A BILL TO BE ENTITLED
AN ACT to repay the funds owed to local school administrative units in accordance with the requirements of the judgment in the civil penalties case.
Whereas, the North Carolina Constitution directs that the clear proceeds of all civil penalties, civil forfeitures, and civil fines that are collected by a State agency must go to the counties and be used exclusively for maintaining free public schools; and
Whereas, in December 1998, the North Carolina School Boards Association and some individual school boards sued the State seeking a determination that some funds that the State was retaining should instead go to the schools under that provision of the North Carolina Constitution; and
Whereas, the funds at issue included payments collected by the Department of Revenue for late payments of taxes, payments collected by the Department of Transportation for vehicles that exceed weight limits, parking fines collected by university campuses, and payments for failure to pay the State unauthorized substances tax; and
Whereas, the North Carolina Supreme Court ruled that these funds were owed to the schools and, in the future, must be given to the schools; and
Whereas, the North Carolina Supreme Court did not rule on what to do about funds collected before its decision but sent that question back to the Wake County Superior Court; and
Whereas, in August 2008, the superior court ruled that the State owed the schools $747,883,074 in funds collected before the North Carolina Supreme Court issued its decision; and
Whereas, the superior court further determined that it had no authority to enforce its decision and that satisfaction of the judgment was in the hands of the General Assembly; and
Whereas, the General Assembly has not acted to satisfy the State's debt to the schools or even expressed any intent to satisfy the debt; Now, therefore,
The General Assembly of North Carolina enacts:
SECTION 1.  The purpose of this act is to meet the requirements set out in the Memorandum of Decision and Judgment filed August 8, 2008, in N.C. School Bds. Ass'n v. Moore, 98 CVS 14158 (Wake County).
SECTION 2.(a)  There is established within the Civil Penalty and Forfeiture Fund a special fund entitled the Civil Penalties Litigation Fund to be administered by the Office of State Budget and Management. Moneys appropriated to the Civil Penalties Litigation Fund shall be allocated to local school administrative units on a per pupil basis, based on the student population for the current school year and shall be spent for school technology.
SECTION 2.(b)  Beginning with the 2014‑2015 fiscal year, there is annually appropriated from the General Fund to the Civil Penalties Litigation Fund a sum equal to the lesser of (i) ten percent (10%) of any unreserved fund balance remaining in the General Fund at the end of the prior fiscal year, (ii) one hundred million dollars ($100,000,000), and (iii) the amount owed to local school administrative units pursuant to the Memorandum of Decision and Judgment filed August 8, 2008, in N.C. School Bds. Ass'n v. Moore, 98 CVS 14158 (Wake County).
SECTION 3.  These funds shall supplement and not supplant other funds appropriated for public school technology by the General Assembly.
SECTION 4.  This act is effective when it becomes law.