A BILL TO BE ENTITLED
AN ACT to mODIFY THE CURRENT OPERATIONS APPROPRIATIONS ACT OF 2017 AND TO MAKE OTHER CHANGES IN THE BUDGET OPERATIONS OF THE STATE.
The General Assembly of North Carolina enacts:

PART I. INTRODUCTION AND TITLE OF ACT

INTRODUCTION
SECTION 1.1.  The appropriations made in this act are for maximum amounts necessary to provide the services and accomplish the purposes described in the budget. Savings shall be effected where the total amounts appropriated are not required to perform these services and accomplish these purposes, and, except as allowed by the State Budget Act or this act, the savings shall revert to the appropriate fund at the end of each fiscal year, except as otherwise provided by G.S. 143C‑1‑2(b).

TITLE OF ACT
SECTION 1.2.  This act shall be known as the "Current Operations Appropriations Act of 2018."

PART II. CURRENT OPERATIONS AND EXPANSION GENERAL FUND

CURRENT OPERATIONS AND EXPANSION/GENERAL FUND
SECTION 2.1.  Appropriations from the General Fund of the State for the maintenance of the State's departments, institutions, and agencies and for other purposes as enumerated are adjusted for the fiscal year ending June 30, 2019, according to the following schedule:

Current Operations – General Fund		FY 2018‑2019

EDUCATION

Community Colleges System Office	81,331,106

Department of Public Instruction	338,518,144

University of North Carolina – Board of Governors
	Appalachian State University
	East Carolina University
		Academic Affairs	(241,276)
		Health Affairs	0
	Elizabeth City State University	1,124,000
	Fayetteville State University	932,000
	NC A&T State University	3,466,000
	NC Central University	1,067,000
	NC State University
		Academic Affairs	2,250,000
		Agricultural Extension	0
		Agricultural Research	0
	UNC‑Asheville	750,000	UNC‑Chapel Hill
		Academic Affairs	2,500,000
		Health Affairs	0
		AHEC	0
	UNC‑Charlotte	0
	UNC‑Greensboro	0
	UNC‑Pembroke	500,000
	UNC‑School of the Arts	1,000,000
	UNC‑Wilmington	0
	Western Carolina University	0
	Winston‑Salem State University	752,809
	General Administration	0
	University Institutional Programs	100,596,546
	Related Educational Programs	0
	NC School of Science & Mathematics	500,000
	Aid to Private Institutions	(5,000,000)

Total University of North Carolina – 
	Board of Governors	110,197,079

HEALTH AND HUMAN SERVICES

Department of Health and Human Services
	Central Management and Support	17,879,628
	Division of Aging and Adult Services	0
	Division of Blind Services/Deaf/HH	0
	Division of Child Development and Early Education	3,425,000
	Health Service Regulation	85,389
	Division of Medical Assistance	33,759,033
	Division of Mental Health, Developmental Disabilities,
		& Substance Abuse Services	25,708,167
	NC Health Choice	1,760
	Health Benefits	12,945,104
	Division of Public Health	3,127,506
	Division of Social Services	0
	Division of Vocation Rehabilitation	0

Total Health and Human Services	96,931,587

AGRICULTURE AND NATURAL AND ECONOMIC RESOURCES

Department of Agriculture and Consumer Services	14,288,861

Department of Commerce
	Commerce	337,629
	Commerce State‑Aid	2,500,000
	Commerce – Economic Development	30,679,142

Department of Natural and Cultural Resources
	Natural and Cultural Resources	6,559,222
	Roanoke Island Commission	0

Wildlife Resources Commission	348,456

Department of Environmental Quality	17,166,694

Department of Labor	1,497,966

JUSTICE AND PUBLIC SAFETY

Department of Public Safety	93,689,779

Judicial Department	21,468,002

Judicial Department – Indigent Defense	3,926,438

Department of Justice	7,278,721

GENERAL GOVERNMENT

Department of Administration	3,530,645

Office of Administrative Hearings	193,405

Department of State Auditor	492,474

Office of State Controller	651,692

State Board of Elections	382,550

General Assembly	1,584,140

Office of the Governor
	Office of the Governor	105,727
	Office of the Governor – Special Projects	0

Office of State Budget and Management
	Office of State Budget and Management	309,805
	OSBM – Reserve for Special Appropriations	1,000,000

Housing Finance Agency

Department of Insurance	1,740,254
	Industrial Commission	131,593

Office of Lieutenant Governor	19,030

Department of Military and Veterans Affairs	1,256,171

Department of Revenue	1,771,030

Department of Secretary of State	894,743

Department of Information Technology	21,955,156

Department of State Treasurer
	State Treasurer	34,221
	State Treasurer – Retirement for
		Fire and Rescue Squad Workers	0

RESERVES, ADJUSTMENTS, AND DEBT SERVICE

Contingency and Emergency Fund	2,000,000
Salary Adjustment Fund Reserve 	20,000,000
NC 457 Contributions for Certified State Correction Officers Reserve	10,000,000
Workers' Compensation Reserve	1,500,000
2020 Census Preparation Reserve	1,500,000
Bond Disclosure, Close Out, and Tax‑Exempt Analysis Reserve	50,000
Public Schools Average Daily Membership (ADM) Reserve	(48,410,289)
Pending Legislation Reserve	(500,000)

Debt Service
	General Debt Service	(54,567,293)

TOTAL CURRENT OPERATIONS –	794,343,880
	GENERAL FUND

GENERAL FUND AVAILABILITY STATEMENT
SECTION 2.2.(a)  The General Fund availability statement set out in Section 2.2(a) of S.L. 2017‑57 applies to the 2017‑2018 fiscal year only. The General Fund Availability used in adjusting the 2018‑2019 budget is shown below:
	
		FY 2018‑2019
Beginning Availability
	Unappropriated Balance from Prior Fiscal Year	490,975,581
	Anticipated Over Collections	356,700,000
	Anticipated Reversions	275,000,000
	Transfers:
		Savings Reserve	(184,100,000)
		Repairs and Renovations Reserve	(125,000,000)
		Public Safety Improvements Reserve	(100,000,000)
		Information Technology Infrastructure Reserve	(50,000,000)
		State Emergency Response & Disaster Relief Reserve Account	(139,500,000)

Beginning Unreserved Fund Balance	524,075,581

Revenues Based on Existing Tax Structure	22,960,100,000

Nontax Revenues
	Investment Income	$ 99,400,000
	Judicial Fees	232,700,000
	Disproportionate Share	163,300,000
	Insurance	82,700,000
	Master Settlement Agreement	139,400,000
	Other Nontax Revenues	193,700,000

Subtotal Nontax Revenue	911,200,000

Total General Fund Availability	23,871,300,000

Adjustments to Availability: 2018 Session
	Conformity with Federal Tax Cuts and Jobs Act	54,000,000
	Two‑Bracket Personal Income Tax Change	67,600,000
	Keep Corporate Income Tax Rate at 3%	42,400,000
	Transfer 25% of Real Estate Conveyance Tax Revenue to Other Funds	(18,700,000)
	Direct Additional Funds to Golden LEAF Foundation	(5,000,000)
	Adjustment for Transfer from Treasurer's Office	34,221
	Adjustment for Transfer from Insurance Regulatory Fund	1,740,254

Subtotal Adjustments to Availability	142,074,475

Revised General Fund Availability	24,537,450,056

Less General Fund Appropriations	(24,537,450,056)

Unappropriated Balance Remaining 	0

SECTION 2.2.(b)  Notwithstanding the provisions of G.S. 143C‑4‑3(a), the State Controller shall transfer a total of one hundred twenty‑five million dollars ($125,000,000) from the unreserved fund balance to the Repairs and Renovations Reserve on June 30, 2018. Funds transferred under this section to the Repairs and Renovations Reserve are hereby appropriated for the 2018‑2019 fiscal year and shall be used in accordance with G.S. 143C‑4‑3. This subsection becomes effective June 30, 2018.
SECTION 2.2.(c)  Notwithstanding G.S. 143C‑4‑2, the State Controller shall transfer a total of one hundred eighty‑four million one hundred thousand dollars ($184,100,000) from the unreserved fund balance to the Savings Reserve Account on June 30, 2018. This transfer is not an "appropriation made by law," as that phrase is used in Section 7(1) of Article V of the North Carolina Constitution. This subsection becomes effective June 30, 2018.
SECTION 2.2.(d)  The State Controller shall transfer a total of twenty‑one million four hundred thirty‑eight thousand one hundred seventy‑one dollars ($21,438,171) from the Medicaid Contingency Reserve to the Department of Health and Human Services.

PART III. CURRENT OPERATIONS/HIGHWAY FUND

CURRENT OPERATIONS AND EXPANSION/HIGHWAY FUND
SECTION 3.1.  Appropriations from the State Highway Fund for the maintenance and operation of the Department of Transportation and for other purposes as enumerated are adjusted for the fiscal year ending June 30, 2019, according to the following schedule.  Amounts set out in parentheses are reductions from the Highway Fund Appropriations for the 2018‑2019 fiscal year:

Current Operations – Highway Fund		FY 2018‑2019

Department of Transportation
	Administration	$	0

Division of Highways
	Administration	0
	Construction	0
	Maintenance	(38,994,179)
	Planning and Research	0
	OSHA Program	0

State Aid to Municipalities	0

Intermodal Divisions
	Ferry	0
	Public Transportation	0
	Aviation	1,600,000
	Rail	(300,000)
	Bicycle and Pedestrian	0

Governor's Highway Safety	0

Division of Motor Vehicles	0

Other State Agencies, Reserves, Transfers	10,696,491
Capital Improvements	0

Total Highway Fund Appropriations	$ 2,224,500,000

HIGHWAY FUND AVAILABILITY STATEMENT
SECTION 3.2.  Section 3.2 of S.L. 2017‑57 is repealed. The Highway Fund availability used in adjusting the 2018‑2019 fiscal year budget is shown below:

Highway Fund Availability Statement	FY 2018‑2019
Unreserved Fund Balance	$	0
Estimated Revenue	2,224,500,000
Adjustment to Revenue Availability	0

Total Highway Fund Availability	$ 2,224,500,000

Unappropriated Balance	$	0

PART IV. HIGHWAY TRUST FUND APPROPRIATIONS

HIGHWAY TRUST FUND APPROPRIATIONS
SECTION 4.1.  Appropriations from the State Highway Trust Fund for the maintenance and operation of the Department of Transportation and for other purposes as enumerated are made for the fiscal biennium ending June 30, 2019, according to the following schedule. Amounts set out in parentheses are reductions from the Highway Fund Appropriations for the 2018‑2019 fiscal year:

Current Operations – Highway Trust Fund	FY 2018‑2019

Program Administration	$	664,054
Debt Service	0
Turnpike Authority	0
State Ports Authority	0
Transfer to Highway Fund	0
FHWA State Match	0
Strategic Prioritization Funding Plan for
	Transportation Investments	(45,988,216)

Total Highway Trust Fund Appropriations	$ 1,540,500,000

HIGHWAY TRUST FUND AVAILABILITY STATEMENT
SECTION 4.2.  Section 4.2 of S.L. 2017‑57 is repealed. The Highway Fund availability used in adjusting the 2018‑2019 fiscal year budget is shown below:

Highway Trust Fund Availability	FY 2018‑2019

Unreserved Fund Balance	$	0
Estimated Revenue	1,540,500,000
Adjustment to Revenue Availability	0

Total Highway Trust Fund Availability	$ 1,540,500,000

Unappropriated Balance	$	0

PART V. OTHER APPROPRIATIONS

EDUCATION LOTTERY FUNDS/CHANGES TO REVENUE ALLOCATIONS/NEEDS‑BASED PUBLIC SCHOOL CAPITAL FUND
SECTION 5.1. Section 5.3(a) of S.L. 2017‑57 reads as rewritten:
"SECTION 5.3.(a)  The appropriations made from the Education Lottery Fund for the 2017‑2019 fiscal biennium are as follows:
	FY 2017‑2018	FY 2018‑2019

Noninstructional Support Personnel	$383,888,897	$385,914,455
Prekindergarten Program	78,252,110	78,252,110
Public School Building Capital Fund	100,000,000	100,000,000
Needs‑Based Public School Capital Fund	30,000,000	75,000,000
Scholarships for Needy Students	30,450,000	30,450,000
UNC Need‑Based Financial Aid	10,744,733	10,744,733
LEA Transportation	43,277,192	11,902,152
K‑3 Class Size Capital Fund		69,000,000

TOTAL APPROPRIATION	$676,612,932	$761,263,450"

K‑3 CLASS SIZE CAPITAL FUND
SECTION 5.3.(a)  There is created the K‑3 Class Size Capital Fund to be administered by the State Board of Education. A minimum of seventy‑five million dollars ($75,000,000) shall be transferred from the Education Lottery Fund and Indian Gaming Fund to the K‑3 Class Size Capital Fund for the 2018‑2019 fiscal year. These funds shall be used to award grants to counties to offset the capital costs associated with K‑3 class size reduction required by the 2021‑2022 school year in G.S. 115C‑301. The State Board of Education shall award grants to counties in accordance with the following priorities:
(1)	Counties with a demonstrated need for additional classrooms in order to comply with G.S. 115C‑301 by the 2021‑2022 school year.
(2)	Counties with a difficulty complying with G.S. 115C‑301 due to a financial hardship.
(3)	Proposals that maximize the class size reduction for the associated cost.
SECTION 5.3.(b)  Funds awarded under this section shall only be used for the following purposes:
(1)	Construction of new K‑3 classroom facilities.
(2)	Purchase and installation of mobile classroom facilitates.
(3)	Renovation and conversion of existing facilities that result in additional K‑3 classrooms.
SECTION 5.3.(c)  Funds awarded under this section may not be used for real property acquisition or for operational lease agreements.
SECTION 5.3.(d)  Grant funds awarded under this section shall be subject to a matching requirement, based on county‑tier of the recipient county. For purposes of this subsection, development tier area is as defined in G.S. 143B‑437.08, and the match requirement is as follows:
(1)	For a county designated as a development tier one area, the grant shall not exceed three dollars ($3.00) in grant funds for every one dollar ($1.00) provided by the county.
(2)	For a county designated as a development tier two area, the grant shall not exceed two dollars ($2.00) in grant funds for every one dollar ($1.00) provided by the county.
(3)	For a county designated as a development tier three area, the grant shall not exceed one dollar ($1.00) in grant funds for every one dollar ($1.00) provided by the county.
SECTION 5.3.(e)  For the purposes of determining matching funds, the following may be utilized by the county for demonstration of non‑State match:
(1)	Local funds appropriated by the county for school capital.
(2)	Proceeds of local bonds issued for school capital.
(3)	Any other non‑State funds that the local government has used for capital.
No funds listed in this subsection may be used for a demonstration of non‑State match, if those funds have previously been used as a match for another State funding program.
SECTION 5.3.(f)  On or before April 1 of each year, a grant recipient shall submit to the State Board of Education an annual report for the preceding year that describes the progress of the project for which the grant was received. The grant recipient shall submit a final report to the State Board of Education within three months of the completion of the project.
SECTION 5.3.(g)  On or before May 1 of each year, the State Board of Education shall submit a report to the chairs of the Senate Appropriations Committee on Education/Higher Education, the chairs of the House Appropriations Committee on Education, the Fiscal Research Division, and the Office of State Budget and Management. The report shall contain at least all of the following information for the fiscal year:
(1)	Number and description of projects awarded.
(2)	Total cost of each project and amount supported by the K‑3 Class Size Capital Fund.
(3)	Any legislative recommendations for improving the K‑3 Class Size Capital Fund.

CIVIL PENALTY AND FORFEITURE FUND
SECTION 5.4.  Section 5.4(b) of S.L. 2017‑57 reads as rewritten:
"SECTION 5.4.(b)  Excess receipts realized in the Civil Penalty and Forfeiture Fund in the 2017‑2018 fiscal year shall be allocated to the State Public School Fund in the 2018‑2019 fiscal year. Excess receipts realized in the 2018‑2019 fiscal year shall remain unspent until appropriated by a further act of the General Assembly."

INDIAN GAMING EDUCATION REVENUE FUND
SECTION 5.5.  Section 5.5 of S.L. 2017‑57 reads as rewritten:
"SECTION 5.5. Notwithstanding G.S. 143C‑9‑7, the sum of six million dollars ($6,000,000) in each year of the 2017‑2019 fiscal biennium is transferred from the Indian Gaming Education Revenue Fund to the Department of Public Instruction, Textbooks, and Digital Resources Allotment and the sum of six million dollars ($6,000,000) in the 2018‑2019 fiscal year is transferred from the Indian Gaming Revenue Fund to the K‑3 Class Size Capital Fund."

PART VI. GENERAL PROVISIONS

ESTABLISHING OR INCREASING FEES
SECTION 6.2.(a)  Notwithstanding G.S. 12‑3.1, an agency is not required to consult with the Joint Legislative Commission on Governmental Operations prior to establishing or increasing a fee to the level authorized or anticipated in this act.
SECTION 6.2.(b)  Notwithstanding G.S. 150B‑21.1A(a), an agency may adopt an emergency rule in accordance with G.S. 150B‑21.1A to establish or increase a fee as authorized by this act if the adoption of a rule would otherwise be required under Article 2A of Chapter 150B of the General Statutes.

EXPENDITURES OF FUNDS IN RESERVES LIMITED
SECTION 6.3.  All funds appropriated by this act into reserves may be expended only for the purposes for which the reserves were established.

CAP STATE FUNDED PORTION OF NONPROFIT SALARIES
SECTION 6.4.  No more than one hundred twenty thousand dollars ($120,000) in State funds may be used for the annual salary of any individual employee of a nonprofit organization receiving State funds. For the purposes of this section, the term "State funds" means funds as defined in G.S. 143C‑1‑1(d)(25) and any interest earnings that accrue from those funds.

ADVANCING EVIDENCE‑BASED POLICY‑MAKING AND PERFORMANCe MANAGEMENT IN STATE BUDGETING
SECTION 6.5.(a)  Section 26.3 of S.L. 2017‑57 is amended by adding a new subsection to read:
"SECTION 26.3.(d)  By October 1, 2018, the Office of State Budget and Management, in consultation with Results First partner agencies and the Pew‑MacArthur Results First Initiative, shall develop and publish descriptive, formal definitions for tiered levels of evidence. Each definition shall outline the criteria needed to qualify for each tier of evidence. The Office of State Budget and Management shall also identify which program or service areas will be expected to include evidence and research to support budget proposals. The definitions may be periodically updated as needed. The definitions, and any subsequent updates, shall be included in the annual report required by subsection (c) of this section."
SECTION 6.5.(b)  The Office of State Budget and Management shall research best practices in performance management from leading states, academia, and nongovernmental organizations and implement a pilot performance management initiative that is designed to inform the budget process and operational management of State programs. By November 30, 2018, the Office of State Budget and Management shall report to the Joint Legislative Oversight Committee on General Government on the progress of implementing the pilot. The report may include recommendations for additional legislation.
SECTION 6.5.(c)  G.S. 143C‑1‑1(d) is amended by adding a new subdivision to read:
"(21a)	Performance management. – An on‑going process of measuring, evaluating, and adjusting actions to improve outcomes."

RESTORE DEBT SERVICE FUNDS FOR WILMINGTON HARBOR
SECTION 6.6.(a)  The Office of State Budget and Management (OSBM) shall use sixteen million dollars ($16,000,000) in the 2017‑2018 fiscal year year‑end reversions to replace the Wilmington Harbor debt repayment funds that reverted to the General Fund in the 2016‑2017 fiscal year. OSBM may first use any reversions from General Fund debt service before using agency reversions.
SECTION 6.6.(b)  This section becomes effective June 30, 2018.

CONTINGENCY AND EMERGENCY FUND LIMITATION AND TRANSFER
SECTION 6.7.  Section 6.1(a) of S.L. 2017‑57 reads as rewritten:
"SECTION 6.1.(a)  Limitation. – For the 2017‑2019 fiscal biennium, and notwithstanding the provisions of G.S. 143C‑4‑4(b), funds appropriated to the Contingency and Emergency Fund may be used only for expenditures required (i) by a court or Industrial Commission order, (ii) to respond to events as authorized under G.S. 166A‑19.40(a) of the North Carolina Emergency Management Act, (iii) by the State Treasurer to pay death benefits as authorized under Article 12A of Chapter 143 of the General Statutes, (iv) by the Office of the Governor for crime rewards in accordance with G.S. 15‑53 and G.S. 15‑53.1, (v) by the Industrial Commission for supplemental awards of compensation, or (vi) by the Department of Justice for legal fees."

MSA FUND/INCREASE APPROPRIATION TO GOLDEN L.E.A.F
SECTION 6.8.  G.S. 143C‑9‑3(a1), as amended by Section 6.5 of S.L 2017‑57, reads as rewritten:
"(a1)	Each year, the sum of twenty‑two million five hundred thousand dollars ($22,500,000) from the Settlement Reserve Fund is appropriated to The Golden L.E.A.F. (Long‑Term Economic Advancement Foundation), Inc., a nonprofit corporation, and these funds shall not be subject to G.S. 143C‑6‑23. The remainder of the funds credited to the Settlement Reserve Fund each fiscal year shall be transferred to the General Fund and included in General Fund availability as nontax revenue."

PART VI‑A. DISASTER RELIEF FUNDING
SECTION 6A.1.  This Part shall be known as "The Disaster Recovery Act of 2018."
SECTION 6A.2.(a)  More than 18 months after Hurricane Matthew, there continues to be many unmet needs in the State of North Carolina, and federal and State programs are inadequate to provide relief to individuals, local governments, and businesses in the impacted areas.
SECTION 6A.2.(b)  The State of North Carolina has continued to assess and determine the scope of the unmet needs associated with the damages caused by Hurricane Matthew. The current estimate of unmet needs is at least nine hundred one million dollars ($901,000,000). The State of North Carolina will continue to work with our federal agencies and appropriators to ensure that the maximum level of funding is secured for reimbursement of State funds for any eligible federal expenditures already incurred as well as additional support for the overall recovery efforts in the State.
SECTION 6A.2.(c)  It is the intent of the General Assembly that the benefits of the projects and programs authorized by this part are for the common good and collective recovery of the people of this State following devastating natural disasters directly affecting a large portion of the State and indirectly affecting the entire State. The entire State faces a major economic loss if the counties that bore the major impact of these disasters are not offered the assistance provided by this act. The purpose of this part is to provide a net public benefit to the State through a successful recovery initiative.
SECTION 6A.2.(d)  The General Assembly finds that the State and federal disaster relief initiatives are intended to assist the affected areas in recovering from the damage caused by Hurricane Matthew.
SECTION 6A.3.  The North Carolina counties that were declared in any of the following:
(1)	Declared a major disaster by the President of the United States under the Stafford Act (P.L. 93‑288) as a result of Hurricane Matthew.
(2)	Part of the emergency area set forth in Executive Order No. 107 (October 3, 2016).
(3)	Any counties declared in the Type III gubernatorial disaster declaration issued in Executive Order No. 120 (December 9, 2016).
SECTION 6A.4.  Funding. – Of the funds appropriated or transferred to the State Emergency Response and Disaster Relief Fund, the sum of one hundred thirty‑nine million five hundred thousand dollars ($139,500,000) in additional funds shall be used to continue to provide disaster relief to assist the affected areas in recovering from the damage caused by Hurricane Matthew.
SECTION 6A.5.  Disaster Relief. – The Governor shall expend funds appropriated to or otherwise transferred to the State Emergency Response and Disaster Relief Fund to provide for the following programs and activities:
(1)	Housing assistance, which may include, but shall not be limited to, direct housing assistance to homeowners and renters, owner‑occupied housing repairs, renter‑occupied housing repairs, buyout, elevation, or reconstruction of both owner‑occupied and renter‑occupied housing, housing counselors, insurance subsidies, public housing repairs, new development of affordable housing complexes, and related housing recovery efforts.
(2)	Infrastructure assistance, which may include, but shall not be limited to, funding for the repair, renovation, and relocation of facilities, sewer line replacements, collection systems, and drainage systems, to include engineered system mapping and documentation; enhancing and expanding the carrying capacity of culverts, curbs, stormwater drains, school projects, and pipes, and relocating utility poles and underwater sewer lines; and removing debris in open channels and public lands. Infrastructure programs may also include allocations to the Golden L.E.A.F. (Long‑Term Economic Advancement Foundation), Inc., a nonprofit corporation, to provide grants to local governments and to 501(c)(3) nonprofit corporations for assistance and relief from Hurricane Matthew, the western wildfires, and Tropical Storms Julia and Hermine. For purposes of this subdivision, infrastructure includes nonresidential buildings that serve the public, water, sewer, sidewalks, storm drainage, and other similar projects.
(3)	Agricultural recovery assistance, including, but not limited to, assistance to the agriculture, aquaculture, and forestry industries due to losses suffered related to livestock, farm equipment, roads, livestock feed, and others.
(4)	Small business recovery services, which may include, but not limited to, allocations provided to the North Carolina Department of Commerce, for the purpose of providing forgivable loans or related assistance to small businesses and eligible entities in areas affected by Hurricane Matthew, the western wildfires, or Tropical Storms Julia and Hermine. The Department of Commerce is also authorized to budget the residual unobligated balance of two hundred thirty‑five thousand eight hundred sixty‑four dollars ($235,864) originally appropriated from Section 4.1(12) of S.L. 2016‑124 to support the administration and program activities association with this small business assistance program.
(5)	Risk Management, including, but not limited to, acquiring high‑resolution topography ground elevation, channel geometry, and built environment data; acquiring, installing, and monitoring flood warning systems; conducting flood hazard studies; identifying and mapping urban, impervious flooding hazard areas; and modeling, mapping, and real‑time display of inundation zones and impact assessments for dams.
(6)	Management and Oversight, including, but not limited to, engineering design, contracting, surveying, grants management, program management, project management, outreach, and technical assistance to the 50 disaster‑declared counties. The North Caroina Division of Emergency Management is authorized to provide grants‑in‑aid to support the Princeville Redevelopment Authority and the Town of Fair Bluff.
(7)	Required Matching Funds for federal Disaster Assistance Programs.
SECTION 6A.6.  Limitations on Fund Use. – Consistent with the provisions of this act, the Governor shall spend monies appropriated to or otherwise transferred to the State Emergency Response and Disaster Relief Fund to assist entities within the counties referenced in this act. Savings shall be effected where the total amount appropriated is not required to implement this act. Savings in one program area may be used to support additional needs in a different program area as referenced in this act. All such savings or reallocations, if required, shall be reported monthly on the required report by the Office of State Budget and Management.
SECTION 6A.7.  Funds Do Not Revert. – G.S. 143C‑6‑23(f1)(1) shall not apply to funds appropriated in this act.
SECTION 6A.8.(a)  No State funds appropriated in this part may be expended for the construction of any new residence within the 100‑year floodplain unless the construction is in an area regulated by a unit of local government pursuant to a floodplain management ordinance and the construction complies with the ordinance. As used in this section, "100‑year floodplain" means any area subject to inundation by a 100‑year flood, as indicated on the most recent Flood Insurance Rate Map prepared and maintained by the North Carolina Flood Plain Mapping Program under the federal Emergency Management Agency's National Flood Insurance Program.
SECTION 6A.8.(b)  Homeowners in the 100‑year floodplain who receive homeowner's housing assistance pursuant to this part shall have in effect federal flood insurance, if available, as a precondition to receipt of State homeowner's housing assistance for losses resulting from future flooding.
SECTION 6A.9.  The Office of State Budget and Management may establish part‑time and full‑time personnel positions to implement this act. Positions established under this section are time limited and exempt from the State Human Resources Act.
SECTION 6A.10.  It is the intent of the General Assembly that, during this time of rebuilding and relief efforts, each State agency should strive to acquire goods and services from historically underutilized business vendors, whether directly as principal contractors or indirectly as subcontractors or otherwise.
SECTION 6A.11.  The General Assembly finds that the magnitude of the devastation caused by Hurricane Matthew and the urgency of the need for immediate State recovery assistance require expeditious actions by State agencies. Delay could (i) cause serious and unforeseen threats to the public health, safety, or welfare; (ii) result in the loss of federal revenues for the recovery effort; or (iii) increase the likelihood of fraud and abuse in recovery programs. Therefore, every agency, as defined in G.S. 150B‑2, may adopt temporary rules necessary to implement the provisions of this act. Except as provided in this section, temporary rules to implement the provisions of this part shall be adopted as provided in G.S. 150B‑21.1. Notwithstanding the provisions of G.S. 150B‑21.1(a)(2) and 26 NCAC 2C .0102(11), the authority to adopt temporary rules to implement the provisions of this part shall continue in effect until all rules necessary to implement the provisions of this part have become effective as either temporary rules or permanent rules. Notwithstanding the provisions of G.S. 150B‑21.1(d), a temporary rule adopted to implement the provisions of this part shall specify the date on which the rule will expire and shall continue in effect until that date. Any agency that adopts a temporary rule to implement the provisions of this part shall report the text of the rule and the agency's written statement of its findings of the need for the rule to the Joint Legislative Administrative Procedure Oversight Committee within 30 days of the adoption of the temporary rule. This section applies to the adoption of temporary rules by the Department of Administration under G.S. 113A‑11(a) and to the adoption of temporary rules that establish minimum criteria by any State agency, as defined in G.S. 113A‑9, under G.S. 113A‑11(b).
SECTION 6A.12.(a)  Each agency disbursing funds or property under this part from the Disaster Relief Reserve Fund for hurricane relief or assistance, other than payments for goods or services provided by the recipient, shall include with the disbursement a written statement of the State and federal income tax treatment of the funds or property disbursed.
SECTION 6A.12.(b)  G.S. 105‑153.5(b) is amended by adding a new subdivision to read:
"(13)	The amount paid to the taxpayer during the taxable year from the State Emergency Response and Disaster Relief Reserve Fund for hurricane relief or assistance, but not including payments for goods or services provided by the taxpayer."
SECTION 6A.12.(c)  G.S. 105‑130.5(b) is amended by adding a new subdivision to read:
"(29)	To the extent included in federal taxable income, the amount paid to the taxpayer during the taxable year from the State Emergency Response and Disaster Relief Reserve Fund for hurricane relief or assistance, but not including payments for goods or services provided by the taxpayer."
SECTION 6A.12.(d)  This section is effective for taxable years beginning on or after January 1, 2017.

PART VII. PUBLIC SCHOOLS

FUNDS FOR CHILDREN WITH DISABILITIES
SECTION 7.1.  Section 7.1(a) of S.L. 2017‑57 reads as rewritten:
"SECTION 7.1.(a)  The State Board of Education shall allocate additional funds for children with disabilities on the basis of four thousand one hundred twenty‑five dollars and twenty‑seven cents ($4,125.27) per child for fiscal year 2017‑2018 and four thousand four hundred forty‑two dollars and thirty‑four cents ($4,442.34) for fiscal year 2018‑2019. Each local school administrative unit shall receive funds for the lesser of (i) all children who are identified as children with disabilities or (ii) twelve and seventy‑five hundredths percent (12.75%) of its 2017‑2018 allocated average daily membership in the local school administrative unit. The dollar amounts allocated under this section for children with disabilities shall also be adjusted in accordance with legislative salary increments, retirement rate adjustments, and health benefit adjustments for personnel who serve children with disabilities."

FUNDS FOR ACADEMICALLY GIFTED CHILDREN
SECTION 7.2.  Section 7.2(a) of S.L. 2017‑57 reads as rewritten:
"SECTION 7.2.(a)  The State Board of Education shall allocate additional funds for academically or intellectually gifted children on the basis of one thousand three hundred fourteen dollars and fifty‑six cents ($1,314.56) per child for fiscal year 2017‑2018 and one thousand three hundred thirty‑nine dollars and fourteen cents ($1,339.14) for fiscal year 2018‑2019. A local school administrative unit shall receive funds for a maximum of four percent (4%) of its 2017‑2018 allocated average daily membership, regardless of the number of children identified as academically or intellectually gifted in the unit. The dollar amounts allocated under this section for academically or intellectually gifted children shall also be adjusted in accordance with legislative salary increments, retirement rate adjustments, and health benefit adjustments for personnel who serve academically or intellectually gifted children."

REORGANIZATION OF THE DEPARTMENT OF PUBLIC INSTRUCTION
SECTION 7.3.(a)  Notwithstanding G.S. 143C‑6‑4, the State Board of Education and the Department of Public Instruction may, in consultation with the Office of State Budget and Management, reorganize the Department, if necessary, to implement the budget reductions for the 2017‑2019 biennium, improve efficiency, and better align fund structure to reflect current programs. Consultation shall occur prior to requesting budgetary and personnel changes through the budget revision process. The State Board of Education and Department of Public Instruction shall provide (i) a current organization chart and the proposed organization chart clearly identifying the changes for the Department and (ii) the current and proposed organization of Purposes and Programs as defined in G.S. 143C‑1‑1 in the consultation process.
SECTION 7.3.(b)  The State Board of Education and Department of Public Instruction shall report to the Joint Legislative Education Oversight Committee, the House Appropriations Committee on Education, the Senate Appropriations Committee on Education/Higher Education, and the Fiscal Research Division on any reorganization, including any movement of positions and funds between fund codes on a recurring basis.

COOPERATIVE INNOVATIVE HIGH SCHOOL FUNDING CHANGES
SECTION 7.4.  Section 7.22 of S.L. 2017‑57 reads as rewritten:
"SECTION 7.22.(a)  Legislative Findings. – The General Assembly finds the following in regard to the State's long‑term, ongoing investment in providing high school students with opportunities to obtain postsecondary credit and career credentials at no cost to the student in order to maximize cost savings to students in obtaining a postsecondary education:
…
"SECTION 7.22.(c)  Cooperative Innovative High Schools Located in Tier I Areas. – Of the funds appropriated to the Department of Public Instruction by this act for the 2017‑2019 fiscal biennium, the Department shall allocate the sum of two hundred seventy‑five thousand dollars ($275,000) for fiscal year 2017‑2018 and two hundred ninety‑five thousand dollars ($295,000) for fiscal year 2018‑2019 in recurring funds from the cooperative innovative high school supplemental allotment to a local school administrative unit located, as of July 1, 2017, in a development tier one area as defined in G.S. 143B‑437.08, with a cooperative innovative high school that was approved by the State Board of Education under G.S. 115C‑238.51A(c), except as follows:
(1)	For a virtual cooperative innovative high school, the Department shall allocate the sum of two hundred thousand dollars ($200,000) in recurring funds from the cooperative innovative high school supplemental allotment to the local school administrative unit for each fiscal year.
(2)	For the Northeast Regional School of Biotechnology and Agriscience, the Department shall allocate the sum of three hundred ten thousand dollars ($310,000) in recurring funds from the regional school supplemental allotment for the school for each fiscal year.
"SECTION 7.22.(d)  Cooperative Innovative High Schools Located in Tier II Areas. – Of the funds appropriated to the Department of Public Instruction by this act for the 2017‑2019 fiscal biennium, the Department shall allocate the sum of two hundred thousand dollars ($200,000) for fiscal year 2017‑2018 and two hundred twenty thousand dollars ($220,000) for fiscal year 2018‑2019 in recurring funds from the cooperative innovative high school supplemental allotment to a local school administrative unit located, as of July 1, 2017, in a development tier two area as defined in G.S. 143B‑437.08, with a cooperative innovative high school that was approved by the State Board of Education pursuant to G.S. 115C‑238.51A(c), including a virtual cooperative innovative high school.
"SECTION 7.22.(e)  Cooperative Innovative High Schools Located in Tier III Areas. – Of the funds appropriated to the Department of Public Instruction by this act for the 2017‑2019 fiscal biennium, the Department shall allocate the sum of one hundred eighty thousand dollars ($180,000) in recurring funds and twenty thousand dollars ($20,000) in nonrecurring funds for fiscal year 2017‑2018, and the sum of two hundred thousand dollars ($200,000) in recurring funds for fiscal year 2018‑2019 from the cooperative innovative high school supplemental allotment to a local school administrative unit located, as of July 1, 2017, in a development tier three area as defined in G.S. 143B‑437.08, with a cooperative innovative high school that was approved by the State Board of Education pursuant to G.S. 115C‑238.51A(c).

…."

RESIDENTIAL SCHOOLS
SECTION 7.5.  From the funds appropriated in this act to the Department of Public Instruction, the State Board of Education shall allocate up to two million dollars ($2,000,000) to the North Carolina School for the Deaf, Eastern North Carolina School for the Deaf, and Governor Morehead School. Funds may be used for hard‑to‑staff positions, equipment, maintenance and repairs, utilities, and position reclassification. The distribution of funds and positions to the three residential schools shall be determined by the State Board of Education.

TROOPS TO TEACHERS
SECTION 7.6.  From the funds appropriated to the Department of Public Instruction, the Department is authorized to use up to two hundred thousand dollars ($200,000) in support of the Troops to Teachers program if federal funds are not available to support the program.

TEACHER PROFESSIONAL DEVELOPMENT ALLOTMENT
SECTION 7.7.  Of the funds appropriated in this act to the Department of Public Instruction, five million dollars ($5,000,000) shall fund the new Teacher Professional Development Allotment. Funds shall be used by local administrative units and charter schools for teacher professional development. Funds shall be allotted to local administrative units based on average daily membership. The Department shall determine an appropriate minimum allotment.

INSTRUCTIONAL SUPPORT PERSONNEL – CERTIFIED ALLOTMENT
SECTION 7.8.  Of the funds appropriated in this act to the Department of Public Instruction, forty million dollars ($40,000,000) shall be used to increase funding for the Instructional Support Personnel – Certified Allotment. These funds shall be used by local administrative units and charter schools for certified school‑based instructional support personnel, including nurses, counselors, school psychologists, and social workers. The State Board of Education shall ensure at least one new full‑time equivalent position is allotted to each local administrative unit. The remaining additional positions shall be allotted based on average daily membership.

EXPANDING OPPORTUNITIES FOR HIGH ACHIEVING STUDENTS GRANT PROGRAM
SECTION 7.9.(a)  Purpose. – The State Board of Education shall establish a grant program to expand opportunities for the identification of high‑achieving students from under‑represented populations, such as low‑income students, minority students, and English language learners, to be placed in Academically and Intellectually Gifted (AIG) classes and other opportunities for academically advanced students. Grants may include, but are not limited to, carrying out the following:
(1)	Screening of all students in schools or school districts for AIG and/or other advanced academic placement.
(2)	Enhanced instruction and experiential learning opportunities.
(3)	Teacher professional development focused on instruction to high‑achieving students from under‑represented populations.
(4)	Implementation of programs that increase access to post‑secondary education.
(5)	Expanding access to AIG and advanced classes such as eighth grade Math I and Advanced Placement courses.
SECTION 7.9.(b)  Request for Proposal. – By September 1, 2018, the State Board of Education shall issue a Request for Proposal (RFP) for the grant program. Local boards of education shall submit their proposals by November 1, 2018. The RFP shall require that proposals include the following information at a minimum:
(1)	Description of the proposal, including the number of additional students from under‑represented populations served.
(2)	Evidence‑based research that supports the proposal.
(3)	Implementation plan.
(4)	Plans for financial sustainability once grant money is no longer available.
SECTION 7.9.(c)  Grant Awards. – By December 15, 2018, the State Board of Education shall review the proposals submitted by local boards of education and shall select up to 10 local school administrative units for grant awards. The State Board of Education may make grant awards for up to three years. A local school administrative unit may not receive more than five hundred thousand dollars ($500,000) in a single fiscal year from this grant program.
SECTION 7.9.(d)  Evaluation and Reporting. – Of the funds appropriated by this act, the State Board of Education may use up to three hundred thousand dollars ($300,000) to contract with an independent research organization to evaluate the impact of this grant program. The independent research organization shall report the results of this evaluation to the Joint Legislative Education Oversight Committee, the Fiscal Research Division of the General Assembly, and the Office of State Budget and Management by September 1, 2021. The Department of Public Instruction shall report annually on the implementation of this grant program beginning on March 1, 2019.
SECTION 7.9.(e)  Carryforward. – Funds unspent in the 2018‑2019 fiscal year shall not revert and shall be carried forward to implement this section.

SCHOOL RESOURCE OFFICERS
SECTION 7.10.(a)  The State Board of Education shall direct the Center for School Safety to conduct an annual census of School Resource Officers located in each local education agency (LEA) across the State. The Center shall submit a report analyzing and summarizing this data to the Joint Legislative Education Oversight Committee and the State Board of Education by March 1 of each year. The report shall include at least all of the following information collected from each LEA:
(1)	The total number of school resource officers.
(2)	Demographic information, including gender, age, race/ethnicity, education level, years as a sworn law enforcement officer, and years as a school resource office.
(3)	School resource officer‑specific training and advanced or additional training completed.
(4)	The school or schools to which the school resource officers are assigned.
(5)	The funding source for each school resource officer.
(6)	The school type, including elementary, middle, and high school, early college, special education school, traditional, charter school, and lab school.
(7)	Whether the resource officer is shared across more than one school.
(8)	The law enforcement affiliation of each school resource officer.
(9)	The type of compliance weapon, if any, carried by each school resource officer.
SECTION 7.10.(b)  Of the funds appropriated in this act to the Department of Public Instruction, seven million dollars ($7,000,000) shall be used to increase funding to the At‑Risk Student Services allotment. The sum allotted for School Safety Officers out of this allotment is increased to fifty thousand dollars ($50,000) for each high school in an LEA that receives a principal allotment. These funds shall be used by local administrative units and charter schools to supplement and not to supplant State, local, and federal funds for school resource officers.
SECTION 7.10.(c)  Section 8.36 of S.L. 2013‑360 reads as rewritten:
"SECTION 8.36. Grants to local school administrative units, regional schools, and charter schools for school resource officers in elementary and middle schools shall be matched on the basis of four dollars ($4.00) in State funds for every one dollar ($1.00) in local funds for local school administrative units, regional schools, and charter schools located as of July 1 in a development tier one area as defined in G.S. 143B‑437.08; the basis of three dollars ($3.00) in State funds for every one dollar ($1.00) in local funds for local school administrative units, regional schools, and charter schools located as of July 1 in a development tier two area as defined in G.S. 143B‑437.08; and the basis of two dollars ($2.00) in State funds for every one dollar ($1.00) in local funds for local school administrative units, regional schools, and charter schools located as of July 1 in a development tier three area as defined in G.S. 143B‑437.08. Funds shall be used to supplement and not to supplant State, local, and federal funds for school resource officers.
The State Board of Education shall include need‑based considerations in its criteria for awarding these grants to local school administrative units, regional schools, and charter schools.
Local school administrative units, regional schools, and charter schools may use these funds to employ school resource officers in elementary and middle schools, to train them, or both. Any such training shall include instruction on research into the social and cognitive development of elementary school and middle school children."

INSTRUCTIONAL SUPPLIES STIPEND
SECTION 7.11.(a)  Effective July 1, 2018, any person paid on the State Teacher Salary Schedule and considered a classroom teacher shall receive, at the beginning of each academic school year, an annual salary stipend of one hundred fifty dollars ($150.00) to purchase classroom supplies. The stipend shall be paid to teachers qualifying under this section who begin employment part‑way through the academic year.
SECTION 7.11.(b)  Notwithstanding G.S. 135‑1(7a), the stipends paid under this section are not compensation under Article 1 of Chapter 135 of the General Statutes, the Teachers' and State Employees' Retirement System.
SECTION 7.11.(c)  Of the funds appropriated to the Department of Public Instruction for the purpose of carrying out this section, the Department shall transfer the amount required to pay the instructional supplies stipend to classroom teachers at schools operated by the Department of Health and Human Services, the Department of Public Safety, the State Board of Education, and the School of Science and Mathematics of The University of North Carolina.

PART VIII. COMPENSATION OF PUBLIC SCHOOL EMPLOYEES

TEACHER SALARY SCHEDULE
SECTION 8.1.(a)  The following monthly teacher salary schedule shall apply for the 2018‑2019 fiscal year to licensed personnel of the public schools who are classified as teachers. The salary schedule is based on years of teaching experience.
2018‑2019 Teacher Monthly Salary Schedule
Years of Experience	"A" Teachers
0	$3,550
1	$3,675
2	$3,780
3	$3,855
4	$3,930
5	$4,000
6	$4,100
7	$4,200
8	$4,300
9	$4,400
10	$4,500
11	$4,600
12	$4,700
13	$4,800
14	$4,900
15	$5,000
16	$5,025
17	$5,050
18	$5,075
19	$5,100
20	$5,125
21	$5,150
22	$5,175
23	$5,200
24	$5,250
25	$5,300
26	$5,390
27	$5,415
28	$5,440
29	$5,465
30+	$5,490
SECTION 8.1.(b)  Salary Supplements for Teachers Paid on This Salary Schedule.
(1)	Licensed teachers who have NBPTS certification shall receive a salary supplement each month of twelve percent (12%) of their monthly salary on the "A" salary schedule.
(2)	Licensed teachers who are classified as "M" teachers shall receive a salary supplement each month of ten percent (10%) of their monthly salary on the "A" salary schedule.
(3)	Licensed teachers with licensure based on academic preparation at the six‑year degree level shall receive a salary supplement of one hundred twenty‑six dollars ($126.00) per month in addition to the supplement provided to them as "M" teachers.
(4)	Licensed teachers with licensure based on academic preparation at the doctoral degree level shall receive a salary supplement of two hundred fifty‑three dollars ($253.00) per month in addition to the supplement provided to them as "M" teachers.
(5)	Certified school nurses shall receive a salary supplement each month of ten percent (10%) of their monthly salary on the "A" salary schedule.
SECTION 8.1.(c)  The first step of the salary schedule for (i) school psychologists, (ii) school speech pathologists who are licensed as speech pathologists at the master's degree level or higher, and (iii) school audiologists who are licensed as audiologists at the master's degree level or higher shall be equivalent to the sixth step of the "A" salary schedule. These employees shall receive a salary supplement each month of ten percent (10%) of their monthly salary and are eligible to receive salary supplements equivalent to those of teachers for academic preparation at the six‑year degree level or the doctoral degree level.
SECTION 8.1.(d)  The twenty‑sixth step of the salary schedule for (i) school psychologists, (ii) school speech pathologists who are licensed as speech pathologists at the master's degree level or higher, and (iii) school audiologists who are licensed as audiologists at the master's degree level or higher shall be one and three‑quarters percent (1.75%) higher than the salary received by these same employees on the twenty‑fifth step of the salary schedule. The twenty‑seventh step of the salary schedule for these employees shall be five percent (5%) higher than the salary received by these same employees on the twenty‑sixth step of the salary schedule. Each subsequent step on the salary schedule shall be fifty dollars ($50.00) per month higher than the salary of the prior step.
SECTION 8.1.(e)  Beginning with the 2014‑2015 fiscal year, in lieu of providing annual longevity payments to teachers paid on the teacher salary schedule, the amounts of those longevity payments are included in the monthly amounts under the teacher salary schedule.
SECTION 8.1.(f)  A teacher compensated in accordance with this salary schedule for the 2018‑2019 school year shall receive an amount equal to the greater of the following:
(1)	The applicable amount on the salary schedule for the applicable school year.
(2)	For teachers who were eligible for longevity for the 2013‑2014 school year, the sum of the following:
a.	The salary the teacher received in the 2013‑2014 school year pursuant to Section 35.11 of S.L. 2013‑360.
b.	The longevity that the teacher would have received under the longevity system in effect for the 2013‑2014 school year provided in Section 35.11 of S.L. 2013‑360 based on the teacher's current years of service.
c.	The annual bonus provided in Section 9.1(e) of S.L. 2014‑100.
(3)	For teachers who were not eligible for longevity for the 2013‑2014 school year, the sum of the salary and annual bonus the teacher received in the 2014‑2015 school year pursuant to Section 9.1 of S.L. 2014‑100.
SECTION 8.1.(g)  As used in this section, the term "teacher" shall also include instructional support personnel.
SECTION 8.1.(h)  Section 8.1 of S.L. 2017‑57 is repealed.

PRINCIPAL SALARY SCHEDULE
SECTION 8.2.(a)  The following annual principal salary schedule is composed of two elements, the base schedule and the complementary schedule, and shall apply for the 2018‑2019 fiscal year, beginning July 1, 2018. The first step of the base schedule is calculated using an annual rate of pay equivalent to 12 months of the monthly rate of pay for teachers on the tenth step of the "A" salary schedule, plus twenty‑four percent (24%).
2018‑2019 Principal Annual Salary Schedule
Base Schedule
Years of Experience	Annual Salary
0	$66,960
1	$68,299
2	$69,665
3	$71,058
4	$72,124
5	$73,206
6	$74,304
7	$75,233
8	$76,173
9	$77,125
10	$77,896
11	$78,675
12	$79,462
13	$80,058
14	$80,658
15	$81,263
16	$81,669
17	$82,077
18	$82,487
19	$82,899
20+	$83,313

Complementary Schedule
Avg. Daily Membership	Annual Supplement
0‑400	$0
401‑700	$1,500
701‑1,000	$3,000
1,001‑1,300	$4,500
1,300+	$6,000

SECTION 8.2.(b)  A principal's placement on the base salary schedule shall be determined by the principal's total number of years of experience as a principal and shall not include years spent as a teacher or assistant principal. A principal's placement on the complementary schedule shall be determined according to the prior year's average daily membership (ADM) of the school supervised by the principal. A principal shall be paid at the highest amount for which the principal qualifies.
SECTION 8.2.(c)  Principals with certification based on academic preparation at the six‑year degree level shall be paid a salary supplement of one hundred twenty‑six dollars ($126.00) per month, and those at the doctoral degree level shall be paid a salary supplement of two hundred fifty‑three dollars ($253.00) per month.
SECTION 8.2.(d)  Beginning with the 2017‑2018 fiscal year, in lieu of providing annual longevity payments to principals paid on the principal salary schedule, the amounts of those longevity payments are included in the annual amounts under the principal salary schedule.
SECTION 8.2.(e)  A principal compensated in accordance with this section for the 2018‑2019 fiscal year shall receive an amount equal to the greater of the following:
(1)	The applicable amount determined pursuant to subsections (a) and (b) of this section.
(2)	For the 2018‑2019 fiscal year only, the salary the principal received in the 2017‑2018 fiscal year pursuant to Section 8.2 of S.L. 2017‑57.
(3)	For principals who were eligible for longevity in the 2016‑2017 fiscal year, the sum of the following:
a.	The salary the principal received in the 2016‑2017 fiscal year pursuant to Section 9.2 of S.L. 2016‑94.
b.	The longevity that the principal would have received as provided for State employees under the North Carolina Human Resources Act for the 2016‑2017 fiscal year based on the principal's current years of service.
(4)	For principals who were not eligible for longevity in the 2016‑2017 school year, the salary the principal received in the 2016‑2017 fiscal year pursuant to Section 9.2 of S.L. 2016‑94.
SECTION 8.2.(f)  Section 8.3 of S.L. 2017‑57 is repealed.

PRINCIPAL BONUSES EFFECTIVE JULY 1, 2019
SECTION 8.3.(a)  Section 8.4 of S.L. 2017‑57 is repealed effective June 30, 2018.
SECTION 8.3.(b)  The State Board of Education, in consultation with local superintendents, the Office of State Budget and Management, and stakeholder groups, shall develop a Principal Bonus Program (program) to reward high‑performing principals and attract principals to hard‑to‑staff schools. The State Board of Education may develop one or more bonuses as components of this program. The Department of Public Instruction shall administer the program in accordance with policies developed by the State Board of Education.
SECTION 8.3.(c)  Of the funds appropriated for compensation increases in S.L. 2017‑57, up to seven million dollars ($7,000,000) shall be used to fund the Principal Bonus Program.
SECTION 8.3.(d)  In developing the program, the State Board of Education shall:
(1)	Use Education Value‑Added Assessment System (EVAAS) growth scores in the development of at least one bonus within the program.
(2)	Develop a bonus that encourages high‑performing principals to move to low‑performing schools.
(3)	Consider the differing needs and strategic goals of local school administrative units.
(4)	Create an allocation formula for the funds appropriated for the Principal Bonus Program to local school administrative units.
(5)	Define eligibility criteria that principals must meet to be eligible for the program.
SECTION 8.3.(e)  Principals no longer employed as a principal due to resignation, dismissal, reduction in force, death, or retirement, or whose last workday is prior to the start of the fiscal year in which the bonus will be granted, shall not be eligible for any bonuses developed under this section. Principals employed in charter schools, regional schools, and University of North Carolina laboratory schools shall not be eligible for any bonuses developed under this section.
SECTION 8.3.(f)  It is the intent of the General Assembly that funds provided to local school administrative units pursuant to this section will supplement principal compensation and not supplant local funds.
SECTION 8.3.(g)  The State Board of Education shall report on the planned policies and procedures of the Principal Bonus Program to the Joint Legislative Education Oversight Committee and the Fiscal Research Division no later than April 15, 2019.
SECTION 8.3.(h)  The Friday Institute for Educational Innovation at North Carolina State University (Friday Institute) shall study the effect of the bonuses awarded pursuant to this section on principal performance and retention. In developing the evaluation, the Friday Institute shall, to the extent possible, do the following:
(1)	Consider factors such as school size, location, and grade span.
(2)	Consider principal specific factors such as years of experience as a principal, total years of experience in a certified position, and credentials.
(3)	Compare results to similar states without a bonus, with historical North Carolina data prior to any principal bonuses, and to North Carolina data from period with different principal bonus structures.
(4)	Determine the extent to which results can be attributed to bonuses as opposed to other variables.
The Friday Institute shall report the results of its findings and the distribution of statewide bonuses to the Joint Legislative Education Oversight Committee, the Fiscal Research Division, and the Office of State Budget and Management by September 1, 2022.

ASSISTANT PRINCIPAL SALARIES
SECTION 8.4.(a)  For the 2018‑2019 fiscal year, commencing July 1, 2018, assistant principals shall receive a monthly salary based on the salary schedule for teachers who are classified as "A" teachers plus nineteen percent (19%). Years of experience for an assistant principal on the salary schedule shall be measured by the total number of years the assistant principal has spent as a teacher, an assistant principal, or both. For purposes of this section, an administrator with a one‑year provisional assistant principal's certificate shall be considered equivalent to an assistant principal.
SECTION 8.4.(b)  Assistant principals with certification based on academic preparation at the six‑year degree level shall be paid a salary supplement of one hundred twenty‑six dollars ($126.00) per month and at the doctoral degree level shall be paid a salary supplement of two hundred fifty‑three dollars ($253.00) per month.
SECTION 8.4.(c)  Participants in an approved full‑time master's in‑school administration program shall receive up to a 10‑month stipend at the beginning salary of an assistant principal during the internship period of the master's program. The stipend shall not exceed the difference between the beginning salary of an assistant principal plus the cost of tuition, fees, and books and any fellowship funds received by the intern as a full‑time student, including awards of the Principal Fellows Program. The Principal Fellows Program or the school of education where the intern participates in a full‑time master's in‑school administration program shall supply the Department of Public Instruction with certification of eligible full‑time interns.
SECTION 8.4.(d)  Beginning with the 2017‑2018 fiscal year, in lieu of providing annual longevity payments to assistant principals on the assistant principal salary schedule, the amounts of those longevity payments are included in the monthly amounts provided to assistant principals pursuant subsection (a) of this section.
SECTION 8.4.(e)  An assistant principal compensated in accordance with this section for the 2018‑2019 fiscal year shall receive an amount equal to the greater of the following:
(1)	The applicable amount determined pursuant to subsections (a) through (c) of this section.
(2)	For assistant principals who were eligible for longevity in the 2016‑2017 fiscal year, the sum of the following:
a.	The salary the assistant principal received in the 2016‑2017 fiscal year pursuant to Section 9.2 of S.L. 2016‑94.
b.	The longevity that the assistant principal would have received as provided for State employees under the North Carolina Human Resources Act for the 2016‑2017 fiscal year based on the assistant principal's current years of service.
(3)	For assistant principals who were not eligible for longevity in the 2016‑2017 fiscal year, the salary the assistant principal received in the 2016‑2017 fiscal year pursuant to Section 9.2 of S.L. 2016‑94.
SECTION 8.4.(f)  Section 8.5 of S.L. 2017‑57 is repealed.

CENTRAL OFFICE SALARIES
SECTION 8.5.(a)  The monthly salary ranges that follow apply to assistant superintendents, associate superintendents, directors/coordinators, supervisors, and finance officers for the 2018‑2019 fiscal year, beginning July 1, 2018:
	2018‑2019 Fiscal Year
	Minimum		Maximum
School Administrator I	$3,629	to	$6,631
School Administrator II	$3,833	to	$7,026
School Administrator III	$4,055	to	$7,446
School Administrator IV	$4,205	to	$7,737
School Administrator V	$4,369	to	$8,045
School Administrator VI	$4,621	to	$8,523
School Administrator VII	$4,797	to	$8,862.
The local board of education shall determine the appropriate category and placement for each assistant superintendent, associate superintendent, director/coordinator, supervisor, or finance officer within the salary ranges and within funds appropriated by the General Assembly for central office administrators and superintendents. The category in which an employee is placed shall be included in the contract of any employee.
SECTION 8.5.(b)  The monthly salary ranges that follow apply to public school superintendents for the 2018‑2019 fiscal year, beginning July 1, 2018:
	2018‑2019 Fiscal Year
	Minimum		Maximum
Superintendent I	$5,078	to	$9,393
Superintendent II	$5,378	to	$9,953
Superintendent III	$5,698	to	$10,551
Superintendent IV	$6,039	to	$11,184
Superintendent V	$6,403	to	$11,859.
The local board of education shall determine the appropriate category and placement for the superintendent based on the average daily membership of the local school administrative unit and within funds appropriated by the General Assembly for central office administrators and superintendents.
SECTION 8.5.(c)  Longevity pay for superintendents, assistant superintendents, associate superintendents, directors/coordinators, supervisors, and finance officers shall be as provided for State employees under the North Carolina Human Resources Act.
SECTION 8.5.(d)  Superintendents, assistant superintendents, associate superintendents, directors/coordinators, supervisors, and finance officers with certification based on academic preparation at the six‑year degree level shall receive a salary supplement of one hundred twenty‑six dollars ($126.00) per month in addition to the compensation provided pursuant to this section. Superintendents, assistant superintendents, associate superintendents, directors/coordinators, supervisors, and finance officers with certification based on academic preparation at the doctoral degree level shall receive a salary supplement of two hundred fifty‑three dollars ($253.00) per month in addition to the compensation provided for under this section.
SECTION 8.5.(e)  The State Board of Education shall not permit local school administrative units to transfer State funds from other funding categories for salaries for public school central office administrators.
SECTION 8.5.(f)  Section 8.6 of S.L. 2017‑57 is repealed.

NONCERTIFIED PERSONNEL SALARIES
SECTION 8.6.(a)  For the 2018‑2019 fiscal year, the annual salary for noncertified public school employees whose salaries are supported from State funds shall be increased as follows:
(1)	For permanent, full‑time employees on a 12‑month contract, by the greater of one thousand two hundred fifty dollars ($1,250) or two percent (2%).
(2)	For the following employees, by a prorated and equitable amount based on the amount specified in subdivision (1) of this subsection:
a.	Permanent, full‑time employees on a contract for fewer than 12 months.
b.	Permanent, part‑time employees.
c.	Temporary and permanent, hourly employees.
SECTION 8.6.(b)  Section 8.7 of S.L. 2017‑57 is repealed.

STUDENT SUPPORT SERVICES PERSONNEL COMPENSATION AND EMPLOYMENT STUDY
SECTION 8.7.  The State Board of Education shall study and make recommendations on the allotment and compensation of school‑based personnel for student support services, including school social workers, counselors, nurses, and psychologists. No later than January 15, 2019, the Department shall submit to the Joint Legislative Education Oversight Committee, the Fiscal Research Division, and the Office of State Budget and Management a report containing, at a minimum, the following information:
(1)	A detailed explanation of how student support services personnel are compensated and employed in public schools, including a review of salary schedules, funding sources, and allotment categories used to support these personnel.
(2)	A review of local supplements for these personnel.
(3)	An analysis of optimal staffing per student ratio based on a team approach to providing a continuum of school mental health services and the impact of that ratio on allotment ratios.
(4)	The challenges of recruiting and retaining student support services personnel faced by local school administrative units.
(5)	Recommendations to improve student access to a continuum of school mental health services.

UPDATE DEFINITION OF DEMOTION
SECTION 8.8.  G.S. 115C‑325.4 reads as rewritten:
"§ 115C‑325.4.  Dismissal or demotion for cause.
(a)	Grounds. – No teacher shall be dismissed, demoted, or reduced to employment on a part‑time basis for disciplinary reasons during the term of the contract except for one or more of the following:
(1)	Inadequate performance. In determining whether the professional performance of a teacher is adequate, consideration shall be given to regular and special evaluation reports prepared in accordance with the published policy of the employing local school administrative unit and to any published standards of performance which shall have been adopted by the board. Inadequate performance for a teacher shall mean (i) the failure to perform at a proficient level on any standard of the evaluation instrument or (ii) otherwise performing in a manner that is below standard.
…
(15)	A justifiable decrease in average daily membership or the number of positions due to district reorganization, decreased enrollment, or decreased funding.
…."

TECHNICAL CHANGES TO CERTAIN BONUS PROVISIONS
SECTION 8.9.(a)  Section 8.8(a) of S.L. 2016‑94, as amended by Section 8.8B(a) of S.L. 2017‑57, reads as rewritten:
"SECTION 8.8.(a)  The State Board of Education shall establish the Advanced Placement/International Baccalaureate/Cambridge AICE Program (program) to reward advanced course teacher performance and to encourage student learning and improvement. To attain this goal, the Department of Public Instruction shall administer bonus pay to teachers of advanced courses in public schools, including charter schools, beginning with data from the 2015‑2016 school year, in accordance with the following:
…
(3)	Bonuses awarded pursuant to this subsection are payable in January, based on data from the previous school year, to qualifying teachers who remain employed teaching in the same local school administrative unit at least from the school year the data is collected until the date that the bonus is paid."
SECTION 8.9.(b)  Section 8.9(a) of S.L. 2016‑94, as amended by Section 8.8B(b) of S.L. 2017‑57, reads as rewritten:
"SECTION 8.9.(a)  The State Board of Education, in collaboration with the Department of Commerce, shall establish the Industry Certifications and Credentials Teacher Bonus Program (program) to reward the performance of teachers in public schools, including charter schools, who teach students earning approved industry certifications or credentials consistent with G.S. 115C‑156.2 and to encourage student learning and improvement. To attain this goal, the Department of Public Instruction shall administer bonus pay to teachers in public schools, including charter schools, who teach students earning approved industry certifications or credentials, beginning with data from the 2015‑2016 school year, in accordance with the following:
...
(4)	Bonuses awarded pursuant to this subsection are payable in January to qualifying teachers who remain employed teaching in the same local school administrative unit at least from the school year the data is collected until the date that the bonus is paid."
SECTION 8.9.(c)  Section 8.8C(a) of S.L. 2017‑57 reads as rewritten:
"SECTION 8.8C.(a)  It is the intent of the State to reward teacher performance and encourage student learning and improvement. To attain this goal, the Department of Public Instruction shall administer the Third Grade Read to Achieve Teacher Bonus Program (program) for the 2018‑2019 fiscal year to qualifying teachers who have an Education Value‑Added Assessment System (EVAAS) student growth index score for third grade reading from the previous school year, as follows:
(1)	For purposes of this section, the following definitions shall apply:
…
b.	Qualifying Teacher. – An eligible teacher who remains teaching in the same local school administrative unit at least from the school year the data for the EVAAS student growth index score for third grade reading is collected until the date a bonus provided under this subsection is paid.
…."

PART IX. COMMUNITY COLLEGES

EXTEND TIME LINE FOR REORGANIZATION OF THE COMMUNITY COLLEGES SYSTEM OFFICE
SECTION 9.1.  Section 9.1 of S.L. 2017‑57 reads as rewritten:
"SECTION 9.1.(a)  Notwithstanding any other provision of law and consistent with the authority established in G.S. 115D‑3, the President of the North Carolina Community College System may reorganize the System Office in accordance with recommendations and plans submitted to and approved by the State Board of Community Colleges.
"SECTION 9.1.(b)  By May 1, 2019, the President of the North Carolina Community Colleges shall report any reorganization, including any movement of positions and funds between fund codes on a recurring basis, to the Joint Legislative Education Oversight Committee, the House Appropriations Committee on Education, the Senate Appropriations Committee on Education/Higher Education, and the Fiscal Research Division.
"SECTION 9.1.(c)  Subsection (a) of this section expires June 30, 2019."

NC JOB READY (WORKFORCE) – NC GETTING READY FOR OPPORTUNITIES IN THE WORKFORCE (NC GROW) SCHOLARSHIPS
SECTION 9.2.(a)  There is established the North Carolina Getting Ready for Opportunities in the Workforce (NC GROW) Scholarship Program to be administered by the North Carolina State Education Assistance Authority (SEAA) in collaboration with the State Board of Community Colleges. The Program is funded by allocations from the NC Job Ready Fund as directed in G.S. 93‑6.3.
SECTION 9.2.(b)  The State Board of Community Colleges, in collaboration with the Department of Commerce, shall determine the eligible programs of study for the NC GROW Scholarships. The eligible programs of study shall include programs in Architecture and Construction, Health Sciences, Information Technology, and Manufacturing, and may include other programs to meet local workforce needs.
SECTION 9.2.(c)  The North Carolina Community College System shall contract with SEAA to administer awards under the NC GROW Scholarship Program. SEAA is authorized to administer this program consistent with the manner in which it administers grants to community college students qualifying for the Scholarships for Needy Students under Article 35A of Chapter 115C of the General Statutes and the Need‑Based Assistance Program under G.S. 115D‑40.1, so that no qualifying North Carolina student incurs costs of tuition and selected fees to attend a community college. Of the funds appropriated in fiscal year 2018‑2019, up to five hundred thousand dollars ($500,000) may be used for program administration and outreach. These efforts shall be used to encourage students to pursue coursework in the selected programs of study.
SECTION 9.2.(d)  The State Board of Community Colleges shall establish criteria for initial and continuing eligibility to participate in the NC GROW Scholarship Program. At a minimum, the criteria shall require an eligible student to:
(1)	Be a legal resident of North Carolina for tuition purposes.
(2)	Be enrolled in an eligible program of study in areas of high, in‑demand training.
(3)	Have unmet financial need for tuition and selected fees remaining after exhausting eligibility for federal and other State‑funded financial aid.
(4)	Maintain a 2.0 or higher grade‑point average to remain eligible for this assistance in future years.
(5)	Maintain satisfactory academic progress, as determined by the community college.
SECTION 9.2.(e)  The North Carolina Community College System and SEAA shall report annually on:
(1)	The number of students receiving awards.
(2)	The average award per recipient.
(3)	The enrollment (by headcount and FTE) in each selected program of study.
(4)	The number of graduates produced in each selected program of study.
(5)	The graduation rate of students receiving a scholarship grant under this program.
SECTION 9.2.(f)  Forward Funding. – Funds appropriated for the NC GROW Scholarship Program in the current fiscal year shall not revert and shall be used to make scholarship awards in the following fiscal year.

NC JOB READY (WORKFORCE) – NC GROW SCHOLARSHIPS FOR INDUSTRY CREDENTIALS
SECTION 9.3.(a)  From funds appropriated in this act for the NC GROW scholarship program for students pursuing industry credentials, the State Board of Community Colleges shall determine the allocation of awards to students pursuing short‑term, noncredit State and industry workforce credentials. The State Board of Community Colleges, in collaboration with the Department of Commerce, shall determine the eligible programs of study for this financial assistance. The eligible programs of study shall include programs in Architecture and Construction, Health Sciences, Information Technology, and Manufacturing, and may include other programs to meet local workforce needs. These funds shall be used to assist students with any education‑related costs incurred while in pursuit of these credentials.
SECTION 9.3.(b)  From funds appropriated for the NC GROW scholarship program's financial assistance to students pursuing industry credentials, up to two hundred thousand ($200,000) dollars may be used to market the financial assistance to prospective recipients.

CLARIFY CAREER‑ AND COLLEGE‑READY GRADUATE PROGRAM
SECTION 9.4.  Section 10.13 of S.L. 2015‑241, as amended by Section 10.5 of S.L. 2016‑94, reads as rewritten:
"SECTION 10.13.(a)  The State Board of Community Colleges, in consultation with the State Board of Education, shall develop a program for implementation beginning with model programs in the 2016‑2017 school year that introduces the college developmental mathematics and developmental reading and English curriculums in the high school senior year and provides opportunities for college remediation for students prior to high school graduation through cooperation with community college partners. Professional development for high school faculty shall begin with the 2018‑2019 school year. The program shall be phased in by cohorts developed by the NC Department of Public Instruction beginning with the 2019‑2020 school year. The program shall be fully implemented in all high schools statewide beginning with the 2020‑2021 school year. Students who are enrolled in the Occupational Course of Study to receive their high school diplomas shall not be required to participate in the program or be required to take mandatory remedial courses as provided for in this section, unless a parent specifically requests through the individualized education program (IEP) process that the student participates. The program shall require the following:
(1)	Establishment by the State Board of Community Colleges of measures for determining student readiness and preparation for college coursework by using ACT scores, student grade point averages, or other measures currently used by the State Board of Community Colleges to determine college readiness for entering students.
(2)	Changes in curriculum, policy, and rules as needed by the State Board of Community Colleges and State Board of Education to make remedial courses mandatory for students who do not meet readiness indicators by their junior year to ensure college readiness prior to high school graduation. These changes shall include the flexibility for students to fulfill senior mathematics and English graduation requirements through enrollment in mandatory remedial courses or to enroll in those courses as electives.
(3)	High schools to use curriculum approved by the State Board of Community Colleges, in consultation with the State Board of Education.
(4)	Determinations by the State Board of Community Colleges on the following:
a.	Appropriate measures of successful completion of the remedial courses to ensure students are prepared for coursework at a North Carolina community college without need for further remediation in mathematics or reading and English.
b.	The length of time following high school graduation in which a student who successfully completed high school remedial courses will not be required to enroll in developmental courses at a North Carolina community college.
(5)	Delivery of remedial courses by high school faculty consistent with policies adopted by the State Board of Community Colleges and the State Board of Education. The policies shall include, at a minimum, the following requirements:
a.	High school faculty teaching the approved remedial courses must successfully complete training requirements as determined by the State Board of Community Colleges, in consultation with the State Board of Education.
b.	The North Carolina Community College System shall periodically review the remedial courses and professional development requirements to ensure appropriate instructional delivery.
"SECTION 10.13.(b)  The State Board of Community Colleges and the State Board of Education shall report on progress of implementation of the program statewide, including the requirements in subsection (a) of this section, to the Joint Legislative Education Oversight Committee no later than March 15, 2016. The State Board of Community Colleges and the State Board of Education shall jointly report to the Joint Legislative Education Oversight Committee as follows:
(1)	No later than March 15, 2017, on the outcomes of model programs implemented in the 2016‑2017 school year and suggested statutory changes to ensure successful implementation of the program statewide.
(2)	No later than March 15, 2018, on implementation and professional development efforts in the 2017‑2018 school year and information on final changes in curriculum, policy, and rules to ensure successful implementation of the program statewide in the 2018‑2019 school year.
(2a)	No later than March 15, 2019, on implementation and professional development efforts in the 2018‑2019 school year and information on final changes in curriculum, policy, and rules to ensure successful implementation of the program statewide.
(3)	No later than October 15, 2020, and annually thereafter, on program outcomes, including impact on remediation rates, by high school, in both mathematics and reading and English for recent high school graduates entering a North Carolina community college or constituent institution of The University of North Carolina."

CONTINUE WORKFORCE INVESTMENT ACT APPRENTICESHIPNC TRANSFER
SECTION 9.5.  Of the Workforce Investment Act funds awarded to the North Carolina Department of Commerce by the United States Department of Labor, the sum of three hundred fifty thousand dollars ($350,000) shall be transferred to the Community Colleges System Office for the administration of ApprenticeshipNC on a recurring basis each fiscal year.

INSTRUCTION IN JAILS
SECTION 9.6.  Section 8.3(b) of S.L. 2010‑31 reads as rewritten:
"SECTION 8.3.(b)  Courses in federal prisons shall not earn regular budget full‑time equivalents, but may be offered on a self‑supporting basis."

REMOVE OUTDATED COMMUNITY COLLEGE STATUTORY REFERENCES
SECTION 9.7.(a)  G.S. 115D‑42 is repealed.
SECTION 9.7.(b)  The cash balance remaining in the Instructional Trust Fund in Budget Code 66800, Fund Code 6125, shall be returned to the Escheat Fund.
SECTION 9.7.(c)  G.S. 115D‑2 reads as rewritten:
"§ 115D‑2.  Definitions.
As used in this Chapter:
…
(4)	The term "regional institution" means an institution whose service area as assigned by the State Board of Community Colleges includes three or more counties.
…."
SECTION 9.7.(d)  G.S. 115D‑31(a)(3) is repealed.
SECTION 9.7.(e)  G.S. 115D‑31.2 is repealed.

PART X. UNIVERSITIES

STUDENT SUCCESS INITIATIVES REPORT
SECTION 10.1.  No later than September 1, 2019, the President of The University of North Carolina shall report to the Joint Legislative Education Oversight Committee regarding the expenditure of State funds used to support various initiatives designed to increase student retention, graduation rates, and time‑to‑degree, including funds appropriated by this act for the Student Success Innovation Lab, Accelerate through Summer Grants, and Adaptive Digital Learning Courseware pilot. The report shall include allocation methodologies, funding by constituent institution, descriptions of program activities and accomplishments, data on outcome measures used to assess program effectiveness, and best practices identified.

REPEAL TUITION SURCHARGE
SECTION 10.2.  G.S. 116‑143.7 is repealed.

MODIFY SHARE REDUCTION‑IN‑FORCE/REORGANIZATION‑THROUGH‑REDUCTION‑COVERAGE
SECTION 10.3.  G.S. 126‑7.1(j) reads as rewritten:
"(j)	A department or office listed in G.S. 126‑5(d)(1) or (2) and The University of North Carolina and its constituent institutions may reorganize and restructure its positions through a voluntary separation process, in accordance with a policy approved by the State Human Resources Commission and subject to funding and approval by the Office of State Budget and Management."

NORTH CAROLINA SCHOOL OF SCIENCE AND MATHEMATICS OVERREALIZED RECEIPTS
SECTION 10.4.  G.S. 116‑30.3A reads as rewritten:
"§ 116‑30.3A.  Availability of excess receipts.
Notwithstanding the provisions of Chapter 143C of the General Statutes, receipts within The University of North Carolina realized in excess of budgeted levels shall be available, up to a maximum of ten percent (10%) above budgeted levels, for each Budget Code, in addition to appropriations to support the operations generating the receipts as approved by the Director of the Budget. Notwithstanding the provisions of Chapter 143C of the General Statutes, receipts within The University of North Carolina Health Care System and the North Carolina School of Science and Mathematics realized in excess of budgeted levels shall be available above budgeted levels, for each Budget Code, in addition to appropriations to support the operations generating the receipts as approved by the Director of the Budget."

CHANGES TO STATUTORY REFERENCES TO UNC GENERAL ADMINISTRATION
SECTION 10.5.  In any instances in the General Statutes in which there is a reference to The University of North Carolina General Administration or a derivative thereof, the Revisor of Statutes may replace that reference with a reference to The University of North Carolina System Office, as appropriate.

UNC CARRYFORWARD INCREASE/MUST BE USED FOR REPAIRS AND RENOVATIONS
SECTION 10.6.  G.S. 116‑30.3 reads as rewritten:
"§ 116‑30.3.  Reversions.
(a)	Of the General Fund current operations appropriations credit balance remaining at the end of each fiscal year in each of the budget codes listed in this subsection, any amount of the General Fund appropriation for that budget code for that fiscal year (i) may be carried forward to the next fiscal year in that budget code, (ii) is appropriated in that budget code, and (iii) may be used for any of the purposes set out in subsection (f) of this section. However, the amount carried forward in each budget code under this subsection shall not exceed five percent (5%) of the General Fund appropriation in that budget code. The Director of the Budget, under the authority set forth in G.S. 143C‑6‑2, shall establish the General Fund current operations credit balance remaining in each budget code.
The budget codes that may carry forward a General Fund current operations appropriations credit balance remaining at the end of each fiscal year pursuant to this section are the budget codes for each of the following:
…
(f)	Funds carried forward pursuant to subsection (a) of this section up to two and one‑half percent (2.5%) of the General Fund appropriation in that budget code may be used for one‑time expenditures, provided, however, that the expenditures shall not impose additional financial obligations on the State and shall not be used to support positions. Funds carried forward in excess of two and one‑half percent (2.5%) of the General Fund appropriation in that budget code shall be used only for projects that are eligible to receive funds from the Repairs and Renovations Reserve under G.S. 143C‑4‑3(b)."

FINISH LINE GRANTS
SECTION 10.7.(a)  The State Board of Community Colleges, the Board of Governors of The University of North Carolina, and the President of The North Carolina Independent Colleges and Universities shall develop program guidelines and shall determine the allocation of funds appropriated in this act for the student Finish Line Grants for their respective systems. Funding for Finish Line Grants in each system is supported by the NC Job Ready Fund via allocations directed in G.S. 93‑6.3.
SECTION 10.7.(b)  Students may receive grants of up to one thousand dollars ($1,000) per semester for documented financial emergencies that threaten their ability to remain enrolled to complete their program of study. To be eligible to receive an award, students must be North Carolina residents, have a minimum cumulative grade point average of 2.0, and must be within 15 credit hours of earning an associate's degree or within 30 credit hours of earning a four‑year degree.
SECTION 10.7.(c)  The State Board of Community Colleges, the Board of Governors of The University of North Carolina, and the President of The North Carolina Independent Colleges and Universities shall report annually on:
(1)	The number of applicants.
(2)	The type of emergency cited by the applicant.
(3)	The number of students receiving awards.
(4)	The average award per recipient.
(5)	The number of recipients who have completed within one year of receiving aid.

NORTH CAROLINA SCHOOL OF SCIENCE AND MATHEMATICS TUITION GRANT
SECTION 10.8.  Article 29 of Chapter 116 of the General Statutes is amended by adding a new section to read:
"§ 116‑239.  Full tuition grant for graduates who attend a State university.
(a)	There is granted to each State resident who graduates from the North Carolina School of Science and Mathematics and who enrolls as a full‑time student in a constituent institution of The University of North Carolina a sum to be determined by the General Assembly as a tuition grant. The tuition grant shall be for four consecutive academic years and shall cover the tuition cost at the constituent institution in which the student is enrolled. The tuition grant shall be distributed to the student as provided by this section.
(b)	The tuition grants provided for in this section shall be administered by the State Education Assistance Authority pursuant to rules adopted by the State Education Assistance Authority not inconsistent with this section. The State Education Assistance Authority shall not approve any grant until it receives proper certification from the appropriate constituent institution that the student applying for the grant is an eligible student. Upon receipt of the certification, the State Education Assistance Authority shall remit at the times it prescribes the grant to the constituent institution on behalf, and to the credit, of the student.
(c)	In the event a student on whose behalf a grant has been paid is not enrolled and carrying a minimum academic load as of the tenth classroom day following the beginning of the school term for which the grant was paid, the institution shall refund the full amount of the grant to the State Education Assistance Authority.
(d)	In the event there are not sufficient funds to provide each eligible student with a full grant:
(1)	The Board of Governors of The University of North Carolina, with the approval of the Office of State Budget and Management, may transfer available funds to meet the needs of the programs provided by subsections (a) and (b) of this section; and
(2)	Each eligible student shall receive a pro rata share of funds then available for the remainder of the academic year within the fiscal period covered by the current appropriation.
(e)	The State Education Assistance Authority may use up to five percent (5%) of the funds appropriated in each fiscal year for administrative costs of the program. Any funds remaining after the award of grants and administration shall revert to the General Fund.
(f)	Notwithstanding any other provision of this section, no tuition grant awarded to a student under this section shall exceed the cost of attendance at the constituent institution at which the student is enrolled. If a student, who is eligible for a tuition grant under this subsection, also receives a scholarship or other grant covering the cost of attendance at the constituent institution for which the tuition grant is awarded, then the amount of the tuition grant shall be reduced by an appropriate amount determined by the State Education Assistance Authority. The State Education Assistance Authority shall reduce the amount of the tuition grant so that the sum of all grants and scholarship aid covering the cost of attendance received by the student, including the tuition grant under this section, shall not exceed the cost of attendance for the constituent institution at which the student is enrolled. The cost of attendance, as used in this subsection, shall be determined by the State Education Assistance Authority for each constituent institution."

WAIVE TUITION FOR DEPENDENTS OF FALLEN CORRECTIONAL OFFICERS
SECTION 10.9.(a)  G.S. 115B‑1 reads as rewritten:
"§ 115B‑1. Definitions.
The following definitions apply in this Chapter:
…
(4)	Permanently and totally disabled as a direct result of a traumatic injury sustained in the line of duty. – A person: (i) who as a law enforcement officer, firefighter, volunteer firefighter, rescue squad worker, or correctional officer suffered a disabling injury while in active service or training for active service, (ii) who at the time of active service or training was a North Carolina resident, and (iii) who has been determined to be permanently and totally disabled for compensation purposes by the North Carolina Industrial Commission.
…
(6)	Survivor. – Any person whose parent, legal guardian, legal custodian, or spouse: (i) was a law enforcement officer, a firefighter, a volunteer firefighter, a rescue squad worker, or a correctional officer, (ii) was killed while in active service or training for active service or died as a result of a service‑connected disability, and (iii) at the time of active service or training was a North Carolina resident. The term does not include the widow or widower of a law enforcement officer, firefighter, volunteer firefighter, a rescue squad worker, or a correctional officer if the widow or widower has remarried.
…."
SECTION 10.9.(b)  G.S. 115B‑2(a) reads as rewritten:
"(a)	The constituent institutions of The University of North Carolina and the community colleges as defined in G.S. 115D‑2(2) shall permit the following persons to attend classes for credit or noncredit purposes without the required payment of tuition:
(1)	Repealed by Session Laws 2009‑451, s. 8.11(a), effective July 1, 2009.
(2)	Any person who is the survivor of a law enforcement officer, firefighter, volunteer firefighter, rescue squad worker, or correctional officer killed as a direct result of a traumatic injury sustained in the line of duty.
(3)	The spouse of a law enforcement officer, firefighter, volunteer firefighter, rescue squad worker, or correctional officer who is permanently and totally disabled as a direct result of a traumatic injury sustained in the line of duty.
(4)	Any child, if the child is at least 17 years old but not yet 24 years old, whose parent, legal guardian, or legal custodian is a law enforcement officer, firefighter, volunteer firefighter, rescue squad worker, or correctional officer who is permanently and totally disabled as a direct result of a traumatic injury sustained in the line of duty. However, a child's eligibility for a waiver of tuition under this Chapter shall not exceed: (i) 54 months, if the child is seeking a baccalaureate degree, or (ii) if the child is not seeking a baccalaureate degree, the number of months required to complete the educational program to which the child is applying.
(5)	Any child, if the child (i) is at least 17 years old but not yet 24 years old, (ii) is a ward of North Carolina or was a ward of the State at the time the child reached the age of 18, (iii) is a resident of the State; and (iv) is eligible for services under the Chaffee Education and Training Vouchers Program; but the waiver shall only be to the extent that there is any tuition still payable after receipt of other financial aid received by the student.
(6)	Any child enrolled in a regional school established pursuant to Part 10 of Article 16 of Chapter 115C of the General Statutes who enrolls in classes at a constituent institution or community college which has a written agreement with the regional school."
SECTION 10.9.(c)  G.S. 115B‑5(b) reads as rewritten:
"(b)	The officials of the institutions charged with administration of this Chapter shall require the following proof to insure that a person applying to the institution and who requests a tuition waiver under G.S. 115B‑2(a)(2), (3), or (4) is eligible for the benefits provided by this Chapter.
(1)	The parent‑child relationship shall be verified by a birth certificate, legal adoption papers, or other documentary evidence deemed appropriate by the institution.
(1a)	The legal guardian‑child relationship shall be verified by an order from a court proceeding that established the legal guardianship.
(1b)	The legal custodian‑child relationship shall be verified by an order from a court proceeding that established the legal custodianship.
(2)	The marital relationship shall be verified by a marriage certificate or other documentary evidence deemed appropriate by the institution.
(3)	The cause of death of the law enforcement officer, firefighter, volunteer firefighter, rescue squad worker, or correctional officer shall be verified by certification from the records of the Department of State Treasurer, the appropriate city or county law enforcement agency that employed the deceased, the administrative agency for the fire department or fire protection district recognized for funding under the Department of State Auditor, or the administrative agency having jurisdiction over any paid firefighters of all counties and cities.
(4)	The permanent and total disability shall be verified by documentation deemed necessary by the institution from the North Carolina Industrial Commission."

SUBPART X‑A. UNIVERSITY/STATE EDUCATION ASSISTANCE AUTHORITY

NORTH CAROLINA TEACHING FELLOWS
SECTION 10A.1.(a)  G.S. 116‑209.60 reads as rewritten:
"§ 116‑209.60.  Definitions.
The following definitions apply in this Part:
(1)	Commission. – The North Carolina Teaching Fellows Commission.
(2)	Director. – The Director of the North Carolina Teaching Fellows Program.
(3)	Forgivable loan. – A forgivable loan made under the Program.
(4)	Program. – The North Carolina Teaching Fellows Program.
(5)	Public school. – An elementary or secondary school located in North Carolina that is governed by a local board of education, charter school board of directors, regional school board of directors, or University of North Carolina laboratory school board of trustees.
	
(7)	Trust Fund. – The North Carolina Teaching Fellows Program Trust Fund."
SECTION 10A.1.(b)  G.S. 116‑209.62 reads as rewritten:
"§ 116‑209.62.  North Carolina Teaching Fellows Program established; administration.
(a)	Program. – There is established the North Carolina Teaching Fellows Program to be administered by the General Administration of The University of North Carolina, in conjunction with the Authority and the Commission. The purpose of the Program is to recruit, prepare, and support students residing in or attending institutions of higher education located in North Carolina for preparation as highly effective teachers in the State's public schools. The Program shall be used to provide a forgivable loan to individuals interested in preparing to teach in the public schools of the State.
(b)	Trust Fund. – There is established the North Carolina Teaching Fellows Program Trust Fund to be administered by the Authority, in conjunction with the General Administration of The University of North Carolina. All funds (i) appropriated to, or otherwise received by, the Program for forgivable loans, (ii) received as repayment of forgivable loans, and (iii) earned as interest on these funds shall be placed in the Trust Fund. The purpose of the Trust Fund is to provide financial assistance to qualified students for completion of teacher education and licensure programs to fill teaching positions in the public schools of the State.
(c)	Uses of Monies in the Trust Fund. – The monies in the Trust Fund may be used only for (i) forgivable loans granted under the Program, (ii) administrative costs associated with the Program, including recruitment and recovery of funds advanced under the Program, and (iii) extracurricular enhancement activities of the Program. At the beginning of each fiscal year, the Authority shall transfer the greater of three hundred fifty thousand dollars ($350,000) or six percent (6%) of available funds from the Trust Fund to The University of North Carolina System Office for the Program's administrative costs, the salary of the Director of the Program and other Program staff, expenses of the Commission, and to provide the Commission with funds to use for the extracurricular enhancement activities of the Program. The Authority may retain the greater of four percent (4%) of the funds appropriated or two hundred fifty thousand dollars ($250,000) each fiscal year for administrative costs associated with the scholarship grant program.
(d)	Director of the Program. – The Board of Governors of The University of North Carolina shall appoint a Director of the Program. The Director shall appoint staff to the Commission and shall be responsible for recruitment and coordination of the Program, including proactive, aggressive, and strategic recruitment of potential recipients. Recruitment activities shall include (i) targeting regions of the State with the highest teacher attrition rates and teacher recruitment challenges and (ii) actively engaging with educators, business leaders, experts in human resources, elected officials, and other community leaders throughout the State. The Director shall report to the President of The University of North Carolina. The Authority shall provide office space and clerical support staff, as necessary, to the Director for the Program.
(e)	Student Selection Criteria for Forgivable Loans. – The Commission shall adopt stringent standards for awarding forgivable loans based on multiple measures to ensure that only the strongest applicants receive them, including the following:
(1)	Grade point averages.
(2)	Performance on relevant career and college readiness assessments.
(3)	Experience, accomplishments, and other criteria demonstrating qualities positively correlated with highly effective teachers, including excellent verbal and communication skills.
(4)	Demonstrated commitment to serve in a STEM or special education licensure area in North Carolina public schools.
(f)	Program Selection Criteria. – The Authority shall administer the Program in cooperation with any institution of higher education with a State Board of Education‑approved educator preparation program selected by the Commission that represent both postsecondary constituent institutions of The University of North Carolina and private postsecondary institutions operating in the State.

	

	
	
(g)	Awards of Forgivable Loans. – The Program shall provide forgivable loans to selected students to be used at the selected institutions for completion of a program leading to initial teacher licensure as follows:
(1)	North Carolina high school seniors. – Forgivable loans of up to eight thousand two hundred fifty dollars ($8,250) per year for up to eight semesters.
(2)	Students applying for transfer to a selected educator preparation program at an institution of higher education. – Forgivable loans of up to eight thousand two hundred fifty dollars ($8,250) per year for up to six semesters.
(3)	Individuals currently holding a bachelor's degree seeking preparation for teacher licensure. – Forgivable loans of up to eight thousand two hundred fifty dollars ($8,250) per year for up to four semesters.
(4)	Students matriculating at institutions of higher education who are changing to enrollment in a selected educator preparation program. – Forgivable loans of up to eight thousand two hundred fifty dollars ($8,250) per year for up to four semesters.
Forgivable loans may be used for tuition, fees, the cost of books, and other qualified expenses as defined by the Authority.
	
(i)	Administration of Forgivable Loan Awards. – Upon the naming of recipients of the forgivable loans by the Commission, the Commission shall transfer to the Authority its decisions. The Authority, in coordination with the Director, shall perform all of the administrative functions necessary to implement this Part, which functions shall include rule making, disseminating information, acting as a liaison with participating institutions of higher education, implementing forgivable loan agreements, loan monitoring, loan cancelling through service and collection, determining the acceptability of service repayment agreements, enforcing the agreements, and all other functions necessary for the execution, payment, and enforcement of promissory notes required under this Part.
(j)	Annual Report. – The Commission, in coordination with the Authority, the Department of Public Instruction, and participating educator preparation programs, shall report no later than January 1, 2019, and annually thereafter, to the Joint Legislative Education Oversight Committee regarding the following:
(1)	Forgivable loans awarded from the Trust Fund, including the following:
a.	Demographic information regarding recipients.
b.	Number of recipients by institution of higher education and program.
c.	Information on number of recipients by anticipated licensure area.
(2)	Placement and repayment rates, including the following:
a.	Number of graduates who have been employed in a North Carolina public school by licensure area within two years of program completion.
b.	Number of graduates who accepted employment at a low‑performing school identified under G.S. 115C‑105.37 as part of their years of service.
c.	Number of graduates who have elected to do loan repayment and their years of service, if any, prior to beginning loan repayment.
d.	Number of graduates employed by licensure area who have received an overall rating of at least accomplished and have met expected growth on applicable standards of the teacher evaluation instrument.
e.	Aggregate information on student growth and proficiency in courses taught by graduates who have fulfilled service requirements.
(3)	Selected school outcomes by program, including the following:
a.	Turnover rate for forgivable loan graduates.
b.	Aggregate information on student growth and proficiency as provided annually by the State Board of Education to the Commission in courses taught by forgivable loan graduates.
c.	Fulfillment rate of forgivable loan graduates."
SECTION 10A.1.(c)  G.S. 116‑209.63 reads as rewritten:
"§ 116‑209.63.  Terms of forgivable loans; receipt and disbursement of funds.
(a)	Notes. – All forgivable loans shall be evidenced by notes made payable to the Authority that bear interest at a rate not to exceed ten percent (10%) per year as set by the Authority and beginning on the first day of September after the completion of the program leading to initial teacher licensure or 90 days after graduation, whichever is later. Notwithstanding the previous sentence, if the forgivable loan is terminated, the note shall be made payable to the Authority within 90 days after the termination of the forgivable loan. The forgivable loan may be terminated upon the recipient's withdrawal from the Program or by the recipient's failure to meet the standards set by the Commission.
(b)	Forgiveness. – The Authority shall forgive the loan and any interest accrued on the loan if, within 10 years after graduation from a program leading to initial teacher licensure, exclusive of any authorized deferment for extenuating circumstances, the recipient serves as a teacher for every year the teacher was awarded the forgivable loan, in any combination of the following:
(1)	One year at a North Carolina public school identified as low‑performing under G.S. 115C‑105.37 at the time the teacher accepts employment at the school or, if the teacher changes employment during this period, at another school identified as low‑performing.
(2)	Two years at a North Carolina public school not identified as low‑performing under G.S. 115C‑105.37.
The Authority shall also forgive the loan if it finds that it is impossible for the recipient to work for up to eight years, within 10 years after completion of the program leading to initial teacher licensure, at a North Carolina public school because of the death or permanent disability of the recipient. If the recipient repays the forgivable loan by cash payments, all indebtedness shall be repaid within 10 years after completion of the program leading to initial teacher licensure supported by the forgivable loan. If the recipient completes a program leading to initial teacher licensure, payment of principal and interest shall begin no later than the first day of September after the completion of the program. Should a recipient present extenuating circumstances, the Authority may extend the period to repay the loan in cash to no more than a total of 12 years."

NORTH CAROLINA PRINCIPAL FELLOWS ADMINISTRATION
SECTION 10A.2.  G.S. 116‑74.43 reads as rewritten:
"§ 116‑74.43.  Terms of loans; receipt and disbursement of funds.
…
(c)	All funds appropriated to, or otherwise received by, the Principal Fellows Program for scholarships, all funds received as repayment of scholarship loans, and all interest earned on these funds, shall be placed in a university trust fund. The monies in the Trust Fund may be used only for (i) scholarship loans granted under the Principal Fellows Program; (ii) administrative costs associated with the Program, including recovery of funds advanced under the Program; and (iii) data collection, evaluation, and extracurricular enhancement activities associated with the Program. The Authority may use up to three hundred fifty thousand dollars ($350,000) or ten percent (10%) of available funds from the Trust Fund in each fiscal year for its administrative costs, the salary of the Director of the Program, expenses of the Commission, data collection and evaluation, and extracurricular enhancement activities."

OPPORTUNITY SCHOLARSHIPS/ELIMINATE STATUTORY INCREASE/PROVIDE FOR ASSESSMENTS OF STUDENT LEARNING
SECTION 10A.3.(a)  G.S. 115C‑562.8(b) is repealed.
SECTION 10A.3.(b)  G.S. 115C‑562.8(c) reads as rewritten:
"(c)	Of the funds allocated to the Authority to award scholarship grants under this Part, the Authority may retain up to two million dollars ($2,000,000) each fiscal year for administrative costs associated with the scholarship grant program and the costs of evaluating gains and losses in student learning as required by G.S. 115C‑562.7(c)(1)."
SECTION 10A.3.(c)  G.S. 115C‑562.5(a)(4) reads as rewritten:
"(4)	Administer annually the tests and assessments required in Article 10A of Chapter 115C of the General Statutes to all eligible students whose tuition and fees are paid in whole or in part with a scholarship grant enrolled in grades three and higher. Test performance data shall be submitted to the Authority by July 15 of each year. Test performance data reported to the Authority under this subdivision is not a public record under Chapter 132 of the General Statutes."
SECTION 10A.3.(d)  The State Education Assistance Authority shall not award scholarship funds to new recipients pursuant to Part 2A of Article 39 of Subchapter X of Chapter 115C of the General Statutes after the 2018‑2019 academic year.

PART XI. DEPARTMENT OF HEALTH AND HUMAN SERVICES

SUBPART XI‑A. CENTRAL MANAGEMENT AND SUPPORT

MAXIMIZE THE USE OF TRANSITIONS TO COMMUNITY LIVING FUNDING FOR REQUIRED SERVICES
SECTION 11A.1.  G.S. 122E‑3.1(b) reads as rewritten:
"(b)	Creation and Source of Funds. – The Community Living Housing Fund is established within the Housing Finance Agency to pay for the transition of individuals diagnosed with severe mental illness or severe and persistent mental illness as defined in G.S. 122C‑20.5 from institutional settings to integrated, community‑based supported housing and to increase the percentage of targeted housing units available to individuals with disabilities for use in the North Carolina Supportive Housing Program under Article 1B of Chapter 122C of the General Statutes. Beginning with fiscal year 2013‑2014, any unexpended, unencumbered balance of the amount appropriated to the Transitions to Community Living Fund established pursuant to Section 10.23A(d) of S.L. 2012‑142 at the end of each fiscal year shall not revert but shall be transferred and made available to the Community Living Housing Fund. Effective July 1, 2018, the amount of the unexpended, unencumbered funds available for transfer to the Housing Finance Agency at the end of the State fiscal year shall not be determined prior to the end of the second quarter of the new State fiscal year or on December 31."

SUBPART XI‑B. DIVISION OF CHILD DEVELOPMENT AND EARLY EDUCATION

ADDITIONAL CHILD CARE SUBSIDY MARKET RATE INCREASES/CERTAIN AGE GROUPS AND COUNTIES
SECTION 11B.1.  Section 11B.4 of S.L. 2017‑57 is amended by adding a new subsection to read:
"SECTION 11B.4.(b1)  Beginning October 1, 2018, the Department of Health and Human Services, Division of Child Development and Early Education (Division), shall increase the child care subsidy market rates to the rates recommended by the 2015 Child Care Market Rate Study from age three through five years and for school‑aged children in three‑, four‑, and five‑star‑rated child care centers and homes in tier three counties."

MODERNIZE COUNTY CHILD CARE FORMULA TO ALLOW FLEXIBILITY AND APPROPRIATE PLANNING AND USE OF INCREASED RESOURCES
SECTION 11B.2.  Section 11B.5(c) of S.L. 2017‑57 reads as rewritten:
"SECTION 11B.5.(c)  When implementing the formula under subsection (a) of this section, the Division shall apply market rate increases to counties outside of the formula process according to projected cost for the first year of implementation. For the second year of implementation and thereafter, the Division shall include the market rate increase in the formula process, rather than calculating the increases outside of the formula process. Additionally, the Department shall do the following:
(1)	Implement the final one third change in a county's allocation beginning fiscal year 2018‑2019. A county's initial allocation shall be the county's expenditure in the previous fiscal year or a prorated share of the county's previous fiscal year expenditures if sufficient funds are not available. With the exception of market rate increases consistent with any increases approved by the General Assembly, a county whose spending coefficient is less than ninety two percent (92%) in the previous fiscal year shall receive its prior year's expenditure as its allocation and shall not receive an increase in its allocation in the following year. A county whose spending coefficient is at least ninety two percent (92%) in the previous fiscal year shall receive, at a minimum, the amount it expended in the previous fiscal year and may receive additional funding, if available. The Division may waive this requirement and allow an increase if the spending coefficient is below ninety‑two percent (92%) due to extraordinary circumstances, such as a State or federal disaster declaration in the affected county, or in situations where enforcement of this requirement would be detrimental to expanding services to children. By October 1 of each year, the Division shall report to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division the counties that received a waiver pursuant to this subdivision and the reasons for the waiver.
…."

SUBPART XI‑C. DIVISION OF SOCIAL SERVICES

CRIMINAL RECORD CHECKS OF APPLICANTS AND CURRENT EMPLOYEES WHO ACCESS FEDERAL TAX INFORMATION UNDER FEDERAL LAW
SECTION 11C.1.  Subpart D of Part 4 of Article 13 of Chapter 143B of the General Statutes is amended by adding a new section to read:
"§ 143B‑935.1.  Criminal record checks of applicants and of current employees who access federal tax information.
(a)	The Department of Public Safety may, upon request, provide to the Department of Health and Human Services, Division of Social Services, the Department of Health and Human Services, Division of Medical Assistance, or a county agency, the criminal history from the State and National Repositories of Criminal Histories of the following individuals if the individual is permitted, or will be permitted, to access federal tax information:
(1)	An applicant for employment.
(2)	A current employee.
(3)	A contractual employee or applicant.
(4)	An employee of a contractor.
(b)	Along with the request, the requesting agency shall provide the following to the Department of Public Safety:
(1)	The fingerprints of the person who is the subject of the record check.
(2)	A form signed by the person who is the subject of the record check consenting to:
a.	The criminal record check.
b.	The use of fingerprints.
c.	Any other identifying information required by the State and National Repositories.
d.	Any additional information required by the Department of Public Safety.
(c)	The fingerprints shall be forwarded to the State Bureau of Investigation for a search of the State's criminal history record file, and the State Bureau of Investigation shall forward a set of fingerprints to the Federal Bureau of Investigation for a national criminal history record check.
(d)	The requesting agency shall keep all information obtained pursuant to this section confidential.
(e)	The Department of Public Safety may charge a fee to offset the cost incurred by it to conduct a criminal record check under this section. The fee shall not exceed the actual cost of locating, editing, researching, and retrieving the information."

ADDRESSING FEDERAL CHILD SUPPORT FEE CHANGE REQUIRED UNDER FEDERAL LAW
SECTION 11C.2.  G.S. 110‑130.1(a) reads as rewritten:
"(a)	All child support collection and paternity determination services provided under this Article to recipients of public assistance shall be made available to any individual not receiving public assistance in accordance with federal law and as contractually authorized by the nonrecipient, upon proper application and payment of a nonrefundable application fee of twenty‑five dollars ($25.00). The fee shall be reduced to ten dollars ($10.00) if the individual applying for the services is indigent. An indigent individual is an individual whose gross income does not exceed one hundred percent (100%) of the federal poverty guidelines issued each year in the Federal Register by the U.S. Department of Health and Human Services. For the purposes of this subsection, the term "gross income" has the same meaning as defined in G.S. 105‑134.1.
In the case of an individual who has never received assistance under a State program funded pursuant to Title IV‑A of the Social Security Act and for whom the State has collected and disbursed to the family in a federal fiscal year at least five hundred fifty dollars ($550.00) of support, the State shall impose an annual fee of thirty‑five dollars ($35.00) for each case in which services are furnished. The child support agency shall retain the fee from support collected on behalf of the individual. However, the child support agency shall not retain the fee from the first five hundred fifty dollars ($550.00) collected. The child support agency shall use the fee to support the ongoing operation of the program."

SUBPART XI‑D. DIVISION OF AGING AND ADULT SERVICES [reserved]

SUBPART XI‑E. DIVISION OF PUBLIC HEALTH

ALIGNING TREATMENT OF LOCAL HEALTH DEPARTMENT GRANTS WITH other DHHS PROGRAMS
SECTION 11E.1.  Section 11E.3(b) of S.L. 2017‑57 reads as rewritten:
"SECTION 11E.3.(b)  The plan for administering the competitive grant process shall include at least all of the following components:
…
(4)	Allows grants to be awarded to local health departments for up to three years."

SUBPART XI‑F. DIVISION OF MH/DD/SAS AND STATE‑OPERATED HEALTH CARE FACILITIES

CORRECTIONS‑BASED MENTAL HEALTH CAPACITY RESTORATION PILOT PROGRAM
SECTION 11F.1.(a)  Purpose. – The Department of Health and Human Services shall establish a pilot program for a corrections‑based mental health capacity restoration program (CRP). The purpose of the pilot program is to expand the provision of capacity restoration programming at locations in addition to the three State Psychiatric Hospitals (SPHs). The pilot program shall run for five years, beginning July 1, 2018, and ending with June 30, 2023.
SECTION 11F.1.(b)  By December 31, 2018, the Department of Health and Human Services and the Department of Public Safety shall release a Request for Information (RFI) to solicit interest from counties that may be interested in providing space for the corrections‑based CRP. DHHS, in consultation with Department of Public Safety and other stakeholders, shall release a Request for Proposals (RFP) for a corrections‑based CRP program based on the information received during the RFI process. If there was not sufficient initial interest solicited via the RFI, finding a location for the CRP would be included as part of the RFP criteria. The RFP shall request that interested vendors meets at least the following criteria:
(1)	To initiate the pilot in the most time‑efficient manner, with a start date set within six months of contract award date.
(2)	The pilot should be conducted in a county jail that sends a high number of individuals with ITP status to the SPH. This could include the highest utilizer counties or counties that respond during the RFI process that can work collaboratively with these counties to address the need.
(3)	Establish and monitor metrics that determine whether the program is successful; this might include, but would in no way be limited to, readmissions to the hospital.
SECTION 11F.1.(c)  By June 30, 2019, the Department of Health and Human Services shall select a location to participate in the pilot program that represent the best location to meet the needs of the State of North Carolina to the extent possible from the pool of applicants.
SECTION 11F.1.(d)  After 18 months of operation, the program should be evaluated according to metrics identified in the RFP and a determination should be made to expand the CRP to other correctional facilities, continue with the existing CRP, modify the existing CRP for additional assessment, or terminate the CRP.
SECTION 11F.1.(e)  Pilot Evaluation. – The Department of Health and Human Services may award the RFP contract directly to a provider of CRP services or a single or multicounty correctional facility with whom the CRP provider is a subcontractor. The pilot program shall be evaluated for the duration of the pilot program to evaluate the implementation and success of the pilot program, including at least the following:
(1)	The use of funds by the vendor awarded the RFP to provide CRP services during the pilot.
(2)	Outcome data.
(3)	Numbers of individuals served at the corrections‑based CRP, including number of individuals that would have received CRP services at one of the three SPH, if the corrections‑based CRP was not available.
(4)	Other information the Department deems necessary.
SECTION 11F.1.(f)  DHHS shall report by June 30 of each year, beginning with the initial report by June 30, 2019, and ending with a final report by June 30, 2023, to the Joint Legislative Oversight Committees for Health and Human Services and Public Safety on all aspects of the pilot program as listed in subsection (e) of this section. The Department of Health and Human Services shall include in the final report, the evaluation of the pilot program, as well as, any legislative recommendations for continuing or expanding the pilot program.

NC COMMUNITY‑BASED PSYCHIATRIC STEP‑DOWN PILOT
SECTION 11F.2.(a)  Of the funds appropriated to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, the sum of three million two hundred eleven thousand eight hundred sixty‑seven dollars ($3,211,867) in nonrecurring funds for the 2018‑2019 fiscal year shall be used to establish a community‑based Residential Intensive Support Team (RIST) model of step‑down care for individuals exiting State‑operated psychiatric hospitals to support reintegration back into their communities by providing less costly, more clinically appropriate services and bridge the gap that exists in the State's behavioral health continuum of services. The pilot shall be for two years.
SECTION 11F.2.(b)  In order to initiate the pilot, the Department of Health and Human Services shall develop a Request for Application (RFA) to develop a Community‑Based Psychiatric Stepdown program that demonstrates how services and supports will be provided in a holistic manner such that it enables individuals diagnosed with a serious mental illness to develop the skills necessary to become fully integrated into their communities, particularly in the areas of housing, employment, and community integration. The RFA shall, at a minimum, include the following:
(1)	A supportive housing, or bridge housing model that is "consumer‑centered," based on an individual consumer's self‑identified strengths, needs, and goals.
(2)	Use of evidence‑based practices, such as motivational interviewing techniques, illness management and recovery, and stages of change principles to engage individuals into service.
(3)	Use of the RIST model established by the State of New Jersey to employ supportive services necessary to maintain housing, achieve identified wellness and recovery goals, as well as case management approaches to assure that consumers access the full array of other clinical, medical, vocational, educational, and supportive services needed to successfully function within the community.
SECTION 11F.2.(c)  By April 1, 2019, the Department of Health and Human Services shall submit a progress report on the development and implementation of the pilot program authorized by this section to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division. At a minimum, the report shall include all of the following:
(1)	The number and outcome of patients served.
(2)	A breakdown of expenditures.
(3)	An estimate of the cost and number to be served for the second year of the pilot.
(4)	An estimate of savings of State funds in State‑operated psychiatric hospitals as a result of reducing the number of psychiatric hospital bed days for people who do not need that level of care by implementing this model.

TECHNICAL CORRECTION TO CORRECT THE AMOUNT OF AVAILABLE FUNDS FOR LOCAL INPATIENT PSYCHIATRIC BEDS OR BED DAYS
SECTION 11F.3.  Section 11F.3(a) of S.L. 2017‑57 reads as rewritten:
"SECTION 11F.3.(a)  Use of Funds – Of the funds appropriated to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, for crisis services, the sum of forty‑one million three hundred fifty‑one thousand six hundred forty‑four dollars ($41,351,644) in recurring funds and the sum of forty million six hundred twenty‑one thousand six hundred forty‑four dollars ($40,621,644) for the 2018‑2019 fiscal year shall be used to purchase additional new or existing local inpatient psychiatric beds or bed days not currently funded by or though LME/MCOs. The Department shall continue to implement a two‑tiered system of payment for purchasing these local inpatient psychiatric beds or bed days based on acuity level with an enhanced rate of payment for inpatient psychiatric beds or bed days for individuals with higher acuity levels, as defined by the Department. The enhanced rate of payment for inpatient psychiatric beds or bed days for individuals with higher acuity levels shall not exceed the lowest average cost per patient bed day among the State psychiatric hospitals. In addition, at the discretion of the Secretary of Health and Human Services, existing funds allocated to LME/MCOs for community‑based mental health, developmental disabilities, and substance abuse services may be used to purchase additional local inpatient psychiatric beds or bed days. Funds designated in this subsection for the purchase of local inpatient psychiatric beds or bed days shall not be used to supplant other funds appropriated or otherwise available to the Department for the purchase of inpatient psychiatric services through contracts with local hospitals."

USE OF DOROTHEA DIX HOSPITAL PROPERTY FUNDS for SUBSTANCE ABUSE RESIDENTIAL TREATMENT FACILITIES
SECTION 11F.4.(a)  Funds for the Establishment of Substance Abuse Residential Treatment Facilities. – The remainder of funds appropriated from the Dorothea Dix Hospital Property Fund established under G.S. 143C‑9‑2(b1) to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, shall be used to pay for any renovation or building costs associated with (i) the construction of substance abuse treatment facilities, (ii) the conversion of existing facilities into substance abuse treatment facilities, or (iii) a combination of these options as follows:
(1)	Six million dollars ($6,000,000) in nonrecurring funds shall be used to pay for any renovation or building costs associated with the construction of new substance abuse treatment facility by Triangle Residential Options for Substance Abuse (TROSA), Inc.
(2)	The remainder of funds shall be used to create a substance abuse residential facility grant program for the purpose of renovation or building costs to create new substance abuse treatment capacity throughout the State.
Any facility or other location constructed or converted with funds allocated under this subsection for substance abuse shall be named in honor of Dorothea Dix.
SECTION 11F.4.(b)  Substance Abuse Residential Treatment Facility Grant Program. – There is created a substance abuse residential facility grant program within the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, for the provision of new substance abuse residential treatment capacity throughout the State. Funds in the grant program shall only be available to nonprofit corporations and local governments for any of the following eligible activities:
(1)	Acquisition of real property within a total project to create new substance abuse residential treatment capacity.
(2)	Renovation of existing real property to create new substance abuse residential treatment capacity.
(3)	Construction of a new facility to create new substance abuse residential treatment capacity.
(4)	Acquisition of personal property solely for the purpose of providing treatment for substance abuse in a newly constructed, acquired, or renovated substance abuse residential treatment facility.
SECTION 11F.4.(c)  Certificate of Need Exemption for Certain Facilities. – Notwithstanding the State Medical Facilities Plan, Article 9 of Chapter 131E of the General Statutes, or any other provision of law to the contrary, funds allocated under subsection (a) of this section are exempt from certificate of need review for the establishment or expansion of outpatient therapy services or substance use disorder treatment services, or both.
SECTION 11F.4.(d)  Applicability of Licensure Laws. – The establishment or expansion of behavioral health services, including any of the items described in subsection (b) of this section, are subject to existing licensure laws and requirements.
SECTION 11F.4.(e)  Reservation of Beds for State Use. – As a condition of receiving these funds, providers shall reserve at least fifty percent (50%) of the beds constructed or converted with funds allocated under subsection (a) of this section for individuals who are indigent or Medicaid recipients.
SECTION 11F.4.(f)  Report on the Substance Abuse Residential Facility Grant Program. – Beginning November 1, 2019, the Department of Health and Human Services shall report to the Joint Legislative Oversight Committee on Health and Human Services, Office of State Budget and Management, and the Fiscal Research Division on grants awarded under subdivision (2) of subsection (a) of this section. The report shall include the following:
(1)	The amount of grants awarded.
(2)	The grant recipient and location.
(3)	The total cost and description of the project receiving funds.
(4)	The expected number of individuals to be treated by the program.
(5)	The total number of applicants and the methodology used by the Department to award grants.
SECTION 11F.4.(g)  Unspent Funds for 2018‑2019 Fiscal Year. – Any funds allocated to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, from the Dorothea Dix Hospital Property Fund established under G.S. 143C‑9‑2(b1) pursuant to this section for the 2018‑2019 fiscal year that are not expended or encumbered as of June 30, 2019, shall remain in the Dorothea Dix Hospital Property Fund.

ENSURE ENFORCEMENT OF TOBACCO LAWS/PREVENTION OF SALES TO YOUTH
SECTION 11F.5.(a)  G.S. 143B‑928 is amended by adding a new subsection to read:
"(d)	Primary responsibility to enforce tobacco laws is under the jurisdiction of the Alcohol Law Enforcement Branch to include underage tobacco enforcement."
SECTION 11F.5.(b)  G.S. 18B‑500(b) reads as rewritten:
"(b)	Subject Matter Jurisdiction. – After taking the oath prescribed for a peace officer, an alcohol law‑enforcement agent shall have authority to arrest and take other investigatory and enforcement actions for any criminal offense. The primary responsibility of an agent shall be enforcement of the ABC, lottery, and tobacco laws."
SECTION 11F.5.(c)  Of the funds appropriated to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, the sum of three hundred thousand dollars ($300,000) in recurring funds for the 2018‑2019 fiscal year shall be used to provide enforcement compliance checks, through the designated statewide entity with jurisdiction (Alcohol Law Enforcement).

SUBPART XI‑G. DIVISION OF HEALTH SERVICE REGULATION [reserved]

SUBPART XI‑H. DIVISION OF MEDICAL ASSISTANCE

MEDICAID EXPANSION
SECTION 11H.1.  Section 11H.1(b) of S.L. 2017‑57 reads as rewritten:
"SECTION 11H.1.(b)  For the following Medicaid eligibility classifications for which the federal poverty guidelines are used as income limits for eligibility determinations, the income limits will be updated each April 1 immediately following publication of federal poverty guidelines. The Department of Health and Human Services, Division of Medical Assistance, shall provide Medicaid coverage to the following:
…
(6)	All people who have incomes equal to or less than one hundred thirty‑eight percent (138%) of the federal poverty guidelines, effective January 1, 2019.
The Department of Health and Human Services, Division of Medical Assistance, shall also provide family planning services to men and women of childbearing age with family incomes equal to or less than one hundred ninety‑five percent (195%) of the federal poverty guidelines and without regard to resources."

ACCOUNTING FOR MEDICAID RECEIVABLES AS NONTAX REVENUE
SECTION 11H.2.  Section 11H.5(b) of S.L. 2017‑57 reads as rewritten:
"SECTION 11H.5.(b)  For the 2017‑2018 fiscal year, the Department of Health and Human Services shall deposit from its revenues one hundred sixty‑four million seven hundred thousand dollars ($164,700,000) with the Department of State Treasurer to be accounted for as nontax revenue. For the 2018‑2019 fiscal year, the Department of Health and Human Services shall deposit from its revenues one hundred sixty‑three million three hundred thousand dollars ($163,300,000) with the Department of State Treasurer to be accounted for as nontax revenue. These deposits shall represent the return of General Fund appropriations, nonfederal revenue, fund balances, or other resources from State‑owned and State‑operated hospitals that are used to provide indigent and nonindigent care services. The return from State‑owned and State‑operated hospitals to DHHS will be made from nonfederal resources in an amount equal to the amount of the payments from the Division of Medical Assistance for uncompensated care. The treatment of any revenue derived from federal programs shall be in accordance with the requirements specified in the Code of Federal Regulations, Title 2, Part 225."

ALIGNING MEDICAID EXPEDITED APPEALS PROCESS WITH FEDERAL LAW
SECTION 11H.3.  G.S. 108A‑70.9A reads as rewritten:
"§ 108A‑70.9A.  Appeals by Medicaid recipients.
(a)	Definitions. – The following definitions apply in this Part, unless the context clearly requires otherwise.
(1)	Adverse determination. A determination by the Department to deny, terminate, suspend, or reduce a new or continuing Medicaid service or an authorization for a Medicaid service. A denial of an expedited appeal request under 42 C.F.R. § 431.22(b) is not an adverse determination.
…
(d)	Appeals. – Except as provided by this section and G.S. 108A‑70.9B, a request for a hearing to appeal an adverse determination of the Department under this section is a contested case subject to the provisions of Article 3 of Chapter 150B of the General Statutes. The recipient shall request a hearing within 30 days of the mailing of the notice required by subsection (c) of this section by sending an appeal request form to OAH and the Department. Where a request for hearing concerns the reduction, modification, or termination of Medicaid services, including the failure to act upon a timely request for reauthorization with reasonable promptness, upon the receipt of a timely appeal, the Department shall reinstate the services to the level or manner prior to action by the Department as permitted by federal law or regulation. The information contained in the notice is confidential unless the recipient appeals. OAH may dispose of the records after one year. The Department may not influence, limit, or interfere with the recipient's decision to request a hearing.
…
(e1)	A recipient may request an expedited appeal under 42 C.F.R. § 413.224(b) by requesting an expedited appeal on the appeal request form described in subsection (e) of this section and by submitting the appeal request form with additional documentation, not duplicative of the original service request, in support of the request for an expedited appeal. For expedited appeal requests, the mediation procedure set forth in G.S. 108A‑70.9B(c) shall not be applicable unless the Department denies the request for an expedited hearing.
…."

PROTECTING MEDICAID CASH FLOWS BY ALIGNING COST SETTLEMENT RECOUPMENT PROCESS WITH FEDERAL LAW
SECTION 11H.4.(a)  G.S. 108C‑2 is amended by adding a new subdivision to read:
"§ 108C‑2.  Definitions.
The following definitions apply in this Chapter:
…
(12)	Notice of Program Reimbursement. – The written notice reflecting the Department's final determination of the total amount of reimbursement, if any, due to either the provider or the Department following receipt of a provider's annual Medicaid or Health Choice cost report, or amended Medicaid or Health Choice cost report where permitted or required."
SECTION 11H.4.(b)  Chapter 108C of the General Statutes is amended by adding a new section to read:
"§ 108C‑15.  Notice of Program Reimbursement as basis for recoupment of overpayments.
Notwithstanding any other provisions of law, upon issuance of the Notice of Program Reimbursement, the Department shall take immediate action to recoup the amount of reimbursement owed by the provider to the Department. Recoupment shall be made notwithstanding any request by the provider for a reconsideration review by the Department or a contested case hearing under Chapter 150B of the General Statutes."

SUBPART XI‑I. DIVISION OF HEALTH BENEFITS

APPROPRIATION OF FEDERAL FUNDS FOR MEDICAID TRANSFORMATION
SECTION 11I.1.  Section 11I.1 of S.L. 2017‑57 is repealed.

SUBPART XI‑J. MISCELLANEOUS [reserved]

SUBPART XI‑K. DIVISION OF VOCATIONAL REHABILITATION, SERVICES FOR THE BLIND, AND SERVICES FOR THE DEAF AND HARD OF HEARING [RESERVED]

SUBPART XI‑L. DHHS BLOCK GRANTS

DHHS BLOCK GRANTS
SECTION 11L.1.  Section 11L.1 of S.L. 2017‑57 reads as rewritten:
"DHHS BLOCK GRANTS
"SECTION 11L.1.(a)  Except as otherwise provided, appropriations from federal block grant funds are made for each year of the fiscal biennium ending June 30, 2019, according to the following schedule:

TEMPORARY ASSISTANCE FOR NEEDY	FY 2017‑2018	FY 2018‑2019
FAMILIES (TANF) FUNDS

Local Program Expenditures

	Division of Social Services

	01. Work First Family Assistance	$49,479,444	$41,722,815

	02. Work First County Block Grants	80,093,566	80,093,566

	03. Work First Electing Counties	2,378,213	2,378,213

	04. Adoption Services – Special Children
	Adoption Fund	2,026,877	2,026,877

	05. Child Protective Services – Child Welfare
	Workers for Local DSS	9,412,391	10,912,391

	06. Child Welfare Program Improvement Plan	775,176	775,176

	07. Child Welfare Collaborative	400,000	400,000

	08. Child Welfare Initiatives	1,400,000	1,400,000

	08A. Evidence‑Based Programs for Children
	and Families in Support of School Safety
	and Youth Mental Health Child Abuse and
	Child Abuse and Neglect Prevention Services	0	10,200,000

Division of Child Development and Early Education

	09. Subsidized Child Care Program	53,605,680	34,184,030

	10. NC Pre‑K Services	6,000,000	37,094,607

	10A. Swap Child Care Subsidy	392,420	294,697

Division of Public Health

	11. Teen Pregnancy Prevention Initiatives	2,950,000	2,950,000

	11A. SHIFT NC	0	500,000

DHHS Administration

	12. Division of Social Services	2,482,260	2,482,260

	12A. Division of Social Services – WIOA	0	93,216

	13. Office of the Secretary	34,042	34,042

	14. Eligibility Systems – Operations and
	Maintenance	2,908,598	2,765,192

	15. NC FAST Implementation	48,495	1,560,070

Transfers to Other Block Grants

Division of Child Development and Early Education

	16. Transfer to the Child Care and
	Development Fund	71,773,001	71,773,001

Division of Social Services

	17. Transfer to Social Services Block
	Grant for Child Protective Services –
	Training	1,300,000	1,300,000

	18. Transfer to Social Services Block
	Grant for Child Protective Services	5,040,000	5,040,000

	19. Transfer to Social Services Block
	Grant for County Departments of
	Social Services for Children's Services	7,500,000	13,097,783

	20. Transfer to Social Services Block
	Grant – Foster Care Services	1,385,152	1,385,152

TOTAL TEMPORARY ASSISTANCE FOR
	NEEDY FAMILIES (TANF) FUNDS	$301,385,315 	$324,463,088

TEMPORARY ASSISTANCE FOR NEEDY FAMILIES
	(TANF)EMERGENCY CONTINGENCY FUNDS

Local Program Expenditures

Division of Child Development and Early Education

	01. Subsidized Child Care	$28,600,000	$25,036,470

	02. Swap for Subsidized Child Care	3,304,255	0

TOTAL TEMPORARY ASSISTANCE FOR
	NEEDY FAMILIES (TANF) EMERGENCY
	CONTINGENCY FUNDS	$31,904,255	$25,036,470

SOCIAL SERVICES BLOCK GRANT

Local Program Expenditures

Divisions of Social Services and Aging and Adult Services

	01. County Departments of Social Services
	(Transfer From TANF $13,097,783)	$32,971,498	$33,003,632

	02. EBCI Tribal Public Health and Human Services	244,740	244,740

	03. Child Protective Services
	(Transfer From TANF)	5,040,000	5,040,000

	04. State In‑Home Services Fund	1,943,950	1,943,950

	05. Adult Protective Services	1,245,363	2,163,605

	06. State Adult Day Care Fund	1,994,084	1,994,084

	07. Child Protective Services/CPS
	Investigative Services – Child Medical
	Evaluation Program	901,868	901,868

	08. Special Children Adoption Incentive Fund	462,600	462,600

	09. Child Protective Services – Child
	Welfare Training for Counties
	(Transfer From TANF)	1,300,000	1,300,000

	10. Child Protective Services – Child
	Welfare Training for Counties	737,067	737,067

	11. Home and Community Care Block
	Grant (HCCBG)	1,696,888	1,696,888

	12. Child Advocacy Centers	582,000	582,000

	13. Guardianship – Division of Social Services	815,362	815,362

	14. Foster Care Services
	(Transfer From TANF)	1,385,152	1,385,152

Division of Central Management and Support

	15. DHHS Competitive Block Grants
	for Nonprofits	4,524,525	4,524,525

Division of Mental Health, Developmental Disabilities, and Substance Abuse Services

	16. Mental Health Services – Adult and
	Child/Developmental Disabilities Program/
	Substance Abuse Services – Adult	4,181,729	4,149,595

DHHS Program Expenditures

Division of Services for the Blind

	17. Independent Living Program	3,361,323	3,447,247

Division of Health Service Regulation

	18. Adult Care Licensure Program	381,087	381,087

	19. Mental Health Licensure and
	Certification Program	190,284	190,284

Division of Aging and Adult Services

	20. Guardianship	3,825,443	3,825,443

DHHS Administration

	21. Division of Aging and Adult Services	577,745	577,745

	22. Division of Social Services	634,680	634,680

	22A. Division of Social Services – Adult
	Protective Services	0	81,758

	23. Office of the Secretary/Controller's Office	127,731	127,731

	24. Legislative Increases/Fringe Benefits	236,278	236,278

	25. Division of Child Development and
	Early Education	13,878	13,878

	26. Division of Mental Health, Developmental
	Disabilities, and Substance Abuse Services	27,446	27,446

	27. Division of Health Service Regulation	118,946	118,946

TOTAL SOCIAL SERVICES BLOCK GRANT	$69,521,667	$70,607,591

LOW‑INCOME ENERGY ASSISTANCE BLOCK GRANT

Local Program Expenditures

Division of Social Services

	01. Low‑Income Energy Assistance
	Program (LIEAP)	$36,402,610	$42,406,793

	02. Crisis Intervention Program (CIP)	36,402,610	42,406,793

Local Administration

Division of Social Services

	03. County DSS Administration	5,978,512	6,964,596

DHHS Administration

Division of Central Management and Support

	04. Division of Social Services	10,000	10,000

	05. Office of the Secretary/DIRM	252,603	128,954

	06. Office of the Secretary/Controller's Office	18,378	18,378

	07. NC FAST Development	139,991	2,287,188

	08. NC FAST Operations and Maintenance	2,135,701	2,539,033

Transfers to Other State Agencies

Department of Environmental Quality

	09. Weatherization Program	10,716,043	12,483,529

	10. Heating Air Repair and Replacement
	Program (HARRP)	5,701,752	6,642,190

	11. Local Residential Energy Efficiency Service
	Providers – Weatherization	439,982	512,552

	12. Local Residential Energy Efficiency Service
	Providers – HARRP	234,105	272,718

	13. DENR – Weatherization Administration	439,982	512,552

	14. DENR – HARRP Administration	234,105	272,718

Department of Administration

	15. N.C. Commission on Indian Affairs	87,736	87,736

TOTAL LOW‑INCOME ENERGY
	ASSISTANCE BLOCK GRANT	$99,194,110	$117,545,730

CHILD CARE AND DEVELOPMENT FUND BLOCK GRANT

Local Program Expenditures

Division of Child Development and Early Education

	01. Child Care Services
	(Smart Start $7,000,000)	$152,923,849	$252,669,029

	02. Transfer from TANF Block Grant
	for Child Care Subsidies	71,773,001	71,773,001

	03. Quality and Availability Initiatives
	(TEACH Program $3,800,000)	45,761,678	60,046,756

DHHS Administration

Division of Child Development and Early Education

	04. DCDEE Administrative Expenses	9,042,159	9,723,308

Division of Social Services

	05. Local Subsidized Child Care
	Services Support	16,436,361	18,750,761

	06. Direct Deposit for Child Care Payments	505,100	505,100

Division of Central Management and Support

	07. NC FAST Development	24,237	396,999

	08. NC FAST Operations and Maintenance	2,758,389	2,581,225

	09. DHHS Central Administration – DIRM
	Technical Services	645,162	645,162

	10. Central Regional Maintenance	287,854	287,854

	11. DHHS Central Administration	7,346	500,000

Division of Public Health

	12. Child Care Health Consultation Contracts	62,205	62,205

TOTAL CHILD CARE AND DEVELOPMENT
	FUND BLOCK GRANT	$300,227,341	$417,941,400

MENTAL HEALTH SERVICES BLOCK GRANT

Local Program Expenditures

	01. Mental Health Services – Child	$3,619,833	$4,884,116

	02. Mental Health Services – Adult/Child	10,967,792	13,172,084

	03. Crisis Solutions Initiative – Critical
	Time Intervention	750,000	0

	04. Mental Health Services – First
	Psychotic Symptom Treatment	1,430,851	2,302,929

	04A. Training to Increase School Safety	0	2,659,600

DHHS Administration

Division of Mental Health, Developmental Disabilities, and Substance Abuse Services

	05. Administration	200,000	200,000

TOTAL MENTAL HEALTH SERVICES
	BLOCK GRANT	$16,968,476	$23,218,729

SUBSTANCE ABUSE PREVENTION AND TREATMENT BLOCK GRANT

Local Program Expenditures

Division of Mental Health, Developmental Disabilities, and Substance Abuse Services

	01. Substance Abuse – HIV and IV Drug	$3,919,723	$3,919,723

	02. Substance Abuse Prevention	8,998,382	8,998,382

	03. Substance Abuse Services – Treatment for
	Children/Adults (Medication‑Assisted
	Opioid Use Disorder Treatment Pilot
	Program $500,000; First Step Farm of
	WNC, Inc. $100,000)	27,722,717	30,285,676

	04. Crisis Solutions Initiatives – Walk‑In
	Crisis Centers	420,000	0

	05. Crisis Solutions Initiatives – Collegiate
	Wellness/Addiction Recovery	1,085,000	1,085,000

	06. Crisis Solutions Initiatives – Community
	Paramedic Mobile Crisis Management	60,000	60,000

	07. Crisis Solutions Initiatives – Innovative
	Technologies	41,000	0

	07A. Crisis Solutions Initiatives – Veteran's Crisis	0	250,000

DHHS Program Expenditures

Division of Central Management and Support

	08. Competitive Block Grant	1,600,000	1,600,000

DHHS Administration

Division of Mental Health, Developmental Disabilities, and Substance Abuse Services

	09. Administration	454,000	1,200,426

	10. Controlled Substance Reporting System
	Enhancement	326,224	427,655

Division of Public Health

	11. HIV Testing for Individuals in Substance
	Abuse Treatment	965,949	241,488

Transfers to Other State Agencies

Department of Military and Veterans Affairs

	12. Crisis Solutions Initiative – Veteran's Crisis	250,000	0

TOTAL SUBSTANCE ABUSE PREVENTION
	AND TREATMENT BLOCK GRANT	$45,842,995	$48,068,350

MATERNAL AND CHILD HEALTH BLOCK GRANT

Local Program Expenditures

Division of Public Health

	01. Women and Children's Health Services
	(Safe Sleep Campaign $45,000; Sickle Cell
	Centers $100,000; Prevent Blindness $575,000;
	March of Dimes $350,000; Teen Pregnancy
	Prevention Initiatives $650,000;
	17P Project $52,000; Nurse‑Family
	Partnership $550,000; Carolina Pregnancy
	Care Fellowship $400,000; Perinatal & Neonatal
	Outreach Coordinator Contracts $440,000)	$11,802,435	$12,232,974

	02. Oral Health	48,227	48,227

	03. Evidence‑Based Programs in Counties
	With Highest Infant Mortality Rates	1,575,000	1,575,000

	03A. Every Week Counts	2,200,000	2,200,000

DHHS Program Expenditures

	04. Children's Health Services	1,427,323	1,593,084

	05. Women's Health – Maternal Health	169,864	229,574

	06. Women and Children's Health – Perinatal
		Strategic Plan Support Position	68,245	68,245

	07. State Center for Health Statistics	158,583	158,583

	08. Health Promotion – Injury and
	Violence Prevention	87,271	87,271

DHHS Administration

	09. Division of Public Health Administration	552,571	552,571

TOTAL MATERNAL AND CHILD
	HEALTH BLOCK GRANT	$18,089,519	$18,745,529

PREVENTIVE HEALTH SERVICES BLOCK GRANT

Local Program Expenditures

	01. Physical Activity and Prevention	$3,545,093	$3,545,093

	02. Injury and Violence Prevention
	(Services to Rape Victims – Set‑Aside)	180,778	180,778

DHHS Program Expenditures

Division of Public Health

	03. HIV/STD Prevention and
	Community Planning	145,819	145,819

	04. Oral Health Preventive Services	451,809	451,809

	05. Laboratory Services – Testing,
	Training, and Consultation	21,012	21,012

	06. Injury and Violence Prevention
	(Services to Rape Victims – Set‑Aside)	192,315	192,315

	07. State Laboratory Services – Testing,
	Training, and Consultation	199,634	199,634

	08. Performance Improvement and
	Accountability	1,104,455	1,104,455

	09. State Center for Health Statistics	107,291	107,291

DHHS Administration

Division of Public Health

	10. Division of Public Health	172,820	172,820

TOTAL PREVENTIVE HEALTH
SERVICES BLOCK GRANT	$6,121,026	$6,121,026

COMMUNITY SERVICES BLOCK GRANT

	01. Community Action Agencies	$24,187,142	$17,196,466

	02. Limited Purpose Agencies	1,343,730	1,780,434

	03. Office of Economic Opportunity	1,343,730	801,021

	03A. Office of Economic Opportunity – 
	Allocation of One‑Stop Center Infrastructure	0	60,000

TOTAL COMMUNITY SERVICES
	BLOCK GRANT	$26,874,602	$19,837,921

"GENERAL PROVISIONS
"SECTION 11L.1.(b)  Information to Be Included in Block Grant Plans. – The Department of Health and Human Services shall submit a separate plan for each Block Grant received and administered by the Department, and each plan shall include the following:
(1)	A delineation of the proposed allocations by program or activity, including State and federal match requirements.
(2)	A delineation of the proposed State and local administrative expenditures.
(3)	An identification of all new positions to be established through the Block Grant, including permanent, temporary, and time‑limited positions.
(4)	A comparison of the proposed allocations by program or activity with two prior years' program and activity budgets and two prior years' actual program or activity expenditures.
(5)	A projection of current year expenditures by program or activity.
(6)	A projection of federal Block Grant funds available, including unspent federal funds from the current and prior fiscal years.
"SECTION 11L.1.(c)  Changes in Federal Fund Availability. – If the Congress of the United States increases the federal fund availability for any of the Block Grants or contingency funds and other grants related to existing Block Grants administered by the Department of Health and Human Services from the amounts appropriated in this section, the Department shall allocate the increase proportionally across the program and activity appropriations identified for that Block Grant in this section. In allocating an increase in federal fund availability, the Office of State Budget and Management shall not approve funding for new programs or activities not appropriated in this section.
If the Congress of the United States decreases the federal fund availability for any of the Block Grants or contingency funds and other grants related to existing Block Grants administered by the Department of Health and Human Services from the amounts appropriated in this section, the Department shall develop a plan to adjust the Block Grants based on reduced federal funding.
Notwithstanding the provisions of this subsection, for fiscal years 2017‑2018 and 2018‑2019, increases in the federal fund availability for the Temporary Assistance to Needy Families (TANF) Block Grant shall be used only for the North Carolina Child Care Subsidy program to pay for child care in four‑ or five‑star rated facilities for four‑year‑old children and shall not be used to supplant State funds.
Prior to allocating the change in federal fund availability, the proposed allocation must be approved by the Office of State Budget and Management. If the Department adjusts the allocation of any Block Grant due to changes in federal fund availability, then a report shall be made to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division.
"SECTION 11L.1.(d)  Except as otherwise provided, appropriations from federal Block Grant funds are made for each year of the fiscal biennium ending June 30, 2019, according to the schedule enacted for State fiscal years 2017‑2018 and 2018‑2019 or until a new schedule is enacted by the General Assembly.
"SECTION 11L.1.(e)  All changes to the budgeted allocations to the Block Grants or contingency funds and other grants related to existing Block Grants administered by the Department of Health and Human Services that are not specifically addressed in this section shall be approved by the Office of State Budget and Management, and the Office of State Budget and Management shall consult with the Joint Legislative Oversight Committee on Health and Human Services for review prior to implementing the changes. The report shall include an itemized listing of affected programs, including associated changes in budgeted allocations. All changes to the budgeted allocations to the Block Grants shall be reported immediately to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division. This subsection does not apply to Block Grant changes caused by legislative salary increases and benefit adjustments.
"SECTION 11L.1.(f)  Except as otherwise provided, the Department of Health and Human Services shall have flexibility to transfer funding between the Temporary Assistance for Needy Families (TANF) Block Grant and the TANF Emergency Contingency Funds Block Grant so long as the total allocation for the line items within those block grants remains the same.

"TEMPORARY ASSISTANCE FOR NEEDY FAMILIES (TANF) FUNDS
"SECTION 11L.1.(g)  The sum of eighty million ninety‑three thousand five hundred sixty‑six dollars ($80,093,566) for each year of the 2017‑2019 fiscal biennium appropriated in this section in TANF funds to the Department of Health and Human Services, Division of Social Services, shall be used for Work First County Block Grants. The Division shall certify these funds in the appropriate State‑level services based on prior year actual expenditures. The Division has the authority to realign the authorized budget for these funds among the State‑level services based on current year actual expenditures. The Division shall also have the authority to realign appropriated funds from Work First Family Assistance for electing counties to the Work First County Block Grant for electing counties based on current year expenditures so long as the electing counties meet Maintenance of Effort requirements.
"SECTION 11L.1.(h)  The sum of nine million four hundred twelve thousand three hundred ninety‑one dollars ($9,412,391) for the 2017‑2018 fiscal year and the sum of ten million nine hundred twelve thousand three hundred ninety‑one ($10,912,391) for the 2018‑2019 fiscal year appropriated in this section to the Department of Health and Human Services, Division of Social Services, in TANF funds for child welfare improvements shall be allocated to the county departments of social services for hiring or contracting staff to investigate and provide services in Child Protective Services cases; to provide foster care and support services; to recruit, train, license, and support prospective foster and adoptive families; and to provide interstate and post‑adoption services for eligible families.
Counties shall maintain their level of expenditures in local funds for Child Protective Services workers. Of the Block Grant funds appropriated for Child Protective Services workers, the total expenditures from State and local funds for fiscal years 2017‑2018 and 2018‑2019 shall not be less than the total expended from State and local funds for the 2012‑2013 fiscal year.
"SECTION 11L.1.(i)  The sum of two million twenty‑six thousand eight hundred seventy‑seven dollars ($2,026,877) appropriated in this section in TANF funds to the Department of Health and Human Services, Special Children Adoption Fund, for each fiscal year of the 2017‑2019 fiscal biennium shall be used in accordance with G.S. 108A‑50.2. The Division of Social Services, in consultation with the North Carolina Association of County Directors of Social Services and representatives of licensed private adoption agencies, shall develop guidelines for the awarding of funds to licensed public and private adoption agencies upon the adoption of children described in G.S. 108A‑50 and in foster care. Payments received from the Special Children Adoption Fund by participating agencies shall be used exclusively to enhance the adoption services program. No local match shall be required as a condition for receipt of these funds.
"SECTION 11L.1.(j)  The sum of one million four hundred thousand dollars ($1,400,000) appropriated in this section in TANF funds to the Department of Health and Human Services, Division of Social Services, for each fiscal year of the 2017‑2019 fiscal biennium shall be used for child welfare initiatives to (i) enhance the skills of social workers to improve the outcomes for families and children involved in child welfare and (ii) enhance the provision of services to families in their homes in the least restrictive setting.
"SECTION 11L.1.(j1)  The sum of ten million two hundred thousand dollars ($10,200,000) appropriated in this section in TANF funds to the Department of Health and Human Services, Division of Social Services, for the 2018‑2019 fiscal year shall be used to implement and provide options for evidenced‑based home visiting programs, including, but not limited to, Child First, Family Connects, as well as, other early childhood mental health interventions to address child abuse and neglect prevention necessary to affect school safety and youth mental health. As a part of this continuum, TANF will be used to implement Community Response Programs in 100 counties over the course of the next three years. The Strengthening Families Framework is an intentional focus on family development and optimal child development that identifies five protective factors that are relevant for the continuum of child welfare services:
(1)	Parental resilience.
(2)	Social connections.
(3)	Knowledge of parenting and child development.
(4)	Concrete support in times of need.
(5)	Children's social and emotional development.
The North Carolina Community Response Program will support cross‑agency collaborative, community‑based initiatives to provide outreach, support, and services to individuals and families identified as being at risk of compromised health and safety to eliminate or reduce those risks by promoting protective factors that strengthen and support families.
"SECTION 11L.1.(j2)  The sum of five hundred thousand dollars ($500,000) appropriated in this section in TANF funds to the Department of Health and Human Services, Division of Public Health, for the 2018‑2019 fiscal year shall provide funding to SHIFT NC (statewide nonprofit in North Carolina working to improve adolescent and young adult health) to continue their efforts with eight continuing and up to three new local Departments of Social Services/LINKS programs to implement teen pregnancy prevention, evidence‑based curricula with youth in foster care. SHIFT NC has worked with DSS/LINKS using this model since 2015, with strong outcomes related to abstinence, pregnancy prevention, and increased connections to health care and social support. SHIFT NC will provide ongoing training and technical assistance to help local agencies use trauma‑informed, evidence‑based, and sustainable programming for teen pregnancy prevention with this vulnerable population of youth.

"SOCIAL SERVICES BLOCK GRANT
"SECTION 11L.1.(k)  The sum of thirty‑two million nine hundred seventy‑one thousand four hundred ninety‑eight dollars ($32,971,498) for the 2017‑2018 fiscal year and the sum of thirty‑three million three thousand six hundred thirty‑two dollars ($33,003,632) for the 2018‑2019 fiscal year appropriated in this section in the Social Services Block Grant to the Department of Health and Human Services, Division of Social Services, shall be used for county block grants. The Division shall certify these funds in the appropriate State‑level services based on prior year actual expenditures. The Division has the authority to realign the authorized budget for these funds, as well as State Social Services Block Grant funds, among the State‑level services based on current year actual expenditures.
Of the funds appropriated in this subsection for each year of the 2017‑2019 fiscal biennium for county block grants, three million dollars ($3,000,000) shall be used to assist counties in the implementation of Project 4, Child Services, in North Carolina Families Accessing Services Through Technology (NC FAST). These funds shall be available in each fiscal year of the fiscal biennium for this purpose.
"SECTION 11L.1.(l)  The sum of one million three hundred thousand dollars ($1,300,000) appropriated in this section in the Social Services Block Grant to the Department of Health and Human Services, Division of Social Services, for each fiscal year of the 2017‑2019 fiscal biennium shall be used to support various child welfare training projects as follows:
(1)	Provide a regional training center in southeastern North Carolina.
(2)	Provide training for residential child caring facilities.
(3)	Provide for various other child welfare training initiatives.
"SECTION 11L.1.(m)  The Department of Health and Human Services is authorized, subject to the approval of the Office of State Budget and Management, to transfer Social Services Block Grant funding allocated for departmental administration between divisions that have received administrative allocations from the Social Services Block Grant.
"SECTION 11L.1.(n)  Social Services Block Grant funds appropriated for the Special Children Adoption Incentive Fund shall require a fifty percent (50%) local match.
"SECTION 11L.1.(o)  The sum of five million forty thousand dollars ($5,040,000) appropriated in this section in the Social Services Block Grant for each fiscal year of the 2017‑2019 fiscal biennium shall be allocated to the Department of Health and Human Services, Division of Social Services. The Division shall allocate these funds to local departments of social services to replace the loss of Child Protective Services State funds that are currently used by county governments to pay for Child Protective Services staff at the local level. These funds shall be used to maintain the number of Child Protective Services workers throughout the State. These Social Services Block Grant funds shall be used to pay for salaries and related expenses only and are exempt from 10A NCAC 71R .0201(3) requiring a local match of twenty‑five percent (25%).
"SECTION 11L.1.(p)  The sum of four million five hundred twenty‑four thousand five hundred twenty‑five dollars ($4,524,525) for each year of the 2017‑2019 fiscal biennium appropriated in this section in the Social Services Block Grant to the Department of Health and Human Services (DHHS), Division of Central Management and Support, shall be used for DHHS competitive block grants pursuant to Section 11A.14 of this act. These funds are exempt from the provisions of 10A NCAC 71R .0201(3).
"SECTION 11L.1.(q)  The sum of five hundred eighty‑two thousand dollars ($582,000) appropriated in this section in the Social Services Block Grant for each fiscal year of the 2017‑2019 fiscal biennium to the Department of Health and Human Services, Division of Social Services, shall be used to continue support for the Child Advocacy Centers, and the funds are exempt from the provisions of 10A NCAC 71R .0201(3).
"SECTION 11L.1.(r)  The sum of three million eight hundred twenty‑five thousand four hundred forty‑three dollars ($3,825,443) for each fiscal year of the 2017‑2019 fiscal biennium appropriated in this section in the Social Services Block Grant to the Department of Health and Human Services, Divisions of Social Services and Aging and Adult Services, shall be used for guardianship services pursuant to Chapter 35A of the General Statutes. The Department may expend funds appropriated in this section to support existing corporate guardianship contracts during the 2017‑2018 and 2018‑2019 fiscal years.
"SECTION 11L.1.(s)  The sum of seven hundred thirty‑seven thousand sixty‑seven dollars ($737,067) appropriated in this section in the Social Services Block Grant for each fiscal year of the 2017‑2019 fiscal biennium shall be allocated to the Department of Health and Human Services, Division of Social Services. These funds shall be used to assist with training needs for county child welfare training staff and shall not be used to supplant any other source of funding for staff. County departments of social services are exempt from 10A NCAC 71R .0201(3) requiring a local match of twenty‑five percent (25%).
"SECTION 11L.1.(s1)  The sum of eighty‑one thousand seven hundred fifty‑eight dollars ($81,758) appropriated in this section from the Social Services Block Grant to the Department of Health and Human Services, Divisions of Social Services and Aging and Adult Services, for the 2018‑2019 fiscal year shall be used to establish a State‑level position to support oversight and monitoring of expanded Adult Protective Services (APS) to local departments of Social Services. These Social Services Block Grant funds shall be used to pay for salary and related expenses only and are exempt from 10A NCAC 71R .0201(3) requiring a local match of twenty‑five percent (25%).

"LOW‑INCOME ENERGY ASSISTANCE BLOCK GRANT
"SECTION 11L.1.(t)  Additional emergency contingency funds received may be allocated for Energy Assistance Payments or Crisis Intervention Payments without prior consultation with the Joint Legislative Oversight Committee on Health and Human Services. Additional funds received shall be reported to the Joint Legislative Oversight Committee on Health and Human Services and the Fiscal Research Division upon notification of the award. The Department of Health and Human Services shall not allocate funds for any activities, including increasing administration, other than assistance payments, without prior consultation with the Joint Legislative Oversight Committee on Health and Human Services.
"SECTION 11L.1.(u)  The sum of thirty‑six million four hundred two thousand six hundred ten dollars ($36,402,610) for the 2017‑2018 fiscal year and the sum of forty‑two million four hundred six thousand seven hundred ninety‑three dollars ($42,406,793) for the 2018‑2019 fiscal year appropriated in this section in the Low‑Income Energy Assistance Block Grant to the Department of Health and Human Services, Division of Social Services, shall be used for Energy Assistance Payments for the households of (i) elderly persons age 60 and above with income up to one hundred thirty percent (130%) of the federal poverty level and (ii) disabled persons eligible for services funded through the Division of Aging and Adult Services.
County departments of social services shall submit to the Division of Social Services an outreach plan for targeting households with 60‑year‑old household members no later than August 1 of each year. The outreach plan shall comply with the following:
(1)	Ensure that eligible households are made aware of the available assistance, with particular attention paid to the elderly population age 60 and above and disabled persons receiving services through the Division of Aging and Adult Services.
(2)	Include efforts by the county department of social services to contact other State and local governmental entities and community‑based organizations to (i) offer the opportunity to provide outreach and (ii) receive applications for energy assistance.
(3)	Be approved by the local board of social services or human services board prior to submission.

"CHILD CARE AND DEVELOPMENT FUND BLOCK GRANT
"SECTION 11L.1.(v)  Payment for subsidized child care services provided with federal TANF funds shall comply with all regulations and policies issued by the Division of Child Development and Early Education for the subsidized child care program.
"SECTION 11L.1.(w)  If funds appropriated through the Child Care and Development Fund Block Grant for any program cannot be obligated or spent in that program within the obligation or liquidation periods allowed by the federal grants, the Department may move funds to child care subsidies, unless otherwise prohibited by federal requirements of the grant, in order to use the federal funds fully.

"MENTAL HEALTH SERVICES BLOCK GRANT
"SECTION 11L.1.(x)  The sum of one million four hundred thirty thousand eight hundred fifty‑one dollars ($1,430,851) for the 2017‑2018 fiscal year and the sum of two million three hundred two thousand nine hundred twenty‑nine dollars ($2,302,929) for the 2018‑2019 fiscal year appropriated in this section in the Mental Health Services Block Grant to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, is allocated for Mental Health Services – First Psychotic Symptom Treatment. The Division shall report on (i) the specific evidence‑based treatment and services provided, (ii) the number of persons treated, and (iii) the measured outcomes or impact on the participants served. The Division shall report to the House of Representatives Appropriations Committee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, and the Fiscal Research Division no later than December 31 of each year.
"SECTION 11L.1.(x1)  The sum of two million six hundred fifty‑nine thousand six hundred dollars ($2,659,600) appropriated in this section in the Mental Health Services Block Grant to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, is allocated to support evidenced‑based training programs and initiatives for school personnel, mental health clinicians, and practitioners to improve school safety and youth mental health.

"SUBSTANCE ABUSE PREVENTION AND TREATMENT BLOCK GRANT
"SECTION 11L.1.(y)  The sum of two hundred fifty thousand dollars ($250,000) appropriated in this section in the Substance Abuse Prevention and Treatment Block Grant to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, for each fiscal year of the 2017‑2019 fiscal biennium shall be allocated to the Department of Military and Veterans Affairs, for the call‑in center established to assist veterans in locating service benefits and crisis services. The call‑in center shall be staffed by certified veteran peers within the Department of Military and Veterans Affairs and trained by the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services.
"SECTION 11L.1.(z)  The sum of five hundred thousand dollars ($500,000) allocated in this section in the Substance Abuse Prevention and Treatment Block Grant to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, for each fiscal year of the 2017‑2019 fiscal biennium shall be used for a medication‑assisted opioid use disorder treatment pilot program.

"MATERNAL AND CHILD HEALTH BLOCK GRANT
"SECTION 11L.1.(aa)  If federal funds are received under the Maternal and Child Health Block Grant for abstinence education, pursuant to section 912 of Public Law 104‑193 (42 U.S.C. § 710), for the 2017‑2018 fiscal year or the 2018‑2019 fiscal year, then those funds shall be transferred to the State Board of Education to be administered by the Department of Public Instruction. The Department of Public Instruction shall use the funds to establish an abstinence until marriage education program and shall delegate to one or more persons the responsibility of implementing the program and G.S. 115C‑81(e1)(4) and (4a). The Department of Public Instruction shall carefully and strictly follow federal guidelines in implementing and administering the abstinence education grant funds.
"SECTION 11L.1.(bb)  The sum of one million five hundred seventy‑five thousand dollars ($1,575,000) appropriated in this section in the Maternal and Child Health Block Grant to the Department of Health and Human Services, Division of Public Health, for each fiscal year of the 2017‑2019 fiscal biennium shall be used for evidence‑based programs in counties with the highest infant mortality rates. The Division shall report on (i) the counties selected to receive the allocation, (ii) the specific evidence‑based services provided, (iii) the number of women served, and (iv) any impact on the counties' infant mortality rate. The Division shall report its findings to the House of Representatives Appropriations Committee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, and the Fiscal Research Division no later than December 31 of each year.
"SECTION 11L.1.(cc)  No more than fifteen percent (15%) of the funds provided in this section in the Maternal and Child Health Block Grant to Carolina Pregnancy Care Fellowship shall be used for administrative purposes. The balance of those funds shall be used for direct services.
"SECTION 11L.1.(dd)  The sum of sixty‑eight thousand two hundred forty‑five dollars ($68,245) allocated in this section in the Maternal and Child Health Block Grant to the Department of Health and Human Services, Division of Public Health, Women and Children's Health Section, for each fiscal year of the 2017‑2019 fiscal biennium shall not be used to supplant existing State or federal funds. This allocation shall be used for a Public Health Program Consultant position assigned full‑time to manage the North Carolina Perinatal Health Strategic Plan and provide staff support for the stakeholder work group.
"SECTION 11L.1.(ee)  The sum of one hundred thousand dollars ($100,000) allocated in this section in the Maternal and Child Health Block Grant to the Department of Health and Human Services, Division of Public Health, for each year of the 2017‑2019 fiscal biennium for community‑based sickle cell centers shall not be used to supplant existing State or federal funds."

PART XII. DEPARTMENT OF AGRICULTURE AND CONSUMER SERVICES [RESERVED]

PART XIII. DEPARTMENT OF ENVIRONMENTAL QUALITY

COMBUSTION RESIDUALS SURFACE IMPOUNDMENTS REGULATORY FEE
SECTION 13.1.  G.S. 62‑302.1(b) reads as rewritten:
"(b)	Rate. – The combustion residuals surface impoundment fee shall be three‑hundredths of one percent (0.03%) of the North Carolina jurisdictional revenues of each public utility with a coal combustion residuals surface impoundment. For the purposes of this section, the term "North Carolina jurisdictional revenues" has the same meaning as in G.S. 62‑302."

SHALLOW DRAFT NAVIGATION CHANNEL DREDGING AND AQUATIC WEED FUND
SECTION 13.2.  G.S. 143‑215.73F(b)(2) reads as rewritten:
"(2)	For aquatic weed control projects in waters of the State under Article 15 of Chapter 113A of the General Statutes. Funding for aquatic weed control projects is limited to one million dollars ($1,000,000) in each fiscal year."

ANNUAL MINE OPERATING FEE/DUE DATE CHANGE
SECTION 13.3.  G.S. 74‑55 reads as rewritten:
"§ 74‑55.  Reclamation report.
(a)	By July 1 of each year, the operator shall file a report of activities completed during the preceding year on a form prescribed by the Department, which includes all of the following:
(1)	Identify the mine, the operator and the permit number. 
(2)	State acreage disturbed by mining in the last 12‑month period. 
(3)	State and describe amount and type of reclamation carried out in the last 12‑month period. 
(4)	Estimate acreage to be newly disturbed by mining in the next 12‑month period. 
(5)	Provide such maps as may be specifically requested by the Department. 
(6)	Include the annual operating fee pursuant to G.S. 74‑54.1(a1).
(b)	When filing the annual report, the permittee shall pay the annual operating fee for the permit to the Department by September 1 of each year until the permit has been terminated by the Department. The Department may assess and collect a monthly penalty for each annual report or annual operating fee not filed by September 30 of each year until the annual report and annual operating fee are filed with the Department. If the required annual report and operating fee, including any late payment penalties, are not filed by February 28 of each year, the Department shall give written notice to the operator and shall then initiate permit revocation proceedings in accordance with G.S. 74‑58."

SUBPART XIII‑A. WILDLIFE RESOURCES COMMISSION [RESERVED]

PART XIV. DEPARTMENT OF NATURAL AND CULTURAL RESOURCES

ESTABLISH STATE PARKS FUNDS AS A SPECIAL REVENUE FUND
SECTION 14.1.  Article 2 of Chapter 143B of the General Statutes is amended by adding a new section to read:
"§ 143B‑135.204.  Establish State Parks Fund as a special revenue fund.
(a)	Fund. – The State Parks Fund is hereby created as a special revenue fund. The State Parks Fund shall be used for the following types of projects with respect to the State Parks System:
(1)	Repair, renovation, maintenance, and educational exhibit construction. Funds used for repair, renovation, and expansion projects may be transferred to a capital projects fund to account for use of the funds for each project.
(2)	Preservation, development, and expansion of an individual park, State recreational area, State natural area, State lake, State river, or State trail.
(3)	The acquisition, maintenance, or replacement of vehicles and other transportation equipment as required to maintain adequate service to the public.
(4)	Matching of private funds that are raised for these purposes.
(5)	Marketing of the State parks.
(b)	Disposition of Receipts. – All receipts derived from the lease or rental of property or facilities; disposition of structures or products of the land; private donations; and camping, activity, and service fees collected shall be credited to the Division of Parks and Recreation's General Fund operating budget. At the end of each fiscal year, the Secretary may transfer from the Division of Parks and Recreation's General Fund operating budget to the State Parks Fund an amount not to exceed the sum of two million dollars ($2,000,000) and any donations, gifts, grants, and devises received by the Division of Parks and Recreation.
(c)	Approval. – The Secretary may approve the use of the State Parks Fund for repair and renovation projects at the Division of Parks and Recreation that comply with the following:
(1)	The total project cost is less than five hundred thousand dollars ($500,000).
(2)	The project meets the requirements of G.S. 143C‑4‑3(b).
(d)	Report. – The Department shall submit to the Joint Legislative Oversight Committee on Agriculture and Natural and Economic Resources and the Fiscal Research Division by September 30 of each year a report on the State Parks Fund that shall include the source and amounts of all funds credited to the Fund and the purpose and amounts of all expenditures from the Fund during the prior fiscal year."

ADD DNCR TO CRIMINAL JUSTICE TRAINING AND STANDARDS ACT
SECTION 14.2.  G.S. 143‑166.13(a) is amended by adding a new subdivision to read:
"(a)	The following persons who are subject to the Criminal Justice Training and Standards Act are entitled to benefits under this Article:
…
(21)	Sworn State Law-Enforcement Officers with the power of arrest, Department of Natural and Cultural Resources."

ADD MARKETING PROJECTS TO THE NORTH CAROLINA ZOO FUND
SECTION 14.3.  G.S. 143B‑135.209(a) is amended by adding a new subdivision to read:
"(a)	Fund. – The North Carolina Zoo Fund is created as a special fund. The North Carolina Zoo Fund shall be used for the following types of projects at the North Carolina Zoological Park and to match private funds raised for these types of projects:
(1)	Repair, renovation, expansion, maintenance, and educational exhibit construction.
(2)	Renovations of exhibits in habitat clusters, visitor services facilities, and support facilities (including greenhouses and temporary animal holding areas).
(3)	The acquisition, maintenance, or replacement of tram equipment as required to maintain adequate service to the public.
(4)	Marketing the zoo."

CLARIFY AND EXTEND HISTORIC PRESERVATION TAX CREDIT
SECTION 14.4.(a)  G.S. 105‑129.106(b) reads as rewritten:
"(b)	Limitations. – The amount of credit allowed under this section with respect to rehabilitation expenses for a non‑income‑producing certified historic structure may not exceed twenty‑two thousand five hundred dollars ($22,500) per discrete property parcel. In the event that the taxpayer is the transferee of a State‑certified historic structure for which rehabilitation expenses were made, the taxpayer as transferee is allowed a credit under this section for the rehabilitation expenses made by the transferor only if the transfer takes place before the structure is placed in service. In this event, the transferor must provide the transferee with documentation detailing the amount of rehabilitation expenses and credit. No other taxpayer may claim such credit. A taxpayer may claim a credit per discrete property parcel under this section no more than once in any five‑year period, carryovers notwithstanding."
SECTION 14.4.(b)  G.S. 105‑129.110 reads as rewritten:
"§ 105‑129.110.  Sunset.
This Article expires for qualified rehabilitation expenditures and rehabilitation expenses incurred on or after January 1, 2030."

NATURAL HERITAGE PROGRAM ADMINISTRATION AND FUND CORRECTION
SECTION 14.5.(a)  Part 42 of Article 2 of Chapter 143B of the General Statutes is amended by adding a new section to read:
"§ 143B‑135.372.  Administration of the Conservation Tax Credit Program.
All authority, power, and responsibility related to Conservation Tax Credits, the Conservation Tax Credit Program, and properties for which tax credits were granted for tax years beginning before January 1, 2014, previously given to the Department of Environmental Quality or its predecessors under G.S. 105‑130.34 and G.S. 105‑151.12, prior to the adoption of S.L. 2013‑316, and G.S. 113A‑231, and prior to the adoption of S.L. 2014‑3, are given to the Department of Natural and Cultural Resources which may exercise the same through the Natural Heritage Program."
SECTION 14.5.(b)  G.S. 143B‑135.272(b) reads as rewritten:
"(b)	Fees collected under this section are receipts of the Department of Natural and Cultural Resources and shall be deposited in a special fund for the purpose of supporting the operations of the Natural Heritage Program."

NATURAL HERITAGE PROGRAM REDUCE OR WAIVE FEES FLEXIBILITY
SECTION 14.6.  G.S. 143B‑135.272 reads as rewritten:
"§ 143B‑135.272.  Access to information; fees.
(a)	The Secretary may establish fees to defray the costs associated with any of the following:
(1)	Responding to inquiries requiring customized environmental review services or maintaining technology that supports an online interface for external users to access Natural Heritage Program data. 
…
(c)	The Secretary may reduce or waive fees established under this section if the Secretary determines that a reduction or waiver of the fees is in the public interest or serves the purposes declared in the Nature Preserves Act, Part 42 of Article 2 of Chapter 143B of the General Statutes."

PART XV. DEPARTMENT OF COMMERCE

INCREASE AWARDS CAP FOR ONE NORTH CAROLINA FUND
SECTION 15.1.  G.S. 143B‑437.71(b1) reads as rewritten:
"(b1)	Awards. – The amounts committed in Governor's Letters issued in a single fiscal biennium may not exceed forty‑four million dollars ($44,000,000)."

COMMUNITY INNOVATION FUND
SECTION 15.2.(a)  Fund. – The North Carolina Community Innovation Fund (CIF) is established as a special revenue fund in the Department of Commerce (Department). The Office of Science, Technology & Innovation within the Department shall be responsible for administering the program.
SECTION 15.2.(b)  Purposes. – Moneys in the CIF shall be allocated pursuant to this subsection. The Department shall make grants from the CIF to "micropolitan" communities and majority‑minority communities within metro areas that have seen systemic under investment across North Carolina to stimulate small business growth, foster vibrant local innovation ecosystems, and help small‑ to medium‑sized communities across the State transition to a knowledge‑based economy. A "micropolitan community" is one or more adjacent counties or county equivalents that have at least one urban core area of at least 10,000 population but less than 50,000, plus adjacent territory that has a high degree of social and economic integration with the core as measured by commuting ties. An "innovation ecosystem" is defined as a collection of people, organizations, cultures, policies, and programs that creates innovative ideas and discoveries and translates those ideas into innovative products, services, and business models to improve economic well‑being and quality of life. Moneys in the CIF shall be used for projects that will target, but not be limited to, the following outcomes:
(1)	Strengthening internal networks among local entrepreneurs and the broader business community, as well as the connection between the local micropolitan innovation ecosystem and proximate metro innovation ecosystems.
(2)	Attracting more capital investment into the local innovation ecosystem.
(3)	Growing the number of locally owned small businesses in the community.
(4)	Increasing employment opportunities within the knowledge‑based economy.
(5)	Fostering more enterprises led and owned by women and entrepreneurs of color.
(6)	Contributing to increased business activity and density in underdeveloped commercial corridors.
(7)	Increasing media visibility for these efforts locally, statewide, and, ultimately, nationally.
SECTION 15.2.(c)  Cap and Matching Funds. – The Department may require a participating community to provide matching funds for a grant from the CIF.
SECTION 15.2.(d)  Administrative Expenses. – Of the funds appropriated to the CIF, the Department may use up to sixty thousand dollars ($60,000), if necessary, to cover the Department's expenses in administering the CIF.
SECTION 15.2.(e)  CIF Advisory Committee. – The Department may establish an advisory committee to assist in the development of the specific selection criteria and the grant‑making process of the CIF.
SECTION 15.2.(f)  Agreements Required. – Funds may be disbursed from the CIF only in accordance with agreements entered into between the Department and an eligible grantee. Eligible grantees are nonprofit organizations, councils of government, and local governments.
SECTION 15.2.(g)  Program Guidelines. – The Department shall develop guidelines related to the administration of this program. At least 20 days before the effective date of any guidelines or nontechnical amendments to the guidelines, the Department shall publish the proposed guidelines on the Department's Web site and provide notice to persons who have requested notice of proposed guidelines. In addition, the Department must accept oral and written comments on the proposed guidelines during the 15 business days beginning on the first day that the Department has completed these notifications. Guidelines adopted under this section shall not be subject to the requirements of Article 2A of Chapter 150B of the General Statutes.

RENAME ONE NORTH CAROLINA SMALL BUSINESS FUND
SECTION 15.3.(a)  G.S. 143B‑437.71 reads as rewritten:
"§ 143B‑437.71.  One North Carolina Fund established as a special revenue fund.
…
(b)	Purposes. – Moneys in the One North Carolina Fund may only be allocated pursuant to this subsection. Moneys may be allocated to local governments for use in connection with securing commitments for the recruitment, expansion, or retention of new and existing businesses and to the Small Business Technology Commercialization Program created pursuant to subsection (c) of this section in an amount not to exceed three million dollars ($3,000,000). Moneys in the One North Carolina Fund allocated to local governments shall be used for the following purposes only:
(1)	Installation or purchase of equipment.
(2)	Structural repairs, improvements, or renovations to existing buildings to be used for expansion.
(3)	Construction of or improvements to new or existing water, sewer, gas, or electric utility distribution lines or equipment for existing buildings.
(4)	Construction of or improvements to new or existing water, sewer, gas, or electric utility distribution lines or equipment for new or proposed buildings to be used for manufacturing and industrial operations.
(5)	Any other purposes specifically provided by an act of the General Assembly.
…
(c)	There is created in the One North Carolina Fund a special account, the Small Business Technology Commercialization Program, to be used for the North Carolina SBIR/STTR Incentive Program and the North Carolina SBIR/STTR Matching Funds Program, as specified in Part 2I of Article 10 of Chapter 143B of the General Statutes."
SECTION 15.3.(b)  G.S. 143B‑437.80(a) reads as rewritten:
"(a)	Program. – There is established the North Carolina SBIR/STTR Incentive Program to be administered by the North Carolina Board of Science, Technology, and Innovation. In order to foster job creation and economic development in the State, the Board may provide grants to eligible businesses to offset costs associated with applying to the United States Small Business Administration for Small Business Innovative Research (SBIR) grants or Small Business Technology Transfer Research (STTR) grants. The grants shall be paid from the Small Business Technology Commercialization Program established in G.S. 143B‑437.71."

NC JOB READY FUND
SECTION 15.4.(a)  Article 2 of Chapter 96 of the General Statutes is amended by adding a new section to read:
"§ 96‑6.3.  NC Job Ready Fund.
(a)	NC Job Ready Fund. – There is established in the Department of Commerce an NC Job Ready Fund for the purposes of providing job training, employment‑related services, and economic development services to North Carolina job seekers and employers in order to address workforce skills gaps. The Fund consists of the revenues derived from the Unemployment Insurance Reserve Fund Surtax imposed under G.S. 96‑9.7.
(b)	Allocation of Funds. – The Department of Commerce shall allocate monies in the fund on the following basis:
(1)	Thirty million dollars ($30,000,000) shall be allocated to the North Carolina Getting Ready for Opportunities in the Workforce (NC GROW) scholarship program in The North Carolina Community College System.
(2)	Ten million dollars ($10,000,000) shall be allocated to the Finish Line Grants program in The University of North Carolina System.
(3)	Five million dollars ($5,000,000) shall be allocated to the Finish Line Grants program in The North Carolina Community College System.
(4)	Five million dollars ($5,000,000) shall be allocated to the Finish Line Grants program administered by the North Carolina Independent Colleges and Universities.
(5)	Ten million dollars ($10,000,000) shall be allocated to the Employer Training Fund in the North Carolina Department of Commerce, Division of Workforce Solutions.
In the event revenues from the surtax imposed under G.S. 96‑9.7 are insufficient to support this allocation or are in excess of these amounts, the Secretary of the Department of Commerce may allocate funds to the programs listed in this subsection on a pro rata basis."
SECTION 15.4.(b)  G.S. 96‑9.2(c) reads as rewritten:
"(c)	Contribution Rate for Experience‑Rated Employer. – The contribution rate for an experience‑rated employer who does not qualify as a beginning employer under subsection (b) of this section is determined in accordance with the table set out below and then rounded to the nearest one‑hundredth percent (0.01%), subject to the minimum and maximum contribution rates. The minimum contribution rate is six‑hundredths of one percent (0.06%). The maximum contribution rate is five and seventy‑six hundredths percent (5.76%). "Total insured wages" are the total wages reported by all insured employers for the 12‑month period ending on June 30 preceding the computation date. The calculations in the table set out below are applied as of September 1 following the computation date. An employer's experience rating is computed as a reserve ratio in accordance with G.S. 96‑9.4. An employer's reserve ratio percentage (ERRP) is the employer's reserve ratio multiplied by sixty‑eight hundredths. A positive ERRP produces a lower contribution rate, and a negative ERRP produces a higher contribution rate.
UI Trust Fund Balance
as Percentage of Total	Contribution Rate
Insured Wages
Less than or equal to 1%	2.9% minus ERRP
Greater than 1% but less
than or equal to 1.25%	2.4% minus ERRP
Greater than 1.25%	1.4% minus ERRP"
SECTION 15.4.(c)  G.S. 96‑9.7 reads as rewritten:
"§ 96‑9.7.  Surtax for the Unemployment Insurance Reserve Fund.
	Surtax Imposed. – A surtax is imposed on an employer who is required to make a contribution to the Unemployment Insurance Fund equal to twenty percent (20%) of the contribution due under G.S. 96‑9.2. Surtaxes collected under this section must be credited to the NC Job Ready Fund established under G.S. 96‑6.3. Interest and penalties collected on unpaid surtaxes imposed by this section must be credited to the Supplemental Employment Security Administration Fund. Penalties collected on unpaid surtaxes imposed by this section must be transferred to the Civil Penalty and Forfeiture Fund established in G.S. 115C‑457.1. Of the revenues derived from the surtax, the Department of Commerce may retain funds equal to the administrative costs associated with collection.
	"
SECTION 15.4.(d)  Subsection (b) of this section becomes effective August 1, 2018. Subsections (a) and (c) of this section become effective July 1, 2018.

EMPLOYER TRAINING FUND
SECTION 15.5.  Article 2 of Chapter 96 of the General Statutes is amended by adding a new section to read:
"§ 96‑6.4.  Employer Training Fund.
(a)	The Employer Training Fund is established as a special revenue fund in the Department of Commerce, Division of Workforce Solutions, for the purposes of supporting collaboration with and assistance to employers in addressing workforce training needs and employee skill gaps. The Fund consists of allocations from the NC Job Ready Fund as directed in G.S. 93‑6.3. The Department of Commerce, Division of Workforce Solutions, may award grants or contract with organizations to support a variety of work‑based learning initiatives, including, but not limited to, the establishment or expansion of registered Apprenticeship programs, training for incumbent workers, and paid employment opportunities for students. Grants may include, but are not limited to, carrying out the following:
(1)	Upskilling existing entry‑ to mid‑level employees through additional training while creating newly open positions that may be backfilled with entry‑level hires.
(2)	Increasing opportunities for flexible, paid internship and employment opportunities for high school and postsecondary students.
(3)	Establishing or expanding registered Apprenticeship programs.
(b)	The Department of Commerce, Division of Workforce Solutions, shall collaborate with the North Carolina Community College System, Workforce Development Boards, employers, and other appropriate entities to design and implement the Employer Training Fund. The Department of Commerce shall issue a Request for Proposal (RFP) for the Employer Training Fund. The RFP shall require that proposals include the following information, at a minimum:
(1)	Description of how funds will be used to carry out the proposed activities, including the number of people served.
(2)	Documentation of expenses where proposals request reimbursement of costs to carry out the proposed activities.
(3)	Plans for financial sustainability once grant funds have been expended.
(c)	By November 1, 2019, and annually thereafter, the Department of Commerce shall submit a report to the Governor, the Office of State Budget and Management, the Joint Legislative Oversight Committee on Agriculture and Natural, and Economic Resources, and the Fiscal Research Division on the use and outcomes of the Employer Training Fund."

SUBPART XV‑A. COMMERCE – STATE AID [RESERVED]

SUBPART XV‑B. DEPARTMENT OF LABOR

CERTAIN FEES SHALL NOT REVERT
SECTION 15B.1.  G.S. 95‑108 reads as rewritten:
"§ 95‑108.  Disposition of fees.
All fees collected by the Department of Labor pursuant to G.S. 95‑69.11, 95‑110.5, 95‑111.4 and 95‑120 shall be deposited with the State Treasurer and shall be used exclusively for inspection and certification purposes. All fees collected pursuant to this section that have not yet been expended or encumbered at the end of each fiscal year shall not revert but shall remain available for expenditure in the subsequent fiscal year."

PART XVI. DEPARTMENT OF PUBLIC SAFETY

SUBPART XVI‑A. GENERAL PROVISIONS

DEPARTMENT OF PUBLIC SAFETY BUDGET FLEXIBILITY
SECTION 16A.1.  Notwithstanding G.S. 143C‑6‑4, for the fiscal year 2018‑2019, the Department of Public Safety, with the approval of the Director of the Budget, may adjust the authorized budget to realign line items across purposes and programs of the Department to fund nonrecurring expenses associated with projects designed to enhance the safety and security of their employees and the prison and juvenile facilities to which they are assigned.

SUBPART XVI‑B. DIVISION OF LAW ENFORCEMENT [RESERVED]

SUBPART XVI‑C. DIVISION OF ADULT CORRECTION

EXTEND REENTRY COUNCIL CONTRACTS
SECTION 16C.1.  Section 16C.11D of S.L. 2017‑57 reads as rewritten:
"SECTION 16C.11D. For the 2017‑2019 fiscal biennium, the Department of Public Safety may use existing Treatment for Effective Community Supervision funds to continue support for Local Reentry Councils in the following five pilot sites:
(1)	Hoke/Scotland/Robeson Counties – Robeson County Manager's Office.
(2)	Nash/Edgecombe/Wilson Counties – NC Community Action Association.
(3)	Pitt County – Life of NC, Inc., dba STRIVE.
(4)	Buncombe County – Buncombe County Health & Human Services/RHA.
(5)	Mecklenburg County – Mecklenburg Criminal Justice Services, Mecklenburg County Manager's Office."

SUBPART XVI‑D. DIVISION OF JUVENILE JUSTICE [RESERVED]

SUBPART XVI‑E. EMERGENCY MANAGEMENT AND NATIONAL GUARD

CREATE HAZARDOUS MATERIALS FACILITY FUND
SECTION 16E.1.  G.S. 166A‑29.1 reads as rewritten:
"§ 166A‑29.1.  Hazardous materials facility fee.
…
(b)	Annual Fee Shall Be Charged. – A person or business required under Section 302 or 312 of EPCRA to submit a notification or an annual inventory form to the Division shall be required to pay to the Department an annual fee in the amount set forth in subsection (c) of this section.
(b1)	The Hazardous Materials Facility Fund is established as a special fund within the Department. All fees collected under this section shall be credited to the fund and shall be used to support the hazardous materials response programs established pursuant to subsection (f) of this section.
…
(f)	Use of Fee Proceeds. – The proceeds of fees assessed pursuant to this section shall be used for the following:
(1)	To offset costs associated with the establishment and maintenance of a hazardous materials database and a hazardous materials response application.
(2)	To offset costs associated with the operations of the regional response program for hazardous materials emergencies and terrorist incidents.
(3)	To provide grants to counties for hazardous materials emergency response planning, training, equipment, and related exercises.
(4)	To offset Division costs that directly support hazardous materials emergency preparedness and response."

RADIOLOGICAL EMERGENCY PLANNING
SECTION 16E.2.  G.S. 166A‑29 reads as rewritten:
"§ 166A‑29.  Emergency planning; charge.
(a)	Every person, firm, corporation or municipality who is licensed to construct or who is operating a fixed nuclear facility for the production of electricity shall pay to the Department of Public Safety an annual fee of at least thirty thousand dollars ($30,000) for each fixed nuclear facility which is located within this State or has a Plume Exposure Pathway Emergency Planning Zone of which any part is located within this State. This fee is to be applied to the costs of planning and implementing emergency response activities as are required by the Federal Emergency Management Agency for the operation of nuclear facilities. Said fee is to be paid on a schedule set by the Department of Public Safety. This minimum fee may be increased from time to time as the costs of such planning and implementation increase. Such increases shall be by agreement between the State and the licensees or operators of the fixed nuclear facilities.
(b)	Every person, firm, corporation or municipality who is licensed to construct or who is operating a fixed nuclear facility for the production of electricity shall pay to the Department of Public Safety, for the use of the Radiation Protection Section of the Division of Health Service Regulation of the Department of Health and Human Services, an annual fee of at least thirty‑six thousand dollars ($36,000) for each fixed nuclear facility that is located within this State or that has a Plume Exposure Pathway Emergency Planning Zone any part of which is located within this State. This fee shall be applied only to the costs of planning and implementing emergency response activities as required by the Federal Emergency Management Agency for the operation of nuclear facilities. This fee is to be paid on a schedule set by the Department of Public Safety.
(c)	The fees imposed by this section do not revert at the end of a fiscal year. The amount of fees carried forward from one fiscal year to the next shall be taken into consideration in determining the fee to be assessed each fixed nuclear facility under subsection (a) in that fiscal year."

PART XVII. DEPARTMENT OF JUSTICE

SEXUAL ASSAULT EVIDENCE COLLECTION KIT TRACKING AND ACCOUNTABILITY
SECTION 17.1.(a)  Article 9 of Chapter 114 of the General Statutes is amended by adding a new section to read:
"§ 114‑65.  Statewide Sexual Assault Evidence Collection Kit Tracking System and Annual Report.
(a)	Establishment. – There shall be established a Statewide Sexual Assault Evidence Collection Kit Tracking System, hereinafter referred to as the System. All sexual assault evidence collection kits purchased or distributed under G.S. 143B‑2101 on or after October 1, 2018, shall be trackable and shall comply with the requirements of the System. The Director of the State Crime Laboratory (Director) shall implement protocols and administer the System and the Secretary of the Department of Public Safety (Secretary) shall adopt rules and guidelines for agencies required to participate in the System under this section. The Director shall ensure that the System protects victim information against disclosure to nonparticipating agencies. Except as otherwise required for reporting under subsection (e) of this section, information maintained in the System is confidential and not a public record as defined in G.S. 132‑1.
(b)	Required Participation. – All medical providers, law enforcement agencies, forensic laboratories, or other persons or entities having custody or use of any sexual assault evidence collection kit in the State shall participate in the System and comply with the established protocols, rules, and guidelines. A participating entity shall be permitted to access the entity's tracking information through the System.
(c)	Victim's Access to View Status of Kit. – It is the policy of the State to ensure that victims of sexual assault or attempted sexual assault is able to track the location of the sexual assault evidence collection kit used to conduct the victim's forensic medical examination and that the victim is also able to determine whether forensic testing of the kit has been completed.
(d)	Tracking of Previously Untested Kits. – The Director shall implement protocols and the Secretary shall adopt rules and guidelines to ensure that previously untested sexual assault evidence collection kits are trackable and are entered into the System. Any law enforcement agency, medical provider, or forensic laboratory that has in its custody a previously untested sexual assault evidence collection kit used for a forensic medical examination shall comply with the established protocols, rules, and guidelines with respect to all untested kits.
For purposes of this subsection, a "previously untested sexual assault evidence collection kit" means any kit that has not undergone forensic testing and was identified and included in the 2017 statewide inventory of kits in law enforcement custody pursuant to Section 17.7 of S.L. 2017‑57. To the extent practicable, and consistent with protecting victim confidentiality for unreported sexual assaults, a law enforcement agency having custody of a kit governed by this subsection shall take reasonable measures to provide appropriate tracking information to the affected victim.
(e)	Annual Report to the General Assembly. – Beginning on December 1, 2019, and yearly thereafter, the State Crime Laboratory shall report to the Joint Legislative Oversight Committee on Justice and Public Safety the following information for the previous fiscal year:
(1)	The number of tracking‑enabled kits which have been shipped to medical facilities/providers.
(2)	The number of tracking‑enabled kits which have been used by medical facilities/providers to conduct forensic medical examinations of sexual assault victims.
(3)	Of the tracking‑enabled kits used by medical facilities or medical providers to conduct forensic medical examinations, the number of kits for which a sexual assault has been reported to law enforcement, sorted by law enforcement agency.
(4)	Of the tracking‑enabled kits generated for reported cases, the number of kits which have been submitted to a laboratory for forensic testing.
(5)	Of the tracking‑enabled kits submitted for forensic testing, the number of kits for which forensic testing has been completed.
(6)	The number of tracking‑enabled kits for which a sexual assault has not been reported, including the total submitted to local law enforcement and the total submitted to Department of Public Safety, Law Enforcement Support Services.
(7)	Information regarding efforts to track and test previously untested kits described in subsection (d) of this section."
SECTION 17.1.(b)  G.S. 143B‑1201 reads as rewritten:
"§ 143B‑1201. Restitution; actions.
(a)	The Program shall be an eligible recipient for restitution or reparation under G.S. 15A‑1021, 15A‑1343, 148‑33.1, 148‑33.2, 148‑57.1, and any other applicable statutes.
(b)	When any victim who: 
(1)	Has received assistance under this Part; 
(2)	Brings an action for damages arising out of the rape, attempted rape, sexual offense, or attempted sexual offense for which she received that assistance; and 
(3)	Recovers damages including the expenses for which she was awarded assistance, the court shall make as part of its judgment an order for reimbursement to the Program of the amount of any assistance awarded less reasonable expenses allocated by the court to that recovery.
(c)	Funds appropriated to the Department of Public Safety for this program may be used to purchase and distribute sexual assault evidence collection kits approved by the Director of the State Crime Laboratory.
(d)	The Secretary, in consultation with the State Crime Laboratory, shall require that all program kits produced for use on or after October 1, 2018, are compatible with the Statewide Sexual Assault Evidence Collection Kit Tracking System, as administered by the State Crime Laboratory under G.S. 114‑65."
SECTION 17.1.(c)  The North Carolina Forensic Science Advisory Board shall convene a working group to make recommendations regarding the testing priority of untested sexual assault kits identified in the 2017 Sexual Assault Evidence Collection Kit Law Enforcement Report made pursuant to Section 17.7 of S.L. 2017‑57. The working group shall include representatives from law enforcement, victims' advocates such as the North Carolina Victim Assistance Network (NCVAN) and the North Carolina Coalition Against Sexual Assault (NCCASA), RTI International, the North Carolina Department of Justice, prosecutors, and criminal defense attorneys. The working group shall develop findings and recommendations, including a strategic plan, that identifies which untested sexual assault evidence collection kits can be tested, the priority order for testing the kits, and a statewide protocol for testing future sexual assault evidence collection kits. The Secretary shall submit the findings and recommendations of the working group to the Joint Legislative Oversight Committee on Justice and Public Safety by December 1, 2018.

REPEAL ATTORNEY GENERAL'S OFFICE MANAGEMENT FLEXIBILITY REDUCTION
SECTION 17.2.  Section 17.5 of S.L. 2017‑57 is repealed.

PART XVIII. JUDICIAL DEPARTMENT [RESERVED]

SUBPART XVIII‑A. OFFICE OF INDIGENT DEFENSE SERVICES [RESERVED]

SUBPART XVIII‑B. ADMINISTRATIVE OFFICE OF THE COURTS [RESERVED]

PART XIX. DEPARTMENT OF MILITARY AND VETERANS AFFAIRS [RESERVED]

PART XX. OFFICE OF ADMINISTRATIVE HEARINGS [RESERVED]

PART XXI. TREASURER [RESERVED]

PART XXII. DEPARTMENT OF INSURANCE

INSURANCE REGULATORY CHARGE
SECTION 22.1.  The percentage rate to be used in calculating the insurance regulatory charge under G.S. 58‑6‑25 is six and one‑half percent (6.5%) for the 2019 calendar year.

PART XXIII. STATE BOARD OF ELECTIONS [RESERVED]

PART XXIV. GENERAL ASSEMBLY[RESERVED]

PART XXV. OFFICE OF GOVERNOR [RESERVED]

PART XXVI. OFFICE OF STATE BUDGET AND MANAGEMENT [RESERVED]

PART XXVII. STATE AUDITOR [RESERVED]

PART XXVIII. HOUSING FINANCE AGENCY [RESERVED]

PART XXIX. DEPARTMENT OF THE SECRETARY OF STATE [RESERVED]

PART XXX. OFFICE OF LT. GOVERNOR [RESERVED]

PART XXXI. DEPARTMENT OF ADMINISTRATION

LICENSE TO GIVE TRUST FUND COMMISSION
SECTION 31.1.(a)  G.S. 20‑7.5(a) reads as rewritten:
"(a)	There is established the License to Give Trust Fund Commission. The Commission shall be located in the Department of Administration. The Commission may allocate funds from the License to Give Trust Fund for the purposes authorized in G.S. 20‑7.4. The Commission shall have 15 members, appointed as follows:
(1)	Four members by the General Assembly, upon the recommendation of the President Pro Tempore of the Senate:
a.	One representative of Carolina Donor Services.
b.	One representative of LifeShare of The Carolinas.
c.	Two members who have demonstrated an interest in organ and tissue donation and education.
(2)	Four members by the General Assembly, upon the recommendation of the Speaker of the House of Representatives:
a.	One representative of The North Carolina Eye Bank, Inc.
b.	One representative of The Carolinas Center for Hospice and End‑of‑Life Care.
c.	Two members who have demonstrated an interest in promoting advance care planning education.
(3)	Seven members by the Governor:
a.	Three members representing organ, tissue, and eye recipients, families of recipients, or families of donors. Of these three, one each from the mountain, heartland, and coastal regions of the State.
b.	One member who is a transplant physician licensed to practice medicine in this State.
c.	One member who has demonstrated an interest in organ and tissue donation and education.
d.	One member who has demonstrated an interest in promoting advance care planning education.
e.	A representative of the North Carolina Department of Transportation."
SECTION 31.1.(b)  G.S. 20‑7.6 reads as rewritten:
"§ 20‑7.6.  Powers and duties of the License to Give Trust Fund Commission.
The License to Give Trust Fund Commission has the following powers and duties:
(1)	Establish general policies and guidelines for awarding grants‑in‑aid to nonprofit entities to conduct education and awareness activities on organ and tissue donation and advance care planning.
(2)	Accept gifts or grants from other sources to further the purposes of the License to Give Trust Fund. Such gifts or grants shall be transmitted to the State Treasurer for credit to the Fund.
	"

SIMPLIFYING PROCUREMENT THROUGH COMMON SENSE GOVERNMENT
SECTION 31.2.(a)  G.S. 116‑31.10 reads as rewritten:
"§ 116‑31.10.  Powers of Board regarding certain purchasing contracts.
	Notwithstanding G.S. 143‑53.1 or G.S. 143‑53(a)(2), the expenditure benchmark for the President of The University of North Carolina or special responsibility constituent institution with regard to competitive bid procedures and the bid value benchmark shall be an amount not greater than one million dollars ($1,000,000). The Board shall set the benchmark for the President and each institution from time to time. In setting the President's or an institution's benchmark in accordance with this section, the Board shall consider the President's administrative staff's or institution's overall capabilities including staff resources, purchasing compliance reviews, and audit reports. The Board shall also consult with the Director of the Division of Purchase and Contract and the Director of the Budget prior to setting the benchmark.
	"
SECTION 31.2.(b)  G.S. 115D‑58.14(c) reads as rewritten:
"(c)	The State Board of Community Colleges, in consultation with the Department of Administration, shall review the purchasing process for community colleges and may increase or decrease the purchasing/delegation benchmark for each community college based on the college's overall capabilities, including staff resources, purchasing compliance reviews, and audit reports. The State Board may, in its discretion, reduce a community college's purchasing/delegation benchmark at anytime. The State Board shall not increase a community college's purchasing/delegation benchmark by more than fifteen percent (15%) in any calendar year without the concurrence of the Department of Administration within 60 days of submission. The maximum purchasing/delegation benchmark for a community college shall be two hundred thousand dollars ($200,000)."
SECTION 31.2.(c)  G.S. 143‑49 reads as rewritten:
"§ 143‑49.  Powers and duties of Secretary.
The Secretary of Administration has the power and authority, and it is the Secretary's duty, subject to the provisions of this Article:
…
(15)	To work in conjunction with the Office of State Human Resources, the Division of Purchase and Contract, and The University of North Carolina System to develop a rigorous procurement training and certification program for State employees. State agencies that are subject to the requirements of this Article shall be required to complete periodic training and education as prescribed by the Division of Purchase and Contract. The program shall be administered by the Division of Purchase and Contract.
…."
SECTION 31.2.(d)  G.S. 143‑53(a) reads as rewritten:
"(a)	The Secretary of Administration may adopt rules governing the following:
(1)	Prescribing the routine and procedures to be followed in canvassing bids and awarding contracts, and for reviewing decisions made pursuant thereto, and the decision of the reviewing body shall be the final administrative review. The Division of Purchase and Contract shall review and decide a protest on a contract valued above the State agency's delegation or benchmark level. The Secretary shall adopt rules or criteria governing the review of and decision on a protest on a contract of less than the State agency's delegation or benchmark level for the agency that awarded the contract.
…
(5)	Prescribing conditions under which purchases and contracts for the purchase, installment or lease‑purchase, rental or lease of goods and services may be entered into by means other than competitive bidding, including, but not limited to, negotiation, reverse auctions, and acceptance of electronic bids. Notwithstanding the provisions of subsections (a) and (b) of this section, any waiver of competition for the purchase, rental, or lease of goods and services is subject to prior review by the Secretary, if the expenditure exceeds an agency's delegation or benchmark level. The Division may levy a fee, not to exceed one dollar ($1.00), for review of each waiver application.
…."
SECTION 31.2.(e)  G.S. 143‑57 reads as rewritten:
"§ 143‑57.  Purchases of articles in certain emergencies.
In case of any emergency or pressing need arising from unforeseen causes including but not limited to delay by contractors, delay in transportation, breakdown in machinery, or unanticipated volume of work, the Secretary of Administration shall have power to obtain or authorize obtaining in the open market any necessary supplies, materials, equipment, printing or services for immediate delivery to any department, institution or agency of the State government. A report on the circumstances of such emergency or need and the transactions thereunder shall be made a matter of record promptly thereafter. If the expenditure exceeds the agency delegation or benchmark, the report shall also be made promptly thereafter to the Division of Purchase and Contract."

PART XXXII. DEPARTMENT OF REVENUE

DOR/REMAINING ITAS BUDGET USED FOR OPERATIONS AND MAINTENANCE FOR TAX SYSTEM
SECTION 32.1.  All remaining funds in Budget Code 24708 (Revenue‑IT Projects) for the Integrated Tax Administration System (ITAS) replacement project are hereby appropriated to support Portfolio Warehouse, Modernize eFile, and tax systems operations and maintenance upgrades.

PART XXXIII. OFFICE OF STATE CONTROLLER [RESERVED]

PART XXXIV. DEPARTMENT OF TRANSPORTATION

CASH FLOW HIGHWAY FUND AND HIGHWAY TRUST FUND APPROPRIATIONS
SECTION 34.1.  Subsections (b) and (c) of Section 34.1 of S.L. 2017‑57 read as rewritten:
"SECTION 34.1.(b)  The General Assembly authorizes and certifies anticipated revenues for the Highway Fund as follows:
For Fiscal Year 2019‑2020	$ 2,288.5 million
For Fiscal Year 2020‑2021	$ 2,376.7 million
For Fiscal Year 2021‑2022	$ 2,415.6 million
For Fiscal Year 2022‑2023	$ 2,449.6 million
"SECTION 34.1.(c)  The General Assembly authorizes and certifies anticipated revenues for the Highway Trust Fund as follows:
For Fiscal Year 2019‑2020	$ 1,576.4 million
For Fiscal Year 2020‑2021	$ 1,604.1 million
For Fiscal Year 2021‑2022	$ 1,631.5 million
For Fiscal Year 2022‑2023	$ 1,669.4 million"

PART XXXV. SALARIES AND BENEFITS

ELIGIBLE STATE‑FUNDED EMPLOYEES AWARDED COst‑of‑living adjustment/ legislative INCREASES/EFFECTIVE JULY 1, 2017
SECTION 35.1.(a)  Except as provided by subsection (b) of this section, a person (i) whose salary is set by this part, pursuant to the North Carolina Human Resources Act or as otherwise authorized in this act and (ii) who is employed in a State‑funded position on June 30, 2018, is awarded a cost‑of‑living adjustment as follows:
(1)	The greater of one thousand two hundred fifty dollars ($1,250) or two percent (2%) effective July 1, 2018.
(2)	As otherwise allowed or provided by law.
SECTION 35.1.(b)  Teachers, principals, and assistant principals paid pursuant to a salary schedule or pay plan enacted in this act are not eligible to receive the legislative salary increases provided by subsection (a) of this section.
SECTION 35.1.(c)  Certified law enforcement officers and certain public safety and mental health employees within the Department of Health and Human Services and the Department of Public Safety who are employed in a State‑funded position on June 30, 2018, are awarded a legislative increase of one thousand dollars ($1,000) in addition to the cost‑of‑living adjustment authorized in subsection (a) of this section.
SECTION 35.1.(d)  Part‑time employees shall receive the increase authorized by this section on a prorated and equitable basis.

GOVERNOR AND COUNCIL OF STATE
SECTION 35.2.(a)  The salary of the Governor, as provided by G.S. 147‑11(a), shall remain unchanged.
SECTION 35.2.(b)  The annual salaries for members of the Council of State, payable monthly, for the 2018‑2019 fiscal year are as follows:
Council of State	Annual Salary
Lieutenant Governor	$130,112
Attorney General	130,112
Secretary of State	130,112
State Treasurer	130,112
State Auditor	130,112
Superintendent of Public Instruction	130,112
Agriculture Commissioner	130,112
Insurance Commissioner	130,112
Labor Commissioner	130,112

CERTAIN EXECUTIVE BRANCH OFFICIALS
SECTION 35.3.  The annual salaries, payable monthly, for the following executive branch officials for the 2018‑2019 fiscal year are as follows:
	Annual Salary
Executive Branch Officials	2018‑2019
Chairman, Alcoholic Beverage
	Control Commission	$116,837
State Controller	162,691
Commissioner of Banks	131,132
Chair, Board of Review, Division
	of Employment Security	128,626
Members, Board of Review,
	Division of Employment Security	127,054
Chairman, Parole Commission	128,626
Full‑Time Members of the Parole Commission	118,927
Chairman, Utilities Commission	145,806
Members of the Utilities Commission	131,132
Executive Director, North Carolina
	Agricultural Finance Authority	113,780

JUDICIAL BRANCH
SECTION 35.4.(a)  The annual salaries, payable monthly, for the following judicial branch officials for the 2018‑2019 fiscal year are as follows:
	Annual Salary
Judicial Branch Officials		2018‑2019
Chief Justice, Supreme Court	$153,088
Associate Justice, Supreme Court	149,115
Chief Judge, Court of Appeals	146,756
Judge, Court of Appeals	142,947
Judge, Senior Regular Resident Superior Court	139,091
Judge, Superior Court	135,236
Chief Judge, District Court	122,900
Judge, District Court	119,044
Chief Administrative Law Judge	120,064
District Attorney	130,779
Assistant Administrative Officer of the Courts	125,938
Public Defender	130,779
Director of Indigent Defense Services	134,788
SECTION 35.4.(b)  The district attorney or public defender of a judicial district, with the approval of the Administrative Officer of the Courts or the Commission on Indigent Defense Services, respectively, shall set the salaries of assistant district attorneys or assistant public defenders, respectively, in that district such that the average salaries of assistant district attorneys or assistant public defenders in that district, for the 2018‑2019 fiscal year, do not exceed seventy‑eight thousand six hundred and fourteen dollars ($78,614) and the minimum salary of any assistant district attorney or assistant public defender is at least forty‑two thousand six hundred sixteen dollars ($42,616), effective July 1, 2018.

CLERKS OF SUPERIOR COURT 
SECTION 35.4A.  Effective July 1, 2018, G.S. 7A‑101(a) reads as rewritten:
"(a)	The clerk of superior court is a full‑time employee of the State and shall receive an annual salary, payable in equal monthly installments, based on the population of the county as determined in subsection (a1) of this section, according to the following schedule:
Population	Annual Salary
Less than 100,000	$90,972
100,000 to 149,999	101,831
150,000 to 249,999	112,690
250,000 and above	123,554
When a county changes from one population group to another, the salary of the clerk shall be changed, on July 1 of the fiscal year for which the change is reported, to the salary appropriate for the new population group, except that the salary of an incumbent clerk shall not be decreased by any change in population group during his continuance in office."

ASSISTANT AND DEPUTY CLERKS OF SUPERIOR COURT
SECTION 35.4B.  Effective July 1, 2018, G.S. 7A‑102(c1) reads as rewritten:
"(c1)	A full‑time assistant clerk or a full‑time deputy clerk, and up to one full‑time deputy clerk serving as head bookkeeper per county, shall be paid an annual salary subject to the following minimum and maximum rates:
Assistant Clerks and Head Bookkeeper	Annual Salary
Minimum	$35,348
Maximum	61,213
Deputy Clerks	Annual Salary
Minimum	30,896
Maximum	48,342."

MAGISTRATES
SECTION 35.4C.  Effective July 1, 2017, G.S. 7A‑171.1 reads as rewritten:
"§ 7A‑171.1.  Duty hours, salary, and travel expenses within county.
(a)	The Administrative Officer of the Courts, after consultation with the chief district judge and pursuant to the following provisions, shall set an annual salary for each magistrate.
(1)	A full‑time magistrate shall be paid the annual salary indicated in the table set out in this subdivision. A full‑time magistrate is a magistrate who is assigned to work an average of not less than 40 hours a week during the term of office. The Administrative Officer of the Courts shall designate whether a magistrate is full‑time. Initial appointment shall be at the entry rate. A magistrate's salary shall increase to the next step every two years on the anniversary of the date the magistrate was originally appointed for increases to Steps 1 through 3, and every four years on the anniversary of the date the magistrate was originally appointed for increases to Steps 4 through 6.
Table of Salaries of Full‑Time Magistrates
Step Level	Annual Salary
	Minimum	Maximum
Entry Rate		$39,112
Step 1	$40,769	41,908
Step 2	43,698	44,923
Step 3	46,798	48,115
Step 4	50,513	51,940
Step 5	54,989	56,548
Step 6	60,004	61,711.
…
(a1)	Notwithstanding subsection (a) of this section, the following salary provisions apply to individuals who were serving as magistrates on June 30, 1994:
(1)	The minimum and maximum salaries of magistrates who, on June 30, 1994, were paid at a salary level of less than five years of service under the table in effect that date shall be as follows:
	Minimum	Maximum
Less than 1 year
of service		$31,349
1 or more but less
than 3 years of service	$31,538	–	32,583
3 or more but less
than 5 years of service	34,023	–	35,068
Upon completion of five years of service, those magistrates shall receive the salary set as the Entry Rate in the table in subsection (a).
(2)	The salaries of magistrates who on June 30, 1994, were paid at a salary level of five or more years of service shall be based on the rates set out in subsection (a) as follows:
	Salary Level	Salary Level
	on June 30, 1994	on July 1, 1994
5 or more but less than 7 years of service	Entry Rate
7 or more but less than 9 years of service	Step 1
9 or more but less than 11 years of service	Step 2
11 or more years of service	Step 3
Thereafter, their salaries shall be set in accordance with the provisions in subsection (a).
(3)	The salaries of magistrates who are licensed to practice law in North Carolina shall be adjusted to the annual salary provided in the table in subsection (a) as Step 4, and, thereafter, their salaries shall be set in accordance with the provisions in subsection (a).
(4)	The salaries of "part‑time magistrates" shall be set under the formula set out in subdivision (2) of subsection (a) but according to the rates set out in this subsection.
…."

LEGISLATIVE EMPLOYEES
SECTION 35.5.(a)  Effective July 1, 2018, the annual salaries of the Legislative Services Officer and of nonelected employees of the General Assembly in effect on June 30, 2018, shall be legislatively increased by the greater of one thousand two hundred fifty dollars ($1,250) or two percent (2%).
SECTION 35.5.(b)  Nothing in this act limits any of the provisions of G.S. 120‑32.

GENERAL ASSEMBLY PRINCIPAL CLERKS
SECTION 35.6.  Effective July 1, 2018, G.S. 120‑37(c) reads as rewritten:
"(c)	The principal clerks shall be full‑time officers. Each principal clerk shall be entitled to other benefits available to permanent legislative employees and shall be paid an annual salary of one hundred eleven thousand one hundred seven dollars ($111,107), payable monthly. Each principal clerk shall also receive such additional compensation as approved by the Speaker of the House of Representatives or the President Pro Tempore of the Senate, respectively, for additional employment duties beyond those provided by the rules of their House. The Legislative Services Commission shall review the salary of the principal clerks prior to submission of the proposed operating budget of the General Assembly to the Governor and shall make appropriate recommendations for changes in those salaries. Any changes enacted by the General Assembly shall be by amendment to this paragraph."

SERGEANTS‑AT‑ARMS AND READING CLERKS
SECTION 35.7.  Effective July 1, 2018, G.S. 120‑37(b) reads as rewritten:
"(b)	The sergeant‑at‑arms and the reading clerk in each house shall be paid a salary of four hundred fifty‑three dollars ($453.00) per week plus subsistence at the same daily rate provided for members of the General Assembly, plus mileage at the rate provided for members of the General Assembly for one round trip only from their homes to Raleigh and return. The sergeants‑at‑arms shall serve during sessions of the General Assembly and at such time prior to the convening of, and subsequent to adjournment or recess of, sessions as may be authorized by the Legislative Services Commission. The reading clerks shall serve during sessions only."

COMMUNITY COLLEGES
SECTION 35.8.(a)  Effective for the 2018‑2019 fiscal year:
(1)	The State Board of Community Colleges may provide community college personnel salary increases in accordance with policies adopted by the Board. Funds appropriated for these compensation increases under Section 35.1 of this act may be used for any one or more of the following purposes: (i) merit pay, (ii) across‑the‑board increases, (iii) recruitment bonuses, (iv) retention increases, and (v) any other compensation increase pursuant to those policies.
(2)	Funds appropriated for community college faculty bonuses shall be awarded pursuant to policies adopted by the State Board of Community Colleges. Notwithstanding G.S. 135‑1(7a), the bonus awarded under this section is not compensation under Article 1 of Chapter 135 of the General Statutes.
(3)	The State Board of Community Colleges shall make a report on the use of compensation increase and faculty bonus funds to the Fiscal Research Division no later than March 1, 2019.
SECTION 35.8.(b)  The minimum salaries for nine‑month, full‑time curriculum community college faculty for the 2018‑2019 fiscal year are as follows:
			Minimum Salary
Education Level		2017‑2018
Vocational Diploma/Certificate or Less		$38,094
Associate Degree or Equivalent		38,606
Bachelor's Degree		40,829
Master's Degree or Education Specialist		42,801
Doctoral Degree		45,644
No full‑time faculty member shall earn less than the minimum salary for his or her education level.
The pro rata hourly rate of the minimum salary for each education level shall be used to determine the minimum salary for part‑time faculty members.

UNIVERSITY OF NORTH CAROLINA SYSTEM
SECTION 35.9.(a)  Effective for the 2018‑2019 fiscal year, the annual salaries of University of North Carolina SHRA employees shall be increased as provided by Section 35.1 of this act.
SECTION 35.9.(b)  For the 2018‑19 fiscal year, the Board of Governors of The University of North Carolina may provide EHRA employees a salary increase pursuant to the policies adopted by the Board. Funds for EHRA compensation increases may be used for any one or more of the following purposes: (i) merit pay, (ii) across the board increases, (iii) recruitment bonuses, (iv) retention increases, and (v) any other compensation increase pursuant to those policies.
SECTION 35.9.(c)  Funds appropriated for faculty bonuses shall be awarded pursuant to policies adopted by the Board of Governors of The University of North Carolina may provide. Notwithstanding G.S. 135‑1(7a), the bonus awarded under this section is not compensation under Article 1 of Chapter 135 of the General Statutes.
SECTION 35.9.(d)  The Board of Governors of The University of North Carolina shall make a report on the use of compensation increase and bonus funds to the General Assembly by no later than March 1, 2019.

STATE AGENCY TEACHERS
SECTION 35.10.(a)  Employees of schools operated by the Department of Health and Human Services, the Department of Public Safety, and the State Board of Education who are paid on the Teacher Salary Schedule shall be paid as authorized by Section 8.1 of this act.
SECTION 35.10.(b)  Employees of the School of Science and Mathematics of The University of North Carolina who are paid pursuant to a salary schedule adopted by the North Carolina School of Science and Math Board of Trustees shall be paid in accordance with the schedule adopted by the Board.

ALL STATE‑SUPPORTED PERSONNEL
SECTION 35.11.(a)  Salaries and related benefits for positions that are funded:
(1)	Partially from the General Fund or Highway Fund and partially from sources other than the General Fund or Highway Fund shall be increased from the General Fund or Highway Fund appropriation only to the extent of the proportionate part of the salaries paid from the General Fund or Highway Fund.
(2)	Fully from sources other than the General Fund or Highway Fund shall be increased as provided by this act. The Director of the Budget may increase expenditures of receipts from these sources by the amount necessary to provide the legislative increase to receipt‑supported personnel in the certified budget.
The Director of the Budget may increase expenditures of receipts from these sources in the certified budget by the amount necessary to provide the increases authorized by this part to receipt‑supported personnel. Nothing in this act authorizes the transfer of funds between the General Fund and the Highway Fund for salary increases.
SECTION 35.11.(b)  The legislative salary increases provided in this act for the 2018‑2019 fiscal year do not apply to persons separated from service due to resignation, dismissal, reduction in force, death, or retirement or whose last workday is prior to July 1, 2018. With respect to the legislative increases awarded in this part, payroll checks issued to employees after July 1 of each year that represent payment of services provided prior to July 1 of each year shall not be eligible for salary increases provided for in this act.
SECTION 35.11.(c)  This section applies to all employees paid from State funds, whether or not subject to or exempt from the North Carolina Human Resources Act, including employees of public schools, community colleges, and The University of North Carolina.

MOST STATE EMPLOYEES
SECTION 35.12.  Unless otherwise expressly provided by this part, the annual salaries in effect for the following persons on June 30, 2018, shall be legislatively increased as provided by Section 35.1 of this act:
(1)	Permanent, full‑time State officials and persons whose salaries are set in accordance with the State Human Resources Act.
(2)	Permanent, full‑time State officials and persons in positions exempt from the State Human Resources Act.
(3)	Permanent, part‑time State employees.
(4)	Temporary and permanent hourly State employees.

CODIFY SALARY ADJUSTMENT FUND
SECTION 35.13.(a)  Article 4 of Chapter 143C of the General Statutes is amended by adding a new section to read:
"§ 143C‑4‑10.  Salary Adjustment Fund.
(a)	Creation. – The Salary Adjustment Fund is established within the General Fund. The General Assembly shall appropriate in the Current Operations Appropriations Act, or other appropriations act, a specific amount to this reserve for salary adjustments in the executive, judicial, and legislative branches.
(b)	Authorized Uses. – The Salary Adjustment Fund shall be used to provide salary adjustments using allowable human resource practices, including in‑range adjustments, salary range revisions, allowances/geographic site differentials, and reclassifications, as follows:
(1)	To address recruitment and retention of hard‑to‑staff, high‑turnover positions.
(2)	To address salaries relative to market rates.
(3)	To provide adjustments for employees with qualifications, including specialized skills, certifications, education, or experience, that significantly exceeds minimum qualifications.
Adjustments must be documented through data collection and analysis according to accepted human resource professional practices and standards. Further, funds may only be used for salary adjustments for the stated purposes that comply with the laws and adopted policies of the appropriate governing entity.
(c)	Report. – The Director of the Budget may transfer to General Fund budget codes from the Salary Adjustment Fund amounts required to support salary adjustments authorized by this section. The Director of the Budget shall report to the Joint Legislative Commission on Governmental Operations within 30 days of allocation of the funds."
SECTION 35.13.(b)  Section 35.14 of S.L. 2017‑57 is repealed.

USE OF FUNDS APPROPRIATED FOR cost‑of‑living adjustment/LEGISLATIVE INCREASES
SECTION 35.14.(a)  The appropriations set forth in Section 2.1 of this act include appropriations for cost‑of‑living adjustments and legislatively mandated employee benefit increases. The Office of State Budget and Management shall ensure that those funds are used only for the purposes of salary increases and employee benefits.
SECTION 35.14.(b)  If the Director of the Budget determines that funds appropriated to a State agency for legislatively mandated salary increases and employee benefits exceed the amount required by that agency for those purposes, the Director may reallocate those funds to other State agencies that received insufficient funds for required cost‑of‑living and benefit increases.
SECTION 35.14.(c)  Any funds appropriated for cost‑of‑living adjustment and legislatively mandated benefits increases in excess of the amounts required to implement the increases shall be used as follows:
(1)	Up to five hundred thousand dollars ($500,000) may be used to fund sign‑on and referral bonuses with the Department of Public Safety, if funds in excess of those appropriated in this act are needed.
(2)	All remaining funds shall be credited to the Pay Plan Reserve established in G.S. 143C‑4‑8.
SECTION 35.14.(d)  Section 35.15 of S.L. 2017‑57 is repealed.

REQUIRE SUBMISSION OF PAY PLAN DESIGN
SECTION 35.15.  G.S. 143C‑4‑9 reads as rewritten:
"§ 143C‑4‑9.  Pay Plan Reserve.
…
(c)	Request for Allocation. – After January 1 of each fiscal year, an agency may request an allocation from the Pay Plan Reserve by submitting:
(1)	A detailed description of the pay plan design, including the salary or salary range at each step within the pay plan and the criteria for movement between steps of the pay plan.
(2)	Proof to the Office of State Budget and Management (OSBM) that the agency has exhausted or is projected to exhaust funds appropriated for statutory or scheduled salary and benefit expenses. 
The OSBM must certify the need for any allocation before disbursing funds from the reserve. The OSBM shall report to Fiscal Research Division on or before April 1 of each year on any disbursements made from the reserve and regarding projected recurring appropriations necessary to fully fund positions eligible for funding in the next fiscal year. Funds from the reserve may be allocated and reallocated only as expressly provided by this section."

DPS SIGN‑ON AND REFERRAL BONUSES
SECTION 35.16.(a)  Notwithstanding G.S. 126‑18, the Department of Public Safety shall develop a referral bonus programs for hard‑to‑fill positions. Referral bonuses shall provide one‑time bonuses to any Department of Public Safety employee who refers an applicant who is hired into a hard‑to‑fill position. Bonuses paid through this program shall not exceed five hundred dollars ($500) in total. The Department shall develop additional program guidelines and policies for the referral bonuses in consultation with the Office of State Budget and Management and the Office of State Human Resources.
SECTION 35.16.(b)  Sign‑on bonuses, authorized by the State Human Resources Commission in April 2018, shall provide one‑time bonuses to applicants hired into a hard‑to‑fill position who complete a probationary period to be determined by the department. Bonuses paid through this program shall not exceed one thousand five hundred dollars ($1,500) in total. The Department shall develop additional program guidelines and policies for sign‑on bonuses in consultation with the Office of State Budget and Management and the Office of State Human Resources.
SECTION 35.16.(c)  Notwithstanding G.S. 135‑1(7a), bonuses awarded through the sign‑on and referral bonus programs are not compensation under Article 1 of Chapter 135 of the General Statutes.
SECTION 35.16.(d)  The Department of Public Safety shall submit a report to the Joint Legislative Oversight Committee on Justice and Public Safety, the Fiscal Research Division, and the Office of State Budget and Management on the sign‑on and referral bonuses by April 1, 2019. The report shall include:
(1)	A detailed description of the sign‑on and referral bonus programs developed, including positions eligible for the program and criteria used to determine eligibility.
(2)	Information on the number of total referrals, number of hired referrals, and number of sign‑on and referral bonuses paid.
(3)	Total expenditures on sign‑on and referral bonuses paid.
(4)	An analysis of changes in vacancy rates, time‑to‑fill, and turnover for positions eligible for sign‑on and referral bonuses.

STUDY DPS USE OF CERTIFICATION/COMPENSATION AND BENEFITS OF CERTIFIED EMPLOYEES
SECTION 35.17.(a)  The Department of Public Safety, in consultation with the Office of State Human Resources and the Office of State Budget and Management, shall study the compensation and benefits provided to all Department personnel certified by the Criminal Justice Training and Standards Division of the Department of Justice. The study shall include an analysis of the criteria used to determine which positions are certified; a comparison of the compensation and benefits of certified personnel within the Department, in other states, and across units of government; and recommendations for compensation and benefit changes to standardize benefits across certified positions.
SECTION 35.17.(b)  The Department may use up to twenty‑five thousand dollars ($25,000) of funds available to the Department to contract for research and analysis on the use of certified personnel and the compensation and benefits of certified personnel across other states and units of government.
SECTION 35.17.(c)  The Department shall report on its findings and recommendations, including cost projections, to the Joint Legislative Oversight Committee on Justice and Public Safety, the Fiscal Research Division, and the Office of State Budget and Management no later than February 1, 2019.

EXTEND REORGANIZATION THROUGH REDUCTION TO UNC SYSTEM
SECTION 35.18.  G.S. 126‑7.1 reads as rewritten:
"§ 126‑7.1.  Posting requirement; State employees receive priority consideration; reduction‑in‑force; Work First hiring; reorganization through reduction.
…
(j)	A department or office listed in G.S. 126‑5(d)(1) or (2) and The University of North Carolina and its constituent institutions may reorganize and restructure its positions through a voluntary separation process, in accordance with a policy approved by the State Human Resources Commission and subject to funding and approval by the Office of State Budget and Management."

SALARY DETERMINATIONS FOR CERTAIN LICENSED HEALTH PROFESSIONALS
SECTION 35.19.  Part 35 of S.L. 2017‑57 is amended by adding a new section to read:
"SALARY DETERMINATIONS FOR CERTAIN LICENSED HEALTH PROFESSIONALS
"SECTION 35.18D. State agencies, departments, and institutions shall have salary administration flexibility for licensed physicians, dentists, nurses, physician assistants, pharmacists, and other allied health professionals and may exercise the flexibility within existing resources. No salary determination made under this section may exceed the maximum of the applicable salary range established by the Office of State Human Resources under Chapter 126 of the General Statutes. On or before September 1, and annually, the Office of State Human Resources shall report to the Joint Legislative Commission on Governmental Operations and to the Fiscal Research Division on the salary actions taken under this section."

SPECIAL ANNUAL LEAVE BONUS
SECTION 35.20.(a)  Any person who is (i) a full‑time, permanent employee of the State, a community college, or a local board of education on July 1, 2018, and (ii) eligible to earn annual leave shall have a one‑time, additional five days of annual leave credited on July 1, 2018.
SECTION 35.20.(b)  The additional leave shall be accounted for separately with the leave provided by Section 28.3A of S.L. 2002‑126, by Section 30.12B(a) of S.L. 2003‑284, by Section 29.14A of S.L. 2005‑276, by Section 35.10A of S.L. 2014‑100, and by Section 35.18A of S.L. 2017‑57. The leave shall remain available until used, notwithstanding any other limitation on the total number of days of annual leave that may be carried forward. Part‑time permanent employees shall receive a pro rata amount of the five days.

SALARY‑RELATED CONTRIBUTIONS
SECTION 35.21.(a)  Section 35.19(c) of S.L. 2017‑57 is repealed.
SECTION 35.21.(b)  Effective July 1, 2018, the State's employer contribution rates budgeted for retirement and related benefits as a percentage of covered salaries for the 2018‑2019 fiscal year for teachers and State employees, State law enforcement officers (LEOs), the University and Community Colleges Optional Retirement Programs (ORPs), the Consolidated Judicial Retirement System (CJRS), and the Legislative Retirement System (LRS) are as set forth below:
Teachers
and State	State
Employees	LEOs	ORPs	CJRS	LRS
Retirement	12.41%	12.41%	6.84%	34.06%	22.49%
Disability	0.14%	0.14%	0.14%	0.00%	0.00%
Death	0.16%	0.16%	0.00%	0.00%	0.00%
Retiree Health	6.27%	6.27%	6.27%	6.27%	6.27%
NC 401(k)	0.00%	5.00%	0.00%	0.00%	0.00%

Total Contribution
Rate	18.98%	23.98%	13.25%	40.63%	29.06%
The rate for teachers and State employees and State law enforcement officers includes one one‑hundredth percent (0.01%) for the Qualified Excess Benefit Arrangement.

PROVIDE COST‑OF‑LIVING ADJUSTMENT FOR RETIREES OF THE TEACHERS' AND STATE EMPLOYEES' RETIREMENT SYSTEM, THE CONSOLIDATED JUDICIAL RETIREMENT SYSTEM, AND THE LEGISLATIVE RETIREMENT SYSTEM
SECTION 35.22.(a)  G.S. 135‑5 is amended by adding a new subsection to read:
"(www)	From and after July 1, 2018, the retirement allowance to or on account of beneficiaries whose retirement commenced on or before July 1, 2017, shall be increased by one percent (1%) of the allowance payable on June 1, 2018, in accordance with subsection (o) of this section. Furthermore, from and after July 1, 2018, the retirement allowance to or on account of beneficiaries whose retirement commenced after July 1, 2017, but before June 30, 2018, shall be increased by a prorated amount of one percent (1%) of the allowance payable as determined by the Board of Trustees based upon the number of months that a retirement allowance was paid between July 1, 2017, and June 30, 2018."
SECTION 35.22.(b)  G.S. 135‑65 is amended by adding a new subsection to read:
"(hh)	From and after July 1, 2018, the retirement allowance to or on account of beneficiaries whose retirement commenced on or before July 1, 2017, shall be increased by one percent (1%) of the allowance payable on June 1, 2018. Furthermore, from and after July 1, 2018, the retirement allowance to or on account of beneficiaries whose retirement commenced after July 1, 2017, but before June 30, 2018, shall be increased by a prorated amount of one percent (1%) of the allowance payable as determined by the Board of Trustees based upon the number of months that a retirement allowance was paid between July 1, 2017, and June 30, 2018."
SECTION 35.22.(c)  G.S. 120‑4.22A is amended by adding a new subsection to read:
"(bb)	In accordance with subsection (a) of this section, from and after July 1, 2018, the retirement allowance to or on account of beneficiaries whose retirement commenced on or before January 1, 2018, shall be increased by one percent (1%) of the allowance payable on June 1, 2018. Furthermore, from and after July 1, 2018, the retirement allowance to or on account of beneficiaries whose retirement commenced after January 1, 2018, but before June 30, 2018, shall be increased by a prorated amount of one percent (1%) of the allowance payable as determined by the Board of Trustees based upon the number of months that a retirement allowance was paid between January 1, 2018, and June 30, 2018."

457 CONTRIBUTIONS FOR CERTIFIED CUSTODY OFFICERS
SECTION 35.23.(a)  Pursuant to G.S. 147‑9.4, the Department of Public Safety (Department), in consultation with the Department of State Treasurer, the Criminal Justice Education and Training Standards Commission within the Department of Justice (Commission), and the Office of State Budget and Management, shall develop a plan to make employer contributions to the North Carolina Public Employee Deferred Compensation Plan (NC 457) for departmental employees certified by the Commission as State Correctional Officers. The plan for employer contributions to the NC 457 shall include:
(1)	Auto‑enrollment for eligible employees as authorized in subsection (d) of this section.
(2)	Annual contributions to each eligible employee's NC 457 on their anniversary date.
(3)	A contribution plan based on years of service in a position certified by the Commission as State Correctional Officers.
(4)	An analysis showing that expected costs for fiscal year 2018‑2019 do not exceed ten million ($10,000,000) per year over a five‑year period.
SECTION 35.23.(b)  The Department shall make no contributions for service prior to July 1, 2018, though service prior to July 1, 2018, may be considered in the development of contribution rates and in contributions made to certified employees. Contributions for fiscal year 2018‑2019 shall begin January 1, 2019, and shall be retroactive to July 1, 2018.
SECTION 35.23.(c)  The Office of the State Controller shall work with the Department and the Commission to update the Integrated HR/Payroll system to track length of service in a certified position. This update shall be completed prior to January 1, 2019.
SECTION 35.23.(d)  G.S. 143B‑426.24 reads as rewritten:
"§ 143B‑426.24. North Carolina Public Employee Deferred Compensation Plan.
…
(h1)	Notwithstanding any other provision of law to the contrary, an employee of any county or municipality, an employee of the North Carolina Community College System, or an employee of any political subdivision of the State may participate in any 457 Plan adopted by the State, with the consent of the Supplemental Retirement Board and with the consent of the proper governing authority of such county, municipality, community college, or political subdivision of the State where such employee is employed. Furthermore, notwithstanding any provision of law to the contrary, the governing body of a county or municipality, the North Carolina Community College System, or a political subdivision of the State, or in the case of the State (or any department or agency of the State), by the General Assembly, may automatically enroll employees in the Plan. The contributions made on behalf of such an employee, whether deferrals from the employee's compensation or otherwise, shall be in the amounts established by the applicable governing body or, if not established by such governing body, the Supplemental Retirement Board, unless otherwise selected by the employee. The contributions of an automatically enrolled employee shall be invested in a default investment option, as determined by the Supplemental Retirement Board, unless otherwise selected by the employee. An employee who is automatically enrolled in the Plan must be notified by the employer and permitted to withdraw from the Plan at least 90 days prior to any contribution to the Plan on behalf of the employee.
…."
SECTION 35.23.(e)  The Department shall report the final contribution plan and eligibility criteria to the Joint Legislative Committee on Justice and Public Safety on or before December 1, 2018.
SECTION 35.23.(f)  NC 457 contributions shall be subject to future legislative change or revision, and no member of the fund, or any person, is deemed to have acquired any vested right to a contribution or other payment provided by this section.

PART XXXVI. CAPITAL APPROPRIATIONS

CAPITAL APPROPRIATIONS/GENERAL FUND
SECTION 36.1.  Section 36.2(a) of S.L. 2017‑57 reads as rewritten:
"SECTION 36.2.(a)  There is appropriated from the General Fund for the 2017‑2019 fiscal biennium the following amounts for capital improvements:

Capital Improvements – General Fund	2017‑2018	2018‑2019

Department of Administration
	Capital Master Plan Update		$1,000,000

Department of Environmental Quality
	Water Resources Development	$15,648,000	$12,056,000
	West Bay Vessel Replacement		1,500,000
	Reedy Creek Lab Renovation and
		Expansion Planning		1,500,000

Department of Public Safety
	Greenville Office Building & Garage	2,000,000	$1,917,993
	National Guard – Joint Forces HQ Helipad	1,000,000	–
	Youth Development Center in Rockingham County	13,200,000	–
	Stonewall Jackson Youth Development Center fence	200,000	–
	National Guard – DuPont Forest
		Joint Training Center	100,000	–
	Western Readiness Center Annex		809,000

Department of Justice
	Memorial for Fallen Law Enforcement
		Officers Planning		$50,000

Department of Natural and Cultural Resources
	Fort Fisher Museum and Visitor Center	5,000,000	–
	Fayetteville Civil War Museum project	5,000,000	–
	State Capitol African American Monument		$1,800,000
	Dinosaur Laboratory and Exhibit		1,800,000	Graveyard of the Atlantic Renovation		1,000,000
	Museum of History Expansion Planning		1,000,000

Department of Health and Human Services
	New Maintenance Facility – Cherry Hospital		$4,300,000

Fayetteville State University
	Health & Wellness Facility	5,500,000	–

Department of Agriculture and Consumer Services
	Emergency Programs Warehouse	500,000	–
	Eaddy Building Renovation and Expansion		$760,000

Office of State Budget and Management
	Department of Health and Human Services
		Relocation		$2,000,000

Cleveland Community College
	Center for Advanced Manufacturing	5,000,000	–

Brunswick Community College
	Gym renovations	60,000	–

Stanly Community College
	Culinary Arts facility	500,000	–

University of North Carolina‑Chapel Hill
	New Business School building	1,000,000	–

TOTAL CAPITAL IMPROVEMENTS –
GENERAL FUND	$54,708,000	$31,492,993"

WATER RESOURCES DEVELOPMENT PROJECTS
SECTION 36.2.(a)  The Department of Environmental Quality shall allocate funds for water resources development projects in accordance with the schedule that follows. The amounts set forth in the schedule include funds appropriated in this act for water resources development projects and funds carried forward from previous fiscal years in accordance with subsection (b) of this section. These funds will provide a State match for an estimated fifty‑seven million seven hundred eighty‑eight thousand dollars ($57,788,000) in federal funds.

	Name of Project	2018‑2019

(1)	Wilmington Harbor DA Maintenance	$3,192,000
(2)	Morehead City Maintenance	1,500,000
(3)	Princeville Flood Damage Reduction	431,000
(3)	Masonboro Island Sand Migration	6,500,000
(4)	Carolina Beach Coastal Storm Damage Reduction	1,836,000
(5)	Kure Beach Coastal Storm Risk Management	2,855,000
(6)	Planning Assistance to Communities	38,000
(7)	Bogue Banks Coastal Storm Risk Management	202,000
(8)	Surf City/North Topsail Beach Coastal Storm Risk Management	255,000
(9)	West Onslow Coast Storm Risk Management	220,000
(10)	Neuse River Goldsboro Section 1135 CAP	333,000
(11)	NRCS EQIP	3,857,000
(12)	State‑Local Projects	2,873,000
(13)	Eastern NC Storm Debris Removal	1,500,000
(14)	Concord Streams, Section 206 CAP	1,023,000
(15)	Manteo Old House Channel, Section 204 CAP	2,219,000
(16)	Lumberton 205 CAP, Flood Damage Reduction	125,000
(17)	B. Everette Jordan Reservoir Water Supply	148,000
(18)	Kunz Farm Park Riverwalk	250,000
(19)	Brunswick Town Fort Anderson Cape Fear Streamline Restoration	487,000
(20)	Wrightsville Beach Coastal Storm Damage Reduction	2,215,000
(21)	New River Storm Damage Reduction	2,000,000
(22)	Cape Fear Lock and Dam #2 and #3 Fish Ramp	840,000
(23)	Town of Rutherfordton Stream Restoration	500,000
(24)	Ararat River Greenway/Stream Restoration	500,000
(25)	Ocean Isle Coastal Storm Damage Restoration	65,000

	TOTALS	$37,064,000

SECTION 36.2.(b)  It is the intent of the General Assembly that funds carried forward from previous fiscal years be used to supplement the fifteen million six hundred forty‑eight thousand dollars ($15,648,000) appropriated for water resources development projects in this section. Therefore, the following funds carried forward from previous fiscal years shall be used for the following projects:

	Name of Project	2018‑2019

(1)	Wilmington Harbor DA Maintenance	$763,000
(2)	Morehead City Maintenance	1,500,000
(3)	Princeville Flood Damage Reduction	431,000
(4)	Carolina Beach Coastal Storm Damage Reduction	1,836,000
(5)	Kure Beach Coastal Storm Risk Management	731,000
(6)	Planning Assistance to Communities	25,000
(7)	Bogue Banks Coastal Storm Risk Management	15,000
(8)	Surf City/North Topsail Beach Coastal Storm Risk Management	255,000
(9)	West Onslow Coast Storm Risk Management	220,000
(10)	Neuse River Goldsboro Section 1135 CAP	25,000
(11)	NRCS EQIP	3,857,000
(12)	State‑Local Projects	2,873,000
(13)	Eastern NC Storm Debris Removal	1,500,000
(14)	Concord Streams, Section 206 CAP	1,023,000
(15)	Manteo Old House Channel, Section 204 CAP	2,219,000
(17)	B. Everette Jordan Reservoir Water Supply	148,000
(18)	Kunz Farm Park Riverwalk	250,000
(20)	Wrightsville Beach Coastal Storm Damage Reduction	2,215,000
(21)	New River Storm Damage Reduction	2,000,000
(22)	Cape Fear Lock and Dam #2 and #3 Fish Ramp	840,000
(23)	Town of Rutherfordton Stream Restoration	500,000
(24)	Ararat River Greenway/Stream Restoration	500,000
(25)	Ocean Isle Coastal Storm Damage Restoration	65,000

	TOTALS	$25,008,000

SECTION 36.2.(c)  Where the actual costs are different from the estimated costs under subsection (a) of this section, the Department may adjust the allocations among projects as needed. If any projects funded under subsection (a) of this section are delayed and the budgeted State funds cannot be used during the 2018‑2019 fiscal year, or if the projects funded under subsection (a) of this section are accomplished at a lower cost, the Department may use the resulting fund availability to fund any of the following:
(1)	U.S. Army Corps of Engineers project feasibility studies.
(2)	U.S. Army Corps of Engineers projects whose schedules have advanced and require State‑matching funds in the 2018‑2019 fiscal year.
(3)	State‑local water resources development projects.
Funds subject to this subsection that are not expended or encumbered for the purposes set forth in subdivisions (1) through (3) of this subsection shall revert to the General Fund at the end of the 2018‑2019 fiscal year.
SECTION 36.2.(d)  The Department shall submit semiannual reports on the use of these funds to the Joint Legislative Oversight Committee on Agriculture and Natural and Economic Resources, the Fiscal Research Division, and the Office of State Budget and Management on or before March 1 and September 1. Each report shall include all of the following:
(1)	All projects listed in this section.
(2)	The estimated cost of each project.
(3)	The date that work on each project began or is expected to begin.
(4)	The date that work on each project was completed or is expected to be completed.
(5)	The actual cost of the project.
The semiannual reports also shall show those projects advanced in schedule, those projects delayed in schedule, and an estimate of the amount of funds expected to revert to the General Fund.

NON‑GENERAL FUND CAPITAL IMPROVEMENT AUTHORIZATIONS
SECTION 36.3.  Section 36.4(a) of S.L. 2017‑57 reads as rewritten:
"SECTION 36.4.(a)  The General Assembly authorizes the following capital projects to be funded with receipts or from other non‑General Fund sources available to the appropriate department:
	Amount of Non‑General Fund
Name of Project	Funding Authorized
	FY 2017‑2018	FY 2018‑2019
Department of Military and Veterans Affairs
	New State Veterans Home – Triangle Region		$38,890,000
	New State Veterans Home – Triad Region		38,890,000
	Cemetery Expansion		9,614,483
	Repairs and Renovations of State Veterans Homes		2,800,000
Department of Natural and Cultural Resources
	Museum of Art‑ New Park and Pavilion Building	915,300	–
	Roanoke Island Aquarium Generator Building		480,000
	Tryon Palace Garden Cottage		500,000
Wildlife Resources Commission
	Land Acquisition	7,000,000	3,000,000
	Infrastructure Repair/Renovation	1,500,000	–
	Setzer Hatchery Building Replacement	750,000	–
	Boating Access	900,000	900,000
	Setzer Hatchery Raceways Replacement	4,500,000	–
	Outer Banks Education Center Air Handlers	–	300,000
	Burnsville Depot	500,000	–
	Butner Lab & Storage Building	500,000	–
	Bolivia Depot	750,000	–
	New Shooting Ranges	1,000,000	1,000,000
Department of Public Safety
	Nash Correctional Institution
	Field Ministry Program Facility	3,800,000	–
	Chase Laundry Air Handling Units Replacements		950,000
	Chase Laundry Roof Replacement		742,000
	Security Cameras and Systems		400,000

TOTAL AMOUNT OF NON‑GENERAL
	FUND CAPITAL PROJECTS
	AUTHORIZED	$22,115,300	$98,468,083"

REPAIRS AND RENOVATIONS RESERVE ALLOCATION
SECTION 36.4.  Section 36.5 of S.L. 2017‑57 reads as rewritten:
"SECTION 36.5.(a)  Of the funds in the Reserve for Repairs and Renovations for the 2017‑2019 fiscal biennium, the following allocations shall be made to the following agencies for repairs and renovations pursuant to G.S. 143C‑4‑3:
(1)	One‑half of the funds shall be allocated to the Board of Governors of The University of North Carolina.
(2)	One‑half of the funds shall be allocated to the Office of State Budget and Management.
The Office of State Budget and Management shall consult with or report to the Joint Legislative Commission on Governmental Operations, as appropriate, in accordance with G.S. 143C‑4‑3(d). The Board of Governors shall report to the Joint Legislative Commission on Governmental Operations in accordance with G.S. 143C‑4‑3(d).
"SECTION 36.5.(b)  Notwithstanding G.S. 143C‑4‑3(d), of the funds allocated to the Board of Governors of The University of North Carolina in subsection (a) of this section, a portion shall be used each fiscal year by the Board of Governors for the installation of fire sprinklers in University residence halls. This portion shall be in addition to funds otherwise appropriated in this act for the same purpose. Such funds shall be allocated among the University's constituent institutions by the President of The University of North Carolina, who shall consider the following factors when allocating those funds:
(1)	The safety and well‑being of the residents of campus housing programs.
(2)	The current level of housing rents charged to students and how that compares to an institution's public peers and other UNC institutions.
(3)	The level of previous authorizations to constituent institutions for the construction or renovation of residence halls funded from the General Fund or from bonds or certificates of participation supported by the General Fund since 1996.
(4)	The financial status of each constituent institution's housing system, including debt capacity, debt coverage ratios, credit rankings, required reserves, the planned use of cash balances for other housing system improvements, and the constituent institution's ability to pay for the installation of fire sprinklers in all residence halls.
(5)	The total cost of each proposed project, including the cost of installing fire sprinklers and the cost of other construction, such as asbestos removal and additional water supply needs.
The Board of Governors shall submit progress reports to the Joint Legislative Commission on Governmental Operations. Reports shall include the status of completed, current, and planned projects. Reports also shall include information on the financial status of each constituent institution's housing system, the constituent institution's ability to pay for fire protection in residence halls, and the timing of installation of fire sprinklers. Reports shall be submitted on January 1 and July 1 until all residence halls have fire sprinklers.
"SECTION 36.5.(c)  Notwithstanding G.S. 143C‑4‑3(d), of the funds allocated to the Board of Governors of The University of North Carolina in subsection (a) of this section, a portion shall be used each fiscal year by the Board of Governors for campus public safety improvements allowable under G.S. 143C‑4‑3(b).
"SECTION 36.5.(d)  In making campus allocations of funds allocated to the Board of Governors of The University of North Carolina in subsection (a) of this section, the Board of Governors shall negatively weight the availability of non‑State resources and carryforward funds available for repair and renovations and shall include information about the manner in which this subsection was complied within any report submitted pursuant to G.S. 143C‑4‑3(d).
"SECTION 36.5.(e)  Notwithstanding G.S. 143C‑4‑3, of the funds allocated from the Reserve for Repairs and Renovations for the 2017‑2018 fiscal year, the following sums shall be allocated for the following projects:
(1)	One million seven hundred fifty thousand dollars ($1,750,000) shall be allocated to the Department of Public Safety to be provided to the North Carolina National Guard for the demolition of Western Youth Correctional Facility.
(2)	Two million dollars ($2,000,000) shall be allocated to the Department of Natural and Cultural Resources for the repairs and renovation projects involving the U.S.S. North Carolina Battleship.
(3)	Three hundred thousand dollars ($300,000) shall be allocated to weatherproof Goodwin Hall and Joiner Hall at the North Carolina School for the Deaf in Morganton.
(4)	Ten million dollars ($10,000,000) shall be allocated for the comprehensive renovation and repurposing of West Hall at the University of North Carolina at Pembroke.
(5)	Two million five hundred thousand dollars ($2,500,000) shall be allocated to the Department of Natural and Cultural Resources, Division of Parks and Recreation, for repair and renovation projects at Morrow Mountain State Park in Stanly County.
(6)	Four million five hundred thousand dollars ($4,500,000) shall be allocated to the Department of Natural and Cultural Resources for repair and renovation projects at the North Carolina Zoological Park.
(7)	Two million two hundred thousand dollars ($2,200,000) shall be allocated to the Department of Public Safety to renovate the former North Piedmont Correctional Center for Women to allow for portions to be used for a female Confinement Response to Violation (CRV) facility.
(8)	Seven hundred fifty thousand dollars ($750,000) shall be allocated for the energy production facility replacement project at Western Carolina University."

RESERVE FOR PUBLIC SAFETY IMPROVEMENTS AT STATE AND LOCAL FACILITIES
SECTION 36.5.(a)  Creation and Source of Funds. – The Reserve for Public Safety Improvements at State and Local Facilities is established as a statewide reserve. Any reserve funds for capital improvements and renovation projects will be moved to a capital fund once the funds have been distributed to the agency. All other uses will be administered out of the agency's general fund.
SECTION 36.5.(b)  The funds shall be allocated in the following manner:
(1)	Twenty‑five million dollars ($25,000,000) shall be allocated to the State Board of Education for public safety improvements at local administrative units, regional schools, charter schools, and laboratory schools.
(2)	Twenty million dollars ($20,000,000) shall be allocated to The University of North Carolina Board of Governors for public safety improvements at constituent institutions.
(3)	Twenty million dollars ($20,000,000) shall be allocated to the State Board of Community Colleges for public safety improvements at community colleges.
(4)	Twenty‑five million dollars ($25,000,000) shall be allocated to the Department of Public Safety for public safety improvements at correctional institutions and for improvements to the Voice Interoperability Plan for Emergency Responders.
(5)	Ten million dollars ($10,000,000) shall be allocated to the Office of State Budget and Management for public safety improvements at State Agencies.
SECTION 36.5.(c)  Use of Funds. – The funds in the Reserve for Public Safety Improvements at State and Local Facilities may be used for the following types of public safety improvements:
(1)	Improvements and expansion of existing capital facilities to provide increased protection, improved notification, and reduced risk from external harm. Examples of such improvements include, but are not limited to, improved doors and windows, guard stations, fencing, and renovations to support items in subdivision (2) of this subsection.
(2)	Purchase of equipment to provide increased monitoring of facilities, notification to emergency responders, and improved response to life threatening events. Examples of such equipment include, but are not limited to, panic buttons, worn devices that can create an emergency notification, cameras, and monitors.
(3)	Improvements to communications and data systems to provide improved response and coordination in the event of a public safety disturbance at a State or local facility. Examples of such communications improvements include, but are not limited to, Voice Interoperability Plan for Emergency Responders improvements, security alarms and notification systems, telephone systems, and alert notification systems.
(4)	Development of security master plans and procedures.
(5)	Training of personnel regarding best practices and procedures for emergency response, public safety risk identification, and related items.
SECTION 36.5.(d)  Application Process. – Each entity receiving funds in subsection (b) of this section shall request applications from relevant recipients.
The State Board of Education shall include need‑based considerations in its criteria for awarding these funds to local school administrative units, regional schools, charter schools, and laboratory schools.
SECTION 36.5.(e)  Non‑Supplant of Funds. – Funds shall be used to supplement and not to supplant State, local, and federal funds for public safety improvements.
SECTION 36.5.(f)  On or before May 1 of each year, each entity receiving funds in subsection (b) of this section shall submit a report to the Joint Legislative Commission on Governmental Operations. The report shall contain the following:
(1)	Number and description of projects awarded.
(2)	Total cost of each project awarded.
(3)	Number of applications received.
(4)	The basis on which the projects were evaluated.
(5)	If applications received subject to subsection (d) of this section were more than the funds available to the entity, the basis on which projects were selected to receive funding.

REALLOCATION OF CONNECT NC BONDS FOR COMPLETED STATE PARK PROJECTS
SECTION 36.6.  Section 1(f)(2) of S.L. 2015‑280 is amended by adding a new sub‑subdivision to read:
"(2)	Special Allocation Provisions. – In determining the use of the proceeds of public improvement bonds and notes, including premium thereon, if any, set forth in subdivision (1) of this subsection, the following special allocation provisions apply:
a.	The proceeds of public improvement bonds and notes, including premium thereon, if any, for Statewide capital repairs and renovations for The University of North Carolina, as provided in subdivision (1) of this subsection, shall be used for projects that are eligible to receive funds from the Repairs and Renovations Reserve under G.S. 143C‑4‑3(b). Any items purchased with such proceeds and installed or replaced as part of a renovation or rehabilitation must have a useful life of at least 10 years or must extend the life of the facility by at least 10 years once renovated or rehabilitated. Such proceeds (i) shall be prioritized to constituent institutions not otherwise specified as receiving proceeds under subdivision (1) of this subsection and (ii) shall not be used to increase any amount to a constituent institution otherwise specified as receiving proceeds under subdivision (1) of this subsection.
b.	The proceeds of public improvement bonds and notes, including premium thereon, if any, for NC Community Colleges, as provided in subdivision (1) of this subsection, shall be used for new construction or rehabilitation of existing facilities and repairs and renovations. Any items purchased with such proceeds and installed or replaced as part of a renovation or rehabilitation must have a useful life of at least 10 years or must extend the life of the facility by at least 10 years once renovated or rehabilitated. In order to receive the proceeds under this sub‑subdivision for projects for new construction, the community college receiving the proceeds shall provide local matching funds from county funds, other non‑State funds, or a combination of these sources for such proceeds. The amount of matching funds shall be (i) one dollar ($1.00) of local matching funds for every three dollars ($3.00) of such proceeds for a community college with a main campus located in a development tier one area, as defined in G.S. 143B‑437.08, (ii) one dollar ($1.00) of local matching funds for every two dollars ($2.00) of such proceeds for a community college with a main campus located in a development tier two area, as defined in G.S. 143B‑437.08, and (iii) one dollar ($1.00) of local matching funds for every one dollar ($1.00) of such proceeds for a community college with a main campus located in a development tier three area, as defined in G.S. 143B‑437.08. Community colleges are not required to match bond proceeds allocated in this section for rehabilitation of existing facilities and repairs and renovations.
c.	The proceeds of public improvement bonds and notes, including premium thereon, if any, for the Department of Environment and Natural Resources for Statewide Children With Disabilities and Veterans With Disabilities Local Parks (Matching Grants), as provided in subdivision (1) of this subsection, shall be allocated to the Parks and Recreation Trust Fund established in G.S. 113‑44.15 and shall be used exclusively for grants to local government units or public authorities, as defined in G.S. 159‑7, for construction of special facilities or adaptation of existing facilities that meet the unique needs of children with physical and developmental disabilities and veterans with physical and developmental disabilities and enable them to participate in recreational and sporting activities, regardless of their abilities. In order to receive such proceeds under this sub‑subdivision, a local government unit or public authority shall provide matching funds in the amount of one dollar ($1.00) of local funds for every four dollars ($4.00) of such proceeds. Grants made using such proceeds under this sub‑subdivision shall not exceed five hundred thousand dollars ($500,000) per project.
d.	The proceeds of public improvement bonds and notes, including premium thereon, if any, for the Department of Environmental Quality for Statewide Water/Sewer Loans and Grants, as provided in subdivision (1) of this subsection, shall be allocated to the Water Infrastructure Fund established in G.S. 159G‑22. One hundred million dollars ($100,000,000) shall be used for grants, and the remainder shall be used for low‑interest loans. The proceeds for loans and the proceeds for grants shall be allocated in equal proportion to the Drinking Water Reserve and the Wastewater Reserve and shall be subject to the following:
1.	If the availability of loan funds exceeds project demand, the limits contained in G.S. 159G‑36 applicable to a loan may be exceeded for the purpose of ensuring that all available loan funds are utilized for projects prioritized pursuant to G.S. 159G‑23.
2.	Loan and grant applications for projects shall be funded first if both of the following criteria are met: (i) the project is required to be completed due to an EPA administrative order or consent decree and (ii) the application for the project is deemed complete by the Division and meets the minimum requirements for the program from which it is seeking funding.
3.	A grant application to be funded from the Wastewater Reserve and required to be prioritized under sub‑sub‑subdivision 2. of this sub‑subdivision shall be awarded a grant equal to fifty percent (50%) of the project costs that are reasonably necessary to comply with the EPA administrative order or consent decree, notwithstanding limits otherwise applicable pursuant to G.S. 159G‑36; provided that, the cumulative amount of all grants received by an applicant under this sub‑subdivision does not exceed one‑third of the amount of bond proceeds for grants allocated to the Wastewater Reserve.
4.	A loan application to be funded from the Wastewater Reserve and required to be prioritized under sub‑sub‑subdivision 2. of this sub‑subdivision shall receive a loan equal to the amount sufficient to cover all project costs that are reasonably necessary to comply with the EPA administrative order or consent decree minus the amount of any grant awarded under sub‑sub‑subdivision 3. of this sub‑subdivision; provided that, the cumulative amount of all loans received by an applicant under this sub‑subdivision does not exceed fifteen million dollars ($15,000,000).
e.	The proceeds of public improvement bonds and notes, including premium thereon, if any, for National Guard, as provided in subdivision (1) of this subsection, shall be used by the Adjutant General of the North Carolina National Guard for capital improvements, as defined in G.S. 143C‑1‑1(d)(5), for readiness centers located in Guilford, Burke, and Wilkes Counties.
f.	The proceeds of public improvement bonds and notes, including premium thereon, if any, for the North Carolina Zoological Park, as provided in subdivision (1) of this subsection, shall be used for capital improvements, as defined in G.S. 143C‑1‑1(d)(5). Any items purchased with such proceeds and installed or replaced as part of a renovation or rehabilitation must have a useful life of at least 10 years or must extend the life of the facility by at least 10 years once renovated or rehabilitated.
g.	The proceeds of public improvement bonds and notes, including premium thereon, if any, for the North Carolina State Parks, as provided in this subdivision may be allocated to another State Park, provided the following conditions are met:
1.	The Park project to which the original allocation was made has been completed.
2.	The Park project receiving funds in sub‑sub‑subdivision 1. of this sub‑subdivision has experienced a cost overrun for which additional funds are required.
3.	The Office of State Budget and Management will report any reallocations made under this subdivision to the Joint Legislative Oversight Committee on Capital Improvements."

NATIONAL GUARD PROJECTS
SECTION 36.7.  Section 36.11(c) of S.L. 2013‑360 reads as rewritten:
"SECTION 36.11.(c)  Where the actual costs are different from the estimated costs under subsection (a) of this section, the Adjutant General of the National Guard may adjust the allocations among projects as needed. However, State funds shall not be allocated to a project in excess of the maximum amount of State funds authorized to be allocated to the project under subsection (a) of this section. If any projects funded under subsection (a) of this section are delayed and the budgeted State funds cannot be used during the 2013‑2015 fiscal biennium, or if the projects funded under subsection (a) of this section are accomplished at a lower cost, the Department may use the resulting fund availability to fund any of the following:
(1)	Future project feasibility studies.
(2)	Survey, testing, and permitting.
(3)	Planning and execution for reversion of facilities no longer in use.
(4)	Repair, renovation, and expansion of an existing armory."

AUTHORIZE STATE AGENCIES TO UNDERTAKE SMALL REPAIRS AND RENOVATIONS PROJECTS WITH FUNDS AVAILABLE
SECTION 36.8.  G.S. 143C‑8‑7 reads as rewritten:
"§ 143C‑8‑7. When a State agency may begin a capital improvement project.
(a)	No State agency may expend funds for the construction or renovation of any capital improvement project except as needed to comply with this Article or otherwise authorized by the General Assembly. Funds that become available by gifts, excess patient receipts above those budgeted at the University of North Carolina Hospitals at Chapel Hill, federal or private grants, receipts becoming a part of special funds by act of the General Assembly, or any other funds available to a State agency or institution may be utilized for advanced planning through the working drawing phase of capital improvement projects, upon approval of the Director of the Budget.
(b)	A State agency may undertake repairs and renovations projects so long as each project satisfies the following requirements:
(1)	Total project costs do not exceed the informal project limit set by the State Building Commission.
(2)	The project is one of the types set forth in G.S. 143C‑4‑3(b)(1) through (13), regardless of whether the relevant State facilities and related infrastructure are supported from the General Fund.
(3)	The project is paid for with funds available to the agency.
(c)	Projects undertaken pursuant to this section shall be reported to the Fiscal Research Division on a quarterly basis. A report under this subsection shall include information about all of the following for each project:
(1)	The facility at which the project is being undertaken.
(2)	The nature and scope of the project.
(3)	The source of funds for the project.
(4)	The category of projects set forth in G.S. 143C‑4‑3(b) that the project falls within."

DEFINE CAPITAL PROJECTS
SECTION 36.9.  G.S. 143C‑1‑1(d)(5) reads as rewritten:
"(5)	Capital improvement. – A term that includes real property acquisition, new construction or rehabilitation of existing facilities, and repairs and renovations over one hundred thousand dollars ($100,000) in value."

REPEAL STATE CAPITAL AND INFRASTRUCTURE FUND
SECTION 36.10.  Section 36.12 of S.L. 2017‑57 is repealed.

ELIMINATE NON‑STATE FUNDED ADVANCE PLANNING REQUIREMENT BEFORE REQUESTING LEGISLATIVE SUPPORTS
SECTION 36.11.  G.S. 143C‑3‑3(b)(2) is repealed.

ALLOCATION OF NET PROCEEDS FROM WAKE COUNTY PROPERTY DISPOSITIONS
SECTION 36.12.  Article 7 of Chapter 146 of the General Statutes is amended by adding a new section to read:
"§ 146‑30.2.  Application of net proceeds from disposition of property allocated to the department of administration in Wake County.
(a)	Limitation. – Notwithstanding G.S. 146‑30 or any other provision of law, and subject to the limitations contained in any applicable deed, the net proceeds of any disposition of, use of, or activity on real property located in Wake County and allocated to the Department of Administration shall be used solely to repair and renovate real property located in Wake County and allocated to the Department of Administration. These funds shall only be used to fund projects listed in G.S. 143C‑4‑3(b), subject to the approval of the Director of the Budget.
(b)	Definition of Net Proceeds. – For purposes of this section, the term "net proceeds" shall have the same meaning as in G.S. 146‑30.
(c)	Appropriation. – Net proceeds received on or after July 1, 2017, are hereby appropriated for the uses contained in subsection (a) of this section.
(d)	Report. – The Director of the Budget shall report annually on July 1 on projects funded under this section to the Joint Legislative Oversight Committee on Capital Improvements."

FOOD SERVICE WITHIN THE CAPITOL COMPLEX
SECTION 36.13.(a)  Article 3 of Chapter 111 of the General Statutes is amended by adding a new section to read:
"§ 111‑47.4A.  Food service within the Capitol Complex.
Notwithstanding any other provision of this Article, the Department of Health and Human Services may operate or contract for the operation of food or vending services at State property or State facilities allocated to the Department of Administration. The net proceeds of revenue generated by food and vending services at the State property or State facilities by the agency or a vendor with whom the agency has contracted with shall be credited to the Division of Services for the Blind of the Department and Health and Human Services for the purposes specified in G.S. 111‑43. Nothing in this section shall be construed to remove an exemption granted under State law for State property or State buildings, as defined in G.S. 111‑42(c)."
SECTION 36.13.(b)  G.S. 66‑58(c)(4) reads as rewritten:
"(4)	The operation of food and vending services pursuant to Article 3 of Chapter 111 of the General Statutes."
SECTION 36.13.(c)  G.S. 146‑29.1 is amended by adding a new subsection to read:
"(i)	This section shall not apply to leases entered into by the Department of Health and Human Services for food and vending services pursuant to Article 3 of Chapter 111 of the General Statutes."

REPAIR, MAINTENANCE, AND SELF‑CONSTRUCTION TO STATE PROPERTY
SECTION 36.14.(a)  Article 8 of Chapter 143 of the General Statutes is amended by adding a new section to read:
"§ 143‑135.10.  Repair, maintenance, and self‑construction to State property.
Notwithstanding any other provision of law, an employee of a State agency or institution may perform work involving the installation, construction, maintenance, or repair of any buildings, wiring, piping, devices, appliances, or equipment located in or constituting improvements located on State‑owned land without the requirement of licensure under Chapter 87 of the General Statutes if the work is performed by an employee who is employed by the State agency or institution and either the work performed is valued at less than one hundred thousand dollars ($100,000), or all work is performed as force‑account work otherwise authorized by law up to the value authorized. The Office of State Construction may regulate work performed pursuant to this section to ensure compliance with building and safety codes. Nothing in this section shall be construed to allow an employee of a State agency or institution to engage in any activities described in this section privately or outside the employee's scope of employment without meeting all licensure requirements otherwise required by law."
SECTION 36.14.(b)  Section 36.15 of S.L. 2015‑360 is repealed.

TWO‑THIRDS BONDS ACT OF 2018
SECTION 36.15.(a)  Short Title. – This section may be cited as the "Two‑Thirds Bonds Act of 2018."
SECTION 36.15.(b)  Findings and Determinations. – It is the intent and purpose of the General Assembly by this section to provide for the issuance of general obligation bonds or notes of the State in order to provide funds for the cost of State capital facilities.
SECTION 36.15.(c)  Definitions. – The following definitions apply in this section, unless the context otherwise requires:
(1)	Bonds. – Bonds issued under this section.
(2)	Cost. – The term includes all of the following:
a.	The cost of constructing, reconstructing, renovating, repairing, enlarging, acquiring, and improving State capital facilities, including the acquisition of land, rights‑of‑way, easements, franchises, equipment, machinery, furnishings, and other interests in real or personal property acquired or used in connection with a State capital facility.
b.	The cost of engineering, architectural, and other consulting services as may be required.
c.	Administrative expenses and charges.
d.	The cost of providing personnel to ensure effective project management.
e.	The cost of bond insurance, investment contracts, credit enhancement and liquidity facilities, interest‑rate swap agreements or other derivative products, financial and legal consultants, and related costs of bond and note issuance, to the extent and as determined by the State Treasurer.
f.	Finance charges, reserves for debt service, and other types of reserves required pursuant to the terms of any bond or note or related documents, interest before and during construction or acquisition of a State capital facility and, if considered advisable by the State Treasurer, for a period not exceeding two years after the estimated date of completion of construction or acquisition.
g.	The cost of bond insurance, investment contracts, credit enhancement facilities and liquidity facilities, interest‑rate swap agreements or other derivative products, financial and legal consultants, and related costs of the incurrence or issuance of any bond or note.
h.	The cost of reimbursing the State for any payments made for any cost described in this subdivision.
i.	Any other costs and expenses necessary or incidental to the purposes of this section.
(3)	Credit facility. – An agreement entered into by the State Treasurer on behalf of the State with a bank, savings and loan association, or other banking institution, an insurance company, reinsurance company, surety company or other insurance institution, a corporation, investment banking firm, or other investment institution, or any financial institution or other similar provider of a credit facility, which provider may be located within or without the United States, such agreement providing for prompt payment of all or any part of the principal or purchase price (whether at maturity, presentment or tender for purchase, redemption, or acceleration), redemption premium, if any, and interest on any bonds or notes payable on demand or tender by the owner, in consideration of the State agreeing to repay the provider of the credit facility in accordance with the terms and provisions of such agreement.
(4)	Notes. – Notes issued under this section.
(5)	Par formula. – A provision or formula adopted by the State to provide for the adjustment, from time to time, of the interest rate or rates borne by any bonds or notes, including the following:
a.	A provision providing for such adjustment so that the purchase price of such bonds or notes in the open market would be as close to par as possible.
b.	A provision providing for such adjustment based upon a percentage or percentages of a prime rate or base rate, which percentage or percentages may vary or be applied for different periods of time.
c.	Such other provision as the State Treasurer may determine to be consistent with this act and will not materially and adversely affect the financial position of the State and the marketing of bonds or notes at a reasonable interest cost to the State.
(6)	State. – The State of North Carolina, including any State agency.
(7)	State agency. – Any agency, institution, board, commission, bureau, council, department, division, officer, or employee of the State. The term does not include counties, municipal corporations, political subdivisions, local boards of education, or other local public bodies.
SECTION 36.15.(d)  Authorization of Bonds and Notes. – The State Treasurer is authorized by, and with the consent of the Council of State, to issue and sell at one time or from time to time, general obligation bonds of the State to be designated "State of North Carolina General Obligation Bonds," with any additional designations as may be determined, or notes of the State, in the aggregate principal amount of up to eighty million eight hundred forty‑two thousand dollars ($80,842,000), this amount being not in excess of two‑thirds of the amount by which the State's outstanding indebtedness was reduced during the fiscal biennium that ended June 30, 2017, for the purpose of providing funds, with any other available funds, for the purposes authorized by this section.
SECTION 36.15.(e)  Uses of Bond and Note Proceeds. – The proceeds of bonds and notes shall be used for financing the cost of State capital facilities as provided in this section. Any additional moneys which may be received by grant from the United States of America or any agency or department thereof or from any other source to aid in financing the cost of any State capital facilities authorized by this section may be placed by the State Treasurer in a separate fund or funds and shall be disbursed, to the extent permitted by the terms of the grant, without regard to any limitations imposed by this section.
The proceeds of bonds and notes may be used with any other moneys made available by the General Assembly for the cost of State capital facilities, including the proceeds of any other State bond or special indebtedness issues, whether heretofore made available or which may be made available at the session of the General Assembly at which this section is ratified or any subsequent sessions. The proceeds of bonds and notes shall be expended and disbursed under the direction and supervision of the Director of the Budget. The funds provided by this section shall be disbursed for the purposes provided in this section upon warrants drawn on the State Treasurer by the State Controller, which warrants shall not be drawn until requisition has been approved by the Director of the Budget and which requisition shall be approved only after full compliance with the State Budget Act, Chapter 143C of the General Statutes.
The Office of State Budget and Management shall provide semiannual reports to the chairs of the Senate Appropriations Committees and the House Appropriations Subcommittees and to the Fiscal Research Division on the expenditure of moneys authorized by this section. The reports shall continue until the completion of the projects provided for in this section.
SECTION 36.15.(f)  Allocation of Proceeds. – The proceeds of bonds and notes shall be allocated and expended as follows:
(1)	A maximum aggregate principal amount of thirteen million dollars ($13,000,000) to finance the capital facility costs of completing the Veterinary/Food/Drug/Motor Fuels Lab.
(2)	A maximum aggregate principal amount of seventeen million two hundred sixty‑three thousand dollars ($17,263,000) for completing the Austrailasia exhibit complex.
(3)	A maximum aggregate principal amount of four million three hundred sixty‑nine thousand dollars ($4,369,000) to finance the capital facility costs of a Department of Public Safety Samarcand Training Facility.
(4)	A maximum aggregate principal amount of fourteen million four hundred twenty‑three thousand dollars ($14,423,000) to finance the capital facility costs of completing three National Guard Readiness Centers in Burke and Wilkes Counties.
(5)	A maximum aggregate principal amount of seven million one hundred eighty‑seven thousand dollars ($7,187,000) to finance the capital facility costs of completing a new Youth Development Center in Rockingham County.
(6)	A maximum aggregate principal amount of eight million six hundred thousand dollars ($8,600,000) to finance the capital facility costs of completing the New School of Business at North Carolina Central University.
(7)	A maximum aggregate principal amount of ten million dollars ($10,000,000) to finance the capital facility costs of completing the North Carolina School of Technology and Engineering.
(8)	A maximum aggregate principal amount of six million dollars ($6,000,000) to finance the capital facility costs of completing the University of North Carolina Pembroke New School of Business.
SECTION 36.15.(g)  Variable Rate Demand Bonds and Notes. – In fixing the details of bonds and notes, the State Treasurer may provide that any of the bonds or notes may:
(1)	Be made payable from time to time on demand or tender for purchase by the owner, if a credit facility supports the bonds or notes, unless the State Treasurer specifically determines that a credit facility is not required upon a finding and determination by the State Treasurer that the absence of a credit facility will not materially and adversely affect the financial position of the State and the marketing of the bonds or notes at a reasonable interest cost to the State.
(2)	Be additionally supported by a credit facility.
(3)	Be made subject to redemption or a mandatory tender for purchase prior to maturity.
(4)	Bear interest at a rate or rates that may vary for any period of time, as may be provided in the proceedings providing for the issuance of the bonds or notes, including, without limitation, such variations as may be permitted pursuant to a par formula.
(5)	Be made the subject of a remarketing agreement whereby an attempt is made to remarket bonds or notes to new purchasers prior to their presentment for payment to the provider of the credit facility or to the State.
If the aggregate principal amount payable by the State under a credit facility is in excess of the aggregate principal amount of bonds or notes secured by the credit facility, whether as a result of the inclusion in the credit facility of a provision for the payment of interest for a limited period of time or the payment of a redemption premium or for any other reason, then the amount of authorized but unissued bonds or notes during the term of such credit facility shall not be less than the amount of such excess, unless the payment of such excess is otherwise provided for by agreement of the State executed by the State Treasurer.
SECTION 36.15.(h)  Issuance of Bonds and Notes. –
(1)	Terms and conditions. – Bonds or notes may bear a date or dates, may be serial or term bonds or notes, or any combination thereof, may mature in such amounts and at such time or times, not exceeding 40 years from their date or dates, may be payable at such place or places, either within or without the United States of America, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts, may bear interest at such rate or rates, which may vary from time to time, and may be made redeemable before maturity, at the option of the State or otherwise as may be provided by the State, at such price or prices, including a price less than or greater than the face amount of the bonds or notes, and under such terms and conditions, all as may be determined by the State Treasurer, by and with the consent of the Council of State.
(2)	Signatures; form and denomination; registration. – Bonds or notes may be issued in certificated or uncertificated form. If issued in certificated form, bonds or notes shall be signed on behalf of the State by the Governor or shall bear the Governor's facsimile signature, shall be signed by the State Treasurer or shall bear the State Treasurer's facsimile signature, and shall bear the Great Seal of the State, or a facsimile of the Seal shall be impressed or imprinted thereon. If bonds or notes bear the facsimile signatures of the Governor and the State Treasurer, the bonds or notes shall also bear a manual signature which may be that of a bond registrar, trustee, paying agent, or designated assistant of the State Treasurer. Should any officer whose signature or facsimile signature appears on bonds or notes cease to be such officer before the delivery of the bonds or notes, the signature or facsimile signature shall nevertheless have the same validity for all purposes as if the officer had remained in office until delivery. Bonds or notes may bear the facsimile signatures of persons, who at the actual time of the execution of the bonds or notes shall be the proper officers to sign any bond or note, although at the date of the bond or note such persons may not have been such officers. The form and denomination of bonds or notes, including the provisions with respect to registration of the bonds or notes and any system for their registration, shall be as the State Treasurer may determine in conformity with this section.
(3)	Manner of sale; expenses. – Subject to the approval by the Council of State as to the manner in which bonds or notes shall be offered for sale, whether at public or private sale, whether within or without the United States, and whether by publishing notices in certain newspapers and financial journals, mailing notices, inviting bids by correspondence, negotiating contracts of purchase, or otherwise, the State Treasurer is authorized to sell bonds or notes at one time or from time to time at any rates of interest, which may vary from time to time, and at any prices, including a price less than or greater than the face amount of the bonds or notes, as the State Treasurer may determine. All expenses incurred in the preparation, sale, and issuance of bonds or notes shall be paid by the State Treasurer from the proceeds of bonds or notes or other available moneys.
(4)	Notes; repayment. –
a.	By and with the consent of the Council of State, the State Treasurer is hereby authorized to borrow money and to execute and issue notes of the State for the same, but only in the following circumstances and under the following conditions:
1.	For anticipating the sale of bonds, the issuance of which the Council of State has approved, if the State Treasurer considers it advisable to postpone the issuance of the bonds.
2.	For the payment of interest on or any installment of principal of any bonds then outstanding, if there are not sufficient funds in the State treasury with which to pay the interest or installment of principal as they respectively become due.
3.	For the renewal of any loan evidenced by notes authorized in this section.
4.	For the purposes authorized in this section.
5.	For refunding bonds or notes as authorized in this section.
b.	Funds derived from the sale of bonds or notes may be used in the payment of any bond anticipation notes issued under this section. Funds provided by the General Assembly for the payment of interest on or principal of bonds shall be used in paying the interest on or principal of any notes and any renewals thereof, the proceeds of which shall have been used in paying interest on or principal of the bonds.
(5)	Refunding bonds and notes. – By and with the consent of the Council of State, the State Treasurer is authorized to issue and sell refunding bonds and notes pursuant to the provisions of the State Refunding Bond Act for the purpose of refunding bonds or notes issued pursuant to this section. The refunding bonds and notes may be combined with any other issues of State bonds and notes similarly secured. Refunding bonds or notes may be issued at any time prior to the final maturity of the debt obligation to be refunded. The proceeds from the sale of any refunding bonds or notes shall be applied to the immediate payment and retirement of the bonds or notes being refunded or, if not required for the immediate payment of the bonds or notes being refunded, the proceeds shall be deposited in trust to provide for the payment and retirement of the bonds or notes being refunded and to pay any expenses incurred in connection with the refunding. Money in a trust fund may be invested in (i) direct obligations of the United States government, (ii) obligations the principal of and interest on which are guaranteed by the United States government, (iii) obligations of any agency or instrumentality of the United States government if the timely payment of principal and interest on the obligations is unconditionally guaranteed by the United States government, or (iv) certificates of deposit issued by a bank or trust company located in the State if the certificates are secured by a pledge of any of the obligations described in (i), (ii), or (iii) above having an aggregate market value, exclusive of accrued interest, equal at least to the principal amount of the certificates so secured. This section does not limit the duration of any deposit in trust for the retirement of bonds or notes being refunded but that have not matured and are not presently redeemable, or if presently redeemable, have not been called for redemption.
(6)	Tax exemption. – Bonds and notes shall at all times be free from taxation by the State or any political subdivision or any of their agencies, excepting estate, inheritance, or gift taxes, income taxes on the gain from the transfer of bonds or notes, and franchise taxes. The interest on bonds or notes is not subject to taxation as income.
(7)	Investment eligibility. – Bonds and notes are securities in which all of the following may invest, including capital in their control or belonging to them: public officers, agencies, and public bodies of the State and its political subdivisions, all insurance companies, trust companies, investment companies, banks, savings banks, savings and loan associations, credit unions, pension or retirement funds, other financial institutions engaged in business in the State, executors, administrators, trustees, and other fiduciaries. Bonds and notes are hereby made securities which may properly and legally be deposited with and received by any officer or agency of the State or political subdivision of the State for any purpose for which the deposit of bonds, notes, or obligations of the State or any political subdivision is now or may hereafter be authorized by law.
(8)	Faith and credit. – The faith and credit and taxing power of the State are hereby pledged for the payment of the principal of and the interest on bonds and notes. The State expressly reserves the right to amend any provision of this section to the extent it does not impair any contractual right of a bond owner.
(9)	Other agreements. – The State Treasurer may authorize, execute, obtain, or otherwise provide for bond insurance, investment contracts, credit and liquidity facilities, interest‑rate swap agreements and other derivative products, and any other related instruments and matters the State Treasurer determines are desirable in connection with issuance, incurrence, carrying, or securing of bonds or notes. The State Treasurer is authorized to employ and designate any financial consultants, underwriters, and bond attorneys to be associated with any bond or note issue under this section as the State Treasurer considers necessary.
SECTION 36.15.(i)  Interpretation of Section. –
(1)	Additional method. – The foregoing subsections of this section shall be deemed to provide an additional and alternative method for the doing of the things authorized under it and shall be regarded as supplemental and additional to powers conferred by other laws and shall not be regarded as in derogation of any powers now existing.
(2)	Statutory references. – References in this section to specific sections or Chapters of the General Statutes or to specific acts are intended to be references to such sections, Chapters, or acts as they may be amended from time to time by the General Assembly.
(3)	Broad construction. – This section, being necessary for the health and welfare of the people of the State, shall be broadly construed to effect the purposes thereof.
(4)	Inconsistent provisions. – Insofar as the provisions of this section are inconsistent with the provisions of any general, special, or local laws, or parts thereof, the provisions of this section shall be controlling.
(5)	Severability. – If any provision of this section or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of the section which can be given effect without the invalid provision or application, and, to this end, the provisions of this section are declared to be severable.
SECTION 36.15.(j)  This section is effective when it becomes law.

PART XXXVII. DEPARTMENT OF INFORMATION TECHNOLOGY

INFORMATION TECHNOLOGY INTERNAL SERVICE FUND/RATES
SECTION 37.1.  Section 37.5(a) of S.L. 2017‑57 reads as rewritten:
"SECTION 37.5.(a)  During the 2017‑2019 fiscal biennium:
(1)	Information Technology Internal Service Fund receipts for the 2017‑2018 fiscal year shall not exceed two hundred five million dollars ($205,000,000).
(2)	Information Technology Internal Service Fund receipts for the 2018‑2019 fiscal year shall be based on projected receipts as calculated in subsection (c) of this section.
(3)	Receipts for the Internal Service Fund shall also include the total receipts for existing services transferred from the following participating agencies to the Department of Information Technology under the State agency information technology consolidation:
a.	Department of Administration.
b.	Department of Environmental Quality.
c.	Department of Military and Veterans Affairs.
d.	Department of Transportation.
e.	Office of State Budget and Management.
f.	Office of State Human Resources.
(4)	Receipts for the Internal Service Fund shall include receipts for any existing services transferred to the Department of Information Technology under the State agency information technology consolidation during the 2018‑2019 fiscal year.
Rates approved by the Office of State Budget and Management during the 2017‑2019 fiscal biennium to support the Information Technology Internal Service Fund shall be based on the fund limit set in this section.
Information Technology Internal Service Fund receipts may be increased for specific purposes only after consultation with the Joint Legislative Commission on Governmental Operations each time a requirement necessitating an increase is identified."
SECTION 37.2.  G.S. 143B‑1333(a) reads as rewritten:
"(a)	The Internal Service Fund is established within the Department as a fund to provide goods and services to State agencies on a cost‑recovery basis. The Department shall establish fees for subscriptions and chargebacks for consumption‑based services. The Information Technology Strategic Sourcing Office shall be funded through a combination of administrative fees as part of the IT Supplemental Staffing contract, as well as fees charged to agencies using their services. For each fiscal biennium, the State CIO shall establish consistent, fully transparent, easily understandable fees and rates that reflect industry standards for any good or service for which an agency is charged. These fees and rates shall be prepared by October 1 of each even‑numbered year and shall be approved by the Office of State Budget and Management. These rates shall remain in effect for the fiscal biennium and the Office of State Budget and Management shall ensure that State agencies have the opportunity to adjust their budgets based on any rate or fee changes prior to submission of those budget recommendations to the General Assembly. Reductions in rates may be made by the State CIO at any time upon consultation with the Office of State Budget and Management. Rates for new services may be approved by the Office of State Budget and Management if funds are available and deemed in the best interest of the State. The approved Information Technology Internal Service Fund budget and associated rates shall be included in the Governor's budget recommendations to the General Assembly."

RESERVE FOR ENTERPRISE RESOURCE PLANNING SOLUTIONS
SECTION 37.3.  Creation and Source of Funds. – The Reserve for Enterprise Resource Planning (ERP) Solutions is established at the Office of State Budget and Management (OSBM) as a special fund.
SECTION 37.4.  Of the amount in the Reserve for Enterprise Resource Planning Solutions, the funds shall be allocated in the following manner:
(1)	The sum of twenty‑seven million dollars ($27,000,000) shall be allocated to the Department of Information Technology for development of a consolidated statewide ERP bringing the total amount allocated to forty million dollars ($40,000,000).
(2)	The sum of twenty three million dollars ($23,000,000) shall be allocated to the North Carolina Community College System for the planning and implementation of a modernized ERP for the State's 58 community colleges.
a.	The North Carolina Community College System shall use these funds to (i) ensure that all community colleges have the capacity to access and operate a cloud‑based ERP system, (ii) promote industry utilization and student enhancement of "career credit" opportunities that build and strengthen North Carolina's workforce, and (iii) design a replacement for the human resources and payroll systems used by all 58 community colleges.
b.	Funds allocated under sub‑subdivision a. of this subdivision to enhance capacity at rural colleges shall be used to upgrade equipment and connectivity at these colleges. Funds shall not be used to renovate or construct new facilities.
SECTION 37.5.  Use of Funds. – The funds in the Reserve for Enterprise Resource Planning shall only be used for approved ERP projects. OSBM shall release funding as required upon consultation with the respective agency and the State CIO.
SECTION 37.6.  On or before January 1 of each year, each entity receiving funds in Section 37.4 of this act shall report to the Joint Legislative Committee on Information Technology and the Fiscal Research Division. The report shall contain the following:
(1)	Status of the ERP project regarding time line and spending.
(2)	Status of contract awards.
(3)	Status of any outstanding requests for proposal.
(4)	Total cost of each awarded contract.
The North Carolina Community College System shall report by March 1, 2019, and semi‑annually thereafter, on the expenditures of all funds related to their ERP to the Joint Legislative Education Oversight Committee.

GRANT TO ENHANCE BROADBAND ACCESS IN UNSERVED AREAS
SECTION 37.7.  The Department of Information Technology is authorized to establish and administer the rural broadband access grant program. The program shall support high‑speed Internet connectivity to locations lacking broadband service to facilitate public safety, education, health care, government services, and economic development. Grants shall incentivize private investment in locations where market forces are not attracting spending. The program shall complement and support Department of Commerce rural initiatives, Department of Health and Humans Services rural initiatives, and other federal initiatives or grant programs.
Funds appropriated in this act for the implementation of the grant program shall be allocated in the following manner:
(1)	Seventeen million five hundred thousand dollars ($17,500,000) to establish broadband deployment grants for the purpose of promoting the deployment and adoption of broadband Internet access services.
(2)	Grants must be awarded to promote the deployment and adoption of broadband infrastructure and services with minimum download speeds of 10 Megabits per second (10Mbps) and a minimum of upload speeds of one Megabit per second (1Mbps) to locations without broadband services at these minimum speeds.
(3)	Grants must be awarded pursuant to criteria developed by the Department of Information Technology, Broadband Infrastructure Office, with priority given to projects that:
a.	Serve locations not receiving a minimum download and upload speed of 10Mbps/1Mbps;
b.	Propose to install infrastructure that supports broadband services scalable to higher download and upload speeds;
c.	Have not received funds or have not been designated to receive funds through other State or federal grant programs designed for broadband deployment or expansion to locations without broadband services at a minimum download and upload speed of 10Mbps/1Mbps;
d. 	Shall provide higher download and upload speeds to locations than the minimum threshold referenced herein;
e.	Serve locations with demonstrated community support and documented support from the political subdivision being served; and
f.	Provide an affordable service offering for qualifying low‑income households.
(4)	Funds may reimburse investments in infrastructure, equipment, construction costs, or other investments required to deliver last‑mile service to unserved areas, for wired or fixed wireless broadband technologies. 
Of the funds appropriated, no more than two percent (2%) may be used to support the planning, administration, and management of the broadband grant program, including broadband coverage data verification.
SECTION 37.8.  The Broadband Infrastructure Office shall collect data on the social and economic impact of the Broadband Grants program. Specific data shall include the following:
(1)	The amount of the grant allocation.
(2)	Number of households impacted.
(3)	Number of businesses impacted.
(4)	Cost or cost range of services.
(5)	Number of jobs created or affected by broadband installation projects.
(6)	The installation project time period.
SECTION 37.9.  On or before January 1 of each year, the Broadband Infrastructure Office shall report to the Joint Legislative Committee on Information Technology and the Fiscal Research Division. The report shall contain the following:
(1)	Status of the Broadband Grant Program.
(2)	Status of grant awards.
(3)	The impact of the Broadband Grant Program on specific communities.

HOMEWORK GAP INITIATIVE
SECTION 37.10.  The Department of Information Technology, in consultation with the Department of Public Instruction, is authorized to establish and administer a pilot Homework Gap Grants program for the purpose of providing Internet access to students who do not have, or who cannot afford, home Internet service. The Department of Information Technology's Broadband Infrastructure Office shall work with the Department of Public Instruction to initiate a one‑year pilot grant program that will serve as the foundation for a long‑term solution for students who lack broadband service. Grants shall be provided to Local Education Agencies for the purchase of equipment and services for individual student use, and to provide WiFi on school buses.
Funds appropriated in this act for the implementation of the grant program shall be allocated in the following manner:
(1)	Two million dollars ($2,000,000) to establish grants to Local Education Agencies for the purchase of mobile hotspot devices, service for the hotspots, and equipment and mobile service to provide WiFi on school buses.
(2)	One hundred twenty‑five thousand dollars ($125,000) to administer the grant program and conduct research on the size and scope of the homework gap.
(3)	Two hundred fifty thousand dollars ($250,000) for a third‑party evaluation of the pilot year and progress made toward closing the homework gap.
(4)	One hundred twenty‑five thousand dollars ($125,000) for mobile service testing to ensure mobile hotspot devices can provide adequate access for at‑home educational needs.
Upon approval of a Local Education Agency's grant request, funding will be transferred to the Department of Public Instruction for distribution.
SECTION 37.11.  The Broadband Infrastructure Office shall develop a strategy to support the affordability of broadband service, including potential partnerships and private sources of funding to support the effort. The Department of Information Technology shall negotiate with wireless providers to lower monthly subscription rates for mobile hotspots and establish convenience contracts where Local Education Agencies shall purchase equipment and services.
SECTION 37.12.  The Broadband Infrastructure Office, in consultation with the Department of Public Instruction, shall establish qualifying grant criteria that includes a district‑wide survey measuring the homework gap and demonstrated progress toward the NC Digital Learning Plan. Implementation should begin no later than the 2019‑2020 school year.
SECTION 37.13.  The Broadband Infrastructure Office shall collect data on the impact of the Homework Grants program. Specific data shall include the following:
(1)	Number of students impacted.
(2)	Number of buses equipped.
(3)	Cost or cost range of services.
SECTION 37.14.  On or before March 1, 2019, the Broadband Infrastructure Office shall submit a report to the Joint Legislative Committee on Information Technology and the Joint Legislative Committee on Education. The report shall contain at least the following:
(1)	Status of the Homework Gap Grants Program.
(2)	Number and amounts of grants awarded.
(3)	Number of students impacted.
SECTION 37.15.  On or before March 1, 2020, the State CIO, in conjunction with the Department of Public Instruction and the third‑party evaluator, shall prepare a plan to bridge the homework gap that includes the following:
(1)	Information regarding the size and scope of the homework gap throughout the State.
(2)	A strategy to provide affordable broadband access for students falling within the homework gap, including the exploration of additional outside sources of funding to support the effort.
(3)	Analysis of means, methods, and best practices to achieve statewide universal access for students.

BROADBAND SERVICE DEFINITION
SECTION 37.16.  G.S. 62‑3 reads as rewritten:
"§ 62‑3.  Definitions.
As used in this Chapter, unless the context otherwise requires, the term:
(1)	"Broadband service" means any service that consists of or includes a high‑speed access capability to transmit at a rate of not less than the current threshold for broadband service established by the Federal Communications Commission and either (i) is used to provide access to the Internet, or (ii) provides computer processing, information storage, information content, or protocol conversion, including any service applications or information service provided over such high‑speed access service. "Broadband service" does not include intrastate service that was tariffed by the Commission and in effect as of the effective date of this subdivision.
…."

AUTHORIZATION TO PROVIDE GRANTS
SECTION 37.17.  G.S. 153A‑349.60 reads as rewritten:
"§ 153A‑349.60.  Authorization to provide grants.
(a)	A county may provide grants to unaffiliated qualified private providers of highspeed Internet access service, as that term is defined in G.S. 160A‑340(4), for the purpose of expanding service in the county. The grants shall be awarded on a technology neutral basis, shall be open to qualified applicants, and may require matching funds by the private provider. A county shall seek and consider request for proposals from qualified private providers within the county prior to awarding a broadband grant and shall use reasonable means to ensure that potential applicants are made aware of the grant, including, at a minimum, compliance with the notice procedures set forth in G.S. 160A‑340.6(c). The county shall use only unrestricted general fund revenue or State or federal grants or loans for the grants. For the purposes of this section, a qualified private provider is a private provider of high‑speed Internet access service in the State prior to the issuance of the grant proposal.
…."

SECURITY COST ESTIMATION REPORTING CHANGE
SECTION 37.18.  G.S. 143B‑1378 reads as rewritten:
"§ 143B‑1378.  Assessment of agency compliance with security standards.
At a minimum, the State CIO shall annually assess the ability of each State agency, and each agency's contracted vendors, to comply with the current security enterprise‑wide set of standards established pursuant to this section. The assessment shall include, at a minimum, the rate of compliance with the enterprise‑wide security standards and an assessment of security organization, security practices, security information standards, network security architecture, and current expenditures of State funds for information technology security. The assessment of a State agency shall also estimate the initial cost to implement the security measures needed for agencies to fully comply with the standards, as well as the costs over the lifecycle of the State agency information system. Each State agency shall submit information required by the State CIO for purposes of this assessment. The State CIO shall include the information obtained from the assessment in the State Information Technology Plan."

PART XXXVIII. FINANCE PROVISIONS

PERSONAL INCOME TAX RATE BRACKETS
SECTION 38.1.(a)  Section 38.1 of S.L. 2017‑57 is repealed.
SECTION 38.1.(b)  G.S. 105‑153.7(a) reads as rewritten:
"(a)	Tax. – A tax is imposed for each taxable year on the North Carolina taxable income of every individual. The tax shall be levied, collected, and paid annually. The tax shall be computed at the following percentages of the taxpayer's North Carolina taxable income:
	Filing Status	Taxable Income	Tax Rate
Married, filing jointly	Up to $200,000	5.25%
	Over $200,000	5.499%
Head of Household	Up to $150,000	5.25%
	Over $150,000	5.499%
Single	Up to $100,000	5.25%
	Over $100,000	5.499%
Married, filing separately	Up to $100,000	5.25%
	Over $100,000	5.499%
Surviving Spouse	Up to $200,000	5.25%
	Over $200,000	5.499%."
SECTION 38.1.(c)  This section is effective for taxable years beginning on or after January 1, 2019.

CORPORATE INCOME TAX RATE FREEZE
SECTION 38.2.(a)  Section 38.5(b) of S.L. 2017‑57 is repealed.
SECTION 38.2.(b)  Section 38.5(d) of S.L. 2017‑57 reads as rewritten:
"SECTION 38.5.(d)  Subsection (a) of this section is effective for taxable years beginning on or after January 1, 2017."

TELEVISION AND FILM REBATE AND GRANT PROGRAMS
SECTION 38.3.(a)  G.S. 143B‑437.02A reads as rewritten:
"§ 143B‑437.02A.  The Film and Entertainment Grant Fund.
(a)	Creation and Purpose of Fund. – There is created in the Department of Commerce a special, nonreverting account to be known as the Film and Entertainment Grant Fund to provide funds to encourage the production of motion pictures, television shows, movies for television, productions intended for on‑line distribution, and commercials and to develop the filmmaking industry within the State. The Department of Commerce shall adopt guidelines providing for the administration of the program. Those guidelines may provide for the Secretary to award the grant proceeds over a period of time, not to exceed three years. Those guidelines shall include the following provisions, which shall apply to each grant from the account:
(1)	The funds are reserved for a production on which the production company has qualifying expenses of at least 

	two hundred fifty thousand dollars ($250,000).
(2)	The funds are not used to provide a grant in excess of any of the following:
a.	An amount more than twenty‑five percent (25%) of the qualifying expenses for the production.
b.	An amount more than two hundred fifty thousand dollars ($250,000) per production.
(3)	The funds are not used to provide a grant to more than one production company for a single production. 
(4)	The funds are not used to provide a grant for a production that meets one or more of the following: 
a.	It contains material that is "obscene," as defined in G.S. 14‑190.1, or that is "harmful to minors," as defined in G.S. 14‑190.13. 
b.	It has the primary purpose of political advertising, fundraising, or marketing, other than by commercial, product, or service.
c.	It is a production of a news program, including weather, financial market, and current events reports.
d.	It is a live sporting event, including pre‑event and post‑event coverage and scripted sports entertainment. For purposes of this exception, a live sporting event is a scheduled sporting competition, game, or race that is originated solely by an amateur, collegiate, or professional organization, institution, or association for live or tape‑delayed television or satellite broadcast. The term does not include commercial advertising, an episodic television series, a television pilot, a music video, a motion picture, or a documentary production in which sporting events are presented through archived historical footage or similar footage taken at least 30 days before it is used.
e.	It is a radio production.
f.	It is a talk, game, or awards show or other gala event. For purposes of this exception, an awards show is television programming involving the filming of a ceremony in which individuals, groups, or organizations are given an award.
g.	It fails to contain, in the end credits of the production, a statement that the production was "Filmed in North Carolina," a logo provided by the North Carolina Film Office, and an acknowledgement of the regional film office responsible for the geographic area in which the filming of the production occurred. Additionally, the production company will offer marketing opportunities to be evaluated by the North Carolina Film Office to ensure that they offer promotional value to the State.
(5)	Priority for the use of funds shall be given to productions that are reasonably anticipated to maximize the benefit to the State, in consideration of at least the following factors: 
a.	Percentage of employees that are permanent residents in the State.
b.	The extent to which the production features identifiable attractions or State locales in a manner that would be reasonably expected to induce visitation by nonresidents of the State to the attraction or locale.
c.	The extent to which the production invests in permanent improvements to open public spaces, commercial districts, traditional downtown areas, public landmarks, residential areas, or similar properties or areas.
d.	The extent to which the production will be filmed in an economically distressed county or area of the State.
e.	The duration of production activities in the State.
…."
SECTION 38.3.(b)  G.S. 105‑130.47 is reenacted as it existed immediately before it was repealed and reads as rewritten:
"§ 105‑130.47.  Film and Entertainment Rebate Program for qualifying expenses of a production company. 
(a)	Definitions. – The following definitions apply in this section:
(1)	Awards show. – An awards show is television programming involving the filming of a ceremony in which individuals, groups, or organizations are given an award.
(2)	Employee. – A person who is employed for consideration and whose wages are subject to withholding tax under Article 4A of Chapter 105 of the General Statutes.
(3)	Highly compensated individual. – An individual who directly or indirectly receives compensation in excess of one million dollars ($1,000,000) for personal services with respect to a single production. An individual receives compensation indirectly when a production company pays a personal service company or an employee leasing company that pays the individual.
(4)	Live sporting event. – A scheduled sporting competition, game, or race that is not originated by a production company, but originated solely by an amateur, collegiate, or professional organization, institution, or association for live or tape‑delayed television or satellite broadcast. A live sporting event does not include commercial advertising, an episodic television series, a television pilot, a music video, a motion picture, or a documentary production in which sporting events are presented through archived historical footage or similar footage taken at least 30 days before it is used.
(5)	Loan‑out company. – A personal service corporation that employs an individual who is hired by a film or digital media production company.
(6)	Production. – Any of the following:
a.	A motion picture intended for commercial distribution to a motion picture theater or directly to the consumer viewing market that has a running time of at least 75 minutes.
b.	A television series for theatrical or television viewing, made‑for‑television movie, or production intended for online distribution. For video and television series, one production is all of the episodes of the series produced for a single season.
(7)	Production company. – Defined in G.S. 105‑164.3.
(8)	Qualifying expenses. – The sum of the following amounts spent in this State by a production company in connection with a production, less the amount in excess of one million dollars ($1,000,000) paid to a highly compensated individual:
a.	Goods and services leased or purchased. For goods with a purchase price of twenty‑five thousand dollars ($25,000) or more, the amount included in qualifying expenses is the purchase price less the fair market value of the good at the time the production is completed. Goods and services includes the costs of tangible and intangible property used for, and services performed primarily and customarily in, production, including preproduction and postproduction and other direct costs of producing the project in accordance with generally accepted entertainment industry practices. Goods and services exclude costs for development, marketing, and distribution; costs of financing for the production, of bonding related to the production, of production‑related insurance coverage obtained on the production; and expenses for insurance coverage purchased from a related member.
b.	Compensation and wages on which withholding payments are remitted to the Department of Revenue under Article 4A of this Chapter. Payments made to a loan‑out company for services provided in North Carolina shall be subject to gross income withholding tax at the applicable rate under the Article 4 of this Chapter.
	
d.	Employee fringe contributions, including health, pension, and welfare contributions.
e. 	Per diems, stipends, and living allowances paid for work being performed in this State.
(9)	Related member. – Defined in G.S. 105‑130.7A.
(b)	Credit. – A taxpayer that is a production company and has qualifying expenses of at least one million dollars ($1,000,000) with respect to a production is allowed a credit against the taxes imposed by this Part equal to twenty‑five percent (25%) of the production company's qualifying expenses. The credit is computed based on all of the taxpayer's qualifying expenses incurred with respect to the production, not just the qualifying expenses incurred during the taxable year. 
(b1)	Repealed by Session Laws 2009‑529, s. 1, effective January 1, 2011.
(c)	Pass‑Through Entity. – Notwithstanding the provisions of G.S. 105‑131.8 and G.S. 105‑269.15, a pass‑through entity that qualifies for a credit provided in this section does not distribute the credit among any of its owners. The pass‑through entity is considered the taxpayer for purposes of claiming a credit allowed by this section. If a return filed by a pass‑through entity indicates that the entity is paying tax on behalf of the owners of the entity, a credit allowed under this section does not affect the entity's payment of tax on behalf of its owners.
(d)	Return. – A taxpayer may claim a credit allowed by this section on a return filed for the taxable year in which the production activities are completed. The return must state the name of the production, and the taxpayer must provide a description of the production and a detailed accounting of the qualifying expenses with respect to which a credit is claimed. The qualifying expenses are subject to audit by the Secretary before the credit is allowed.
(e)	Credit Refundable. – If a credit allowed by this section exceeds the amount of tax imposed by this Part for the taxable year reduced by the sum of all credits allowable, the Secretary must refund the excess to the taxpayer. The refundable excess is governed by the provisions governing a refund of an overpayment by the taxpayer of the tax imposed in this Part. In computing the amount of tax against which multiple credits are allowed, nonrefundable credits are subtracted before refundable credits.
(f)	Limitations. – The amount of credit allowed under this section per production shall not exceed the following amounts:
(1)	For a feature‑length film, five million dollars ($5,000,000).
(2)	For a television series, fifteen million dollars ($15,000,000) per season.
No credit is allowed under this section for any production that satisfies one or more of the following conditions:
(1)	It has the primary purpose of political advertising, fund‑raising, or marketing a product or service.
(2)	It is a production of a news program, including weather, financial market, and current events reports.
(3)	It is a live sporting event, including pre‑event and post‑event coverage and scripted sports entertainment.
(4)	It is a talk, game, or awards show or other gala event. 
(5)	It contains material that is "obscene," as defined in G.S. 14‑190.1, or that is "harmful to minors," as defined in G.S. 14‑190.13.
(6)	It is a radio production.
(7)	It fails to contain in the end credits of the production a statement that the production was "Filmed in North Carolina," a logo provided by the North Carolina Film Office, and an acknowledgement of the regional film office responsible for the geographic area in which the filming of the production occurred. Additionally, the production company will offer marketing opportunities to be evaluated by the North Carolina Film Office to ensure that they offer promotional value to the State.
(8)	It has received a grant from the Film and Entertainment Grant Fund set out in G.S. 143B‑437.02A.
(g)	Substantiation. – A taxpayer allowed a credit under this section must maintain and make available for inspection any information or records required by the Secretary of Revenue. The taxpayer has the burden of proving eligibility for a credit and the amount of the credit. The Secretary may consult with the North Carolina Film Office within the Economic Development Partnership of North Carolina and the regional film commissions in order to determine the amount of qualifying expenses.
(h)	Report. – The Department must include in the economic incentives report required by G.S. 105‑256 the following information, itemized by taxpayer:
(1)	The location of sites used in a production for which a credit was taken.
(2)	The qualifying expenses for which a credit was taken, classified by whether the expenses were for goods, services, or compensation paid by the production company.
(3)	The number of people employed in the State with respect to credits taken.
(4)	The total cost to the General Fund of the credits taken.
(i)	Repealed by Session Laws 2006‑220, s. 2, effective for taxable years beginning on or after January 1, 2007.
(j)	Notification. – To claim a credit under this section, a taxpayer must notify the North Carolina Film Office within the Economic Development Partnership of North Carolina of the taxpayer's intent to claim the production tax credit. The notification must include the title of the production, the name of the production company, a financial contact for the production company, the proposed dates on which the production company plans to begin filming the production, and any other information required by the Department.
(k)	Sunset. – This section is repealed for qualifying expenses occurring on or after January 1, 2022."
SECTION 38.3.(c)  G.S. 105‑151.29 is reenacted as it existed immediately before it was repealed and reads as rewritten:
"§ 105‑151.29.  Film and Entertainment Rebate Program for qualifying expenses of a production company.
(a)	Definitions. – The following definitions apply in this section:
(1)	Awards show. – An awards show is television programming involving the filming of a ceremony in which individuals, groups, or organizations are given an award.
(2)	Employee. – A person who is employed for consideration and whose wages are subject to withholding under Article 4A of Chapter 105 of the General Statutes.
(3)	Highly compensated individual. – An individual who directly or indirectly receives compensation in excess of one million dollars ($1,000,000) for personal services with respect to a single production. An individual receives compensation indirectly when a production company pays a personal service company or an employee leasing company that pays the individual.
(4)	Live sporting event. – A scheduled sporting competition, game, or race that is not originated by a production company, but originated solely by an amateur, collegiate, or professional organization, institution, or association for live or tape‑delayed television or satellite broadcast. A live sporting event does not include commercial advertising, an episodic television series, a television pilot, a music video, a motion picture, or a documentary production in which sporting events are presented through archived historical footage or similar footage taken at least 30 days before it is used.
(5)	Loan‑out company. – A personal service corporation that employs an individual who is hired by a film or digital media production company.
(6)	Production. – Any of the following:
a.	A motion picture intended for commercial distribution to a motion picture theater or directly to the consumer viewing market that has a running time of at least 75 minutes.
b.	A television series for theatrical or television viewing, made‑for‑television movie, or production intended for online distribution. For video and television series, one production is all of the episodes of the series produced for a single season.
(7)	Production company. – Defined in G.S. 105‑164.3.
(8)	Qualifying expenses. – The sum of the following amounts spent in this State by a production company in connection with a production, less the amount paid in excess of one million dollars ($1,000,000) to a highly compensated individual:
a.	Goods and services leased or purchased. For goods with a purchase price of twenty‑five thousand dollars ($25,000) or more, the amount included in qualifying expenses is the purchase price less the fair market value of the good at the time the production is completed. Goods and services includes the costs of tangible and intangible property used for, and services performed primarily and customarily in, production, including preproduction and postproduction and other direct costs of producing the project in accordance with generally accepted entertainment industry practices. Goods and services exclude costs for development, marketing, and distribution; costs of financing for the production, of bonding related to the production, of production‑related insurance coverage obtained on the production; and expenses for insurance coverage purchased from a related member.
b.	Compensation and wages on which withholding payments are remitted to the Department of Revenue under Article 4A of this Chapter. Payments made to a loan‑out company for services provided in North Carolina shall be subject to gross income withholding tax at the applicable rate under the Article 4 of this Chapter.
	
c.	Employee fringe contributions, including health, pension, and welfare contributions.
d.	Per diems, stipends, and living allowances paid for work being performed in this State.
(9)	Related member. – Defined in G.S. 105‑130.7A.
(b)	Credit. – A taxpayer that is a production company and has qualifying expenses of at least one million dollars ($1,000,000) with respect to a production is allowed a credit against the taxes imposed by this Part equal to twenty‑five percent (25%) of the production company's qualifying expenses. The credit is computed based on all of the taxpayer's qualifying expenses incurred with respect to the production, not just the qualifying expenses incurred during the taxable year. 
(b1)	Repealed by Session Laws 2009‑529, s. 2, effective January 1, 2011.
(c)	Pass‑Through Entity. – Notwithstanding the provisions of G.S. 105‑131.8 and G.S. 105‑269.15, a pass‑through entity that qualifies for a credit provided in this section does not distribute the credit among any of its owners. The pass‑through entity is considered the taxpayer for purposes of claiming a credit allowed by this section. If a return filed by a pass‑through entity indicates that the entity is paying tax on behalf of the owners of the entity, a credit allowed under this section does not affect the entity's payment of tax on behalf of its owners.
(d)	Return. – A taxpayer may claim a credit allowed by this section on a return filed for the taxable year in which the production activities are completed. The return must state the name of the production, and the taxpayer must provide a description of the production and a detailed accounting of the qualifying expenses with respect to which a credit is claimed. The qualifying expenses are subject to audit by the Secretary before the credit is allowed.
(e)	Credit Refundable. – If a credit allowed by this section exceeds the amount of tax imposed by this Part for the taxable year reduced by the sum of all credits allowable, the Secretary must refund the excess to the taxpayer. The refundable excess is governed by the provisions governing a refund of an overpayment by the taxpayer of the tax imposed in this Part. In computing the amount of tax against which multiple credits are allowed, nonrefundable credits are subtracted before refundable credits.
(f)	Limitations. – The amount of credit allowed under this section per production shall not exceed the following amounts:
(1)	For a feature‑length film, five million dollars ($5,000,000).
(2)	For a television series, fifteen million dollars ($15,000,000) per season.
No credit is allowed under this section for any production that satisfies one or more of the following conditions:
(1)	It has the primary purpose of political advertising, fund‑raising, or marketing a product or service.
(2)	It is a production of a news program, including weather, financial market, and current event reports.
(3)	It is a live sporting event, including pre‑event and post‑event coverage and scripted sports entertainment.
(4)	It is a talk, game, or awards show or other gala event.
(5)	It contains material that is "obscene," as defined in G.S. 14‑190.1, or that is "harmful to minors," as defined in G.S. 14‑190.13.
(6)	It is a radio production.
(7)	It fails to contain in the end credits of the production a statement that the production was "Filmed in North Carolina," a logo provided by the North Carolina Film Office, and an acknowledgement of the regional film office responsible for the geographic area in which the filming of the production occurred. Additionally, the production company will offer marketing opportunities to be evaluated by the North Carolina Film Office to ensure that they offer promotional value to the State.
(8)	It has received a grant from the Film and Entertainment Grant Fund set out in G.S. 143B‑437.02A.
(g)	Substantiation. – A taxpayer allowed a credit under this section must maintain and make available for inspection any information or records required by the Secretary of Revenue. The taxpayer has the burden of proving eligibility for a credit and the amount of the credit. The Secretary may consult with the North Carolina Film Office within the Economic Development Partnership of North Carolina and the regional film commissions in order to determine the amount of qualifying expenses.
(h)	Report. – The Department must include in the economic incentives report required by G.S. 105‑256 the following information itemized by taxpayer:
(1)	The location of sites used in a production for which a credit was taken.
(2)	The qualifying expenses for which a credit was taken, classified by whether the expenses were for goods, services, or compensation paid by the production company.
(3)	The number of people employed in the State with respect to credits taken.
(4)	The total cost to the General Fund of the credits taken.
(i)	Repealed by Session Laws 2006‑220, s. 4, effective for taxable years beginning on and after January 1, 2007.
(j)	Notification. – To claim a credit under this section, a taxpayer must notify the North Carolina Film Office within the Economic Development Partnership of North Carolina of the taxpayer's intent to claim the production tax credit. The notification must include the title of the production, the name of the production company, a financial contact for the production company, the proposed dates on which the production company plans to begin filming the production, and any other information required by the Department.
(k)	Sunset. – This section is repealed for qualifying expenses occurring on or after January 1, 2022."
SECTION 38.3.(d)  This section becomes effective January 1, 2019, and applies to productions with qualifying expenses occurring on or after January 1, 2019.

DEED STAMP PROCEEDS
SECTION 38.4.(a)  G.S. 105‑228.30(b) reads as rewritten:
"(b)	The register of deeds of each county must remit the proceeds of the tax levied by this section to the county finance officer. The finance officer of each county must credit one‑half of the proceeds to the county's general fund and remit the remaining one‑half of the proceeds, less taxes refunded and the county's allowance for administrative expenses, to the Department of Revenue on a monthly basis. A county may retain two percent (2%) of the amount of tax proceeds allocated for remittance to the Department of Revenue as compensation for the county's cost in collecting and remitting the State's share of the tax. The Department of Revenue shall credit seventy‑five percent (75%) of the funds remitted to the Department of Revenue under this subsection to the General Fund. Of the remaining twenty‑five percent (25%) of the funds remitted to it pursuant to this section, the Department of Revenue shall credit thirty‑five percent (35%) to the Clean Water Management Trust Fund, thirty‑five percent (35%) to the Parks and Recreation Trust Fund, fifteen percent (15%) to the North Carolina Agricultural Development and Farmland Preservation Trust Fund established under G.S. 106‑744, and fifteen percent (15%) to the North Carolina Housing Trust Fund established under G.S. 122E‑3."
SECTION 38.4.(b)  G.S. 143B‑135.234(a) reads as rewritten:
"(a)	Fund Established. – The Clean Water Management Trust Fund is established as a special revenue fund to be administered by the Department of Environmental Quality. The Fund receives revenue from the following sources and may receive revenue from other sources: 
(1)	Annual appropriations. 
(2)	Special registration plates under G.S. 20‑81.12.
(3)	Other special registration plates under G.S. 20‑79.7.
(4)	The excise tax on conveyances levied pursuant to Article 8E of Chapter 105 of the General Statutes."
SECTION 38.4.(c)  G.S. 143B‑135.56(a) reads as rewritten:
"(a)	Fund Created. – There is established a Parks and Recreation Trust Fund in the State Treasurer's Office. The Trust Fund shall be a special revenue fund consisting of gifts and grants to the Trust Fund, monies credited to the Trust Fund pursuant to G.S. 105‑288.30(b), and other monies appropriated to the Trust Fund by the General Assembly."
SECTION 38.4.(d)  G.S. 106‑744(c) reads as rewritten:
"(c)	There is established a "North Carolina Agricultural Development and Farmland Preservation Trust Fund" to be administered by the Commissioner of Agriculture. The Trust Fund shall consist of all monies received for the purpose of purchasing agricultural conservation easements or funding programs that promote the development and sustainability of farming and assist in the transition of existing farms to new farm families, or monies transferred from counties or private sources, or monies credited to the Trust Fund pursuant to G.S. 105‑288.30(b). The Trust Fund shall be invested as provided in G.S. 147‑69.2 and G.S. 147‑69.3. The Commissioner shall use Trust Fund monies for any of the following purposes:
…."
SECTION 38.4.(e)  G.S. 122E‑3(b) reads as rewritten:
"(b)	The Fund shall consist of monies received under this act, monies credited to the Fund pursuant to G.S. 105‑288.30(b), and any other sources of revenue, public or private, dedicated for inclusion in the Fund."
SECTION 38.4.(f)  This section is effective for tax proceeds from the excise tax on conveyances received by the Department of Revenue on or after July 1, 2018.

EVALUATION OF SAVINGS RESERVE
SECTION 38.5.  G.S. 143C‑4‑2(f) reads as rewritten:
"(f)	Evaluation of Savings Reserve. – The Office of State Budget and Management and the Fiscal Research Division of the General Assembly shall jointly develop and annually produce an evaluation of the adequacy of the Savings Reserve based on the volatility of North Carolina's General Fund tax structure, which shall take into consideration relevant statistical and economic literature. After completing the evaluation, these entities may revise the methodology as needed to estimate the target for the Savings Reserve balance, which shall be calculated so as to be sufficient to cover two years of need for eight out of 10 scenarios involving a decline in General Fund revenue from one fiscal year to the next fiscal year. The recommended balance shall be expressed as a percentage of the prior year General Fund operating budget appropriations, excluding departmental receipts. The Office of State Budget and Management shall report this percentage to the Chairs of the House of Representatives and Senate Appropriations and Finance Committees no later than February 1 of each year."

PART XXXIX. MISCELLANEOUS PROVISIONS

STATE BUDGET ACT APPLIES
SECTION 39.1.  The provisions of the State Budget Act, Chapter 143C of the General Statutes, are reenacted and shall remain in full force and effect and are incorporated in this act by reference.

MOST TEXT APPLIES TO THE 2018‑2019 FISCAL YEAR
SECTION 39.2.  Except for statutory changes or other provisions that clearly indicate an intention to have effects beyond the 2018‑2019 fiscal year, the textual provisions of this act apply only to funds appropriated for, and activities occurring during, the 2018‑2019 fiscal year.

EFFECT OF HEADINGS
SECTION 39.3.  The headings to the parts, subparts, and sections of this act are a convenience to the reader and are for reference only. The headings do not expand, limit, or define the text of this act, except for effective dates referring to a part or subpart.

SEVERABILITY
SECTION 39.4.  If any section or provision of this act is declared unconstitutional or invalid by the courts, it does not affect the validity of this act as a whole or any part other than the part so declared to be unconstitutional or invalid.

EFFECTIVE DATE
SECTION 39.5.  Except as otherwise provided, this act becomes effective July 1, 2018.