GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2005
SESSION LAW 2005-276
SENATE BILL 622
The General Assembly of North Carolina enacts:
PART i. INtroduction and title of act
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 in accordance with the Executive Budget Act. Savings shall be effected where the total amounts appropriated are not required to perform these services and accomplish these purposes and the savings shall revert to the appropriate fund at the end of each fiscal year, except as otherwise provided by law.
SECTION 1.2. This act shall be known as the "Current Operations and Capital Improvements Appropriations Act of 2005."
PART iI. current operations and expansion/general fund
CURRENT OPERATIONS AND EXPANSION/GENERAL FUND
Current Operations – General Fund 2005‑2006 2006‑2007
EDUCATION
Community Colleges System Office $ 787,685,943 $ 767,295,886
Department of Public Instruction 6,607,998,945 6,579,807,097
University of North Carolina ‑ Board of Governors
Appalachian State University 97,708,514 98,114,232
East Carolina University
Academic Affairs 165,132,181 168,098,010
Health Affairs 45,624,110 45,671,394
Elizabeth City State University 28,376,210 28,173,367
Fayetteville State University 42,540,261 42,778,425
North Carolina Agricultural and
Technical State University 76,497,695 76,533,207
North Carolina Central University 59,223,437 58,883,106
North Carolina School of the Arts 21,173,905 20,698,614
North Carolina State University
Academic Affairs 299,773,341 304,775,818
Agricultural Extension 36,389,142 35,668,328
Agricultural Research 45,200,460 45,281,347
University of North Carolina at Asheville 29,211,816 29,705,695
University of North Carolina at Chapel Hill
Academic Affairs 212,164,735 220,475,219
Health Affairs 162,938,570 164,709,561
Area Health Education Centers 44,743,422 44,743,422
University of North Carolina at Charlotte 125,613,588 132,319,883
University of North Carolina at Greensboro 112,318,841 113,459,797
University of North Carolina at Pembroke 41,277,854 41,754,482
University of North Carolina at Wilmington 74,161,294 76,371,666
Western Carolina University 71,404,729 71,990,778
Winston‑Salem State University 48,726,028 48,658,641
General Administration 48,804,831 48,890,151
University Institutional Programs 24,610,415 28,278,415
Related Educational Programs 112,937,512 114,905,552
North Carolina School of Science and
Mathematics 14,555,420 14,513,392
UNC Hospitals at Chapel Hill 44,944,579 43,944,579
Total University of North Carolina –
Board of Governors $ 2,086,052,890 $ 2,119,397,081
HEALTH AND HUMAN SERVICES
Department of Health and Human Services
Office of the Secretary $ 113,855,919 $ 118,880,919
Division of Aging 29,975,639 29,495,139
Division of Blind Services/Deaf/HH 9,676,797 9,681,220
Division of Child Development 268,350,017 267,356,799
Division of Education Services 33,852,267 34,281,895
Division of Facility Services 13,608,838 15,959,466
Division of Medical Assistance 2,509,772,054 2,751,209,159
Division of Mental Health 603,315,155 602,556,655
NC Health Choice 68,169,765 51,882,902
Division of Public Health 152,391,232 150,814,496
Division of Social Services 188,512,693 190,679,285
Division of Vocational Rehabilitation Services 41,755,526 42,142,193
Total Health and Human Services $ 4,033,235,902 $ 4,264,940,128
NATURAL AND ECONOMIC RESOURCES
Department of Agriculture and Consumer Services $ 52,040,846 $ 51,032,884
Department of Commerce
Commerce 49,686,999 36,728,265
Commerce State‑Aid 26,512,085 11,722,085
NC Biotechnology Center 12,083,395 10,583,395
Rural Economic Development Center 25,277,607 25,052,607
Department of Environment and Natural Resources 177,197,119 167,451,089
Department of Labor 14,419,553 14,434,925
JUSTICE AND PUBLIC SAFETY
Department of Correction $ 1,029,924,421 $ 1,048,492,502
Department of Crime Control and Public Safety 34,793,934 35,153,488
Judicial Department 342,604,760 345,726,582
Judicial Department ‑ Indigent Defense 94,037,973 88,648,414
Department of Justice 77,322,567 78,697,271
Department of Juvenile Justice and
Delinquency Prevention 140,377,666 138,873,166
GENERAL GOVERNMENT
Department of Administration $ 62,039,261 $ 58,818,473
Office of Administrative Hearings 2,987,410 2,969,712
Department of State Auditor 10,850,737 10,840,918
Office of State Controller 10,043,268 10,044,511
Department of Cultural Resources
Cultural Resources 73,433,514 62,917,147
Roanoke Island Commission 1,783,374 1,783,374
State Board of Elections 5,107,543 5,069,307
General Assembly 42,934,588 46,965,432
Office of the Governor
Office of the Governor 5,324,590 5,344,528
Office of State Budget and Management 5,019,735 5,021,795
OSBM – Reserve for Special Appropriations 11,358,429 5,111,429
Housing Finance Agency 10,450,945 4,750,945
Department of Insurance
Insurance 28,220,714 28,110,582
Insurance – Volunteer Safety Workers'
Compensation 2,000,000 4,500,000
Office of Lieutenant Governor 754,737 753,037
Department of Revenue 81,447,475 80,630,250
Department of Secretary of State 8,934,063 9,269,633
Department of State Treasurer
State Treasurer 8,690,595 8,295,843
State Treasurer – Retirement for Fire
and Rescue Squad Workers 8,651,457 8,651,457
TRANSPORTATION
Department of Transportation $ 200,000 $ 0
RESERVES, ADJUSTMENTS AND DEBT SERVICE
Reserve for Compensation Increases $ 243,181,327 $ 235,185,705
Salary Adjustment Fund: 2005‑2007 Biennium 4,500,000 4,500,000
Salary Adjustment Fund: 2004‑2005 Fiscal Year 4,500,000 4,500,000
Reserve for Teachers' and State Employees'
Retirement Contribution 13,810,800 13,810,800
Reserve for Retirement System Payback 25,000,000 0
Reserve for Death Benefit Trust 12,899,200 12,899,200
Reserve for Disability Income Plan 6,586,500 6,586,500
Reserve for State Health Plan 108,648,000 142,728,000
Contingency and Emergency Fund 5,000,000 5,000,000
Reserve for Information Technology
Rate Adjustments (2,300,000) (2,300,000)
Information Technology Fund 24,375,000 8,025,000
MH/DD/SAS Trust Fund 10,000,000 0
Health and Wellness Trust Fund 10,000,000 0
Reserve for Job Development
Investment Grants (JDIG) 9,000,000 12,400,000
Reserve for Increased Fuel Costs 3,000,000 0
Reserve for Contingent Appropriations 85,000,000 85,000,000
Debt Service
General Debt Service 489,544,211 619,291,140
Federal Reimbursement 1,616,380 1,616,380
TOTAL CURRENT OPERATIONS –
GENERAL FUND $ 17,025,846,458 $ 17,293,127,963
GENERAL FUND AVAILABILITY STATEMENT
SECTION 2.2.(a) The General Fund availability used in developing the 2005‑2007 biennial budget is shown below:
FY 2005‑2006 FY 2006‑2007
Unappropriated Balance Remaining
from Previous Year $ 0 $ 117,227,875
Projected Over Collections FY 2004‑2005 681,500,000 0
Projected Reversions FY 2004‑2005 115,000,000 0
Less Earmarkings of Year End Credit Balance 0
Savings Reserve Account (199,125,000) 0
Repairs and Renovations (125,000,000) 0
Beginning Unreserved Credit Balance $ 472,375,000 $ 114,345,875
Revenues Based on Existing Tax Structure $ 15,417,300,000 $ 16,993,257,284
Nontax Revenues
Investment Income 74,800,000 78,700,000
Judicial Fees 144,800,000 148,300,000
Disproportionate Share 100,000,000 100,000,000
Insurance 49,500,000 51,300,000
Other Nontax Revenues 138,000,000 151,300,000
Highway Trust Fund/Use Tax
Reimbursement Transfer 252,558,117 252,663,009
Highway Fund Transfer 16,166,400 16,166,400
Subtotal Nontax Revenues $ 775,824,517 $ 798,429,409
Total General Fund Availability $ 16,665,499,517 $ 16,990,375,284
Adjustments to Availability: 2005 Session
Streamlined Sales Tax Changes 40,000,000 61,700,000
Maintain 4.5% Sales Tax Rate 417,100,000 462,700,000
Other Sales Tax Changes
Apply Sales Tax to Candy 9,800,000 15,800,000
Apply General Sales Tax Rate to Cable 10,900,000 26,100,000
Exempt Potting Soil for Farmers (200,000) (300,000)
Tobacco Tax Rate Changes 118,800,000 189,400,000
Extend 8.25% Individual Income
Tax Rate for 2 years 39,800,000 89,700,000
Continue Use Tax Line on Individual Returns 3,200,000 3,200,000
Conform Estate Tax to Federal Sunset 29,100,000 115,600,000
Film Industry Jobs Incentives (3,500,000) (3,500,000)
IRC Update – Partial Conformance (8,000,000) (10,700,000)
Adjust Rates for Health Maintenance
Organizations 0 14,300,000
Increase Earmarking for
NC Grape Growers Council (150,000) (150,000)
Proceeds from the Sale of the Polk Building 4,977,781 0
Justice and Public Safety Fees 17,028,271 20,428,271
Transfer from Tobacco Trust Fund 34,000,000 30,000,000
Transfers from Special Revenue and Other Funds 5,453,950 0
Reimburse Debt Service for
Certain Capital Facilities and
Land Acquisition per S.L. 2004‑179 5,958,723 21,060,827
Transfer to Civil Penalty and Forfeiture Fund (80,000,000) (85,000,000)
Suspend Highway Fund Transfer (16,166,400) (16,166,400)
Adjust Transfer from Insurance Regulatory Fund 389,013 243,813
Adjust Transfer from Treasurer's Office 468,478 67,478
Subtotal Adjustments to Availability:
2005 Session $ 628,959,816 $ 934,483,989
Revised General Fund Availability $ 17,294,459,333 $ 17,927,741,273
Less: General Fund Appropriations
SB 622 (2005 Appropriations Act) (17,077,231,458) (17,293,127,963)
G.S. 143‑15.3B: Clean Water
Management Trust Fund (100,000,000) (100,000,000)
Total General Fund Appropriations
2005‑2007 Biennium ($17,177,231,458) ($17,393,127,963)
Unappropriated Balance Remaining $ 117,227,875 $ 534,613,310
SECTION 2.2.(b) Notwithstanding G.S. 143‑16.4(a2), of the funds credited to the Tobacco Trust Account from the Master Settlement Agreement pursuant to Section 6(2) of S.L. 1999‑2 during the 2005‑2007 fiscal biennium, the sum of thirty‑four million dollars ($34,000,000) for the 2005‑2006 fiscal year and the sum of thirty million dollars ($30,000,000) for the 2006‑2007 fiscal year shall be transferred from the Department of Agriculture and Consumer Services, Budget Code 23703 (Tobacco Trust Fund) to the State Controller to be deposited in Nontax Budget Code 19978 (Intrastate Transfers) to support General Fund appropriations for the 2005‑2006 and 2006‑2007 fiscal years.
SECTION 2.2.(c) G.S. 143‑15.3 is amended by adding a new subsection to read:
"(a2) The transfer of funds to the Savings Reserve Account in accordance with this section or any other provision of law is not an "appropriation made by law", as that phrase is used in Article V, Section 7(1) of the North Carolina Constitution."
This subsection becomes effective June 30, 2005.
SECTION 2.2.(e) When the Highway Trust Fund was created in 1989, the revenue from the sales tax on motor vehicles was transferred from the General Fund to the Highway Trust Fund. To offset this loss of revenue from the General Fund, the Highway Trust Fund was required to transfer one hundred seventy million dollars ($170,000,000) to the General Fund each year, an amount equal to the revenue in 1989 from the sales tax on motor vehicles. This transfer did not, however, make the General Fund whole after the transfer of the sales tax revenue because no provision has been made to adjust the amount for the increased volume of transactions and increased vehicle prices. The additional eighty million dollars ($80,000,000) transferred from the Highway Trust Fund to the General Fund by this act is an effort to recover a portion of the sales tax revenues that would have gone to the General Fund over the last 16 years.
SECTION 2.2.(f) Notwithstanding G.S. 105‑187.9(b)(1), the sum to be transferred under that subdivision for the 2005‑2006 fiscal year and for the 2006‑2007 fiscal year is two hundred fifty million dollars ($250,000,000).
SECTION 2.2.(g) Section 2.2(g) of S.L. 2002‑126 is repealed.
SECTION 2.2.(h) Notwithstanding any other provision of law to the contrary, effective July 1, 2005, cash balances remaining in special funds on June 30, 2005, shall be transferred to the State Controller to be deposited in Nontax Budget Code 19978 (Intrastate Transfers) according to the schedule that follows. These funds shall be used to support General Fund appropriations for the 2005‑2006 fiscal year.
Fund Amount Transferred
Department of Environment and Natural Resources
Budget Code 24300, Fund Code 2338 (DAQ‑Inspections
and Maintenance – Air Pollution) $ 300,000
Budget Code 24300, Fund Code 2106 (DEH – Sleep Products) 200,000
Budget Code 24300, Fund Code 2735 (DLR – Sedimentation Fees) 200,000
Budget Code 24300, Fund Code 2130 (DWQ – Well Construction Fund) 100,000
Budget Code 24300, Fund Code 2335 (DWQ – Lab Certification Fees) 100,000
Budget Code 24300, Fund Code 2341 (DWQ – Water Permits) 500,000
Budget Code 64306, Fund Code 6341 (DWQ – WW Treatment
Maintenance and Repair) 100,000
Budget Code 24304, Fund Code 2982 (DWQ – Riparian Buffer
Restoration) 2,000,000
Department of Corrections
Budget Code 24502, (Inmate Canteen/Welfare Fund) 440,000
Judicial Department
Budget Code 22005, Fund Code 2263 (Worthless Check Fund) 100,000
Department of Administration
Budget Code 24160, Fund Code 2000 (NC Flex) 913,950
SECTION 2.2.(i) The transfer of cash from Department of Correction, Budget Code 74500, Fund Code 7100 (Prison Enterprises) to Nontax Budget Code 19978 (Intrastate Transfers) shall be increased by five hundred thousand dollars ($500,000), effective July 1, 2005, for the 2005‑2006 fiscal year.
SECTION 2.2.(j) The Governor shall analyze the current State public school teacher salary schedule, trends in salaries, and the current disparity between North Carolina teacher pay and the national average to determine how teacher pay affects the State's ability to recruit and retain highly qualified public school teachers to improve educational opportunity and outcomes for children across North Carolina. The Governor may, after consultation with the Speaker of the House and the President Pro Tempore of the Senate, devise and execute prior to July 1, 2006, a plan to reduce the disparity and may use funds available from the Reserve for Contingent Appropriations to begin to execute such a plan.
PART iII. current operations and expansion/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 made for the biennium ending June 30, 2007, according to the following schedule:
Current Operations – Highway Fund 2005‑2006 2006‑2007
Department of Transportation
Administration $ 93,888,317 $ 95,100,980
Division of Highways
Administration 30,621,612 30,632,164
Construction 167,010,000 139,750,000
Maintenance 804,714,539 714,793,288
Planning and Research 4,280,000 4,280,000
OSHA Program 425,000 425,000
Ferry Operations 21,264,811 21,264,811
State Aid
Municipalities 91,910,000 92,650,000
Public Transportation 66,466,447 89,866,447
Railroads 17,308,153 17,101,153
Governor's Highway Safety 293,118 293,118
Division of Motor Vehicles 96,047,914 95,468,137
Other State Agencies 222,948,237 214,860,979
Reserves and Transfers 20,831,852 22,422,852
TOTAL $1,638,010,000 $1,538,908,929
HIGHWAY FUND AVAILABILITY STATEMENT
SECTION 3.2. The Highway Fund availability used in developing the 2005‑2007 biennial budget is shown below:
Highway Fund Availability Statement 2005‑2006 2006‑2007
Beginning Credit Balance $ 10,490,000 –
Estimated Revenue 1,627,520,000 1,697,940,000 Estimated Reversions – –
Total Highway Fund Availability $ 1,638,010,000 $ 1,697,940,000
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 biennium ending June 30, 2007, according to the following schedule:
Current Operations – Highway Trust Fund 2005‑2006 2006‑2007
Intrastate System 472,112,366 496,924,658
Urban Loops 190,902,579 200,935,637
Aid to Municipalities 49,535,599 52,138,988
Secondary Roads 86,825,599 90,358,988
Program Administration 41,295,740 42,918,720
Transfer to General Fund 252,558,117 252,663,009
Grand Total Current Operations
and Expansion $1,093,230,000 $1,135,940,000
PART V. BLOCK GRANTS
SECTION 5.1.(a) Appropriations from federal block grant funds are made for the fiscal year ending June 30, 2006, according to the following schedule:
COMMUNITY SERVICES BLOCK GRANT
01. Community Action Agencies $ 15,071,666
02. Limited Purpose Agencies 837,315
03. Department of Health and Human Services
to administer and monitor
the activities of the
Community Services Block Grant 837,315
TOTAL COMMUNITY SERVICES BLOCK GRANT $ 16,746,296
SOCIAL SERVICES BLOCK GRANT
01. County departments of social services $ 28,868,189
(Transfer from TANF – $4,500,000)
02. Allocation for in‑home services provided
by county departments of
social services 2,101,113
03. Adult day care services 2,155,301
04. Child Protective Services/CPS Investigative
Services/Child Medical Evaluation Program 238,321
05. Foster Care Services – CCIs 1,706,063
06. Division of Aging and Adult Services – Home and Community
Care Block Grant 1,834,077
07. UNC‑CH CARES Program for training and
consultation services 247,920
08. Mental Health Services Program 422,003
09. Division of Mental Health, Developmental Disabilities, and
Substance Abuse Services – Developmentally Disabled
Services Program 5,000,000
10. Division of Mental Health, Developmental Disabilities,
and Substance Abuse Services 3,234,601
11. Division of Services for the Blind – Independent
Living Program 3,182,987
12. Division of Vocational Rehabilitation Services –
Easter Seals Society/UCP 188,263
13. Office of the Secretary – Office of Economic
Opportunity for N.C. Senior Citizens'
Federation for outreach services to
low‑income elderly persons 41,302
14. Child Care Subsidies 3,150,000
15. Division of Facility Services –
Adult Care Licensure Program 411,897
16. Division of Facility Services –
Mental Health Licensure 205,668
17. State administration 1,706,017
18. Division of Mental Health, Developmental
Disabilities, and Substance Abuse Services –
Administration 18,098
19. Division of Facility Services 37,204
20. Office of the Secretary – NC Interagency Council
for Coordinating Homeless Programs 250,000
21. Department of Administration
for the N.C. State Commission of Indian Affairs
In‑Home Services Program for the Elderly 203,198
22. Transfer to Preventative Health Services Block
Grant for HIV/AIDS education, counseling, and
testing 145,819
TOTAL SOCIAL SERVICES BLOCK GRANT $ 55,348,041
LOW‑INCOME ENERGY BLOCK GRANT
01. Energy Assistance Programs $ 13,208,740
02. Crisis Intervention 9,592,387
03. Administration 3,186,258
County DSS $1,930,734
Division of Social Services $ 300,000
Division of Mental Health, Developmental
Disabilities, and Substance Abuse
Services $ 7,146
Local Residential Energy Efficiency
Service Providers $ 353,820
Office of the Secretary $ 594,558
04. Weatherization Program 4,343,072
05. Department of Administration –
N.C. State Commission of Indian Affairs 54,840
06. Heating Air Repair and Replacement Program 2,025,687
TOTAL LOW‑INCOME ENERGY BLOCK GRANT $ 32,410,984
MENTAL HEALTH SERVICES BLOCK GRANT
01. Provision of community‑based
services for severe and persistently
mentally ill adults $ 6,983,202
02. Provision of community‑based
services to children 3,921,991
03. Comprehensive Treatment Services
Program for Children 1,500,000
04. Administration 568,911
TOTAL MENTAL HEALTH SERVICES BLOCK GRANT $ 12,974,104
SUBSTANCE ABUSE PREVENTION
AND TREATMENT BLOCK GRANT
01. Provision of community‑based
alcohol and drug abuse services,
tuberculosis services, and services
provided by the Alcohol and Drug Abuse
Treatment Centers $ 20,441,082
02. Continuation of services for
pregnant women and women
with dependent children 8,069,524
03. Continuation of services to
IV drug abusers and others at risk
for HIV diseases 4,816,378
04. Child Substance Abuse Prevention 5,835,701
05. Provision of services to children
and adolescents 4,940,500
06. Juvenile Services – Family Focus 851,156
07. Allocation to the Division of Public Health
for HIV/STD Risk Reduction Projects 383,980
08. Allocation to the Division of Public Health
for HIV/STD Prevention by County Health
Departments 209,576
09. Allocation to the Division of Public Health
for the Maternal and Child Health Hotline 37,779
10. Administration 2,596,307
TOTAL SUBSTANCE ABUSE PREVENTION
AND TREATMENT BLOCK GRANT $ 48,181,983
CHILD CARE AND DEVELOPMENT FUND BLOCK GRANT
01. Child care subsidies $161,058,393
02. Quality and availability initiatives 33,059,644
03. Administrative expenses 7,163,654
04. Transfer from TANF Block Grant for
child care subsidies 81,292,880
TOTAL CHILD CARE AND DEVELOPMENT FUND
BLOCK GRANT $282,574,571
TEMPORARY ASSISTANCE TO NEEDY FAMILIES
(TANF) BLOCK GRANT
01. Work First Cash Assistance $114,625,680
02. Work First County Block Grants 94,653,315
03. Child Welfare Workers for local DSS 12,452,391
04. Support Our Students – Department of
Juvenile Justice and Delinquency
Prevention 2,749,642
05. Family Violence Prevention 1,200,000
06. Work First – After‑School Services for
At‑Risk Children
YWCA Central Carolinas
Youth Development Programs $176,000 2,249,642
07. Division of Social Services –
Administration 356,291
08. Office of the Secretary –
Administration 60,249
09. Child Welfare Training 2,550,000
10. Boys and Girls Clubs 1,500,000
11. Work Central Career Advancement Center 550,000
12. Special Children's Adoption Fund 3,000,000
13. Maternity Homes 838,000
14. After‑School Programs for At‑Risk Youth in
Middle Schools 500,000
15. Pregnancy Prevention Initiatives 2,500,000
16. Subsidized Child Care for TANF Recipients 36,563,266
17. TANF Automation Projects 592,500
18. NC FAST Implementation 2,717,298
19. Transfer to the Child Care and
Development Fund Block Grant
for child care subsidies 81,292,880
20. Transfer to Social Services Block Grant for
County Departments of Social Services for
Children's Services 4,500,000
TOTAL TEMPORARY ASSISTANCE TO NEEDY FAMILIES
(TANF) BLOCK GRANT $365,451,154
MATERNAL AND CHILD HEALTH BLOCK GRANT
01. Healthy Mothers/Healthy Children
Block Grants to Aid‑to‑County 9,359,236
02. Children's Health Services Aid‑to‑County 7,364,216
03. Healthy Beginnings Aid‑to‑County 404,559
04. Maternal Health Aid‑to‑County 397,761
05. Children's Health Services 2,836,028
06. Office of Women's Health and
Maternal Health Activities 114,063
07. State Center for Health Statistics 28,874
08. Local Technical Assistance & Training 46,866
09. Injury and Violence Prevention 149,438
10. Office of Minority Health 99,352
11. Special Supplemental Nutrition Program
for Women, Infants and Children (WIC) 25,713
12. Immunization Program – Vaccine Distribution 819,997
13. Administration 475,282
14. Adolescent Pregnancy Prevention Coalition of NC 85,710
Total of $150,000 grant‑in‑aid
TOTAL MATERNAL AND CHILD
HEALTH BLOCK GRANT $ 22,207,095
PREVENTIVE HEALTH SERVICES BLOCK GRANT
01. Statewide Health Promotion Programs $3,653,520
02. Rape Crisis/Victims' Services
Program – Council for Women 197,112
03. Transfer from Social Services
Block Grant – HIV/AIDS education,
counseling, and testing 145,819
04. Oral Health 134,251
05. Administration and Program Support 121,271
06. Osteoporosis Task Force Operating Costs 150,000
TOTAL PREVENTIVE HEALTH SERVICES BLOCK GRANT $4,401,973
GENERAL PROVISIONS
SECTION 5.1.(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 5.1.(c) Changes in Federal Fund Availability. – If the Congress of the United States increases the federal fund availability for any of the Block Grants 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 Department shall not propose funding for new programs or activities not appropriated in this section or increase State administrative expenditures.
If the Congress of the United States decreases the federal fund availability for any of the Block Grants administered by the Department of Health and Human Services from the amounts appropriated in this section, the Department shall reduce State administration by at least the percentage of the reduction in federal funds. After determining the State administration, the remaining reductions shall be allocated proportionately across the program and activity appropriations identified for that Block Grant in this section. In allocating a decrease in federal fund availability, the Department shall not eliminate the funding for a program or activity appropriated in this section unless it is related to the State administration.
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 Commission on Governmental Operations, the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, and the Fiscal Research Division.
SECTION 5.1.(d) All changes to the budgeted allocations to the 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 a report shall be submitted to the Joint Legislative Commission on Governmental Operations for review prior to implementing the changes. All changes to the budgeted allocations to the Block Grant shall be reported immediately to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, and the Fiscal Research Division.
SECTION 5.1.(e) The Department of Health and Human Services shall develop a monitoring and oversight plan for all recipients, both public and private, and subrecipients of the federal Block Grant funding. The plan shall be modeled after the Department's performance contracting initiative and include the following:
(1) Performance standards for recipients.
(2) Financial audit standards for non‑State entities equivalent to the requirements in G.S. 143‑6.2 for non‑State entities receiving State funds.
(3) Means for collecting performance data from recipients.
(4) Any other information necessary for monitoring and overseeing the use of Block Grant funding.
The Department shall provide the plan to the Fiscal Research Division by January 1, 2006.
SECTION 5.1.(f) The Department of Health and Human Services shall report to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, and the Fiscal Research Division on positions funded from federal Block Grants. The report shall include the following for each Block Grant:
(1) All State positions currently funded through the Block Grant, including permanent, temporary, and time‑limited positions.
(2) Budgeted salary and fringe benefits for each position.
(3) Identify the percentage of Block Grant funds used to fund each position.
The report shall be submitted no later than December 1, 2005.
SOCIAL SERVICES BLOCK GRANT
SECTION 5.1.(g) Social Services Block Grant funds appropriated to the North Carolina Inter‑Agency Council for Coordinating Homeless Programs are exempt from the provisions of 10A NCAC 71R.0201(3).
LOW‑INCOME HOME ENERGY ASSISTANCE PROGRAM
SECTION 5.1.(h) Additional emergency contingency funds received may be allocated for Energy Assistance Payments or Crisis Intervention Payments without prior consultation with the Joint Legislative Commission on Governmental Operations. Additional funds received shall be reported to the Joint Legislative Commission on Governmental Operations 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 Commission on Governmental Operations.
MENTAL HEALTH BLOCK GRANT
SECTION 5.1.(i) The sum of one million five hundred thousand dollars ($1,500,000) appropriated in this section in the Mental Health Block Grant to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, for the 2005‑2006 fiscal year, and the sum of four hundred twenty‑two thousand three dollars ($422,003) appropriated in this section in the Social Services Block Grant to the Department of Health and Human Services, Division of Social Services, for the 2005‑2006 fiscal year shall be used to continue a Comprehensive Treatment Services Program for Children in accordance with Section 10.25 of this act.
SECTION 5.1.(j) The Department of Health and Human Services shall contract with the University of North Carolina at Chapel Hill for the purpose of providing psychology student stipends in the amount of fifty thousand dollars ($50,000) for the 2005‑2006 fiscal year. Twenty‑five thousand dollars ($25,000) of this contract shall be paid from the Mental Health Block Grant.
CHILD CARE AND DEVELOPMENT FUND BLOCK GRANT
SECTION 5.1.(k) The sum of no more than four hundred thousand dollars ($400,000) appropriated in this section to the Department of Health and Human Services in the Child Care and Development Fund Block Grant may be used for the operations of the Medical Child Care Pilot.
SECTION 5.1.(l) 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 School Readiness for the subsidized child care program.
SECTION 5.1.(m) 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.
TEMPORARY ASSISTANCE FOR NEEDY FAMILIES BLOCK GRANT (TANF)
SECTION 5.1.(n) The sum of four hundred sixteen thousand five hundred forty dollars ($416,540) appropriated in this section in the TANF Block Grant to the Department of Health and Human Services, Division of Social Services, for the 2005‑2006 fiscal year shall be used to support administration of TANF‑funded programs.
SECTION 5.1.(o) The sum of two million seven hundred forty‑nine thousand six hundred forty‑two dollars ($2,749,642) appropriated in this section in the TANF Block Grant to the Department of Health and Human Services and transferred to the Department of Juvenile Justice and Delinquency Prevention for the 2005‑2006 fiscal year shall be used to support the existing Support Our Students Program, including gang prevention, and to expand the Program statewide, focusing on low‑income communities in unserved areas. These funds shall not be used for administration of the Program.
SECTION 5.1.(p) The sum of one million two hundred thousand dollars ($1,200,000) appropriated under this section in the TANF Block Grant to the Department of Health and Human Services, Division of Social Services, for the 2005‑2006 fiscal year shall be used to provide domestic violence services to Work First recipients. These funds shall be used to provide domestic violence counseling, support, and other direct services to clients. These funds shall not be used to establish new domestic violence shelters or to facilitate lobbying efforts. The Division of Social Services may use up to seventy‑five thousand dollars ($75,000) in TANF funds to support one administrative position within the Division of Social Services to implement this subsection.
Each county department of social services and the local domestic violence shelter program serving the county shall jointly develop a plan for utilizing these funds. The plan shall include the services to be provided and the manner in which the services shall be delivered. The county plan shall be signed by the county social services director or the director's designee and the domestic violence program director or the director's designee and submitted to the Division of Social Services by December 1, 2005. The Division of Social Services, in consultation with the Council for Women, shall review the county plans and shall provide consultation and technical assistance to the departments of social services and local domestic violence shelter programs, if needed.
The Division of Social Services shall allocate these funds to county departments of social services according to the following formula: (i) each county shall receive a base allocation of five thousand dollars ($5,000); and (ii) each county shall receive an allocation of the remaining funds based on the county's proportion of the statewide total of the Work First caseload as of July 1, 2005, and the county's proportion of the statewide total of the individuals receiving domestic violence services from programs funded by the Council for Women as of July 1, 2005. The Division of Social Services may reallocate unspent funds to counties that submit a written request for additional funds.
The Department of Health and Human Services shall report on the uses of these funds no later than March 1, 2006, to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, and the Fiscal Research Division.
SECTION 5.1.(q) The sum of two million two hundred forty‑nine thousand six hundred forty‑two dollars ($2,249,642) appropriated in this section in the TANF Block Grant to the Department of Health and Human Services, Division of Social Services, shall be used to expand after‑school programs and services for at‑risk children. The Department shall develop and implement a grant program to award grants to community‑based programs that demonstrate the ability to reach children at risk of teen pregnancy, school dropout, and gang participation. The Department shall award grants to community‑based organizations that demonstrate the ability to develop and implement linkages with local departments of social services, area mental health programs, schools, and other human services programs in order to provide support services and assistance to the child and family. These funds may be used to fund one position within the Division of Social Services to coordinate at‑risk after‑school programs and shall not be used for other State administration. The Department shall report no later than March 1, 2006, on its progress in complying with this section to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, and the Fiscal Research Division.
SECTION 5.1.(r) The sum of twelve million four hundred fifty‑two thousand three hundred ninety‑one dollars ($12,452,391) appropriated in this section to the Department of Health and Human Services, Division of Social Services, in the TANF Block Grant for the 2005‑2006 fiscal year 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 postadoption services for eligible families.
SECTION 5.1.(s) The sum of two million five hundred fifty thousand dollars ($2,550,000) appropriated in this section in the TANF Block Grant to the Department of Health and Human Services, Division of Social Services, for fiscal year 2005‑2006 shall be used to support various child welfare training projects as follows:
(1) Provide a regional training center in southeastern North Carolina.
(2) Support the Masters Degree in Social Work/Baccalaureate Degree in Social Work Collaborative.
(3) Provide training for residential child care facilities.
(4) Provide for various other child welfare training initiatives.
SECTION 5.1.(t) The sum of eight hundred thirty‑eight thousand dollars ($838,000) appropriated in this section in the TANF Block Grant to the Department of Health and Human Services shall be used to purchase services at maternity homes throughout the State.
SECTION 5.1.(u) The sum of three million dollars ($3,000,000) appropriated in this section in the TANF Block Grant to the Department of Health and Human Services, Special Children Adoption Fund, for the 2005‑2006 fiscal year shall be used in accordance with Section 10.48 of this act. 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 5.1.(v) The sum of one million seven hundred six thousand sixty‑three dollars ($1,706,063) appropriated in this section in the TANF Block Grant for child caring agencies for the 2005‑2006 fiscal year shall be allocated to the State Private Child Caring Agencies Fund.
SECTION 5.1.(w) The sum of one million five hundred thousand dollars ($1,500,000) appropriated in this section to the Department of Health and Human Services in the TANF Block Grant for Boys and Girls Clubs shall be used to make grants for approved programs. The Department of Health and Human Services, in accordance with federal regulations for the use of TANF Block Grant funds, shall administer a grant program to award funds to the Boys and Girls Clubs across the State in order to implement programs that improve the motivation, performance, and self‑esteem of youths and to implement other initiatives that would be expected to reduce gang participation, school dropout, and teen pregnancy rates. The Department shall encourage and facilitate collaboration between the Boys and Girls Clubs and Support Our Students, Communities in Schools, and similar programs to submit joint applications for the funds if appropriate.
SECTION 5.1.(x) The sum of five hundred fifty thousand dollars ($550,000) appropriated in this section to the Department of Health and Human Services in the TANF Block Grant shall be transferred to Work Central, Inc. Work Central, Inc., shall report on the number of people served and the services received as a result of the receipt of funds. The report shall contain expenditure data, including the amount of funds used for administration and direct training. The report shall also include the number of people who have been employed as a direct result of services provided by Work Central, Inc., including the length of employment in the new position. The Department of Health and Human Services shall evaluate the program and ensure that services provided are not duplicative of local employment security commissions in the nine counties served by Work Central, Inc. The evaluation report shall be submitted to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, and the Fiscal Research Division no later than May 1, 2006.
SECTION 5.1.(y) The sum of two million seven hundred seventeen thousand two hundred ninety‑eight dollars ($2,717,298) in this section appropriated to the Department of Health and Human Services in the TANF Block Grant shall be used to implement N.C. FAST (North Carolina Families Accessing Services through Technology). The N.C. FAST Program involves the entire automation initiative through which families access services and local departments of social services deliver benefits, supervised by the Department of Health and Human Services, Divisions of Social Services, Aging and Adult Services, Medical Assistance, and Child Development. The statewide automated initiative shall be implemented in compliance with federal regulations in order to ensure federal financial participation in the project. The Department of Health and Human Services shall report on its compliance with this subsection to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, and the Fiscal Research Division no later than January 1, 2006.
SECTION 5.1.(z) The sum of five hundred thousand dollars ($500,000) appropriated in this section to the Department of Health and Human Services, Division of Social Services, in the TANF Block Grant shall be used to expand after‑school programs for at‑risk children attending middle school. The Department shall develop and implement a grant program to award funds to community‑based programs demonstrating the capacity to reach children at risk of teen pregnancy, school dropout, and gang participation. These funds shall not be used for training or administration at the State level. All funds shall be distributed to community‑based programs, focusing on those communities where similar programs do not exist in middle schools. The Department shall report to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, and the Fiscal Research Division on its progress in complying with this subsection no later than May 1, 2006.
SECTION 5.1.(z1) In implementing the TANF Block Grant, the Department of Health and Human Services shall review policies, programs, and initiatives to ensure that they support men in their role as fathers and strengthen fathers' involvement in their children's lives. The Department shall encourage county departments of social services to ensure their Work First programs emphasize responsible fatherhood and increased participation by noncustodial fathers.
SECTION 5.1.(z2) The Department of Health and Human Services shall reallocate up to eight million two hundred eight thousand nine hundred thirty‑one dollars ($8,208,931) from General Fund appropriations for Work First Cash Assistance payments for fiscal year 2005‑2006 to the Adoption and Foster Care Programs to fund shortfalls in foster care and adoption services during State fiscal year 2005‑2006. Of these reallocated funds, six million eight hundred thirty‑one thousand three hundred fifteen dollars ($6,831,315) shall be TANF cash assistance carryforward from State fiscal year 2004‑2005, and one million three hundred seventy‑seven thousand six hundred sixteen dollars ($1,377,616) shall be from the State fiscal year 2005‑2006 appropriation for State TANF cash assistance. The Department of Health and Human Services shall use State funds reallocated under this subsection only after all other appropriated State and federal funding for adoption and foster care has been exhausted and may only use these funds for adoption and foster care or to maintain the State TANF cash assistance maintenance of effort (MOE).
The Department shall submit a report to the Senate Appropriations Committee on Health and Human Services, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division no later than April 1, 2006. The report shall provide specific information on how funding for adoption and foster care has been spent. The following data shall be included:
(1) The total number of foster children served and the number that are IV‑E eligible, by county.
(2) The amount of federal and State spending for both foster care and adoption by funding source.
(3) Total payments made to child caring institutions (CCIs) by institution, the number of children served by each, and the total number of days of foster care services each provided.
(4) The daily payment provided by each child caring institution to foster parents.
(5) The amount of funding for foster care provided to each county, the number of children placed in foster care, and the number of days of care provided.
(6) For each county, the number of children placed in county foster homes and the number placed by CCIs.
(7) The length of time children placed by counties and by child caring institutions remain in foster care, listed by county and by CCI.
(8) The amount of funding for adoption provided to each county and the number of children placed by each county.
(9) The amount of funding provided to each private adoption agency and the number of children placed by each adoption agency.
(10) The number of children adopted out of foster care by child caring institution and by county.
(11) The special needs adoption assistance‑amount spent and the number of children included.
MATERNAL AND CHILD HEALTH BLOCK GRANT
SECTION 5.1.(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 2005‑2006 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). The Department of Public Instruction shall carefully and strictly follow federal guidelines in implementing and administering the abstinence education grant funds.
SECTION 5.1.(bb) The Department of Health and Human Services shall ensure that there will be follow‑up testing in the Newborn Screening Program.
SECTION 5.1.(cc) Of the funds budgeted in the Maternal and Child Health Block Grant, three million two hundred fifty thousand dollars ($3,250,000) shall be used for a school nurse funding initiative for the 2005‑2006 fiscal year. The Department of Health and Human Services, Division of Public Health, in conjunction with the Department of Public Instruction, shall provide funds to communities to hire school nurses. The program will fund approximately 65 time‑limited nurses. The criteria shall include determining the areas in the greatest need for school nurses with the greatest inability to pay for these nurses. Among other criteria, consideration shall also be given to (i) the current nurse‑to‑student ratio; (ii) the economic status of the community; and (iii) the health needs of area children.
There shall be no supplanting of local or Title I funds with these block grant funds. Communities shall maintain their current level of effort and funding for school nurses. No block grant funds shall be used for funding nurses for State agencies. All funding shall be used for direct services.
The Department of Health and Human Services shall report on the use of funds allocated under this section by December 1, 2005, to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, and the Fiscal Research Division.
SECTION 5.2.(a) Appropriations from federal block grant funds are made for fiscal year ending June 30, 2006, according to the following schedule:
COMMUNITY DEVELOPMENT BLOCK GRANT
01. State Administration $ 1,000,000
02. Urgent Needs and Contingency 1,000,000
03. Scattered Site Housing 13,200,000
04. Economic Development 8,710,000
05. Community Revitalization 13,500,000
06. State Technical Assistance 450,000
07. Housing Development 2,000,000
08. Infrastructure 5,140,000
TOTAL COMMUNITY DEVELOPMENT
BLOCK GRANT – 2006 Program Year $ 45,000,000
SECTION 5.2.(b) Decreases in Federal Fund Availability. – If federal funds are reduced below the amounts specified above after the effective date of this act, then every program in each of these federal block grants shall be reduced by the same percentage as the reduction in federal funds.
SECTION 5.2.(c) Increases in Federal Fund Availability for Community Development Block Grant. – Any block grant funds appropriated by the Congress of the United States in addition to the funds specified in this section shall be expended as follows: each program category under the Community Development Block Grant shall be increased by the same percentage as the increase in federal funds.
SECTION 5.2.(d) Limitations on Community Development Block Grant Funds. – Of the funds appropriated in this section for the Community Development Block Grant, the following shall be allocated in each category for each program year: up to one million dollars ($1,000,000) may be used for State Administration; not less than one million dollars ($1,000,000) may be used for Urgent Needs and Contingency; up to thirteen million two hundred thousand dollars ($13,200,000) may be used for Scattered Site Housing; up to eight million seven hundred ten thousand dollars ($8,710,000) may be used for Economic Development, including Urban Redevelopment Grants and Small Business or Entrepreneurial Assistance; not less than thirteen million five hundred thousand dollars ($13,500,000) shall be used for Community Revitalization; up to four hundred fifty thousand dollars ($450,000) may be used for State Technical Assistance; up to two million dollars ($2,000,000) may be used for Housing Development; up to five million one hundred forty thousand dollars ($5,140,000) may be used for Infrastructure. If federal block grant funds are reduced or increased by the Congress of the United States after the effective date of this act, then these reductions or increases shall be allocated in accordance with subsection (b) or (c) of this section, as applicable.
SECTION 5.2.(e) Increase Capacity for Nonprofit Organizations. – Assistance to nonprofit organizations to increase their capacity to carry out CDBG‑eligible activities in partnership with units of local government is an eligible activity under any program category in accordance with federal regulations. Capacity building grants may be made from funds available within program categories, program income, or unobligated funds.
SECTION 5.2.(f) Department of Commerce Demonstration Grants in Partnership with Rural Economic Development Center, Inc. – The Department of Commerce, in partnership with the Rural Economic Development Center, Inc., shall award up to two million two hundred fifty thousand dollars ($2,250,000) in demonstration grants to local governments in very distressed rural areas of the State. These grants shall be used to address critical infrastructure and entrepreneurial needs and to provide small business assistance.
SECTION 5.2.(g) The Department of Commerce shall consult with the Joint Legislative Commission on Governmental Operations prior to reallocating Community Development Block Grant Funds. Notwithstanding the provisions of this subsection, whenever the Director of the Budget finds that:
(1) A reallocation is required because of an emergency that poses an imminent threat to public health or public safety, the Director of the Budget may authorize the reallocation without consulting the Commission. The Department of Commerce shall report to the Commission on the reallocation no later than 30 days after it was authorized and shall identify in the report the emergency, the type of action taken, and how it was related to the emergency.
(2) The State will lose federal block grant funds or receive less federal block grant funds in the next fiscal year unless a reallocation is made, the Department of Commerce shall provide a written report to the Commission on the proposed reallocation and shall identify the reason that failure to take action will result in the loss of federal funds. If the Commission does not hear the issue within 30 days of receipt of the report, the Department may take the action without consulting the Commission.
PART VI. general provisions
APPROPRIATION OF CASH BALANCES AND RECEIPTS
SECTION 6.1.(a) Expenditures of cash balances, federal funds, departmental receipts, grants, and gifts from the various General Fund, Special Revenue Fund, Enterprise Fund, Internal Service Fund, and Trust and Agency Fund budget codes are appropriated and authorized for the 2005‑2007 fiscal biennium as follows:
(1) For all budget codes listed in "State of North Carolina, Recommended Continuation Budget 2005‑2007, Volumes 1 through 6", cash balances and receipts are appropriated up to the amounts specified in Volumes 1 through 6, as adjusted by the General Assembly, for the 2005‑2006 fiscal year and the 2006‑2007 fiscal year. Funds may be expended only for the programs, purposes, objects, and line items specified in Volumes 1 through 6, or otherwise authorized by the General Assembly.
(2) For all budget codes that are not listed in "State of North Carolina, Recommended Continuation Budget 2005‑2007, Volumes 1 through 6", cash balances and receipts are appropriated for each year of the 2005‑2007 fiscal biennium up to the level of actual expenditures for the 2004‑2005 fiscal year, unless otherwise provided by law. Funds may be expended only for the programs, purposes, objects, and line items authorized for the 2004‑2005 fiscal year.
(3) Notwithstanding subdivisions (1) and (2) of this subsection, any receipts that are required to be used to pay debt service requirements for various outstanding bond issues and certificates of participation are appropriated up to the actual amounts received for the 2005‑2006 fiscal year and the 2006‑2007 fiscal year and shall be used only to pay debt service requirements.
(4) Notwithstanding subdivisions (1) and (2) of this subsection, cash balances and receipts of funds that meet the definition issued by the Governmental Accounting Standards Board of a trust or agency fund are appropriated for and in the amounts required to meet the legal requirements of the trust agreement for the 2005‑2006 fiscal year and the 2006‑2007 fiscal year.
All these cash balances, federal funds, departmental receipts, grants, and gifts shall be expended and reported in accordance with the provisions of the Executive Budget Act, except as otherwise provided by law and this section.
SECTION 6.1.(b) Receipts collected in a fiscal year in excess of the amounts authorized by this section shall remain unexpended and unencumbered until appropriated by the General Assembly in a subsequent fiscal year, unless the expenditure of overrealized receipts in the fiscal year in which the receipts were collected is authorized by the Executive Budget Act.
Overrealized receipts are appropriated up to the amounts necessary to implement this subsection.
In addition to the consultation and reporting requirements set out in G.S. 143‑23 and G.S. 143‑27, the Office of State Budget and Management shall report to the Joint Legislative Commission on Governmental Operations and to the Fiscal Research Division of the Legislative Services Office within 30 days after the end of each quarter on any overrealized receipts approved for expenditure under this subsection by the Director of the Budget. The report shall include the source of the receipt, the amount overrealized, the amount authorized for expenditure, and the rationale for expenditure.
SECTION 6.1.(c) Notwithstanding subsections (a) and (b) of this section, there is appropriated from the Reserve for Reimbursements to Local Governments and Shared Tax Revenues for each fiscal year an amount equal to the amount of the distributions required by law to be made from that reserve for that fiscal year.
SECTION 6.1.(d) Notwithstanding subsections (a) and (b) of this section, if Senate Bill 1126, 2005 Session, or substantially similar legislation revising the Coastal Recreational Fishing License program or establishing a unified fishing license for hunting and fishing in coastal, joint, and inland waters, becomes law, any receipts from license revenues generated pursuant to such legislation are hereby appropriated for the 2005‑2006 fiscal year and the 2006‑2007 fiscal year for programs and purposes authorized by law.
CONTINGENCY AND EMERGENCY FUND ALLOCATIONS
SECTION 6.2. Funds in the amount of five million dollars ($5,000,000) for the 2005‑2006 fiscal year and five million dollars ($5,000,000) for the 2006‑2007 fiscal year are appropriated in this act to the Contingency and Emergency Fund. Of these funds:
(1) Up to one million dollars ($1,000,000) for the 2005‑2006 fiscal year may be used for purposes related to the Base Realignment and Closure Act (BRAC); and
(2) Notwithstanding any other provision of law, no more than five hundred thousand dollars ($500,000) for the 2005‑2006 fiscal year and no more than five hundred thousand dollars ($500,000) for the 2006‑2007 fiscal year shall be expended for purposes other than those set out in G.S.143‑23(a1)(2) or in subdivision (1) of this section.
The remainder of these funds shall be expended for purposes outlined in G.S. 143‑23(a1)(2).
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.
BUDGET REPORTS ACCURATELY REFLECT PROJECTED RECEIPTS, EXPENDITURES, FUND BALANCES, AND ACTUAL COLLECTIONS
SECTION 6.4. G.S. 143‑11(a) reads as rewritten:
"§
143‑11. Survey of departments. departments and recommended
budget report.
(a) On or before the fifteenth day of December, biennially in the even‑numbered years, the Director shall make a complete, careful survey of the operation and management of all the departments, bureaus, divisions, officers, boards, commissions, institutions, and agencies and undertakings of the State and all persons or corporations who use or expend State funds, in the interest of economy and efficiency, and of obtaining a working knowledge upon which to base recommendations to the General Assembly as to appropriations for maintenance and special funds and capital expenditures for the succeeding biennium. If the Director and the Commission shall agree in their recommendations for the budget for the next biennial period, he shall prepare their report in the form of a proposed budget, together with such comment and recommendations as they may deem proper to make. If the Director and Commission shall not agree in substantial particulars, the Director shall prepare the proposed budget based on his own conclusions and judgment, and the Commission or any of its members retain the right to submit separately to the General Assembly such statement of disagreement and the particulars thereof as representing their views. The budget report shall contain a complete and itemized plan of all proposed expenditures for each State department, bureau, board, division, institution, commission, State agency or undertaking, person or corporation who receives or may receive for use and expenditure any State funds, in accordance with the classification of funds and accounts adopted by the State Controller, and of the estimated revenues and borrowings for each year in the ensuing biennial period beginning with the first day of July thereafter. Opposite each line item of the proposed expenditures, the budget shall show in separate parallel columns:
(1) Proposed expenditures and receipts for each fiscal year of the biennium;
(2) The certified budget for the preceding fiscal year;
(3) The currently authorized budget for the preceding fiscal year;
(4) Actual expenditures and receipts for the most recent fiscal year for which actual expenditure information is available; and
(5) Proposed increases and decreases.
Revenue and expenditure information shall be no less specific than the two‑digit level in the State Accounting System Chart of Accounts as prescribed by the State Controller. The budget shall clearly differentiate between general fund expenditures for operating and maintenance, special fund expenditures for any purpose, and proposed capital improvements. The budget report shall include accurate projections of receipts, expenditures, and fund balances for all budget codes, funds, and accounts. Estimated receipts, including tuition collected by university or community college institutions, shall be adjusted to reflect actual collections from the previous fiscal year, unless the Director either (i) recommends a change that will result in collections in the budget year that differ from the actual collections of the prior year or (ii) otherwise determines there is a more reasonable basis upon which to accurately project receipts."
AUTHORIZATION TO ESTABLISH RECEIPT‑SUPPORTED POSITIONS
SECTION 6.5. Notwithstanding G.S. 143‑34.1(a1), a department, institution, or other agency of State government may establish receipt‑supported positions authorized in this act upon approval by the Director of the Budget. The Director, if necessary, may establish a receipt‑supported position pursuant to this section at an annual salary amount different from the salary amount set out in this act if (i) funds are available from the proposed funding source and (ii) the alternative salary amount remains within the established salary range grade identified for the job classification of the affected receipt‑supported position established in this act. The Director shall not change the job classifications or increase the number of receipt‑supported positions specified in this act without prior consultation with the Joint Legislative Commission on Governmental Operations.
SECTION 6.6.(a) The General Assembly finds that the General Fund supports many State agencies that provide services and administer programs that impact all of State government. These agencies include the Office of the Governor, the Office of State Controller, the Department of Administration, including the Office of State Personnel, State Property Office, Office of State Construction, and the Division of Purchase and Contract, the Secretary of State, the Office of State Treasurer, and the Office of State Auditor. The General Assembly also finds that the General Fund bears the departmental administrative overhead costs for many programs, activities, boards, and commissions that are supported by non‑General Fund sources. The General Assembly finds that an indirect cost allocation program should be established to reimburse the General Fund for overhead and indirect costs incurred on behalf of these programs, activities, boards, and commissions.
SECTION 6.6.(b) The Office of State Budget and Management shall study the allocation of overhead costs and propose an overhead cost recovery program for consideration by the General Assembly. In developing its recommendation, the Office of State Budget and Management shall do the following:
(1) Determine a methodology appropriate for the calculation and allocation of overhead costs.
(2) For each program whose overhead costs are borne in whole or in part by the General Fund and that receive overhead cost reimbursement from the federal government or other non‑General Fund sources, ensure that all future overhead cost reimbursements revert to the General Fund in accordance with the State Budget Manual, except as otherwise required by law.
(3) For each program whose overhead costs are borne in whole or in part by the General Fund and that are not recovering overhead costs from other funding sources, establish an indirect cost allocation methodology that properly reimburses the General Fund, except as otherwise required by law.
(4) Estimate the anticipated reimbursement to the General Fund.
SECTION 6.6.(c) The Office of State Budget and Management shall report its recommendations developed pursuant to this section to the Chairs of the Senate Committee on Appropriations/Base Budget, the Chairs of the House of Representatives Committee on Appropriations, and the Fiscal Research Division by April 1, 2006.
SECTION 6.6.(d) Overhead cost recovery recommendations developed pursuant to this section shall not apply to overhead cost reimbursements collected under any grant agreement by The University of North Carolina or any of its affiliated institutions.
PRIOR CONSULTATION WITH THE JOINT LEGISLATIVE COMMISSION ON GOVERNMENTAL OPERATIONS
SECTION 6.7.(a) The last paragraph of G.S. 120‑76(8) is recodified as G.S. 120‑76.1 and reads as rewritten:
"§ 120‑76.1. Prior consultation with the Commission.
(a) Notwithstanding
the provisions of this subdivision G.S. 120‑76(8) or
any other provision of law requiring prior consultation by the Governor with
the Commission, whenever an expenditure is required because of an emergency
that poses an imminent threat to public health or public safety, and is either
the result of a natural event, such as a hurricane or a flood, or an accident,
such as an explosion or a wreck, the Governor may take action under this
subsection without consulting the Commission if the action is determined by
the Governor to be related to the emergency. The Governor shall report to the
Commission on any expenditures made under this paragraph subsection no
later than 30 days after making the expenditure and shall identify in the
report the emergency, the type of action taken, and how it was related to the
emergency.
(b) Any agency, board, commission, or other entity required under G.S. 120‑76(8) or any other provision of law to consult with the Commission prior to taking an action shall submit a detailed report of the action under consideration to the Chairs of the Commission, the Commission Assistant, and the Fiscal Research Division of the General Assembly. If the Commission does not hold a meeting to hear the consultation within 90 days of receiving the submission of the detailed report, the consultation requirement is satisfied.
(c) Consultations regarding the establishment of new fees and charges and the increase of existing fees and charges are governed by G.S. 12-3.1, and this section does not apply to those consultations."
SECTION 6.7.(b) G.S. 143‑23(a1) reads as rewritten:
"(a1) Notwithstanding the provisions of subsection (a) of this section, a department, institution, or other spending agency may, with approval of the Director of the Budget, spend more than was appropriated for:
(1) An object or line item within a purpose or program so long as the total amount expended for the purpose or program is no more than was appropriated from all sources for the purpose or program for the fiscal period;
(2) A purpose or program, without consultation with the Joint Legislative Commission on Governmental Operations, if the overexpenditure of the purpose or program is:
a. Required by a court, Industrial Commission, or administrative hearing officer's order;
b. Required to respond to an unanticipated disaster such as a fire, hurricane, or tornado; or
c. Required to call out the National Guard.
The Director of the Budget shall report on a quarterly basis to the Joint Legislative Commission on Governmental Operations on any overexpenditures under this subdivision; or
(3) A purpose or program, after consultation with the Joint Legislative Commission on Governmental Operations in accordance with G.S. 120‑76(8), and only if: (i) the overexpenditure is required to continue the purpose or programs due to complications or changes in circumstances that could not have been foreseen when the budget for the fiscal period was enacted and (ii) the scope of the purpose or program is not increased. The consultation is required as follows:
a. For a purpose or program with a certified budget of up to five million dollars ($5,000,000), consultation is required when the authorization for the overexpenditure exceeds ten percent (10%) of the certified budget;
b. For a purpose or program with a certified budget of from five million dollars ($5,000,000) up to twenty million dollars ($20,000,000), consultation is required when the authorization for the overexpenditure exceeds five hundred thousand dollars ($500,000) or seven and one‑half percent (7.5%) of the certified budget, whichever is greater;
c. For a purpose or program with a certified budget of twenty million dollars ($20,000,000) or more, consultation is required when the authorization for the overexpenditure exceeds one million five hundred thousand dollars ($1,500,000) or five percent (5%) of the certified budget, whichever is greater;
d. For a purpose or program supported by federal funds or when expenditures are required for the reasons set out in subdivision (2) of this subsection, no consultation is required.
If the Joint Legislative
Commission on Governmental Operations does not meet for more than 30 days, the
Director of the Budget may satisfy the requirements of the subsection to report
to or consult with the Commission by reporting to or consulting with a joint
meeting of the Chairs of the Appropriations Committees of the Senate and the
House of Representatives."
CONSULTATION NOT REQUIRED PRIOR TO ESTABLISHING OR INCREASING FEES IN ACCORDANCE WITH BUDGET ACT AND CLARIFICATION OF THE LAW PROVIDING LEGISLATIVE OVERSIGHT OF AGENCY FEES AND CHARGES
SECTION 6.8.(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 as authorized or anticipated in the Current Operations and Capital Improvements Appropriations Act of 2005 or the Joint Conference Committee Report on the Continuation, Expansion and Capital Budgets, which was distributed in the Senate and the House of Representatives and used to explain this act.
SECTION 6.8.(b) G.S. 12‑3.1 reads as rewritten:
"§ 12‑3.1. Fees and charges by agencies.
(a) Authority. – Only the
General Assembly has the power to authorize an agency to establish or increase
a fee or charge for the rendering of any service or fulfilling of any duty to
the public. In the construction of a statute, unless that construction would be
inconsistent with the manifest intent of the General Assembly or repugnant to
the context of the statute, the legislative grant of authority to an agency to make
and promulgate adopt rules shall not be construed as a grant of
authority to the agency to establish by rule a fee or a charge for the
rendering of any service or fulfilling of any duty to the public, unless the
statute expressly provides for the grant of authority to establish a fee or
charge for that specific service. Notwithstanding any other law, an agency's
establishment or increase of a fee or charge shall not go into effect until one
of the following conditions has been met:
(1) The General
Assembly has enacted express authorization of the amount of the fee or charge
to be established or increased and the purpose of that fee or charge.
(2) The General
Assembly has enacted general authorization for the agency to establish or
increase the fee or charge, and the agency has consulted with
a rule adopted by an agency to establish or increase a fee or charge shall not go into effect until the agency has consulted with the Joint Legislative Commission on Governmental Operations on the amount and purpose of the fee or charge to be established or increased. The agency shall submit a request for consultation to all members of the Commission, the Commission Assistant, and the Fiscal Research Division of the General Assembly on the same date the notice of text of the rule is published. The request for consultation shall consist of a written report stating (i) the amount of the current fee or charge, if applicable, (ii) the amount of the proposed new or increased fee or charge, (iii) the statutory authority for the fee or charge, and (iv) a detailed explanation of the need for the establishment or increase of the fee or charge.
(a1) If the Commission does not hold a meeting to hear the consultation required by subsection (a) of this section within 90 days after the notice of text of the rule has been published and the consultation request required by subsection (a) of this section has been submitted, the consultation requirement is satisfied.
(b) Definitions. – The following definitions apply in this section:
(1) Agency. – Every agency, institution, board, commission, bureau, department, division, council, member of the Council of State, or officer of the legislative, executive or judicial branches of State government. The term does not include counties, cities, towns, villages, other municipal corporations or political subdivisions of the State or any agencies of these subdivisions, the University of North Carolina, community colleges, hospitals, county or city boards of education, other local public districts, units, or bodies of any kind, or private corporations created by act of the General Assembly.
(2) Rule. – Every rule, regulation, ordinance, standard, and amendment thereto adopted by any agency, including rules and regulations regarding substantive matters, standards for products, procedural rules for complying with statutory or regulatory authority or requirements and executive orders of the Governor.
(c) Exceptions. – This section does not apply to any of the following:
(1) Rules establishing fees or charges to State, federal or local governmental units.
(2) A reasonable fee or charge for copying, transcripts of public hearings, State publications, or mailing a document or other item.
(3) Reasonable registration fees covering the cost of a conference or workshop.
(4) Reasonable user fees covering the cost of providing data processing services.
(d) In lieu of the
requirements of subdivision (a)(2) subsections (a) and (a1) of
this section, the North Carolina State Ports Authority shall report the
establishment or increase of any fee to the Joint Legislative Commission on
Governmental Operations as provided in G.S. 143B‑454(a)(11)."
SECTION 6.8.(c) Subsection (a) of this section expires June 30, 2007.
STATE GRANT RECIPIENTS/CONFLICT OF INTEREST POLICY/NO OVERDUE TAX DEBTS/OTHER TECHNICAL AND CLARIFYING CHANGES
SECTION 6.9.(a) G.S. 143‑6.2 reads as rewritten:
"§ 143‑6.2. Use of State funds by non‑State entities.
(a) Disbursement and Use of
State Funds. – Every non‑State entity that receives, uses, or expends any
State funds shall use or expend the funds only for the purposes for which they
were appropriated by the General Assembly. State funds include federal funds
that flow through the State. For the purposes of this section, the term
"non‑State entity" means a firm, corporation, partnership,
association, unit of local government, public authority, or any other person,
organization, group, or governmental entity that is not a State agency,
department, or institution. For the purposes of this section, "unit of
local government" has the meaning set out in G.S. 159‑7(15) and
"public authority" has the meaning set out in G.S. 159‑7(10).
section, the following definitions apply:
(1) Non-State entity. – A firm, corporation, partnership, association, county, unit of local government, public authority, or any other person, organization, group, or governmental entity that is not a State agency, department, or institution.
(2) Unit of local government. – A municipal corporation that has the power to levy taxes, including a consolidated city-county as defined by G.S. 160B-2(1), and all boards, agencies, commissions, authorities, and institutions thereof that are not municipal corporations.
(3) Public authority. – A municipal corporation that is not a unit of local government or a local governmental authority, board, commission, council, or agency that (i) is not a municipal corporation and (ii) operates on an area, regional, or multiunit basis, and the budgeting and accounting systems of which are not fully a part of the budgeting and accounting systems of a unit of local government.
(b) For the purposes of this section, the term "grantee" means a non‑State entity that receives a grant of State funds from a State agency, department, or institution but does not include any non‑State entity subject to the audit and other reporting requirements of the Local Government Commission. The term "subgrantee" means a non‑State entity that receives a grant of State funds from a grantee or from another subgrantee but does not include any non‑State entity subject to the audit and other reporting requirements of the Local Government Commission. The terms "State grant funds" and "State grants" do not include any payment made by the Medicaid program, the Teachers' and State Employees' Comprehensive Major Medical Plan, or other similar medical programs.
(b1) Conflict of Interest Policy. – Every grantee shall file with the State agency or department disbursing funds to the grantee a copy of that grantee's policy addressing conflicts of interest that may arise involving the grantee's management employees and the members of its board of directors or other governing body. The policy shall address situations in which any of these individuals may directly or indirectly benefit, except as the grantee's employees or members of its board or other governing body, from the grantee's disbursing of State funds and shall include actions to be taken by the grantee or the individual, or both to avoid conflicts of interest and the appearance of impropriety. The policy shall be filed before the disbursing State department or agency may disburse the grant funds.
(b2) No Overdue Tax Debts. – Every grantee shall file with the State agency or department disbursing funds to the grantee a written statement completed by that grantee's board of directors or other governing body stating that the grantee does not have any overdue tax debts, as defined by G.S. 105-243.1, at the federal, State, or local level. The written statement shall be made under oath and shall be filed before the disbursing State agency or department may disburse the grant funds. A person who makes a false statement in violation of this subsection is guilty of a criminal offense punishable as provided by G.S. 143-34(b).
(c) Compliance by Non‑State Entities. – If the Director of the Budget finds that a non‑State entity has spent or encumbered State funds for an unauthorized purpose, or fails to submit or falsifies any information required by this section or any other provision of law, the Director shall take appropriate administrative action to ensure that no further irregularities or violations of law occur and shall report to the Attorney General any facts that pertain to an apparent violation of a criminal law or an apparent instance of malfeasance, misfeasance, or nonfeasance in connection with the use of State funds. Appropriate administrative action includes suspending or withholding the disbursement of State funds and recovering State funds previously disbursed.
(d) The Office of State Budget and Management shall adopt rules to ensure the uniform administration of State grants by all grantor State agencies and grantees or subgrantees. The rules shall establish policies and procedures for disbursements of grants and for State agency oversight, monitoring, and evaluation of grantees and subgrantees. Such policies and procedures shall:
(1) Ensure that the purpose and reporting requirements of each grant are specified to the grantee.
(2) Ensure that grantees specify the purpose and reporting requirements for grants made to subgrantees.
(3) Ensure that funds are spent in accordance with the purposes for which they were granted.
(4) Hold the grantees and subgrantees accountable for the legal and appropriate expenditure of State grant funds.
(5) Provide for adequate oversight and monitoring to prevent the misuse of State funds.
(6) Establish mandatory periodic reporting requirements for grantees and subgrantees, including methods of reporting, to provide financial and program performance information. The mandatory periodic reporting requirements shall require grantees and subgrantees to file with the State Auditor copies of reports and statements that are filed with State agencies pursuant to this subsection. Compliance with the mandatory periodic reporting requirements of this subdivision shall not require grantees and subgrantees to file with the State Auditor the information described in subsections (b1) and (b2) of this section.
(7) Require grantees and subgrantees to maintain reports, records, and other information to properly account for the expenditure of all State grant funds and to make such reports, records, and other information available to the grantor State agency for oversight, monitoring, and evaluation purposes.
(8) Require grantees and subgrantees to ensure that work papers in the possession of their auditors are available to the State Auditor for the purposes set out in subsection (h) of this section.
(9) Require grantees to be responsible for managing and monitoring each project, program, or activity supported by State grant funds and each subgrantee project, program, or activity supported by State grant funds.
(10) Provide procedures for the suspension of further disbursements or use of State grant funds for noncompliance with these rules or other inappropriate use of the funds.
(11) Provide procedures for use in appropriate circumstances for reinstatement of disbursements that have been suspended for noncompliance with these rules or other inappropriate use of State grant funds.
(12) Provide procedures for the recovery and return to the grantor State agency of unexpended State grant funds from a grantee or subgrantee if the grantee or subgrantee is unable to fulfill the purposes of the grant.
(e) Notwithstanding the provisions of G.S. 150B‑2(8a)b, rules adopted pursuant to subsection (d) of this section are subject to the provisions of Chapter 150B of the General Statutes.
(f) The Office of State Budget and Management shall consult with the Office of the State Auditor and the Attorney General in establishing the rules required by subsection (d) of this section.
(g) The Office of State Budget and Management, after consultation with the administering agency, shall have the power to suspend disbursement of State grant funds to grantees or subgrantees, to prevent further use of State grant funds already disbursed, and to recover State grant funds already disbursed for noncompliance with rules adopted pursuant to subsection (d) of this section. If the grant funds are a pass‑through of funds granted by an agency of the United States, then the Office of State Budget and Management must consult with the granting agency of the United States and the State agency that is the recipient of the pass‑through funds prior to taking the actions authorized by this subsection.
(h) Audit Oversight. – The State Auditor has audit oversight, with respect to State grant funds received by the grantee or subgrantee, pursuant to Article 5A of Chapter 147 of the General Statutes, of every grantee or subgrantee that receives, uses, or expends State grant funds. A grantee or subgrantee must, upon request, furnish to the State Auditor for audit all books, records, and other information necessary for the State Auditor to account fully for the use and expenditure of State grant funds received by the grantee or subgrantee. The grantee or subgrantee must furnish any additional financial or budgetary information requested by the State Auditor, including audit work papers in the possession of any auditor of a grantee or subgrantee directly related to the use and expenditure of State grant funds.
(i) Not later than May 1, 2007, and by May 1 of every succeeding year, the Office of State Budget and Management shall report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division on all grantees or subgrantees that failed to comply with this section during the prior fiscal year, including the amount of State funds that were disbursed to each of those grantees or subgrantees during that fiscal year and the amount of State funds that were withheld.
(j) Grantor State agencies shall submit a list to the State Auditor, in the format prescribed by the State Auditor, by October 31 each year of every grantee to which the agency disbursed State funds in the prior fiscal year, the amount disbursed, the amount disbursed to each grantee, and other such information as required by the State Auditor to comply with the requirements set forth in this section.
(k) Civil Actions. – Civil actions to recover State funds or to obtain other mandatory orders in the name of the State on relation of the Attorney General, or in the name of the Office of State Budget and Management, shall be filed in the General Court of Justice in Wake County."
SECTION 6.9.(b) G.S. 143‑34 reads as rewritten:
"§ 143‑34. Penalties and punishment for violations.
(a) A Except
as provided by subsection (b) of this section, a refusal to perform any of
the requirements of this Article, and the refusal to perform any rule or
requirement or request of the Director of the Budget made pursuant to, or under
authority of, the Executive Budget Act, shall subject the offender to penalty
of two hundred fifty dollars ($250.00), to be recovered in an action instituted
either in Wake County Superior Court, or any other county, by the Attorney
General for the use of the State of North Carolina, and shall also constitute a
Class 1 misdemeanor. If such the offender be is not
an officer elected by vote of the people, such the offense shall
be sufficient cause for removal from office or dismissal from employment by the
Governor upon 30 days' notice in writing to such the offender.
(b) A false statement made in violation of G.S. 143-6.2(b2) is a Class A1 misdemeanor offense."
SECTION 6.9.(c) This section shall apply to all State grant funds appropriated or awarded on or after July 1, 2005. Grants awarded prior to July 1, 2005, shall be subject to the reporting requirements in effect at the time the grant was made.
AMEND THE TOBACCO RESERVE FUND TO PROMOTE THE HEALTH AND WELLNESS OF THE STATE'S CITIZENS AND ECONOMIC DEVELOPMENT
SECTION 6.12.(a) G.S. 66‑291(b)(2) reads as rewritten:
"(2) To the extent that a
tobacco product manufacturer establishes that the amount it was required to
place into escrow on account of units sold in the State in a particular
year was greater than the State's allocable share of the total payments that
such manufacturer would have been required to make in that year under the
Master Settlement Agreement (as determined pursuant to section IX(i)(2) of the
Master Settlement Agreement, and before any of the adjustments or offsets
described in section IX(i)(3) of that Agreement other than the Inflation
Adjustment)the Master Settlement Agreement payments, as determined
pursuant to Section IX(i) of that agreement, including after final
determination of all adjustments, that the manufacturer would have been
required to make on account of the units sold had it been a participating
manufacturer, the excess shall be released from escrow and revert back to such
tobacco product manufacturer; or".
SECTION 6.12.(b) If this section, or any portion of the amendment made to G.S. 66‑291(b)(2) by this section, is held by a court of competent jurisdiction to be unconstitutional, then G.S. 66‑291(b)(2) shall be deemed to be repealed in its entirety. If G.S. 66‑291(b)(2) shall thereafter be held by a court of competent jurisdiction to be unconstitutional, then this section shall be repealed, and G.S. 66‑291(b)(2) shall be restored as if no amendments had been made by this section. Neither any judicial holding of unconstitutionality nor the repeal of G.S. 66‑291(b)(2) shall affect, impair, or invalidate any other portion of Part 1 of Article 37 of Chapter 66 of the General Statutes or the application of Part 1 of Article 37 of Chapter 66 of the General Statutes to any other person or circumstance, and the remaining portions of Part 1 of Article 37 of Chapter 66 of the General Statutes shall at all times continue in full force and effect.
SECTION 6.12.(c) This section becomes effective January 1, 2006.
INFORMATION TECHNOLOGY FUND AVAILABILITY STATEMENT
SECTION 6.13.(a) The availability used to support appropriations made in this act from the Information Technology Fund established in G.S. 147‑33.72H is as follows:
FY 2005‑2006 FY 2006‑2007
Receipts from Information Technology
Enterprise Fee (G.S. 147‑33.82) $5,000,000 $5,000,000
Transfer from June 30, 2005, Information Technology
Services Internal Service Fund cash balance to
support statewide IT initiatives $5,000,000
Appropriation from General Fund $24,375,000 $8,025,000
Total Funds Available $34,375,000 $13,025,000.
SECTION 6.13.(b) Of the funds collected by the Office of Information Technology Services from the information technology enterprise fee approved by the Office of State Budget and Management pursuant to G.S. 147‑33.82, the Office shall deposit the sum of five million dollars ($5,000,000) for the 2005‑2006 fiscal year and the sum of five million dollars ($5,000,000) for the 2006‑2007 fiscal year in the Information Technology Fund established in G.S. 147‑33.72H.
SECTION 6.13.(c) Effective July 1, 2005, the State Controller shall transfer to the Information Technology Fund established in G.S. 147‑33.72H the sum of five million dollars ($5,000,000) from the cash balance remaining in the Office of Information Technology Services Internal Service Fund on June 30, 2005.
INFORMATION TECHNOLOGY APPROPRIATIONS
SECTION 6.14. Appropriations are made from the Information Technology Fund established in G.S. 147‑33.72H as follows:
Office of Information Technology Services FY 2005‑2006 FY 2006‑2007
To establish two project management assistant
positions and one enterprise licensing position
and to purchase and maintain asset management
software and enterprise licenses. $1,600,000 $1,400,000
To continue existing activities including project
management assistance, security, asset management,
legal support, and legacy system assessment. $5,100,000 $3,300,000
To provide services previously supported by
cross subsidies in the rate structure, including
State portal maintenance, security services,
enterprise identity management, and office
operations. $6,300,000 $5,800,000
To facilitate consolidation of information
technology services in State agencies. $500,000
Office of State Controller
To initiate replacement of the State's personnel
and payroll systems consistent with the analysis
and findings of the Statewide Business Infra‑
structure study. $20,875,000 $2,525,000
Total Appropriation $34,375,000 $13,025,000
Funds appropriated under this section are subject to the reporting requirement set out in G.S. 147‑33.72H.
MONITOR AND EVALUATE LEASE PURCHASE AND INSTALLMENT PURCHASE ACTIVITY
SECTION 6.17.(a) By December 30, 2005, the Office of State Budget and Management, in consultation with the Office of State Treasurer, the Office of State Controller, and the Department of Administration shall:
(1) Develop and implement a management process that does all of the following:
a. Standardizes the criteria used by executive branch agencies to evaluate the business case for acquisitions by lease purchase and installment purchase.
b. Provides for executive branch agency budget submissions that clearly show current and proposed debt service requirements occasioned by existing and proposed lease purchase and installment purchase agreements.
c. Provides that all lease purchase and installment purchase agreements entered into by executive branch agencies (i) contain provisions to protect the interests of the State against nonperformance or insolvency and (ii) are centrally inventoried and monitored.
d. Includes debt accruing through lease purchase and installment purchase activity by executive branch agencies in the annual report of the Debt Affordability Advisory Committee required by G.S. 142‑101.
e. Evaluates the advantages of a pooled or master lease or installment arrangement.
(2) Prepare a consolidated report summarizing by State agency all lease purchase and installment purchase expenditures in the current fiscal year and all lease purchase and installment purchase expenditures planned for the upcoming fiscal year and submit the report to the Chairs of the House of Representatives and Senate Appropriations Committees and to the Fiscal Research Division on the first day of the 2006 and 2007 Regular Sessions of the General Assembly.
SECTION 6.17.(b) This section does not apply to The University of North Carolina.
PRIVATE LICENSE PLATES ON PUBLICLY OWNED MOTOR VEHICLES
SECTION 6.18.(a) Section 6.14(b) of S.L. 2001‑424 is repealed.
SECTION 6.18.(b) This section becomes effective April 30, 2005.
SECTION 6.19. G.S. 143B‑426.39 reads as rewritten:
"§ 143B‑426.39. Powers and duties of the State Controller.
The State Controller shall:
…
(6) Operate a central
payroll system, in accordance with G.S. 143‑3.2 and 143‑34.1.
Prescribe, develop, operate, and maintain a uniform payroll system, in
accordance with G.S. 143‑3.2 and G.S. 143‑34.1, for all
State agencies. This uniform payroll system shall be designed to assure
compliance with all legal and constitutional requirements. When the State
Controller finds it expedient to do so because of a State agency's size and
location, the State Controller may authorize a State agency to operate its own
payroll system. Any State agency authorized by the State Controller to operate
its own payroll system shall comply with the requirements adopted by the State
Controller.
…."
CLEAN WATER MANAGEMENT TRUST FUND BOARD OF TRUSTEES/STUDY STEWARDSHIP OF CONSERVATION EASEMENTS
SECTION 6.22. The Clean Water Management Trust Fund Board of Trustees shall study management and stewardship of conservation easements. The Board shall report its findings and any recommendations to the Environmental Review Commission by December 1, 2005.
COMMISSION ON STATE PROPERTY FUNDS
SECTION 6.23. Of the funds appropriated to the Department of Administration for the 2005‑2006 fiscal year, the Director of the Budget shall transfer two hundred thousand dollars ($200,000) to the Commission on State Property established in Article 78 of Chapter 143 of the General Statutes.
COLLABORATION AMONG DEPARTMENTS OF ADMINISTRATION, HEALTH AND HUMAN SERVICES, JUVENILE JUSTICE AND DELINQUENCY PREVENTION, AND PUBLIC INSTRUCTION ON SCHOOL‑BASED CHILD AND FAMILY TEAM INITIATIVE
SECTION 6.24.(a) School‑Based Child and Family Team Initiative established. –
(1) Purpose and duties. – There is established the School‑Based Child and Family Team Initiative. The purpose of the Initiative is to identify and coordinate appropriate community services and supports for children at risk of school failure or out‑of‑home placement in order to address the physical, social, legal, emotional, and developmental factors that affect academic performance. The Department of Health and Human Services, the Department of Public Instruction, the State Board of Education, the Department of Juvenile Justice and Delinquency Prevention, the Administrative Office of the Courts, and other State agencies that provide services for children shall share responsibility and accountability to improve outcomes for these children and their families. The Initiative shall be based on the following principles:
a. The development of a strong infrastructure of interagency collaboration;
b. One child, one team, one plan;
c. Individualized strengths‑based care;
d. Accountability;
e. Cultural competence;
f. Children at risk of school failure or out‑of‑home placement may enter the system through any participating agency;
g. Services shall be specified, delivered, and monitored through a unified Child and Family Plan that is outcome‑oriented and evaluation‑based;
h. Services shall be the most efficient in terms of cost and effectiveness and shall be delivered in the most natural settings possible;
i. Out‑of‑home placements for children shall be a last resort and shall include concrete plans to bring the children back to a stable, permanent home, their schools, and their community; and
j. Families and consumers shall be involved in decision making throughout service planning, delivery, and monitoring.
(2) Program goals and services. – In order to ensure that children receiving services are appropriately served, the affected State and local agencies shall:
a. Increase capacity in the school setting to address the academic, health, mental health, social, and legal needs of children.
b. Ensure that children receiving services are screened initially to identify needs and assessed periodically to determine progress and sustained improvement in educational, health, safety, behavioral, and social outcomes.
c. Develop uniform screening mechanisms and a set of outcomes that are shared across affected agencies to measure children's progress in home, school, and community settings.
d. Promote practices that are known to be effective based upon research or national best practice standards.
e. Review services provided across affected State agencies to ensure that children's needs are met.
f. Eliminate cost shifting and facilitate cost‑sharing among governmental agencies with respect to service development, service delivery, and monitoring for participating children and their families.
g. Participate in a local memorandum of agreement signed annually by the participating superintendent of the local LEA, directors of the county departments of social services and health, director of the local management entity, the chief district court judge, and the chief district court counselor.
(3) Local level responsibilities. – In coordination with the North Carolina Child and Family Leadership Council (Council), the local board of education shall establish the School‑Based Child and Family Team Initiative (Initiative) at designated schools and shall appoint the Child and Family Team Leaders who shall be a school nurse and a school social worker. Each local management entity that has any selected schools in its catchment area shall appoint a Care Coordinator, and any department of social services that has a selected school in its catchment area shall appoint a Child and Family Teams Facilitator. The Care Coordinators and Child and Family Team Facilitators shall have as their sole responsibility working with the selected schools in their catchment areas and shall provide training to school‑based personnel, as required. The Child and Family Team Leaders shall identify and screen children who are potentially at risk of academic failure or out‑of‑home placement due to physical, social, legal, emotional, or developmental factors. Based on the screening results, responsibility for developing, convening, and implementing the Child and Family Team Initiative is as follows:
a. School personnel shall take the lead role for those children and their families whose primary unmet needs are related to academic achievement.
b. The local management entity shall take the lead role for those children and their families whose primary unmet needs are related to mental health, substance abuse, or developmental disabilities and who meet the criteria for the target population established by the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services.
c. The local department of public health shall take the lead role for those children and their families whose primary unmet needs are health‑related.
d. Local departments of social services shall take the lead for those children and their families whose primary unmet needs are related to child welfare, abuse, or neglect.
e. The chief district court counselor shall take the lead for those children and their families whose primary unmet needs are related to juvenile justice issues.
A representative from each named or otherwise identified publicly supported children's agency shall participate as a member of the Team as needed. Team members shall coordinate, monitor, and assure the successful implementation of a unified Child and Family Plan.
(4) Reporting requirements. – School‑Based Child and Family Team Leaders shall provide data to the Council for inclusion in their report to the North Carolina General Assembly. The report shall include the following:
a. The number of and other demographic information on children screened and assigned to a team and a description of the services needed by and provided to these children;
b. The number of and information about children assigned to a team who are placed in programs or facilities outside the child's home or outside the child's county and the average length of stay in residential treatment;
c. The amount and source of funds expended to implement the Initiative;
d. Information on how families and consumers are involved in decision making throughout service planning, delivery, and monitoring;
e. Other information as required by the Council to evaluate success in local programs and ensure appropriate outcomes; and
f. Recommendations on needed improvements.
(5) Local advisory committee. – In each county with a participating school, the superintendent of the local LEA shall either identify an existing cross agency collaborative or council, or shall form a new group, to serve as a local advisory committee to work with the Initiative. Newly formed committees shall be chaired by the superintendent and one other member of the committee to be elected by the committee. The local advisory committee shall include the directors of the county departments of social services and health, the directors of the local management entity, the chief district court judge, the chief district court counselor, and representatives of other agencies providing services to children, as designated by the Committee. The members of the Committee shall meet as needed to monitor and support the successful implementation of the School‑Based Child and Family Team Initiative.
The Local Child and Family Team Advisory Committee may designate existing cross agency collaboratives or councils as working groups or to provide assistance in accomplishing established goals.
SECTION 6.24.(b) North Carolina Child and Family Leadership Council. –
(1) Leadership Council established; location. – There is established the North Carolina Child and Family Leadership Council (Council). The Council shall be located within the Department of Administration for organizational and budgetary purposes.
(2) Purpose. – The purpose of the Council is to review and advise the Governor in the development of the School‑Based Child and Family Team Initiative and to ensure the active participation and collaboration in the Initiative by all State agencies and their local counterparts providing services to children in participating counties in order to increase the academic success and reduce out‑of‑home and out‑of‑county placements of children at risk of academic failure.
(3) Membership. – The Superintendent of Public Instruction and the Secretary of Health and Human Services shall serve as cochairs of the Council. Council membership shall include the Secretary of the Department of Juvenile Justice and Delinquency Prevention, the Chairman of the State Board of Education, the Director of the Administrative Office of the Courts, and other members as appointed by the Governor.
(4) The Council shall:
a. Sign an annual memorandum of agreement (MOA) among the named State agencies to define the purposes of the program and to ensure that program goals are accomplished.
b. Resolve State policy issues, as identified at the local level, which interfere with effective implementation of the School‑Based Child and Family Team Initiative.
c. Direct the integration of resources, as needed, to meet goals and ensure that the Initiative promotes the most effective and efficient use of resources and eliminates duplication of effort.
d. Establish criteria for defining success in local programs and ensure appropriate outcomes.
e. Develop an evaluation process, based on expected outcomes, to ensure the goals and objectives of this Initiative are achieved.
f. Review progress made on integrating policies and resources across State agencies, reaching expected outcomes, and accomplishing other goals.
g. Report semiannually, on January 1 and July 1, on progress made and goals achieved to the Office of the Governor, the Joint Appropriations Committees and Subcommittees on Education, Justice and Public Safety, and Health and Human Services, and the Fiscal Research Division of the Legislative Services Office.
The Council may designate existing cross agency collaboratives or councils as working groups or to provide assistance in accomplishing established goals.
SECTION 6.24.(c) Department of Health and Human Services. – The Secretary of the Department of Health and Human Services shall ensure that all agencies within the Department collaborate in the development and implementation of the School‑Based Child and Family Team Initiative and provide all required support to ensure that the Initiative is successful.
SECTION 6.24.(d) Department of Juvenile Justice and Delinquency Prevention. – The Secretary of the Department of Juvenile Justice and Delinquency Prevention shall ensure that all agencies within the Department collaborate in the development and implementation of the School‑Based Child and Family Team Initiative and provide all required support to ensure that the Initiative is successful.
SECTION 6.24.(e) Administrative Office of the Courts. – The Director of the Administrative Office of the Courts shall ensure that the Office collaborates in the development and implementation of the School‑Based Child and Family Team Initiative and shall provide all required support to ensure that the Initiative is successful.
SECTION 6.24.(f) Department of Public Instruction. – The Superintendent of Public Instruction shall ensure that the Department collaborates in the development and implementation of the School‑Based Child and Family Team Initiative and shall provide all required support to ensure that the Initiative is successful.
LIMIT DISPOSITION OF DOROTHEA DIX AND BLUE RIDGE ROAD PROPERTIES
SECTION 6.25.(a) G.S. 146‑27 reads as rewritten:
"§
146‑27. The role of the Department of Administration in sales, leases,
and rentals.rentals; approval by General Assembly.
(a) General. – Every Except
as otherwise provided by this section, every sale, lease, rental, or gift
of land owned by the State or by any State agency shall be made by the
Department of Administration and approved by the Governor and Council of State.
A lease or rental of land owned by the State may not exceed a period of 99
years. The Department of Administration may initiate proceedings for sales,
leases, rentals, and gifts of land owned by the State or by any State agency.
(b) Large Disposition. – If a proposed disposition is a sale or gift of land with an appraised value of at least twenty‑five thousand dollars ($25,000), the sale or gift shall not be made until after consultation with the Joint Legislative Commission on Governmental Operations.
(c) Exceptions. – Notwithstanding any other provision of law, the following State‑owned property shall not be sold, leased, rented, or otherwise disposed of without the prior approval of the General Assembly:
(1) The property encompassing the Dorothea Dix Hospital campus.
(2) The property described in the 1995 Capital Area Master Plan for State Government, Blue Ridge Road Area, developed by O'Brien/Atkins, except for the Special Development District."
SECTION 6.25.(b) G.S. 143‑341(4)g reads as rewritten:
"§ 143‑341. Powers and duties of Department.
The Department of Administration has the following powers and duties:
…
(4) Real Property Control:
…
g. To Except as
otherwise provided by this sub‑subdivision, to allocate and
reallocate land, buildings, and space in buildings to the several State
agencies, in accordance with rules adopted by the Governor with the approval of
the Council of State; provided that if the proposed reallocation is of land
with an appraised value of at least twenty‑five thousand dollars
($25,000), the reallocation may only be made after consultation with the Joint
Legislative Commission on Governmental Operations. The authority granted in
this paragraph shall not apply to the State Legislative Building and grounds or
to the Legislative Office Building and grounds.
Notwithstanding any other provision of law, the following State‑owned property shall not be allocated or reallocated without the prior approval of the General Assembly:
1. The property encompassing the Dorothea Dix Hospital campus.
2. The property described in the 1995 Capital Area Master Plan for State Government, Blue Ridge Road Area, developed by O'Brien/Atkins, except for the Special Development District."
SECTION 6.25.(c) This section expires September 1, 2007.
NO FUNDS BUDGETED FOR REPLACED EQUIPMENT
SECTION 6.27. Once a State agency has purchased and installed equipment that performs the same function as equipment it leases, the agency shall not continue to budget funds for leased equipment that it no longer needs.
HEALTH BENEFIT PLAN CO‑PAYMENTS
SECTION 6.29. G.S. 58‑50‑30(a3) reads as rewritten:
"(a3) Whenever any health benefit plan, subscriber contract, or policy of insurance issued by a health maintenance organization, hospital or medical service corporation, or insurer governed by Articles 1 through 67 of this Chapter provides coverage for medically necessary treatment, the insurer shall not impose any limitation on treatment or levels of coverage if performed by a duly licensed chiropractor acting within the scope of the chiropractor's practice as defined in G.S. 90‑151 unless a comparable limitation is imposed on the medically necessary treatment if performed or authorized by any other duly licensed physician. An insurer shall not impose as a limitation on treatment or level of coverage a co‑payment amount charged to the insured for chiropractic services that is higher than the co‑payment amount charged to the insured for the services of a duly licensed primary care physician for the same medically necessary treatment or condition."
PLANNING FOR BETTER COLLECTION OF INFRASTRUCTURE INFORMATION
SECTION 6.33.(a) The Office of State Budget and Management shall conduct a study to determine the best methods for collecting, managing, and providing access to information about technology, water, sewer, and other modern infrastructures needed to assist communities in becoming and remaining economically viable.
SECTION 6.33.(b) The Office of State Budget and Management shall report the results of this study to the 2006 Regular Session of the 2005 General Assembly. The report shall include legislative proposals, including a proposal to define the term "infrastructure" in the General Statutes to include modern communication technologies.
SECTION 6.34.(a) The General Assembly finds that the traditional method of budgeting focuses only on expansion adjustments to the previous year's expenditures. This method of budgeting may no longer be sufficient to manage the competing demands of North Carolina's complex budget, its rapidly expanding education and health care expenditures, and the need to foster economic development. To meet the State's growing needs, it is necessary to examine new approaches to budgeting and management.
SECTION 6.34.(b) The Legislative Services Commission is hereby authorized to undertake no more than two zero‑based budget reviews prior to the convening of the 2007 General Assembly. The President Pro Tempore of the Senate and the Speaker of the House of Representatives shall select the two departments for review.
SECTION 6.34.(c) In conducting a zero‑based budget review, the Commission may consider the following:
(1) The activities that comprise the department's budget, and a justification for the existence of each activity by reference to the constitution, federal and State statutes, case law, administrative rules, and departmental practices.
(2) For each activity within the department, a quantitative estimate of any adverse impacts that could reasonably be expected should the activity be discontinued, together with a full description of the methods by which the expected adverse impacts were measured.
(3) For each activity within the department, the account of expenditures that would be required to maintain the activity at the minimum level of service required by law.
(4) For each activity within the department, an itemized account of expenditures required to maintain the activity at current levels of service, together with a concise statement of the quantity and quality of services being provided.
(5) A ranking of all activities of the department that shows the relative contribution of each activity to the overall goals and purposes of the agency at current service levels.
(6) Other issues the Commission deems appropriate for the budget review.
Payroll Deduction For Employees' Associations
SECTION 6.35. G.S. 143‑3.3(g) reads as rewritten:
"(g) Payroll Deduction
for Payments to Certain Employees' Associations Allowed. – An employee of the
State or any of its political subdivisions, institutions, departments,
bureaus, agencies or commissions, or any of its local boards of education or
community colleges, who is a member of a domiciled employees' association that
has at least 2,000 members, the majority 500 of whom are
employees of the State State, a political subdivision of the State, or
public school employees, may authorize, in writing, the periodic deduction each
payroll period from the employee's salary or wages a designated lump sum to be
paid to the employees' association.
An employee of any local board of education who is a member of a domiciled employees' association that has at least 40,000 members, the majority of whom are public school teachers, may authorize in writing the periodic deduction each payroll period from the employee's salary or wages a designated lump sum or sums to be paid for dues and voluntary contributions for the employees' association.
An authorization under this subsection shall remain in effect until revoked by the employee. A plan of payroll deductions pursuant to this subsection for employees of the State and other association members shall become void if the employees' association engages in collective bargaining with the State, any political subdivision of the State, or any local school administrative unit. This subsection does not apply to county or municipal governments or any local governmental unit, except for local boards of education."
study COnsolidation of State Laboratories
SECTION 6.36.(a) The Office of State Budget and Management shall develop a plan to consolidate all State‑funded laboratories. This plan will augment capital and space‑allocation plans already developed for the new laboratories.
The State‑funded laboratories to be considered for consolidation include the Public Health State Laboratory within the Department of Health and Human Services, the Agricultural Laboratory within the Department of Agriculture and Consumer Services, Veterinary Division, and the State Bureau of Investigation Crime Laboratories within the Department of Justice. The Office of State Budget and Management shall hire an independent consultant to conduct the study and develop the consolidation plan. The study shall include the feasibility of consolidating these laboratory functions and the identification of any duplicative functions.
SECTION 6.36.(b) The consolidation plan shall include a cost analysis for consolidating facilities and staff and eliminating duplicative services. The plan shall assure that confidentiality of shared data is not compromised and that the chain of custody of evidence is maintained for forensic evidence sent to the laboratory for analysis. The plan shall also assure that all laboratory functions will continue to receive certification in each field now certified and to conform with federal rules and regulations governing the laboratories' eligibility for federal grant funds. The plan shall include recommendations to privatize laboratory functions that can be more efficiently performed by non‑State entities.
SECTION 6.36.(c) The Office of State Budget and Management shall submit a complete report of the study findings and recommendations to the General Assembly and the Fiscal Research Division no later than May 1, 2006.
civil penalty and forfeiture fund
SECTION 6.37.(a) Availability. – The availability used to support appropriations made in this act from the Civil Penalty and Forfeiture Fund is based upon estimated collections of fines and forfeitures from the agencies and in the amounts listed below:
FY 2005‑2006 FY 2006‑2007
Department of Revenue $ 80,000,000 $ 85,000,000
Department of Transportation $ 15,000,000 $ 15,000,000
Employment Security Commission $ 3,000,000 $ 3,000,000
Department of Insurance $ 3,000,000 $ 3,000,000
University of North Carolina $ 5,000,000 $ 5,000,000
Other Agencies $ 14,500,000 $ 14,500,000
Total Funds Available $ 120,500,000 $ 125,500,000
CIVIL PENALTY AND FORFEITURE FUNDS APPROPRIATIONS
SECTION 6.37.(b) Appropriations. – Appropriations are made from the Civil Penalty and Forfeiture Fund for the fiscal biennium ending June 30, 2007, as follows:
2005‑2006 2006‑2007
School Technology Fund $ 18,000,000 $ 18,000,000
State Public School Fund $ 102,500,000 $ 107,500,000
Total Appropriation $ 120,500,000 $ 125,500,000
Funds appropriated pursuant to this section shall be allotted, on behalf of the counties, to local school administrative units on a per pupil basis.
SECTION 6.37.(c) Shortfall. – If funds accruing to the Civil Penalty and Forfeiture Fund are not adequate for the appropriations set out in subsection (b) of this section, the Director of the Budget shall use funds available in the State Public School Fund for each fiscal year to offset the shortfall.
SECTION 6.37.(d) Unappropriated Funds. – Except as provided in subsection (f) of this section, if funds accruing to the Civil Penalty and Forfeiture Fund for the 2005‑2006 fiscal year or the 2006‑2007 fiscal year from agencies or pursuant to a settlement agreement or court order exceed the amounts appropriated in subsection (b) of this section, the excess funds shall remain in the Fund until appropriated by the General Assembly.
SECTION 6.37.(e) G.S. 105‑164.44D does not apply in either the 2005‑2006 or 2006‑2007 fiscal years.
SECTION 6.37.(f) Overrealized Funds from the Department of Transportation. - If funds deposited in the Civil Penalty and Forfeiture Fund for the 2005-2006 fiscal year or the 2006-2007 fiscal year by the Department of Transportation exceed the amount projected in subsection (a) of this section, the Director of the Budget shall authorize the use of these excess funds to offset Highway Fund appropriations to the Department of Public Instruction for the State Public School Fund. These excess funds are hereby appropriated from the Civil Penalty and Forfeiture Fund to the State Public School Fund for the 2005-2006 and the 2006-2007 fiscal years to offset such Highway Fund appropriations and shall be allocated in accordance with G.S. 115C-457.3, except that for the drivers education program it is allocated per pupil for those in that program in the public schools. The Director of the Budget shall decrease the amount of Highway Funds appropriated for driver education for the 2005-2006 and the 2006-2007 fiscal years by corresponding amounts.
SECTION 6.37.(g) G.S. 115C‑457.3 reads as rewritten:
"§
115C‑457.3. Transfer of funds to the State School Technology Fund.Appropriation
of moneys in the Fund.
The Office of State Budget and
Management shall transfer funds accruing to the Civil Penalty and Forfeiture
Fund to the State School Technology Fund. These funds shall be allocated to
counties on the basis of average daily membership. These funds shall be
distributed to the counties to be allocated to the public schools, including
charter schools, in the same manner as provided under G.S. 115C‑452.
(a) The General Assembly shall appropriate moneys in the Civil Penalty and Forfeiture Fund in the Current Operations Appropriations Act. These appropriations shall be made to the State Public School Fund for allotment by the State Board of Education, on behalf of the counties, to local school administrative units on a per pupil basis in accordance with Article IX, Section 7(b) of the North Carolina Constitution.
(b) In accordance with subsection (a) of this section, the State Board of Education shall allocate these funds according to the allotted average daily membership of each local school administrative unit as determined by and certified to the local school administrative units and the board of county commissioners by the State Board pursuant to G.S. 115C‑430."
SECTION 6.37.(h) G.S. 96‑5(c) reads as rewritten:
"(c) There is hereby
created in the State treasury a special fund to be known as the Special
Employment Security Administration Fund. All interest and penalties,interest,
regardless of when the same became payable, collected from employers under the
provisions of this Chapter subsequent to June 30, 1947 as well as any
appropriations of funds by the General Assembly, shall be paid into this fund.
No part of said fund shall be expended or available for expenditure in lieu of
federal funds made available to the Commission for the administration of this Chapter.
Said fund shall be used by the Commission for the payment of costs and charges
of administration which are found by the Secretary of Labor not to be proper
and valid charges payable out of any funds in the Employment Security
Administration Fund received from any source and shall also be used by the
Commission for: (i) extensions, repairs, enlargements and improvements to
buildings, and the enhancement of the work environment in buildings used for
Commission business; (ii) the acquisition of real estate, buildings and
equipment required for the expeditious handling of Commission business; and
(iii) the temporary stabilization of federal funds cash flow. The Employment
Security Commission may use funds either from the Special Employment Security
Commission Administration Fund created by this subsection or from federal
funds, or from a combination of the two, to offset the costs of compliance with
Article 7A of Chapter 163 of the General Statutes of North Carolina or
compliance with P.L. 103‑31. Refunds of interest allowable under
G.S. 96‑10, subsection (e) shall be made from this special fund:
Provided, such interest was deposited in said fund: Provided further, that in
those cases where an employer takes credit for a previous overpayment of
interest on contributions due by such employer pursuant to G.S. 96‑10,
subsection (e), that the amount of such credit taken for such overpayment of
interest shall be reimbursed to the Unemployment Insurance Fund from the
Special Employment Security Administration Fund. The Special Employment
Security Administration Fund, except as otherwise provided in this Chapter,
shall be subject to the provisions of the Executive Budget Act (G.S. 143‑1
et seq.) and the Personnel Act (G.S. 126‑1 et seq.). All moneys in
this fund shall be deposited, administered, and disbursed in the same manner
and under the same conditions and requirements as is provided by law for other
special funds in the State treasury, and shall be maintained in a separate
account on the books of the State treasury. The State Treasurer shall be liable
on his official bond for the faithful performance of his duties in connection
with the Special Employment Security Administration Fund provided for under
this Chapter. Such liability on the official bond shall be effective
immediately upon the enactment of this provision, and such liability shall
exist in addition to any liability upon any separate bond existent on the
effective date of this provision, or which may be given in the future. All sums
recovered on any surety bond for losses sustained by the Special Employment
Security Administration Fund shall be deposited in said fund. The moneys in the
Special Employment Security Administration Fund shall be continuously available
to the Commission for expenditure in accordance with the provisions of this
section."
SECTION 6.37.(i) G.S. 96‑6.1(a) reads as rewritten:
"(a) Contribution. – A mandatory training and reemployment contribution is levied upon employers at a percentage rate of the amount of the employer's unemployment insurance contributions due under G.S. 96‑9. The rate is the lesser of (i) twenty percent (20%) or (ii) a percentage of the unemployment insurance contributions that yields an amount that, when added to the amount of the employer's unemployment insurance contributions due for the taxable period, is no greater than five and seven‑tenths percent (5.7%) of wages for employment for the taxable period. The purpose of the training and reemployment contribution is to provide funds for Department of Community College training programs, Employment Security Commission reemployment services, administration and collection of the new contribution, and other needs of the State. The training and reemployment contribution is due and payable at the time and in the same manner as the unemployment insurance contributions under G.S. 96‑9. The training and reemployment contribution does not apply in a calendar year if, as of August 1 of the preceding year, the amount in the Unemployment Insurance Fund equals or is less than nine hundred million dollars ($900,000,000) or if at any time during the 12 months preceding August 1, the State unemployment rate rises above four and three‑tenths percent (4.3%). The collection of the training and reemployment contribution, the assessment of interest and penalties on unpaid contributions under this section, the filing of judgment liens, and the enforcement of the liens for unpaid contributions under this section are governed by the provisions of G.S. 96‑10 where applicable.
Training and reemployment
contributions collected under this section shall be credited to the Employment
Security Commission Training and Employment Account created in this section,
and refunds of these contributions shall be paid from the same account. The
clear proceeds of any civil penalties levied pursuant to this section shall be
remitted to the Civil Penalty and Forfeiture Fund in accordance with G.S. 115C‑457.2.
Any interest or penalties collected on unpaid contributions under
this section shall be credited to the Special Employment Security
Administration Fund, and any interest or penalties refunded on
contributions imposed by this section shall be paid from the same Fund."
SECTION 6.37.(j) G.S. 96‑9(b)(3)j. reads as rewritten:
"j. A tax is imposed
upon contributions at the rate of twenty percent (20%) of the amount of
contributions due. The tax is due and payable at the time and in the same
manner as the contributions. The tax does not apply in a calendar year if, as
of August 1 of the preceding year, the amount in the Reserve Fund equals or
exceeds one hundred sixty‑three million three hundred forty‑nine
thousand dollars ($163,349,000), which is one percent (1%) of taxable wages for
calendar year 1984. The collection of this tax, the assessment of interest and
penalties on unpaid taxes, the filing of judgment liens, and the enforcement of
the liens for unpaid taxes is governed by the provisions of G.S. 96‑10
where applicable. Taxes collected under this subpart shall be credited to the
Employment Security Commission Reserve Fund, and refunds of the taxes shall be
paid from the same Fund. The clear proceeds of any civil penalties collected
under this subpart shall be remitted to the Civil Penalty and Forfeiture Fund
in accordance with G.S. 115C‑457.2. Any interest or penalties
collected on unpaid taxes shall be credited to the Special Employment
Security Administration Fund, and any interest or penalties refunded on
taxes imposed by this subpart shall be paid from the same Fund."
SECTION 6.37.(k) G.S. 96‑10(a) reads as rewritten:
"(a) Interest on Past‑Due
Contributions. – Contributions unpaid on the date on which they are due and
payable, as prescribed by the Commission, shall bear interest at the rate set
under G.S. 105‑241.1(i) per month from and after that date until
payment plus accrued interest is received by the Commission. An additional
penalty in the amount of ten percent (10%) of the taxes due shall be added. Penalties
and interest The clear proceeds of any civil penalties levied pursuant
to this section shall be remitted to the Civil Penalty and Forfeiture Fund in
accordance with G.S. 115C‑457.2. Interest collected pursuant to
this subsection shall be paid into the Special Employment Security
Administration Fund. If any employer, in good faith, pays contributions to
another state or to the United States under the Federal Unemployment Tax Act,
prior to a determination of liability by this Commission, and the contributions
were legally payable to this State, the contributions, when paid to this State,
shall be deemed to have been paid by the due date under the law of this State
if they were paid by the due date of the other state or the United
States."
SECTION 6.37.(l) G.S. 105‑163.15 reads as rewritten:
"§
105‑163.15. Failure by individual to pay estimated income tax; penalty.interest.
(a) In the case of any
underpayment of the estimated tax by an individual, the Secretary shall assess a
penalty interest in an amount determined by applying the applicable
annual rate established under G.S. 105‑241.1(i) to the amount of the
underpayment for the period of the underpayment.
…
(f) No addition to the
tax interest shall be imposed under subsection (a) if the tax shown
on the return for the taxable year reduced by the tax withheld under this
Article is less than the amount set in section 6654(e) of the Code or if the
individual did not have any liability for tax under Part 2 of Article 4 for the
preceding taxable year.
…
(h) If, on or before January
31 of the following taxable year, the taxpayer files a return for the taxable
year and pays in full the amount computed on the return as payable, no addition
to tax interest shall be imposed under subsection (a) with respect
to any underpayment of the fourth required installment for the taxable year.
(i) Notwithstanding subsections (c), (d), (e), and (h) of this section, an individual who is a farmer or fisherman for a taxable year is subject to the provisions of this subsection.
(1) One installment. – The individual is required to make only one installment payment of tax for that taxable year. This installment is due on or before January 15 of the following taxable year. The amount of the installment payment must be the lesser of:
a. Sixty‑six and two‑thirds percent (66 2/3%) of the tax shown on the return for the taxable year, or, if no return is filed, sixty‑six and two‑thirds percent (66 2/3%) of the tax for that year; or
b. One hundred percent (100%) of the tax shown on the return of the individual for the preceding taxable year, if the preceding taxable year was a taxable year of 12 months and the individual filed a return for that year.
(2) Exception. – If, on or
before March 1 of the following taxable year, the taxpayer files a return for
the taxable year and pays in full the amount computed on the return as payable,
no addition to taxinterest is imposed under subsection (a) of
this section with respect to any underpayment of the required installment for
the taxable year.
(3) Eligibility. – An individual is a farmer or fisherman for any taxable year if the individual's gross income from farming or fishing, including oyster farming, for the taxable year is at least sixty‑six and two‑thirds percent (66 2/3%) of the total gross income from all sources for the taxable year, or the individual's gross income from farming or fishing, including oyster farming, shown on the return of the individual for the preceding taxable year is at least sixty‑six and two‑thirds percent (66 2/3%) of the total gross income from all sources shown on the return.
…."
SECTION 6.37.(m) G.S. 105‑163.41 reads as rewritten:
"§
105‑163.41. Penalty for underpayment.Underpayment.
(a) Except as provided in
subsection (d), if the amount of estimated tax paid by a corporation during the
taxable year is less than the amount of tax imposed upon the corporation under
Article 4 of this Chapter for the taxable year, the corporation must be
assessed an additional tax as a penaltyinterest in an amount
determined by multiplying the amount of the underpayment as determined under
subsection (b), for the period of the underpayment as determined under
subsection (c), by the percentage established as the rate of interest on
assessments under G.S. 105‑241.1(i) that is in effect for the period
of the underpayment. For the purpose of this section, the amount of tax imposed
under Article 4 of this Chapter is the net amount after subtracting the credits
against the tax allowed by this Chapter other than the credit allowed by this
Article.
…
(d) Except as provided in
subdivision (5) of this subsection, the penalty interest for underpayment
imposed by this section shall not be imposed if the total amount of all
payments of estimated tax made on or before the last date prescribed for the
payment of the installments equals or exceeds the amount that would have been
required to be paid on or before that date if the estimated tax was equal to
the least of:
(1) The tax shown on the return of the corporation for the preceding taxable year, if the corporation filed a return for the preceding taxable year and the preceding year was a taxable year of 12 months;
(2) An amount equal to the tax computed at the rates applicable to the taxable year but otherwise on the basis of the facts shown on the return of the corporation for, and the law applicable to, the preceding taxable year; or
(3) An amount equal to ninety percent (90%) of the tax for the taxable year computed by placing on an annualized basis the taxable income:
a. For the first three months of the taxable year, in the case of the installment required to be paid in the 4th month;
b. For the first three months or for the first five months of the taxable year, in the case of the installment required to be paid in the 6th month;
c. For the first six months or for the first eight months of the taxable year, in the case of the installment required to be paid in the 9th month; and
d. For the first nine months or for the first 11 months of the taxable year, in the case of the installment required to be paid in the 12th month of the taxable year.
(4) For purposes of this subdivision, the taxable income shall be placed on an annualized basis by multiplying by 12 the taxable income referred to in the preceding sentence, and dividing the resulting amount by the number of months in the taxable year (3, 5, 6, 8, 9, or 11 as the case may be) referred to in that sentence.
(5) In the case of a large corporation, as defined in section 6655 of the Code, subdivisions (1) and (2) of this subsection shall not apply."
SECTION 6.37.(n) G.S. 105‑236 reads as rewritten:
"§ 105‑236. Penalties.
Penalties assessed by the Secretary under this Subchapter are assessed as an additional tax. The clear proceeds of any civil penalties levied pursuant to subdivisions (3), (4), (5)a., and (6) of this section shall be remitted to the Civil Penalty and Forfeiture Fund in accordance with G.S. 115C‑457.2. Except as otherwise provided by law, and subject to the provisions of G.S. 105‑237, the following penalties shall be applicable:
…."
SECTION 6.37.(o) G.S. 20‑118(e) is amended by adding a new subdivision to read:
"(7) The clear proceeds of all civil penalties, civil forfeitures, and civil fines that are collected by the Department of Transportation pursuant to this section shall be remitted to the Civil Penalty and Forfeiture Fund in accordance with G.S. 115C‑457.2."
SECTION 6.37.(p) G.S. 20‑309 is amended by adding a new subsection to read:
"(g) Penalties. – The clear proceeds of all civil penalties, civil forfeitures, and civil fines that are collected by the Department of Transportation pursuant to this section shall be remitted to the Civil Penalty and Forfeiture Fund in accordance with G.S. 115C‑457.2."
SECTION 6.37.(q) G.S. 20‑79 is amended by adding a new subsection to read:
"(g) Penalties. – The clear proceeds of all civil penalties, civil forfeitures, and civil fines that are collected by the Department of Transportation pursuant to this section shall be remitted to the Civil Penalty and Forfeiture Fund in accordance with G.S. 115C‑457.2."
SECTION 6.37.(r) G.S. 116‑44.4(m) reads as rewritten:
"(m) All moneys received
pursuant to this Part Part, except for the clear proceeds of all
civil penalties collected pursuant to subsection (h) of this section, shall
be placed in a trust account in each constituent institution and may be used
for any of the following purposes:
(1) To defray the cost of administering and enforcing ordinances adopted under this Part;
(2) To develop, maintain, and supervise parking areas and facilities;
(3) To provide bus service or other transportation systems and facilities, including payments to any public or private transportation system serving University students, faculty, or employees;
(4) As a pledge to secure revenue bonds for parking facilities issued under Article 21 of this Chapter;
(5) Other purposes related to parking, traffic, and transportation on the campus.
The clear proceeds of all civil penalties collected pursuant to subsection (h) of this section shall be remitted to the Civil Penalty and Forfeiture Fund in accordance with G.S. 115C‑457.2."
SECTION 6.37.(s) G.S. 130A‑248 reads as rewritten:
"§ 130A‑248. Regulation of food and lodging establishments.
…
(d) The Department shall
charge each establishment subject to this section, except nutrition programs
for the elderly administered by the Division of Aging of the Department of
Health and Human Services, establishments that prepare and sell meat food
products or poultry products, and public school cafeterias, an annual fee of
fifty dollars ($50.00). The Department shall charge an additional twenty‑five
dollar ($25.00) late payment fee to any establishment that fails to pay the
required fee within 45 days after billing by the Department. The Department
may, in accordance with G.S. 130A‑23, suspend the permit of an
establishment that fails to pay the required fee within 60 days after billing
by the Department. The Department shall charge a reinstatement fee of one
hundred fifty dollars ($150.00) to any establishment that requests
reinstatement of its permit after the permit has been suspended. The
Commission shall adopt rules to implement this subsection. Fees collected under
this subsection shall be used for State and local food, lodging, and
institution sanitation programs and activities. No more than thirty‑three
and one‑third percent (33 1/3%) of the fees collected under this
subsection may be used to support State health programs and activities.
(d1) The Department shall charge a twenty‑five dollar ($25.00) late payment fee to any establishment subject to this section, except nutrition programs for the elderly administered by the Division of Aging of the Department of Health and Human Services, establishments that prepare and sell meat food products or poultry products, and public school cafeterias, that fails to pay the fee required by subsection (d) of this section within 45 days after billing by the Department. The Department may, in accordance with G.S. 130A‑23, suspend the permit of an establishment that fails to pay the required fee within 60 days after billing by the Department. The Department shall charge a reinstatement fee of one hundred fifty dollars ($150.00) to any establishment that requests reinstatement of its permit after the permit has been suspended. The Commission shall adopt rules to implement this subsection.
The clear proceeds of civil penalties collected pursuant to this subsection shall be remitted to the Civil Penalty and Forfeiture Fund in accordance with G.S. 115C‑457.2.
…."
SECTION 6.37.(t) G.S. 130A‑291.1(e2) reads as rewritten:
"(e2) A properly completed application for a permit and the annual fee under this section are due by 1 January of each year. The Department shall mail a notice of the annual fees to each permitted septage management firm and each individual who operates a septage treatment or disposal facility prior to 1 November of each calendar year. A late fee in the amount equal to fifty percent (50%) of the annual permit fee under this section shall be submitted when a properly completed application and annual permit fee are not submitted by 1 January following the 1 November notice. The clear proceeds of civil penalties collected pursuant to this subsection shall be remitted to the Civil Penalty and Forfeiture Fund in accordance with G.S. 115C‑457.2."
SECTION 6.37.(u) G.S. 54‑109.15(b) reads as rewritten:
"§ 54‑109.15. Reports.
(a) Credit unions organized under Articles 14A to 14L of this Chapter shall, in January and in July of each year, make a report of condition to the Administrator of Credit Unions on forms supplied for that purpose. Additional reports may be required.
(b) Any credit union that
neglects to make semiannual reports as provided in subsection (a) of this
section, or any of the other reports required by the Administrator of Credit
Unions at the time fixed by the Administrator, shall pay a late penalty to the
Administrator of Credit Unions of seventy‑five dollars ($75.00) for each
day the neglect continues. The Administrator of Credit Unions may revoke the
certificate of incorporation and take possession of the assets and business of
any credit union failing to pay a penalty imposed under this section after
serving notice of at least 15 days upon the credit union of the proposed
action. Penalties collected under this section shall be credited to the
special account established under G.S. 54‑109.14.The clear
proceeds of penalties collected pursuant to this subsection shall be remitted
to the Civil Penalty and Forfeiture Fund in accordance with G.S. 115C‑457.2."
SECTION 6.37.(v) Effective July 1, 2006, G.S. 115C‑457.2 reads as rewritten:
"§ 115C‑457.2. Remittance of moneys to the Fund.
The clear proceeds of all civil
penalties, civil forfeitures, and civil fines that are collected by a State
agency and that the General Assembly is authorized to place in a State fund
pursuant to Article IX, Section 7(b) of the Constitution shall be remitted to
the Office of State Budget and Management by the officer having custody of the
funds within 10 days after the close of the calendar month in which the
revenues were received or collected. Notwithstanding any other law, all such
funds shall be deposited in the Civil Penalty and Forfeiture Fund. The clear
proceeds of these funds include the full amount of all civil penalties, civil
forfeitures, and civil fines collected under authority conferred by the State,
diminished only by the actual costs of collection, not to exceed ten percent
(10%) twenty percent (20%) of the amount collected."
SECTION 6.37.(w) The Office of State Budget and Management shall develop a methodology for computing the actual costs of collection of civil penalties by State departments and agencies. This methodology shall apply to all State departments and agencies, effective July 1, 2006.
reports on personal services contracts
SECTION 6.38. G.S. 143‑64.70 reads as rewritten:
"§ 143‑64.70. Personal service contracts – reporting requirements.
(a) By January 1, 2002,
and quarterly thereafter, January 1 of each year, each State
department, agency, and institution shall make a detailed written report to the
Office of State Budget and Management and the Office of State Personnel on its
utilization of personal services contracts.contracts that have an
annual expenditure greater than five thousand dollars ($5,000). The report
by each State department, agency, and institution shall include the following:
(1) The total number of personal services contractors in service during the reporting period.
(2) The type, duration, status, and cost of each contract.
(3) The number of contractors utilized per contract.
(4) A description of the functions and projects requiring contractual services.
(5) The number of contractors for each function or project.
(6) Identification of the State employee responsible for oversight of the performance of each contract and the number of contractors reporting to each contract manager or supervisor.
(7) The budget code, fund number, and expenditure account number from which the contract funds were disbursed.
(b) By March 15, 2002,
and biannually thereafter,March 15 of each year, the Office of State
Budget and Management and the Office of State Personnel shall compile and
analyze the information required under subsection (a) of this section and shall
submit to the Joint Legislative Commission on Governmental Operations a
detailed report on the type, number, duration, cost and effectiveness of State
personal services contracts throughout State government."
PART vII. PUBLIC SCHOOLS
SECTION 7.1.(a) Effective for the 2005‑2006 school year, the Director of the Budget shall transfer from the Reserve for Experience Step Salary Increase for Teachers and Principals in Public Schools funds necessary to implement the teacher salary schedules set out in subsection (b) of this section and for longevity in accordance with subsection (d) of this section, including funds for the employer's retirement and social security contributions for all teachers whose salaries are supported from the State's General Fund.
These funds shall be allocated to individuals according to rules adopted by the State Board of Education.
SECTION 7.1.(b) The following monthly salary schedules shall apply for the 2005‑2006 fiscal year to certified personnel of the public schools who are classified as teachers. The schedule contains 30 steps with each step corresponding to one year of teaching experience.
2005‑2006 Monthly Salary Schedule
"A" Teachers
Years of Experience "A" Teachers NBPTS Certification
0 $2,551 N/A
1 $2,593 N/A
2 $2,637 N/A
3 $2,793 $3,128
4 $2,933 $3,285
5 $3,067 $3,435
6 $3,196 $3,580
7 $3,300 $3,696
8 $3,348 $3,750
9 $3,397 $3,805
10 $3,447 $3,861
11 $3,496 $3,916
12 $3,547 $3,973
13 $3,598 $4,030
14 $3,651 $4,089
15 $3,705 $4,150
16 $3,760 $4,211
17 $3,815 $4,273
18 $3,874 $4,339
19 $3,932 $4,404
20 $3,990 $4,469
21 $4,052 $4,538
22 $4,113 $4,607
23 $4,179 $4,680
24 $4,243 $4,752
25 $4,308 $4,825
26 $4,374 $4,899
27 $4,442 $4,975
28 $4,513 $5,055
29+ $4,584 $5,134
2005‑2006 Monthly Salary Schedule
"M" Teachers
Years of Experience "M" Teachers NBPTS Certification
0 $2,806 N/A
1 $2,852 N/A
2 $2,901 N/A
3 $3,072 $3,441
4 $3,226 $3,613
5 $3,374 $3,779
6 $3,516 $3,938
7 $3,630 $4,066
8 $3,683 $4,125
9 $3,737 $4,185
10 $3,792 $4,247
11 $3,846 $4,308
12 $3,902 $4,370
13 $3,958 $4,433
14 $4,016 $4,498
15 $4,076 $4,565
16 $4,136 $4,632
17 $4,197 $4,701
18 $4,261 $4,772
19 $4,325 $4,844
20 $4,389 $4,916
21 $4,457 $4,992
22 $4,524 $5,067
23 $4,597 $5,149
24 $4,667 $5,227
25 $4,739 $5,308
26 $4,811 $5,388
27 $4,886 $5,472
28 $4,964 $5,560
29+ $5,042 $5,647
SECTION 7.1.(c) Annual longevity payments for teachers shall be at the rate of one and one‑half percent (1.5%) of base salary for 10 to 14 years of State service, two and twenty‑five hundredths percent (2.25%) of base salary for 15 to 19 years of State service, three and twenty‑five hundredths percent (3.25%) of base salary for 20 to 24 years of State service, and four and one‑half percent (4.5%) of base salary for 25 or more years of State service. The longevity payment shall be paid in a lump sum once a year.
SECTION 7.1.(d) Certified public schoolteachers 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 for certified personnel of the public schools who are classified as "M" teachers. Certified public schoolteachers 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 certified personnel of the public schools who are classified as "M" teachers.
SECTION 7.1.(e) The first step of the salary schedule for school psychologists shall be equivalent to Step 5, corresponding to five years of experience, on the salary schedule established in this section for certified personnel of the public schools who are classified as "M" teachers. Certified psychologists shall be placed on the salary schedule at an appropriate step based on their years of experience. Certified psychologists shall receive longevity payments based on years of State service in the same manner as teachers.
Certified psychologists 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 for certified psychologists. Certified psychologists 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 certified psychologists.
SECTION 7.1.(f) Speech pathologists who are certified as speech pathologists at the masters degree level and audiologists who are certified as audiologists at the masters degree level and who are employed in the public schools as speech and language specialists and audiologists shall be paid on the school psychologist salary schedule.
Speech pathologists and audiologists 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 for speech pathologists and audiologists. Speech pathologists and audiologists 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 speech pathologists and audiologists.
SECTION 7.1.(g) Certified school nurses who are employed in the public schools as nurses shall be paid on the "M" salary schedule.
SECTION 7.1.(h) As used in this section, the term "teacher" shall also include instructional support personnel.
SCHOOL‑BASED ADMINISTRATOR SALARY SCHEDULE
SECTION 7.2.(a) Effective for the 2005‑2006 school year, the Director of the Budget shall transfer from the Reserve for Compensation Increases funds necessary to implement the salary schedules for school‑based administrators as provided in this section. These funds shall be used for State‑paid employees only.
SECTION 7.2.(b) The base salary schedule for school‑based administrators shall apply only to principals and assistant principals. The base salary schedule for the 2005‑2006 fiscal year, commencing July 1, 2005, is as follows:
2005‑2006
Principal and Assistant Principal Salary Schedules
Classification
Yrs. of Assistant Prin I Prin II Prin III Prin IV
Exp Principal (0‑10) (11‑21) (22‑32) (33‑43)
0‑4 $3,259 ‑ ‑ ‑ ‑
5 $3,408 ‑ ‑ ‑ ‑
6 $3,551 ‑ ‑ ‑ ‑
7 $3,666 ‑ ‑ ‑ ‑
8 $3,719 $3,719 ‑ ‑ ‑
9 $3,773 $3,773 ‑ ‑ ‑
10 $3,829 $3,829 $3,885 ‑ ‑
11 $3,885 $3,885 $3,941 ‑ ‑
12 $3,941 $3,941 $3,997 $4,056 ‑
13 $3,997 $3,997 $4,056 $4,115 $4,178
14 $4,056 $4,056 $4,115 $4,178 $4,240
15 $4,115 $4,115 $4,178 $4,240 $4,303
16 $4,178 $4,178 $4,240 $4,303 $4,368
17 $4,240 $4,240 $4,303 $4,368 $4,432
18 $4,303 $4,303 $4,368 $4,432 $4,502
19 $4,368 $4,368 $4,432 $4,502 $4,570
20 $4,432 $4,432 $4,502 $4,570 $4,643
21 $4,502 $4,502 $4,570 $4,643 $4,713
22 $4,570 $4,570 $4,643 $4,713 $4,786
23 $4,643 $4,643 $4,713 $4,786 $4,860
24 $4,713 $4,713 $4,786 $4,860 $4,936
25 $4,786 $4,786 $4,860 $4,936 $5,013
26 $4,860 $4,860 $4,936 $5,013 $5,094
27 $4,936 $4,936 $5,013 $5,094 $5,195
28 $5,013 $5,013 $5,094 $5,195 $5,299
29 $5,094 $5,094 $5,195 $5,299 $5,406
30 $5,195 $5,195 $5,299 $5,406 $5,514
31 $5,299 $5,299 $5,406 $5,514 $5,624
32 ‑ $5,406 $5,514 $5,624 $5,736
33 ‑ ‑ $5,624 $5,736 $5,851
34 ‑ ‑ $5,736 $5,851 $5,969
35 ‑ ‑ ‑ $5,969 $6,087
36 ‑ ‑ ‑ $6,087 $6,210
37 ‑ ‑ ‑ ‑ $6,334
2005‑2006
Principal and Assistant Principal Salary Schedules
Classification
Yrs. of PrinV PrinVI PrinVII PrinVIII
Exp (44‑54) (55‑65) (66‑100) (101+)
0‑14 $4,303
15 $4,368
16 $4,432 $4,502
17 $4,502 $4,570 $4,713
18 $4,570 $4,643 $4,786 $4,860
19 $4,643 $4,713 $4,860 $4,936
20 $4,713 $4,786 $4,936 $5,013
21 $4,786 $4,860 $5,013 $5,094
22 $4,860 $4,936 $5,094 $5,195
23 $4,936 $5,013 $5,195 $5,299
24 $5,013 $5,094 $5,299 $5,406
25 $5,094 $5,195 $5,406 $5,514
26 $5,195 $5,299 $5,514 $5,624
27 $5,299 $5,406 $5,624 $5,736
28 $5,406 $5,514 $5,736 $5,851
29 $5,514 $5,624 $5,851 $5,969
30 $5,624 $5,736 $5,969 $6,087
31 $5,736 $5,851 $6,087 $6,210
32 $5,851 $5,969 $6,210 $6,334
33 $5,969 $6,087 $6,334 $6,461
34 $6,087 $6,210 $6,461 $6,590
35 $6,210 $6,334 $6,590 $6,721
36 $6,334 $6,461 $6,721 $6,855
37 $6,461 $6,590 $6,855 $6,992
38 $6,590 $6,721 $6,992 $7,132
39 $6,855 $7,132 $7,274
40 $6,992 $7,274 $7,420
41 $7,420 $7,568
SECTION 7.2.(c) The appropriate classification for placement of principals and assistant principals on the salary schedule, except for principals in alternative schools and in cooperative innovative high schools, shall be determined in accordance with the following schedule:
Number of Teachers
Classification Supervised
Assistant Principal
Principal I Fewer than 11 Teachers
Principal II 11‑21 Teachers
Principal III 22‑32 Teachers
Principal IV 33‑43 Teachers
Principal V 44‑54 Teachers
Principal VI 55‑65 Teachers
Principal VII 66‑100 Teachers
Principal VIII More than 100 Teachers
The number of teachers supervised includes teachers and assistant principals paid from State funds only; it does not include teachers or assistant principals paid from non‑State funds or the principal or teacher assistants.
The beginning classification for principals in alternative schools and in cooperative innovative high school programs shall be the Principal III level. Principals in alternative schools who supervise 33 or more teachers shall be classified according to the number of teachers supervised.
SECTION 7.2.(d) A principal shall be placed on the step on the salary schedule that reflects total number of years of experience as a certificated employee of the public schools and an additional step for every three years of experience as a principal. A principal or assistant principal shall also continue to receive any additional State‑funded percentage increases earned for the 1997‑1998, 1998‑1999, and 1999‑2000 school years for improvement in student performance or maintaining a safe and orderly school.
SECTION 7.2.(e) Principals and 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 7.2.(f) Longevity pay for principals and assistant principals shall be as provided for State employees under the State Personnel Act.
SECTION 7.2.(g) If a principal is reassigned to a higher job classification because the principal is transferred to a school within a local school administrative unit with a larger number of State‑allotted teachers, the principal shall be placed on the salary schedule as if the principal had served the principal's entire career as a principal at the higher job classification.
If a principal is reassigned to a lower job classification because the principal is transferred to a school within a local school administrative unit with a smaller number of State‑allotted teachers, the principal shall be placed on the salary schedule as if the principal had served the principal's entire career as a principal at the lower job classification.
This subsection applies to all transfers on or after the effective date of this section, except transfers in school systems that have been created, or will be created, by merging two or more school systems. Transfers in these merged systems are exempt from the provisions of this subsection for one calendar year following the date of the merger.
SECTION 7.2.(h) Participants in an approved full‑time masters 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 masters program. For the 2005‑2006 fiscal year and subsequent fiscal years, the stipend shall not exceed the difference between the beginning salary of an assistant principal 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 masters in school administration program shall supply the Department of Public Instruction with certification of eligible full‑time interns.
SECTION 7.2.(i) During the 2005‑2006 fiscal year, the placement on the salary schedule of an administrator with a one‑year provisional assistant principal's certificate shall be at the entry‑level salary for an assistant principal or the appropriate step on the teacher salary schedule, whichever is higher.
SECTION 7.3.(a) The monthly salary ranges that follow apply to assistant superintendents, associate superintendents, directors/coordinators, supervisors, and finance officers for the 2005‑2006 fiscal year, beginning July 1, 2005.
School Administrator I $2,932 $5,506
School Administrator II $3,112 $5,840
School Administrator III $3,303 $6,195
School Administrator IV $3,436 $6,442
School Administrator V $3,574 $6,702
School Administrator VI $3,792 $7,108
School Administrator VII $3,945 $7,394
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 7.3.(b) The monthly salary ranges that follow apply to public school superintendents for the 2005‑2006 fiscal year, beginning July 1, 2005.
Superintendent I $4,187 $7,844
Superintendent II $4,445 $8,318
Superintendent III $4,716 $8,825
Superintendent IV $5,005 $9,360
Superintendent V $5,312 $9,931
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 7.3.(c) Longevity pay for superintendents, assistant superintendents, associate superintendents, directors/coordinators, supervisors, and finance officers shall be as provided for State employees under the State Personnel Act.
SECTION 7.3.(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 7.3.(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 7.3.(f) The annual salary increase for all permanent full‑time personnel paid from the Central Office Allotment who work a nine‑, 10‑, 11‑, or 12‑month work year schedule shall be the greater of eight hundred fifty dollars ($850.00) or two percent (2%), commencing July 1, 2005. The State Board of Education shall allocate these funds to local school administrative units. The local boards of education shall establish guidelines for providing salary increases to these personnel.
SECTION 7.4.(a) The annual salary increase for permanent, full‑time noncertified public school employees whose salaries are supported from the State's General Fund shall be the greater of eight hundred fifty dollars ($850.00) or two percent (2%), commencing July 1, 2005.
SECTION 7.4.(b) Local boards of education shall increase the rates of pay for such employees who were employed for all or part of fiscal year 2004‑2005 and who continue their employment for fiscal year 2005‑2006 by providing an annual salary increase for employees of the greater of eight hundred fifty dollars ($850.00) or two percent (2%).
For part‑time employees, the pay increase shall be pro rata based on the number of hours worked.
SECTION 7.4.(c) The State Board of Education may adopt salary ranges for noncertified personnel to support increases of the greater of eight hundred fifty dollars ($850.00) or two percent (2%) for the 2005‑2006 fiscal year.
SECTION 7.4.(d) For the 2005‑2006 fiscal year, permanent full‑time employees who work a nine‑, 10‑, 11‑, or 12‑month work year schedule shall receive the eight hundred fifty dollars ($850.00) or the two percent (2%) annual increase provided by this act, whichever is greater.
BONUS FOR CERTIFIED PERSONNEL AT THE TOP OF THEIR SALARY SCHEDULES
SECTION 7.5. Effective July 1, 2005, any permanent certified personnel employed on July 1, 2003, and paid on the teacher salary schedule with 29+ years of experience shall receive a one‑time bonus equivalent to the average increase of the 26 to 29 year steps. Effective July 1, 2005, any permanent personnel employed on July 1, 2004, and paid at the top of the principal and assistant principal salary schedule shall receive a one‑time bonus equivalent to two percent (2%).
For permanent part‑time personnel, the one‑time bonus shall be adjusted pro rata. Personnel defined under G.S. 115C‑325(a)(5a) are not eligible to receive the bonus.
SUPPLEMENTAL FUNDING IN LOW‑WEALTH COUNTIES
SECTION 7.6.(a) Funds for Supplemental Funding. – The General Assembly finds that it is appropriate to provide supplemental funds in low‑wealth counties to allow those counties to enhance the instructional program and student achievement. Therefore, funds are appropriated to State Aid to Local School Administrative Units for the 2005‑2006 fiscal year and the 2006‑2007 fiscal year to be used for supplemental funds for the schools.
SECTION 7.6.(b) Use of Funds for Supplemental Funding. – All funds received pursuant to this section shall be used only: (i) to provide instructional positions, instructional support positions, teacher assistant positions, clerical positions, school computer technicians, instructional supplies and equipment, staff development, and textbooks; (ii) for salary supplements for instructional personnel and instructional support personnel; and (iii) to pay an amount not to exceed ten thousand dollars ($10,000) of the plant operation contract cost charged by the Department of Public Instruction for services.
Local boards of education are encouraged to use at least twenty‑five percent (25%) of the funds received pursuant to this section to improve the academic performance of children who are performing at Level I or II on either reading or mathematics end‑of‑grade tests in grades 3‑8 and children who are performing at Level I or II on the writing tests in grades 4 and 7. Local boards of education shall report to the State Board of Education on an annual basis on funds used for this purpose, and the State Board shall report this information to the Joint Legislative Education Oversight Committee. These reports shall specify how these funds were targeted and used to implement specific improvement strategies of each local school administrative unit and its schools, such as teacher recruitment, closing the achievement gap, improving student accountability, addressing the needs of at‑risk students, and establishing and maintaining safe schools.
SECTION 7.6.(c) Definitions. – As used in this section:
(1) "Anticipated county property tax revenue availability" means the county‑adjusted property tax base multiplied by the effective State average tax rate.
(2) "Anticipated total county revenue availability" means the sum of the:
a. Anticipated county property tax revenue availability,
b. Local sales and use taxes received by the county that are levied under Chapter 1096 of the 1967 Session Laws or under Subchapter VIII of Chapter 105 of the General Statutes,
c. Sales tax hold harmless reimbursement received by the county under G.S. 105‑521, and
d. Fines and forfeitures deposited in the county school fund for the most recent year for which data are available.
(3) "Anticipated total county revenue availability per student" means the anticipated total county revenue availability for the county divided by the average daily membership of the county.
(4) "Anticipated State average revenue availability per student" means the sum of all anticipated total county revenue availability divided by the average daily membership for the State.
(5) "Average daily membership" means average daily membership as defined in the North Carolina Public Schools Allotment Policy Manual, adopted by the State Board of Education. If a county contains only part of a local school administrative unit, the average daily membership of that county includes all students who reside within the county and attend that local school administrative unit.
(6) "County‑adjusted property tax base" shall be computed as follows:
a. Subtract the present‑use value of agricultural land, horticultural land, and forestland in the county, as defined in G.S. 105‑277.2, from the total assessed real property valuation of the county,
b. Adjust the resulting amount by multiplying by a weighted average of the three most recent annual sales assessment ratio studies,
c. Add to the resulting amount the:
1. Present‑use value of agricultural land, horticultural land, and forestland, as defined in G.S. 105‑277.2,
2. Value of property of public service companies, determined in accordance with Article 23 of Chapter 105 of the General Statutes, and
3. Personal property value for the county.
(7) "County‑adjusted property tax base per square mile" means the county‑adjusted property tax base divided by the number of square miles of land area in the county.
(8) "County wealth as a percentage of State average wealth" shall be computed as follows:
a. Compute the percentage that the county per capita income is of the State per capita income and weight the resulting percentage by a factor of five‑tenths,
b. Compute the percentage that the anticipated total county revenue availability per student is of the anticipated State average revenue availability per student and weight the resulting percentage by a factor of four‑tenths,
c. Compute the percentage that the county‑adjusted property tax base per square mile is of the State‑adjusted property tax base per square mile and weight the resulting percentage by a factor of one‑tenth,
d. Add the three weighted percentages to derive the county wealth as a percentage of the State average wealth.
(9) "Effective county tax rate" means the actual county tax rate multiplied by a weighted average of the three most recent annual sales assessment ratio studies.
(10) "Effective State average tax rate" means the average of effective county tax rates for all counties.
(10a) "Local current expense funds" means the most recent county current expense appropriations to public schools, as reported by local boards of education in the audit report filed with the Secretary of the Local Government Commission pursuant to G.S. 115C‑447.
(11) "Per capita income" means the average for the most recent three years for which data are available of the per capita income according to the most recent report of the United States Department of Commerce, Bureau of Economic Analysis, including any reported modifications for prior years as outlined in the most recent report.
(12) "Sales assessment ratio studies" means sales assessment ratio studies performed by the Department of Revenue under G.S. 105‑289(h).
(13) "State average current expense appropriations per student" means the most recent State total of county current expense appropriations to public schools, as reported by local boards of education in the audit report filed with the Secretary of the Local Government Commission pursuant to G.S. 115C‑447.
(14) "State average adjusted property tax base per square mile" means the sum of the county‑adjusted property tax bases for all counties divided by the number of square miles of land area in the State.
(14a) "Supplant" means to decrease local per student current expense appropriations from one fiscal year to the next fiscal year.
(15) "Weighted average of the three most recent annual sales assessment ratio studies" means the weighted average of the three most recent annual sales assessment ratio studies in the most recent years for which county current expense appropriations and adjusted property tax valuations are available. If real property in a county has been revalued one year prior to the most recent sales assessment ratio study, a weighted average of the two most recent sales assessment ratios shall be used. If property has been revalued the year of the most recent sales assessment ratio study, the sales assessment ratio for the year of revaluation shall be used.
SECTION 7.6.(d) Eligibility for Funds. – Except as provided in subsection (h) of this section, the State Board of Education shall allocate these funds to local school administrative units located in whole or in part in counties in which the county wealth as a percentage of the State average wealth is less than one hundred percent (100%).
SECTION 7.6.(e) Allocation of Funds. – Except as provided in subsection (g) of this section, the amount received per average daily membership for a county shall be the difference between the State average current expense appropriations per student and the current expense appropriations per student that the county could provide given the county's wealth and an average effort to fund public schools. (To derive the current expense appropriations per student that the county could be able to provide given the county's wealth and an average effort to fund public schools, multiply the county wealth as a percentage of State average wealth by the State average current expense appropriations per student.)
The funds for the local school administrative units located in whole or in part in the county shall be allocated to each local school administrative unit located in whole or in part in the county based on the average daily membership of the county's students in the school units.
If the funds appropriated for supplemental funding are not adequate to fund the formula fully, each local school administrative unit shall receive a pro rata share of the funds appropriated for supplemental funding.
SECTION 7.6.(f) Formula for Distribution of Supplemental Funding Pursuant to This Section Only. – The formula in this section is solely a basis for distribution of supplemental funding for low‑wealth counties and is not intended to reflect any measure of the adequacy of the educational program or funding for public schools. The formula is also not intended to reflect any commitment by the General Assembly to appropriate any additional supplemental funds for low‑wealth counties.
SECTION 7.6.(g) Minimum Effort Required. – Counties that had effective tax rates in the 1996‑1997 fiscal year that were above the State average effective tax rate but that had effective rates below the State average in the 1997‑1998 fiscal year or thereafter shall receive reduced funding under this section. This reduction in funding shall be determined by subtracting the amount that the county would have received pursuant to Section 17.1(g) of Chapter 507 of the 1995 Session Laws from the amount that the county would have received if qualified for full funding and multiplying the difference by ten percent (10%). This method of calculating reduced funding shall apply one time only.
This method of calculating reduced funding shall not apply in cases in which the effective tax rate fell below the statewide average effective tax rate as a result of a reduction in the actual property tax rate. In these cases, the minimum effort required shall be calculated in accordance with Section 17.1(g) of Chapter 507 of the 1995 Session Laws.
If the county documents that it has increased the per student appropriation to the school current expense fund in the current fiscal year, the State Board of Education shall include this additional per pupil appropriation when calculating minimum effort pursuant to Section 17.1(g) of Chapter 507 of the 1995 Session Laws.
SECTION 7.6.(h) Nonsupplant Requirement. – A county in which a local school administrative unit receives funds under this section shall use the funds to supplement local current expense funds and shall not supplant local current expense funds. For the 2005‑2007 fiscal biennium, the State Board of Education shall not allocate funds under this section to a county found to have used these funds to supplant local per student current expense funds. The State Board of Education shall make a finding that a county has used these funds to supplant local current expense funds in the prior year, or the year for which the most recent data are available, if:
(1) The current expense appropriation per student of the county for the current year is less than ninety‑five percent (95%) of the average of the local current expense appropriations per student for the three prior fiscal years; and
(2) The county cannot show: (i) that it has remedied the deficiency in funding or (ii) that extraordinary circumstances caused the county to supplant local current expense funds with funds allocated under this section.
The State Board of Education shall adopt rules to implement this section.
SECTION 7.6.(i) Reports. – The State Board of Education shall report to the Joint Legislative Education Oversight Committee prior to May 1, 2006, if it determines that counties have supplanted funds.
SECTION 7.6.(j) Department of Revenue Reports. – The Department of Revenue shall provide to the Department of Public Instruction a preliminary report for the current fiscal year of the assessed value of the property tax base for each county prior to March 1 of each year and a final report prior to May 1 of each year. The reports shall include for each county the annual sales assessment ratio and the taxable values of (i) total real property, (ii) the portion of total real property represented by the present‑use value of agricultural land, horticultural land, and forestland as defined in G.S. 105‑277.2, (iii) property of public service companies determined in accordance with Article 23 of Chapter 105 of the General Statutes, and (iv) personal property.
SMALL SCHOOL SYSTEM SUPPLEMENTAL FUNDING
SECTION 7.7.(a) Funds for Small School Systems. – Except as provided in subsection (b) of this section, the State Board of Education shall allocate funds appropriated for small school system supplemental funding (i) to each county school administrative unit with an average daily membership of fewer than 3,175 students and (ii) to each county school administrative unit with an average daily membership from 3,175 to 4,000 students if the county in which the local school administrative unit is located has a county‑adjusted property tax base per student that is below the State‑adjusted property tax base per student and if the total average daily membership of all local school administrative units located within the county is from 3,175 to 4,000 students. The allocation formula shall:
(1) Round all fractions of positions to the next whole position.
(2) Provide five and one‑half additional regular classroom teachers in counties in which the average daily membership per square mile is greater than four, and seven additional regular classroom teachers in counties in which the average daily membership per square mile is four or fewer.
(3) Provide additional program enhancement teachers adequate to offer the standard course of study.
(4) Change the duty‑free period allocation to one teacher assistant per 400 average daily membership.
(5) Provide a base for the consolidated funds allotment of at least seven hundred forty thousand seventy‑four dollars ($740,074), excluding textbooks for the 2005‑2006 fiscal year and a base of seven hundred forty thousand seventy‑four dollars ($740,074) for the 2006‑2007 fiscal year.
(6) Allot vocational education funds for grade 6 as well as for grades 7‑12.
If funds appropriated for each fiscal year for small school system supplemental funding are not adequate to fully fund the program, the State Board of Education shall reduce the amount allocated to each county school administrative unit on a pro rata basis. This formula is solely a basis for distribution of supplemental funding for certain county school administrative units and is not intended to reflect any measure of the adequacy of the educational program or funding for public schools. The formula is also not intended to reflect any commitment by the General Assembly to appropriate any additional supplemental funds for such county administrative units.
SECTION 7.7.(b) Nonsupplant Requirement. – A county in which a local school administrative unit receives funds under this section shall use the funds to supplement local current expense funds and shall not supplant local current expense funds. For the 2005‑2007 fiscal biennium, the State Board of Education shall not allocate funds under this section to a county found to have used these funds to supplant local per student current expense funds. The State Board of Education shall make a finding that a county has used these funds to supplant local current expense funds in the prior year, or the year for which the most recent data are available, if:
(1) The current expense appropriation per student of the county for the current year is less than ninety‑five percent (95%) of the average of the local current expense appropriations per student for the three prior fiscal years; and
(2) The county cannot show: (i) that it has remedied the deficiency in funding or (ii) that extraordinary circumstances caused the county to supplant local current expense funds with funds allocated under this section.
The State Board of Education shall adopt rules to implement this section.
SECTION 7.7.(c) Phase‑Out Provisions. – If a local school administrative unit becomes ineligible for funding under this formula because of (i) an increase in the population of the county in which the local school administrative unit is located or (ii) an increase in the county‑adjusted property tax base per student of the county in which the local school administrative unit is located, funding for that unit shall be continued for five years after the unit becomes ineligible.
SECTION 7.7.(d) Definitions. – As used in this section:
(1) "Average daily membership" means within two percent (2%) of the average daily membership as defined in the North Carolina Public Schools Allotment Policy Manual adopted by the State Board of Education.
(2) "County‑adjusted property tax base per student" means the total assessed property valuation for each county, adjusted using a weighted average of the three most recent annual sales assessment ratio studies, divided by the total number of students in average daily membership who reside within the county.
(2a) "Local current expense funds" means the most recent county current expense appropriations to public schools, as reported by local boards of education in the audit report filed with the Secretary of the Local Government Commission pursuant to G.S. 115C‑447.
(3) "Sales assessment ratio studies" means sales assessment ratio studies performed by the Department of Revenue under G.S. 105‑289(h).
(4) "State‑adjusted property tax base per student" means the sum of all county‑adjusted property tax bases divided by the total number of students in average daily membership who reside within the State.
(4a) "Supplant" means to decrease local per student current expense appropriations from one fiscal year to the next fiscal year.
(5) "Weighted average of the three most recent annual sales assessment ratio studies" means the weighted average of the three most recent annual sales assessment ratio studies in the most recent years for which county current expense appropriations and adjusted property tax valuations are available. If real property in a county has been revalued one year prior to the most recent sales assessment ratio study, a weighted average of the two most recent sales assessment ratios shall be used. If property has been revalued during the year of the most recent sales assessment ratio study, the sales assessment ratio for the year of revaluation shall be used.
SECTION 7.7.(e) Reports. – The State Board of Education shall report to the Joint Legislative Education Oversight Committee prior to May 1, 2006, if it determines that counties have supplanted funds.
SECTION 7.7.(f) Use of Funds. – Local boards of education are encouraged to use at least twenty percent (20%) of the funds they receive pursuant to this section to improve the academic performance of children who are performing at Level I or II on either reading or mathematics end‑of‑grade tests in grades 3‑8 and children who are performing at Level I or II on the writing tests in grades 4 and 7. Local boards of education shall report to the State Board of Education on an annual basis on funds used for this purpose, and the State Board shall report this information to the Joint Legislative Education Oversight Committee. These reports shall specify how these funds were targeted and used to implement specific improvement strategies of each local school administrative unit and its schools such as teacher recruitment, closing the achievement gap, improving student accountability, addressing the needs of at‑risk students, and establishing and maintaining safe schools.
DISADVANTAGED STUDENT SUPPLEMENTAL FUNDING
SECTION 7.8.(a) Funds are appropriated in this act to address the capacity needs of local school administrative units to meet the needs of disadvantaged students. Each local school administrative unit shall use funds allocated to it for disadvantaged student supplemental funding to implement a plan jointly developed by the unit and the LEA Assistance Program team. The plan shall be based upon the needs of students in the unit not achieving grade‑level proficiency. The plan shall detail how these funds shall be used in conjunction with all other supplemental funding allotments such as Low‑Wealth, Small County, At‑Risk Student Services/Alternative Schools, and Improving Student Accountability, to provide instructional and other services that meet the educational needs of these students. Prior to the allotment of disadvantaged student supplemental funds, the plan shall be approved by the State Board of Education.
Funds received for disadvantaged student supplemental funding shall be used, consistent with the policies and procedures adopted by the State Board of Education, only to:
(1) Provide instructional positions or instructional support positions and/or professional development;
(2) Provide intensive in‑school and/or after‑school remediation;
(3) Purchase diagnostic software and progress‑monitoring tools; and
(4) Provide funds for teacher bonuses and supplements. The State Board of Education shall set a maximum percentage of the funds that may be used for this purpose.
The State Board of Education may require districts receiving funding under the Disadvantaged Student Supplemental Fund to purchase the Education Value Added Assessment System in order to provide in‑depth analysis of student performance and help identify strategies for improving student achievement. This data shall be used exclusively for instructional and curriculum decisions made in the best interest of children and for professional development for their teachers and administrators.
SECTION 7.8.(b) Funds are appropriated in this act to evaluate the Disadvantaged Student Supplemental Funding Initiatives and Low‑Wealth Initiatives. The State Board of Education shall use these funds to:
(1) Evaluate the strategies implemented by local school administrative units with Disadvantaged Student Supplemental Funds and Low‑Wealth Funds and assess their impact on student performance; and
(2) Evaluate the efficiency and effectiveness of the technical assistance and support provided to local school administrative units by the Department of Public Instruction.
The State Board of Education shall report the results of the evaluation to the Office of State Budget and Management, the Joint Legislative Education Oversight Committee, and the Fiscal Research Division by February 15, 2006, and by January 15 of each subsequent year.
STUDENTS WITH LIMITED ENGLISH PROFICIENCY
SECTION 7.9.(a) The State Board of Education shall develop guidelines for identifying and providing services to students with limited proficiency in the English language.
The State Board shall allocate these funds to local school administrative units and to charter schools under a formula that takes into account the average percentage of students in the units or the charters over the past three years who have limited English proficiency. The State Board shall allocate funds to a unit or a charter school only if (i) average daily membership of the unit or the charter school includes at least 20 students with limited English proficiency or (ii) students with limited English proficiency comprise at least two and one‑half percent (2.5%) of the average daily membership of the unit or charter school. For the portion of the funds that is allocated on the basis of the number of identified students, the maximum number of identified students for whom a unit or charter school receives funds shall not exceed ten and six‑tenths percent (10.6%) of its average daily membership.
Local school administrative units shall use funds allocated to them to pay for classroom teachers, teacher assistants, tutors, textbooks, classroom materials/instructional supplies/equipment, transportation costs, and staff development of teachers for students with limited English proficiency.
A county in which a local school administrative unit receives funds under this section shall use the funds to supplement local current expense funds and shall not supplant local current expense funds.
Students in the head count shall be assessed at least once every three years to determine their level of English proficiency. A student who scores "superior" on the standard English language proficiency assessment instrument used in this State shall not be included in the head count of students with limited English proficiency.
FLEXIBILITY FOR THE HIGHEST PRIORITY ELEMENTARY SCHOOLS
SECTION 7.10. The State Board of Education may allow high priority schools that have made high growth for three consecutive years to be removed from the list of high priority schools. If a local board of education chooses to have a school removed from the list of high priority schools, the additional high priority funding for that school shall be discontinued.
AT‑RISK STUDENT SERVICES/ALTERNATIVE SCHOOLS
SECTION 7.11. The State Board of Education may use up to two hundred thousand dollars ($200,000) of the funds in the Alternative Schools/At‑Risk Student allotment each year for the 2005‑2006 fiscal year and for the 2006‑2007 fiscal year to implement G.S. 115C‑12(24).
FUNDS FOR CHILDREN WITH DISABILITIES
SECTION 7.12. The State Board of Education shall allocate funds for children with disabilities on the basis of two thousand eight hundred thirty‑eight dollars and thirty‑nine cents ($2,838.39) per child for a maximum of 168,602 children for the 2005‑2006 school year. 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 five‑tenths percent (12.5%) of the 2005‑2006 allocated average daily membership in the local school administrative unit.
The dollar amounts allocated under this section for children with disabilities shall also adjust 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 7.13. The State Board of Education shall allocate funds for academically or intellectually gifted children on the basis of nine hundred twenty‑six dollars and fifty‑five cents ($926.55) per child. A local school administrative unit shall receive funds for a maximum of four percent (4%) of its 2005‑2006 allocated average daily membership, regardless of the number of children identified as academically or intellectually gifted in the unit. The State Board shall allocate funds for no more than 55,895 children for the 2005‑2006 school year.
The dollar amounts allocated under this section for academically or intellectually gifted children shall also adjust in accordance with legislative salary increments, retirement rate adjustments, and health benefit adjustments for personnel who serve academically or intellectually gifted children.
EXPENDITURE OF FUNDS TO IMPROVE STUDENT ACCOUNTABILITY
The principal of a school receiving these funds, in consultation with the faculty and the site‑based management team, shall implement plans for expending these funds to improve the performance of students.
Local boards of education are encouraged to use federal funds such as Title I Comprehensive School Reform Development Funds and to examine the use of State funds to ensure that every student is performing at or above grade level in reading and mathematics.
These funds shall be allocated to local school administrative units for the 2005‑2006 fiscal year within 30 days of the date this act becomes law.
SECTION 7.15. The State Board of Education may expend up to five hundred thousand dollars ($500,000) each year for the 2005‑2006 and 2006‑2007 fiscal years from unexpended funds for certified employees' salaries to pay expenses related to pending litigation.
BASE BUDGET REDUCTION TO DEPARTMENT OF PUBLIC INSTRUCTION
SECTION 7.16. Notwithstanding any other provision of law, the Department of Public Instruction may use salary reserve funds and other funds and may transfer funds within the Department's continuation budget to implement budget reductions for the 2005‑2006 fiscal year.
REPLACEMENT SCHOOL BUSES FUNDS
(1) The local board of education shall use the funds only to make the first, second, or third year's payment on a financing contract entered into pursuant to G.S. 115C‑528.
(2) The term of a financing contract entered into under this section shall not exceed three years.
(3) The local board of education shall purchase the buses only from vendors selected by the State Board of Education and on terms approved by the State Board of Education.
(4) The Department of Administration, Division of Purchase and Contract, in cooperation with the State Board of Education, shall solicit bids for the direct purchase of school buses and activity buses and shall establish a statewide term contract for use by the State Board of Education. Local boards of education and other agencies shall be eligible to purchase from the statewide term contract. The State Board of Education shall also solicit bids for the financing of school buses.
(5) A bus financed pursuant to this section shall meet all federal motor vehicle safety regulations for school buses.
(6) Any other condition the State Board of Education considers appropriate.
EXPENDITURES FOR DRIVING ELIGIBILITY CERTIFICATES
SECTION 7.18. G.S. 115C‑12(28) reads as rewritten:
"§ 115C‑12. Powers and duties of the Board generally.
The general supervision and administration of the free public school system shall be vested in the State Board of Education. The State Board of Education shall establish policy for the system of free public schools, subject to laws enacted by the General Assembly. The powers and duties of the State Board of Education are defined as follows:
…
(28) Duty to Develop Rules for Issuance of Driving Eligibility Certificates. – The State Board of Education shall adopt the following rules to assist schools in their administration of procedures necessary to implement G.S. 20‑11 and G.S. 20‑13.2:
a. To define what is equivalent to a high school diploma for the purposes of G.S. 20‑11 and G.S. 20‑13.2. These rules shall apply to all educational programs offered in the State by public schools, charter schools, nonpublic schools, or community colleges.
b. To establish the procedures a person who is or was enrolled in a public school or in a charter school must follow and the requirements that person shall meet to obtain a driving eligibility certificate.
c. To require the person who is required under G.S. 20‑11(n) to sign the driving eligibility certificate to provide the certificate if he or she determines that one of the following requirements is met:
1. The person seeking the certificate is eligible for the certificate under G.S. 20‑11(n)(1) and is not subject to G.S. 20‑11(n1).
2. The person seeking the certificate is eligible for the certificate under G.S. 20‑11(n)(1) and G.S. 20‑11(n1).
These rules shall apply to public schools and charter schools.
d. To provide for an appeal to an appropriate education authority by a person who is denied a driving eligibility certificate. These rules shall apply to public schools and charter schools.
e. To define exemplary student behavior and to define what constitutes the successful completion of a drug or alcohol treatment counseling program. These rules shall apply to public schools and charter schools.
The State Board also shall develop policies as to when it is appropriate to notify the Division of Motor Vehicles that a person who is or was enrolled in a public school or in a charter school no longer meets the requirements for a driving eligibility certificate.
The State Board shall develop a form for parents, guardians, or emancipated juveniles, as appropriate, to provide their written, irrevocable consent for a school to disclose to the Division of Motor Vehicles that the student no longer meets the conditions for a driving eligibility certificate under G.S. 20‑11(n)(1) or G.S. 20‑11(n1), if applicable, in the event that this disclosure is necessary to comply with G.S. 20‑11 or G.S. 20‑13.2. Other than identifying under which statutory subsection the student is no longer eligible, no other details or information concerning the student's school record shall be released pursuant to this consent. This form shall be used for students enrolled in public schools or charter schools.
The State Board of Education may use funds appropriated for drivers education to cover the costs of driving eligibility certificates."
DISCREPANCIES BETWEEN ANTICIPATED AND ACTUAL ADM
The allotments reduced pursuant to this subsection shall include only those allotments that may be increased pursuant to the Allotment Adjustments for ADM Growth provisions of the North Carolina Public Schools Allotment Policy Manual.
CHARTER SCHOOL ADVISORY COMMITTEE/CHARTER SCHOOL EVALUATION
SECTION 7.20. The State Board of Education may spend up to fifty thousand dollars ($50,000) a year from State Aid to Local School Administrative Units for the 2005‑2006 and 2006‑2007 fiscal years to continue support of a charter school advisory committee and to continue to evaluate charter schools.
MENTOR TEACHER FUNDS MAY BE USED FOR FULL‑TIME MENTORS
SECTION 7.21.(a) The State Board of Education shall grant flexibility to a local board of education regarding the use of mentor funds to provide mentoring support, provided the local board submits a detailed plan on the use of the funds to the State Board and the State Board approves that plan. The plan shall include information on how all mentors in the local school administrative unit have been or will be adequately trained to provide mentoring support.
Local boards of education shall use funds allocated for mentor teachers to provide mentoring support to all State‑paid newly certified teachers, second‑year teachers who were assigned mentors during the prior school year, and entry‑level instructional support personnel who have not previously been teachers.
SECTION 7.21.(b) The State Board, after consultation with the Professional Teaching Standards Commission, shall adopt standards for mentor training.
SECTION 7.21.(c) Each local board of education with a plan approved pursuant to subsection (a) of this section shall report to the State Board on the impact of its mentor program on teacher retention. The State Board shall analyze these reports to determine the characteristics of mentor programs that are most effective in retaining teachers and shall report its findings to the Joint Legislative Education Oversight Committee by October 15, 2006.
VISITING INTERNATIONAL EXCHANGE TEACHERS
SECTION 7.22.(a) G.S. 115C‑105.25(b) is amended by adding a new subdivision to read:
"(5a) Positions allocated for classroom teachers may be converted to dollar equivalents to contract for visiting international exchange teachers. These positions shall be converted at the statewide average salary for classroom teachers, including benefits. The converted funds shall be used only to cover the costs associated with bringing visiting international exchange teachers to the local school administrative unit through a State‑approved visiting international exchange teacher program and supporting the visiting exchange teachers."
SECTION 7.22.(b) The Visiting International Faculty Program is a State‑approved visiting international exchange teacher program.
FUNDS TO IMPLEMENT THE ABCS OF PUBLIC EDUCATION
(1) Incentive awards in schools that achieve higher than expected improvements may be:
a. Up to one thousand five hundred dollars ($1,500) for each teacher and for certified personnel; and
b. Up to five hundred dollars ($500.00) for each teacher assistant.
(2) Incentive awards in schools that meet the expected improvements may be:
a. Up to seven hundred fifty dollars ($750.00) for each teacher and for certified personnel; and
b. Up to three hundred seventy‑five dollars ($375.00) for each teacher assistant.
SECTION 7.23.(b) The State Board of Education may use funds appropriated to the State Public School Fund for assistance teams to low‑performing schools.
SECTION 7.24. Of the funds appropriated to the State Public School Fund, the State Board of Education shall use five hundred thousand dollars ($500,000) for the 2005‑2006 fiscal year and five hundred thousand dollars ($500,000) for the 2006‑2007 fiscal year to provide assistance to the State's low‑performing Local School Administrative Units (LEAs) and to assist schools in meeting adequate yearly progress in each subgroup identified in the No Child Left Behind Act of 2001. The State Board of Education shall report to the Office of State Budget and Management, the Fiscal Research Division, and the Joint Legislative Education Oversight Committee on the expenditure of these funds by May 15, 2006, and by December 15, 2007. The report shall contain: (i) the criteria for selecting LEAs and schools to receive assistance, (ii) measurable goals and objectives for the assistance program, (iii) an explanation of the assistance provided, (iv) findings from the assistance program, (v) actual expenditures by category, (vi) recommendations for the continuance of this program, and (vii) any other information the State Board deems necessary. These funds shall not revert at the end of each fiscal year but shall remain available until expended for this purpose.
FUNDS FOR THE TESTING AND IMPLEMENTATION OF THE NEW STUDENT INFORMATION SYSTEM
SECTION 7.25.(a) Funds appropriated for the Uniform Education Reporting System shall not revert at the end of the 2005‑2006 and 2006‑2007 fiscal years but shall remain available until expended.
SECTION 7.25.(b) This section becomes effective June 30, 2005.
LEA SALES TAX REFUND REPORTING
SECTION 7.27.(a) G.S. 105‑164.14(c) reads as rewritten:
"(c) Certain Governmental Entities. – A governmental entity listed in this subsection is allowed an annual refund of sales and use taxes paid by it under this Article on direct purchases of tangible personal property and services, other than electricity and telecommunications service. Sales and use tax liability indirectly incurred by a governmental entity on building materials, supplies, fixtures, and equipment that become a part of or annexed to any building or structure that is owned or leased by the governmental entity and is being erected, altered, or repaired for use by the governmental entity is considered a sales or use tax liability incurred on direct purchases by the governmental entity for the purpose of this subsection. A request for a refund must be in writing and must include any information and documentation required by the Secretary. A request for a refund is due within six months after the end of the governmental entity's fiscal year. The Secretary shall make an annual report to the Department of Public Instruction and the Fiscal Research Division of the General Assembly by March 1 of the amount of refunds, identified by taxpayer, claimed under subdivisions (2b) and (2c) of this subsection over the preceding year.
This subsection applies only to the following governmental entities:
(1) A county.
(2) A city as defined in G.S. 160A‑1.
(2a) A consolidated city‑county as defined in G.S. 160B‑2.
(2b) A local school administrative unit.
(2c) A joint agency created by interlocal agreement among local school administrative units pursuant to G.S. 160A‑462 to jointly purchase food service‑related materials, supplies, and equipment on their behalf.
(3) A metropolitan sewerage district or a metropolitan water district in this State.
(4) A water and sewer authority created under Chapter 162A of the General Statutes.
(5) A lake authority created by a board of county commissioners pursuant to an act of the General Assembly.
(6) A sanitary district.
(7) A regional solid waste management authority created pursuant to G.S. 153A‑421.
(8) An area mental health, developmental disabilities, and substance abuse authority, other than a single‑county area authority, established pursuant to Article 4 of Chapter 122C of the General Statutes.
(9) A district health department, or a public health authority created pursuant to Part 1A of Article 2 of Chapter 130A of the General Statutes.
(10) A regional council of governments created pursuant to G.S. 160A‑470.
(11) A regional planning and economic development commission or a regional economic development commission created pursuant to Chapter 158 of the General Statutes.
(12) A regional planning commission created pursuant to G.S. 153A‑391.
(13) A regional sports authority created pursuant to G.S. 160A‑479.
(14) A public transportation authority created pursuant to Article 25 of Chapter 160A of the General Statutes.
(14a) A facility authority created pursuant to Part 4 of Article 20 of Chapter 160A of the General Statutes.
(15) A regional public transportation authority created pursuant to Article 26 of Chapter 160A of the General Statutes, or a regional transportation authority created pursuant to Article 27 of Chapter 160A of the General Statutes.
(16) A local airport authority that was created pursuant to a local act of the General Assembly.
(17) A joint agency created by interlocal agreement pursuant to G.S. 160A‑462 to operate a public broadcasting television station.
(18) Repealed by Session Laws 2001‑474, s. 7, effective November 29, 2001.
(19) Repealed by Session Laws 2001‑474, s. 7, effective November 29, 2001.
(20) A constituent institution of The University of North Carolina, but only with respect to sales and use tax paid by it for tangible personal property or services that are eligible for refund under this subsection acquired by it through the expenditure of contract and grant funds.
(21) The University of North Carolina Health Care System.
(22) A regional natural gas district created pursuant to Article 28 of Chapter 160A of the General Statutes."
SECTION 7.27.(b) G.S. 105‑259(b) is amended by adding a new subdivision to read:
"(b) Disclosure Prohibited. – An officer, an employee, or an agent of the State who has access to tax information in the course of service to or employment by the State may not disclose the information to any other person unless the disclosure is made for one of the following purposes:
…
(32) To provide the report required under G.S. 105‑164.14(c) to the Department of Public Instruction and the Fiscal Research Division of the General Assembly."
SECTION 7.27.(c) In addition to the report required under G.S. 105‑164.14(c), as amended by this section, the Secretary of Revenue shall make a report to the Department of Public Instruction and the Fiscal Research Division of the General Assembly within 30 days after this act becomes law of the amount of refunds, identified by taxpayer, claimed under subdivisions (2b) and (2c) of G.S. 105‑164.14(c) during the 2002‑2003, 2003‑2004, and 2004‑2005 fiscal years.
REVIEW OF STANDARDS FOR MASTERS IN SCHOOL ADMINISTRATION PROGRAMS
SECTION 7.28. The State Board of Education, in consultation with the Board of Governors of The University of North Carolina, shall review standards for Masters in School Administration programs to ensure that appropriate competencies related to teacher retention, teacher evaluations, teacher support programs, and teacher effectiveness are included and emphasized.
EVALUATION OF SCHOOL PRINCIPALS
SECTION 7.29. Chapter 115C of the General Statutes is amended by adding a new section to read:
"§ 115C‑286.1. Evaluations of principals.
Local school administrative units shall evaluate all principals and assistant principals at least once each year. Either the superintendent or the superintendent's designee shall conduct the evaluations.
The State Board of Education shall ensure that the standards and criteria for the evaluations include the accountability measures of teacher retention, teacher support, and school climate. The State Board shall revise its evaluation instruments to include these measures. A local board shall use the performance standards and criteria adopted by the State Board unless the board develops an alternative evaluation that is properly validated and that includes standards and criteria similar to those adopted by the State Board."
SECTION 7.30. The State Board of Education shall report on best practices from North Carolina schools for providing a minimum of five hours per week within the instructional day for planning, collaborating with colleagues and parents, and professional development, especially within elementary school schedules. The State Board shall submit its report to the Education Cabinet and to the Joint Legislative Education Oversight Committee by January 15, 2006.
The State Board shall disseminate this information about best practices to schools and school systems across the State.
SECTION 7.32.(a) Funds are appropriated in this act for the Learn and Earn high school workforce development program. The purpose of the program is to create rigorous and relevant high school options that provide students with the opportunity and assistance to earn an associate degree or two years of college credit by the conclusion of the year after their senior year in high school. The State Board of Education shall work closely with the Education Cabinet and the New Schools Project in administering the program.
SECTION 7.32.(b) These funds shall be used to establish new high schools in which a local school administrative unit, two‑ and four‑year colleges and universities, and local employers work together to ensure that high school and postsecondary college curricula operate seamlessly and meet the needs of participating employers.
Funds shall not be allotted until Learn and Earn high schools are certified as operational.
SECTION 7.32.(c) During the first year of its operation, a high school established under G.S. 115C‑238.50 shall be allotted a principal regardless of the number of State‑paid teachers assigned to the school or the number of students enrolled in the school. The budget flexibility authorized by G.S. 115C‑105.25 does not apply to these positions.
SECTION 7.32.(d) The State Board of Education, in consultation with the State Board of Community Colleges and The University of North Carolina Board of Governors, shall conduct an annual evaluation of this program. The evaluation shall include measures as identified in G.S. 115C‑238.55. It shall also include: (i) an accounting of how funds and personnel resources were utilized and their impact on student achievement, retention, and employability; (ii) recommended statutory and policy changes; and (iii) recommendations for improvement of the program. The State Board of Education shall report the results of this evaluation to the Office of State Budget and Management, the Joint Legislative Education Oversight Committee, and the Fiscal Research Division by January 15 of each fiscal year.
FLEXIBILITY FOR HIGH SCHOOL INNOVATION
SECTION 7.33.(a) Part 9 of Article 16 of Chapter 115C of the General Statutes reads as rewritten:
"Part 9. Cooperative Innovative High School Programs.
"§ 115C‑238.50. Purpose.
(a) The purpose of this Part
is to authorize boards of trustees of community colleges and local boards of
education to jointly establish local boards of education to jointly establish
with one or more boards of trustees cooperative innovative programs in high
schools and community colleges or universities that will expand
students' opportunities for educational success through high quality
instructional programming. These cooperative innovative high school programs
shall target:
(1) High school students who are at risk of dropping out of school before attaining a high school diploma; or
(2) High school students who would benefit from accelerated academic instruction.
(b) All the cooperative innovative high school programs established under this Part shall:
(1) Prepare students adequately for future learning in the workforce or in an institution of higher education.
(2) Expand students' educational opportunities within the public school system.
(3) Be centered on the core academic standards represented by the college preparatory or tech prep program of study as defined by the State Board of Education.
(4) Encourage the cooperative
or shared use of resources, personnel, and facilities between public schools
and community colleges. colleges or universities, or both.
(5) Integrate and emphasize both academic and technical skills necessary for students to be successful in a more demanding and changing workplace.
(6) Emphasize parental involvement and provide consistent counseling, advising, and parent conferencing so that parents and students can make responsible decisions regarding course taking and can track the students' academic progress and success.
(7) Be held accountable for meeting measurable student achievement results.
(8) Encourage the use of different and innovative teaching methods.
(9) Establish joint institutional responsibility and accountability for support of students and their success.
(10) Effectively utilize
existing funding sources for high school, community college, university,
and vocational programs and actively pursue new funding from other sources.
(11) Develop methods for early identification of potential participating students in the middle grades and through high school.
(12) Reduce the percentage of students needing remedial courses upon their initial entry from high school into a college or university.
(c) Programs developed under this Part that target students who are at risk of dropping out of high school before attaining a high school diploma shall:
(1) Provide these students with the opportunity to graduate from high school possessing the core academic skills needed for postsecondary education and high‑skilled employment.
(2) Enable students to complete a technical or academic program in a field that is in high demand and has high wages.
(3) Set and achieve goals
that significantly reduce dropout rates and raise high school and community college
retention, certification, and degree completion rates.
(4) Enable students who complete these programs to pass employer exams, if applicable.
(d) Cooperative innovative high school programs that offer accelerated learning programs shall:
(1) Provide a flexible, customized program of instruction for students who would benefit from accelerated, higher level coursework or early graduation from high school.
(2) Enable students to obtain
a high school diploma in less than four years and years, to begin
or complete an associate degree program or program, to master a
certificate or vocational program.program, or to earn up to two years
of college credit.
(3) Offer a college preparatory academic core and in‑depth studies in a career or technical field that will lead to advanced programs or employment opportunities in engineering, health sciences, or teaching.
(e) Cooperative innovative
high school programs may include the creation of a school within a school, a
technical high school, or a high school or technical center located on the
campus of a community college.college or university.
(f) Students are eligible to attend these programs as early as ninth grade.
"§ 115C‑238.50A. Definitions.
The following definitions apply in this Part:
(1) Constituent institution. – A constituent institution as defined in G.S. 116‑2(4).
(2) Education partner. – An education partner as provided in G.S. 115C‑238.52.
(3) Governing board. – The State Board of Community Colleges, the Board of Governors of The University of North Carolina, or the Board of the North Carolina Independent Colleges and Universities.
(4) Local board of trustees. – The board of trustees of a community college, constituent institution of The University of North Carolina, or private college located in North Carolina.
"§ 115C‑238.51. Application process.
(a) A local board of education
and a at least one local board of trustees of a community
college shall jointly apply to establish a cooperative innovative high
school program under this Part.
(b) The application shall contain at least the following information:
(1) A description of a program that implements the purposes in G.S. 115C‑238.50.
(2) A statement of how the program relates to the Economic Vision Plan adopted for the economic development region in which the program is to be located.
(3) The facilities to be used by the program and the manner in which administrative services of the program are to be provided.
(4) A description of student academic and vocational achievement goals and the method of demonstrating that students have attained the skills and knowledge specified for those goals.
(5) A description of how the program will be operated, including budgeting, curriculum, transportation, and operating procedures.
(6) The process to be followed by the program to ensure parental involvement.
(7) The process by which students will be selected for and admitted to the program.
(8) A description of the funds that will be used and a proposed budget for the program. This description shall identify how the average daily membership (ADM) and full‑time equivalent (FTE) students are counted.
(9) The qualifications required for individuals employed in the program.
(10) The number of students to be served.
(11) A description of how the program's effectiveness in meeting the purposes in G.S. 115C‑238.50 will be measured.
(c) The application shall be
submitted to the State Board of Education and the State Board of Community
Colleges applicable governing Boards by November 1 of each year. The
State Board of Education and the State Board of Community Colleges Boards
shall appoint a joint advisory committee to review the applications and to
recommend to the State Boards those programs that meet the requirements
of this Part and that achieve the purposes set out in G.S. 115C‑238.50.
(d) The State Board of
Education and the State Board of Community Colleges shall approve two
cooperative innovative high school programs in each of the State's economic
development regions. The State Boards may approve programs
recommended by the joint advisory committee or may approve other programs that
were not recommended. The State Boards shall approve all applications by
March 15 of each year. No application shall be approved unless the State Boards
State Board of Education and the applicable governing Board find
that the application meets the requirements set out in this Part and that
granting the application would achieve the purposes set out in G.S. 115C‑238.50.
Priority shall be given to applications that are most likely to further State
education policies, to address the economic development needs of the economic
development regions in which they are located, and to strengthen the
educational programs offered in the local school administrative units in which
they are located.
"§ 115C‑238.52. Participation by other education partners.
(a) Any or all of the following education partners may participate in the development of a cooperative innovative program under this Part that is targeted to high school students who would benefit from accelerated academic instruction:
(1) A constituent
institution of The University of North Carolina.
(2) A private
college or university located in North Carolina.
(3) A private business or organization.
(4) The county board of commissioners in the county in which the program is located.
(b) Any or all of the education partners listed in subsection (a) of this section that participate shall:
(1) Jointly apply with the
local board of education and the local board of trustees of the community
college to establish a cooperative innovative program under this Part.
(2) Be identified in the application.
(3) Sign the written agreement under G.S. 115C‑238.53(b).
"§ 115C‑238.53. Program operation.
(a) A program approved by
the State shall be is accountable to the local board of
education.
(b) A program approved under
this Part shall operate under the terms of a written agreement signed by the
local board of education, local board of trustees of the community college, trustees,
State Board of Education, and State Board of Community Colleges. applicable
governing Board. The agreement shall incorporate the information provided
in the application, as modified during the approval process, and any terms and
conditions imposed on the program by the State Board of Education and the State
Board of Community Colleges. applicable governing Board. The agreement
may be for a term of no longer than five school years.
(c) A program may be
operated in a facility owned or leased by the local board of education, the
local board of trustees of the community college, trustees, or
the education partner, if any.
(d) A program approved under this Part shall provide instruction each school year for at least 180 days during nine calendar months, shall comply with laws and policies relating to the education of students with disabilities, and shall comply with Article 27 of this Chapter.
(e) A program approved under
this Part may use State, federal, and local funds allocated to the local school
administrative unit, to the State Board of Community Colleges, applicable
governing Board, and to the community college or university to
implement the program. If there is an education partner and if it is a public
body, the program may use State, federal, and local funds allocated to that
body.
(f) Except as provided in
this Part and pursuant to under the terms of the agreement, a program
is exempt may be exempted by the applicable governing Board from
laws and rules applicable to a local board of education, a local school
administrative unit, a community college, a constituent institution, or
a local board of trustees of a community college.trustees.
"§ 115C‑238.54. Funds for programs.
(a) The Department of Public Instruction shall assign a school code for each program that is approved under this Part. All positions and other State and federal allotments that are generated for this program shall be assigned to that school code. Notwithstanding G.S. 115C‑105.25, once funds are assigned to that school code, the local board of education may use these funds for the program and may transfer these funds between funding allotment categories.
(b) The local board of
trustees of a community college may allocate State and federal funds for
a program that is approved under this Part.
(c) An education partner under G.S. 115C‑238.52 that is a public body may allocate State, federal, and local funds for a program that is approved under this Part.
(d) If not an education partner under G.S. 115C‑238.52, a county board of commissioners in a county where a program is located may nevertheless appropriate funds to a program approved under this Part.
(e) The local board of
education and the local board of trustees of the community college are
strongly encouraged to seek funds from sources other than State, federal, and
local appropriations. They are strongly encouraged to seek funds the Education
Cabinet identifies or obtains under G.S. 116C‑4.
"§ 115C‑238.55. Evaluation of programs.
The State Board of Education and
the State Board of Community Colleges governing Boards shall
evaluate the success of students in programs approved under this Part. Success
shall be measured by high school retention rates, high school completion rates,
high school dropout rates, certification and associate degree completion,
admission to four‑year institutions, postgraduation employment in career
or study‑related fields, and employer satisfaction of employees who
participated in and graduated from the programs. Beginning October 15, 2005,
and annually thereafter, the Boards shall jointly report to the Joint
Legislative Education Oversight Committee on the evaluation of these programs.
If, by October 15, 2006, the Boards determine any or all of these programs have
been successful, they shall jointly develop a prototype plan for similar
programs that could be expanded across the State. This plan shall be included
in their report to the Joint Legislative Education Oversight Committee that is
due by October 15, 2007."
SECTION 7.33.(b) It is the intent of the General Assembly that three cooperative innovative high school programs are established that emphasize the educational development of high school students in the areas of science and mathematics in a nonresidential setting. One of these programs shall be located in the eastern region of the State, one shall be located in the central region of the State, and one shall be located in the western region of the State. The State Board of Education shall begin planning for the design and implementation of these programs and shall report their plan to the Joint Legislative Education Oversight Committee and the Fiscal Research Division of the General Assembly by March 15, 2006.
The plan shall include, but not be limited to, the following aspects of the proposed programs:
(1) Programmatic design including location, curriculum, student access, and calendar.
(2) Projected costs of operation, including instructional, administrative, transportation, capital, and other costs.
(3) Any plans for coordination with institutes of higher education.
(4) Proposed implementation schedule.
MINIMIZE TIME DEVOTED TO STANDARDIZED TESTS
SECTION 7.37. G.S. 115C‑174.12(a) reads as rewritten:
"(a) The State Board of Education shall establish policies and guidelines necessary for minimizing the time students spend taking tests administered through State and local testing programs, for minimizing the frequency of field testing at any one school, and for otherwise carrying out the provisions of this Article. These policies and guidelines shall include the following:
(1) Schools shall devote no more than two days of instructional time per year to the taking of practice tests that do not have the primary purpose of assessing current student learning;
(2) Students in a school shall not be subject to field tests or national tests during the two‑week period preceding the administration of end‑of‑grade tests, end‑of‑course tests, or the school's regularly scheduled final exams; and
(3) No school shall participate in more than two field tests at any one grade level during a school year unless that school volunteers, through a vote of its school improvement team, to participate in an expanded number of field tests.
These policies shall reflect standard testing practices to insure reliability and validity of the sample testing. The results of the field tests shall be used in the final design of each test. The State Board of Education's policies regarding the testing of children with disabilities shall (i) provide broad accommodations and alternate methods of assessment that are consistent with a child's individualized education program and section 504 (29 U.S.C. § 794) plans, (ii) prohibit the use of statewide tests as the sole determinant of decisions about a child's graduation or promotion, and (iii) provide parents with information about the Statewide Testing Program and options for students with disabilities. The State Board shall report its proposed policies and proposed changes in policies to the Joint Legislative Education Oversight Committee prior to adoption.
The State Board of Education may appoint an Advisory Council on Testing to assist in carrying out its responsibilities under this Article."
SECTION 7.38.(a) G.S. 116C‑1(b) reads as rewritten:
"(b) The Education Cabinet shall consist of the Governor, who shall serve as chair, the President of The University of North Carolina, the State Superintendent of Public Instruction, the Chairman of the State Board of Education, the President of the North Carolina Community Colleges System, the Secretary of Health and Human Services, and the President of the North Carolina Independent Colleges and Universities. The Education Cabinet may invite other representatives of education to participate in its deliberations as adjunct members."
SECTION 7.38.(b) The Education Cabinet shall study:
(1) The extent to which school nurses, school social workers, and other instructional support personnel collaborate with each other and with local health, mental health, and social services providers to meet the needs of at‑risk children and their families and to support the educational achievement of at‑risk children; and
(2) The need for additional training for school nurses, school social workers, and other instructional support personnel on multidisciplinary assessments and on referral and care coordination for at‑risk students and their families.
The Education Cabinet shall report the results of its study and its recommendations to the Joint Legislative Education Oversight Committee prior to April 15, 2006.
THE CENTER FOR 21ST CENTURY SKILLS
SECTION 7.39.(a) The State Board of Education shall transfer funds appropriated for the Center for 21st Century Skills to the Office of the Governor. These funds shall be used for the establishment of the Center for 21st Century Skills within the North Carolina Business Committee for Education, Inc. The purpose of the Center shall be to design curriculum, teacher training, and student assessment to support students acquiring the knowledge and skills needed for the emerging workforce of the 21st century.
SECTION 7.39.(b) The North Carolina Business Committee for Education, Inc., and the Center for 21st Century Skills shall coordinate their efforts on high school reform with the North Carolina New Schools Project.
SECTION 7.39.(c) The North Carolina Business Committee for Education, Inc., and the Center for 21st Century Skills shall work with the North Carolina Science, Mathematics and Technology Education Center, the North Carolina School of Science and Mathematics, the North Carolina Board of Science and Technology, and the governing boards of education to research and propose options to create new or expand existing mathematics and science summer enrichment programs across the State and to establish nonresidential high schools focused on mathematics, science, and technology.
TEACHER WORKING CONDITIONS SURVEY
PLAN AND FUNDING FOR A VIRTUAL HIGH SCHOOL
SECTION 7.41.(a) The State Board of Education, the Board of Governors of The University of North Carolina, the Independent Colleges and Universities, and the State Board of Community Colleges shall develop E‑learning standards and plans for infrastructures that provide virtual learning opportunities accessible to students and other citizens through all North Carolina schools, universities, and community colleges. In developing the plan for the public schools, the State Board of Education shall focus initially on high schools while also researching and developing, where appropriate, E‑learning for middle schools, junior high schools, and elementary schools. E‑learning programs shall support both teachers and students.
SECTION 7.41.(b) As used in this section, "E‑learning" is electronic learning that includes a wide set of applications and processes, such as Web‑based learning, computer‑based learning, virtual classrooms, and digital collaboration. It includes the delivery of content via Internet, intranet/extranet (LAN/WAN), audiotape, videotape, satellite broadcast, interactive television, and CD‑ROM.
SECTION 7.41.(c) It is the intent of the General Assembly to give public schools the highest priority in funding for and development of E‑learning. Funding for E‑learning should be a new appropriation and not come exclusively from existing funds.
SECTION 7.41.(d) The State Board of Education shall use funds appropriated for a virtual high school to establish and implement a pilot virtual high school during the 2005‑2006 school year and the 2006‑2007 school year.
The State Board of Education shall include in the pilot program instruction on personal financial literacy. This instruction shall be designed to equip students with the knowledge and skills they need, before they become self‑supporting, to make critical decisions regarding their personal finances. The components of instruction shall include, at a minimum, consumer financial education, personal finance, and personal credit.
SECTION 7.41.(e) If the pilot program is successful, it is the intent of the General Assembly to provide funding to implement a virtual high school on a statewide basis for the 2006‑2007 fiscal year.
FEASIBILITY STUDY FOR DEVELOPING REGIONAL EDUCATION NETWORKS
SECTION 7.42. The North Carolina Rural Economic Development Center and the e‑NC Authority, in collaboration with interested providers of broadband services, representatives from local school administrative units, The University of North Carolina, private colleges, the State Board of Education, the State Chief Information Officer, and the Community College System shall perform a feasibility study on developing regional education networks that provide and sustain broadband service access to individual students and teachers in schools, community colleges, and universities.
The study shall include (i) an evaluation of existing technology and service applications such as the statewide infrastructure, those operated by the private sector, the North Carolina Research and Education Network, and networks such as Winston‑Net and (ii) an evaluation of newer technology such as wireless broadband access. It shall recommend ways to maximize the use of these existing resources to support growth in broadband service access to the State, including underserved regions.
The North Carolina Rural Economic Development Center and the e‑NC Authority shall report the results of the study to the 2006 Regular Session of the 2005 General Assembly.
ASSISTANCE WITH SCHOOL TECHNOLOGY NEEDS
SECTION 7.43.(a) G.S. 115C‑102.6A(c) is amended by adding a new subdivision to read:
"(c) Components of the State school technology plan shall include at least the following:
…
(17) A baseline template for:
a. Technology and service application infrastructure, including broadband connectivity, personnel recommendations, and other resources needed to operate effectively from the classroom desktop to local, regional, and State networks, and
b. An evaluation component that provides for local school administrative unit accountability for maintaining quality upgradeable systems."
SECTION 7.43.(b) No later than October 31, 2005, the Department of Public Instruction shall hold regional workshops for local school administrative units to provide guidance in developing local school system technology plans that meet the criteria established in the State school technology plan, including the components added under subsection (a) of this section.
SECTION 7.43.(c) G.S. 115C‑102.7 is amended by adding the following new subsection to read:
"(c) The Department of Public Instruction shall randomly check local school system technology plans to ensure that local school administrative units are implementing their plans as approved. The Department shall report to the State Board of Education and the State Chief Information Officer on which local school administrative units are not complying with their plans. The report shall include the reasons these local school administrative units are out of compliance and a recommended plan of action to support each of these local school administrative units in carrying out their plans."
SECTION 7.43.(d) The State Board of Education shall determine the total amount of funds needed for the recurring total cost of ownership to implement, maintain, and upgrade technology infrastructures and instructional technology as specified in the revised local school system technology plans. This shall include personnel costs for both technical and instructional needs so that a three‑ to five‑year budget plan can be developed for the General Assembly.
SECTION 7.43.(e) The State Board of Education shall also study and identify the types of resources needed to operate schools designed to meet the needs of twenty‑first century learners.
The State Board shall report the results of this study to the 2006 Regular Session of the 2005 General Assembly.
SECTION 7.43.(f) 2IIn order to provide assistance to local school administrative units with E‑rate applications, the Department of Public Instruction shall, within existing funds, ensure that a minimum of one full‑time coordinator is assigned this responsibility. The Department shall notify local school administrative units about the person or office assigned the responsibility of providing assistance with E‑rate applications.
The Department shall provide the State Board of Education with an annual report on E‑rate, including funding, commitments, and enrollment by local school administrative units.
As used in this section, "E‑rate" is the mechanism to provide discount rates to support universal telecommunications services for use by schools and libraries as provided in section 254 of the federal Telecommunications Act of 1996.
SECTION 7.47. The Joint Legislative Education Oversight Committee shall research and study the current salary structure for teachers. In the course of the study, the Committee shall:
(1) Develop a method to determine North Carolina’s ability to remain competitive in recruiting and retaining highly qualified teachers.
(2) Consider new salary schedule options in lieu of a simple modification of the current salary schedule.
(3) Research and make recommendations on whether or not compressing or expanding a teacher salary schedule would assist in retaining teachers at critical periods when many teachers tend to leave the profession.
(4) Develop and recommend an adequate compensation structure for masters degree and other advanced training.
(5) Consider the placement of appropriate extraordinary increases on the teacher salary schedule for achievement of career status, teacher retention, and other purposes.
(6) Consider how personal leave and other fringe benefits contribute to the compensation packages for employees.
REDIRECT REFUNDABLE SALES TO STATE PUBLIC SCHOOL FUND
SECTION 7.51.(a) G.S. 105‑164.14(c)(2b) and (2c) are repealed.
SECTION 7.51.(b) Part 8 of Article 5 of Chapter 105 of the General Statutes is amended by adding a new section to read:
"§ 105‑164.44H. Transfer to State Public School Fund.
Each fiscal year, the Secretary of Revenue shall transfer at the end of each quarter from the State sales and use tax net collections received by the Department of Revenue under Article 5 of Chapter 105 of the General Statutes to the State Treasurer for the State Public School Fund, one‑fourth of the amount transferred the preceding fiscal year plus or minus the percentage of that amount by which the total collection of State sales and use taxes increased or decreased during the preceding fiscal year."
SECTION 7.51.(c) Subsection (b) of this section becomes effective July 1, 2006. Notwithstanding the provisions of G.S. 105‑164.44H, for the 2006‑2007 fiscal year, the amount transferred to the State Public School Fund each quarter shall equal one‑fourth of the amount refunded under G.S. 105‑164.4(c)(2b) and (2c) during the 2005‑2006 fiscal year plus or minus the percentage of that amount by which the total collection of State sales and use tax increased or decreased during the preceding fiscal year. The remainder of this section becomes effective July 1, 2005, and applies to sales made on or after that date.
SMALL SPECIALTY HIGH SCHOOLS PILOT PROGRAM
SECTION 7.52.(a) Funds are appropriated in this act for a pilot program to create 11 small specialty high schools within existing schools. The purpose of the program is to improve graduation rates and to achieve higher student performance as measured by standard tests and postgraduate gainful employment or admission into an institution of higher education. The State Board of Education shall work closely with the Education Cabinet and the New Schools Project in administering the program.
SECTION 7.52.(b) The State Board of Education shall conduct an evaluation of this program. The evaluation shall include measures as identified in G.S. 115C‑238.55. It shall also include: (i) an accounting of how funds and personnel resources were utilized and their impact on student achievement, retention, and employability; and (ii) recommendations for improvement of the program. The State Board of Education shall report the results of this evaluation to the Office of State Budget and Management, the Joint Legislative Education Oversight Committee, and the Fiscal Research Division by November 15, 2006.
ENSURE DHHS SCHOOLS RECEIVE FEDERAL FUNDS
SECTION 7.54.(a) It is the intent of the General Assembly that the schools operated by the Department of Health and Human Services participate in federal funding to the same degree as other public schools in the State. The Department of Public Instruction shall ensure that the Department of Health and Human Services schools receive a proportionate share of federal funds for public schools.
SECTION 7.54.(b) G.S. 115C‑66 reads as rewritten:
"§ 115C‑66. Administrative units classified.
Each county of the State shall be classified as a county school administrative unit, the schools of which, except in city administrative units, shall be under the general supervision and control of a county board of education with a county superintendent as the administrative officer.
A city school administrative unit shall be classified as an area within a county or adjacent parts of two or more contiguous counties which has been or may be approved by the State Board of Education as such a unit for purposes of school administration. The general administration and supervision of a city administrative unit shall be under the control of a board of education with a city superintendent as the administrative officer.
All local school administrative units, whether city or county, shall be dealt with by the State school authorities in all matters of school administration in the same way.
For purposes of eligibility for federal grant funds, the Department of Health and Human Services is hereby classified as a public authority, which is the school administrative agency for the schools that it operates, and shall be considered as such by the State school authorities in the administration and distribution of federal grant funds."
SECTION 7.54.(c) The Department of Health and Human Services shall report on the use, type, and amount of funds received from federal funding and other Department of Public Instruction funding under this section to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Health and Human Services, and the Fiscal Research Division by January 31, 2006.
STUDY OF SCHOOL TRANSPORTATION
SECTION 7.57. Of the funds appropriated for Student Transportation for the 2005‑2006 fiscal year, the Department of Public Instruction shall use up to one hundred fifty thousand dollars ($150,000) for a study of the current allotment formula for school transportation. The study shall be conducted by an independent consultant.
In the course of the study, the consultant shall consider whether (i) the current formula sufficiently encourages the efficient and effective use of school transportation funds by urban and rural school systems, (ii) the formula is adequately and equitably meeting the needs of school systems, and (iii) the formula is appropriate in light of the Leandro litigation. The consultant shall also propose options for reducing the severe and growing disparity in funding that exists under the formula among local school administrative units.
The consultant shall report the results of its study to the State Board of Education by December 1, 2005. The State Board of Education shall submit a plan for the implementation of the consultant's report to the Joint Legislative Education Oversight Committee by March 15, 2006.
SECTION 7.58. G.S. 115C‑447 reads as rewritten:
"§ 115C‑447. Annual independent audit.
(a) Each local school administrative unit shall have its accounts and the accounts of individual schools therein audited as soon as possible after the close of each fiscal year by a certified public accountant or by an accountant certified by the Local Government Commission as qualified to audit local government accounts. The auditor who audits the accounts of a local school administrative unit shall also audit the accounts of its individual schools. The auditor shall be selected by and shall report directly to the board of education. The audit contract shall be in writing, shall include all its terms and conditions, and shall be submitted to the Secretary of the Local Government Commission for his approval as to form, terms and conditions. The terms and conditions of the audit contract shall include the scope of the audit, and the requirement that upon completion of the examination the auditor shall prepare a typewritten or printed report embodying financial statements and his opinion and comments relating thereto. The financial statements accompanying the auditor's report shall be prepared in conformity with generally accepted accounting principles. The auditor shall file a copy of the audit report with the Secretary of the Local Government Commission, the State Board of Education, the board of education and the board of county commissioners, and shall submit all bills or claims for audit fees and costs to the Secretary of the Local Government Commission for his approval. It shall be unlawful for any local school administrative unit to pay or permit the payment of such bills or claims without this approval. Each officer, employee and agent of the local school administrative unit having custody of public money or responsibility for keeping records of public financial or fiscal affairs shall produce all books and records requested by the auditor and shall divulge such information relating to fiscal affairs as he may request. If any member of a board of education or any other public officer, employee or agent shall conceal, falsify, or refuse to deliver or divulge any books, records, or information, with an intent thereby to mislead the auditor or impede or interfere with the audit, he is guilty of a Class 1 misdemeanor.
The State Auditor shall have authority to prescribe the manner in which funds disbursed by administrative units by warrants on the State Treasurer shall be audited.
(b) When the State Board of Education finds that incidents of fraud, embezzlement, theft, or management failures in a local school administrative unit make it appropriate to review the internal control procedures of the unit, the State Board of Education shall so notify the unit. If the incidents were discovered by the firm performing the audit under subsection (a) of this section, the board of the local school administrative unit shall submit the audit together with a plan for any corrective actions relative to its internal control procedures to the State Board of Education and the Local Government Commission for approval and shall implement the approved changes prior to the next annual audit. Where the firm preparing the audit under subsection (a) of this section identifies significant problems with internal control procedures the local school administrative unit shall submit the audit together with a plan for any corrective actions relative to its internal control procedures to the State Board of Education and the Local Government Commission for approval and shall implement the approved changes prior to the next annual audit.
If the incidents were not discovered by the firm performing the audit under subsection (a) of this section, the State Board of Education and the Local Government Commission shall employ an audit firm to review the internal control procedures of that local school administrative unit. Upon completion of this review, the audit firm shall report publicly to the State Board of Education, the Local Government Commission, and the board of the local school administrative unit. If the State Board of Education determines that significant changes are needed in the internal control procedures of the local school administrative unit, the local board shall submit a plan of corrective actions to the State Board of Education and the Local Government Commission for approval and shall implement the approved changes prior to the next annual audit. The local school administrative unit shall pay the cost of this audit."
Teach Financial Literacy in Public Schools
SECTION 7.59.(a) G.S. 115C‑81 is amended by adding a new subsection to read:
"(i) Both the standard course of study and the Basic Education Program shall include the requirement that the public schools provide instruction in personal financial literacy for all students during the high school years. The State Board of Education shall determine the components of personal financial literacy that will be covered in the curriculum. The State Board shall also review the high school standard course of study to determine in which course the new personal financial literacy curriculum can be integrated."
SECTION 7.59.(b) When developing the personal financial literacy curriculum, the State Board of Education shall consider the curriculum, materials, and guidelines developed for the pilot programs on financial literacy created by Section 7.35 of S.L. 2003‑284. The State Board shall also consider the recommendations from any evaluations of the pilot programs.
SECTION 7.59.(c) The State Board of Education shall have up to two years to develop the personal financial literacy curriculum and integrate the curriculum into the standard course of study. The State Board shall report to the Joint Legislative Education Oversight Committee on the proposed curriculum before implementation.
reports on the expenditure of supplemental funds for low‑wealth counties
SECTION 7.60. Local boards of education shall report to the State Board of Education by August 31 of each year on the expenditure of supplemental funds for low‑wealth counties and how these funds were targeted and used to implement specific improvement strategies of each local school administrative unit and its schools, such as teacher recruitment, closing the achievement gap, improving student accountability, addressing the needs of at‑risk students, and establishing and maintaining safe schools. The State Board of Education shall report this information annually by October 31 to the Office of State Budget and Management, the Joint Legislative Education Oversight Committee, and the Fiscal Research Division.
provide for NEW ACCOUNTABILITY FOR THE USE OF FUNDS IN the AT‑RISK AND IMPROVING STUDENT ACCOUNTABILITY ALLOTMENTs
SECTION 7.61.(a) Funds appropriated for the At‑Risk/Alternative Schools allotment and the Improving Student Accountability allotment shall be used consistent with the policies and procedures adopted by the State Board of Education. Priority for use of the funds shall be to (i) provide instructional positions or instructional support positions and/or professional development; (ii) provide intensive in‑school and/or after‑school remediation; and (iii) purchase diagnostic software and progress monitoring tools.
SECTION 7.61.(b) To remain eligible for funds appropriated for the At‑Risk/Alternative Schools allotment and the Improving Student Accountability allotment, local school administrative units must submit a report to the State Board of Education by October 31 of each year detailing the expenditure of the funds and the impact of these funds on student achievement. The State Board of Education shall report this information annually by October 31 to the Office of State Budget and Management, the Joint Legislative Education Oversight Committee, and the Fiscal Research Division.
PART VIII. COMMUNITY COLLEGES
USE OF FUNDS FOR THE COLLEGE INFORMATION SYSTEM PROJECT
SECTION 8.1.(a) Funds appropriated to the Community Colleges System Office for the College Information System Project shall not revert at the end of the 2004‑2005 fiscal year but shall remain available until expended.
SECTION 8.1.(c) Subsection (a) of this section becomes effective June 30, 2005.
SECTION 8.2.(a) Subject to the approval of the Office of State Budget and Management and cash availability, the North Carolina Community Colleges System Office may carry‑forward an amount not to exceed fifteen million dollars ($15,000,000) of the operating funds that were not reverted in fiscal year 2004‑2005 to be reallocated to the State Board of Community Colleges' Equipment Reserve Fund. These funds shall be distributed to colleges consistent with G.S. 115D‑31.
SECTION 8.2.(b) This section becomes effective June 30, 2005.
SALARIES OF COMMUNITY COLLEGE FACULTY AND PROFESSIONAL STAFF
SECTION 8.3.(a) The minimum salaries for community college faculty shall be based on the following education levels:
(1) Vocational Diploma/Certificate or Less. – This education level includes faculty members who are high school graduates, have vocational diplomas, or have completed one year of college.
(2) Associate Degree or Equivalent. – This education level includes faculty members who have an associate degree or have completed two or more years of college but have no degree.
(3) Bachelors Degree.
(4) Masters Degree or Education Specialist.
(5) Doctoral Degree.
SECTION 8.3.(b) For the 2005‑2006 school year, the minimum salaries for nine‑month, full‑time, curriculum community college faculty shall be as follows:
Education Level Minimum Salary
2005‑2006
Vocational Diploma/Certificate or Less $29,932
Associate Degree or Equivalent $30,373
Bachelors Degree $32,283
Masters Degree or Education Specialist $33,978
Doctoral Degree $36,421
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.
(1) It is the intent of the General Assembly to encourage community colleges to make faculty salaries a priority and to reward colleges that have taken steps to achieve the national average, therefore:
a. If the average faculty salary at a community college is one hundred percent (100%) or more of the national average community college faculty salary, the college may transfer up to eight percent (8%) of the State funds allocated to it for faculty salaries.
b. If the average faculty salary at a community college is at least ninety‑five percent (95%) but less than one hundred percent (100%) of the national average community college faculty salary, the college may transfer up to six percent (6%) of the State funds allocated to it for faculty salaries.
c. If the average faculty salary at a community college is at least ninety percent (90%) but less than ninety‑five percent (95%) of the national average community college faculty salary, the college may transfer up to five percent (5%) of the State funds allocated to it for faculty salaries.
d. If the average faculty salary at a community college is at least eighty‑five percent (85%) but less than ninety percent (90%) of the national average community college faculty salary, the college may transfer up to three percent (3%) of the State funds allocated to it for faculty salaries.
e. If the average faculty salary at a community college is eighty‑five percent (85%) or less of the national average community college faculty salary, the college may transfer up to two percent (2%) of the State funds allocated to it for faculty salaries.
Except as provided by subdivision (2) of this subsection, a community college shall not transfer a greater percentage of the State funds allocated to it for faculty salaries than is authorized by this subsection.
(2) With the approval of the State Board of Community Colleges, a community college at which the average faculty salary is eighty‑five percent (85%) or less of the national average may transfer a greater percentage of the State funds allocated to it for faculty salaries than is authorized by sub‑subdivision e. of subdivision (1) of this subsection. The State Board shall approve the transfer only for purposes that directly affect student services.
(3) A local community college may use all State funds allocated to it except for Literacy Funds and Funds for New and Expanding Industry Training to increase faculty salaries.
SECTION 8.3.(d) As used in this section:
(1) "Average faculty salary at a community college" means the total nine‑month salary from all sources of all nine‑month, full‑time, curriculum faculty at the college, as determined by the North Carolina Community College System on October 1 of each year.
(2) "National average community college faculty salary" means the nine‑month, full‑time, curriculum salary average, as published by the Integrated Postsecondary Education Data System (IPEDS), for the most recent year for which data are available.
SECTION 8.3.(e) The State Board of Community Colleges shall adopt rules to implement the provisions of this section.
SECTION 8.3.(f) The State Board of Community Colleges shall report to the appropriations subcommittees on education, the Speaker of the House of Representatives, the President Pro Tempore of the Senate, the Fiscal Research Division, and the Office of State Budget and Management by December 1, 2005, and every year thereafter through December 1, 2009, on the implementation of this section.
SECTION 8.3.(g) Funds appropriated in this act for salary increases shall be used to increase faculty and professional staff salaries by an average of two percent (2%). These increases are in addition to other salary increases provided for in this act and shall be calculated on the average salaries prior to the issuance of the compensation increase. Colleges may provide additional increases from funds available.
The State Board of Community Colleges shall adopt rules to ensure that these funds are used only to move faculty and professional staff to the respective national averages. These funds shall not be transferred by the State Board or used for any other budget purpose by the community colleges.
WORKFORCE DEVELOPMENT PROGRAMS
SECTION 8.4.(a) Article 1 of Chapter 115D of the General Statutes is amended by adding a new G.S. 115D‑5.1 to be entitled "Workforce Development Programs"; G.S. 115D‑5(d) is recodified as G.S. 115D‑5.1(a); G.S. 115D‑5(k) is recodified as G.S. 115D‑5.1(b); and G.S. 115D‑5(i) is recodified as G.S. 115D‑5.1(c).
SECTION 8.4.(b) G.S. 115D‑5.1, as enacted by subsection (a) of this section, reads as rewritten:
"§ 115D‑5.1. Workforce Development Programs.
(a) Community colleges shall assist in the preemployment and in‑service training of employees in industry, business, agriculture, health occupation and governmental agencies. Such training shall include instruction on worker safety and health standards and practices applicable to the field of employment. The State Board of Community Colleges shall make appropriate regulations including the establishment of maximum hours of instruction which may be offered at State expense in each in‑plant training program. No instructor or other employee of a community college shall engage in the normal management, supervisory and operational functions of the establishment in which the instruction is offered during the hours in which the instructor or other employee is employed for instructional or educational purposes.
(b) The North Carolina Community College System's New and Expanding Industry Training (NEIT) Program Guidelines, which were adopted by the State Board of Community Colleges on April 18, 1997, apply to all funds appropriated for the Program after June 30, 1997. A project approved as an exception under these Guidelines, or these Guidelines as modified by the State Board of Community Colleges, shall be approved for one year only.
(c) The State Board of Community Colleges shall report to the Joint Legislative Education Oversight Committee on September 1 of each year on expenditures for the New and Expanding Industry Training Program each fiscal year. The report shall include, for each company or individual that receives funds for the New and Expanding Industry Training Program:
(1) The total amount of funds received by the company or individual;
(2) The amount of funds per trainee received by the company or individual;
(3) The amount of funds received per trainee by the community college training the trainee;
(4) The number of trainees trained by company and by community college; and
(5) The number of years the companies or individuals have been funded.
(d) Funds available to the New and Expanding Industry Training Program shall not revert at the end of a fiscal year but shall remain available until expended.
(e) There is created within the North Carolina Community College System the Customized Industry Training (CIT) Program. The CIT Program shall offer programs and training services as new options for assisting existing business and industry to remain productive, profitable, and within the State. Before a business or industry qualifies to receive assistance under the CIT Program, the President of the North Carolina Community College System shall determine that:
(1) The business is making an appreciable capital investment;
(2) The business is deploying new technology; and
(3) The skills of the workers will be enhanced by the assistance.
The State Board shall report on an annual basis to the Joint Legislative Education Oversight Committee on:
(1) The total amount of funds received by a company under the CIT Program;
(2) The amount of funds per trainee received by that company;
(3) The amount of funds received per trainee by the community college delivering the training;
(4) The number of trainees trained by the company and community college; and
(5) The number of years that company has been funded.
The State Board shall adopt rules and policies to implement this section."
SECTION 8.4.(c) Notwithstanding any other provision of law, the State Board of Community Colleges may use funds appropriated to it for the New and Expanding Industry Training Program to operate programs under the Customized Industry Training Program.
SECTION 8.4.(d) G.S. 115D‑5.1(d), as enacted by this section, becomes effective June 30, 2005.
REPORT ON THE ADEQUACY OF MULTICAMPUS FUNDS
SECTION 8.5. The General Assembly finds that additional data are needed to determine the adequacy of multicampus and off‑campus center funds; therefore, multicampus colleges and colleges with off‑campus centers shall report annually, beginning September 1, 2005, to the Community Colleges System Office on all expenditures by line item of funds used to support their multicampuses and off‑campus centers. The Community Colleges System Office shall report on these expenditures to the Education Appropriation Subcommittees of the House of Representatives and the Senate, the Office of State Budget and Management, and the Fiscal Research Division by October 1 of each year.
Notwithstanding any other provision of law, funds appropriated to the Community Colleges System Office for multicampus colleges or off‑campus centers shall be used only for the administration of the multicampus college or off‑campus center for which the funds were allotted. These funds shall not be transferred to any other campus or center, or used for any other purpose.
EDUCATION PROGRAM AUDITING FUNCTION
SECTION 8.6. G.S. 115D‑5(m) reads as rewritten:
"(m) The State Board
of Community Colleges shall require auditors of community college programs to
use a statistically valid sample size in performing program audits of community
colleges. The State Board of Community Colleges shall maintain an
education program auditing function that conducts an annual audit of each
community college operating under the provisions of this Chapter. The purpose
of the annual audit shall be to ensure that college programs and related fiscal
operations comply with State law, State regulations, State Board policies, and
System Office guidance. The State Board of Community Colleges shall require
auditors of community college programs to use a statistically valid sample size
in performing program audits of community colleges. All education program audit
findings shall be forwarded to the college president, local college board of
trustees, the State Board of Community Colleges, and the State Auditor. The
State Board shall assess a twenty‑five percent (25%) fiscal penalty in
addition to the audit exception on all audits of both dollars and student
membership hours excepted when the audit exceptions result from nonprocessing
errors."
FERRY BOAT OPERATOR TRAINING FEASIBILITY STUDY
SECTION 8.7.(a) The State Board of Community Colleges, in consultation with the Ferry Division of the Department of Transportation, shall study the need for training for ferry boat operators. In conducting the study, the State Board shall consider the following:
(1) Types of training needed and whether it is feasible for the community colleges to provide this training.
(2) Estimated number of students.
(3) Estimated employment opportunities for the students.
(4) Start‑up costs for the program and resources for those costs.
(5) Location of the training.
SECTION 8.7.(b) The State Board shall report to the Joint Legislative Education Oversight Committee and the Joint Legislative Transportation Oversight Committee on its findings and recommendations no later than December 1, 2005.
EXTEND THE SUNSET ON TRAINING AND REEMPLOYMENT CONTRIBUTIONS MADE BY EMPLOYERS
SECTION 8.8.(a) Section 8 of S.L. 1999‑321, as amended by Section 30.5(f) of S.L. 2001‑424, reads as rewritten:
"Section 8. Section 1 of this
act is effective with respect to calendar quarters beginning on or after April
1, 1999. Section 7 of this act becomes effective July 1, 1999. The remainder of
this act is effective with respect to calendar quarters beginning on or after
January 1, 2000. G.S. 96‑6.1, as enacted by Section 2 of this
act, is repealed effective with respect to calendar quarters beginning on or
after January 1, 2006."
SECTION 8.8.(b) G.S. 96‑6.1 is amended by adding a new subsection to read:
"(c) Sunset. – This section is repealed effective with respect to calendar quarters beginning on or after January 1, 2011."
CARRYFORWARD FOR COLLEGES IN ECONOMICALLY DISADVANTAGED COUNTIES
SECTION 8.10.(a) Notwithstanding G.S. 143‑18 or any other provision of law, a community college may retain and carry forward its General Fund current operations credit balance remaining at the end of the fiscal year if the county in which the main campus of the community college is located:
(1) Is designated as a Tier 1 or Tier 2 county in accordance with G.S. 105‑129.3;
(2) Had an unemployment rate greater than or equal to seven percent (7%) in calendar year 2004; and
(3) Is designated as a Low‑Wealth County under Section 7.6 of this act, whose wealth as calculated by the Low‑Wealth Formula is eighty percent (80%) or less of the State Average.
SECTION 8.10.(b) Community colleges that qualify for a carryforward under subsection (a) of this section that do not receive maintenance of plant funds pursuant to G.S. 115D‑31.2 may use up to fifty thousand dollars ($50,000) from the carryforward to supplement local funding for maintenance of plant. Funds may be used for this purpose only after all local funds appropriated for maintenance of plant have been expended.
SECTION 8.10.(c) Colleges who serve counties that meet the criteria outlined in subsection (a) of this section, but whose main campuses are not located in such counties, may carry forward the percentage of the funds remaining at the end of the fiscal year equal to the percentage of total full‑time equivalent students served in those counties that meet the criteria, as determined by the North Carolina Community Colleges System Office.
SECTION 8.10.(d) Allowable carryforwards under this section shall be calculated prior to the calculation of Performance Funding as described in G.S. 115D‑31.3.
SECTION 8.10.(e) This section becomes effective June 30, 2005, but expires June 30, 2006.
DEFENSE TECHNOLOGY INNOVATION CENTER
SECTION 8.11. Funds appropriated in this act for North Carolina Electronics and Information Technologies Association's Defense Technology Innovation Center shall be used for the following:
(1) Site selection and acquisition, including the purchase or lease of real property to house the Center; the construction of buildings or other site structures; the improvement or refurbishment of existing structures to provide appropriate laboratory and administrative space; and the improvement of existing infrastructure at the facility, including improvements to utility, telecommunications, and Internet infrastructure.
(2) Equipment acquisition, including acquisition of laboratory equipment and supplies and office furniture, equipment, and supplies.
(3) Employment of staff to support the mission of the Center and to oversee day‑to‑day operations of the Center.
(4) Implementation of a comprehensive business and marketing plan for the Center.
(5) Development of a tenant screening process and the recruitment of appropriate tenants for the Center.
(6) Administration and operatio