A BILL TO BE ENTITLED
AN ACT to amend the state budget act to provide for the budgetary independence of the judicial branch.
The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 143C‑1‑1(b) reads as rewritten:
"(b)	The provisions of this Chapter shall apply to every State agency, unless specifically exempted herein, and to every non‑State entity that receives or expends any State funds. No State agency or non‑State entity shall expend any State funds except in accordance with an act of appropriation and the requirements of this Chapter. The provisions of Chapter 120 of the General Statutes shall continue to apply to the General Assembly and to control its expenditures and in the event of a conflict with this Chapter, the provisions of Chapter 120 of the General Statutes shall control. Nothing in this Chapter abrogates or diminishes the inherent power of the legislative, executive, or judicial branch."
SECTION 2.  G.S. 143C‑1‑2(b) reads as rewritten:
"(b)	Reversions. – Unless otherwise provided by law, at the end of the fiscal year the unexpended, unencumbered balance of an appropriation reverts to the fund from which the appropriation was made; except that (i) an appropriation to the General Assembly shall not revert unless otherwise provided by the Legislative Services Commission, (ii) an appropriation for a capital improvement project shall revert as provided by G.S. 143C‑8‑11,  (iii) an appropriation for the implementation of information technology (IT) projects shall not revert until the project is implemented or abandoned, and (iv) an appropriation to the Judicial Branch shall not revert unless otherwise provided by the Chief Justice and Judicial Council."
SECTION 3.  G.S. 143C‑3‑2 reads as rewritten:
"§ 143C‑3‑2.  (Effective July 1, 2007) Budget estimate for the judicial branch.
The Administrative Officer of the Courts shall give the Director an estimate of the financial needs of the judicial branch for the upcoming fiscal period in accordance with the schedule prescribed by the Director. The estimates for the judiciary shall be approved and certified by the Chief Justice. The estimates shall be itemized in accordance with the accounting classifications adopted by the Controller. The Director shall include these estimates for the Judicial Branch in the budget the Director submits to the General Assembly. The Director may separately recommend changes to these estimates; however, the Director shall not reduce or modify the estimates for the judicial branch in the budget the Director submits to the General Assembly."
SECTION 4.  G.S. 143C‑3‑5(a) reads as rewritten:
"(a)	Budget Proposals. – The Governor shall present budget recommendations, consistent with G.S. 143C‑3‑1, 143C‑3‑2, and 143C‑3‑3 to each regular session of the General Assembly at a mutually agreeable time to be fixed by joint resolution."
SECTION 5.  G.S. 143C‑4‑6(b) reads as rewritten:
"(b)	Increase in Size Limitation. – To the extent that any percent increase in appropriations for a fiscal year for (i) Medicaid, (ii) operation of prisons, or (iii) operation of the courts or (iv) the costs of providing health insurance for teachers and State employees, exceeds the percent increase in State personal income growth for the same period, the limitation on the size of the General Fund operating budget provided in subsection (a) of this section for that fiscal year shall be increased by the dollar amount represented by the excess percentage. For all subsequent fiscal years, the percent limitation contained in subsection (a) shall then be increased to reflect that dollar adjustment."
SECTION 6.  G.S. 143C‑4‑7 reads as rewritten:
"§ 143C‑4‑7.  (Effective July 1, 2007) Limit on number of permanent positions budgeted.
The total number of permanent budgeted positions established in State agencies shall not be increased by the end of any State fiscal year by a greater percentage rate of change than the percentage rate of change of the residential population growth for the State of North Carolina. The Office of State Budget and Management shall be responsible for computing the annual percentage rates of change for each measure. The population growth rate shall be computed by averaging the annual residential population growth rate in each of the preceding 10 fiscal years as stated in the annual estimates of residential population in North Carolina made by the United States Census Bureau. The growth rate of the number of budgeted positions shall be computed by averaging the annual rate of growth of State budgeted positions in each of the preceding 10 fiscal years. The total number of permanent budgeted positions established in State agencies shall be computed by adding the total number of budgeted Full‑Time Equivalents from all fund types. This section does not apply to State‑funded positions supported by the State in a local public school system, local community college institution, or local courthouses."
SECTION 7.  G.S. 143C‑6‑2(b) reads as rewritten:
"(b)	Revenue Collections. – The Director, with the assistance of the Secretary of Revenue and other officials collecting or receiving appropriated State revenue, shall continuously survey the revenue collections. If the Director finds that revenues to any fund, when added to the beginning unreserved fund balance in that fund, will be insufficient to support appropriations from that fund, the Director shall immediately notify the General Assembly and the Chief Justice that a deficit is anticipated. The Director shall report in a timely manner to the General Assembly a plan for the Executive Branch, and the Chief Justice shall report in a timely manner to the General Assembly a plan for the Judicial Branch, containing the expenditure reductions and other lawful measures as the Director and Chief Justice are implementing in order to avert the deficit."
SECTION 8.  G.S.143C‑6‑4 is amended by adding a new subsection to read:
"(h)	Overexpenditures and Transfers in the Judicial Branch Budget. – The Chief Justice of the Supreme Court may approve transfers and expenditures for more than was authorized in the enacted budget for objects or line items in the budget of the Judicial Branch and shall report overexpenditures quarterly, beginning October 31, to the Joint Legislative Commission on Governmental Operations on overexpenditures approved by the Chief Justice."
SECTION 9.  G.S. 143C‑6‑6(c) reads as rewritten:
"(c)	This section does not apply to The University of North Carolina or the Judicial Branch."
SECTION 10.  G.S. 143C‑7‑1(a) reads as rewritten:
"(a)	Report to Director. – A State agency that submits to the federal government or to any other party an application for funds that will be subject to this Chapter shall  provide to the Director a copy of the application along with any related information the Director may require."
SECTION 11.  G.S. 143C‑10‑3(a) reads as rewritten:
"(a)	State Officers or Employee of the Executive Branch. – The Governor may suspend from the performance of his or her duties any State officer or employee of the Executive Branch except an officer elected by the people, who persists, after notice and warning, in failing or refusing to comply with the provisions of this Chapter or any lawful administrative directive issued pursuant to this Chapter. Before acting to suspend, the Governor shall give the accused notice and an opportunity to be heard in his or her own defense. The Governor shall report the facts leading to suspension to the Attorney General who may initiate appropriate criminal or civil proceedings. The Governor may apply to the General Court of Justice for a restraining order and injunction if a suspended officer or employee persists in performing official acts."
SECTION 12.  This act becomes effective July 1, 2007.