall report its findings and recommendations to the 1999 General Assembly.

PART XX.  DEPARTMENT OF ADMINISTRATION
Requested by:   Senators Warren, Plyler, Perdue, Odom
PROCUREMENT CARD PILOT PROGRAM
Section 20.  (a) Except as provided by this section, no State agency, community college, constituent institution of The University of North Carolina, or local school administrative unit may use procurement cards for the purchase of equipment or supplies before March 31, 1999.
(b)	The Secretary of Administration shall designate no more than 15 governmental entities to participate in a pilot program on the purchase of supplies and equipment by procurement card.  Those designated shall represent a cross section of governmental entities and shall include at least one State agency, one community college, two constituent institutions of The University of North Carolina, and one local school administrative unit.
(c)	The Division of Purchase and Contract and the State Controller shall report to the Joint Legislative Commission on Governmental Operations and the Joint Appropriations Subcommittee on General Government on November 1, 1998, on this pilot program.
The report shall include all of the following:
(1)	Estimates from the pilot program of:
a.	How many purchasing and accounts payable personnel hours could be saved or redirected or both as a result of the procurement card.
b.	The impact of the procurement card on accounting and budgeting records and on purchasing history records.  
(2)	A discussion of the effect of the procurement card on the State's ability to track both:
a.	Out-of-state sales taxes.
b.	North Carolina State and local sales tax payments by county.  
(3)	A discussion of any other costs and benefits of the procurement card.
(d)	This section does not affect contracts for procurement cards entered into prior to March 31, 1997.

Requested by:   Senators Warren, Plyler, Perdue, Odom
DOMESTIC VIOLENCE PREVENTION FUNDS
Section 20.1.  There is appropriated from the General Fund to the Department of Administration the sum of one million dollars ($1,000,000) for the 1998-99 fiscal year for the North Carolina Council for Women for the prevention of domestic violence and the continuation of domestic violence programs within the State.  The Council for Women shall provide grants from these funds to existing domestic violence programs, including the North Carolina Coalition Against Domestic Violence, Inc., and for the development of new domestic violence programs.  The Department of Administration or the Council for Women shall not use any of the funds for operating expenses.

PART XXI. DEPARTMENT OF CULTURAL RESOURCES
Requested by:   Senator Warren
MARITIME MUSEUM/DISPOSITION OF OBJECTS
Section 21. (a) G.S. 106-22.2 is recodified as G.S. 143B-344.2 and reads as rewritten:
"§ 143B-344.22.  Museum of Natural Sciences; disposition of objects.
Notwithstanding Article 3A of Chapter 143 of the General Statutes, G.S. 143-49(4), or any other law pertaining to surplus State property, the Department of Environment and Natural Resources may sell or exchange any object from the collection of the Museum of Natural Sciences when it would be in the best interest of the Museum to do so. Sales or exchanges shall be conducted in accordance with generally accepted practices for accredited museums. If an object is sold, the net proceeds of the sale shall be deposited in the State treasury to the credit of a special fund to be used for the improvement of the Museum's collections or exhibits."
(b)	Chapter 121 of the General Statutes is amended by adding a new section to read:
"§ 121-7.1.  Maritime Museum; disposition of artifacts.
Notwithstanding Article 3A of Chapter 143 of the General Statutes, G.S. 143-49(4), or any other law pertaining to surplus State property, the Department of Cultural Resources, with the approval of the North Carolina Historical Commission, may sell, trade, or place on permanent loan any artifact from the collection of the North Carolina Maritime Museum unless the sale, trade, or loan would be contrary to the terms of the acquisition. Sales or exchanges shall be conducted in accordance with generally accepted practices for accredited museums. If an artifact is sold, the net proceeds of the sale shall be deposited in the State treasury to the credit of a special fund to be used for the improvement of the Museum's collections or exhibits."

Requested by:   Senators Warren, Plyler, Odom, Perdue
ROANOKE ISLAND COMMISSION CHANGES
Section 21.1. (a)	G.S. 143B-131.2(b)(10) reads as rewritten:
"(10)	To establish and maintain a separate fund composed of moneys which may come into its hands from gifts, donations, grants, or bequests, which funds will be used by the Commission for purposes of carrying out its duties and purposes herein set forth. The Commission may also establish a reserve fund to be maintained and used for contingencies and emergencies.  Funds appropriated to the Commission may be transferred to the Friends of Elizabeth II, Inc., a private, nonprofit corporation. The Friends of Elizabeth II, Inc., shall use the funds transferred to it to carry out the purposes of this Part."
(b)	G.S. 143B-131.2(b)(15) reads as rewritten:
"(15)	To procure supplies, services, and property as appropriate and to enter into contracts, leases, or other legal agreements to carry out the purposes of this Part and duties of the Commission.  The provisions of G.S. 143-129 and Article 3 of Chapter 143 of the General Statutes do not apply to purchases by the Roanoke Island Commission of equipment, supplies, and services."

Requested by:   Senators Warren, Plyler, Perdue, Odom
UNITED ARTS COUNCIL FUNDS
Section 21.2.  Of the funds appropriated in this act to the Department of Cultural Resources, the sum of sixty-eight thousand two hundred dollars ($68,200) may be allocated to the United Arts Council of Greensboro, Inc.  The funds allocated pursuant to this section shall only be used for construction and renovation of facilities and for production costs associated with performing arts programs.

Requested by:   Senators Plyler, Perdue, Odom
GRANTS FOR SMALL LIBRARIES AND LIBRARIES IN ECONOMICALLY DISTRESSED COUNTIES
Section 21.3.  The one million dollars ($1,000,000) appropriated by this act to the Department of Cultural Resources for aid to small libraries and libraries in economically distressed counties shall be allocated by the Secretary of that department to support capital improvements, including renovations, to public libraries in small, economically distressed counties only.

Requested by:   Senators Warren, Plyler, Odom, Perdue
PROCEDURE FOR AWARD OF CULTURAL RESOURCES GRANTS
Section 21.4.  Of the funds appropriated to the Department of Cultural Resources, the sum of eight million dollars ($8,000,000) for the 1998-99 fiscal year shall be used for grants to nonprofit organizations or local governmental entities throughout the State for cultural, historical, or artistic organizations, for cultural, historical, or artistic projects, and for museums.  The Secretary of the Department of Cultural Resources shall follow the established process for the review, evaluation, and consideration of applications for these grants.
In awarding grants, the Secretary shall consider the merits of the project, the cultural, historical, or artistic significance of the project, the benefit to the State and local communities of the project, and the cost of the project. These grants are not subject to review by the Historical Commission.

Requested by:  Senator Rand
STUDY RECLASSIFICATION OF STATE MUSEUM BRANCH DIRECTORS
Section 21.5.  The Office of State Personnel shall study whether to reclassify the Branch Museum Administrators at the Mountain Gateway Museum, the Museum of the Albemarle, and the Museum of the Cape Fear.  The Office of State Personnel shall report its findings and recommendations to the 1999 General Assembly.

PART XXII. OFFICE OF ADMINISTRATIVE HEARINGS
Requested by:   Senator Warren
EEOC DEFERRED CASES TO OAH/REPEAL SUNSET
Section 22.  Section 5 of S.L. 1997-513 reads as rewritten:
"Section 5.  Section 1 of this act is effective when it becomes law, applies to charges pending or filed on and after that date.  The remainder of this act becomes effective July 1, 1997, and applies to all suggestions and innovations pending on that date that were submitted under the former State Employee Suggestion Program as authorized by G.S. 143-340(1)	on or before June 30, 1997."

PART XXIII. OFFICE OF SECRETARY OF STATE
Requested by:   Senators Warren, Plyler, Perdue, Odom
TRANSFER BOXING COMMISSION TO DEPARTMENT OF COMMERCE
Section 23.  (a) The statutory authority, powers, duties, functions, records, personnel, property, and unexpended balances of appropriations, allocations, or other funds of the North Carolina State Boxing Commission are transferred from the Department of the Secretary of State to the Department of Commerce.  This transfer has all of the elements of a Type I transfer as defined by G.S. 143A-6.
(b) G.S. 143-652 reads as rewritten:
"§ 143-652.  State Boxing Commission.
(a)	Creation. – The North Carolina State Boxing Commission is created within the Department of Commerce to regulate in North Carolina live boxing and kickboxing matches, whether professional, amateur, sanctioned amateur, or toughman events, in which admission is charged for viewing, or the contestants compete for a purse or prize of value greater than twenty-five dollars ($25.00). The Commission shall consist of six voting members and two nonvoting advisory members. All the members shall be residents of North Carolina and shall meet requirements for membership under the Professional Boxing Safety Act of 1996. The members shall be appointed as follows:
(1)	One voting member shall be appointed by the Governor for an initial term of two years.
(2)	One voting member shall be appointed by the General Assembly upon the recommendation of the President Pro Tempore of the Senate for an initial term of one year, in accordance with G.S. 120-121.
(3)	One voting member shall be appointed by the General Assembly upon the recommendation of the Speaker of the House of Representatives for an initial term of one year.
(4)	Two voting members shall be appointed by the Secretary of Commerce. One shall serve for an initial term of three years, and the other shall serve for an initial term of two years.
(4a)	One member shall be appointed by the Tribal Council of the Eastern Band of the Cherokee for an initial term of three years.
(5)	One nonvoting advisory member shall be appointed by the General Assembly upon the recommendation of the Speaker of the House of Representatives for an initial term of one year, in accordance with G.S. 120-121, from nominations made by the North Carolina Medical Society, which shall nominate two licensed physicians for the position.
(6)	One nonvoting advisory member shall be appointed by the General Assembly upon the recommendation of the President Pro Tempore of the Senate for an initial term of one year, in accordance with G.S. 120-121, from nominations made by the North Carolina Medical Society, which shall nominate two licensed physicians for the position.
The member appointed pursuant to subdivision (5)	of subsection (a) of this section may serve on the Commission only if an agreement exists and remains in effect between the Tribal Council of the Eastern Band of the Cherokee and the Commission authorizing the Commission to regulate professional boxing matches within the Cherokee Indian Reservation as provided by the Professional Boxing Safety Act of 1996.
The two nonvoting advisory members appointed pursuant to subdivisions (6)	and (7) of subsection (a) of this section shall advise the Commission on matters concerning the health and physical condition of boxers and health issues relating to the conduct of exhibitions and boxing matches. They may prepare and submit to the Commission for its consideration and approval any rules that in their judgment will safeguard the physical welfare of all participants engaged in boxing.
Terms for all members of the Commission except for the initial appointments shall be for three years.
	The Secretary of Commerce shall designate which member of the Commission is to serve as chair. A member of the Commission may be removed from office by the Secretary of Commerce for cause. Each member before entering upon the duties of a member shall take and subscribe an oath to perform the duties of the office faithfully, impartially, and justly to the best of the member's ability. A record of these oaths shall be filed in the Department of Commerce.
(b)	Vacancies. – Members shall serve until their successors are appointed and have been qualified. Any vacancy in the membership of the Commission shall be filled in the same manner as the original appointment. Vacancies for members appointed by the General Assembly shall be filled in accordance with G.S. 120-122. A vacancy in the membership of the Commission other than by expiration of term shall be filled for the unexpired term only.
(c)	Meetings. – Meetings of the Commission shall be called by the chair or by any two members of the Commission, and meetings shall be held at least quarterly. Any three voting members of the Commission shall constitute a quorum at any meeting. Action may be taken and motions and resolutions adopted by the Commission at any meeting by the affirmative vote of a majority of the members of the Commission present at a meeting at which a quorum exists. Any or all members may participate in a regular or special meeting by, or conduct the meeting through the use of, any means of communication by which all members participating may simultaneously hear each other during the meeting. A member participating in the meeting by this means is deemed to be present in person at the meeting.
(d)	Rule-Making Authority of the Commission. – The Commission shall have the exclusive authority to approve and issue rules for the regulation of the conduct, promotion, and performances of live boxing, kickboxing, sanctioned amateur, amateur, and toughman matches and exhibitions in this State. The rules shall be issued pursuant to the provisions of Chapter 150B of the General Statutes and may include, without limitation, the following subjects:
(1)	Requirements for issuance of licenses and permits required by this Article.
(2)	Regulation of ticket sales.
(3)	Physical requirements for contestants, including classification by weight and skill.
(4)	Supervision of matches and exhibitions by licensed physicians and referees.
(5)	Insurance and bonding requirements.
(6)	Compensation of participants and licensees.
(7)	Contracts and financial arrangements.
(8)	Prohibition of dishonest, unethical, and injurious practices.
(9)	Facilities.
(10)	Approval of sanctioning amateur sports organizations.
(11)	Procedures and requirements for compliance with the Professional Boxing Safety Act of 1996.
(e)	Compensation. – None of the members of the Commission shall receive compensation for serving on the Commission. However, members of the Commission may be reimbursed for their expenses in accordance with the provisions of Chapter 138 of the General Statutes.
(f)	Staff Assistance. – The Secretary of Commerce shall hire a person to serve as Executive Director of the Commission and shall provide staff assistance to the Executive Director. The Executive Director may train and contract with independent contractors for the purpose of regulating and monitoring events, issuing licenses, collecting fees, and enforcing rules of the Commission. The Executive Director may initiate criminal background checks on persons requesting to work as independent contractors for the Commission or persons applying to be licensed by the Commission."
(c) G.S. 143-654 (c) reads as rewritten:
"(c)	Surety Bond. – An applicant for a promoter's license must submit, in addition to any other forms, documents, or exhibits requested by the Commission, a surety bond payable to the Commission for the benefit of any person injured or damaged by (i) the promoter's failure to comply with any provision of this Article or any rules adopted by the Commission or (ii) the promoter's failure to fulfill the obligations of any contract between or among licensees related to the holding of a boxing event. The surety bond shall be issued in an amount to be no less than five thousand dollars ($5,000). The amount of the surety bond shall be negotiable upon the sole discretion of the Commission. All surety bonds shall be upon forms approved by the Secretary of Commerce and supplied by the Commission."
(d) G.S. 143-655 (c) reads as rewritten:
"(c)	State Boxing Commission Revenue Account. – There is created the State Boxing Commission Revenue Account within the Department of Commerce. Monies collected pursuant to the provisions of this Article shall be credited to the Account and applied to the administration of the Article."
(e) G.S. 143-658 reads as rewritten:
"§ 143-658.  Violations.
(a)	Civil Penalties. – The Secretary of Commerce may issue an order against a licensee or other person who willfully violates any provision of this Article, imposing a civil penalty of up to five thousand dollars ($5,000) for a single violation or of up to twenty-five thousand dollars ($25,000) for multiple violations in a single proceeding or a series of related proceedings. No order under this subsection may be entered without giving the licensee or other person 15 days' prior notice and an opportunity for a contested case hearing conducted pursuant to Article 3 of Chapter 150B of the General Statutes.
(b)	Criminal Penalties. – A willful violation of any provision of this Article shall constitute a Class 2 misdemeanor. The Secretary of Commerce may refer any available evidence concerning violations of this Article to the proper district attorney, who may, with or without such a reference, institute the appropriate criminal proceedings.
(c)	Injunction. – Whenever it appears to the Secretary of Commerce that a person has engaged or is about to engage in an act or practice constituting a violation of any provision of this Article or any rule or order hereunder, the Secretary of Commerce shall refer the matter to the Attorney General's Office for appropriate action.
	."
(f) Section 9 of S.L. 1997-504 reads as rewritten:
"Section 9. Except as otherwise specified herein, this act is effective when it becomes law.  "

PART XXIV. STATE BOARD OF ELECTIONS
Requested by:   Senators Warren, Plyler, Perdue, Odom
EXTEND STATEWIDE DATA ELECTIONS MANAGEMENT SYSTEM
Section 24.  Section 31(a) of S.L. 1997-443 reads as rewritten:
"(a)	The State Board of Elections shall establish a statewide data elections management system. The system shall prescribe data format standards, data communication standards, and data content standards. The State Board of Elections shall establish the system no later than November 1, 1997. Counties shall adhere to the standards prescribed by the system no later than December 31, 1998. The State Board of Elections may adopt rules to implement this section.  Chapter 150B of the General Statutes governs the adoption of rules by the State Board of Elections."

PART XXV.  OFFICE OF STATE BUDGET AND MANAGEMENT
Requested by:   Senators Warren, Plyler, Perdue, Odom, Kerr
FIRE PROTECTION AND RESCUE GRANT FUNDS
Section 25. (a) Article 85A of Chapter 58 of the General Statutes reads as rewritten:
           "ARTICLE 85A.
        "State Fire Protection and Rescue Grant Fund.
"§ 58-85A-1.  Creation of Fund; allocation to local fire districts, political subdivisions of the State, volunteer fire departments, and volunteer rescue squads.
	(a)	There is created in the Office of State Budget and Management the State Fire Protection and Rescue Grant Fund. The purposes of the Fund are to:
(1)	Compensate local fire districts and political subdivisions of the State for providing local fire protection to State-owned buildings and their contents.
(2)	Reimburse volunteer fire departments and volunteer rescue squads for highway use tax they pay on their fire trucks and emergency services vehicles.
(b)	The Office of State Budget and Management shall develop and implement an equitable and uniform statewide method for distributing any funds to the State's local fire districts, political subdivisions, and volunteer fire departments and volunteer rescue squads.
Upon the request of the Director of the Budget, the Department of Insurance shall provide the Office of State Budget and Management all information necessary to develop and implement the formula.
(b1)	Definitions. – The following definitions apply in this section:
(1)	Fire truck. – A fire truck, a pump truck, a tanker truck, or a ladder truck used to suppress fire; or a four-wheel drive vehicle intended to be mounted with a water tank and hose and used for forest fire fighting.
(2)	Highway use tax. – The tax imposed in Article 5A of Chapter 105 of the General Statutes.
(3)	Volunteer fire department. – A fire department that is not part of a unit of local government, has no more than two paid employees, and is exempt from State income tax under G.S. 105-130.11.
(4)	Volunteer rescue squad. – An organization that provides rescue services, emergency medical services, or both, is not part of a unit of local government, has no more than two paid employees, and is exempt from State income tax under G.S. 105-130.11.
(c)	It is the intent of the General Assembly to appropriate annually to the State Fire Protection and Rescue Grant Fund at least three million eighty thousand dollars ($3,080,000) from the General Fund, one hundred fifty thousand dollars ($150,000) from the Highway Fund, and nine hundred seventy thousand dollars ($970,000) from University of North Carolina receipts. Funds received from the General Fund shall be allocated only for (i) providing local fire protection for State-owned property supported by the General Fund; and (ii) grants to volunteer fire departments and volunteer rescue squads to reimburse them for highway use tax they pay on their fire trucks and emergency services vehicles; funds received from the Highway Fund shall be allocated only for providing local fire protection for State-owned property supported by the Highway Fund; and funds received from University of North Carolina receipts shall be allocated only for providing local fire protection for State-owned property supported by University of North Carolina receipts."
(b) The Appropriations Subcommittees on General Government shall study the need for additional Highway Fund appropriations to fund subsection (a) of this section for the 1999-2001 biennium and shall report to the 1999 General Assembly.

PART XXVI. OFFICE OF STATE CONTROLLER
Requested by:   Senators Warren, Plyler, Perdue, Odom
PILOT PROGRAM ON REPORTING ON COLLECTION OF BAD DEBTS BY STATE AGENCIES
Section 26.  (a) The General Assembly finds that a significant number of bad debts are owed to State agencies, and even expansion of the Debt Collection Setoff act scheduled for 2000 may still leave room for improvement.  The General Assembly has been presented information on the extent of the debts, but lacks sufficient information to determine if the lack of collection in some cases relates to inability to the debtor to pay, contractual discharges that may have been taken to receive partial recovery from third parties, or need to improve collection procedures within State agencies.  Focusing on health care institutions within State government will allow maximum information without disrupting other agencies which have small amounts of bad debts.
(b) The Office of State Controller shall establish a procedure by which health care institutions under or affiliated with the Department of Health and Human Services or The University of North Carolina shall report on collection of bad debts.  This pilot program is intended to concentrate on agencies that have a large amount of bad debts, in order to determine the extent to which those debts may be better collected both in those agencies and in the whole of State Government.
(c) The procedures shall require that in the case of each bad debt, that debt is reported to the Office of State Controller with its total amount and with standardized codes indicating the type of debt, the actions taken to collect the debt, and the estimate of the agency on the likelihood of being able to collect the bad debt.
(d) The Office of State Controller shall report the results of the pilot study to the General Assembly no later than April 1, 1999, along with recommendations on changes in law or procedure to better collect the bad debts.

PART XXVII.  DEPARTMENT OF TRANSPORTATION
Requested by:   Senator Jordan
DESIGN-BUILD TRANSPORTATION CONSTRUCTION CONTRACTS AUTHORIZED
Section 27.  Notwithstanding any other provision of law, the Board of Transportation may award up to three contracts annually for construction of transportation projects on a design-build basis.  These contracts may be awarded after a determination by the Department of Transportation that delivery of the projects must be expedited and that it is not in the public interest to comply with normal design and construction contracting procedures.  Prior to the award of a design-build contract, the Secretary of Transportation shall report to the Joint Legislative Transportation Oversight Committee and to the Joint Legislative Commission on Governmental Operations on the nature and scope of the project and the reasons an award on a design-build basis will best serve the public interest.

Requested by: Senator Jordan
DISCONTINUE DEPARTMENT OF TRANSPORTATION SALES TAX REIMBURSEMENT FROM HIGHWAY FUND TO GENERAL FUND FOR ONE YEAR
Section 27.1.  (a) G.S. 105-164.44D is suspended from June 30, 1998, to June 29, 1999.
(b)	This section becomes effective June 30, 1998.

Requested by:   Senator Jordan
DISCONTINUE BOND RETIREMENT TRANSFER FROM HIGHWAY FUND TO HIGHWAY TRUST FUND FOR ONE YEAR
Section 27.2.  G.S. 136-176(a)(4) and G.S. 136-183 are suspended from July 1, 1998, to June 30, 1999.

Requested by:   Senator Jordan
FEDERAL FUNDS FOR PUBLIC TRANSPORTATION IMPROVEMENTS
Section 27.3.  Section 32.18 of S.L. 1997-443 reads as rewritten:
"Section 32.18.  To the extent allowable by federal law, the Department of Transportation shall use ten million dollars ($10,000,000) of federal highway funds during each year of the 1997-99 biennium for improvements to public transportation."

Requested by:   Senator Jordan
CASH FLOW HIGHWAY FUND AND HIGHWAY TRUST FUND APPROPRIATIONS
Section 27.4.  Section 32.13 of S.L. 1997-443 reads as rewritten:
"Section 32.13.  The General Assembly authorizes and certifies anticipated revenues of the Highway Fund as follows:
FY 1999-2000	$1,190.8 million
FY 2000-2001	$1,225.7 million
FY 2001-2002	$1,265.4 million
FY 2002-2003	$1,301.0 million
The General Assembly authorizes and certifies anticipated revenues of the Highway Trust Fund as follows:
FY 1999-2000	$871.4 million
FY 2000-2001	$901.8 million
FY 2001-2002	$934.7 million
FY 2002-2003	$967.2 million."

Requested by:   Senator Jordan
OUTDOOR ADVERTISING JUST COMPENSATION SUNSET EXTENDED
Section 27.5. (a)	Section 2 of Chapter 1147 of the 1981 Session Laws, as amended by all of the following:
Chapter 318 of the 1983 Session Laws
Chapter 1024 of the 1987 Session Laws
Section 1 of Chapter 166 of the 1989 Session Laws
Section 1 of Chapter 725 of the 1993 Session Laws
reads as rewritten:
"Sec. 2.  This act is effective upon ratification, but shall expire June 30, 2004, and shall have no force or effect after that date."
(b)	This section becomes effective June 30, 1998.

Requested by:   Senator Jordan
PAYMENTS TO CONTRACT AGENTS FOR COLLECTING EMISSION CONTROL CIVIL PENALTIES AND FOR MAKING SALES OF INSPECTION STICKERS TO LICENSED INSPECTION STATIONS, AND A TECHNICAL CHANGE TO A RELATED STATUTE.
Section 27.6.  (a)	G.S. 20-63(h) reads as rewritten:
"(h)	Commission Contracts for Issuance of Plates and Certificates. – All registration plates, registration certificates and certificates of title issued by the Division, outside of those issued from the Raleigh offices of the said Division and those issued and handled through the United States mail, shall be issued insofar as practicable and possible through commission contracts entered into by the Division for the issuance of such plates and certificates in localities throughout North Carolina with persons, firms, corporations or governmental subdivisions of the State of North Carolina and the Division shall make a reasonable effort in every locality, except as hereinbefore noted, to enter into a commission contract for the issuance of such plates and certificates and a record of these efforts shall be maintained in the Division. In the event the Division is unsuccessful in making commission contracts as hereinbefore set out it shall then issue said plates and certificates through the regular employees of the Division. Whenever registration plates, registration certificates and certificates of title are issued by the Division through commission contract arrangements, the Division shall provide proper supervision of such distribution. Commission contracts entered under this subsection shall provide for the payment of compensation for all transactions as set forth below. Nothing contained in this subsection will allow or permit the operation of fewer outlets in any county in this State than are now being operated.
A transaction is any of the following activities:
(1)	Issuance of a registration plate, a registration card, a registration renewal sticker, or a certificate of title.
(2)	Issuance of a handicapped placard or handicapped identification card.
(3)	Acceptance of an application for a personalized registration plate.
(4)	Acceptance of a surrendered registration plate, registration card, or registration renewal sticker, or acceptance of an affidavit stating why a person cannot surrender a registration plate, registration card, or registration renewal sticker.
(5)	Cancellation of a title because the vehicle has been junked.
(6)	Acceptance of an application for, or issuance of, a refund for a fee or a tax, other than the highway use tax.
(7)	Receipt of the civil penalty imposed by G.S. 20-309 for a lapse in financial responsibility or receipt of the restoration fee imposed by that statute.
(8)	Acceptance of a notice of failure to maintain financial responsibility for a motor vehicle.
(8a)	Collection of civil penalties imposed for violations of G.S. 20-183.8A.
(8b)	Sale of one or more inspection stickers in a single transaction to a licensed inspection station.
(9)	Collection of the highway use tax.

Performance at the same time of any combination of the items that are listed within each subdivision or are listed within subdivisions (1)	through (8b) of this section is a single transaction for which a dollar and thirty-five cent ($1.35) compensation shall be paid. Performance of the item listed in subdivision (9) of this subsection in combination with any other items listed in this subsection is a separate transaction for which a one dollar and twenty cent ($1.20) compensation shall be paid."
(b)	G.S. 20-183.8A reads as rewritten:
"§ 20-183.8A.  Civil penalties against motorists for emissions violations.
The Division shall assess a civil penalty against a person who owns or leases a vehicle that is subject to an emissions inspection and who does any of the following:
(1)	Fails to have the vehicle inspected within four months after it is required to be inspected under this Part.
(2)	Instructs or allows a person to tamper with an emission control device of the vehicle so as to make the device inoperative or fail to work properly.
(3)	Incorrectly states the county of registration of the vehicle to avoid having an emissions inspection of the vehicle.
The amount of penalty is one hundred dollars ($100.00) if the vehicle is a pre-1981 vehicle and two hundred fifty dollars ($250.00) if the vehicle is a 1981 or newer model vehicle. As provided in G.S. 20-54, the registration of a vehicle may not be renewed until a penalty imposed under this section has been paid."

Requested by:   Senator Ballance
REOPEN STATE HIGHWAY IN BERTIE COUNTY
Section 27.7. (a)	The Department of Transportation may use available funds to reopen S.R. 1109 in Bertie County.
(b)	If a court determines that reopening the road requires compensation, then the Department of Transportation may expend funds from the Highway Fund in fiscal year 1998-99 for that purpose.

Requested by:   Senator Plyler
BRANDED TITLE CLARIFICATION
Section 27.8.  (a) G.S. 20-71.3 reads as rewritten:
"§ 20-71.3.  Titles and registration cards to be branded.
(a)	Motor Vehicle certificates of title and registration cards issued pursuant to G.S. 20-57 may be branded. 
As used in this section, 'branded' means that the title and registration card shall contain a designation that discloses if the vehicle is classified as any of the following:
(1)	Flood Vehicle.
(2)	Non-U.S.A. Vehicle.
(3)	Reconstructed Vehicle.
(4)	Salvage Motor Vehicle.
(5)	Salvage Rebuilt Vehicle.
(6)	Any other classification authorized by law.
(b)	Any motor vehicle up to, and including, five model years old damaged by collision or other occurrence, which requires a disclosure pursuant to G.S. 20-71.4, and which, as a result of such damage, is to be retitled in this State shall be subject to preliminary and final inspections by the Enforcement Section of the Division.  The Division shall not retitle a vehicle described in the first sentence of this subsection which has not undergone a preliminary inspection required by this subsection.
These inspections serve as antitheft measures and do not certify the safety or roadworthiness of a vehicle.
(c)	Any motor vehicle more than five model years old damaged by collision or other occurrence which requires a disclosure pursuant to G.S. 20-71.4 and which, as a result of such damage, is to be retitled by the State shall, without inspection, be retitled with an unbranded or branded title, as appropriate, based upon a title application by the rebuilder with a supporting affidavit disclosing all of the following:
(1)	The parts used or replaced.
(2)	The major components replaced.
(3)	The total cost of repair, including labor costs.
The Division shall maintain these affidavits and make them available for review and copying by persons researching the salvage and repair history of the vehicle.
(d)	Any motor vehicle which has been branded in another state shall be branded with the nearest applicable brand specified in this section, except that no junk vehicle or vehicle that has been branded junk in another state shall be titled or registered.
	(e)  A motor vehicle titled in another state and damaged by collision or other occurrence may be repaired and an unbranded title issued in North Carolina only if the cost of repairs, including parts and labor, does not exceed seventy-five percent (75%) of its fair market retail value.  
(f)	Once a branded title has been issued for a motor vehicle, subsequent titles shall continue to reflect the branding until the title for that motor vehicle is either surrendered to the Division or cancelled by the Division.
(g)	The Division shall prepare necessary forms and may adopt rules required to carry out the provisions of this Part.  
	All title and title application forms shall contain a notice that indicates that the complete repair or salvage history of the vehicle might not be disclosed on the face of the title."
(b)	This section is effective when it becomes law.

Requested by:   Senator Jordan
DMV ENFORCEMENT SECTION PAY EQUITY PLAN LIMITATIONS
Section 27.9.  Of the funds appropriated in this act to the Department of Transportation, up to three million three hundred ninety thousand seven hundred eight dollars ($3,390,708) may be used to adjust the salaries and benefits of the enforcement officers assigned to the Enforcement Section of the Division of Motor Vehicles.
	These adjustments shall be based on factors such as:  employee salary, position class title, position grade, and creditable years of sworn service with the Enforcement Section.  
No salary adjustment shall result in an increase beyond the maximum salary set for an officer's pay grade.  If an officer's salary is near or at the top of the officer's pay grade, the officer shall be eligible to receive a salary adjustment up to the top of the officer's pay grade.  If an officer is at the top of the officer's pay grade, then the officer is not eligible to receive a salary adjustment.
Before adjusting salaries or benefits pursuant to this section, the Department of Transportation shall do all of the following:
(1)	Consult with and get approval of the Office of State Personnel.
(2)	Report to the Joint Legislative Transportation Oversight Committee.
(3)	Report to the Joint Legislative Commission on Governmental Operations.

PART XXVIII  SALARIES AND BENEFITS
Requested by:   Senators Plyler, Perdue, Odom
GOVERNOR AND COUNCIL OF STATE/SALARY INCREASES
Section 28.  (a) G.S. 147-11(a) reads as rewritten:
"(a)	The salary of the Governor shall be one hundred ten thousand three hundred forty-six dollars ($110,346) annually, payable monthly."
(b) Section 33(b) of Chapter 443 of the 1997 Session Laws reads as rewritten:
"(b)	The annual salaries for the members of the Council of State, payable monthly, for the 1998-99 fiscal year, beginning July 1, 1998, are:

Council of State	Annual Salary

Lieutenant Governor		$97,388
Attorney General		97,388
Secretary of State		97,388
State Treasurer		97,388
State Auditor		97,388
Superintendent of Public Instruction		97,388
Agriculture Commissioner		97,388
Insurance Commissioner		97,388
Labor Commissioner		97,388."

Requested by:  Senators Plyler, Perdue, Odom
NONELECTED DEPARTMENT HEADS/SALARY INCREASES
Section  28.1.  Section 33.1 of Chapter 443 of the 1997 Session Laws reads as rewritten:
"Section 33.1.  In accordance with G.S. 143B-9, the maximum annual salaries, payable monthly, for the nonelected heads of the principal State departments for the 1998-99 fiscal year, beginning July 1, 1998,  are:

Nonelected Department Heads	Annual Salary

Secretary of Administration		$95,149
Secretary of Correction		95,149
Secretary of Cultural Resources		95,149
Secretary of Commerce		95,149
Secretary of 
  Environment and Natural Resources		95,149
Secretary of Health and Human 
   Services		95,149
Secretary of Revenue		95,149
Secretary of Transportation		95,149
Secretary of Crime Control and Public Safety		95,149."

Requested by:  Senators Plyler, Perdue, Odom
CERTAIN EXECUTIVE BRANCH OFFICIALS/SALARY INCREASES
Section  28.2.  Section 33.2 of Chapter 443 of the 1997 Session Laws reads as rewritten:
"Section 33.2.  The annual salaries, payable monthly, for the 1998-99 fiscal year, beginning July 1, 1998, for the following executive branch officials are:

Executive Branch Officials	Annual Salary

Chairman, Alcoholic Beverage Control
  Commission		$86,602
State Controller		121,199
Commissioner of Motor Vehicles		86,602
Commissioner of Banks		97,389
Chairman, Employment Security Commission		121,046
State Personnel Director		95,149
Chairman, Parole Commission		79,078
Members of the Parole Commission		73,008
Chairman of the Utilities Commission		108,459
Commissioners of the Utilities Commission		97,388
Executive Director, Agency for Public
  Telecommunications		73,008
General Manager, Ports Railway Commission		65,925
Director, Museum of Art		88,739
	Executive Director, North Carolina Housing
  Finance Agency		107,179
Executive Director, North Carolina Agricultural
Finance Authority		84,294
	".

Requested by:  Senators Plyler, Perdue, Odom
JUDICIAL BRANCH OFFICIALS/SALARY INCREASES
Section  28.3. (a) Section 33.7 of Chapter 443 of the 1997 Session Laws reads as rewritten:
"Section 33.7.  (a)	The annual salaries, payable monthly, for specified judicial branch officials for the 1998-99 fiscal year, beginning July 1, 1998, are:

Judicial Branch Officials	Annual Salary

Chief Justice, Supreme Court	$107,132
Associate Justice, Supreme Court	104,333
Chief Judge, Court of Appeals	101,724
Judge, Court of Appeals	99,986
Judge, Senior Regular Resident Superior Court		 99,900
Judge, Superior Court		97,388
Chief Judge, District Court		88,433
Judge, District Court		85,635
District Attorney		90,224
Administrative Officer of the Courts		100,187
Assistant Administrative Officer of the Courts		84,134
Public Defender		90,224.

			%)."
(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-five thousand five hundred dollars ($55,500) and the minimum salary of any assistant district attorney or assistant public defender is at least twenty-eight thousand three hundred thirty-four dollars ($28,334), effective July 1, 1998.
(c)	The salaries in effect for the 1997-98 fiscal year on June 30, 1998, for permanent, full-time employees of the Judicial Department, except for those whose salaries are itemized in this Part, shall be increased by three percent (3%), commencing July 1, 1998.
(d)	The salaries in effect on June 30, 1998, for all permanent, part-time employees of the Judicial Department shall be increased on and after July 1, 1998, by pro rata amounts of three percent (3%).

Requested by:  Senators Plyler, Perdue, Odom
CLERKS OF SUPERIOR COURT/SALARY INCREASES
Section  28.4.   G.S. 7A-101(a) reads as rewritten:
"(a)	The clerk of superior court is a full-time employee of the State and shall receive an annual salary, payable in equal monthly installments, based on the population of the county as determined in subsection (a1) of this section, according to the following schedule:

Population	Annual Salary
Less than 100,000 		$64,556
100,000 to 149,999		72,515
150,000 to 249,999		80,474
250,000 and above		88,433.

The salary schedule in this subsection is intended to represent the following percentage of the salary of a chief district court judge:

Population	Annual Salary
Less than 100,000	73%
100,000 to 149,999	82%
150,000 to 249,999	91%
250,000 and above       	100%.

When a county changes from one population group to another, the salary of the clerk shall be changed, on July 1 of the fiscal year for which the change is reported, to the salary appropriate for the new population group, except that the salary of an incumbent clerk shall not be decreased by any change in population group during his continuance in office."

Requested by:   Senators Plyler, Perdue, Odom 
ASSISTANT AND DEPUTY CLERKS OF SUPERIOR COURT/SALARY INCREASES
Section  28.5.  (a)	Effective July 1, 1998, those State employees whose salaries are determined by G.S. 7A-102 shall receive across-the-board salary increases in the amount of three percent (3%) in addition to step increases associated with their respective pay plans.
(b) 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		$24,122
  Maximum		42,710
  Deputy Clerks	Annual Salary
  Minimum		$19,286
  Maximum		32,899."
Requested by:   Senators Plyler, Perdue, Odom
MAGISTRATES/SALARY INCREASES
Section  28.6.  (a) G.S. 7A-171.1 reads as rewritten:
"§ 7A-171.1. Duty hours, salary, and travel expenses within county.
(a)	The Administrative Officer of the Courts, after consultation with the chief district judge and pursuant to the following provisions, shall set an annual salary for each magistrate.
(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		$26,213
Step 1		28,844
Step 2		31,708
Step 3		34,831
Step 4		38,254
Step 5		42,015
Step 6		46,151.

(2)	A part-time magistrate is a magistrate who is assigned to work an average of less than 40 hours of work a week during the term, except that no magistrate shall be assigned an average of less than 10 hours of work a week during the term. A part-time magistrate is included, in accordance with G.S. 7A-170, under the provisions of G.S. 135-1(10) and G.S. 135-40.2(a). The Administrative Officer of the Courts designates whether a magistrate is a part-time magistrate. A part-time magistrate shall receive an annual salary based on the following formula: The average number of hours a week that a part-time magistrate is assigned work during the term shall be multiplied by the annual salary payable to a full-time magistrate who has the same number of years of service prior to the beginning of that term as does the part-time magistrate and the product of that multiplication shall be divided by the number 40. The quotient shall be the annual salary payable to that part-time magistrate.
(3)	Notwithstanding any other provision of this subsection, an individual who, when initially appointed as a full-time magistrate, is licensed to practice law in North Carolina, shall receive the annual salary provided in the Table in subdivision (1) of this subsection for Step 4. This magistrate's salary shall increase to the next step every four years on the anniversary of the date the magistrate was originally appointed. An individual who, when initially appointed as a part-time magistrate, is licensed to practice law in North Carolina, shall be paid an annual salary based on that for Step 4 and determined according to the formula in subdivision (2) of this subsection. This magistrate's salary shall increase to the next step every four years on the anniversary of the date the magistrate was originally appointed. The salary of a full-time magistrate who acquires a license to practice law in North Carolina while holding the office of magistrate and who at the time of acquiring the license is receiving a salary at a level lower than Step 4 shall be adjusted to Step 4 and, thereafter, shall advance in accordance with the Table's schedule. The salary of a part-time magistrate who acquires a license to practice law in North Carolina while holding the office of magistrate and who at the time of acquiring the license is receiving an annual salary as determined by subdivision (2) of this subsection based on a salary level lower than Step 4 shall be adjusted to a salary based on Step 4 in the Table and, thereafter, shall advance in accordance with the provision in subdivision (2) of this subsection.
(a1)	(Effective until June 30, 1999) Notwithstanding subsection (a) of this section, the following salary provisions apply to individuals who were serving as magistrates on June 30, 1994:
(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: 

	3 or more but less than 5 years of service	23,859.

		Upon completion of five years of service, those magistrates shall receive the salary set as the Entry Rate in the table in subsection (a).
(2)	The salaries of magistrates who on June 30, 1994, were paid at a salary level of five or more years of service shall be based on the rates set out in subsection (a) as follows: 

Salary Level	Salary Level
on June 30, 1994	on July 1, 1994
5 or more but less than 7 years of service	Entry Rate
7 or more but less than 9 years of service	Step 1
9 or more but less than 11 years of service	Step 2
11 or more years of service	Step 3.

		Thereafter, their salaries shall be set in accordance with the provisions in subsection (a).
(3)	The salaries of magistrates who are licensed to practice law in North Carolina shall be adjusted to the annual salary provided in the table in subsection (a) as Step 4, and, thereafter, their salaries shall be set in accordance with the provisions in subsection (a).
(4)	The salaries of 'part-time magistrates' shall be set under the formula set out in subdivision (2) of subsection (a) but according to the rates set out in this subsection.
(a2)	The Administrative Officer of the Courts shall provide magistrates with longevity pay at the same rates as are provided by the State to its employees subject to the State Personnel Act.
(b)	Notwithstanding G.S. 138-6, a magistrate may not be reimbursed by the State for travel expenses incurred on official business within the county in which the magistrate resides."
(b)	Any magistrate who received a step increase during the 1997-98 fiscal year shall also receive a four percent (4%) salary adjustment effective July 1, 1997, in addition to whatever step increase the person may be eligible to receive pursuant to subsection (a) of this section.  The Administrative Office of the Courts may use any available funds to make the retroactive salary adjustment for certain magistrates pursuant to this subsection.

Requested by:  Senators Plyler, Perdue, Odom
GENERAL ASSEMBLY PRINCIPAL CLERKS/SALARY INCREASES
Section  28.7.   G.S. 120-37(c) reads as rewritten:
"(c)	The principal clerks shall be full-time officers.  Each principal clerk shall be entitled to other benefits available to permanent legislative employees and shall be paid an annual salary of sixty-one thousand six hundred fifty-seven dollars ($61,657) payable monthly.  The Legislative Services Commission shall review the salary of the principal clerks prior to submission of the proposed operating budget of the General Assembly to the Governor and Advisory Budget Commission and shall make appropriate recommendations for changes in those salaries.  Any changes enacted by the General Assembly shall be by amendment to this paragraph."

Requested by:  Senators Plyler, Perdue, Odom
SERGEANT-AT-ARMS AND READING CLERKS/SALARY INCREASES
Section  28.8.   G.S. 120-37(b) reads as rewritten:
"(b)	The sergeant-at-arms and the reading clerk in each house shall be paid a salary of two hundred sixty-six ($266.00) per week plus subsistence at the same daily rate provided for members of the General Assembly, plus mileage at the rate provided for members of the General Assembly for one round trip only from their homes to Raleigh and return.  The sergeants-at-arms shall serve during sessions of the General Assembly and at such time prior to the convening of, and subsequent to adjournment or recess of, sessions as may be authorized by the Legislative Services Commission.  The reading clerks shall serve during sessions only."

Requested by:  Senators Plyler, Perdue, Odom
LEGISLATIVE EMPLOYEES/SALARY INCREASES
Section  28.9.  The Legislative Administrative Officer shall increase the salaries of nonelected employees of the General Assembly in effect for fiscal year 1997-98 by three percent (3%).  Nothing in this act limits any of the provisions of G.S. 120-32.

Requested by:  Senators Plyler, Perdue, Odom
COMMUNITY COLLEGES PERSONNEL/SALARY INCREASES
Section 28.10.  The Director of the Budget shall transfer from the Reserve for Salary Increases created in this act for fiscal year 1998-99 funds to the Department of Community Colleges necessary to provide an average annual salary increase of three percent (3%), including funds for the employer's retirement and social security contributions, commencing July 1, 1998, for all permanent full-time community college institutional personnel supported by State funds.  The State Board of Community Colleges shall establish guidelines for providing their salary increases to community college institutional personnel to include consideration of increases based on performance.  Salary funds shall be used to provide an average annual salary increase of three percent (3%) to all full-time employees and part-time employees on a pro rata basis.

Requested by:   Senators Plyler, Perdue, Odom
UNIVERSITY OF NORTH CAROLINA SYSTEM - EPA SALARY INCREASES
Section 28.11.  (a) The Director of the Budget shall transfer to the Board of Governors of The University of North Carolina sufficient funds from the Reserve for Compensation Increase created in this act for fiscal year 1998-99 to provide an annual average salary increase of three percent (3%), including funds for the employer's retirement and social security contributions, commencing July 1, 1998, 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 shall 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.
(b) 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 1998-99 to provide an annual average salary increase comparable to that provided in this act for public school teachers, including funds for the employer's retirement and social security contributions, commencing July 1, 1998, for all teaching employees 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 Trustees of the North Carolina School of Science and Mathematics and shall not be used for any purpose other than for salary increases and necessary employer contributions provided by this section.

Requested by:  Senators Plyler, Perdue, Odom, Winner, Lee
SCHOOL CENTRAL OFFICE SALARIES
Section 28.12.  (a) The following monthly salary ranges apply to assistant superintendents, associate superintendents, directors/coordinators, supervisors, and finance officers for the 1998-99 fiscal year, beginning July 1, 1998:
(1)	School Administrator I:	$2,846 - $4,857
(2)	School Administrator II:	$3,021 - $5,155
(3)	School Administrator III:	$3,206 - $5,471
(4)	School Administrator IV:	$3,335 - $5,692
(5)	School Administrator V:	$3,469 - $5,923
(6)	School Administrator VI:	$3,681 - $6,286
(7)	School Administrator VII:	$3,830 - $6,540
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, 1998.
(b)	The following monthly salary ranges apply to public school superintendents for the 1998-99 fiscal year, beginning July 1, 1998:
(1)	Superintendent I (Up to 2,500 ADM):	$4,065 - $6,941
(2)	Superintendent II (2,501 - 5,000 ADM):	$4,315 - $7,364
(3)	Superintendent III (5,001 - 10,000 ADM):	$4,578 - $7,815
(4)	Superintendent IV (10,001 - 25,000 ADM):	$4,859 - $8,293
(5)	Superintendent V (Over 25,000 ADM):	$5,157 - $8,801
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 9.6 of this act.
(c)	Longevity pay for superintendents, assistant superintendents, associate superintendents, directors/coordinators, supervisors, and finance officers shall be as provided for State employees.
(d)	Superintendents, assistant superintendents, associate superintendents, directors/coordinators, supervisors, and finance officers with certification based on academic preparation at the six-year degree level shall receive a salary supplement of one hundred twenty-six dollars ($126.00) per month in addition to the compensation provided for pursuant to this section.  Superintendents, assistant superintendents, associate superintendents, directors/coordinators, supervisors, and finance officers with certification based on academic preparation at the doctoral degree level shall receive a salary supplement of two hundred fifty-three dollars ($253.00) per month in addition to the compensation provided for under this section.
(e)  The State Board shall not permit local school administrative units to transfer State funds from other funding categories for salaries for public school central office administrators.
(f)  The Director of the Budget shall transfer from the Reserve for Salary Increases created in this act for fiscal year 1998-99, beginning July 1, 1998, funds necessary to provide an average annual salary increase of three percent (3%), including funds for the employer's retirement and social security contributions, commencing July 1, 1998, 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:  Senators Plyler, Perdue, Odom, Winner, Lee
NONCERTIFIED PERSONNEL SALARY FUNDS/TEACHER ASSISTANT SALARY FUNDS
Section 28.13. (a) The Director of the Budget may transfer from the Reserve for Compensation Increase created in this act for fiscal year 1998-99, commencing July 1, 1998, funds necessary to provide a salary increase of three percent (3%), including funds for the employer's retirement and social security contributions, commencing July 1, 1998, for all noncertified public school employees whose salaries are supported from the State's General Fund.  Local boards of education shall increase the rates of pay for all such employees who were employed during fiscal year 1997-98 and who continue their employment for fiscal year 1998-99 by at least three percent (3%), commencing July 1, 1998.  These funds shall not be used for any purpose other than for the salary increases and necessary employer contributions provided by this section.
The Director of the Budget may transfer from the Reserve for Compensation Increase created in this act for fiscal year 1998-99, beginning July 1, 1998, funds necessary to provide the salary increases for noncertified public school employees whose salaries are supported from the State's General Fund in accordance with the provisions of this section.
The State Board of Education may enact or create salary ranges for noncertified personnel to support increases of three percent (3%) for the 1998-99 fiscal year.
(b)	G.S. 115C-12(16)b. reads as rewritten:
"b.	Salary schedules for the following public school support personnel shall be adopted by the State Board of Education: school finance officer, office support personnel, teacher assistants, maintenance supervisors, custodial personnel, and transportation personnel. The Board shall classify these support positions in terms of uniform pay grades included in the salary schedule of the State Personnel Commission.
		By the end of the third payroll period of the 1995-96 fiscal year, local boards of education shall place State-allotted office support personnel, teacher assistants, and custodial personnel on the salary schedule adopted by the State Board of Education so that the average salary paid is the State-allotted amount for the category. In placing employees on the salary schedule, the local board shall consider the education, training, and experience of each employee, including experience in other local school administrative units. It is the intent of the General Assembly that a local school administrative unit not fail to employ an employee who was employed for the prior school year in order to implement the provisions of this sub-subdivision. A local board of education is in compliance with this sub-subdivision if the average salary paid is at least ninety-five percent (95%) of the State-allotted amount for the category at the end of the third payroll period of the 1995-96 fiscal year, and at least ninety-eight percent (98%) of the State-allotted amount for the category at the end of the third payroll period of each subsequent fiscal year. The Department of Public Instruction shall provide technical assistance to local school administrative units regarding the implementation of this sub-subdivision."
(c) Subsection (b) of this section applies beginning with the 1999-2000 school year.

Requested by:  Senators Plyler, Perdue, Odom
COMPENSATION BONUS/STATE EMPLOYEES/SCHOOL PERSONNEL
Section 28.14.  (a)	Any person:
(1)	Whose salary is set by or under this Part, other than Sections 28, 28.1, 28.2, 28.3(a), 28.4, 28.15(a); and 28.15(c), 28.15(d), 28.15(e), except that the exclusion of those under 28.15(c), 28.15(d), and 28.15(e) only applies to those whose salaries are set by the State Personnel Act; and 
(2)	Who was, on July 1, 1998, a permanent officer or permanent employee whose salary is set by or under this Part shall receive not later than September of 1998 a compensation bonus of one percent (1%), except that:
a.	The compensation bonus for persons subject to Section 28.10 of this act shall be an average of one percent (1%) per year and shall be allocated in accordance with guidelines adopted by the State Board of Community Colleges;
b.	The compensation bonus for persons subject to Section 28.11 of this act shall be an average of one percent (1%) per year and 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
c.	The guidelines and rules adopted under sub-subdivisions a. and b. of this subdivision may cover employees of those institutions whose first day of employment for the 1998-99 academic year came after July 1, 1998.
(a1)  Any person:
(1)	Who did not receive a compensation bonus under subsection (a) of this section; and
(2)	Who was employed on the first day  of the 1998-99 school year as a permanent public school employee whose salary is set by or under this Part
shall receive in the third payroll period of the 1998-99 school year a compensation bonus of one percent (1%) of the annual salary for that position.
(b)	The annual salary on which the percentage compensation bonus is based is the annual salary in effect during the pay period in which the bonus is paid.
(c)	The Director of the Budget shall transfer from the Reserve for Compensation Bonus provided by this act sufficient funds to implement this section.

Requested by:  Senators Plyler, Perdue, Odom
MOST STATE EMPLOYEES/SALARY INCREASES
Section 28.15.  (a)	The salaries in effect June 30, 1998, 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, 1998, unless otherwise provided by this act, pursuant to the Comprehensive Compensation System set forth in G.S. 126-7 and rules adopted by the State Personnel Commission, as follows:
(1)	Career growth recognition awards in the amount of two percent (2%);
(2)	A cost-of-living adjustment in the amount of one percent (1%); and
(3)	A performance bonus in the amount of one percent (1%).
Notwithstanding G.S. 126-7(4a), any permanent full-time State employee whose salary is set in accordance with the State Personnel Act and whose salary is at the top of the salary range or within one percent (1%) of the top of the salary range shall receive a one-time bonus of one percent (1%) less the career growth recognition award the employee receives.  The employee shall receive the career growth bonus at the time the employee is eligible for the career growth recognition award, but not earlier than July 1, 1998.
(a1)  It is the intent of the General Assembly that the annual career growth recognition award in the amount of two percent (2%) provided by G.S. 126-7(c)(4a) shall be part of the continuation budget for each fiscal year of the 1999-2001 biennium.
(b)	Except as otherwise provided in this act, salaries in effect June 30, 1998, for permanent full-time State officials and persons in exempt positions that are recommended by the Governor or the Governor and the Advisory Budget Commission and set by the General Assembly shall be increased by three percent (3%), commencing July 1, 1998.
(c)	The salaries in effect June 30, 1998, for all permanent part-time State employees shall be increased on and after July 1, 1998, 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, 1998, 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 the salary increase provided for permanent full-time employees covered by the provisions of subsection (a) of this section, commencing July 1, 1998.
(f)  Except as provided by subsection (a) of this section, no person may receive a salary increase under G.S. 126-7 during the 1998-99 fiscal year, and no State employee or officer shall receive a merit increment during the 1998-99 fiscal year except as otherwise provided by this act.

Requested by:  Senators Plyler, Perdue, Odom
ALL STATE-SUPPORTED PERSONNEL
Section 28.16.  (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, 1998, 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, 1998, 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, 1998, which represent payment of services provided prior to July 1, 1998, 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 Compensation Increase in this act for fiscal year 1998-99 all funds necessary for the salary increases provided by this act, including funds for the employer's retirement and social security contributions.
(e)  Nothing in this act authorizes the transfer of funds between the General Fund and the Highway Fund for salary increases.

Requested by:  Senators Plyler, Perdue, Odom
SALARY ADJUSTMENT FUND
Section 28.17.  Any remaining appropriations for legislative salary increases not required for that purpose may be used to supplement the Salary Adjustment Fund.  These funds shall first be used to provide reclassifications of those positions already approved by the Office of State Personnel. The Office of State Budget and Management shall report to the Joint Legislative Commission on Governmental Operations prior to the allocation of these funds.

Requested by:   Senators Plyler, Perdue, Odom, Rand
SALARIES OF THE ADMINISTRATOR AND THE EXECUTIVE SECRETARY OF THE INDUSTRIAL COMMISSION SET BY STATUTE
Section 28.18.(a)	G.S. 97-78 reads as rewritten:
"§ 97-78.  Salaries and expenses; administrator, executive secretary, and other staff assistance; annual report.
(a)	The salary of each commissioner shall be the same as that fixed from time to time for district attorneys except that the commissioner designated as chair shall receive one thousand five hundred dollars ($1,500) additional per annum.
(b)	The Commission may appoint an administrator whose duties shall be prescribed by the Commission, and who shall be subject to the State Personnel System, and who may be removed at the will of the Commission.  The Commission may appoint an executive secretary whose duties shall be prescribed by the Commission, and who shall be subject to the State Personnel System and who,  upon entering upon his duties, shall give bond in such sum as may be fixed by the Commission, and who may be removed at the will of the Commission.  The Commission may also employ such clerical or other assistance as it may deem necessary, and fix the compensation of its staff, except that the salaries of the administrator and the executive secretary shall be fixed by subsection (b1) of this section.  The compensation of Commission staff shall be in keeping with the compensation paid to the persons employed to do similar work in other State departments.
(b1)	The salary of the administrator shall be ninety percent (90%) of the salary of a commissioner.  The salary of the executive secretary shall be eighty percent (80%) of the salary of a commissioner.  In lieu of merit and other incremental raises, the administrator and the executive secretary shall receive longevity pay on the same basis as is provided to other employees subject to the State Personnel Act.
(c)	The members of the Commission and its assistants shall be entitled to receive from the State their actual and necessary expenses while traveling on the business of the Commission, but such expenses shall be certified by the person who incurred the same, and shall be approved by the chairman of the Commission before payment is made.
(d)	All salaries and expenses of the Commission shall be audited and paid out of the State treasury, in the manner prescribed for similar expenses in other departments or branches of the State service, and to defray such salaries and expenses a sufficient appropriation shall be made under the General Appropriation Act as made to other departments, commissions and agencies of the State government.
(e)	The Commission shall publish annually for free distribution a report of the administration of this Article, together with such recommendations as the Commission deems advisable."
(b)	Of the funds appropriated from the General Fund to the Department of Commerce, the sum of thirty-six thousand seven hundred fifty-four dollars ($36,754) for the 1998-99 fiscal year shall be used to implement the Industrial Commission staff salaries authorized by subsection (a) of this section.

Requested by:    Senators Plyler, Perdue, Odom, Martin of Pitt
WILDLIFE RESOURCES COMMISSION DIRECTOR SALARY
Section 28.19.  G.S. 143-246 reads as rewritten:
"§ 143-246. Executive Director; appointment, qualifications and duties.
The North Carolina Wildlife Resources Commission as soon as practicable after its organization shall select and appoint a competent person qualified as hereinafter set forth as Executive Director of the North Carolina Wildlife Resources Commission. The Executive Director shall be charged with the supervision of all activities under the jurisdiction of the Commission and shall serve as the chief administrative officer of the said Commission. Subject to the approval of the Commission and the Director of the Budget, he is hereby authorized to employ such clerical and other assistants as may be deemed necessary. The person selected as Executive Director shall have had training and experience in conservation, protection and management of wildlife resources. The salary of such Director shall be fixed by the Wildlife Resources Commission, in an amount at least equal to the salary of the Director of the Division of Marine Fisheries.  The Director shall be allowed actual expenses incurred while on official duties away from resident headquarters.  The salary and expenses of the Director shall be paid from the Wildlife Resources Fund subject to the provisions of the Executive Budget Act. The term of office of the Executive Director shall be at the pleasure of the Commission. Such bond shall be made as part of the blanket bond of State officers and employees provided for in G.S. 128-8."

Requested by:   Senators Plyler, Perdue, Odom
TRAVEL RATES FOR STATE EMPLOYEES
Section 28.20.  (a)	G.S. 138-6(a) reads as rewritten:
"(a)	Travel on official business by the officers and employees of State departments, institutions and agencies which operate from funds deposited with the State Treasurer shall be reimbursed at the following rates:
(1)	For transportation by privately owned automobile, the business standard mileage rate set by the Internal Revenue Service per mile of travel and the actual cost of tolls paid. Any other law which sets a mileage rate by referring to the rate set herein, instead establishes a rate of twenty-five cents (25¢) per mile. No reimbursement shall be made for the use of a personal car in commuting from an employee's home to his duty station in connection with regularly scheduled work hours. Any designation of an employee's home as his duty station by a department head shall require prior approval by the Office of State Budget and Management on an annual basis.
(2)	For bus, railroad, Pullman, or other conveyance, actual fare.
(3)	For expenses incurred for subsistence, payment of eighty-one dollars ($81.00) per day when traveling in-state or  ninety-three dollars ($93.00) per day when traveling out-of-state. Payment of sales tax, lodging tax, local tax, or service fees applied to the cost of lodging are to be paid in addition to the daily subsistence amount. The employee may exceed the part of the ceiling allocated for lodging without approval for overexpenditure provided that the total lodging and food reimbursement does not exceed the maximum provided by this subdivision.  When travel involves less than a full day (24-hour period), a reasonable prorated amount shall be paid in accordance with regulations and criteria which shall be promulgated and published by the Director of the Budget. Reimbursement to State employees for lunches eaten while on official business may be made only in the following circumstances:
a.	When an overnight stay is required reimbursement is allowed while an employee is in travel status;
b.	When the cost of the lunch is included as part of a registration fee for a formal congress, conference, assembly, or convocation, by whatever name called. Such assembly must involve the active participation of persons other than the employees of a single State department, institution, or agency and must be necessary for conducting official State business; or
c.	When the State employee is a member of, or providing staff assistance to, a State board, commission, committee, or council which operates from funds deposited with the State Treasurer, and the lunch is preplanned as part of the meeting for the entire board, commission, committee, or council.
(4)	For convention registration fees not to exceed the actual amount expended as shown by a valid receipt or invoice.
(5)	Effective on July 1, 2001, and effective on July 1 of each odd-numbered year thereafter, the Director of the Budget shall revise the amounts of payment of subsistence per day when traveling in-state and out-of-state by an amount equal to the percent increase in the Consumer Price Index for All Urban Consumers for the most recent 24-month period."
(b)	The Office of State Budget and Management shall revise the schedule used for reporting allowable subsistence expenses incurred by State officers and employees while traveling on State business by allocating to lodging the increase provided in subsection (a) of this section.

Requested by:   Senators Warren, Kerr, Plyler, Perdue, Odom
INCREASE THE MONTHLY PENSION FOR MEMBERS OF THE FIREMEN'S AND RESCUE SQUAD WORKERS' PENSION FUND
Section 28.21. (a) G.S. 58-86-55 reads as rewritten:
"§ 58-86-55.  Monthly pensions upon retirement.
Any member who has served 20 years as an 'eligible fireman' or 'eligible rescue squad worker' in the State of North Carolina, as provided in G.S. 58-86-25 and G.S. 58-86-30, and who has attained the age of 55 years is entitled to be paid a monthly pension from this fund. The monthly pension shall be in the amount of one hundred forty-six dollars ($146.00) per month. Any retired fireman receiving a pension shall, effective July 1, 1998, receive a pension of one hundred forty-six dollars ($146.00) per month.
Members shall pay ten dollars ($10.00) per month as required by G.S. 58-86-35 and G.S. 58-86-40 for a period of no longer than 20 years. No 'eligible rescue squad member' shall receive a pension prior to July 1, 1983. No member shall be entitled to a pension hereunder until the member's official duties as a fireman or rescue squad worker for which the member is paid compensation shall have been terminated and the member shall have retired as such according to standards or rules fixed by the board of trustees.
A member who is totally and permanently disabled while in the discharge of the member's official duties as a result of bodily injuries sustained or as a result of extreme exercise or extreme activity experienced in the course and scope of those official duties and who leaves the fire or rescue squad service because of this disability shall be entitled to be paid from the fund a monthly benefit in an amount of one hundred forty-six dollars ($146.00) per month beginning the first month after the member's fifty-fifth birthday. All applications for disability are subject to the approval of the board who may appoint physicians to examine and evaluate the disabled member prior to approval of the application, and annually thereafter. Any disabled member shall not be required to make the monthly payment of ten dollars ($10.00) as required by G.S. 58-86-35 and G.S. 58-86-40.
A member who is totally and permanently disabled for any cause, other than line of duty, who leaves the fire or rescue squad service because of this disability and who has at least 10 years of service with the pension fund, may be permitted to continue making a monthly contribution of ten dollars ($10.00) to the fund until the member has made contributions for a total of 240 months. The member shall upon attaining the age of 55 years be entitled to receive a pension as provided by this section. All applications for disability are subject to the approval of the board who may appoint physicians to examine and evaluate the disabled member prior to approval of the application and annually thereafter.
A member who, because his residence is annexed by a city under Part 2 or Part 3 of Article 4 of Chapter 160A of the General Statutes, or whose department is closed because of an annexation by a city under Part 2 or Part 3 of Article 4 of Chapter 160A of the General Statutes, and because of such annexation is unable to perform as a fireman of any status, and if the member has at least 10 years of service with the pension fund, may be permitted to continue making a monthly contribution of ten dollars ($10.00) to the fund until the member has made contributions for a total of 240 months. The member upon attaining the age of 55 years and completion of such contributions shall be entitled to receive a pension as provided by this section. Any application to make monthly contributions under this section shall be subject to a finding of eligibility by the Board of Trustees upon application of the member.
The pensions provided shall be in addition to all other pensions or benefits under any other statutes of the State of North Carolina or the United States, notwithstanding any exclusionary provisions of other pensions or retirement systems provided by law."
(b)	This section becomes effective July 1, 1998.

Requested by:   Senators Jenkins, Plyler, Perdue, Odom
RETIREE COLAS
Section 28.22. (a) G.S. 135-5 is amended by adding a new subsection to read:
"( eee)	From and after July 1, 1998, the retirement allowance to or on account of beneficiaries whose retirement commenced on or before July 1, 1997, shall be increased by two and one-half percent (2.5%) of the allowance payable on June 1, 1998, in accordance with G.S. 135-5(o). Furthermore, from and after July 1, 1998, the retirement allowance to or on account of beneficiaries whose retirement commenced after July 1, 1997, but before June 30, 1998, shall be increased by a prorated amount of two and one-half percent (2.5%) 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, 1997, and June 30, 1998."
(b) G.S. 135-65 is amended by adding a new subsection to read:
"( s)	From and after July 1, 1998, the retirement allowance to or on account of beneficiaries whose retirement commenced on or before July 1, 1997, shall be increased by two and one-half percent (2.5%) of the allowance payable on June 1, 1998. Furthermore, from and after July 1, 1998, the retirement allowance to or on account of beneficiaries whose retirement commenced after July 1, 1997, but before June 30, 1998, shall be increased by a prorated amount of two and one-half percent (2.5%) 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, 1997, and June 30, 1998."
(c)	G.S. 120-4.22A is amended by adding a new subsection to read:
"( m)	In accordance with subsection (a) of this section, from and after July 1, 1998, the retirement allowance to or on account of beneficiaries whose retirement commenced on or before January 1, 1998, shall be increased by two and one-half percent (2.5%) of the allowance payable on June 1, 1998. Furthermore, from and after July 1, 1998, the retirement allowance to or on account of beneficiaries whose retirement commenced after January 1, 1998, but before June 30, 1998, shall be increased by a prorated amount of two and one-half percent (2.5%) 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, 1998, and June 30, 1998."
(d)	G.S. 128-27 is amended by adding a new subsection to read:
"( uu)	From and after July 1, 1998, the retirement allowance to or on account of beneficiaries whose retirement commenced on or before July 1, 1997, shall be increased by two and one-half percent (2.5%) of the allowance payable on June 1, 1998, in accordance with subsection (k) of this section.  Furthermore, from and after July 1, 1998, the retirement allowance to or on account of beneficiaries whose retirement commenced after July 1, 1997, but before June 30, 1998, shall be increased by a prorated amount of two and one-half percent (2.5%) 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, 1997, and June 30, 1998."
(e)  This section becomes effective July 1, 1998.

Requested by:   Senators Jenkins, Plyler, Perdue, Odom
EMPLOYER CONTRIBUTION RATES
Section 28.23. (a) Section 33.23(c) of S.L. 1997-443 reads as rewritten:
"(c)	Effective July 1, 1998, the State's employer contribution rates budgeted for retirement and related benefits as a percentage of covered salaries for the 1998-99 fiscal year are (i) ten and one-tenth percent (10.10%) - Teachers and State Employees; (ii) fifteen and one-tenth percent (15.10%) - State Law Enforcement Officers; (iii) nine and thirty-six hundredths percent (9.36%) - University Employees' Optional Retirement Program; (iv) eighteen and ninety-seven hundredths percent (18.97%) - Consolidated Judicial Retirement System; and (v) twenty-four and fifty-eight hundredths percent (24.58%) - 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 include fifty-two hundredths percent (0.52%) for the Disability Income Plan."
(b) The change provided by subsection (a) of this section is for the 1998-99 fiscal year only.  It is the intent of the General Assembly that the rates provided by Section 33.23(b) of S.L. 1997-443 shall apply for the 1999-2001 biennium.
(c)	Required employer salary-related contributions for employees whose salaries are paid from department, office, institution, or agency receipts shall be paid from the same source as the source of the employees' salary.  If an employee's salary is paid in part from the General Fund or Highway Fund and in part from department, office, institution, or agency receipts, required employer salary-related contributions may be paid from the General Fund or Highway Fund only to the extent of the proportionate part paid from the General Fund or Highway Fund in support of the salary of the employee, and the remainder of the employer's requirements shall be paid from the source that supplies the remainder of the employee's salary.  The requirements of this section as to source of payment are also applicable to payments on behalf of the employee for hospital-medical benefits, longevity pay, unemployment compensation, accumulated leave, workers' compensation, severance pay, separation allowances, and applicable disability income and disability salary continuation benefits.

Requested by:   Senators Lee, Plyler, Perdue, Odom
PERMIT RETIRED TEACHERS TO WORK AS SUBSTITUTE TEACHERS IN PUBLIC SCHOOLS OR AS TEACHERS IN LOW-PERFORMING PUBLIC SCHOOLS WITHOUT LOSING RETIREMENT BENEFITS
Section 28.24. (a) G.S. 135-3(8)c. reads as rewritten:
"c.	Should a beneficiary who retired on an early or service retirement allowance under this Chapter be reemployed, or otherwise engaged to perform services, by an employer participating in the Retirement System on a part-time, temporary, interim, or on a fee-for-service basis, whether contractual or otherwise, and if such beneficiary earns an amount in any calendar year which exceeds fifty percent (50%) of the reported compensation, excluding terminal payments, during the 12 months of service preceding the effective date of retirement, or twenty thousand dollars ($20,000), whichever is greater, as hereinafter indexed, then the retirement allowance shall be suspended as of the first day of the month following the month in which the reemployment earnings exceed the amount above, for the balance of the calendar year. The retirement allowance of the beneficiary shall be reinstated as of January 1 of each year following suspension. The amount that may be earned before suspension shall be increased on January 1 of each year by the ratio of the Consumer Price Index to the Index one year earlier, calculated to the nearest tenth of a percent (1/10 of 1%).
		The computation of postretirement earnings of a beneficiary under this sub-subdivision, G.S 135-3(8)c., who is or has been certified to teach in North Carolina, shall not include earnings while:
1.	The beneficiary is employed as a substitute or interim teacher in a public school identified by the State Board of Education as low-performing; or
2.	A beneficiary who has been retired for at least 12 months who is employed to teach in a public school identified by the State Board of Education as low-performing, until the school is no longer identified as low-performing; or
3.	A beneficiary who has been retired for at least 12 months who is employed to teach in a public school that qualifies for 'low-wealth supplemental funding'; or
4.	A beneficiary who has been retired for at least 12 months who is employed to teach in a subject area and a geographical area in which the State Board of Education finds that there is a shortage of teachers, until the local board of education locates and hires a teacher certified to teach in the subject area.
	A beneficiary subject to the provisions of G.S. 135-3(8)c. 1, 2, 3, or 4 shall notify the retirement system when the beneficiary is hired by a local school administrative unit."
(b)	This section is effective when it becomes law.

Requested by:   Senators Cooper, Rand, Plyler, Perdue, Odom. Lee
SALARY CONTINUATION BENEFITS FOR UNIVERSITY SYSTEM CAMPUS LAW ENFORCEMENT OFFICERS
Section 28.25. (a) G.S. 143-166.13(a) is amended by adding a new subdivision to read:
"(19)	Sworn State Law-Enforcement Officers with the power of arrest, University System."
(b)	This section becomes effective July 1, 1998, and applies to incapacities that occur on or after that date.

Requested by:   Senators Jenkins, Plyler, Perdue, Odom
ALLOW MEMBERS OF THE LEGISLATIVE, LOCAL GOVERNMENTAL EMPLOYEES', AND TEACHERS' AND STATE EMPLOYEES' RETIREMENT SYSTEMS TO CHANGE THEIR DESIGNATED BENEFICIARIES AFTER RETIREMENT HAS BECOME EFFECTIVE UNDER CERTAIN CIRCUMSTANCES
Section 28.26. (a) G.S. 120-4.26 reads as rewritten:
"§ 120-4.26.  Benefit payment options.
Any member may elect to receive his benefits in a retirement allowance payable throughout life, or he may elect to receive the actuarial equivalent of the retirement allowance in a reduced allowance payable throughout life under the provisions of one of the options set forth below.  No election may be made after the first payment becomes due, or the first retirement check cashed, nor may an election be revoked or a nomination changed.  The election of Option 2 or Option 3 or the nomination of the person thereunder shall be revoked if the person nominated dies prior to the date the first payment becomes normally due or until the first retirement check has been cashed.  The election may be revoked by the member prior to the date the first payment becomes normally due or until his first retirement check has been cashed.  Provided, however, in the event a member has elected Option 2 or Option 3 and nominated his or her spouse to receive a retirement allowance upon the member's death, and the spouse predeceases the member after the first payment becomes normally due or the first retirement check has been cashed, if the member remarries he or she may nominate a new spouse to receive the retirement allowance under the previously elected option, within 90 days of the remarriage.  The new nomination shall be effective on the first day of the month in which it is made and shall provide for a retirement allowance computed to be the actuarial equivalent of the retirement allowance in effect immediately prior to the effective date of the new nomination. Any member having elected Options 2 or 3 and nominated his or her spouse to receive a retirement allowance upon the member's death may, after divorce from his or her spouse, revoke the nomination and elect a new option, effective on the first day of the month in which the new option is elected, providing for a retirement allowance computed to be the actuarial equivalent to the retirement allowance in effect immediately prior to the effective date of the new option.
Option 1.  For Members Retiring Prior to July 1, 1993. – If a member dies within 10 years from his retirement date, an amount equal to his accumulated contributions at retirement, less one-one hundred twentieth (1/120) for each month for which he has received a retirement allowance payment, shall be paid to his legal representative or to the person he nominates by written designation acknowledged and filed with the Board of Trustees;
Option 2. – Upon his death, his reduced retirement allowance shall be continued throughout the life of and paid to the person he nominates by written designation duly acknowledged and filed with the Board of Trustees at the time of his retirement.  If the person selected is other than his spouse, the reduced retirement allowance payable to the member shall not be less than one half of the retirement allowance without optional modification which would otherwise be payable to him; or
Option 3. – Upon his death, one half of his reduced retirement allowance shall be continued throughout the life of and paid to the person he nominates by written designation duly acknowledged and filed with the Board of Trustees at the time of his retirement."
(b) G.S. 128-27(g) reads as rewritten:
"(g)	Election of Optional Allowance. – With the provision that until the first payment on account of any benefit becomes normally due, or his first retirement check has been cashed, any member may elect to receive his benefits in a retirement allowance payable throughout life, or he may elect to receive the actuarial equivalent of such retirement allowance in a reduced allowance payable throughout life under the provisions of one of the Options set forth below. The election of Option two or Option three or nomination of the person thereunder shall be revoked if such person nominated dies prior to the date the first payment becomes normally due or the first retirement check has been cashed.  Such election may be revoked by the member prior to the date the first payment becomes normally due or his first retirement check has been cashed.  Provided, however, in the event a member has elected Option 2 or Option 3 and nominated his or her spouse to receive a retirement allowance upon the member's death, and the spouse predeceases the member after the first payment becomes normally due or the first retirement check has been cashed, if the member remarries he or she may nominate a new spouse to receive the retirement allowance under the previously elected option, within 90 days of the remarriage.  The new nomination shall be effective on the first day of the month in which it is made and shall provide for a retirement allowance computed to be the actuarial equivalent of the retirement allowance in effect immediately prior to the effective date of the new nomination. Any member having elected Options two, three, or six and nominated his or her spouse to receive a retirement allowance upon the member's death may, after divorce from his or her spouse, revoke the nomination and elect a new option, effective on the first day of the month in which the new option is elected, providing for a retirement allowance computed to be the actuarial equivalent of the retirement allowance in effect immediately prior to the effective date of the new option.
Option one. (a)	In the Case of a Member Who Retires prior to July 1, 1965. – If
he dies before he has received in annuity payments the present value of his annuity as it was at the time of his retirement, the balance shall be paid to such person as he shall nominate by written designation duly acknowledged and filed with the Board of Trustees or, if none, to his legal representative.
(b)	In the Case of a Member Who Retires on or after July 1, 1965, but prior to July 1, 1993. – If he dies within 10 years from his retirement date, an amount equal to his accumulated contributions at retirement, less one one-hundred-twentieth thereof for each month for which he has received a retirement allowance payment, shall be paid to such person as he shall nominate by written designation duly acknowledged and filed with the Board of Trustees or, if none, to his legal representative; or
Option two. Upon his death his reduced retirement allowance shall be continued throughout the life of and paid to such person as he shall nominate by written designation duly acknowledged and filed with the Board of Trustees at the time of his retirement, provided that if the person selected is other than his spouse the reduced retirement allowance payable to the member shall not be less than one half of the retirement allowance without optional modification which would otherwise be payable to him; or
Option three. Upon his death, one half of his reduced retirement allowance shall be continued throughout the life of, and paid to such person as he shall nominate by written designation duly acknowledged and filed with the Board of Trustees at the time of his retirement; or
Option four. Adjustment of Retirement Allowance for Social Security Benefits. – Until the first payment on account of any benefit becomes normally due, any member may elect to convert his benefit otherwise payable on his account after retirement into a retirement allowance of equivalent actuarial value of such amount that with his benefit under Table II of the Federal Social Security Act, he will receive, so far as possible, approximately the same amount per year before and after the earliest age at which he becomes eligible, upon application therefor, to receive a social security benefit.
Option five. For Members Retiring prior to July 1, 1993. – The member may elect to receive a reduced retirement allowance under the conditions of Option two or Option three, as provided for above, with the modification that if both he and the person nominated die within 10 years from his retirement date, an amount equal to his accumulated contributions at retirement, less 1/120th thereof for each month for which a retirement allowance has been paid, shall be paid to his legal representatives or to such person as he shall nominate by written designation duly acknowledged and filed with the Board of Trustees.
Option six. A member may elect either Option two or Option three with the added provision that in the event the designated beneficiary predeceases the member, the retirement allowance payable to the member after the designated beneficiary's death shall be equal to the retirement allowance which would have been payable had the member not elected the option."
(c)	G.S. 135-5(g) reads as rewritten:
"(g)	Election of Optional Allowance. – With the provision that until the first payment on account of any benefit becomes normally due, or his first retirement check has been cashed, any member may elect to receive his benefits in a retirement allowance payable throughout life, or he may elect to receive the actuarial equivalent of such retirement allowance in a reduced allowance payable throughout life under the provisions of one of the options set forth below. The election of Option 2 or Option 3 or nomination of the person thereunder shall be revoked if such person nominated dies prior to the date the first payment becomes normally due or until the first retirement check has been cashed. Such election may be revoked by the member prior to the date the first payment becomes normally due or until his first retirement check has been cashed. Provided, however, in the event a member has elected Option 2 or Option 3 and nominated his or her spouse to receive a retirement allowance upon the member's death, and the spouse predeceases the member after the first payment becomes normally due or the first retirement check has been cashed, if the member remarries he or she may nominate a new spouse to receive the retirement allowance under the previously elected option, within 90 days of the remarriage.  The new nomination shall be effective on the first day of the month in which it is made and shall provide for a retirement allowance computed to be the actuarial equivalent of the retirement allowance in effect immediately prior to the effective date of the new nomination. Any member having elected Options 2, 3, or 6 and nominated his or her spouse to receive a retirement allowance upon the member's death may, after divorce from his or her spouse, revoke the nomination and elect a new option, effective on the first day of the month in which the new option is elected, providing for a retirement allowance computed to be the actuarial equivalent of the retirement allowance in effect immediately prior to the effective date of the new option.
Option 1. (a)	In the Case of a Member Who Retires prior to July 1, 1963. – If he
	dies before he has received in annuity payments the present value of his annuity as it was at the time of his retirement, the balance shall be paid to his legal representatives or to such person as he shall nominate by written designation duly acknowledged and filed with the Board of Trustees.
(b)	In the Case of a Member Who Retires on or after July 1, 1963, but prior to July 1, 1993. – If he dies within 10 years from his retirement date, an amount equal to his accumulated contributions at retirement, less  1/120 thereof for each month for which he has received a retirement allowance payment, shall be paid to his legal representatives or to such person as he shall nominate by written designation duly acknowledged and filed with the Board of Trustees; or
Option 2. Upon his death his reduced retirement allowance shall be continued throughout the life of and paid to such person as he shall nominate by written designation duly acknowledged and filed with the Board of Trustees at the time of his retirement, provided that if the person selected is other than his spouse the reduced retirement allowance payable to the member shall not be less than one half of the retirement allowance without optional modification which would otherwise be payable to him; or
Option 3. Upon his death, one half of his reduced retirement allowance shall be continued throughout the life of, and paid to such person as he shall nominate by written designation duly acknowledged and filed with the Board of Trustees at the time of his retirement; or
Option 4. Adjustment of Retirement Allowance for Social Security Benefits. – Until the first payment on account of any benefit becomes normally due, any member may elect to convert his benefit otherwise payable on his account after retirement into a retirement allowance of equivalent actuarial value of such amount that with his benefit under Title II of the Federal Social Security Act, he will receive, so far as possible, approximately the same amount per year before and after the earliest age at which he becomes eligible, upon application therefor, to receive a social security benefit.
Option 5. For Members Retiring Prior to July 1, 1993. – The member may elect to receive a reduced retirement allowance under the conditions of Option 2 or Option 3, as provided for above, with the modification that if both he and the person nominated die within 10 years from his retirement date, an amount equal to his accumulated contributions at retirement, less  1/120 thereof for each month for which a retirement allowance has been paid, shall be paid to his legal representatives or to such person as he shall nominate by written designation duly acknowledged and filed with the Board of Trustees.
Option 6. A member may elect either Option 2 or Option 3 with the added provision that in the event the designated beneficiary predeceases the member, the retirement allowance payable to the member after the designated beneficiary's death shall be equal to the retirement allowance which would have been payable had the member not elected the option."
(d) This section is effective when it becomes law, and its provisions shall apply to all persons who are retired from the Legislative Retirement System, the Local Governmental Employees' Retirement System, or the Teachers' and State Employees' Retirement System on that date or who retire from any of those retirement systems after that date.  In the case of retired members who designated a spouse as survivor under one of the options specified in this act, whose designated spouses predeceased them, and who remarried prior to the effective date of this act, such members may nominate the new spouse to receive the survivor retirement benefits in accordance with this act, provided that such nomination is made within 90 days of the effective date of this section.

Requested by:   Senators Jenkins, Plyler, Perdue, Odom
INCREASE RETIREE DEATH BENEFIT
Section 28.27. (a) G.S. 135-5(l) reads as rewritten:
"(l)	Death Benefit Plan. – There is hereby created a Group Life Insurance Plan (hereinafter called the "Plan") which is established as an employee welfare benefit plan that is separate and apart from the Retirement System and under which the members of the Retirement System shall participate and be eligible for group life insurance benefits. Upon receipt of proof, satisfactory to the Board of Trustees in their capacity as trustees under the Group Life Insurance Plan, of the death, in service, of a member who had completed at least one full calendar year of membership in the Retirement System, there shall be paid to such person as he shall have nominated by written designation duly acknowledged and filed with the Board of Trustees, if such person is living at the time of the member's death, otherwise to the member's legal representatives, a death benefit. Such death benefit shall be equal to the greater of:
(1)	The compensation on which contributions were made by the member during the calendar year preceding the year in which his death occurs, or
(2)	The greatest compensation on which contributions were made by the member during a 12-month period of service within the 24-month period of service ending on the last day of the month preceding the month in which his last day of actual service occurs;
(3),	(4) Repealed by Session Laws 1983 (Regular Session, 1984), c. 1049, s. 2.
subject to a minimum of twenty-five thousand dollars ($25,000) and to a maximum of fifty thousand dollars ($50,000). Such death benefit shall be payable apart and separate from the payment of the member's accumulated contributions under the System on his death pursuant to the provisions of subsection (f) of this section. For the purpose of the Plan, a member shall be deemed to be in service at the date of his death if his death occurs within 180 days from the last day of his actual service.
The death benefit provided in this subsection (l)	shall not be payable, notwithstanding the member's compliance with all the conditions set forth in the preceding paragraph, if his death occurs
(1)	After December 31, 1968 and after he has attained age 70; or
(2)	After December 31, 1969 and after he has attained age 69; or
(3)	After December 31, 1970 and after he has attained age 68; or
(4)	After December 31, 1971 and after he has attained age 67; or
(5)	After December 31, 1972 and after he has attained age 66; or
(6)	After December 31, 1973 and after he has attained age 65; or
(7)	After December 31, 1978, but before January 1, 1987, and after he has attained age 70.
Notwithstanding the above provisions, the death benefit shall be payable on account of the death of any member who died or dies on or after January 1, 1974, but before January 1, 1979, after attaining age 65, if he or she had not yet attained age 65, if he or she had not yet attained age 66, was at the time of death completing the work year for those individuals under specific contract, or during the fiscal year for those individuals not under specific contract, in which he or she attained 65, and otherwise met all conditions for payment of the death benefit.
Notwithstanding the above provisions, the Board of Trustees may and is specifically authorized to provide the death benefit according to the terms and conditions otherwise appearing in this Plan in the form of group life insurance, either (i)	by purchasing a contract or contracts of group life insurance with any life insurance company or companies licensed and authorized to transact business in this State for the purpose of insuring the lives of members in service, or (ii) by establishing a separate trust fund qualified under Section 501(c)(9) of the Internal Revenue Code of 1954, as amended, for such purpose. To that end the Board of Trustees is authorized, empowered and directed to investigate the desirability of utilizing group life insurance by either of the foregoing methods for the purpose of providing the death benefit. If a separate trust fund is established, it shall be operated in accordance with rules and regulations adopted by the Board of Trustees and all investment earnings on the trust fund shall be credited to such fund.
In administration of the death benefit the following shall apply:
(1)	For the purpose of determining eligibility only, in this subsection 'calendar year' shall mean any period of 12 consecutive months or, if less, the period covered by an annual contract of employment. For all other purposes in this subsection "calendar year" shall mean the 12 months beginning January 1 and ending December 31.
(2)	Last day of actual service shall be:
a.	When employment has been terminated, the last day the member actually worked.
b.	When employment has not been terminated, the date on which an absent member's sick and annual leave expire, unless he is on approved leave of absence and is in service under the provisions of G.S. 135-4(h).
(3)	For a period when a member is on leave of absence, his status with respect to the death benefit will be determined by the provisions of G.S. 135-4(h).
(4)	A member on leave of absence from his position as a teacher or State employee for the purpose of serving as a member or officer of the General Assembly shall be deemed to be in service during sessions of the General Assembly and thereby covered by the provisions of the death benefit. The amount of the death benefit for such member shall be the equivalent of the salary to which the member would have been entitled as a teacher or State employee during the 12-month period immediately prior to the month in which death occurred, not to be less than twenty-five thousand dollars ($25,000) nor to exceed fifty thousand dollars ($50,000).
The provisions of the Retirement System pertaining to Administration, G.S. 135-6, and management of funds, G.S. 135-7, are hereby made applicable to the Plan.
A member who is a beneficiary of the Disability Income Plan provided for in Article 6 of this Chapter shall be eligible for group life insurance benefits as provided in this subsection, notwithstanding that the member is no longer an employee or teacher or that the member's death occurs after the eligibility period after active service. The basis of the death benefit payable hereunder shall be the higher of the death benefit computed as above or a death benefit based on compensation used in computing the benefit payable under G.S. 135-105 and G.S. 135-106, as may be adjusted for percentage post-disability increases, all subject to the maximum dollar limitation as provided above. A member in receipt of benefits from the Disability Income Plan under the provisions of G.S. 135-112 whose right to a benefit accrued under the former Disability Salary Continuation Plan shall not be covered under the provisions of this paragraph.
Upon receipt of proof, satisfactory to the Board of Trustees in its capacity under this subsection, of the death of a retired member of the Retirement System on or after July 1, 1988, but before January 1, 1999, there shall be paid a death benefit to the surviving spouse of the deceased retired member or to the deceased retired member's legal representative if not survived by a spouse; provided the retired member has elected, when first eligible, to make, and has continuously made, in advance of his death required contributions as determined by the Board of Trustees on a fully contributory basis, through retirement allowance deductions or other methods adopted by the Board of Trustees, to a group death benefit trust fund administered by the Board of Trustees separate and apart from the Retirement System's Annuity Savings Fund and Pension Accumulation Fund. This death benefit shall be a lump-sum payment in the amount of five thousand dollars ($5,000) upon the completion of twenty-four months of contributions required under this subsection. Should death occur before the completion of twenty-four months of contributions required under this subsection, the deceased retired member's surviving spouse or legal representative if not survived by a spouse shall be paid the sum of the retired member's contributions required by this subsection plus interest to be determined by the Board of Trustees.
Upon receipt of proof, satisfactory to the Board of Trustees in its capacity under this subsection, of the death of a retired member of the Retirement System on or after January 1, 1999, there shall be paid a death benefit to the surviving spouse of the deceased retired member or to the deceased retired member's legal representative if not survived by a spouse; provided the retired member has elected, when first eligible, to make, and has continuously made, in advance of his death required contributions as determined by the Board of Trustees on a fully contributory basis, through retirement allowance deductions or other methods adopted by the Board of Trustees, to a group death benefit trust fund administered by the Board of Trustees separate and apart from the Retirement System's Annuity Savings Fund and Pension Accumulation Fund. This death benefit shall be a lump-sum payment in the amount of six thousand dollars ($6,000) upon the completion of 24 months of contributions required under this subsection. Should death occur before the completion of 24 months of contributions required under this subsection, the deceased retired member's surviving spouse or legal representative if not survived by a spouse shall be paid the sum of the retired member's contributions required by this subsection plus interest to be determined by the Board of Trustees."
(b) G.S. 135-64(g) reads as rewritten:
"(g)	Upon the death of a retired member on or after July 1, 1988, but before  January 1, 1999, there shall be paid a death benefit to the surviving spouse of a deceased retired member or to the deceased retired member's legal representative if not survived by a spouse; provided the retired member has elected, when first eligible, to make, and has continuously made, in advance of his death required contributions as determined by the Board of Trustees on a fully contributory basis, through retirement allowance deductions or other methods adopted by the Board of Trustees, to a group death benefit trust fund administered by the Board of Trustees separate and apart from the Retirement System's Annuity Savings Fund and Pension Accumulation Fund. This death benefit shall be a lump-sum payment in the amount of five thousand dollars ($5,000) upon the completion of 24 months of contributions required under this subsection. Should death occur before the completion of 24 months of contributions required under this subsection, the deceased retired member's surviving spouse or legal representative if not survived by a spouse shall be paid the sum of the retired member's contributions required by this subsection plus interest to be determined by the Board of Trustees."
(c)	G.S. 135-64 is amended by adding a new subsection to read:
"( h)	Upon the death of a retired member on or after January 1, 1999, there shall be paid a death benefit to the surviving spouse of a deceased retired member or to the deceased retired member's legal representative if not survived by a spouse; provided the retired member has elected, when first eligible, to make, and has continuously made, in advance of his death required contributions as determined by the Board of Trustees on a fully contributory basis, through retirement allowance deductions or other methods adopted by the Board of Trustees, to a group death benefit trust fund administered by the Board of Trustees separate and apart from the Retirement System's Annuity Savings Fund and Pension Accumulation Fund. This death benefit shall be a lump-sum payment in the amount of six thousand dollars ($6,000) upon the completion of 24 months of contributions required under this subsection. Should death occur before the completion of 24 months of contributions required under this subsection, the deceased retired member's surviving spouse or legal representative if not survived by a spouse shall be paid the sum of the retired member's contributions required by this subsection plus interest to be determined by the Board of Trustees."
(d)	G.S. 120-4.27 reads as rewritten:
"§ 120-4.27.  Death benefit.
The designated beneficiary of a member who dies while in service after completing one year of creditable service shall receive a lump-sum payment of an amount equal to the deceased member's highest annual salary, to a maximum of fifteen thousand dollars ($15,000). For purposes of this death benefit 'in service' means currently serving as a member of the North Carolina General Assembly.
The death benefit provided by this section shall be designated a group life insurance benefit payable under an employee welfare benefit plan that is separate and apart from the Retirement System but under which the members of the Retirement System shall participate and be eligible for group life insurance benefits. The Board of Trustees is authorized to provide the death benefit in the form of group life insurance either by purchasing a contract or contracts of group life insurance with any life insurance company or companies licensed and authorized to transact business in the State of North Carolina for the purpose of insuring the lives of qualified members in service, or by establishing or affiliating with a separate trust fund qualified under Section 501(c)(9) of the Internal Revenue Code of 1954, as amended.
	Upon receipt of proof, satisfactory to the Board of Trustees, of the death of a retired member of the Retirement System or Retirement Fund on or after July 1, 1988, but before January 1, 1999, there shall be paid a death benefit to the surviving spouse of a deceased retired member, or to the deceased retired member's legal representative if not survived by a spouse; provided the retired member has elected, when first eligible, to make, and has continuously made, in advance of his death required contributions as determined by the Retirement System on a fully contributory basis, through retirement allowance deductions or other methods adopted by the Retirement System, to a group death benefit trust fund administered by the Board of Trustees separate and apart from the Retirement System's Annuity Savings Fund and Pension Accumulation Fund.  This death benefit shall be a lump-sum payment in the amount of five thousand dollars ($5,000) upon the completion of twenty-four months of contributions required under this subsection.  Should death occur before the completion of twenty-four months of contributions required under this subsection, the deceased retired member's surviving spouse or legal representative if not survived by a spouse shall be paid the sum of the retired member's contributions required by this subsection plus interest to be determined by the Board of Trustees.
	Upon receipt of proof, satisfactory to the Board of Trustees, of the death of a retired member of the Retirement System or Retirement Fund on or after January 1, 1999, there shall be paid a death benefit to the surviving spouse of a deceased retired member, or to the deceased retired member's legal representative if not survived by a spouse; provided the retired member has elected, when first eligible, to make, and has continuously made, in advance of his death required contributions as determined by the Retirement System on a fully contributory basis, through retirement allowance deductions or other methods adopted by the Retirement System, to a group death benefit trust fund administered by the Board of Trustees separate and apart from the Retirement System's Annuity Savings Fund and Pension Accumulation Fund.  This death benefit shall be a lump-sum payment in the amount of six thousand dollars ($6,000) upon the completion of 24 months of contributions required under this subsection.  Should death occur before the completion of 24 months of contributions required under this subsection, the deceased retired member's surviving spouse or legal representative if not survived by a spouse shall be paid the sum of the retired member's contributions required by this subsection plus interest to be determined by the Board of Trustees."
(e)  G.S. 128-27(l2) reads as rewritten:
"(l2)	Death Benefit for Retired Members. – Upon receipt of proof, satisfactory to the Board of Trustees in its capacity under this subsection, of the death of a retired member of the Retirement System on or after July 1, 1988, but before January 1, 1999, there shall be paid a death benefit to the surviving spouse of the deceased retired member or to the deceased retired member's legal representative if not survived by a spouse; provided the retired member has elected, when first eligible, to make, and has continuously made, in advance of his death required contributions as determined by the Board of Trustees on a fully contributory basis through retirement allowance deductions or other methods adopted by the Board of Trustees, to a group death benefit trust fund administered by the Board of Trustees separate and apart from the Retirement System's Annuity Savings Fund and Pension Accumulation Fund. This death benefit shall be a lump-sum payment in the amount of five thousand dollars ($5,000) upon the completion of 24 months of contributions required under this subsection. Should death occur before the completion of 24 months of contributions required under this subsection, the deceased retired member's surviving spouse or legal representative if not survived by a spouse shall be paid the sum of the retired member's contributions required by this subsection plus interest to be determined by the Board of Trustees."
(f)  G.S. 128-27 is amended by adding a new subsection to read:
"( l3)	Death Benefit for Retired Members. – Upon receipt of proof, satisfactory to the Board of Trustees in its capacity under this subsection, of the death of a retired member of the Retirement System on or after January 1, 1999,  there shall be paid a death benefit to the surviving spouse of the deceased retired member or to the deceased retired member's legal representative if not survived by a spouse; provided the retired member has elected, when first eligible, to make, and has continuously made, in advance of his death required contributions as determined by the Board of Trustees on a fully contributory basis through retirement allowance deductions or other methods adopted by the Board of Trustees, to a group death benefit trust fund administered by the Board of Trustees separate and apart from the Retirement System's Annuity Savings Fund and Pension Accumulation Fund. This death benefit shall be a lump-sum payment in the amount of six thousand dollars ($6,000) upon the completion of 24 months of contributions required under this subsection. Should death occur before the completion of 24 months of contributions required under this subsection, the deceased retired member's surviving spouse or legal representative if not survived by a spouse shall be paid the sum of the retired member's contributions required by this subsection plus interest to be determined by the Board of Trustees."
(g)  This section becomes effective January 1, 1999.

Requested by:   Senator Gulley
RIF ABUSES PROHIBITED
Section 28.28.  G.S. 143-27.2 reads as rewritten:
"§ 143-27.2.  Discontinued service retirement allowance and severance wages for certain State employees.
(a)	When the Director of the Budget determines that the closing of a State institution or a reduction in force will accomplish economies in the State Budget, he shall pay either a discontinued service retirement allowance or severance wages to any affected State employee, provided reemployment is not available.  As used in this section, "economies in the State Budget" means economies resulting from elimination of a job and its responsibilities or from a lack of funds to support the job.  In determining whether to pay a discontinued service retirement allowance or severance wages, the Director of the Budget shall consider the recommendation of the department head involved and any recommendation of the State Personnel Director.  Severance wages shall not be paid to an employee who chooses a discontinued service retirement.  Severance wages shall not be subject to employer or employee retirement contributions.  Severance wages shall be paid according to the policies adopted by the State Personnel Commission.
Notwithstanding any other provisions of the State's retirement laws, any employee of the State who is a member of the Teachers' and State Employees' Retirement System or the Law-Enforcement Officers' Retirement System and who has his job involuntarily terminated as a result of economies in the State Budget may be entitled to a discontinued service retirement allowance, subject to the approval of the employing agency and the availability of agency funds.  An unreduced discontinued service retirement allowance, not otherwise allowed, may be approved for employees with 20 or more years of creditable retirement service who are at least 55 years of age; or a discontinued service retirement allowance, not otherwise allowed, may be approved for employees with 20 or more years of creditable retirement service who are at least 50 years of age, reduced by one-fourth of one percent (1/4 of 1%) for each month that retirement precedes his fifty-fifth birthday.  In cases where a discontinued service retirement allowance is approved, the employing agency shall make a lump sum payment to the Administrator of the State Retirement Systems equal to the actuarial present value of the additional liabilities imposed upon the System, to be determined by the System's consulting actuary, as a result of the discontinued service retirement, plus an administrative fee to be determined by the Administrator.
The salary used to determine severance wages under this section, is the last annual salary except that if the employee was promoted within the previous 12 months, the last annual salary is that annual salary prior to the promotion.  If the annual salary prior to the promotion is used, it shall be adjusted to account for any across-the-board legislative salary increases.  Excluded from any calculation are any benefits such as, but not limited to, overtime pay, shift pay, holiday premium, or longevity pay.
(b)	Any employee separated from State government and paid severance wages under this section shall not be employed under a contractual arrangement by the same department until 12 months have elapsed since the separation.  This subsection does not affect any reduction in force rights that the employee may have."

PART XXIX.  GENERAL CAPITAL APPROPRIATIONS/PROVISIONS
CAPITAL APPROPRIATIONS/GENERAL FUND
Section 29.  Appropriations are made from the General Fund of the State for the 1998-99 fiscal year for use by the State departments, institutions, and agencies to provide for capital improvement projects according to the following schedule:

Capital Improvements - General Fund
	1998-99
ADMINISTRATION

Reserve for State Veterans Nursing Home-Salisbury
Renovation of a 100-bed nursing care unit	$1,000,000

AGRICULTURE AND CONSUMER SERVICES

N.C. State Fair
Conservation Education Center-Design	$500,000

Eastern Agriculture Center
Funds for continued development including parking, paving,
and a covered walkway	$1,000,000

Southeastern Farmers Market and Agriculture Center
Continued Development	$500,000

Union County Equine Facility-Planning	$1,000,000

Umstead Farm Unit
Authorizes the Department to use timber receipts
for fiscal year 1998-99 for the construction of nutrition
and animal care facilities at the Umstead Farm 
Unit in Butner

Total Requirements	$533,000
Less Receipts	($533,000)
–––––––––––––––––––––––-
Appropriation                    0

COMMUNITY COLLEGES

Center for Applied Textile Technology
Lab and Administration Building	$2,000,000

Fayetteville Technical Community College
to construct a model early childhood
education center	$3,000,000

CORRECTION

Central Prison-Acute Care Hospital
Design of a new 90-bed facility	$2,500,000

CULTURAL RESOURCES

Museum of Art-Expansion and Renovation
Design funds	$2,400,000

Museum of the Albemarle-New Building
Site preparation and beginning construction	$7,000,000

ENVIRONMENT AND NATURAL RESOURCES

State Match-Water Resources Projects
Funds for the State share of federal civil	$7,300,000
works projects

Construction/Renovation of Aquariums
Funds to complete Roanoke Island facility and to	$3,750,000
do site development at Pine Knoll Shores and 
Fort Fisher facilities

Central Piedmont Aquarium-Planning	$500,000

Land Acquisition-Jocassee Lake-Transylvania County
Purchase land adjacent to Jocassee Lake to be preserved
as a park, recreational, and scenic areas	$5,000,000

Detoxification of PCB Landfill in Warren County	$3,000,000

Channel Widening/Deepening-Wilmington Port
To improve navigation for shipping terminals and industries	$4,800,000

HEALTH AND HUMAN SERVICES

Eastern School for the Deaf
Construction of 11,000 square foot Independent Living
Complex in Wilson	$1,040,000

Cherry Hospital/Children and Youth Facility
Replace an existing building which no longer
meets federal standards	$5,000,000

New Whitaker School-Planning
Planning for a 33-bed facility	$250,000

Eastern Vocational Rehabilitation Facility/Goldsboro
Purchase an existing building for the expansion of the
Traumatic Brain Injured Program	$300,000

STATE PORTS

Reserve for Continued Development of State Ports
Continued development of the State ports at Wilmington
and Morehead City	$2,000,000

UNIVERSITY OF NORTH CAROLINA-BOARD OF GOVERNORS

East Carolina University
Science Laboratories and Technology Building-Site Development	$3,200,000

East Carolina University
Multipurpose Center-Matching Funds	$2,000,000

Elizabeth City State University
To complete Fine Arts and Mass Communications Building	$948,600

Fayetteville State University
Fine Arts and General Classroom Facility-Site Development	$1,000,000

North Carolina A&T State University
Campus Security Improvements	$1,450,000
General Classroom and Laboratory
   Building Complex # 1	$3,850,000

North Carolina Central University
Health and Safety Repairs and Renovations	$2,000,000

North Carolina School of the Arts
Basic Education Complex-Planning	$800,000
Filmmaking Office/Classroom Post Production Complex	$300,000

North Carolina State University
Toxicology Building-Construction	$13,806,100
Engineering Instructional Facility-Advanced Planning	$5,000,000
Upfit and Equip Center for Marine Science and
Technology Building	$2,400,000
Polk House-Funds to relocate and renovate	$600,000
Raulston Arboretum Education Center	$3,400,000

UNC-Asheville
Highsmith Center Renovation and Addition-Planning	$1,000,000

UNC-Chapel Hill
R.B. House Library-Renovation	$9,332,700
Medical Biomolecular Research Building-
Site Development	$6,000,000
Paul Green Theatre	$1,000,000
Additional renovations of Memorial Hall-Planning	$1,000,000
Addition and renovation of the Knapp Building	$6,570,600

UNC-General Administration
School Leadership Academy	$2,000,000

UNC-Public Television
Advanced Planning, Conversion to Digital TV	$1,100,000

UNC-Charlotte
Academic Facilities-Humanities-Site Development	$3,000,000
Academic Facilities-Sciences-Planning	$2,000,000

UNC-Greensboro
Science Instructional Building-Site Development	$3,850,000

UNC-Pembroke
Regional Center for Economic, Professional and
Community Development Planning	$700,000

Western Carolina University
Fine and Performing Arts Center-Site Development	$2,500,000

Winston-Salem State University
Computer Science Facility-Planning	$700,000

TOTAL CAPITAL APPROPRIATION	$135,348,000

Requested by:   Senators Odom, Plyler, Perdue
EXPENDITURE OF FUNDS FROM RESERVE FOR REPAIRS AND RENOVATIONS
Section 29.1 (a)	Of the funds in the Reserve for Repairs and Renovations for the 1998-99 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 allocations 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:   Senators Lee, Winner
UNC REPAIRS AND RENOVATIONS
Section 29.2.  The Board of Governors of The University of North Carolina may allocate up to ten million dollars ($10,000,000) of its funding from the Reserve for Repairs and Renovations for improvements to the technology infrastructure on the campuses of the constituent institutions.  Such improvements to the technology infrastructure shall include repairs to existing systems, improvements to improve the use and suitability of existing space for technology, and other improvements to utilities infrastructure that will allow the increased use of advanced technology for educational and research purposes.
These funds shall be used in accordance with G.S. 143-15.3A.

Requested by:   Senators Plyler, Perdue, Odom
HISTORIC SITES REPAIRS AND RENOVATIONS FUNDS
Section 29.3.  (a) Funds allocated in this act to the Office of State Budget and Management for the Repairs and Renovations Fund may be used to make needed repairs and renovations at the State Historic Sites.
(b) There is established the Historic Sites Repairs and Renovations Review Committee.  The Committee shall consist of the following members:  the three cochairs of the Senate Appropriations and Base Budget Committee and the four cochairs of the House of Representatives Appropriations Committee.  The Office of State Budget and Management shall submit its proposal for the use of funds from the Repairs and Renovations Fund for Historic Sites to the Committee before submitting the proposal to the Joint Legislative Commission on Governmental Operations in accordance with this act.

Requested by:   Senators Warren, Plyler, Odom, Perdue
STATE CAPITOL AND VISITOR'S CENTER SITE
Section 29.4.  The new State Capitol and Visitor Center being planned for construction shall be located at the site bounded by Blount Street, Wilmington Street, Edenton Street, and Jones Street in Raleigh, unless that construction site is unacceptable for structural reasons.

Requested by:   Senator Martin of Pitt
TIMBER RECEIPTS FOR CAPITAL CONSTRUCTION
Section 29.5.  The sum of five hundred thirty-three thousand dollars ($533,000) shall be transferred from the Department of Agriculture and Consumer Services' timber sales capital improvement account, established pursuant to G.S. 146-30, to the Department of Agriculture and Consumer Services for the 1998-99 fiscal year for construction of nutrition and animal care facilities at the Umstead Farm Unit in Butner.

Requested by: Senator Jenkins
SOUTH BROAD PARK LAKE AND WATER CONSERVATION FUND CONVERSION
Section 29.6.  Lands purchased by the State to establish a new State park in Transylvania County shall be used as replacement property to fulfill the requirements of the federal Land and Water Conservation Fund for the conversion of land within South Broad Park in Brevard to a use other than outdoor recreation.  Except for the tract currently used for an arboretum, Transylvania County may use for library purposes lands in South Broad Park converted under this section.

Requested by:   Senators Plyler, Perdue, Odom
CONSTRUCTION FUNDS FOR STATE PORTS AND WANCHESE SEAFOOD INDUSTRIAL PARK
Section 29.7.  Of the two million dollars ($2,000,000) appropriated in this act to the Department of Commerce for capital improvements, the sum of one million seven hundred fifty thousand dollars ($1,750,000) for the 1998-99 fiscal year shall be divided equally between the State ports at Morehead City and Wilmington to be used for capital improvements. The remaining two hundred fifty thousand dollars ($250,000) for the 1998-99 fiscal year shall be used for construction of new meeting and office space and renovation of existing meeting and office space at the Wanchese Seafood Industrial Park.

Requested by:   Senator Martin of Pitt
WATER RESOURCES DEVELOPMENT PROJECTS FUNDS
Section 29.8.  (a)	The Department of Environment and Natural Resources shall allocate the funds appropriated in this act for water resources development projects to the following projects whose estimated costs are as indicated:

Name of Project

1.  Morehead City Harbor Turning Basin	$ 2,000,000

2.  Wilmington Harbor Maintenance Dredging	200,000

3.  B. Everett Jordan Lake Water Supply	110,000

4.  Wilmington Harbor Long-Term Disposal	1,400,000

5.  Aquatic Plant Control Statewide and Lake Gaston	150,000

6.  Beaufort Harbor Maintenance Dredging	80,000

7.  North Channel Maintenance Dredging	1,200,000
   and Disposal Site

8.  Manteo Shallowbag Bay Maintenance Dredging	200,000

9.  Rollinson Channel Maintenance Dredging 	400,000
     (Dare County)

10.  State-Local Projects

a.  Frisco Ditch Snagging (Dare County)	3,500
b.  Moccasin Creek Restoration (Johnston County)	78,800
c.  Avery Pond Jetties and Dredging	140,800
     (Town of Kitty Hawk)
d.  High Rock Lake Dredging Feasibility Study 	20,000
e.  Northwest Creek Dredging 	100,000
f.  Other Stream Restoration Projects 	256,900
Subtotal	600,000

11.  Pine Knolls Shores Protection (Carteret Co.)	200,000

12. Tar River Road Streambank Protection	50,000
     (City of Greenville)

13. Battery Island Bird Habitat Restoration	140,000
     (Brunswick County)

14. Dare County Beaches Feasibility Study	70,000

15. Deep Creek Watershed Project (Yadkin Co.)	500,000

Total	$ 7,300,000
(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 1998-99 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 1998-99.
(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 1999-2000 fiscal year.
(c)	The Department shall make quarterly reports on the use of these funds to the Joint Legislative Commission on Governmental Operations, the Fiscal Research Division, and the Office of State Budget and Management.  Each report shall include all of the following:
(1)	All projects listed in this section.
(2)	The estimated cost of each project.
(3)	The date that work on each project began or is expected to begin.
(4)	The date that work on each project was completed or is expected to be completed.
(5)	The actual cost of each project.
The quarterly reports shall also show those projects advanced in schedule, those projects delayed in schedule, and an estimate of the amount of funds expected to revert to the General Fund.

Requested by:   Senator Ballance
WARREN COUNTY PCB LANDFILL DETOXIFICATION FUNDS
Section 29.9.  (a)	The Director of the Budget shall place funds appropriated in this act to the Department of Environment and Natural Resources for the 1998-99 fiscal year for the detoxification of the Warren County polychlorinated biphenyl (PCB) landfill, any available funds for the 1998-99 fiscal year, and any available federal funds into a nonreverting reserve to be used by the Department for the detoxification of a landfill located in Warren County that contains polychlorinated biphenyl (PCBs) and dioxin/furan contaminated materials.  The detoxification treatment standards for residual concentrations of contaminants remaining in the soil shall be 200 parts per billion for PCBs and 200 parts per trillion toxicity equivalent concentration (TEQ) for dioxins/furans.  Based catalyzed decomposition (BCD) technology shall be used to detoxify the landfill in accordance with a plan approved by the Department.  The Department shall oversee the detoxification of this landfill.
(b) Any funds remaining in the reserve established under subsection (a) of this section at the conclusion of the detoxification of the landfill shall remain in a nonreverting reserve and shall be transferred to the Department of Commerce to be used for economic development in Warren County or Warren County's infrastructure needs, or both.

Requested by:   Senator Perdue
GLOBAL TRANSPARK RESERVE
Section 29.10.  There is established in the Office of State Budget and Management a reserve fund entitled the "Global TransPark Reserve Fund" for runway and taxiway construction, wetlands compensatory mitigation, and assuming the local sponsor role for the Kinston Regional Jetport facility.  Of the funds appropriated in this act to the Office of State Budget and Management for the Global TransPark Authority, the sum of five million three hundred twenty-five thousand dollars ($5,325,000) shall be placed in the Global TransPark Reserve Fund.  These funds shall be used to match federal funds and shall be allocated by the North Carolina Global TransPark Authority as follows:
(1)	Up to $3,500,000 to begin construction of the runway extension and taxiways.
(2)	Up to $1,500,000 to satisfy wetlands compensatory mitigation requirements associated with obtaining a State water quality certification under section 401 of the federal Clean Water Act or any other compensatory mitigation requirements under section 404 of the federal Clean Water Act in connection with the construction of the runway extension and taxiways.  The compensatory mitigation requirements shall be met by the North Carolina Global TransPark Authority by making payment to the Wetlands Restoration Fund in accordance with G.S. 143-214.12.
(3)	Up to $325,000 to assume the local sponsor role for the Kinston Regional Jetport facility.
Any funds not expended or encumbered pursuant to this section by June 30, 2000, shall revert to the General Fund.

Requested by:  Senators Plyler, Perdue, Odom
CAPITAL IMPROVEMENT PROJECTS/SUPPLEMENTAL FUNDING APPROVAL/REPORTING REQUIREMENT
Section 29.11. Each department receiving capital improvement appropriations from the Highway Fund under this act shall report quarterly to the Director of the Budget on the status of those capital projects.  The reporting procedure to be followed shall be developed by the Director of the Budget.
Capital improvement projects authorized in this act that have not been placed under contract for construction due to insufficient funds may be supplemented with funds identified by the Director of the Budget, provided:
(1)	That the project was designed and bid within the scope as authorized by the General Assembly;
(2)	That the funds to supplement the project are the same source as authorized for the original project;
(3)	That the department to which the project was authorized has unsuccessfully pursued all statutory authorizations to award the contract; and
(4)	That the action be reported to the Fiscal Research Division of the Legislative Services Office.

Requested by:   Senator Jordan
RELOCATE GLOBAL TRANSPARK AUTHORITY
Section 29.12.  Of funds available to the North Carolina Global TransPark Authority from funds appropriated in this act, the Authority shall relocate its administrative offices from Raleigh to the site of the TransPark in Kinston.  No State funds shall be spent to lease office space in Raleigh after June 30, 1999.  At the request of the Authority, the State Property Office shall assist the Authority in locating State uses for that space, if practical and economical.
The Authority may maintain a contact person housed in the offices of the Department of Transportation in Raleigh.

PART XXX.  MISCELLANEOUS PROVISIONS
Requested by:  Senators Plyler, Perdue, Odom
EXECUTIVE BUDGET ACT APPLIES
Section 30.  The provisions of the Executive Budget Act, Chapter 143, Article 1 of the General Statutes, are reenacted and shall remain in full force and effect and are incorporated in this act by reference.

Requested by:  Senators Plyler, Perdue, Odom, 
COMMITTEE REPORT
Section 30.1. (a)	The Senate Appropriations Committee Report on the Continuation, Expansion and Capital Budgets, dated June 30, 1998, which was distributed in the Senate and 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 and as such shall be printed as a part of the Session Laws.
(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 1998-99 fiscal year 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, 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)	The base budget was adjusted in accordance with the base budget cuts and additions that were set out in the Senate Appropriations Committee Report on the Continuation, Expansion and Capital Budgets, dated June 30, 1998, together with any accompanying correction sheets.
(2)	Transfers of funds supporting programs were made in accordance with the Senate Appropriations Committee Report on the Continuation, Expansion and Capital Budgets, dated June 30, 1998, together with any accompanying correction sheets.
The budget enacted by the General Assembly shall also be interpreted in accordance with the special provisions in this act and in accordance with other appropriate legislation.
In the event that there is a conflict between the line item budget certified by the Director of the Budget and the budget enacted by the General Assembly, the budget enacted by the General Assembly shall prevail.

Requested by:  Senators Plyler, Perdue, Odom
MOST TEXT APPLIES ONLY TO 1998-99
Section 30.2.  Except for statutory changes or other provisions that clearly indicate an intention to have effects beyond the 1998-99 fiscal year, the textual provisions of this act apply only to funds appropriated for, and activities occurring during, the 1998-99 fiscal year.

Requested by:  Senators Plyler, Perdue, Odom
1997-98 APPROPRIATIONS LIMITATIONS AND DIRECTIONS APPLY
Section 30.3.  (a)	Except where expressly repealed or amended by this act, the provisions of S.L. 1997-443, S.L. 1998-1 Extra Session, and S.L. 1998-9 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 1998-99 fiscal year in S.L. 1997-443, S.L. 1998-1 Extra Session, and S.L. 1998-9 that applied to appropriations to particular agencies or for particular purposes apply to the newly enacted appropriations and budget reductions of this act for those same particular purposes.
Requested by:  Senators Plyler, Perdue, Odom

EFFECT OF HEADINGS
Section 30.4.  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, except for effective dates referring to a Part.

Requested by:  Senators Plyler, Perdue, Odom
SEVERABILITY CLAUSE
Section 30.5.  If any section or provision of this act is declared unconstitutional or invalid by the courts, it does not affect the validity of this act as a whole or any part other than the part so declared to be unconstitutional or invalid.

Requested by:  Senators Plyler, Perdue, Odom
EFFECTIVE DATE
Section 30.6.  Except as otherwise provided, this act becomes effective July 1, 1998.