A BILL TO BE ENTITLED
AN ACT to make reforms to the State Government Ethics Act, Lobbying Laws, Campaign Finance Laws, and the legislative budgetary process.
The General Assembly of North Carolina enacts:
SECTION 1.(a)  G.S. 163‑278.6 is amended by adding a new subdivision to read:
"§ 163‑278.6.  Definitions.
When used in this Article:
...
(5a)	The term 'Constitutional officers of the State' means officers whose offices are established in Article III of the Constitution.
..."
SECTION 1.(b)  Article 22A of Chapter 163 of the General Statutes is amended by adding a new section to read:
"§ 163‑278.13C.  Limitation on contributions by registered lobbyists.
(a)	No lobbyist registered under Chapter 120C of the General Statutes shall do any of the following:
(1)	Make or offer to make a contribution to a legislator, executive branch official, or candidate campaign committee.
(2)	Make a contribution to any candidate, officeholder, or political committee, directing or requesting that the contribution be made in turn to a legislator, executive branch official, or candidate campaign committee.
(3)	Transfer any amount of money or anything of value to any entity, directing or requesting that the entity use what was transferred to contribute to a legislator, executive branch official, or candidate campaign committee.
(4)	Solicit a contribution from any individual, political committee, or other entity on behalf of a legislator, executive branch official, or candidate campaign committee. This subdivision does not apply to a registered lobbyist soliciting a contribution on behalf of a political party executive committee if the solicitation is solely for a separate segregated fund kept by the political party limited to use for activities that are not candidate‑specific, including generic voter registration and get‑out‑the‑vote efforts, pollings, mailings, and other general activities and advertising that do not refer to a specific individual candidate.
(5)	Deliver any contribution made by another to a legislator, executive branch official, or candidate campaign committee.
(b)	No legislator, executive branch official, or candidate campaign committee or the real or purported agent of that legislator, executive branch official, or candidate campaign committee shall do any of the following:
(1)	Solicit a contribution from a lobbyist registered under Chapter 120C of the General Statutes.
(2)	Solicit a third party, requesting or directing that the third party directly or indirectly solicit a contribution from a lobbyist registered under Chapter 120C of the General Statutes or relay to the lobbyist registered under Chapter 120C of the General Statutes the legislator's, executive branch official's, or candidate campaign committee's solicitation of a contribution.
(3)	Accept a contribution from a lobbyist registered under Chapter 120C of the General Statutes.
(c)	It shall not be deemed a violation of this section for a legislator or executive branch official to serve on a board or committee of an organization that makes a solicitation of a lobbyist registered under Chapter 120C of the General Statutes as long as that legislator or executive branch official does not directly participate in the solicitation and that legislator or executive branch official does not directly benefit from the solicitation.
(d)	This section shall not prohibit a lobbyist registered under Chapter 120C of the General Statutes from advising any of the following with regard to contributions to a legislator, executive branch official, or candidate campaign committee:
(1)	A political committee that employs or contracts with, or whose parent entity employs or contracts with, that lobbyist.
(2)	Individual members of a political committee described in subdivision (1) of this subsection.
(3)	The lobbyist's principal as defined in G.S. 120C‑100.
(e)	This section shall not apply to a lobbyist filing a notice of candidacy for office as a member of the General Assembly or a Constitutional officer of the State making a contribution to that lobbyist.
(f)	As used in this section, the following terms mean:
(1)	Candidate campaign committee. – As defined in G.S. 163‑278.38Z, and that candidate has filed a notice of candidacy for office as a member of the General Assembly or a Constitutional officer of the State.
(2)	Executive branch official. – As defined in G.S. 138A‑3(30)a.
(3)	Legislator. – As defined in G.S. 120C‑100.(g)	A violation of this section is punishable by a civil fine in accordance with G.S. 163‑278.34 only."
SECTION 2.  G.S. 163‑278.16B(a) reads as rewritten:
"(a)	A candidate or candidate campaign committee may use contributions only for the following purposes:
(1)	Expenditures resulting from the campaign for public office by the candidate or candidate's campaign committee.
(2)	Expenditures resulting from holding public office.
(3)	Contributions to an organization described in section 170(c) of the Internal Revenue Code of 1986 (26 U.S.C. § 170(c)), provided that the candidate or the candidate's spouse, children, parents, brothers, or sisters are not employed by the organization.
(4)	Contributions no more than four thousand dollars ($4,000) per election cycle to a national, State, district, or county committee of a political party or a caucus of a political party.
(5)	Contributions to another candidate or candidate's campaign committee.
(6)	To return all or a portion of a contribution to the contributor.
(7)	Payment of any penalties against the candidate or candidate's campaign committee for violation of this Article imposed by a board of elections or a court of competent jurisdiction.
(8)	Payment to the Escheat Fund established by Chapter 116B of the General Statutes."
SECTION 3.(a)  G.S. 138A‑10(a) is amended by adding a new subdivision to read:
"(5a)	Send recommendations for punishment of legislators and legislative employees to the Committee."
SECTION 3.(b)  G.S. 138A‑12 reads as rewritten:
"§ 138A‑12.  Inquiries by the Commission.
(a)	Jurisdiction. – The Commission may receive complaints alleging unethical conduct by covered persons and legislative employees and shall conduct inquiries of complaints alleging unethical conduct by covered persons and legislative employees, as set forth in this section.
(b)	Institution of Proceedings. – On its own motion, in response to a signed and sworn complaint of any individual filed with the Commission, or upon the written request of any public servant or any person responsible for the hiring, appointing, or supervising of a public servant, the Commission shall conduct an inquiry into any of the following:
(1)	The application or alleged violation of this Chapter.
(2)	For legislators, the application of alleged violations of Part 1 of Article 14 of Chapter 120 of the General Statutes.
(3)	An alleged violation of the criminal law by a covered person in the performance of that individual's official duties.
(4)	An alleged violation of G.S. 126‑14.
Allegations of violations of the Code of Judicial Conduct shall be referred to the Judicial Standards Commission without investigation.
(c)	Complaint. –
(1)	A sworn complaint filed under this Chapter shall state the name, address, and telephone number of the person filing the complaint, the name and job title or appointive position of the person against whom the complaint is filed, and a concise statement of the nature of the complaint and specific facts indicating that a violation of this Chapter or Chapter 120 of the General Statutes has occurred, the date the alleged violation occurred, and either (i) that the contents of the complaint are within the knowledge of the individual verifying the complaint, or (ii) the basis upon which the individual verifying the complaint believes the allegations to be true.
(2)	Except as provided in subsection (d) of this section, a complaint filed under this Chapter must be filed within two years of the date the complainant knew or should have known of the conduct upon which the complaint is based.
(3)	The Commission may decline to accept, refer, or conduct an inquiry into any complaint that does not meet all of the requirements set forth in subdivision (1) of this subsection, or the Commission may, in its sole discretion, request additional information to be provided by the complainant within a specified period of time of no less than seven business days.
(4)	In addition to subdivision (3) of this subsection, the Commission may decline to accept, refer, or conduct an inquiry into a complaint if it determines that any of the following apply:
a.	The complaint is frivolous or brought in bad faith.
b.	The individuals and conduct complained of have already been the subject of a prior complaint.
c.	The conduct complained of is primarily a matter more appropriately and adequately addressed and handled by other federal, State, or local agencies or authorities, including law enforcement authorities. If other agencies or authorities are conducting an investigation of the same actions or conduct involved in a complaint filed under this section, the Commission may stay its complaint inquiry pending final resolution of the other investigation.
(5)	The Commission shall send a copy of the complaint to the covered person or legislative employee who is the subject of the complaint and the employing entity, within 30 days of the filing.
(d)	Conduct of Inquiry of Complaints by the Commission. – The Commission shall conduct an inquiry into all complaints properly before the Commission in a timely manner. The Commission shall initiate an inquiry into a complaint within 60 days of the filing of the complaint. The Commission is authorized to initiate inquiries upon request of any member of the Commission if there is reason to believe that a covered person or legislative employee has or may have violated this Chapter. Commission‑initiated complaint inquiries under this section shall be initiated within two years of the date the Commission knew of the conduct upon which the complaint is based, except when the conduct is material to the continuing conduct of the duties in office. In determining whether there is reason to believe that a violation has or may have occurred, a member of the Commission may take general notice of available information even if not formally provided to the Commission in the form of a complaint. The Commission may utilize the services of a hired investigator when conducting inquiries.
(e)	Covered Person and Legislative Employees Cooperation With Inquiry. – Covered persons and legislative employees shall promptly and fully cooperate with the Commission in any Commission‑related inquiry. Failure to cooperate fully with the Commission in any inquiry shall be grounds for sanctions as set forth in G.S. 138A‑45.
(f)	Dismissal of Complaint After Preliminary Inquiry. – If the Commission determines at the end of its preliminary inquiry that (i) the individual who is the subject of the complaint is not a covered person or legislative employee subject to the Commission's jurisdiction and authority under this Chapter, or (ii) the complaint does not allege facts sufficient to constitute a violation of this Chapter, the Commission shall dismiss the complaint.
(g)	Commission Inquiries. – If at the end of its preliminary inquiry, the Commission determines to proceed with further inquiry into the conduct of a covered person or legislative employee, the Commission shall provide written notice to the individual who filed the complaint and the covered person or legislative employee as to the fact of the inquiry and the charges against the covered person or legislative employee. The covered person or legislative employee shall be given an opportunity to file a written response with the Commission.
(h)	Action on Inquiries. – The Commission shall conduct inquiries into complaints to the extent necessary to either dismiss the complaint for lack of probable cause of a violation under this section, or:
(1)	For public servants, legislators, and legislative employees decide to proceed with a hearing under subsection (i) of this section.
	
(2)	For judicial officers, refer the complaint to the Judicial Standards Commission for complaints against justices and judges, to the senior resident superior court judge of the district or county for complaints against district attorneys, or to the chief district court judge for the district or county for complaints against clerks of court.
	
(i)	Hearing. –
(1)	The Commission shall give full and fair consideration to all complaints received against a public servant, legislator, or legislative employee. If the Commission determines that the complaint cannot be resolved without a hearing, or if the public servant, legislator, or legislative employee requests a hearing, a hearing shall be held.
(2)	The Commission shall send a notice of the hearing to the complainant, and the public servant, legislator, or legislative employee. The notice shall contain the time and place for a hearing on the matter, which shall begin no less than 30 days and no more than 90 days after the date of the notice.
(3)	The Commission shall make available to the public servant, legislator, or legislative employee prior to a hearing all relevant information collected by the Commission in connection with its investigation of a complaint.
(4)	At any hearing held by the Commission:
a.	Oral evidence shall be taken only on oath or affirmation.
b.	The hearing shall be held in closed session unless the public servant, legislator, or legislative employee requests that the hearing be held in open session. In any event, the deliberations by the Commission on a complaint may be held in closed session.
c.	The public servant, legislator, or legislative employee being investigated shall have the right to present evidence, call and examine witnesses, cross‑examine witnesses, introduce exhibits, and be represented by counsel.
(j)	Settlement of Inquiries. – The public servant, legislator, or legislative employee who is the subject of the complaint and the staff of the Commission may meet by mutual consent before the hearing to discuss the possibility of settlement of the inquiry or the stipulation of any issues, facts, or matters of law. Any proposed settlement of the inquiry is subject to the approval of the Commission.
(k)	Disposition of Inquiries. – After hearing, the Commission shall dispose of the matter in one or more of the following ways:
(1)	If the Commission finds substantial evidence of an alleged violation of a criminal statute, the Commission shall refer the matter to the Attorney General for investigation and referral to the district attorney for possible prosecution.
(2)	If the Commission finds that the alleged violation is not established by clear and convincing evidence, the Commission shall dismiss the complaint.
(3)	If the Commission finds that the alleged violation of this Chapter is established by clear and convincing evidence, the Commission shall do one or more of the following:
a.	Issue a private admonishment to the public servant and notify the employing entity, if applicable. Such notification shall be treated as part of the personnel record of the public servant.
b.	Refer the matter for appropriate action to the Governor and the employing entity that appointed or employed the public servant or of which the public servant is a member.
c.	Refer the matter for appropriate action to the Chief Justice for judicial employees.
d.	Refer the matter to the Principal Clerks of the House of Representatives and Senate of the General Assembly for constitutional officers of the State.
e.	Refer the matter for appropriate action to the principal clerk of the house of the General Assembly that elected the public servant for members of the Board of Governors.
f.	Issue recommendations for punishment of the legislator or legislative employee under subsection (o) of this section and refer the matter to the Committee.
(l)	Notice of Dismissal. – Upon the dismissal of a complaint under this section, the Commission shall provide written notice of the dismissal to the individual who filed the complaint and the person against whom the complaint was filed. The Commission shall forward copies of complaints and notices of dismissal of complaints against legislators to the Committee, against legislative employees to the employing entity for legislative employees, and against judicial officers to the Judicial Standards Commission for complaints against justices and judges, and the senior resident superior court judge of the district or county for complaints against district attorneys, or the chief district court judge of the district or county for complaints against clerks of court.
(m)	Reports and Records. – The Commission shall render the results of its inquiry in writing. When a matter is referred under subdivision (h)(2)  or subsection (k) of this section, the Commission's report shall consist of the complaint, response, and detailed results of its inquiry in support of the Commission's finding of a violation under this Chapter.
(n)	Confidentiality. – Complaints and responses filed with the Commission and reports and other investigative documents and records of the Commission connected to an inquiry under this section shall be confidential and not matters of public record, except when the covered person or legislative employee under inquiry requests in writing that the records and findings be made public prior to the time the employing entity imposes public sanctions. At such time as public sanctions are imposed on a covered person, the complaint, response, and Commission's report to the employing entity shall be made public.
(o)	Recommendations of Sanctions. – After referring a matter under subsection (k) of this section, if requested by the entity to which the matter was referred, the Commission may recommend sanctions or issue rulings as it deems necessary or appropriate to protect the public interest and ensure compliance with this Chapter. In recommending appropriate sanctions, the Commission may consider the following factors:
(1)	The public servant's prior experience in an agency or on a board and prior opportunities to learn the ethical standards for a public servant as set forth in Article 4 of this Chapter, including those dealing with conflicts of interest.
(2)	The number of ethics violations.
(3)	The severity of the ethics violations.
(4)	Whether the ethics violations involve the public servant's, legislator's, or legislative employee's financial interests or arise from an appearance of conflict of interest.
(5)	Whether the ethics violations were inadvertent or intentional.
(6)	Whether the public servant, legislator, or legislative employee knew or should have known that the improper conduct was a violation of this Chapter.
(7)	Whether the public servant, legislator, or legislative employee has previously been advised or warned by the Commission.
(8)	Whether the conduct or situation giving rise to the ethics violation was pointed out to the public servant, legislator, or legislative employee in the Commission's Statement of Economic Interest evaluation letter issued under G.S. 138A‑24(e).
(9)	The public servant's, legislator's, or legislative employee's motivation or reason for the improper conduct or action, including whether the action was for personal financial gain versus protection of the public interest.
In making recommendations under this subsection, if the Commission determines, after proper review and investigation, that sanctions are appropriate, the Commission may recommend any action it deems necessary to properly address and rectify any violation of this Chapter by a public servant or legislator, including removal of the public servant from the public servant's State position. Nothing in this subsection is intended, and shall not be construed, to give the Commission any independent civil, criminal, or administrative investigative or enforcement authority over covered persons, or other State employees or appointees.
(p)	Authority of Employing Entity. – Any action or failure to act by the Commission under this Chapter, except G.S. 138A‑13, shall not limit any authority of any of the applicable employing entities to discipline the covered person or legislative employee.
(q)	Continuing Jurisdiction. – The Commission shall have continuing jurisdiction to investigate possible criminal violations of this Chapter for a period of one year following the date a person, who was formerly a public servant or legislative employee, ceases to be a public servant or legislative employee for any investigation that commenced prior to the date the public servant or legislative employee ceases to be a public servant or legislative employee.
(r)	Subpoena Authority. – The Commission may petition the Superior Court of Wake County for the approval to issue subpoenas and subpoenas duces tecum as necessary to conduct investigations of alleged violations of this Chapter. The court shall authorize subpoenas under this subsection when the court determines the subpoenas are necessary for the enforcement of this Chapter. Subpoenas issued under this subsection shall be enforceable by the court through contempt powers. Venue shall be with the Superior Court of Wake County for any person covered by this Chapter, and personal jurisdiction may be asserted under G.S. 1‑75.4.
(s)	Reports. – The number of complaints referred under this section shall be reported under G.S. 138A‑10(a)(12).
(t)	Concurrent Jurisdiction. – Nothing in this section shall limit the jurisdiction of the Committee or the Judicial Standards Commission with regards to legislative or judicial misconduct, and jurisdiction under this section shall be concurrent with the jurisdiction of the Committee and the Judicial Standards Commission."
SECTION 3.(c)  G.S. 138A‑8 reads as rewritten:
"§ 138A‑8.  Meetings and quorum.
The Commission shall meet at least quarterly and at other times as called by its chair or by four of its members. In the case of a vacancy in the chair, meetings may be called by the vice‑chair. Five members of the Commission constitute a quorum. All meetings of the Commission shall be subject to Article 33C of Chapter 143 of the General Statutes."
SECTION 4.  G.S. 120C‑304 reads as rewritten:
"§ 120C‑304.  Restrictions.
(a)	No legislator or former legislator may register as a lobbyist under this Chapter:
(1)	While in office.
(2)	Before the later of the close of the session in which the legislator served or six months after leaving office.
(b)	No public servant or former public servant as defined in G.S. 138A‑3(30)a. may register as a lobbyist while in office or within six months after leaving office.
(c)	No person serving as a public servant as defined in G.S. 138A‑3(30)c. may register as a lobbyist under this Chapter within six months after separation from employment.
(d)	No individual registered as a lobbyist under this Chapter shall serve as a treasurer as defined in G.S. 163‑278.6(19) or an assistant campaign treasurer for a political committee for the election of a member of the General Assembly or a Constitutional officer of the State.
(e)	A lobbyist shall not be eligible for appointment by a State official to, or service on, any body created under the laws of this State that has regulatory authority over the activities of a person that the lobbyist currently represents or has represented within 120 days after the expiration of the lobbyist's registration representing that person. Nothing herein shall be construed to prohibit appointment by any unit of local government.
(f)	Any appointment or registration made in violation of this section shall be void.
(g)	No legislator or agent of the legislator may knowingly influence or knowingly attempt to influence the selection of a lobbyist as defined in G.S. 120C‑100(a)(10)b. or c."
SECTION 5.(a)  G.S. 15A‑622(h) is recodified as G.S. 15A‑632(c).
SECTION 5.(b)  G.S. 15A‑623(h) is recodified as G.S. 15A‑632(d).
SECTION 5.(c)  G.S. 15A‑632, as recodified by this act, reads as rewritten:
"§ 15A‑632.  Investigative grand jury.
(a)	Allegations Subject to Investigation. – An investigative grand jury may be convened in accordance with this section to investigate an allegation regarding the commission or conspiracy of any of the following:
(1)	The misdemeanor or felony offense of obstruction of justice (Common law offense).
(2)	A violation of G.S. 14‑7 (Murder) or G.S. 14‑18 (Manslaughter).
(3)	A violation of G.S. 14‑90 (Embezzlement), G.S. 14‑100 (False pretenses), G.S. 14‑118.4 (Extortion), or G.S. 14‑119 (Forgery).
(4)	A violation of G.S. 14‑190.6 through G.S. 14‑190.8 or G.S. 14‑190.14 through G.S. 14‑190.19 (Relating to the distribution of certain materials to minors, the use of a minor for obscene purposes, sexual exploitation of a minor, and the promotion of or participation in prostitution of a minor).
(5)	A violation of G.S. 14‑209 (Perjury) or G.S. 14‑210 (Subornation of perjury).
(6)	A violation of Article 29, 30, or 30A of Chapter 14 of the General Statutes (Relating to perjury, bribery of officials and jurors, obstructing justice, and secret listening), G.S. 14‑228 (Relating to buying and selling of offices), G.S. 14‑230 (Failing to discharge duties), G.S. 14‑234 (Conflict of interest), or G.S. 14‑234.1 (Misuse of confidential information).
(7)	A violation of G.S. 14‑254 (Corporate malfeasance).
(8)	A violation of Article 37 of Chapter 14 of the General Statutes (Relating to lotteries, gaming, bingo, and raffles).
(9)	A violation of G.S. 90‑95(h) or G.S. 90‑95.1 (Relating to controlled substances and continuing criminal enterprises).
(10)	A violation of G.S. 136‑13 (Malfeasance at Department of Transportation), G.S. 136‑13.1 (Use of position to influence elections or political action), G.S. 136‑13.2 (Falsifying highway inspection reports), G.S. 136‑14 (Profiting from official position at Department of Transportation; misuse of confidential information by Board members).
(11)	A violation of Article 20, 22, or 22A of Chapter 163 of the General Statutes (Relating to absentee ballots, corrupt practices and other offenses against the elective franchise, and regulation of contributions and expenditures in political campaigns).
(b)	Appointment of Permanent Three‑Judge Panel to Determine Whether to Convene Investigative Grand Jury. – Beginning July 1, 2005, and every two years thereafter, the Chief Justice shall appoint a permanent panel of three superior court judges to determine whether to order an investigative grand jury convened under this section. The panel of judges shall be appointed to serve for a term of two years. The Chief Justice shall fill any vacancy that occurs on the panel before the two‑year term ends.
(c)	Procedure For Determining Whether to Convene Investigative Grand Jury. – A written petition for convening of an investigative grand jury under this section may be filed by the district attorney, the district attorney's designated assistant, or a special prosecutor requested pursuant to G.S. 114‑11.6 with the Clerk of the North Carolina Supreme Court. The petition shall be forwarded to the Chief Justice who shall refer the petition to the panel of three judges established under subsection (b) of this section to determine whether to order the grand jury convened. An investigative grand jury under this section may be convened if the three‑judge panel determines all of the following:
(1)	The petition alleges the commission of or a conspiracy to commit  any of the offenses listed in subsection (a) of this section, any part of which violation or conspiracy occurred in the county where the proposed investigative grand jury sits or will sit, and that persons named in the petition have knowledge related to the identity of the perpetrators of those crimes but will not divulge that knowledge voluntarily or that such persons request that they be allowed to testify before the grand jury.
(2)	The affidavit sets forth facts that establish probable cause to believe that the crimes specified in the petition have been committed and reasonable grounds to suspect that the persons named in the petition have knowledge related to the identity of the perpetrators of those crimes.
The affidavit shall be based upon personal knowledge or, if the source of the information and basis for the belief are stated, upon information and belief. The panel's order convening the grand jury as an investigative grand jury shall direct the grand jury to investigate the crimes and persons named in the petition, and shall be filed with the Clerk of the North Carolina Supreme Court. A grand jury so convened retains all powers, duties, and responsibilities of a grand jury under this Article. The contents of the petition and the affidavit shall not be disclosed. 
A grand jury authorized by this section may be convened from an existing grand jury or grand juries authorized by G.S. 15A‑622(b) or may be convened as an additional grand jury to an existing grand jury or grand juries. Notwithstanding G.S.  15A‑622(b), grand jurors impaneled pursuant to this  section shall serve for a period of 12 months, and, if an additional grand jury is convened, 18 persons shall be selected to constitute that grand jury. At any time for cause shown, the presiding superior court judge may excuse a juror temporarily or permanently, and in the latter event the court may impanel another person in place of the juror excused.
(d)	Investigative Grand Jury Proceedings and Operations. – If an investigative grand jury is convened pursuant to this section, notwithstanding G.S. 15A‑623(d), a prosecutor shall be present to examine witnesses, and a court reporter shall be present and record the examination of witnesses. The record shall be transcribed. If the prosecutor determines that it is necessary to compel testimony from the witness, the prosecutor may grant use immunity to the witness. The grant of use immunity shall be given to the witness in writing by the prosecutor and shall be signed by the prosecutor. The written grant of use immunity shall also be read into the record by the prosecutor and shall include an explanation of use immunity as provided in G.S. 15A‑1051. A witness shall have the right to leave the grand jury room to consult with the witness's counsel at reasonable intervals and for a reasonable period of time upon the request of the witness. Notwithstanding G.S.  15A‑623(e), the record of the examination of witnesses shall be made available to the examining prosecutor, and the prosecutor may disclose contents of the record to other investigative or law‑enforcement officers, the witness or the witness's attorney to the extent that the disclosure is appropriate to the proper performance of the prosecutor's official duties. The record of the examination of a witness may be used in a trial to the extent that it is relevant and otherwise admissible. Further disclosure of grand jury proceedings convened pursuant to this act may be made upon written order of a superior court judge if the judge determines disclosure is essential:
(1)	To prosecute a witness who appeared before the grand jury for contempt or perjury; or
(2)	To protect a defendant's constitutional rights or statutory rights to discovery pursuant to G.S. 15A‑903.
Upon the convening of the investigative grand jury pursuant to this section, the district attorney shall subpoena the witnesses. The subpoena shall be served by the investigative grand jury officer, who shall be appointed by the court. The name of the person subpoenaed and the issuance and service of the subpoena shall not be disclosed, except that a witness so subpoenaed may divulge that information. The presiding superior court judge shall hear any matter concerning the investigative grand jury in camera to the extent necessary to prevent disclosure of its existence. The court reporter for the investigative grand jury shall be present and record and transcribe the in camera proceeding. The transcription of any in camera proceeding and a copy of all subpoenas and other process shall be returned to the Chief Justice or to such member of the three‑judge panel as the Chief Justice may designate, to be filed with the Clerk of the North Carolina Supreme Court. The subpoena shall otherwise be subject to the provisions of G.S. 15A‑801 and Article 43 of Chapter 15A. When an investigative grand jury has completed its investigation of the crimes alleged in the petition, the investigative functions of the grand jury shall be dissolved and such investigation shall cease. The District Attorney shall file a notice of dissolution of the investigative functions of the grand jury with the Clerk of the North Carolina Supreme Court."
SECTION 6.(a)  Subchapter VIII of Chapter 163 is amended to add a new Article to read:
"Article 22M.
"Legal Assistance Funds.
"§ 163‑278.300.  Definitions.
As used in this Article, the following terms mean:
(1)	Board. – The State Board of Elections.
(2)	Contribution. – As defined in G.S. 163‑278.6.
(3)	Elected officer. – Any individual holding elected office in this State.
(4)	Legal assistance fund. – Any collection of money for the purpose of funding a legal action, or a potential legal action, taken by or against an elected officer in that elected officer's official capacity.
(5)	Person. – An individual. 
(6)	Treasurer. – An individual appointed by an elected officer or other person or group of persons collecting money for a legal assistance fund.
"§ 163‑278.301.  Creation of legal assistance funds.
(a)	An elected official, or another person or group of persons on the elected official's behalf, may create a legal assistance fund.
(b)	If a legal assistance fund is created, the legal assistance fund shall comply with all provisions of this Article.
(c)	A violation of this Article shall be punishable as a Class 2 misdemeanor.
"§ 163‑278.302. Appointment of treasurer.
(a)	Each legal assistance fund shall appoint a treasurer and, under verification, report the name and address of the treasurer to the Board.
(b)	Each appointed treasurer shall file with the Board at the time required by G.S. 163‑278.9(a)(1), a statement of organization that includes the following:
(1)	The name, address, and purpose of the legal assistance fund.
(2)	The names, addresses, and relationships of affiliated or connected elected officials, candidates, political committees, referendum committees, political parties, or similar organizations.
(3)	The name, address, and position with the legal assistance fund of the custodian of books and accounts.
(4)	A listing of all banks, safety deposit boxes, or other depositories used, including the names and numbers of all accounts maintained and the numbers of all such safety deposit boxes used, provided that the Board shall keep any account number required by this Article confidential except as necessary to conduct an audit or investigation, except as required by a court of competent jurisdiction, or unless confidentiality is waived by the treasurer. Disclosure of an account number in violation of this subdivision shall not give rise to a civil cause of action. This limitation of liability does not apply to the disclosure of account numbers in violation of this subdivision as a result of gross negligence, wanton conduct, or intentional wrongdoing that would otherwise be actionable.
(5)	The name or names and address or addresses of any assistant treasurers appointed by the treasurer. Such assistant treasurers shall be authorized to act in the name of the treasurer, who shall be fully responsible for any act or acts committed by an assistant treasurer, and the treasurer shall be fully liable for any violation of this Article committed by any assistant treasurer.
(6)	Any other information which might be requested by the Board that deals with the legal assistance fund organization.
(c)	Any change in information previously submitted in a statement of organization shall be reported to the Board within 10 calendar days following the change.
(d)	A legal assistance fund may remove its treasurer. In case of the death, resignation, or removal of its treasurer before compliance with all obligations of a treasurer under this Article, such legal assistance fund shall appoint a successor within 10 calendar days of the vacancy of such office and certify the name and address of the successor in the manner provided in the case of an original appointment.
(e)	Every treasurer of a legal assistance fund shall receive training from the Board as to the duties of the office.
"§ 163‑278.303.  Detailed accounts to be kept by political treasurers.
(a)	The treasurer of each legal assistance fund shall keep detailed accounts, current within not more than seven days after the date of receiving a contribution or making an expenditure, of all contributions received and all expenditures made by or on behalf of the legal assistance fund.
(b)	Accounts kept by the treasurer of a legal assistance fund or the accounts of a treasurer or legal assistance fund at any bank or other depository may be inspected by a member, designee, agent, attorney, or employee of the Board who is making an investigation pursuant to G.S. 163‑278.22.
(c)	A treasurer shall not be required to report the name of any individual who is a resident of this State who makes a total contribution of fifty dollars ($50.00) or less but shall instead report the fact that the treasurer has received a total contribution of fifty dollars ($50.00) or less, the amount of the contribution, and the date of receipt. If a treasurer receives contributions of fifty dollars ($50.00) or less, each at a single event, the treasurer may account for and report the total amount received at that event, the date and place of the event, the nature of the event, and the approximate number of people at the event.
(d)	With respect to the proceeds of sale of services, campaign literature and materials, wearing apparel, tickets or admission prices to campaign events such as rallies or dinners, and the proceeds of sale of any legal assistance fund related services or goods, if the price or value received for any single service or goods exceeds fifty dollars ($50.00), the treasurer shall account for and report the name of the individual paying for such services or goods, the amount received, and the date of receipt. If the price or value received for any single service or item of goods does not exceed fifty dollars ($50.00), the treasurer may report only those services or goods rendered or sold at a value that does not exceed fifty dollars ($50.00), the nature of the services or goods, the amount received in the aggregate for the services or goods, and the date of the receipt.
(e)	All expenditures for media expenses shall be made by a verifiable form of payment. The Board shall prescribe methods to ensure an audit trail for every expenditure so that the identity of each payee can be determined. All media expenditures in any amount shall be accounted for and reported individually and separately.
(f)	All expenditures for nonmedia expenses (except postage) of more than fifty dollars ($50.00) shall be made by a verifiable form of payment. The Board shall prescribe methods to ensure an audit trail for every expenditure so that the identity of each payee can be determined. All expenditures for nonmedia expenses of fifty dollars ($50.00) or less may be made by check or by cash payment. All nonmedia expenditures of more than fifty dollars ($50.00) shall be accounted for and reported individually and separately, but expenditures of fifty dollars ($50.00) or less may be accounted for and reported in an aggregated amount, but in that case the treasurer shall account for and report that the treasurer made expenditures of fifty dollars ($50.00) or less each, the amounts, dates, and the purposes for which made. In the case of a nonmedia expenditure required to be accounted for individually and separately by this subsection, if the expenditure was to an individual, the report shall list the name and address of the individual.
(g)	All proceeds from loans shall be recorded separately with a detailed analysis reflecting the amount of the loan, the source, the period, the rate of interest, and the security pledged, if any, and all makers and endorsers."§ 163‑278.304.  Statements filed with Board.
(a)	The treasurer of each legal assistance fund shall file with the Board under certification of the treasurer as true and correct to the best of the knowledge of that officer the following reports:
(1)	Organizational report. – The appointment of the treasurer as required by G.S. 163‑278.302(a), the statement of organization required by G.S. 163‑278.302(b), and a report of all contributions and expenditures not previously reported.
(2)	Quarterly reports. – The treasurer shall file a report by mailing or otherwise delivering it to the Board no later than seven working days after the end of each calendar quarter covering the prior calendar quarter.
(b)	Any report or attachment filed under this section must be certified.
(c)	Treasurers shall electronically file each report required by this section that shows a cumulative total for the election cycle in excess of five thousand dollars ($5,000) in contributions, in expenditures, or in loans, according to rules adopted by the Board. The Board shall provide the software necessary to file an electronic report to a treasurer required to file an electronic report at no cost to the treasurer.
"§§ 163-278.305 through 163-278.309: Reserved for future codification purposes.
"§ 163‑278.310.  Limitation on contributions.
No legal assistance fund or its treasurer shall accept any contribution made by any corporation, labor union, insurance company, professional association, or other business entity, regardless of whether such corporation does business in the State of North Carolina. This section does not apply with regard to entities permitted to make contributions by G.S. 163‑278.19(f). Contributions shall be limited to four thousand dollars ($4,000) per contributor per year."
"§§ 163-278.311 through 163-278.315: Reserved for future codification purposes.
"§ 163‑278.316.  Permitted uses of legal assistance funds.
A legal assistance fund may be used for reasonable expenses actually incurred by the elected official in relation to a legal action or potential legal action brought by or against the elected official. Upon completion of the legal action or potential legal action, the remaining monies in the legal assistance fund shall be distributed to either the Indigent Persons' Attorney Fee Fund or to the North Carolina State Bar for the provision of civil legal services for indigents.
"§§ 163-278.317 through 163-278.320: Reserved for future codification purposes.
SECTION 6.(b)  G.S. 163‑278.36 is repealed.
SECTION 7.(a)  G.S. 143‑23(c), (d), and (e) read as rewritten:
"(c)	Transfers or changes as between objects or line items in the budget of the Senate may be made by the President Pro Tempore of the Senate. The President Pro Tempore shall report any such changes to all members of the General Assembly within 14 days.
(d)	Transfers or changes as between objects or line items in the budget of the House of Representatives may be made by the Speaker of the House of Representatives. The Speaker shall report any such changes to all members of the General Assembly within 14 days.
(e)	Transfers or changes as between objects or line items in the budget of the General Assembly other than of the Senate and House of Representatives may be made jointly by the President Pro Tempore of the Senate and the Speaker of the House of Representatives. The President Pro Tempore and the Speaker shall report any such changes to all members of the General Assembly within 14 days."
SECTION 7.(b)  Effective July 1, 2007, G.S. 143C‑3‑1 reads as rewritten:
"§ 143C‑3‑1.  Budget estimate for the legislative branch.
The Legislative Services Officer shall give the Director an estimate of the financial needs of the legislative branch for the upcoming fiscal period in accordance with the schedule prescribed by the Director. A copy of those estimates shall be provided within 14 days to all members of the General Assembly. The estimates for the legislative branch shall be approved and certified by the President Pro Tempore of the Senate and the Speaker of the House of Representatives. The estimates shall be itemized in accordance with the accounting classifications adopted by the Controller. The Director shall include the estimates in the budget the Director submits to the General Assembly. The Director may recommend changes to these estimates in the budget submitted to the General Assembly."
SECTION 7.(c)  Effective July 1, 2007, G.S. 143C‑6‑4(d), (e), and (f) read as rewritten:
"(d)	Overexpenditures in Senate Budget. – The President Pro Tempore of the Senate may approve expenditures for more than was authorized in the enacted budget for objects or line items in the budget of the Senate. The President Pro Tempore shall report any such approval to all members of the General Assembly within 14 days.
(e)	Overexpenditures in House of Representatives Budget. – The Speaker of the House of Representatives may approve expenditures for more than was authorized in the enacted budget objects or line items in the budget of the House of Representatives. The Speaker shall report any such changes to all members of the General Assembly within 14 days.
(f)	Transfers Between Line Items or Programs in General Assembly Budget Other Than Senate and House of Representatives. – Expenditures exceeding amounts authorized for programs, objects, or line items in the budget of the General Assembly other than those of the Senate and House of Representatives shall be approved jointly by the President Pro Tempore of the Senate and the Speaker of the House of Representatives. The President Pro Tempore and the Speaker shall report any such changes to all members of the General Assembly within 14 days."
SECTION 7.(d)  Article 1 of Chapter 143 of the General Statutes is amended by adding a new section to read:
"§ 143‑23.4. Legislative budget administration.
(a)	The Speaker shall report to all members of the General Assembly on a monthly basis, within 30 days of the end of the month, all actions taken in administering the budget of the House of Representatives.
(b)	The President Pro Tempore shall report to all members of the General Assembly on a monthly basis, within 30 days of the end of the month, all actions taken in administering the budget of the Senate.
(c)	The Legislative Services Officer shall report to all members of the General Assembly on a monthly basis, within 30 days of the end of the month, all actions taken in administering the budget of the General Assembly other than of the Senate and House of Representatives."
SECTION 8.  Chapter 143 of the General Statutes is amended by adding a new section to read:
"§ 143‑32.1.  Discretionary funds.
All appropriations made by the General Assembly in a current appropriations act shall clearly specify in a separate line item the exact description of the appropriation in clear and precise language. When the General Assembly permits the expenditure of funds in a discretionary manner, that discretion shall reside only with the Director or the Director's designee, and it shall be unlawful and unethical for a member of the General Assembly after the current appropriations act is signed by the Governor to attempt to influence the exercise of that discretion or otherwise attempt to influence the way such funds so appropriated are expended."
SECTION 9.(a)  Chapter 143C of the General Statutes is amended by adding a new section to read:
"§ 143C‑5‑6.  Consideration of budget.
Neither the Current Operations Appropriations Bill or a bill making general revisions in that act for the second fiscal year of a biennium may not be placed on the favorable calendar for:
(1)	Second reading earlier than the third legislative day after the bill in the form that will be considered on second reading is distributed to the office of all members of the house where the bill is being considered.
(2)	Adoption of the conference report earlier than the third legislative day after the conference report in the form that will be presented to the Governor for signature is distributed to the office of all 170 members of the General Assembly."
SECTION 9.(b)  Chapter 143C of the General Statutes is amended by adding a new section to read:
"§ 143C‑5‑7.  Content of appropriations bills.
(a)	No provision changing existing law shall be contained in any of the following bills: (i) the Current Operations Appropriations Bill; (ii) the Capital Improvement Appropriations Bill; (iii) any bill generally revising appropriations for the second fiscal year of a biennium.
(b)	No amendment to any bill listed in subsection (a) of this rule shall be in order if the language is prohibited by that subsection.
(c)	Notwithstanding subsections (a) and (b) of this section, any of the bills listed in subsection (a) of this section or an amendment to such bill may change existing law if the change:
(1)	Alters expenditures or salaries;
(2)	Changes the scope or character of a program which must be reduced, increased, or changed because of an increase or decrease of funds appropriated for the program or because of changes in federal law or regulation; or
(3)	Modifies any function of State government which necessitates a transfer of funds from one department to another;
provided, that for a provision to be in order under this subsection, it must be recommended to the General Assembly in a written report adopted by the Appropriations/Base Budget Committee before or at the same time the bill is reported, or, if such provision is contained in a floor amendment, the sponsor of the amendment must present to the Principal Clerk at or before the time the amendment is offered an explanation of the amendment for distribution to each member of the Senate."
SECTION 10.  G.S. 14‑225 reads as rewritten:
"§ 14‑225.  False reports to law enforcement agencies or officers.
(a)	For purposes of this section, the term "official inquiry" means the pursuit of an investigative matter by a sworn agent of the State Bureau of Investigation pursuant to a statutorily authorized request from the Governor or the Attorney General, assistance rendered in accordance with G.S. 114‑14, or an investigation being conducted as a matter of original jurisdiction conferred upon the State Bureau of Investigation by North Carolina law.
(b)	Any person who shall willfully make or cause to be made to a law enforcement agency or officer any false, misleading or unfounded report, for the purpose of interfering with the operation of a law enforcement agency, or to hinder or obstruct any law enforcement officer in the performance of his duty, shall be guilty of a Class 2 misdemeanor.
(c)	In response to an official inquiry by a sworn agent of the State Bureau of Investigation who is investigating a Class A, B, C, D, E, F, or G felony, any person who shall willfully do any of the following is guilty of a Class H felony:
(1)	Falsify or conceal by any trick, scheme, or device a material fact.
(2)	Make any materially false, fictitious, or fraudulent statement or representation.
(3)	Use any false writing or document knowing the writing or document to contain any materially false, fictitious, or fraudulent statement or entry."
SECTION 11.  G.S. 163‑278.13(e) is repealed.
SECTION 12.  Section 3 of S.L. 2006‑201 is repealed.
SECTION 13.  Sections 1.(a), 1.(b), 2, 3.(a), 3.(b), 3.(c), 4, 5.(a), 5.(b), 5.(c), 6.(a), 11, and 12 of this act become effective January 1, 2008. Sections 6.(b), 7.(a), 7.(b), 7.(c), and 7.(d) of this act are effective when it becomes law. Sections 8 and 9 of this act become effective July 1, 2007.  Effective July 1, 2007, G.S. 143‑23.4 as enacted by Section 7.(d) of this act is recodified as G.S. 143C‑6‑12.  Section 10 of this act becomes effective December 1, 2007, and applies to offenses committed on or after that date. The remainder of this act is effective when it becomes law.