A BILL TO BE ENTITLED
AN ACT appropriating funds to provide to state employees and public school personnel a legislative pay increase of seven percent.
The General Assembly of North Carolina enacts:
governor and council of state/salary increases 
SECTION 1.(a)  Effective July 1, 2006, G.S. 147‑11(a) reads as rewritten:
"(a)	The salary of the Governor shall be one hundred thirty‑two thousand four hundred eighty‑six dollars ($132,486) annually, payable monthly."
SECTION 1.(b)  Section 29.1(b) of S.L. 2005‑276 reads as rewritten:
"SECTION 29.1.(b)  Effective July 1, 2006, the annual salaries for the members of the Council of State, payable monthly, for the 2006‑2007 fiscal year are:

	Council of State	Annual Salary
	Lieutenant Governor	$116,929
	Attorney General	116,929
	Secretary of State	116,929
	State Treasurer	116,929
	State Auditor	116,929
	Superintendent of Public Instruction	116,929
	Agriculture Commissioner	116,929
	Insurance Commissioner	116,929
	Labor Commissioner	116,929"

nonelected department heads/salary increases
SECTION 2.  Section 29.2 of S.L. 2005‑276 reads as rewritten:
"SECTION 29.2.  In accordance with G.S. 143B‑9, the maximum annual salaries, payable monthly, for the nonelected heads of the principal State departments for the 2006‑2007 fiscal year are:

	Nonelected Department Heads	Annual Salary
	Secretary of Administration	$114,239
	Secretary of Correction	114,239
	Secretary of Crime Control and Public Safety	114,239
	Secretary of Cultural Resources	114,239
	Secretary of Commerce	114,239
	Secretary of Environment and Natural Resources	114,239
	Secretary of Health and Human Services	114,239
	Secretary of Juvenile Justice and Delinquency	114,239
	Secretary of Revenue	114,239
	Secretary of Transportation	114,239"

certain executive branch officials/salary increases
SECTION 3.  Section 29.3 of S.L. 2005‑276 reads as rewritten:
"SECTION 29.3.  The annual salaries, payable monthly, for the 2006‑2007 fiscal year for the following executive branch officials are:

	Executive Branch Officials	Annual Salary
	Chairman, Alcoholic Beverage Control Commission	$		103,977
	State Controller	145,517
	Commissioner of Motor Vehicles	103,977
	Commissioner of Banks	116,929
	Chairman, Employment Security Commission	142,482
	State Personnel Director	114,239
	Chairman, Parole Commission		94,944
	Members of the Parole Commission		43,827
	Chairman, Utilities Commission		130,220
	Members of the Utilities Commission		116,929
	Executive Director, Agency for
		Public Telecommunications	87,655
	Director, Museum of Art	106,543
	Executive Director, North Carolina Agricultural
		Finance Authority		101,208
	State Chief Information Officer	145,429"

judicial branch officials/salary increases
SECTION 4.  Section 29.4 of S.L. 2005‑276 reads as rewritten:
"SECTION 29.4.(a)  The annual salaries, payable monthly, for specified Judicial Branch officials for the 2006‑2007 fiscal year are:

	Judicial Branch Officials	Annual Salary
	Chief Justice, Supreme Court	$132,486
	Associate Justice, Supreme Court	129,024
	Chief Judge, Court of Appeals	125,798
	Judge, Court of Appeals	123,648
	Judge, Senior Regular Resident Superior Court	120,288
	Judge, Superior Court	116,929
	Chief Judge, District Court	106,177
	Judge, District Court	102,817
	Administrative Officer of the Courts	120,288
	Assistant Administrative Officer of the Courts	109,872
"SECTION 29.4.(b)  The district attorney or public defender of a judicial district, with the approval of the Administrative Officer of the Courts or the Commission on Indigent Defense Services, respectively, 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 sixty‑seven thousand three hundred thirty‑five dollars ($67,335), and the minimum salary of any assistant district attorney or assistant public defender is at least thirty‑five thousand one hundred eighty‑seven dollars ($35,187) effective July 1, 2006.
"SECTION 29.4.(c)  Effective July 1, 2005, the annual salaries of permanent, full‑time employees of the Judicial Department whose salaries are not itemized in this act shall be increased by the greater of eight hundred fifty dollars ($850.00) or two percent (2%). Effective July 1, 2006, the annual salaries of permanent full‑time employees of the Judiciary Department whose salaries are not itemized in this act shall be increased by seven percent (7%).
"SECTION 29.4.(d)  Effective July 1, 2005, the annual salaries of permanent, part‑time employees of the Judicial Department whose salaries are not itemized in this act shall be increased by pro rata amounts of eight hundred fifty dollars ($850.00) or two percent (2%), whichever is greater. Effective July 1, 2006, the annual salaries of permanent, part‑time employees of the Judicial Department whose salaries are not itemized in this act shall be increased by seven percent (7%)."

clerk of superior court/salary increases
SECTION 5.  Effective July 1, 2006, G.S. 7A‑101 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		$78,208
100,000 to 149,999		87,762
150,000 to 249,999		97,319
250,000 and above	106,876.
The salary schedule in this subsection is intended to represent the following approximate 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."

assistant and deputy clerks of court/salary increases
SECTION 6.  Effective July 1, 2006, 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		$30,351
Maximum		51,980

Deputy Clerks	Annual Salary
Minimum		$26,124
Maximum		40,429"

magistrates' salary increases
SECTION 7.(a)  Effective July 1, 2006, G.S. 7A‑171.1(a) reads as rewritten:
"(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		$30,751
Step 1		33,571
Step 2		36,640
Step 3		39,989
Step 4		43,658
Step 5		47,792
Step 6		52,427.
(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, a magistrate who is licensed to practice law in North Carolina or any other state shall receive the annual salary provided in the Table in subdivision (1) of this subsection for Step 4."
SECTION 7.(b)  Effective July 1, 2006, G.S. 7A‑171.1(a1) reads as rewritten:
"(a1)	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: 
Less than 1 year of service		$24,797
1 or more but less than 3 years of service		25,936
3 or more but less than 5 years of service		28,227.

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."

general assembly principal clerks/salary increases
SECTION 8.  Effective July 1, 2006, 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 ninety‑eight thousand seven hundred eighty‑seven dollars ($98,787) 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."

sergeants‑at‑arms and reading clerks
SECTION 9.  Effective July 1, 2006, 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 three hundred fifty dollars ($350.00) 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."

legislative employees
SECTION 10.  Effective July 1, 2006, the Legislative Services Officer shall increase the salaries of nonelected employees of the General Assembly in effect for fiscal year 2005‑2006 by seven percent (7%).  Nothing in this act limits any of the provisions of G.S. 120‑32.

Community college personnel/salary increases
SECTION 11.  Section 29.11 of S.L. 2005‑276 reads as rewritten:
"SECTION 29.11.  The Director of the Budget shall transfer from the Reserve for Compensation Increases, created in this act for fiscal years 2005‑2006 and 2006‑2007, funds to the North Carolina Community Colleges System Office necessary to provide an annual salary increase of the greater of eight hundred fifty dollars ($850.00) or two percent (2%), including funds for the employer's retirement and social security contributions, commencing July 1, 2005, for all community college employees supported by State funds. The Director of the Budget shall transfer from the Reserve for Compensation Increases, created in this act for fiscal year 2006‑2007, funds to the North Carolina Community Colleges System Office necessary to provide an annual salary increase of seven percent (7%), including funds for the employer's retirement and social security contributions, commencing July 1, 2006, for all community college employees supported by State funds."

university of north carolina system/epa compensation
SECTION 12.  Section 29.12 of S.L. 2005‑276 reads as rewritten:
"SECTION 29.12.(a)   For the 2005‑2006 fiscal year, 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 Increases, created in this act for fiscal year 2005‑2006 and 2006‑2007, to provide an annual salary increase of the greater of eight hundred fifty dollars ($850.00) or two percent (2%), including funds for the employer's retirement and social security contributions, commencing July 1, 2005, 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). The flat dollar increase of eight hundred fifty dollars ($850.00) shall be made to all employees whose annual salary is less than or equal to forty‑two thousand five hundred dollars ($42,500). The percentage annual salary increase of two percent (2%) authorized by this section shall be made on an aggregated average basis, and these funds shall be allocated to individuals whose annual salary is greater than forty‑two thousand five hundred dollars ($42,500), according to the rules adopted by the Board of Governors of The University of North Carolina or the Board of Trustees of the North Carolina School of Science and Mathematics, as appropriate, and may not be used for any purpose other than for salary increases and necessary employer contributions provided by this section.
"SECTION 29.12.(a1)  For the 2006‑2007 fiscal year, 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 Increases, created in this act for fiscal year 2006‑2007, to provide an annual salary increase of seven percent (7%), including funds for the employer's retirement and social security contributions, commencing July 1, 2006, 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). The percentage annual salary increase of seven percent (7%) authorized by this section shall be made on an aggregated average basis, according to the rules adopted by the Board of Governors of The University of North Carolina or the Board of Trustees of the North Carolina School of Science and Mathematics, as appropriate, and may not be used for any purpose other than for salary increases and necessary employer contributions provided by this section.
"SECTION 29.12.(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 Compensation Increases, created in this act for fiscal years 2005‑2006 and 2006‑2007, to provide an average annual salary increase of two and twenty‑four hundredths percent (2.24%), including funds for the employer's retirement and social security contributions, commencing July 1, 2005, 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 may not be used for any purpose other than for salary increases and necessary employer contributions provided by this section.
"SECTION 29.12.(b1)  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 Increases, created in this act for fiscal year 2006‑2007, to provide an average annual salary increase of seven percent (7%), including funds for the employer's retirement and social security contributions, commencing July 1, 2006, 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 may not be used for any purpose other than for salary increases and necessary employer contributions provided by this section."

most state employees/salary increases
SECTION 13.  Section 29.13 of S.L. 2005‑276 reads as rewritten:
"SECTION 29.13.(a)  The salaries in effect June 30, 2005, 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, effective July 1, 2005, by the greater of eight hundred fifty dollars ($850.00) or two percent (2%), unless otherwise provided by this act. Effective July 1, 2006, the salaries 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 Highway Funds shall be increased by seven percent (7%).
"SECTION 29.13.(b)  Except as otherwise provided in this act, the fiscal year 2005‑2006 salaries 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 the greater of eight hundred fifty dollars ($850.00) or two percent (2%), effective July 1, 2005, unless otherwise provided by this act. Effective July 1, 2006, the compensation of 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 seven percent (7%).
"SECTION 29.13.(c)  The salaries in effect for fiscal year 2005‑2006 for all permanent part‑time State employees shall be increased, effective July 1, 2005, by pro rata amounts of eight hundred fifty dollars ($850.00) or two percent (2%), whichever is greater. Effective July 1, 2006, the salaries of all permanent part‑time State employees shall be increased by seven percent (7%).
"SECTION 29.13.(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 salary increases, in accordance with subsection (a), (b), or (c) of this section, including funds for the employer's retirement and social security contributions, for the permanent full‑time and part‑time employees of the agency, provided the employing agency elects to make available the necessary funds.
"SECTION 29.13.(e)  For the 2005‑2006 fiscal year, 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 of the greater of the eight hundred fifty dollar ($850.00) or two percent (2%) increase provided for permanent full‑time employees covered by the provisions of subsection (a) of this section, commencing July 1, 2005. For the 2006‑2007 fiscal year, 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 the seven percent (7%) increase provided for permanent full‑time employees covered by the provisions of subsection (a) of this section, commencing July 1, 2006."

all state‑supported personnel/salary increases
SECTION 14.  Section 29.14 of S.L. 2005‑276 reads as rewritten:
"SECTION 29.14.(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.
"SECTION 29.14.(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.
"SECTION 29.14.(c)  The fiscal year 2005‑2006 salary increases provided in this act are to be effective July 1, 2005, and do not apply to persons separated from State service due to resignation, dismissal, reduction in force, death, or retirement, or whose last workday is prior to July 1, 2005. The fiscal year 2006‑2007 salary increases provided in this act are to be effective July 1, 2006, and do not apply to persons separated from State service due to resignation, dismissal, reduction in force, death, or retirement, or whose last workday is prior to July 1, 2006.
Payroll checks issued to employees which represent payment of services provided prior to these increases 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.
"SECTION 29.14.(d)  The Director of the Budget shall transfer from the Reserve for Compensation Increases in this act for fiscal year 2005‑2006 and fiscal year 2006‑2007 all funds necessary for the salary increases provided by this act, including funds for the employer's retirement and social security contributions.
"SECTION 29.14.(e)  Nothing in this act authorizes the transfer of funds between the General Fund and the Highway Fund for salary increases.
"SECTION 29.14.(f)  For the 2005‑2006 fiscal year, permanent full‑time employees who work a nine‑, ten‑, or eleven‑month work year schedule shall receive the eight hundred fifty dollars ($850.00) or two percent (2%) annual increase provided by this act, whichever is greater. For the 2006‑2007 fiscal year, permanent full‑time employees who work a nine‑, ten‑, or eleven‑month work year schedule shall receive the seven percent (7%) annual increase provided by this act."

appropriations/reserve for compensation increase
SECTION 15.(a)  There is appropriated from the General Fund to the Reserve for Compensation Increases the sum of seven hundred eleven million twenty‑five thousand dollars ($711,025,000) for the 2006‑2007 fiscal year to implement the legislative pay increases authorized by this act for public school personnel and State employees.
SECTION 15.(b)  There is appropriated from the General Fund to the Reserve for Compensation Increases the sum of eight million seven hundred seventy‑five thousand dollars ($8,775,000), nonrecurring, for the 2006‑2007 fiscal year to provide a one‑time compensation bonus for teachers, principals, and assistant principals who are at the top of their salary schedules in accordance with this act.
SECTION 15.(c)  There is appropriated from the Highway Fund to the Reserve for Compensation Increases the sum of thirty‑three million five hundred sixteen thousand dollars ($33,516,000) for the 2006‑2007 fiscal year to implement legislative pay increases authorized by this act.
SECTION 16.(a)  The Director of the Budget shall transfer to the State Board of Education from the Reserve for Compensation Increases for fiscal year 2006‑2007 funds necessary to provide an average annual salary increase, effective July 1, 2006, of seven percent (7%), including funds for the employer's retirement and social security contributions for all public school personnel.
Notwithstanding any other provision of this act, these funds shall be used to:
(1)	Provide for an average salary increase of seven percent (7%) for teachers, school‑based administrators, and all other certified public school personnel who are not at the top of their respective salary ranges.
(2)	Provide a salary increase of seven percent (7%) to noncertified public school personnel.
(3)	Provide all teachers with 29 or more years of experience with a one‑time bonus equivalent to the average salary increase of the 26‑ to 29‑year steps.
(4)	Provide permanent personnel who are at the top of the principal and assistant principal salary schedule with a one‑time bonus equivalent to the average salary increase of the 35‑ to 41‑year steps.
SECTION 16.(b)  Funds in the Reserve for Compensation Increases shall be used for experience step increases for employees of schools operated by the Department of Health and Human Services, the Department of Correction, or the Department of Juvenile Justice and Delinquency Prevention, who are paid on the Teacher Salary Schedule or the School Based Administrator Salary Schedule.
SECTION 17.  This act becomes effective July 1, 2006.