A BILL TO BE ENTITLED
AN ACT AUTHORIZing THE DIRECTOR OF THE BUDGET TO CONTINUE EXPENDITURES FOR THE OPERATION OF GOVERNMENT UNTIL september 30, 2011, AT THE LEVEL IN EFFECT ON JUNE 30, 2011, and implementing the three‑year look back period for federally funded extended unemployment benefits AS AUTHORIZED BY SECTION 502 OF THE TAX RELIEF, UNEMPLOYMENT INSURANCE REAUTHORIZATION, AND JOB CREATION ACT OF 2010, public law 111‑312, with the amendments effective april 16, 2011, and expiring January 1, 2012.
The General Assembly of North Carolina enacts:

BUDGET CONTINUATION
SECTION 1.(a)  The Director of the Budget may continue to allot funds for expenditure by State agencies, departments, and institutions, at a level not to exceed the level of recurring expenditures authorized in S.L. 2009‑451, as amended, or in S.L. 2010‑31, as amended.  
SECTION 1.(b)  The Director of the Budget shall not allocate funds for any of the purposes set out in the budget reductions in House Bill 200, 4th edition.
SECTION 1.(c)  Vacant positions subject to the proposed budget reductions in House Bill 200, 4th edition, shall not be filled. State employees in positions set out in House Bill 200, 4th edition, to be eliminated for the 2011‑2012 fiscal year shall be given notice of termination as required by law.   
SECTION 1.(d)  The appropriations and the authorizations to allocate and spend funds which are set out in this section shall remain in effect until the Current Operations and Capital Improvements Appropriations Act of 2011 (2011 Appropriations Act) becomes law, at which time that act shall become effective and shall govern appropriations and expenditures. When the 2011 Appropriations Act becomes law, the Director of the Budget shall adjust allotments to give effect to that act from July 1, 2011.
SECTION 1.(e)  Except as otherwise provided by this section, the limitations and directions for the 2010‑2011 fiscal year in S.L. 2009‑451, as amended, or in S.L. 2010‑31, as amended, remain in effect.  
SECTION 1.(f)  There is appropriated from the appropriate State funds and cash balances, federal receipts, and departmental receipts for the 2011‑2012 fiscal year funds necessary to carry out the provisions of this act. 

EMPLOYEE SALARIES
SECTION 2.(a)  The salary schedules and specific salaries established for the 2010‑2011 fiscal year by or under S.L. 2010‑31 and in effect on June 30, 2011, or the last day in pay status during the 2010‑2011 fiscal year if earlier, for offices and positions, including positions in the UNC Health Care System, shall remain in effect and shall not be increased regardless of funding source of the increase or regardless of the exceptions established in Section 26.1A of S.L. 2009‑451, as amended by S.L. 2009‑575, Section 21; S.L. 2010‑31, Section 29.7(c); and S.L. 2010‑123, Section 9.2 until the date the 2011 Appropriations Act becomes law.
SECTION 2.(b)  State employees subject to G.S. 7A‑102(c), 7A‑171.1, or 20‑187.3 shall not move up on salary schedules or receive automatic increases, including automatic step increases, until authorized by the General Assembly.
SECTION 2.(c)  Public school employees paid on the teacher salary schedule or the school‑based administrator salary schedule and other employees shall not move up on salary schedules or receive automatic step increases, annual, performance, merit, or other increments until authorized by the General Assembly.
SECTION 2.(d)  Nothing in this section prohibits a salary reduction when authorized by the Director of the Budget or other authorized officer. 

STATE CONTROLLER SHALL NOT TRANSFER FUNDS ON JUNE 30
SECTION 3.(a)  Notwithstanding G.S. 143C‑4‑3, for the 2010‑2011 fiscal year only, funds shall not be reserved to the Repairs and Renovations Reserve Account, and the State Controller shall not transfer funds from the unreserved credit balance to the Repairs and Renovations Reserve Account on June 30, 2011.
SECTION 3.(b)  Notwithstanding G.S. 143C‑4‑2, for the 2010‑2011 fiscal year only, funds shall not be reserved to the Savings Reserve Account, and the State Controller shall not transfer funds from the unreserved credit balance to the Savings Reserve Account on June 30, 2011.
SECTION 3.(c)  This section becomes effective June 30, 2011.

CERTAIN FUNDS SHALL NOT REVERT
SECTION 4.(a)  If the provisions of House Bill 200, Fourth Edition, direct that funds shall not revert, the funds shall not revert on June 30, 2011. Unless these funds are encumbered on or before June 30, 2011, these funds shall not be expended after June 30, 2011, except as provided by a law enacted after June 30, 2011.
SECTION 4.(b)  If the provisions of S.L. 2009‑451, as amended, or S.L. 2010‑31, as amended, direct that funds appropriated for a purpose shall not revert on June 30, 2010, funds appropriated for that purpose for the 2010‑2011 fiscal year shall not revert on June 30, 2011.
SECTION 4.(c)  This section becomes effective June 30, 2011.

FEDERAL BLOCK GRANTS
SECTION 5.  The Director of the Budget shall continue to allocate federal block grant funds at the levels provided in S.L. 2010‑31 and as otherwise provided by law, and appropriations from federal block grants are hereby made. 

ENROLLMENT INCREASES
SECTION 6.  Funds appropriated in this act may be used to fund increases in average daily membership in public schools and increases in enrollment in the North Carolina Community College System, and The University of North Carolina.

MEDICAID
SECTION 7.  The Director of the Budget may use up to one hundred twenty‑five million dollars ($125,000,000) to repay the federal Centers for Medicare and Medicaid Services for excess Medicaid funds drawn down during the 2009‑2010 fiscal year.  The Director of the Budget shall report the amount of funds used under this section no later than 30 days after payment to the Joint Legislative Commission on Governmental Operations, the Chairs of the Senate and House of Representatives Appropriations Committees, and the Fiscal Research Division.

unemployment insurance/implement three‑year look back
SECTION 8.(a)  G.S. 96‑12.01(a1)(4)c. is amended by adding a new sub‑sub‑subdivision to read:
"3.	This section applies as provided under the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (P.L. 111‑312) as it existed on December 17, 2010, and is applicable to compensation for weeks of unemployment beginning after December 17, 2010, and ending on or before December 31, 2011, provided that:
I.	The average rate of (i) insured unemployment, not seasonally adjusted, equaled or exceeded one hundred twenty percent (120%) of the average of such rates for the corresponding 13‑week period ending in all of the preceding three calendar years and equaled or exceeded five percent (5%) or (ii) total unemployment, seasonally adjusted, as determined by the United States Secretary of Labor, for the period consisting of the most recent three months for which data for all states are published before the close of the week equals or exceeds six and one‑half percent (6.5%); and 
II.	The average rate of total unemployment in this State, seasonally adjusted, as determined by the United States Secretary of Labor, for the three‑month period referred to in this subsection, equals or exceeds one hundred ten percent (110%) of the average for any of the corresponding three‑month periods ending in the three preceding calendar years."
SECTION 8.(b)  G.S. 96‑12.01(a1)(4)e. reads as rewritten:
"(4)	There is an "on indicator" for this State for a week if the Commission determines, in accordance with the regulations of the United States Secretary of Labor, that for the period consisting of such week and the immediate preceding 12 weeks, the rate of insured unemployment (not seasonally adjusted) under this Chapter:
…
e.	Total extended benefit amount.
1.	The total extended benefit amount payment to any eligible individual with respect to the applicable benefit year shall be the least of the following amounts:
I.	Fifty percent (50%) of the total amount of regular benefits which were payable to the individual under this Chapter in the individual's applicable benefit year; or
II.	Thirteen times the individual's weekly benefit amount that was payable to the individual under this Chapter for a week of total unemployment in the applicable benefit year.
2.	I.	Effective with respect to weeks beginning in a high unemployment period, sub‑subdivision e.1. of this subdivision shall be applied by substituting:
A.	"Eighty percent (80%)" for "fifty percent (50%)" in sub‑subdivision e.1.I., and
B.	"Twenty" for "thirteen" in sub‑subdivision e.1.II.
II.	For purposes of sub‑subdivision 2.I., the term "high unemployment period" means any period during which an extended benefit period would be in effect if sub‑subdivision c. of this subdivision were applied by substituting "eight percent (8%)" for six and one‑half percent (6.5%)".
3.	This subdivision applies as provided under the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (P.L. 111‑312) as it existed on December 17, 2010, and is applicable to compensation for weeks of unemployment beginning after December 17, 2010, and ending on or before December 31, 2011, provided that:
I.	The average rate of total unemployment, seasonally adjusted, as determined by the United States Secretary of Labor, for the period consisting of the most recent three months for which data for all states are published before the close of the week equals or exceeds eight percent (8%); and 
II.	The average rate of total unemployment in this State, seasonally adjusted, as determined by the United States Secretary of Labor, for the three‑month period referred to in this subdivision equals or exceeds one hundred ten percent (110%) of the average for any of the corresponding three‑month periods ending in the three preceding calendar years."
SECTION 8.(c)  The intent of this section is to allow extended benefits to be paid as provided under the Federal Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 so long as the payment of the benefits does not hinder the State's ability to reduce the debt it owes the federal government to pay unemployment benefits. It is not the intent of this section to pay for the extended benefits with contributions paid by employers under Chapter 96 of the North Carolina General Statutes or with contributions paid by employers under the federal payroll tax that would otherwise be used to pay down the amount borrowed from the federal government by the State to pay unemployment benefits. Nothing in this section obligates the State to pay extended benefits provided by this section with contributions payable under Chapter 96 of the General Statutes or with any other State funds.  This section is null and void if the payment of the benefits would divert federal payroll tax revenue payable by North Carolina employers that would otherwise be used to pay down the amount borrowed from the federal government by the State to pay unemployment benefits. 
SECTION 8.(d)  This section becomes effective April 16, 2011, and expires January 1, 2012.

effective dateS
SECTION 9.  Except as otherwise provided, this act becomes effective July 1, 2011, and expires the earlier of September 30, 2011, at 11:59 P.M. or the date the Current Operations and Capital Improvements Appropriations Act of 2011 becomes law.