A BILL TO BE ENTITLED
AN ACT to establish the capital improvements reserve account and to reserve one‑fourth of the unreserved General Fund year‑end credit balance to the account.
The General Assembly of North Carolina enacts:
SECTION 1.  Article 1 of Chapter 143 of the General Statutes is amended by adding a new section to read:
"§ 143‑15.3F.  Capital Improvements Reserve Account.
(a)	Account and Use. – The Capital Improvements Reserve Account is established as a reserve in the General Fund. The funds in the Account shall be used only for one or more of the following capital improvement projects supported from the General Fund:
(1)	Real property acquisition.
(2)	Construction of a new State facility.
(3)	Expansion of an existing State facility.
(4)	Rehabilitation of an existing State facility to accommodate a use for which the existing facility was not originally designed.
(b)	Source of Funds. – The State Controller shall reserve to the Capital Improvements Reserve Account one‑fourth of any unreserved credit balance. The General Assembly may appropriate additional funds to the Account.
(c)	Appropriation. – Funds in the Capital Improvements Reserve Account shall be expended only by an appropriation by the General Assembly. The General Assembly shall designate the capital improvement projects to be funded from this Account in the Capital Improvements Appropriation Act or another appropriations bill."
SECTION 2.  G.S. 143‑15.2 reads as rewritten:
"§ 143‑15.2.  Use of General Fund credit balance; priority uses.
(a)	Definition. – As used in G.S. 143‑15.3, 143‑15.3A, and 143‑15.3F, the term "unreserved credit balance" means the credit balance amount remaining in the General Fund at the end of a fiscal year, as determined on a cash basis, before funds are reserved by the State Controller in accordance with this section.
(b)	Transfers. – The State Controller shall transfer funds from the unreserved credit balance to the following reserve accounts. The Controller must transfer funds to the accounts in the order listed and must satisfy the requirements set for an account before reserving any funds for the next account in the list.
(1)	The Savings Reserve Account established in G.S. 143‑15.3.
(2)	The
	Repairs and Renovation Reserve Account established in G.S. 143‑15.3A.
(3)	The Capital Improvements Reserve Account established in G.S. 143‑15.3F.
(d)	Repealed by Session Laws 2000, ch. 67, s. 7.7(e), effective June 30, 2001.
(e)	Remaining Balance. – The General Assembly may appropriate that part of the anticipated General Fund credit balance not expected to be reserved only for capital improvements or other one‑time expenditures."
SECTION 3.  G.S. 143‑15.3 reads as rewritten:
"§ 143‑15.3.  Savings Reserve Account.
(a)	There is established a Savings Reserve Account as a restricted reserve in the General Fund. The State Controller shall reserve to the Savings Reserve Account one‑fourth of any unreserved credit balance until the account contains funds equal to five percent (5%) of the amount appropriated the preceding year for the General Fund operating budget, including local government tax‑sharing funds, that were directly appropriated. In the event that the one‑fourth exceeds the amount necessary to reach the five percent (5%) level, only funds necessary to reach that level shall be reserved. 
(a1)	If the balance in the Savings Reserve Account falls below the five percent (5%) level during a fiscal year, the State Controller shall, in accordance with subsection (a) of this section, reserve to the Savings Reserve Account for the following fiscal years up to one‑fourth of any unreserved credit balance remaining in the General Fund at the end of each fiscal year until the account again equals the five percent (5%) level set out in subsection (a) of this section.
(a2)	The transfer of funds to the Savings Reserve Account in accordance with this section or any other provision of law is not an "appropriation made by law", as that phrase is used in Article V, Section 7(1) of the North Carolina Constitution.
(b)	The Director may not use funds in the Savings Reserve Account unless the use has been approved by an act of the General Assembly."
SECTION 4.  This act becomes effective July 1, 2006.