S1005 [Edition 3]

GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 2001

S 3

SENATE BILL 1005

Appropriations/Base Budget Committee Substitute Adopted 5/28/01
Appropriations/Base Budget Committee Substitute No. 2 Adopted 5/29/01
Third Edition Engrossed 5/31/01

Short Title: The Appropriations Act of 2001.	()
Sponsors:
Referred to:

April 5, 2001

A BILL TO BE ENTITLED

AN ACT TO MAKE BASE BUDGET APPROPRIATIONS FOR CURRENT OPERATIONS OF STATE DEPARTMENTS, INSTITUTIONS, AND AGENCIES, AND FOR OTHER PURPOSES.

The General Assembly of North Carolina enacts:

Requested by: Senators Plyler, Odom, Lee

Part I. Introduction and Title of Act

INTRODUCTION

SECTION 1.1. The appropriations made in this act are for maximum amounts necessary to provide the services and accomplish the purposes described in the budget. Savings shall be effected where the total amounts appropriated are not required to perform these services and accomplish these purposes and, except as allowed by the Executive Budget Act, or this act, the savings shall revert to the appropriate fund at the end of each fiscal year.

Requested by: Senators Plyler, Odom, Lee

title of act

SECTION 1.2. This act shall be known as the "Current Operations and Capital Improvements Appropriations Act of 2001."

Requested by: Senators Plyler, Odom, Lee

PART II. current operations and expansion/general fund

SECTION 2.1. Appropriations from the General Fund of the State for the maintenance of the State departments, institutions, and agencies, and for other purposes as enumerated are made for the biennium ending June 30, 2003, according to the following schedule:

Current Operations - General Fund 2001-2002 2002-2003

EDUCATION

Community Colleges System Office $643,560,167 $643,010,167

Department of Public Instruction 5,893,107,574 5,930,005,558

University of North Carolina - Board of Governors

Appalachian State University 85,675,242 85,938,242

East Carolina University

Academic Affairs 121,351,949 122,615,017

Health Affairs 46,304,621 46,304,621

Elizabeth City State University 21,763,052 21,763,052

Fayetteville State University 30,955,888 30,955,888

North Carolina Agricultural and

Technical University 59,833,778 59,833,778

North Carolina Central University 44,621,691 44,621,691

North Carolina School of the Arts 16,497,831 16,771,450

North Carolina State University

Academic Affairs 267,290,298 267,775,250

Agricultural Extension Service 38,457,017 38,457,017

Agricultural Research Service 47,037,045 47,010,929

University of North Carolina at Asheville 25,615,037 25,771,136

University of North Carolina at Chapel Hill

Academic Affairs 201,509,167 202,018,681

Health Affairs 155,830,419 157,310,635

Area Health Education Centers 46,094,558 46,094,558

University of North Carolina at Charlotte 96,161,797 96,633,023

University of North Carolina at Greensboro 93,738,103 93,815,427

University of North Carolina at Pembroke 24,719,084 24,660,397

University of North Carolina at Wilmington 59,898,259 60,249,641

Western Carolina University 52,162,159 52,430,418

Winston-Salem State University 28,245,873 28,669,462

General Administration 42,937,551 43,932,975

University Institutional Programs 38,600,964 38,350,964

Related Educational Programs 103,637,912 103,637,912

North Carolina School of Science

and Mathematics 11,487,156 11,839,342

UNC Health Care 40,587,322 40,587,322

Total $1,801,013,774 $1,808,048,829

HEALTH AND HUMAN SERVICES

Department of Health and Human Services

Office of the Secretary 41,441,585 44,074,849

Division of Aging 29,756,535 29,506,535

Division of Child Development 289,569,273 289,569,273

Division of Education Services 69,666,533 69,666,533

Division of Public Health 106,338,824 107,063,824

Division of Social Services 191,587,740 198,661,034

Division of Medical Assistance 1,984,704,074 2,243,993,097

Division of Medical Assistance - Health Choice 32,987,142 37,487,142

Division of Blind Services/Deaf 10,154,205 10,154,205

Division of Mental Health 583,450,916 559,014,250

Division of Facility Services 13,874,279 14,069,546

Division of Vocational Rehabilitation 42,768,956 42,148,689

Total $3,396,300,062 $3,645,408,977

NATURAL AND ECONOMIC RESOURCES

Department of Agriculture and Consumer Services 55,545,270 55,194,468

Department of Commerce

Commerce 45,509,011 44,428,369

Commerce State-Aid 7,500,000 5,200,000

NC Biotechnology Center 5,270,468 6,270,468

Rural Economic Development Center 4,470,777 5,470,471

Department of Environment and Natural Resources

Environment and Natural Resources 159,293,994 158,821,667

Clean Water Management Trust Fund 40,000,000 70,000,000

Office of the Governor - Housing Finance Agency 5,300,000 5,300,000

Department of Labor 16,023,147 15,992,906

JUSTICE AND PUBLIC SAFETY

Department of Correction 927,428,368 939,786,036

Department of Crime Control and Public Safety 35,300,144 0

Judicial Department 305,092,577 305,015,376

Judicial Department - Indigent Defense 70,007,423 70,007,423

Department of Justice 73,777,373 82,432,277

Department of Juvenile Justice

and Delinquency Prevention 140,631,495 142,079,708

GENERAL GOVERNMENT

Department of Administration 59,877,776 75,263,823

Office of Administrative Hearings 2,835,447 2,835,447

Department of State Auditor 11,864,673 11,864,673

Office of State Controller 11,523,868 11,523,868

Department of Cultural Resources

Cultural Resources 59,477,419 59,477,419

Roanoke Island Commission 1,859,463 1,859,463

State Board of Elections 3,186,269 3,186,269

General Assembly 39,553,848 39,553,848

Office of the Governor

Office of the Governor 5,442,905 5,442,905

Office of State Budget and Management 5,130,255 4,839,125

Mapping and Surveying 0 0

Reserve for Special Appropriations 3,480,000 3,080,000

Department of Insurance

Insurance 23,129,288 23,129,288

Insurance -- Volunteer Safety Workers' Compensation 1,500,000 4,500,000

Office of Lieutenant Governor 669,545 669,545

Department of Revenue 75,228,760 75,219,160

Rules Review Commission 325,795 325,795

Department of Secretary of State 8,643,292 8,643,292

Department of State Treasurer

State Treasurer 7,641,817 7,641,817

State Treasurer -- Retirement for Fire and Rescue

Squad Workers 10,301,897 12,379,780

TRANSPORTATION

Department of Transportation 11,690,709 13,393,341

RESERVES, DEBT SERVICE, AND ADJUSTMENTS

Contingency and Emergency 5,000,000 5,000,000

Reserve for Compensation Increases 186,942,000 186,942,000

Reserve for Salary Adjustments 500,000 500,000

Reserve for State Health Plan 150,000,000 200,000,000

Teachers' and State Employees'

Retirement Rate Adjustment (251,761,770) (251,761,770)

Consolidated Judicial Retirement Rate

Adjustment (2,345,000) (2,345,000)

Hurricane Floyd Reserve Fund 304,853,740 135,629,172

Reserve to Implement HIPAA 30,000,000

Information Technology Rate Adjustment (11,000,000) (11,000,000)

Payroll Turnover Adjustment (37,300,000) (37,300,000)

Debt Service

General Debt Service 275,120,390 352,266,860

Federal Reimbursement 1,155,948 1,155,948

GRAND TOTAL CURRENT OPERATIONS -

GENERAL FUND $14,619,659,958 $14,876,388,768

Requested by: Senators Plyler, Odom, Lee

general fund availability statement

SECTION 2.2.(a) The General Fund availability used in developing the 2001-2003 biennial budget is shown below:

2001-2002 2002-2003

General Fund Budget Reform Statement ($ Millions) ($ Millions)

1. Composition of the 2001-2002 beginning

availability: a. Unappropriated balance 0.0 --

b. Revenue collections in fiscal year 2000-2001

in excess of authorized estimates 0.0 --

c. Unexpended appropriations

during fiscal year 2000-2001 (Reversions) 0.0 --

Beginning Unreserved Credit Balance 0.0 --

2. Revenues Based on Existing Tax Structure 13,473.8 14,451.2

3. Non-Tax Revenues:

Investment Income 152.0 167.0

Judicial Fees 109.5 111.7

Disproportionate Share 107.0 107.0

Insurance 43.9 45.8

Other Non-Tax Revenues 110.0 111.2

Highway Trust Fund Transfer 170.0 170.0

Highway Fund Transfer 14.0 15.3

Subtotal 14,180.7 15,179.2

4. Other Adjustments

North Carolina Railroad General Fund Repayment 19.0 --

Senate Bill 353 Enhance Department of

Revenue Collections 18.0 18.0

Butner Assessment Increase 0.3 0.5

Internal Revenue Code Conformity Adjustment (3.4) (3.8)

Closure of Tax Loopholes 190.8 232.9

Tax Withholding Acceleration 66.1 2.0

Transfer of Cash from Special, Trust,

Internal Service, and Reserve Funds 447.0 --

Court Fees Adjustment for the State Bar (1.7) (1.7)

Transfer to the Savings Reserve Account (164.2) --

Subtotal 571.9 247.9

TOTAL GENERAL FUND AVAILABILITY $14,752.6 $15,427.1

SECTION 2.2.(b) Notwithstanding the provisions of Section 7.2.(a) of S.L. 2000-67, nineteen million dollars ($19,000,000) of the North Carolina Railroad Company dividends received by the State during the 2000-2001 fiscal year and the 2001-2002 fiscal year shall: (i) be applied to increase the capital of the North Carolina Railroad Company, (ii) reduce the obligations described in subsection (c) of Section 32.30 of S.L. 1997-443, as amended by subsection (d) of Section 27.11 of S.L. 1999-237, and (iii) be deposited in the General Fund.

SECTION 2.2.(c) The balance of Budget Code 19930, the Hurricane Floyd Reserve Fund established pursuant to S.L.1999-463 (Extra Session), shall be transferred to the General Fund on July 1, 2001. Funds are appropriated in this act for the 2001-2003 fiscal biennium to the Office of State Budget and Management, Hurricane Floyd Reserve Fund, in an amount equal to the amount transferred under this section. These funds shall be expended only for Hurricane Floyd recovery according to the purposes, procedures, and requirements provided in S.L. 1999-463 (Extra Session).

SECTION 2.2.(d) Effective July 1, 2001, cash balances remaining in special funds on June 30, 2001, shall be transferred to the State Controller to be deposited in Nontax Budget Code 19978 (Intra State Transfers) according to the schedule that follows. These funds shall be used to support General Fund appropriations for the 2001-2002 fiscal year.

Fund Amount Transferred

Department of Agriculture and Consumer Services

Budget Code 23701, Fund Code 2201 (Warehouse

Investment Fund) $500,000

Department of Environment and Natural Resources

Budget Code 24300, Fund Code 2106 (DEH - Sleep Products) 46,437

Budget Code 24300, Fund Code 2331 (DAQ - Air Permits) 77,889

Budget Code 24300, Fund Code 2735 (DLR - Sedimentation Fees) 148,562

Budget Code 24300, Fund Code 2620 (DLR - Land Env Controls) 111,261

Budget Code 24300, Fund Code 2740 (DLR - Dam Safety Account) 18,522

Budget Code 64305, Fund Code 6372 (DWM - Inactive Hazardous Sites

Cleanup) 499,263

Budget Code 64305, Fund Code 6373 (DWM - Emergency Response

Fund) 49,771

Budget Code 24300, Fund Code 2341 (DWQ - Water Permits) 371,682

Budget Code 64306, Fund Code 6341 (DWQ - WW Treatment

Maintenance & Repair) 43,256

Budget Code 23400, Fund Code 2335 (DWQ - Lab Certification Fees) 16,371

Budget Code 23400, Fund Code 2130 (DWQ - Well Construction Fund) 18,134

Budget Code 23400, Fund Code 2310 (DWQ - Oil Pollution Control) 8,170

Department of Commerce

Budget Code 24610, Fund Code 2431 (International Trade Show Fund) 75,000

Department of Correction

Budget Code 24502 (Inmate Canteen/Welfare Fund) 380,000

SECTION 2.2.(e) Effective October 1, 2001, the sum of one million two hundred thousand dollars ($1,200,000) shall be transferred from the Department of Administration, Budget Code 74100, Fund Code 7211 (Motor Fleet Management) to the State Controller to be deposited in Nontax Budget Code 19978 (Intra State Transfers) to support General Fund appropriations for the 2001-2002 fiscal year.

Effective April 1, 2002, the sum of two million dollars ($2,000,000) shall be transferred from the Department of Administration, Budget Code 74100, Fund Code 7211 (Motor Fleet Management) to the State Controller to be deposited in Nontax Budget Code 19978 (Intra State Transfers) to support General Fund appropriations for the 2001-2002 fiscal year.

SECTION 2.2.(f) The transfer of cash from Department of Correction, Budget Code 74500, Fund Code 7100 (Prison Enterprises) to Nontax Budget Code 19978 (Intra State Transfers) shall be increased by one million dollars ($1,000,000), effective July 1, 2001, for the 2001-2002 fiscal year.

The transfer of cash from Department of Correction, Budget Code 74500, Fund Code 7100 (Prison Enterprises) to Nontax Budget Code 19978 (Intra State Transfers) shall be increased by five hundred thousand dollars ($500,000), effective July 1, 2002, for the 2002-2003 fiscal year and for subsequent fiscal years.

SECTION 2.2.(g) Notwithstanding G.S. 143-15.2 and G.S. 143-15.3, for the 2000-2001 fiscal year only, funds shall not be reserved to the Savings Reserve Account, and the State Controller shall not transfer funds from the unreserved credit balance to the Savings Reserve Account on June 30, 2001. The State Controller shall transfer the sum of one hundred sixty-four million two hundred thousand dollars ($164,200,000) from the General Fund to the Savings Reserve Account on July 1, 2001. This is not an "appropriation made by law", as that phrase is used in Article V, Section 7(2) of the North Carolina Constitution.

Of the funds in the Savings Reserve Account on July 1, 2001, the sum of one million nine hundred one thousand five hundred one dollars ($1,901,501) for each fiscal year shall be used to support the Martin County Child Support Call Center, and the sum of six hundred thousand dollars ($600,000) for each fiscal year shall be used to support the State Maternity Home Fund.

This subsection becomes effective June 30, 2001.

PART III. CURRENT OPERATIONS AND EXPANSION/HIGHWAY FUND

Requested by: Senators Plyler, Odom, Lee

SECTION 3.1. Appropriations from the Highway Fund of the State for the maintenance and operation of the Department of Transportation, and for other purposes as enumerated, are made for the biennium ending June 30, 2003, according to the following schedule:

Current Operations - Highway Fund 2001-2002 2002-2003

(1) Transportation admin. (84210) $69,195,895 $69,195,895

(2) Transportation operations (84220) 28,801,650 28,801,650

(3) Transportation programs (84230)

State construction

Primary - -

Secondary 87,462,000 89,387,000

Urban 14,000,000 14,000,000

Public access 2,000,000 2,000,000

Spot safety 9,100,000 9,100,000

Contingency 15,000,000 10,000,000

Federal aid match 5,212,266 5,212,266

Maintenance 580,878,337 573,855,366

Asphalt plant/OSHA 425,000 425,000

Capital 1,634,000

Ferry operations 19,747,132 19,747,132

Aid to municipalities 87,462,000 89,387,000

Rail 31,575,000 10,575,000

Public transit 64,460,834 64,460,834

Airports 5,000,000

(4) Governor's highway safety (84240) - -

(5) Transportation regulation (84260) 98,938,931 98,346,612

(6) Reserves and transfers (84270) 198,246,955 202,820,508

GRAND TOTAL CURRENT OPERATIONS

AND EXPANSION $1,319,140,000 $1,287,314,263

Requested by: Senators Plyler, Odom, Lee

highway fund availability statement

SECTION 3.2. The Highway Fund availability used in developing the 2001-2003 biennial budget is shown below:

Highway Fund Budget Reform Statement 2001-2002 2002-2003

Beginning Credit Balance $ 14,860,000 -

Estimated Revenue 1,303,280,000 $1,311,720,000

Transfer of Cash from Reserve Funds 1,000,000 -

Total Highway Fund Availability $1,319,140,000 $1,311,720,000

part Iv. highway trust fund appropriations

Requested by: Senators Plyler, Odom, Lee

SECTION 4.1. Appropriations from the Highway Fund of the State for the maintenance and operation of the Department of Transportation, and for other purposes as enumerated, are made for the biennium ending June 30, 2003, according to the following schedule:

Current Operations - Highway Trust Fund 2001-2002 2002-2003

Intrastate System $464,295,516 $489,403,290

Urban Loops 187,741,771 197,894,308

Aid to Municipalities 48,715,429 51,349,821

Total for Secondary Roads 83,827,858 87,445,392

Program Administration 34,142,426 36,181,189

Transfer to General Fund 170,000,000 170,000,000

GRAND TOTAL CURRENT OPERATIONS

AND EXPANSION $988,723,000 $1,032,274,000

PART V. BLOCK GRANTS

Requested by: Senators Martin of Guilford, Plyler, Odom, Lee

DHHS Block Grants

SECTION 5.1.(a) Appropriations from federal block grant funds are made for the fiscal year ending June 30, 2002, according to the following schedule:

COMMUNITY SERVICES BLOCK GRANT

01. Community Action Agencies $ 14,160,375

02. Limited Purpose Agencies 979,017

03. Department of Health and Human Services

to administer and monitor

the activities of the

Community Services Block Grant 500,000

TOTAL COMMUNITY SERVICES BLOCK GRANT $ 15,639,392

SOCIAL SERVICES BLOCK GRANT

01. County departments of social services $ 27,395,663

(Transfer from TANF - $4,500,000)

02. Allocation for in-home services provided

by county departments of

social services 2,101,113

03. Division of Mental Health, Developmental

Disabilities, and Substance Abuse Services 3,234,601

04. Division of Services for the Blind 3,105,711

05. Division of Facility Services 426,836

06. Division of Aging - Home and Community

Care Block Grant 1,840,234

07. Child Care Subsidies 3,000,000

08. Division of Vocational Rehabilitation -

United Cerebral Palsy 71,484

09. State administration 1,693,368

10. Child Medical Evaluation Program 238,321

11. Adult day care services 2,245,912

12. Comprehensive Treatment Services

Program 1,145,789

13. Transfer to Preventive Health Services

Block Grant for emergency medical services 213,128

14. Transfer to Preventive Health Services Block

Grant for AIDS education, counseling, and

testing 66,939

15. Department of Administration

for the N.C. State Commission of Indian Affairs

In-Home Services Program for the Elderly 203,198

16. Division of Vocational Rehabilitation -

Easter Seals Society 116,779

17. UNC-CH CARES Program for training and

consultation services 247,920

18. Office of the Secretary - Office of Economic

Opportunity for N.C. Senior Citizens'

Federation for outreach services to

low-income elderly persons 41,302

19. Transfer from TANF Block Grant for

Division of Social Services - Child

Caring Agencies 1,500,000

20. Division of Mental Health,

Developmental Disabilities, and

Substance Abuse Services - Developmentally

Disabled Waiting List for services 5,000,000

TOTAL SOCIAL SERVICES BLOCK GRANT $ 53,888,298

LOW-INCOME ENERGY BLOCK GRANT

01. Energy Assistance Programs $ 8,306,967

02. Crisis Intervention 7,078,114

03. Administration 1,984,934

04. Department of Commerce -

Weatherization Program 2,684,116

05. Department of Administration -

N.C. State Commission of Indian Affairs 39,765

TOTAL LOW-INCOME ENERGY BLOCK GRANT $ 20,093,896

MENTAL HEALTH SERVICES BLOCK GRANT

01. Provision of community-based

services in accordance with the

Mental Health Study Commission's

Adult Severe and Persistently

Mentally Ill Plan $ 5,192,826

02. Provision of community-based

services to children 2,378,540

03. Establish Child Residential

Treatment Services Program 1,500,000

04. Administration 783,911

TOTAL MENTAL HEALTH SERVICES BLOCK GRANT $ 9,855,277

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 $ 14,501,711

02. Continuation of services for

pregnant women and women

with dependent children 6,007,303

03. Continuation of services to

IV drug abusers and others at risk

for HIV diseases 5,209,934

04. Provision of services to children

and adolescents 6,839,190

05. Juvenile Services - Family Focus 774,414

06. Establish Child Residential Treatment

Services Program 500,000

07. Administration 2,623,049

TOTAL SUBSTANCE ABUSE PREVENTION

AND TREATMENT BLOCK GRANT $ 36,455,601

CHILD CARE AND DEVELOPMENT FUND BLOCK GRANT

01. Child care subsidies $148,343,839

02. Quality and availability initiatives 17,259,661

03. Administrative expenses 6,550,000

04. Transfer from TANF Block Grant for

child care subsidies 76,675,000

TOTAL CHILD CARE AND DEVELOPMENT FUND

BLOCK GRANT $248,828,500

TEMPORARY ASSISTANCE TO NEEDY FAMILIES

(TANF) BLOCK GRANT

01. Work First Cash Assistance $114,181,958

02. Work First County Block Grants 92,018,855

03. Transfer to the Child Care and

Development Fund Block Grant

for child care subsidies 76,675,000

04. Allocation to the Division of Mental

Health, Developmental Disabilities, and

Substance Abuse Services for Work First

substance abuse screening, diagnostic, and

support treatment services and drug testing 3,500,000

05. Cash Assistance Reserve 9,702,978

06. Allocation to the Division of Social

Services for staff development 500,000

07. Reduction of out-of-wedlock births 1,600,000

08. Substance Abuse Services for Juveniles 1,182,280

09. Special Children Adoption Fund 2,811,687

10. Business Process Reengineering

Project Reserve 3,500,000

11. Work First Job Retention and Follow-Up

Initiatives 300,000

12. Allocation to the Division of Public Health

for teen pregnancy prevention 2,239,261

13. Transfer to Social Services Block Grant

for Child Caring Agencies 1,500,000

14. Child Care Subsidies for TANF Recipients 26,621,241

15. Work First Housing Initiative 3,000,000

16. Allocation to the Division of Social

Services for Domestic Violence

Prevention and Awareness 1,000,000

17. County Child Protective Services,

Foster Care, and Adoption Workers 2,727,550

18. Intensive Family Preservation Program 2,000,000

19. Work First/Boys and Girls Clubs 1,000,000

20. Transfer to Social Services Block Grant for

County Departments of Social Services for

Children's Services 4,500,000

21. Support Our Students - Department of

Juvenile Justice and Delinquency

Prevention 2,750,674

22. Residential Substance Abuse Services

for Women With Children 5,000,000

23. Domestic Violence Services

for Work First Families 2,000,000

24. After-School Services for

At-Risk Children 3,000,000

25. Division of Social Services -

Administration 500,000

26. Child Welfare workers for local

departments of social services 7,299,494

27. Child Welfare Training 2,000,000

TOTAL TEMPORARY ASSISTANCE TO NEEDY FAMILIES

(TANF) BLOCK GRANT $373,110,978

MATERNAL AND CHILD HEALTH BLOCK GRANT

01. Healthy Mothers/Healthy Children

Block Grants to Local Health

Departments 9,838,074

02. High-Risk Maternity Clinic Services,

Perinatal Education and Training,

Childhood Injury Prevention,

Public Information and Education, and

Technical Assistance to Local Health

Departments 2,012,102

03. Services to Children With Special Health

Care Needs 5,078,647

TOTAL MATERNAL AND CHILD

HEALTH BLOCK GRANT $ 16,928,823

PREVENTIVE HEALTH SERVICES BLOCK GRANT

01. Statewide Health Promotion Programs $3,061,182

02. Dental Services/Fluoridation 100,800

03. Rape Crisis/Victims' Services

Program - Council for Women 190,134

04. Rape Prevention and Education

Program - Division of Public

Health and Council for Women 1,139,869

05. Transfer from Social Services

Block Grant -

AIDS/HIV Education, Counseling,

and Testing 66,939

06. Transfer from Social Services

Block Grant -

Emergency Medical Services 213,128

07. Office of Minority Health 159,459

08. Administrative Costs 108,546

TOTAL PREVENTIVE HEALTH SERVICES BLOCK GRANT $5,040,057

SECTION 5.1.(b) Decreases in Federal Fund Availability. - If the United States Congress reduces federal fund availability in the Social Services Block Grant below the amounts appropriated in this section, then the Department of Health and Human Services shall allocate these decreases giving priority first to those direct services mandated by State or federal law, then to those programs providing direct services that have demonstrated effectiveness in meeting the federally and State-mandated services goals established for the Social Services Block Grant. The Department shall not include transfers from TANF for specified purposes in any calculations of reductions to the Social Services Block Grant.

If the United States Congress reduces the amount of TANF funds below the amounts appropriated in this section after the effective date of this act, then the Department shall allocate the decrease in funds after considering any underutilization of the budget and the effectiveness of the current level of services. Any TANF Block Grant fund changes shall be reported 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.

Decreases in federal fund availability shall be allocated for the Maternal and Child Health and Preventive Health Services federal block grants by the Department of Health and Human Services after considering the effectiveness of the current level of services.

SECTION 5.1.(c) Increases in Federal Fund Availability. - Any block grant funds appropriated by the United States Congress in addition to the funds specified in this act shall be expended by the Department of Health and Human Services, with the approval of the Office of State Budget and Management, provided the resultant increases are in accordance with federal block grant requirements and are within the scope of the block grant plan approved by the General Assembly.

SECTION 5.1.(d) Changes to the budgeted allocations to the block grants appropriated in this act shall be reported immediately 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.

SECTION 5.1.(e) Limitations on Preventive Health Services Block Grant Funds. - Twenty-five percent (25%) of funds allocated for Rape Prevention and Rape Education shall be allocated as grants to nonprofit organizations to provide rape prevention and education programs targeted for middle, junior high, and high school students.

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 2001-2002 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.(f) The Department of Health and Human Services, Division of Social Services, shall do the following:

(1) Continue the current evaluation of the Work First Program to assess former recipients' earnings, barriers to advancement to economic self-sufficiency, utilization of community support services, and other longitudinal employment data. Assessment periods shall include six and 18 months following closure of the case.

(2) Continue the current evaluation of the Work First Program to profile the State's child-only caseload to include indicators of economic and social well-being, academic and behavioral performance, demographic data, description of living arrangements including length of placement out of the home, social and other human services provided to families, and other information needed to assess the needs of the child-only Work First Family Assistance clients and families.

(3) Continue the current evaluation to profile clients and families exempted from federal and State work participation requirements. The evaluation shall include an assessment of the client and family needs including why clients and families have been exempted.

The Department of Health and Human Services shall make a report on its progress in complying with this subsection 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 September 30, 2001, and shall make a final report no later than September 30, 2002.

SECTION 5.1.(g) The sum of two million eight hundred eleven thousand six hundred eighty-seven dollars ($2,811,687) appropriated in this section in the TANF Block Grant to the Department of Health and Human Services, Special Children Adoption Fund, for the 2001-2002 fiscal year shall be used to implement this subsection. 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.(h) The sum of one million five hundred thousand dollars ($1,500,000) appropriated in this act in the TANF Block Grant and transferred to the Social Services Block Grant to the Department of Health and Human Services, Division of Social Services, for child caring agencies for the 2001-2002 fiscal year shall be allocated to the State Private Child Caring Agencies Fund. These funds shall be combined with all other funds allocated to the State Private Child Caring Agencies Fund for the reimbursement of the State's portion of the cost of care for the placement of certain children by the county departments of social services who are not eligible for federal IV-E funds. These funds shall not be used to match other federal funds.

SECTION 5.1.(i) The sum of two million dollars ($2,000,000) appropriated in this act in the TANF Block Grant to the Department of Health and Human Services, Division of Social Services, for the 2001-2002 fiscal year for the Intensive Family Preservation Services (IFPS) Program shall be used by the Division in accordance with the provisions of this subsection.

The Department of Health and Human Services shall review the Intensive Family Preservation Services Program to enhance and implement initiatives which focus on increasing the sustainability and effectiveness of the Program.

The Department of Health and Human Services shall require that any program or entity that receives State, federal, or other funding for the purpose of Intensive Family Preservation Services shall provide the following information on an annual basis:

(1) An established follow-up system with a minimum of 12 months of follow-up services.

(2) Detailed information on the specific interventions applied including utilization indicators and performance measurement.

(3) Cost-benefit data.

(4) Data on long-term benefits associated with Intensive Family Preservation Services. This data shall be obtained by tracking families through the intervention process.

(5) The number of families remaining intact due to associated interventions beyond 12 months.

(6) The number and percentage of minority race children who received Intensive Family Preservation Services at a ratio essentially equivalent to the ratio of their distribution in the general population exposed to Child Protective Services involvement based on the CPS risk ratings.

The Department shall establish performance-based funding protocol and shall only provide funding to those counties providing the required information specified in subsection (b) of this section. The amount of funding shall be based on the individual performance of each program.

The Department of Health and Human Services shall prepare an interim 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 on the implementation of these changes by January 1, 2002, and shall provide a final report no later than May 30, 2002.

SECTION 5.1.(j) The sum of three hundred thousand dollars ($300,000) appropriated in this section to the Department of Health and Human Services in the Child Care and Development Fund Block Grant shall be used to develop and implement a Medical Child Care Pilot.

SECTION 5.1.(k) The sum of one million dollars ($1,000,000) 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 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. The Department shall report on its progress in complying with this subsection 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 that April 1, 2002.

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 for the subsidized child care program.

SECTION 5.1.(m) 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, Division of Social Services, for the Work First Housing Initiative shall be used to expand direct housing support to Work First clients and families. Direct housing support includes using funds for rental assistance, loans, moving expenses, and other financial assistance. No more than ten percent (10%) of these funds may be used for administration. These funds may be used for counseling or similar services only if it is demonstrated that those services are not otherwise available in the community.

SECTION 5.1.(n) The sum of five hundred thousand dollars ($500,000) appropriated in this section in the TANF Block Grant to the Department of Health and Human Services, Division of Social Services, for the 2001-2002 fiscal year shall be used to support administration of TANF-funded programs.

SECTION 5.1.(o) The sum of five million dollars ($5,000,000) appropriated in this section in the TANF Block Grant to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, for the 2001-2002 fiscal year shall be used to provide regional residential substance abuse treatment and services for women with children. The Department of Health and Human Services, the Division of Social Services, and the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, in consultation with local departments of social services, area mental health programs, and other State and local agencies or organizations, shall coordinate this effort in order to facilitate the expansion of regionally based substance abuse services for women with children. These services shall be culturally appropriate and designed for the unique needs of TANF women with children.

In order to expedite the expansion of these services, the Secretary of the Department of Health and Human Services may enter into contracts with service providers.

The Department of Health and Human Services, the Division of Social Services, and the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, shall report on their progress in complying with this subsection no later than October 1, 2001, and March 1, 2002, 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. These reports shall include all of the following:

(1) The number and location of additional beds created.

(2) The types of facilities established.

(3) The delineation of roles and responsibilities at the State and local levels.

(4) Demographics of the women served, the number of women served, and the cost per client.

(5) Demographics of the children served, the number of children served, and the services provided.

(6) Job placement services provided to women.

(7) A plan for follow-up and evaluation of services provided with an emphasis on outcomes.

(8) Barriers identified to the successful implementation of the expansion.

(9) Identification of other resources needed to appropriately and efficiently provide services to Work First recipients.

(10) Other information as requested.

SECTION 5.1.(p) The sum of two million seven hundred fifty thousand six hundred seventy-four dollars ($2,750,674) 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 2001-2002 fiscal year shall be used to support the existing Support Our Students Program 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.(q) The sum of two million dollars ($2,000,000) appropriated under this section in the TANF Block Grant to the Department of Health and Human Services, Division of Social Services, for the 2001-2002 fiscal year shall be used to provide domestic violence services to Work First recipients. The Division of Social Services, in consultation with the Council for Women and local departments of social services, shall develop and implement a mechanism by which these funds may be used to facilitate delivery of domestic violence counseling, support, and other direct services to clients. These funds shall not be used to establish new domestic violence shelters, for State administration, or to facilitate lobbying efforts. The Department of Health and Human Services and the Council for Women shall report on the uses of these funds no later than February 1, 2002, 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.

SECTION 5.1.(r) The sum of two million two hundred thirty-nine thousand two hundred sixty-one dollars ($2,239,261) appropriated in this section in the TANF Block Grant to the Department of Health and Human Services, Division of Public Health, for the 2001-2002 fiscal year for adolescent pregnancy prevention shall be used in accordance with this subsection.

The Department of Health and Human Services shall administer the adolescent pregnancy prevention programs and the adolescent parenting programs pursuant to the provisions of this subsection.

The programs shall include primary prevention efforts, secondary prevention efforts, and special initiatives.

The Commission for Health Services may adopt rules necessary to implement the programs.

State-level administrative costs for programs shall not exceed ten percent (10%) of the total funds.

In awarding grants, the Department of Health and Human Services shall target counties with the highest teen pregnancy rates, increasingly higher rates, high rates within demographic subgroups, or greatest need for parenting programs. Grants will be awarded on an annual basis.

Programs are not required to provide a cash match for these funds; however, the Department may require an in-kind match.

Local adolescent pregnancy prevention councils are encouraged but not required for program funding. State funds shall not be used for these activities.

The Department shall maintain the adolescent pregnancy prevention and adolescent parenting program database created for the program via contract and shall not continue to contract for database management, development, or analysis. Of the funds appropriated to the Department in this act, the Department shall not spend more than twenty-five thousand dollars ($25,000) to transition the database from the contractor to the Department. The Department shall continue to collect and manage program data in order to conduct longitudinal studies in the future. Notwithstanding any other provision of law, the Department shall not continue to have the behavioral/attitudinal evaluation completed annually for all programs.

Of funds appropriated to the Department of Health and Human Services, the Department shall not spend more than twenty-five thousand dollars ($25,000) to complete the longitudinal adolescent parenting program evaluation. The Department shall not contract for additional evaluations or assessments of the adolescent pregnancy prevention program or the adolescent parenting program during the 2001-2002 fiscal year.

The Department of Health and Human Services shall plan an outcome-based evaluation of the adolescent pregnancy prevention programs. In doing so, the Department shall address how to properly evaluate all programs and may issue a request for proposals to select an organization that has expertise in this area to assist with this evaluation.

The Department shall report on activities conducted pursuant to this subsection 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 by March 1, 2002.

SECTION 5.1.(s) The sum of two million dollars ($2,000,000) 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 and school dropout. 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 establish 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, 2002, on its progress in complying with this section to the Senate Appropriations Committee on Health and Human Services, the House of Representatives Subcommittee on Health and Human Services, and the Fiscal Research Division.

SECTION 5.1.(t) The sum of seven million two hundred sixty thousand dollars ($7,260,000) appropriated in this section in the TANF Block Grant to the Department of Health and Human Services, Division of Social Services, for the 2001-2002 fiscal year for Child Welfare Improvements shall be allocated to the county departments of social services for hiring or contracting additional staff on or after July 1, 2001, to investigate and provide services in Child Protective Services cases; to provide foster care and support services; to recruit, train, license, and support prospective foster and adoptive families; and to provide interstate and post-adoption services for eligible families.

SECTION 5.1.(u) 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 2001-2002 fiscal year and the sum of one million dollars ($1,000,000) appropriated in this section in the Substance Abuse Prevention and Treatment Block Grant to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, for the 2001-2002 fiscal year shall be used to continue a Comprehensive Treatment Services Program in accordance with Section 21.60 of this act.

SECTION 5.1.(v) The sum of two million dollars ($2,000,000) appropriated in this section in the TANF Block Grant to the Department of Health and Human Services, Division of Social Services, for fiscal year 2001-2002 shall be used to support various child welfare training projects as follows:

(1) The sum of three hundred fifty thousand dollars ($350,000) shall be used to establish a regional training center in southeastern North Carolina.

(2) The sum of seven hundred fifty thousand dollars ($750,000) shall be used to support the Masters Degree in Social Work/Baccalaureate Degree in Social Work Collaborative.

(3) The sum of one hundred eighty thousand dollars ($180,000) to provide training for residential child care facilities.

(4) The sum of seven hundred twenty thousand dollars ($720,000) to provide for various other child welfare training initiatives.

Requested by: Senators Martin of Pitt, Weinstein, Plyler, Odom, Lee

NER BLOCK GRANT FUNDS

SECTION 5.2.(a) Appropriations from federal block grant funds are made for the fiscal year ending June 30, 2002, 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 - 2002 Program Year $45,000,000

SECTION 5.2.(b) Decreases in Federal Fund Availability. - Decreases in federal fund availability for the Community Development Block Grants. - 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; up to 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; 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) Study. - The Department of Commerce shall study the development of a training program designed to provide a minimum level of knowledge and skills for Community Development Block Grant administrators. In conducting the study, the Department shall consult the North Carolina League of Municipalities, the North Carolina Association of County Commissioners, the North Carolina Community Development Association, and the Institute of Government at the University of North Carolina at Chapel Hill. The Department may use unencumbered and unspent State Technical Assistance funds from previous program years to conduct the study. The Department shall report its findings to the House and Senate Appropriations Subcommittees on Natural and Economic Resources and the Fiscal Research Division by February 1, 2002.

PART VI. GENERAL PROVISIONS

Requested by: Senators Plyler, Odom, Lee

special funds, federal funds, DEPARTMENTAL RECEIPTs, and cash balanceS/AUTHORIZATION FOR EXPENDITURES

SECTION 6.1.(a) There is appropriated out of the cash balances, federal receipts, and departmental receipts available to each department, sufficient amounts to carry on authorized activities included under each department's operations. All these cash balances, federal receipts, and departmental receipts shall be expended and reported in accordance with provisions of the Executive Budget Act, except as otherwise provided by statute, and shall be expended at the level of service authorized by the General Assembly. If the receipts, other than gifts and grants that are unanticipated and are for a specific purpose only, collected in a fiscal year by an institution, department, or agency exceed the receipts certified for it in General Fund Codes or Highway Fund Codes, then the Director of the Budget shall decrease the amount he allots to that institution, department, or agency from appropriations from that Fund by the amount of the excess, unless the Director of the Budget finds that the appropriations from the Fund are necessary to maintain the function that generated the receipts at the level anticipated in the certified Budget Codes for that Fund.

Funds that become available from overrealized receipts in General Fund Codes and Highway Fund Codes may be used for new permanent employee positions or to raise the salary of existing employees only as follows:

(1) As provided in G.S. 116-30.1, 116-30.2, 116-30.3, 116-30.4; or

(2) If the Director of the Budget finds that the new permanent employee positions are necessary to maintain the function that generated the receipts at the level anticipated in the certified budget codes for that Fund. The Director of the Budget shall notify the President Pro Tempore of the Senate, the Speaker of the House of Representatives, the chairmen of the appropriations committees of the Senate and the House of Representatives, and the Fiscal Research Division of the Legislative Services Office that he intends to make such a finding at least 10 days before he makes the finding. The notification shall set out the reason the positions are necessary to maintain the function.

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 the General Fund Codes or Highway Fund Codes that did not result in a corresponding reduced allotment from appropriations from that Fund.

SECTION 6.1.(b) 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.(c) The Director of the Budget shall develop necessary budget controls, regulations, and systems to ensure that these funds and other State funds subject to the Executive Budget Act are not spent in a manner that would cause a deficit in expenditures.

Requested by: Senators Plyler, Odom, Lee

insurance and fidelity bonds

SECTION 6.2. All insurance and all official fidelity and surety bonds authorized for the several departments, institutions, and agencies shall be effected and placed by the Department of Insurance, and the cost of placement shall be paid by the affected department, institution, or agency with the approval of the Commissioner of Insurance.

Requested by: Senators Plyler, Odom, Lee

contingency and emergency fund allocations

SECTION 6.3.(a) Funds in the amount of five million dollars ($5,000,000) for the 2001-2002 fiscal year and five million dollars ($5,000,000) for the 2002-2003 fiscal year are appropriated in this act to the Contingency and Emergency Fund. Of the funds:

(1) The sum of three million eight hundred seventy-five thousand dollars ($3,875,000) for the 2001-2002 fiscal year and the sum of three million eight hundred seventy-five thousand dollars ($3,875,000) for the 2002-2003 fiscal year shall be used only to respond to an unanticipated disaster such as a fire, hurricane, or tornado;

(2) The sum of nine hundred thousand dollars ($900,000) for the 2001-2002 fiscal year and the sum of nine hundred thousand dollars (900,000) for the 2002-2003 fiscal year shall be used only (i) for the purposes set out in subdivision (1) of this subsection, (ii) as required by a court, Industrial Commission, or administrative hearing officer's order or award, or (iii) to match unanticipated federal funds; and

(3) The sum of two hundred twenty-five thousand dollars ($225,000) for the 2001-2002 fiscal year and the sum of two hundred twenty-five thousand dollars ($225,000) for the 2002-2003 fiscal year shall be used for the purposes set out in subdivisions (1) and (2) of this subsection or for other allocations from the Contingency and Emergency Fund.

SECTION 6.3.(b) Funds appropriated to the Contingency and Emergency Fund shall not be used to lease office space unless the expenditure is for a purpose set out in subdivisions (1) or (2) of subsection (a) of this section.

Requested by: Senators Plyler, Odom, Lee

authorized transfers from salary adjustment reserves

SECTION 6.4. The Director of the Budget may transfer to General Fund budget codes from the General Fund Salary Adjustment Reserves appropriation and may transfer to Highway Fund budget codes from the Highway Fund Salary Adjustment Reserve appropriation, amounts required to support approved salary adjustments made necessary by difficulties in recruiting and holding qualified employees in State government. The funds may be transferred only when salary reserve funds in individual operating budgets are not available.

The Director of the Budget shall report to the Fiscal Research Division prior to approving salary adjustments and transferring funds pursuant to this section.

Requested by: Senators Plyler, Odom, Lee

expenditures of funds in reserves limited

SECTION 6.5. All funds appropriated by this act into reserves may be expended only for the purposes for which the reserves were established.

Requested by: Senators Plyler, Odom, Lee

state money recipients/conflict of interest policy

SECTION 6.6. Each private, nonprofit entity eligible to receive State funds, either by General Assembly appropriation, or by grant, loan, or other allocation from a State agency, before funds may be disbursed to the entity, shall file with the disbursing agency a notarized copy of that entity's policy addressing conflicts of interest that may arise involving the entity'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 entity's employees or members of the board or other governing body, from the entity's disbursing of State funds, and shall include actions to be taken by the entity or the individual, or both, to avoid conflicts of interest and the appearance of impropriety.

Requested by: Senators Plyler, Odom, Lee

disbursements to nonprofits

SECTION 6.7. G.S. 143-26 reads as rewritten:

"§ 143-26. Director to have discretion as to manner of paying annual appropriations.

(a) ~~Unless otherwise provided,~~ Except as provided in subsection (b) of this section or as otherwise provided by law, it shall be discretionary with the Director of the Budget whether any annual appropriation shall be paid in monthly, quarterly or semiannual installments or in a single payment.

(b) Except as otherwise provided by law, an annual appropriation of one hundred thousand dollars ($100,000) or less to or for the use of a nonprofit corporation shall be paid in a single annual payment. An annual appropriation of more than one hundred thousand dollars ($100,000) to or for the use of a nonprofit corporation shall be paid in quarterly or monthly installments, in the discretion of the Director of the Budget."

Requested by: Senators Plyler, Odom, Lee

budgeting of pilot programs

SECTION 6.8.(a) Any program designated by the General Assembly as experimental, model, or pilot shall be shown as a separate budget item and shall be considered as an expansion item until a succeeding General Assembly reapproves it.

Any new program funded in whole or in part through a special appropriations bill shall be designated as an experimental, model, or pilot program.

SECTION 6.8.(b) The Governor shall submit to the General Assembly with his proposed budget a report of which items in the proposed budget are subject to the provisions of this section.

Requested by: Senators Plyler, Odom, Lee

APPROPRIATIONS EFFICIENCY STUDY

SECTION 6.9. The Appropriations Committees of the Senate and House of Representatives shall convene at least once a month during the interim period between the 2001 General Assembly and the 2002 Regular Session of the 2001 General Assembly to study the structure, duties, and functions of the various agencies and programs of State government. The purpose of the study shall be to determine ways to make State government more efficient and effective and to produce cost savings to the citizens of the State. During the study, the Appropriations Committees shall review the recommendations of the Governor's Efficiency Commission and shall consider the feasibility of consolidating, eliminating, transferring, or privatizing certain programs, divisions, or other entities where there is duplication of services or functions or where the functions being performed are not cost-effective.

Requested by: Senators Plyler, Odom, Lee

LIMITATIONS ON AGENCY LEGISLATIVE LIAISON

SECTION 6.10.(a) Article 9A of Chapter 120 of the General Statues is amended by adding the following new section to read:

"§ 120-47.12. Limitations on agency legislative liaisons.

(a) No principal State department may use State funds to contract with persons who are not employed by the State to serve as legislative liaisons or otherwise lobby the General Assembly.

(b) No more than two persons in each principal State department may be registered to lobby or designated as legislative liaisons pursuant to this Article."

SECTION 6.10.(b) G.S. 120-47.1 is amended by adding a new subdivision to read:

"(4a) The term "legislative liaison personnel" means State officers and employees whose principal duties involve lobbying."

Requested by: Senators Plyler, Odom, Lee

reserve to implement the health insurance pOrtability and accountability act (hipaa)

SECTION 6.11.(a) Funds in the amount of thirty million dollars ($30,000,000) are appropriated in this act to the Reserve to Implement HIPAA. This reserve shall be located in the Office of Budget and Management.

SECTION 6.11.(b) The federal Health Insurance Portability and Accountability Act (HIPAA) was enacted in 1996 and set many goals for the health care industry. The act’s primary purpose is to protect health insurance coverage for workers and their families when workers change or lose jobs. This new protection requires major administrative changes for health care programs. The most comprehensive changes include: (i) moving from paper-based transactions to electronic transactions, (ii) establishing national identifiers for providers, payers, and employers, and (iii) upgrading security and privacy of health care information. Failure to implement HIPAA requirements may result in denied or delayed reimbursements and severe civil and criminal penalties.

SECTION 6.11.(c) The Office of State Budget and Management, in consultation with the Chief Information Officer and the Secretary of Health and Human Services, shall develop a strategic plan to implement the requirements outlined in HIPAA. Specifically, the plan shall:

(1) Identify and document all requirements outlined in the federal HIPAA legislation as they relate to State agencies;

(2) Include an assessment of the State’s existing administrative systems, policies, and information technology systems, as they relate to the requirements of HIPAA;

(3) Include a timeline for implementing all necessary administrative, policy, and technology changes to ensure compliance; and

(4) Provide a detailed cost and cash flow analysis for each State agency subject to compliance. The analysis shall include personnel requirements, information technology equipment needs, and other operating and start-up expenses needed to implement HIPAA requirements.

SECTION 6.11.(d) The Office of State Budget and Management shall report on the strategic plan developed pursuant to this section to the Chairs of the Senate and House of Representatives Appropriations Committees, the Chairs of the Senate and House of Representatives Appropriations Subcommittees on Information Technology, the Joint Legislative Commission on Governmental Operations, and the Fiscal Research Division by October 1, 2001. No funds shall be spent to implement this section until the requirements of this subsection are met.

SECTION 6.11.(e) Prior to expending any funds to implement this section, the Office of State Budget and Management shall report to the Chairs of the Senate and House of Representatives Appropriations Committees, the Chairs of the Senate and House of Representatives Appropriations Subcommittees on Information Technology, the Joint Legislative Commission on Governmental Operations, and the Fiscal Research Division on proposed expenditures and projected monthly cash requirements for the 2001-2002 fiscal year and beyond. After making this report, the Office of State Budget and Management shall report quarterly on its progress in implementing this section to the Chairs of the Senate and House of Representatives Appropriations Committees, the Chairs of the Senate and House of Representatives Appropriations Subcommittees on Information Technology, the Joint Legislative Commission on Governmental Operations, and the Fiscal Research Division.

Requested by: Senators Plyler, Odom, Lee

LIMITATIONS ON USE OF STATE AIRCRAFT

SECTION 6.12. No State-owned airplane or helicopter may be used to transport any member of a board or commission to or from a meeting of the board or commission to which that member is appointed. This section does not apply when the State-owned airplane or helicopter is traveling to a particular destination for official State business other than a meeting of a board or commission. This section does not apply to elected officials who serve on a board or commission by virtue of their office.

Requested by: Senators Plyler, Odom, Lee

Attorney General Reporting of pending lawsuits

SECTION 6.13. Article 1 of Chapter 114 is amended by adding a new section to read:

"§ 114-2.6. Attorney General to report on pending lawsuits in which State is a party.

By April 1 and October 1 each year, the Attorney General shall submit a written report to the Chairs of the Joint Legislative Commission on Governmental Operations, the Chairs of the Appropriations Committees of the Senate and House of Representatives, the Chairs of the Finance Committees of the Senate and House of Representatives, and the Fiscal Research Division of the Legislative Services Office on all pending lawsuits against the State, the status of the lawsuits, and the potential liability to the State. In addition, the Attorney General shall submit a written report to the Joint Legislative Commission on Governmental Operations, the Chairs of the Appropriations Committees of the Senate and House of Representatives, the Chairs of the Finance Committees of the Senate and House of Representatives, and the Fiscal Research Division of the Legislative Services Office within 30 days of a final judgment that orders the State to pay the sum of one million dollars ($1,000,000) or more."

Requested by: Senators Plyler, Odom, Lee

private LICENSE PLATES ON PUBLICly owned motor VEHICLES

SECTION 6.14.(a) Pursuant to the provisions of G.S. 14-250, for the 2001-2003 fiscal biennium, the General Assembly authorizes the use of private license tags on State-owned motor vehicles only for the State Highway Patrol and for the following:

Department Exemption Category Number

Motor Vehicles License and Theft 97

Justice SBI Agents 277

Correction Probation/Parole Surveillance

Officers (intensive

probation) 25

Crime Control and

Public Safety ALE Officers 92

Revenue 24

Capitol Area

Police 2

Wildlife Resources

Commission Wildlife Enforcement Officers 12.

SECTION 6.14.(b) The 92 ALE vehicles authorized by this section to use private license tags shall be distributed as follows:

(1) 54 among Agent I officers;

(2) 20 among Agent II officers;

(3) 1 to the Deputy Director;

(4) 12 to the District Offices/Extra Vehicles; and

(5) 5 to the Director, to be distributed at the Director's discretion.

SECTION 6.14.(c) Except as provided in this section, all State-owned motor vehicles shall bear permanent registration plates issued under G.S. 20-84.

SECTION 6.14.(d) G.S. 14-250 reads as rewritten:

"§ 14-250. Publicly owned vehicle to be marked.

It shall be the duty of the executive head of every department of the State government, and of any county, or of any institution or agency of the State, to have painted on every motor vehicle owned by the State, or by any county, or by any institution or agency of the State, a statement that such car belongs to the State or to some county, or institution or agency of the State. Provided, however, that no automobile used by any county officer or county official for the purpose of transporting, apprehending or arresting persons charged with violations of the laws of the State of North Carolina, shall be required to be lettered. Provided, further, that in lieu of the above method of marking motor vehicles owned by any agency or department of the State government, it shall be deemed a compliance with the law if such vehicles have imprinted on the license tags thereof, above the license number, the words "State Owned" and that such vehicles have affixed to the front thereof a plate with the statement "State Owned". Provided, further, that in lieu of the above method of marking vehicles owned by any county, it shall be deemed a compliance with the law if such vehicles have painted or affixed on the side thereof a circle not less than eight inches in diameter showing a replica of the seal of such county. Provided, further, that no county-owned motor vehicle used for transporting day or residential facility clients of area mental health, developmental disabilities, and substance abuse authorities established under Article 4 of Chapter 122C of the General Statutes shall be required to be lettered; provided, further, notwithstanding this sentence, each vehicle shall bear the distinctive permanent registration plate pursuant to G.S. 20-84. Provided, further, that in lieu of the above method of marking vehicles owned by the State and permanently assigned to members of the Council of State, it shall be deemed a compliance with the law if such vehicles have imprinted on the license tags thereof the license number assigned to the appropriate member of the Council of State pursuant to ~~G.S. 20-81(4);~~G.S. 20-79.5, a member of the Council of State shall not be assessed any registration fee if he elects to have a State-owned motor vehicle assigned to him designated by his official plate number.

The General Assembly recognizes the need to allow the limited use of private license plates on publicly owned vehicles, and may authorize exemptions from the provisions of this section for each fiscal year. Each agency shall submit requests for private tags to the Division of Motor Fleet Management of the Department of Administration. The Division shall report the requests to the Appropriations Committees of the General Assembly by June 1. The total number of private licenses plates authorized by the General Assembly for each agency is inclusive of all confidential license plates issued to the agency pursuant to G.S. 20-56 and all fictitious license plates issued to the agency pursuant to G.S. 20-39(g) and G.S. 20-39(h).

For purposes of this section, the term "private license plate" refers to a license plate that would normally be issued to a private party and therefore lacks any markings indicating that it has been assigned to a publicly owned vehicle. "Confidential" license plates are a specialized form of private license plate for which a confidential registration has been authorized under G.S. 20-56. "Fictitious" license plates are a specialized form of private license plate for which a fictitious registration has been issued under G.S. 20-39(g) or G.S. 20-39(h)."

SECTION 6.14.(e) G.S. 20-39 reads as rewritten:

"§ 20-39. Administering and enforcing laws; rules and regulations; agents, etc.; seal; fees; licenses and plates for undercover officers.

(a) The ~~Commissioner~~ Secretary of Transportation, or the Secretary's designee is hereby vested with the power and is charged with the duty of administering and enforcing the provisions of this Article and of all laws regulating the operation of vehicles or the use of the highways, the enforcement or administration of which is now or hereafter vested in the Division.

(b) The ~~Commissioner~~ Secretary of Transportation, or the Secretary's designee is hereby authorized to adopt and enforce such rules and regulations as may be necessary to carry out the provisions of this Article and any other laws the enforcement and administration of which are vested in the Division.

(c) The ~~Commissioner~~ Secretary of Transportation, or the Secretary's designee is authorized to designate and appoint such agents, field deputies, and clerks as may be necessary to carry out the provisions of this Article.

(d) The ~~Commissioner~~ Secretary of Transportation, or the Secretary's designee shall adopt an official seal for the use of the Division.

(e) The ~~Commissioner~~ Secretary of Transportation, or the Secretary's designee is authorized to cooperate with and provide assistance to the Environmental Management Commission, or appropriate local government officials, and to develop, adopt, and ensure enforcement of necessary rules and regulations, regarding programs of motor vehicle emissions inspection/maintenance required for areas in which ambient air pollutant concentrations exceed National Ambient Air Quality Standards.

(f) The ~~Commissioner~~ Secretary of Transportation, or the Secretary's designee is authorized to charge and collect the following fees for the verification of equipment to be used on motor vehicles or to be sold in North Carolina, when that approval is required pursuant to this Chapter:

(1) When a federal standard has been established, the fee shall be equal to the cost of verifying compliance with the applicable federal standard; or

(2) When no federal standard has been established, the fee shall be equal to the cost of verifying compliance with the applicable State standard. Any motor vehicle manufacturer or distributor who is required to certify his products under the National Traffic and Motor Vehicle Safety Act of 1966, as from time to time amended, may satisfy the provisions of this section by submitting an annual written certification to the ~~Commissioner~~ Secretary of Transportation, or the Secretary's designee attesting to the compliance of his vehicles with applicable federal requirements. Failure to comply with the certification requirement or failure to meet the federal standards will subject the manufacturer or distributor to the fee requirements of this subsection.

(g) The ~~Commissioner~~ Secretary of Transportation, or the Secretary's designee, notwithstanding any other provision of this Chapter, but subject to the limitations on private license plates established by the General Assembly under G.S. 14-250, may lawfully to the extent necessary provide law-enforcement officers of the Division on special undercover assignments with motor vehicle operator's licenses and motor vehicle registration plates under assumed names using false or fictitious addresses. The ~~Commissioner~~ Secretary of Transportation, or the Secretary's designee shall be responsible for the request for issuance and use thereof. The ~~Commissioner~~ Secretary of Transportation, or the Secretary's designee may direct the immediate return of any operator's license or registration plate issued pursuant to this section.

(h) The ~~Commissioner~~ Secretary of Transportation, or the Secretary's designee, notwithstanding any other provision of this Chapter, but subject to the limitations on private license plates established by the General Assembly under G.S. 14-250, may lawfully and to the extent necessary, provide local, State or federal law-enforcement officers on special undercover assignments with motor vehicle drivers licenses and motor vehicle registration plates under assumed names using false or fictitious addresses. Such registration plates shall only be used on publicly owned or leased ~~vehicles.~~ vehicles and shall not be used on privately owned vehicles under any circumstances. Requests for these licenses and registration plates shall be made to the ~~Commissioner~~ Secretary of Transportation, or the Secretary's designee by the head of the local, State or federal law-enforcement agency and be accompanied by approval in writing from the Director of the State Bureau of Investigation upon a specific finding by the Director that the request is justified and necessary. The Director shall keep a record of all such licenses, registration plates, assumed names, false or fictitious addresses, and law-enforcement officers using the licenses or registration plates, and shall request the immediate return of any license or registration plate that is no longer necessary. Licenses and registration plates provided under this subsection shall expire six months after initial issuance or subsequent validation after the request for extension has been approved in writing by the Director of the State Bureau of Investigation. The head of the local, State or federal law-enforcement agency shall be responsible for the use of the licenses and registration plates and shall return them immediately to the ~~Commissioner~~ Secretary of Transportation, or the Secretary's designee for cancellation upon either (i) their expiration, (ii) request of the Director of the State Bureau of Investigation, or (iii) request of the ~~Commissioner~~ Secretary of Transportation, or the Secretary's designee. Failure to return a license or registration plates issued pursuant to this subsection shall be punished as a Class 2 misdemeanor. At no time shall the number of valid licenses and registration plates issued under this act exceed one hundred twenty-five, and those issued shall be strictly monitored by the Director. All of the private registration plates issued to special agents of the State Bureau of Investigation under the Department of Justice and to alcohol law enforcement agents under the Department of Crime Control and Public Safety, pursuant to G.S. 14-250, may be fictitious plates and shall not be counted in the total number of fictitious plates authorized by this subsection.

(i) Notwithstanding the requirements of G.S. 20-7.1 and G.S. 20-67(a), the ~~Commissioner~~ Secretary of Transportation, or the Secretary's designee may correct the address records of drivers license and registration plate holders as shown in the files of the Division to that shown on notices and renewal cards returned to the Division with new addresses provided by the United States Postal Service.

(j) The Secretary of Transportation, or the Secretary's designee shall administer the issuance of private plates to State-owned vehicles under the provisions of G.S. 14-250, G.S. 20-56, and subsections (g) and (h) of this section to ensure that the limitations placed on the issuance of private license plates by the General Assembly are complied with, that confidential and fictitious license plates are not used on private vehicles, that confidential plates are only issued to those persons whose personal safety is demonstrably at risk, and that all other laws governing the issuance of private license plates are strictly complied with."

SECTION 6.14.(f) G.S. 20-56 reads as rewritten:

"§ 20-56. Registration indexes.

(a) The Division shall file each application received, and when satisfied as to the genuineness and regularity thereof, and that the applicant is entitled to register such vehicle and to the issuance of a certificate of title, shall register the vehicle therein described and keep a record thereof as follows:

(1) Under a distinctive registration number assigned to the vehicle;

(2) Alphabetically, under the name of the owner;

(3) Under the motor number or any other identifying number of the vehicle; and

(4) In the discretion of the Division, in any other manner it may deem advisable.

(b) The Division ~~shall~~ may maintain a separate registration file for vehicles bearing private tags which are owned or leased for use by individuals who comply with the provisions of this subsection and who are in the following categories:

(1) Members of federal, State, and local law enforcement agencies if the vehicles are used for the purpose of transporting, apprehending, or arresting persons charged with violations of the laws of the United States or the State of North Carolina;

(2) Agents for the Internal Revenue Service;

(3) Public officials.

Individuals in the aforementioned categories ~~must provide satisfactory evidence~~ shall demonstrate to the ~~Commissioner~~ Secretary of Transportation, or the Secretary's designee that their personal safety is at ~~risk.~~ risk and provide details supporting that claim. The fact that a person is a law enforcement officer is not sufficient by itself to establish that the person's safety is at risk. The Secretary of Transportation, or the Secretary's designee shall adopt strict verification procedures to ensure the integrity of the registration system. This file shall be confidential for the use of the Division.

Upon the annual renewal of the registration of a vehicle for which a confidential file has been established under this section, the information placed in that file shall lose its confidential status unless the Secretary of Transportation, or the Secretary's designee is supplied with information demonstrating that the person's safety remains at risk at the time of renewal.

Private tags issued pursuant to this section are subject to the limitations on private license plates established by the General Assembly under G.S. 14-250 and shall not be placed on privately owned vehicles under any circumstances. The number of confidential license plates issued under this section shall not exceed 500 at any time unless the Secretary of Transportation, or the Secretary's designee finds that exceptional circumstances exist that justify exceeding that number."

SECTION 6.14.(g) The Division of Motor Vehicles shall report to the Joint Legislative Commission on Governmental Operations by January 1 and July 1 of each year on the number of private plates issued to State-owned vehicles. The report shall show the total number of private plates issued to each agency, the total number of confidential plates issued to each agency, the total number of fictitious plates issued to each agency, and any additional information necessary for an assessment of the agency's compliance with G.S. 14-250.

Requested by: Senators Plyler, Odom, Lee

Payroll Turnover Adjustment

SECTION 6.15.(a) The purpose of the two percent (2%) turnover adjustment set out in Section 2.1 of this act is to adjust the amount appropriated from the General Fund for State-paid salaries to more accurately reflect actual salary requirements of State-paid personnel. The Office of State Budget and Management shall administer the two percent (2%) turnover adjustment by reducing the allotment to each spending agency except for the public schools, community colleges, and State colleges and universities by an amount equal to two percent (2%) of the amount appropriated to that agency for regular salaries and wages including the employer's contributions for retirement and social security.

SECTION 6.15.(b) The provisions of G.S. 143-23 shall not apply to overexpenditures of funds other than salary funds that are necessary to implement this section. Funds other than salary funds shall not be used to offset expenditures of salary funds for new personnel positions or to reclassify or otherwise increase the salary of existing employees.

Requested by: Senator Lee

EXTEND THE COMMISSION TO ADDRESS SMART GROWTH, GROWTH MANAGEMENT, AND DEVELOPMENT ISSUES

SECTION 6.16. Section 16.7(g) of S.L.1999-237 reads as rewritten:

"Section 16.7.(g) Report. - The Commission shall submit an interim report to the 2000 Regular Session of the 1999 General Assembly and shall submit a final report of its findings and recommendations by ~~January 15, 2001,~~October 1, 2001, to the General Assembly, the Governor, and the citizens of the State. The report may include recommendations to (i) enact and implement a program of comprehensive planning, supportive infrastructure development, and growth management and (ii) address the issue of continued oversight of growth and development in the State, including whether a permanent commission should be established. The Commission shall terminate upon filing its final report."

PART VII. Department of administration

Requested by: Senators Warren, Plyler, Odom, Lee

veteran's scholarship program

SECTION 7.1. G.S. 165-20(3) reads as rewritten:

"§ 165-20. Definitions.

As used in this Article the terms defined in this section shall have the following meaning:

…

(3) "Child" means a person who is a domiciliary of North Carolina and is a resident of North Carolina when applying for a scholarship, who has completed high school or its equivalent prior to receipt of a scholarship as may be awarded under this Article, who has complied with the requirements of the Selective Service System, if applicable, and who further meets one of the following requirements:

a. A person whose veteran parent was a legal resident of North Carolina at the time of said veteran's entrance into that period of service in the armed forces during which eligibility is established under G.S. 165-22.

b. A veteran's child who was born in North Carolina and has lived in North Carolina continuously since birth. Provided, that the requirement in the preceding sentence as to birth in North Carolina may be waived by the Department of Administration if it is shown to the satisfaction of the Department that the child's mother was a native-born resident of North Carolina and was such resident at the time of her marriage to the veteran and was outside the State temporarily at the time of the child's birth, following which the child was returned to North Carolina within a reasonable period of time where said child has since lived continuously.

c. A person meeting either of the requirements set forth in subdivision (3)a or b above, and who was legally adopted by the veteran prior to said person's reaching the age of 15 years."

Requested by: Senators Warren, Plyler, Odom, Lee

modifications to THE STATE EMPLOYEE INCENTIVE BONUS PROGRAM

SECTION 7.2.(a) G.S. 143-340(1) reads as rewritten:

"(1) To establish the State Employee Incentive Bonus Program pursuant to Article 36A of this Chapter, with the authority to adopt all rules necessary to implement the program. The Secretary shall serve ex officio on all program committees and shall designate an executive secretary to administer the program."

SECTION 7.2.(b) G.S. 143-345.20 reads as rewritten:

"§ 143-345.20. Definitions.

The following definitions apply in this Article:

(1) Baseline reversion. - The two-year historical average of reversions by a State department, agency, or institution.

~~(2)~~ ~~Employing unit. - Any of the following:~~

a. ~~The principal Council of State office or department enumerated in G.S. 143A-11 for which a State employee works.~~

b. ~~The principal State department enumerated in G.S. 143B-6 for which a State employee works.~~

c. ~~The constituent institution of The University of North Carolina or the General Administration of The University of North Carolina for which a State employee works.~~

d. ~~The local school administrative unit for which a State employee works.~~

e. The board, commission, or agency and its staff for which a State employee works, if that agency is not organizationally housed in any of the other offices, departments, or institutions listed in this subdivision.

(2a) Participating agency. - Any State department, agency, or institution, or any local school administrative unit that employs State employees eligible to participate in the State Employee Incentive Bonus Program. The term includes the North Carolina Community Colleges System, The University of North Carolina and its constituent universities, and charter schools. The term does not include federal or local government agencies.

(2b) SEIBP. - Acronym for the State Employee Incentive Bonus Program.

(3) State employee. - Any of the following:

a. A person who is a contributing member of the Teachers' and State Employees' Retirement System of North Carolina, the Consolidated Judicial Retirement System of North Carolina, or the Optional Program.

b. A person who receives wages from the State as a part-time or temporary worker, but is not otherwise a contributing member of one of the retirement programs listed in sub-subdivision a. of this subdivision."

SECTION 7.2.(c) G.S. 143-345.21 reads as rewritten:

"§ 143-345.21. State employee incentive bonus.

(a) A State employee or team of State employees may receive an incentive bonus or bonuses in reward for suggestions or innovations resulting in monetary savings to the State, increased revenues to the State, or improved quality of services delivered to the public.

~~(b)~~ In addition to any bonuses paid directly to individual State employees, a portion of the cost-savings associated with any savings realized from permanent efficiencies implemented pursuant to this Article may be contributed to a reserve fund for State employee performance bonuses. Funds for State employee incentive bonuses shall only come from savings including reversions above the baseline reversion of the employing State department, agency, or institution.

(b1) The amount of savings generated by suggestions and innovations shall be determined after a 12-month period of implementation. No incentive bonus shall be paid prior to the expiration of 12 months, and payment may be delayed further as reasonably required to ensure that a complete cost implementation cycle is evaluated fully.

(c) Savings generated by suggestions and innovations shall be determined at the end of the fiscal year in which the suggestion or innovation is implemented or the determination may be carried over for one full fiscal year after implementation before making an award if the actual savings cannot be verified before the end of the fiscal year.Any savings are to be calculated using the actual expenditures for a program, activity, or service compared to the budgeted amount for the same, if an amount has been budgeted for the program, activity, or service. The savings calculation shall include the amount of any reversions in excess of the baseline reversion. ~~The savings or revenue increases realized from any suggestion or innovation implemented for less than one full fiscal year shall be annualized.~~Any savings realized through the State Employee Incentive Bonus Program shall be weighed against continued service to the ~~public.~~public and the assurance that there is not a negative impact on State programs.

(d) If a suggestion or innovation affects a program, activity, or service for which no separate budgeted amount has been made, the State Coordinator, in conjunction with the agency evaluator or agency fiscal officer, or both for that suggestion or innovation, shall determine the budgetary impact of the suggestion or innovation.

(e) Federal and local government funds and corporate and foundation grant funds are excluded from the SEIBP.

(f) The Department of Administration shall establish the SEIBP reserve fund in which all savings for all suggestions shall be deposited as earned. Each participating agency shall be responsible for transferring savings to the SEIBP reserve fund. The funds may be encumbered as needed to ensure payment to the General Fund, to the suggester, and for distribution as required by G.S. 143-345.22. The Department of Administration shall provide the SEIBP reserve fund summary at the close of each fiscal year to the Office of State Budget and Management and to the participating agencies. The Office of State Budget and Management shall have oversight responsibility for ensuring that the required reversions and transfers are made to the General Fund, and that all encumbered funds are accounted for and paid as required by law.

(g) No distribution of suggester awards shall occur until reversion requirements to the General Fund are met and distributions as required by G.S. 143-345.22 are satisfied and verified by the Office of State Budget and Management. When all of the requirements of G.S. 143-345.22 are fulfilled, the Department of Administration shall transfer to the suggester's agency funds required to award the suggester. The suggester's agency shall make the suggestion award and ensure that all taxes and withholding requirements are met.

(h) Implementation costs may be prorated over a maximum of three years for suggestions or innovations that are capital intensive, involve leading-edge technology, or involve unconventional processes that require longer than 12 months for implementation. The amount of the average annual savings minus the average annual implementation cost shall be used as the basis for the agency to recommend a suggester award. The State Review Committee shall consult the Office of State Budget and Management to make the final award determination in these cases.

(i) There is established in the Department of Administration a nonreverting fund to be administered by the Office of State Personnel for the training and education of permanent State employees to address specific mission critical needs and objectives. Funds shall be credited from the SEIBP to the fund as provided by this Article."

SECTION 7.2.(d) G.S. 143-345.22 reads as rewritten:

"§ 143-345.22. Allocation of incentive bonus funds; nonmonetary recognition.

(a) If a State employee's suggestion or innovation results in a monetary savings or increased revenue to the State, the funds saved or increased shall be distributed according to the following scale or subject to guidelines as set forth by the funding source:

(1) Twenty percent (20%) of the annualized savings or increased revenues, up to a maximum of twenty thousand dollars ($20,000) for any one State employee, to constitute gainsharing. If a team of State employees is the suggester, the bonus provided in this subdivision shall be divided equally among the team members, except that no team member ~~may~~ shall receive in excess of twenty thousand dollars ($20,000), nor ~~may~~ shall the team receive an aggregate amount in excess of one hundred thousand dollars ($100,000). These funds shall not revert.

(2) Thirty percent (30%) ~~for all current employees in the work unit, as designated by the agency head, of the employing unit of the suggester.~~allocated as follows:

a. Ten percent (10%) to the implementing agency for nonrecurring budget items to be used (i) by the implementing agency to provide equipment, supplies, training, and limited but appropriate recognition for the division, section, or group responsible for the implementation of the cost-saving measure and (ii) to meet other similar needs within the agency.

b. Ten percent (10%) to the Department of Administration for augmenting funding for the management and administration of the SEIBP. These funds shall not revert.

c. Ten percent (10%) to the State employee education and training fund administered by the Office of State Personnel under G.S. 143-342.21(i). These funds shall not revert.

(3) The remainder to the General Fund for nonrecurring budget items.

(a1) Of the pool of funds identified in subsection (a) of this section, only the General Fund appropriations shall be subject to reversion, except during declared budget emergencies. Under nonemergency budget conditions, SEIBP funds arising from savings at The University of North Carolina, the North Carolina Community Colleges System, the Highway Trust Fund, enterprise funds, and receipt-supported organizations shall be exempt from the General Fund reversion requirements.

(b) The budget of a State agency shall not be reduced in the following fiscal year by an amount similar to the monetary savings or increased revenues realized by the State Employee Incentive Bonus Program. The agency budget shall be reduced in subsequent years only if structural or organizational changes are made that warrant the reductions, including the transfer of responsibility for an activity or service to another agency or the elimination of some function of State government.

(c) If a suggestion or innovation results in improved quality of services to the public or to other State agencies, departments, and institutions, but not in monetary savings to the State, the suggester shall receive a nonmonetary award in the form of a certificate, leave with pay, or other similar recognition."

SECTION 7.2.(e) G.S. 143-345.23 reads as rewritten:

"§ 143-345.23. Suggestion and review process; role of agency coordinator and agency evaluator.

(a) The process for a State employee or team of State employees to submit a cost-saving or revenue-increasing proposal shall begin by with the employee or team of employees submitting the suggestion or innovation to an agency ~~coordinator designated by the State department, agency, or institution impacted by the suggestion or innovation.~~coordinator. The agency coordinator, in conjunction with an agency evaluator, shall review the suggestion or innovation for submission to the State Review Committee established in ~~G.S. 143-345.14.~~G.S. 143-345.24.

(b) An agency coordinator shall be appointed by the head of each participating agency to serve as liaison between the agency, the suggester, the agency evaluator, and the SEIBP office. The duties of the agency coordinator shall include:

(1) Serving as an information source and maintaining sufficient forms necessary to submit suggestions.

(2) ~~Responsibility for presenting,~~ Presenting, in conjunction with the agency evaluator, the ~~plan of implementation for a suggestion or innovation~~ recommendation for an award to the State Review Committee.

(3) Working in conjunction with the agency evaluator ~~designated by the Agency Coordinator for~~ to process a particular suggestion or ~~innovation.~~innovation within 180 days, except when there are extenuating circumstances.

An agency may have more than one coordinator if required to provide sufficient services to State employees.

(c) An agency evaluator shall be designated by the management of the implementing agency to evaluate one or more suggestions. The duties of an agency evaluator shall include:

(1) ~~Reviewing~~ Receiving from the agency coordinator and reviewing within 90 days, when possible, the feasibility and effectiveness of cost-saving or revenue-increasing measures suggested by State employees.

(2) Being knowledgeable of the subject program, activity, or service.

(3) Determining, in conjunction with the agency fiscal officer, the budgetary impact of a suggestion or innovation.

(4) Judging impartially both the positive and negative effects of a suggestion or innovation on the current functions of the subject program, activity, or service.

~~The specific assignments of the agency evaluator shall be determined by the agency coordinator.~~

(d) The ~~State Coordinator~~ executive secretary shall be responsible for general oversight and coordination of the State Employee Incentive Bonus Program. The State ~~Coordinator~~ coordinator shall be ~~a State~~ an employee ~~working in~~of the Department of Administration. The State coordinator shall be responsible for day-to-day SEIBP program management and administration of the technical aspects of the program. The State coordinator shall be an ex officio voting member of the State Review Committee."

SECTION 7.2.(f) G.S. 143-345.24 reads as rewritten:

"§ 143-345.24. Incentive Bonus Review Committee.

(a) The Incentive Bonus Review Committee, hereinafter "State Review Committee", shall consist of nine members, as follows:

(1) The State Coordinator.

(2) A representative of the Office of State Budget and Management.

(3) A representative of the Office of State Personnel.

(4) A representative of The University of North Carolina.

(5) A representative of the Department of Justice.

(6) A representative of the Department of Labor.

(7) One State employee appointed by the Speaker of the House of Representatives.

(8) One State employee appointed by the President Pro Tempore of the Senate.

(9) One State employee appointed by the Governor upon the recommendation of the State Employees Association of North Carolina, Inc.

(b) The duties of the State Review Committee shall include:

(1) ~~Responsibility for receiving~~ Receiving from the various agency coordinators recommendations on ~~suggestion and innovation implementation plans.~~suggestions and innovations.

(2) Determining the impact of a suggestion or innovation on State government services by judging the monetary savings, increased revenues, or improved quality of services generated by a suggestion or innovation.

(3) Ensuring that the State employee incentive bonus process does not result in a negative impact on services provided to taxpayers by State government.

(c) All administrative, management, clerical, and other functions and services required by the State Review Committee shall be supplied by the Department of Administration. The Department of Administration and the State Review Committee shall report annually to the Joint Legislative Commission on Governmental Operations on the administration of the State Employee Incentive Bonus Program."

SECTION 7.2.(g) G.S. 143-345.25 reads as rewritten:

"§ 143-345.25. ~~Effect~~ Innovations deemed property of the State; effect of decisions regarding bonuses.

(a) All suggestions or innovations submitted by State employees pursuant to this Article are the property of the ~~State.~~State, and all related intellectual property rights shall be assigned to the State. By January 1, 2002, the Office of State Personnel shall establish a policy regarding intellectual property rights that arise from the SEIBP.

(b) Decisions regarding the award of bonuses by the agency coordinator and the State Review Committee are final and are not subject to review under the contested case procedures of Chapter 150B of the General Statutes."

SECTION 7.2.(h) This section becomes effective July 1, 2001, and applies to State employee suggestions and innovations submitted on or after that date.

Requested by: Senators Warren, Plyler, Odom, Lee

study of motor fleet management

SECTION 7.3. The Office of State Budget and Management shall study the operations of the State motor fleet management system and shall consider the feasibility of privatizing the function. The Office of State Budget and Management shall report the results of this study to the 2002 Regular Session of the 2001 General Assembly.

Requested by: Senators Warren, Plyler, Odom, Lee

Motor Pool operations and assignment of vehicles

SECTION 7.4. G.S. 143-341(8)(i) reads as rewritten:

"§ 143-341. Powers and duties of Department.

The Department of Administration has the following powers and duties:

…

(8) General Services:

…

i. To establish and operate a central motor pool and such subsidiary related facilities as the Secretary may deem necessary, and to that end:

…

4. To maintain, store, repair, dispose of, and replace state-owned motor vehicles under the control of the Department. The Department shall ensure that state-owned vehicles are not normally replaced until they have been driven for ~~90,000~~ 110,000 miles or more.

5. Upon proper requisition, proper showing of need for use on State business only, and proper showing of proof that all persons who will be driving the motor vehicle have valid drivers' licenses, to assign economically suitable transportation, either on a temporary or permanent basis, to any State employee or agency. An agency assigned a motor vehicle may not allow a person to operate that motor vehicle unless that person displays to the agency and allows the agency to copy that person's valid driver's license. Notwithstanding G.S. 20-30(6), persons or agencies requesting assignment of motor vehicles may photostat or otherwise reproduce drivers' licenses for purposes of complying with this subpart.

As used in this subpart, "economically suitable transportation" means the most cost-effective standard vehicle in the State motor fleet, unless special towing provisions are required by the ~~employee or~~ agency. The Department may not assign any employee or agency a motor vehicle that is not economically suitable. The Department shall not approve requests for vehicle assignment or reassignment when the purpose of that assignment or reassignment is to provide any employee with a newer or lower mileage vehicle because of his or her rank, management authority, or length of service or because of any non-job-related reason. The Department shall not assign "special use" vehicles, such as four-wheel drive vehicles or law enforcement vehicles, to any agency or individual except upon written justification, verified by historical data, and accepted by the Secretary. The Department may provide law enforcement vehicles only to those agencies which have statutory pursuit authority."

Requested by: Senators Warren, Plyler, Odom, Lee

Plan for privatization of state capitol police

SECTION 7.5. The Department of Administration shall develop a plan for privatizing the security services that State Capitol Police currently provide. The Department shall report on its plan, including the costs of implementation, by January 1, 2002, to the Joint Legislative Commission on Governmental Operations, the Cochairs of the Senate Appropriations Committee, the Chair of the Senate Appropriations Committee on General Government, the Cochairs of the House of Representatives Appropriations Committee, the Cochairs of the House of Representatives Appropriations Subcommittee on General Government, and the Fiscal Research Division.

Requested by: Senators Warren, Plyler, Odom, Lee

TRANSFER BOARD OF SCIENCE AND TECHNOLOGY

SECTION 7.6. The statutory authority, power, duties, functions, records, personnel, property, unexpended balances of appropriations, allocations, or other funds, including the functions of budgeting and purchasing, of the North Carolina Board of Science and Technology, as established in G.S. 143B-426.30, are transferred to the Department of Commerce. Part 27 of Article 9 of Chapter 143B of the General Statutes is recodified as Part 18 of Article 10 of Chapter 143B of the General Statutes and the Revisor of Statutes shall substitute the term "Commerce" for the term "Administration" everywhere that term appears in Part 18 of Article 10 of Chapter 143B of the General Statues.

PART VIII. Office of Administrative Hearings

Requested by: Senators Warren, Plyler, Odom, Lee

OFFICE OF ADMINISTRATIVE HEARINGS RECLASSIFICATION OF POSITIONS

SECTION 8.1. The Office of Administrative Hearings shall reclassify positions in the Rules Division, Civil Rights Division, Hearings Division, and Administration Division of the Office of Administrative Hearings in accordance with the findings and recommendations of the Office of State Personnel submitted to the General Assembly on January 30, 2001.

PART IX. OFFice of the State auditor

Requested by: Senators Warren, Plyler, Odom, Lee

electronic distribution of auditor's reports

SECTION 9.1.(a) G.S. 147-64.6(c) reads as rewritten:

"(c) The Auditor shall be responsible for the following acts and activities:

…

(12) The Auditor shall provide ~~in a written statement~~ a report to the Governor and Attorney General, and other appropriate officials, of such facts as are in his possession which pertain to the apparent violation of penal statutes or apparent instances of malfeasance, misfeasance, or nonfeasance by an officer or employee.

…

(14) The Auditor shall ~~provide copies of each audit report to~~ notify the General Assembly, the Governor, the Chief Executive Officer of each agency audited, and other persons as the Auditor deems ~~appropriate.~~ appropriate that an audit report has been published, its subject and title, and the locations, including State libraries, at which the report is available. The Auditor shall then distribute copies of the report only to those who request a report. The copies shall be in written or electronic form, as requested. He shall also file a copy of the audit report in the Auditor's office, which will be a permanent public record; Provided, nothing in this subsection shall be construed as authorizing or permitting the publication of information whose disclosure is otherwise prohibited by law.

…."

SECTION 9.1.(b) G.S. 147-64.5(a) reads as rewritten:

"(a) Joint Legislative Commission on Governmental Operations. - The Auditor shall furnish copies of any and all audits only when requested by the Joint Legislative Commission on Governmental Operations. The copies shall be in written or electronic form, as requested. Accordingly, the Auditor shall, upon request by the chairmen, appear before the Commission to present findings and answer questions concerning the results of these audits. The Commission is hereby authorized to use these audit findings in its inquiries concerning the operations of State agencies and is empowered to require agency heads to advise the Commission of actions taken or to be taken on any recommendations made in the report or explain the reasons for not taking action."

PART X. office of the state controller

Requested by: Senators Warren , Plyler, Odom, Lee

Overpayments Audit

SECTION 10.1.(a) During the 2001-2002 fiscal year, receipts generated by the collection of inadvertent overpayments by State agencies to vendors as a result of pricing errors, neglected rebates and discounts, miscalculated freight charges, unclaimed refunds, erroneously paid excise taxes, and related errors as required by G.S. 147-86.22(c) are to be deposited in the Special Reserve Account 24172.

SECTION 10.1.(b) For the 2001-2002 fiscal year, two hundred thousand dollars ($200,000) of the funds transferred from the Special Reserve Account 24172 shall be used by the Office of the State Controller for data processing, debt collection, or e-commerce costs.

SECTION 10.1.(c) All funds available in the Special Reserve Account 24172 on July 1, 2001, are transferred to the General Fund on that date.

SECTION 10.1.(d) Any unobligated funds in the Special Reserve Account 24172 that are realized above the allowance in subsection (b) of this section are subject to appropriation by the General Assembly in the 2002 Regular Session of the 2001 General Assembly.

SECTION 10.1.(e) The State Controller shall report quarterly to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division on the revenue deposited into the Special Reserve Account and the disbursement of that revenue.

PART XI. DEPARTMENT of cultural resources

Requested by: Senators Warren, Plyler, Odom, Lee

COMPLETION OF THE INFORMATION TECHNOLOGY EXPANSION PROJECT AND THE INFORMATION RESOURCE MANAGEMENT COMMISSION PROJECT CERTIFICATION

SECTION 11.1. Of the funds appropriated to the Department of Cultural Resources, the sum of fifty thousand dollars ($50,000) shall be used to complete the planning for the Information Technology Expansion Project and the Information Resource Management Commission (IRMC) Project Certification. The Department shall not expend any additional funds for information technology expansion prior to review of the IRMC Project Certification by the Joint Select Committee on Information Technology. The results of the IRMC Project Certification shall be presented to the Joint Select Committee on Information Technology no later than December 31, 2001.

PART XII. OFFice of the governor

Requested by: Senators Kerr, Warren, Lee, Plyler, Odom

Advisory Commission on Military Affairs

SECTION 12.1. The General Statutes are amended by adding a new Chapter to read:

"Chapter 127C.

"Advisory Commission on Military Affairs.

"§ 127C-1. Creation of the North Carolina Advisory Commission on Military Affairs.

There is created in the Office of the Governor the North Carolina Advisory Commission on Military Affairs to advise the Governor and the Secretary of Commerce on protecting the existing military infrastructure in this State and to promote new military missions and economic opportunities for the State and its citizens.

"§ 127C-2. Membership.

(a) The North Carolina Advisory Commission on Military Affairs shall consist of 21 voting members, who shall serve on the Executive Committee, and nine nonvoting, ex officio members who shall serve by reason of their positions.

(b) The Executive Committee shall be appointed as follows:

(1) Three members appointed by the General Assembly upon the recommendation of the Speaker of the House of Representatives, one of whom shall be a member of a recognized veterans' organization.

(2) Three members appointed by the General Assembly upon the recommendation of the President Pro Tempore of the Senate, one of whom shall be a member of a recognized veterans' organization.

(3) Fifteen members appointed by the Governor, consisting of:

a. Three representatives from the Jacksonville community.

b. Three representatives from the Havelock community.

c. Three representatives from the Goldsboro community.

d. Three representatives from the Fayetteville community.

e. Three public members from across the State.

(1) Secretary of Crime Control and Public Safety, or a designee.

(2) Secretary of Commerce, or a designee.

(3) Commanding General 18^th Airborne Corps, Fort Bragg.

(4) Commanding General Marine Corps Base, Camp Lejeune.

(5) Commanding General Marine Corps Air Station, Cherry Point.

(6) Commander 4^th FW, Seymour Johnson Air Force Base.

(7) Commander 43^rd Airlift Wing, Pope Air Force Base.

(8) Commander of the U.S. Coast Guard Support Center, Elizabeth City.

(9) Adjutant General of the North Carolina National Guard.

(d) The Executive Committee appointed pursuant to subsection (b) of this section shall choose a Chairman and four Vice-Chairmen from amongst its membership.

"§ 127C-3. Military Advisor.

The Military Advisor within the Office of the Governor shall serve as the administrative head of the Commission and be responsible for the operations and normal business activities of the Commission, with oversight by the Executive Committee."§ 127C-4. Purposes.

The Commission shall have the following responsibilities and duties:

(1) Advise the Governor and Secretary of Commerce on how to strengthen the State's relationship with the military to protect the installations of this State from the results of any future defense budget cuts or military downsizing by providing a sound infrastructure, affordable housing, and affordable education for military members and their families, working to be viewed by national military leaders as the most military-friendly State in the nation.

(2) Develop a strategic plan to provide initiatives to support the long-term viability and prosperity of the military of this State that shall include, at least:

a. A comprehensive Economic Impact Study of Military Activities in North Carolina to be conducted by the North Carolina State University Department of Economics and the East Carolina University Office of Regional Development.

b. A Strengths/Weaknesses/Opportunities/Threats (SWOT) Analysis conducted by a professional strategic planning group on the current status of the military in North Carolina.

(3) Study ways to improve educational opportunities for military personnel in North Carolina.

(4) Assist in coordinating the State's interests in future activities of the Department of Defense.

(5) Promote initiatives to improve the quality of life for military personnel in this State.

"§ 127C-5. Expenses of the Commission.

(a) The Governor shall include the funding requirements for the Commission in the annual budget for the Office of the Governor.

(b) Commission members shall receive per diem and travel reimbursements as provided in G.S. 138-5 and G.S. 138-6, as appropriate."

Requested by: Senators Warren, Plyler, Odom, Lee

Eliminate State Planning Unit and rename budget office

SECTION 12.2.(a) G.S. 143-10.3, 143-10.4, 143-10.5, and 143-10.6 are repealed.

SECTION 12.2.(b) The phrase "Office of State Budget, Planning, and Management" is deleted and replaced by the phrase "Office of State Budget and Management" wherever it occurs in each of the following General Statutes:

G.S. 7A-101. Compensation.

G.S. 7A-113. Bookkeeping and accounting systems equipment.

G.S. 18B-1009. In-stand sales.

G.S. 20-7. Issuance and renewal of drivers licenses.

G.S. 47-30. Plats and subdivisions; mapping requirements.

G.S. 58-6-25. Insurance regulatory charge.

G.S. 58-85A-1. Creation of Fund; allocation to local fire districts and political subdivisions of the State.

G.S. 62A-25. Use of funds.

G.S. 96-4. Administration.

G.S. 96-32. Common follow-up information management system created.

G.S. 96-35. Reports on common follow-up system activities.

G.S. 97-80. Rules and regulations; subpoena of witnesses; examination of books and records; depositions; costs.

G.S. 105-130.5. Adjustments to federal taxable income in determining State net income.

G.S. 105-134.6. Adjustments to taxable income.

G.S. 105-262. Rules.

G.S. 108A-27.8. Standard Program Counties - Duties of Department.

G.S. 115C-457.1. Creation of Fund; administration.

G.S. 115C-457.2. Remittance of moneys to the Fund.

G.S. 115C-457.3. Transfer of funds to the State School Technology Fund.

G.S. 115C-546.1. Creation of Fund; administration.

G.S. 115D-31. State financial support of institutions.

G.S. 116-220. Establishment and administration of self-insurance trust funds; rules and regulations; defense of actions against covered persons; application of § 143-300.6.

G.S. 120-30.45. Fiscal note on legislation.

G.S. 120-30.49. Compiling federal mandates; annual report.

G.S. 120-36.8. Certification of legislation required by federal law.

G.S. 120-131.1. Requests from legislative employees for assistance in the preparation of fiscal notes.

G.S. 120-166. Additional criteria; nearness to another municipality.

G.S. 122A-16. Oversight by committees of General Assembly; annual reports.

G.S. 122C-112. Powers and duties of the Secretary.

G.S. 122C-185. Application of funds belonging to State facilities.

G.S. 131D-4.2. Adult care homes; family care homes; annual cost reports; exemptions; enforcement.

G.S. 131E-13. Lease or sale of hospital facilities to or from for-profit or nonprofit corporations or other business entities by municipalities and hospital authorities.

G.S. 135-39.3. Oversight team.

G.S. 138-6. Travel allowances of State officers and employees.

G.S. 138-8. Moving expenses of State employees.

G.S. 143-1. Scope and definitions.

G.S. 143-2. Purposes.

G.S. 143-3.5. Coordination of statistics; fiscal analysis required for any bill proposed by a State agency that affects the budget.

G.S. 143-4. (For applicability see note) Advisory Budget Commission.

G.S. 143-6. Information from departments and agencies asking State aid.

G.S. 143-6.1. Report on use of State funds by non-State entities.

G.S. 143-10.1A. Same - Continuation and expansion costs.

G.S. 143-10.2. Limit on number of State employees.

G.S. 143-10.3. Strategic planning process.

G.S. 143-10.4. Departmental operations plans.

G.S. 143-10.5. Development of performance measures for major programs.

G.S. 143-10.7. Review of department forms and reports.

G.S. 143-12.1. Vending facilities.

G.S. 143-15.4. General Fund operating budget size limited.

G.S. 143-19. Help for Director.

G.S. 143-20.1. Annual financial statements.

G.S. 143-27. Appropriations to educational, charitable and correctional institutions are in addition to receipts by them.

G.S. 143-28.1. Highway Fund appropriation.

G.S. 143-31.1. Study and review of plans and specifications for building, improvement, etc., projects.

G.S. 143-34.2. Information as to requests for nonstate funds for projects imposing obligation on State; statement of participation in contracts, etc., for nonstate funds; limiting clause required in certain contracts or grants.

G.S. 143-34.41. Legislative intent; purpose.

G.S. 143-34.43. Capital improvement needs criteria.

G.S. 143-34.44. Agency capital improvement needs estimates.

G.S. 143-138. North Carolina State Building Code.

G.S. 143-215.94P. Groundwater Protection Loan Fund.

G.S. 143-299.4. Payment of State excess liability.

G.S. 143-345.24. Incentive Bonus Review Committee.

G.S. 143B-133.1. Powers of Commission.

G.S. 143B-336.1. Special Zoo Fund.

G.S. 143B-372.3. Staff.

G.S. 143B-426.39. Powers and duties of the State Controller.

G.S. 146-30. Application of net proceeds.

G.S. 147-33.78. Information Resource Management Commission.

G.S. 147-33.87. Financial reporting and accountability for information technology investments and expenditures.

G.S. 147-86.22. Statewide accounts receivable program.

G.S. 150B-21. Agency must designate rule-making coordinator; duties of coordinator.

G.S. 150B-21.4. Fiscal notes on rules.

G.S. 150B-21.9. Standards and timetable for review by Commission.

G.S. 150B-21.28. Role of the Office of State Budget and Management.

G.S. 153A-230.1. Definitions.

G.S. 153A-230.2. Creation of Satellite Jail/Work Release Unit Fund.

G.S. 153A-230.5. Satellite jails/work release units built with non-State funds.

G.S. 159I-25. Disbursement.

G.S. 159I-28. Rules.

G.S. 159I-29. Annual reports to Joint Legislative Commission on Governmental Operations.

G.S. 160A-486. Estimates of population.

G.S. 163-132.5. Cooperation of State and local agencies.

SECTION 12.2.(c) G.S. 147-33.85(b) reads as rewritten:

"(b) The Office shall coordinate with the ~~Office of State Budget, Planning, and Management~~ Office of State Budget and Management to integrate agency strategic and business planning, technology planning and budgeting, and project expenditure processes into the Office's information technology portfolio-based management. The Office shall provide recommendations for agency annual budget requests for information technology investments, projects, and initiatives to the ~~Office of State Budget, Planning, and Management.~~Office of State Budget and Management."

Requested by: Senators Warren, Plyler, Odom, Lee

TRansfer the Center for Geographic Information Analysis/Geodetic Survey and the Statewide Floodplain Mapping unit

SECTION 12.3.(a) The Center for Geographic Information Analysis/Geodetic Survey is transferred from the Office of State Budget and Management to the Department of Environment and Natural Resources, Division of Land Resources. This transfer has all of the elements of a Type I transfer as defined in G.S. 143A-6.

SECTION 12.3.(b) The Statewide Floodplain Mapping Unit is transferred from the Office of State Budget and Management to the Department of Crime Control and Public Safety, Division of Emergency Management. This transfer has all of the elements of a Type I transfer as defined in G.S. 143A-6.

PART XIII. office of state personnel

Requested by: Senators Warren, Plyler, Odom, Lee

Abolish Office of State PERSONNEL Prepare Program

SECTION 13.1. The General Assembly encourages the Department of State Treasurer to include the model of the PREPARE program in its current delivery of retirement services. The PREPARE program in the Office of State Personnel is abolished.

PART XIV. general government

Requested by: Senators Warren, Plyler, Odom, Lee

Use of Internet for Agency Publications

SECTION 14.1.(a) Each of the State agencies listed in subsection (b) of this section shall review its printing and publication requirements and schedules and develop a plan to reduce the cost of printing, publishing, and distributing agency information and materials, including documents, reports, and other publications by using computer technology and the Internet, in particular, to distribute information and materials to the public. In developing the plan, each State agency shall review the statutory and regulatory requirements of the agency with regard to publishing and distributing information to the public and make recommendations on any statutory revisions needed to publish and distribute agency information over the Internet or by other computer-related means. Each agency shall submit a written report to the Fiscal Research Division of the General Assembly by April 1, 2002, outlining the required information and the recurring adjustments in the agency budget.

SECTION 14.1.(b) This section applies to the Office of the Governor, the Office of the Lieutenant Governor, the Department of Administration, the Office of the State Auditor, the Office of State Budget and Management, the Board of Elections, the Department of Insurance, the Office of the Secretary of State, the Office of the State Treasurer, the Office of Administrative Hearings, the Office of the State Controller, the Department of Cultural Resources, the General Assembly, the Office of State Personnel, the Department of Revenue, and the Rules Review Commission.

part XV. information technology

Requested by: Senators Reeves, Plyler, Odom, Lee

State intellectual property assets/nongovernmental organizations

SECTION 15.1.(a) Chapter 66 of the General Statutes is amended by adding a new Article to read:

"Article 11C.

"State Intellectual Property Assets.

"§ 66-58.21. Definitions.

The following definitions apply in this Article:

(1) Copyrighted materials. - Includes any of the following:

a. Books, journal articles, texts, glossaries, bibliographies, study guides, laboratory manuals, syllabi, tests, and proposals.

b. Lectures, musical or dramatic compositions, and unpublished scripts.

c. Video and audio tapes or cassettes.

d. Films, filmstrips, charts, transparencies, and other visual aids.

e. Live video and audio broadcasts.

f. Programmed instructional materials.

g. Other materials or work which qualify for protection under the patent laws of the United States or other protective statutes, whether or not registered under those laws or statutes.

(2) Intellectual property. - Patentable materials and copyrighted materials, whether or not formal protection is sought. The term also includes a patentable plant and a novel plant variety.

(3) Inventor. - Any person who conceives a new concept that may result in a proprietary product.

(4) Novel plant variety. - A novel variety of sexually reproduced plant.

(5) Patentable materials. - Items other than software which reasonably appear to qualify for patent protection under the patent laws of the United States.

(6) Patentable plant. - An asexually reproduced distinct and new variety of plant.

(7) Royalties. - All things of value received by an inventor in connection with the licensing, assignment, or sale of intellectual property.

"§ 66-58.22. State intellectual property assets.

(a) Intellectual property developed by a State employee within the scope of the employee's employment shall be the property of the State.

(b) Intellectual property developed by a local government employee, including public school personnel, within the scope of the employee's employment shall be the property of the employing local government or local school administrative unit.

(c) The State may hold a security interest in royalties from any intellectual property developed by any person, as provided by the express terms of a contract conveying the security interest, where the person uses State or local funds or facilities to develop the intellectual property.

(d) The Governor shall set policies that he or she deems necessary to implement the provisions of this section.

(e) The University of North Carolina and its constituent institutions and the North Carolina Community Colleges System shall adopt and from time to time revise intellectual property and inventor policies for their respective State-supported institutions of higher education.

(f) The Department of Public Instruction shall adopt and from time to time revise intellectual property and inventor guidelines applicable to local school administrative units.

(g) The governing board of each unit of local government shall adopt and from time to time revise intellectual property and inventor guidelines applicable to local government employees and contractors.

(h) The provisions of subsections (a) and (c) of this section shall not apply to The University of North Carolina and its constituent institutions, or to the North Carolina Community Colleges System, or to employees of these respective institutions who are subject to the intellectual property and inventor policies of the institutions employing them."

SECTION 15.1.(b) G.S. 55A-13-01 reads as rewritten:

"§ 55A-13-01. Prohibited distributions.

(a) Except as authorized by G.S. 55A-13-02 or Article 14 of this Chapter, a corporation shall not make any distributions.

(b) A corporation shall not:

(1) Make distributions to its members, directors, and officers derived from royalties or gains arising from intellectual property assets developed by the corporation with funding from the State or a governmental subdivision.

(2) Transfer any asset to its members, directors, and officers derived from intellectual property assets developed by the corporation with funding from the State or a governmental subdivision.

SECTION 15.1.(c) G.S. 55A-8-31 is amended by adding a new subsection to read:

"(f) It shall be a conflict of interest transaction for a director of a corporation to be an employee of the corporation or to receive any asset or direct financial benefit from the corporation where the employment, asset, or benefit is derived from royalties, assets, or gains arising from intellectual property assets developed by the corporation with funding from the State or a governmental subdivision. A conflict of interest transaction under this subsection shall not be authorized, approved, or ratified by the members or the board of directors of the corporation, and violation of this subsection shall constitute a breach of duty. For the purposes of this subsection, the term "intellectual property" includes copyrights, patents, and trademarks."

SECTION 15.1.(d) G.S. 55A-8-42 is amended by adding a new subsection to read:

"(f) It shall be a conflict of interest for an officer to be an employee of the corporation or to receive any asset or direct financial benefit from the corporation where the employment, asset, or benefit is derived from royalties, assets, or gains arising from intellectual property assets developed by the corporation with funding from the State or a governmental subdivision. A conflict of interest under this subsection shall not be authorized, approved, or ratified by the members or the board of directors of the corporation, and violation of this subsection shall constitute a breach of duty. For the purposes of this subsection, the term "intellectual property" includes copyrights, patents, and trademarks."

SECTION 15.1.(e) Chapter 55A of the General Statutes is amended by adding a new Article to read:

"Article 18.

"Miscellaneous.

"§ 55A-18-01. Enforcement of State remedies for certain violations.

(a) It is unlawful for a corporation or its members, directors, or officers to violate the provisions of G.S. 55A-8-31(f), 55A-8-42(f), or 55A-13-01(b).

(b) In any case in which the Attorney General has reason to believe that there has been a violation of G.S. 55A-8-31(f), 55A-8-42(f), or 55A-13-01(b) by a corporation or its members, directors, or officers, the Attorney General may bring a civil action on behalf of the State or the corporation in Superior Court to:

(1) Enjoin unlawful practices.

(2) Recover on behalf of the State or the corporation the value of unlawful distributions and the amount of salaries paid unlawfully.

(3) Obtain such other relief as the court may consider to be appropriate.

(c) Civil actions under this section shall be tried in the county where the violation occurred or in any county where the defendant resides or conducts, transacts, or has transacted business.

(d) It shall be against public policy for a corporation to indemnify any of its members, directors, officers, or agents who violate G.S. 55A-8-31(f), 55A-8-42(f), or 55A-13-01(b).

(e) The liabilities of this section are in addition to any other liabilities that may be imposed by law upon a corporation or its members, directors, officers, and agents for unlawful distributions or other actions unlawful under this Chapter."

SECTION 15.1.(f) This section is effective when it becomes law and applies to State intellectual property assets developed on or after that date.

Requested by: Senators Reeves, Plyler, Odom, Lee

security standards for state information technology

SECTION 15.2.(a) G.S. 147-33.81 reads as rewritten:

"§ 147-33.81. Definitions.

As used in this Article:

(1) "Distributed information technology assets" means hardware, software, and communications equipment not classified as traditional mainframe-based items, including personal computers, local area networks (LANs), servers, mobile computers, peripheral equipment, and other related hardware and software items.

(2) "Information technology" means electronic data processing goods and ~~services and~~ services, telecommunications goods and services, security goods and services, microprocessors, software, information processing, office systems, any services related to the foregoing, and consulting or other services for design or redesign of information technology supporting business processes.

(3) "Information technology enterprise management" means a method for managing distributed information technology assets from acquisition through retirement so that total ownership costs (purchase, operation, maintenance, disposal, etc.) are minimized while maximum benefits are realized.

(4) "Information technology portfolio management" means a business-based approach for analyzing and ranking potential technology investments and selecting those investments that are the most cost-effective in supporting the strategic business and program objectives of the agency.

(5) "Office" means the Office of Information Technology Services as established in this Article.

(6) "State agency" means any department, institution, commission, committee, board, division, bureau, office, officer, or official of the State. The term does not include any State entity excluded from coverage under this Article by G.S. 147-33.80, unless otherwise expressly provided."

SECTION 15.2.(b) G.S. 147-33.82 reads as rewritten:

"§ 147-33.82. Powers and duties of the State Chief Information Officer and the Office of Information Technology Services.

(a) The Office of Information Technology Services shall:

(1) Procure all information technology for State agencies, as provided in Part 4 of this Article.

(2) Submit for approval of the Information Resources Management Commission all rates and fees for common, shared State government-wide technology services provided by the Office.

(3) Submit for approval of the Information Resources Management Commission recommended State government-wide, enterprise-level policies for information technology.

(4) Develop standards, procedures, and processes to implement policies approved by the Information Resources Management Commission.

(5) Assure that State agencies implement and manage information technology portfolio-based management of State information technology resources, in accordance with the direction set by the State Chief Information Officer.

(6) Assure that State agencies implement and manage information technology enterprise management efforts of State government, in accordance with the direction set by the State Chief Information Officer.

(7) Provide recommendations to the Information Resources Management Commission for its biennial technology strategy and to develop State government-wide technology initiatives to be approved by the Information Resources Management Commission.

(8) Develop a project management, quality assurance, and architectural review process that adheres to the Information Resources Management Commission's certification program and portfolio-based management initiative.

(9) Establish and utilize the Information Technology Management Advisory Council to consist of representatives from other State agencies to advise the Office on information technology business management and technology matters.

(b) Notwithstanding any other provision of law, local governmental entities may use the information technology programs, services, or contracts offered by the Office, including information technology procurement, in accordance with the statutes, policies, and rules of the Office. For purposes of this subsection, "local governmental entities" includes local school administrative units, as defined in G.S. 115C-5, and community colleges. Local governmental entities are not required to comply with otherwise applicable competitive bidding requirements when using contracts established by the Office. Any other State entities may also use the information technology programs, services, or contracts offered by the Office, including information technology procurement, in accordance with the statutes, policies, and rules of the Office.

(c) The State Chief Information Officer shall establish an enterprise-wide set of standards for information technology security to maximize the functionality, security, and interoperability of the State's distributed information technology assets, including communications and encryption technologies. As part of this function, the State Chief Information Officer shall review periodically existing security standards and practices in place among the various State agencies to determine whether those standards and practices meet enterprise-wide security and encryption requirements. The State Chief Information Officer may assume the direct responsibility of providing for the information technology security of any State agency that fails to adhere to security standards adopted pursuant to this section. Any actions taken by the State Chief Information Officer under this subsection shall be reported to the Information Resources Management Commission at its next scheduled meeting.

(d) Notwithstanding G.S. 143-48.3 or any other provision of law, and except as otherwise provided by this subsection, all information technology security purchased using State funds, or for use by a State agency or in a State facility, shall be subject to approval by the State Chief Information Officer in accordance with security standards adopted under this section.

(1) If the legislative branch, the judicial branch, The University of North Carolina and its constituent institutions, local school administrative units as defined by G.S. 115C-5, or the North Carolina Community Colleges System develop their own security standards, taking into consideration the mission and functions of that entity, that are comparable to or exceed those set by the State Chief Information Officer under this section, then these entities may elect to be governed by their own respective security standards, and approval of the State Chief Information Officer shall not be required before the purchase of information technology security. The State Chief Information Officer shall consult with the legislative branch, the judicial branch, The University of North Carolina and its constituent institutions, local school administrative units, and the North Carolina Community Colleges System in reviewing the security standards adopted by those entities.

(2) If the State Chief Information Officer certifies that a State agency has developed security standards that meet or exceed those set under this section, then the agency may elect to be governed by its own security standards, and approval of the State Chief Information Officer shall not be required before the purchase of information technology security. This certification by the State Chief Information Officer is subject to annual renewal and may be revoked by the State Chief Information Officer at any time that a State agency's standards no longer exceed those set under this section.

(e) The State Chief Information Officer shall submit the enterprise-wide set of standards for the State's information technology security to the Information Resources Management Commission for approval. The Information Resources Management Commission shall report approval of the standards to the Joint Legislative Commission on Governmental Operations prior to implementation of the standards. The State Chief Information Officer shall review and revise the standards at least annually, and the revisions shall be subject to approval by the Information Resources Management Commission, with the Commission reporting to the Joint Legislative Commission on Governmental Operations on the revisions.

(f) The head of each State agency shall cooperate with the State Chief Information Officer in the discharge of his or her duties by:

(1) Providing the full details of the agency's information technology and operational requirements.

(2) Providing comprehensive information concerning the information technology security employed to protect the agency's information technology.

(3) Forecasting the parameters of the agency's projected future information technology security needs and capabilities.

(4) Designating an agency liaison in the information technology area to coordinate with the State Chief Information Officer.

The information provided by State agencies to the State Chief Information Officer under this subsection is protected from public disclosure pursuant to G.S. 132-6.1(c)."

SECTION 15.2.(c) G.S. 147-64.6(c) is amended by adding a new subdivision to read:

"(18) The Auditor shall assess, confirm, and report on the security practices of information technology systems. If an agency has adopted standards pursuant to G.S. 147-33.82(d)(1) or (2), the audit shall be in accordance with those standards. The Auditor's assessment of information security practices shall include an assessment of network vulnerability. The Auditor may conduct network penetration or any similar procedure as the Auditor may deem necessary. The Auditor may investigate reported information technology security breaches, cyber attacks, and cyber fraud in State government."

SECTION 15.2.(d) This section is effective when it becomes law.

Requested by: Senators Reeves, Plyler, Odom, Lee

Executive budget act information technology provisions

SECTION 15.3.(a) G.S. 143-6 is amended by adding a new subsection to read:

"(b2) Any department, bureau, division, officer, board, commission, institution, or other State agency or undertaking desiring to request financial aid from the State for the purpose of acquiring or maintaining information technology as defined by G.S. 147-33.81(2) shall, before making the request for State financial aid, submit to the State Chief Information Officer (CIO) a statement of its needs in terms of information technology and other related requirements, and shall furnish the CIO with any additional information requested by the CIO. The CIO shall then review the statement of needs submitted by the requesting department, bureau, division, officer, board, commission, institution, or other State agency or undertaking and perform additional analysis, as necessary, to comply with G.S. 147-33.82. All requests for financial aid for the purpose of acquiring or maintaining information technology shall be accompanied by a certification from the CIO deeming the request for financial aid to be consistent with Article 3D of Chapter 147 of the General Statutes. The CIO shall make recommendations to the Governor regarding the merits of requests for financial aid for the purpose of acquiring or maintaining information technology. This subsection shall not apply to requests for appropriations of less than one hundred thousand dollars ($100,000)."

SECTION 15.3.(b) G.S. 143-7 reads as rewritten:

"§ 143-7. Itemized statements and forms; exemptions from G.S. 147- 64.6(c)(10).

(a) The statements and estimates required under G.S. 143-6 shall be itemized in accordance with the budget classification adopted by the State Controller, and upon forms prescribed by the Director, and shall be approved and certified by the respective heads or responsible officer of each department, bureau, board, commission, institution, or agency submitting same. Official estimate blanks which shall be used in making these reports shall be furnished by the Director of the Budget.

(b) The budget classification adopted by the State Controller and the forms prescribed by the Director shall include budget account codes relating specifically to information technology to allow reliable and meaningful analysis of information technology funding and expenditures throughout State government."

Requested by: Senators Reeves, Plyler, Odom, Lee

OFFICE OF STATE CONTROLLER TO ESTABLISH ACCOUNTS FOR COMPUTER NETWORKINg/telecommunications service billing for state agencies

SECTION 15.4.(a) The Office of the State Controller, the Office of State Budget and Management, and the Office of Information Technology Services shall adopt a common definition for computer networking costs. The definition shall include a specific and detailed list of the separate components that comprise overall networking costs.

SECTION 15.4.(b) The Office of the State Controller shall establish separate accounts within the Statewide Chart of Accounts to capture networking costs to State government. The accounts should include the hardware and software components and the staffing costs for operating and maintaining the State network.

SECTION 15.4.(c) The Office of the State Controller, the Office of State Budget and Management, and the Office of Information Technology Services shall complete the definition by September 1, 2001. Information Technology Services shall implement its billing reforms by October 1, 2001. The Office of the State Controller shall establish the appropriate accounts by December 1, 2001.

SECTION 15.4.(d) The Office of Information Technology Services shall accurately identify and present State agencies with detailed information on the cost of ITS Services for telecommunications data and video services in a monthly bill. The bill should clearly indicate the usage and the rate for the service. Where applicable, the bill shall include information on hardware and software costs including maintenance and support costs for those services. To the extent that ITS bills agencies for networking costs, the bill shall clearly identify each element of that cost to facilitate each agency's ability to properly account for networking costs.

Requested by: Senators Reeves, Plyler, Odom, Lee

study state agency use of contractors for information TECHNOLOGY

SECTION 15.5.(a) The Office of State Personnel, the Office of Information Technology Services, the Office of State Budget and Management, and the Office of the State Controller shall study the issue of State-agency use of information technology contractors. The study shall report on the number of contractors currently in use by State agencies, the duration of the working period for individual contractors, and the length of the contracts. The purpose of the contracts should be clearly identified. The unit and actual costs of the contracts should be clearly identified.

SECTION 15.5.(b) The Office of the State Controller shall establish an account for IT Contractual Services. The account may consist of subaccounts that specify the major categories of IT consulting, i.e., LAN/WAN management, web design, web hosting, applications development, applications hosting, and others.

SECTION 15.5.(c) The Office of State Personnel shall identify the results of market analyses comparing State information technology workers with private sector information technology workers. The Office shall review its current classification scheme for IT workers to determine its adequacy for capturing the range of IT activities within State government.

SECTION 15.5.(d) The study report should recommend the most appropriate use of contractors (i.e., for discrete projects) and the most appropriate use of permanent employee (i.e., for ongoing activities such as LAN/WAN management.) In cases where the study indicates that permanent employees are best suited for a given task or activity, the Office of State Personnel is directed to identify effective mechanisms for recruiting and retaining employees.

SECTION 15.5.(e) By December 1, 2001, the study group shall report its findings and recommendations to the Joint Legislative Commission on Governmental Operations and to the Joint Select Committee on Information Technology.

Requested by: Senators Plyler, Odom, Lee

E-Procurement/Procurement card program

SECTION 15.6.(a) Section 20.3 of S.L. 1998-212, Section 24 of S.L. 1999-237, and Section 21.3 of S.L. 2000-67 are repealed.

SECTION 15.6.(b) G.S. 143-48.3 reads as rewritten:

"§ 143-48.3. Electronic ~~procurement.~~procurement; procurement card program.

(a) The Department of Administration and the Office of the State Controller, in conjunction with the Office of Information Technology Services (ITS), the Department of State Auditor, the Department of State Treasurer, the University of North Carolina General Administration, the Community Colleges System Office, and the Department of Public Instruction shall collaborate to develop electronic or digital procurement standards.

(b) The Department of Administration, in conjunction with the Office of the State Controller and the Office of Information Technology Services may, upon request, provide to all State agencies, universities, local school administrative units, and the community colleges, training in the use of the electronic procurement system.

(c) The Office of Information Technology Services shall act as an Application Service Provider for an electronic procurement system and shall establish, manage, and operate this electronic procurement system and shall establish, manage, and operate, through State ownership or commercial leasing, in accordance with the requirements and operating standards developed by the Department of Administration, the Office of the State Controller, and ITS.

(d) ~~Nothing in this section modifies~~Except as provided by subsection (e) of this section, this section does not otherwise modify existing law relating to procurement between The University of North Carolina, UNC Health Care, local school administrative units, community colleges, and the Department of Administration. For each purchase, the University of North Carolina and UNC Health Care may elect to use the procurement card program and the electronic procurement service established by the Department of Administration or to use an independent procurement card program and electronic procurement service where cost savings and efficiencies may be achieved.

(e) The Department of Administration shall establish and maintain a procurement card program for use by State agencies, community colleges, constituent institutions of The University of North Carolina, and local school administrative units. The Secretary of Administration may adopt temporary rules for the implementation and operation of the program in accordance with the payment policies of the State Controller, in consultation with the Office of Information Technology Services. Prior to implementing the program, the Secretary shall consult with the State Controller, UNC General Administration, the North Carolina Community Colleges System Office, and the Department of Public Instruction. All procurement card orders that are two hundred fifty dollars ($250.00) or more, except for orders by The University of North Carolina or UNC Health Care, shall be issued electronically when the statewide electronic procurement service is made available, regardless of the method of payment, whether by procurement card, any credit or store card, or any other payment mechanism. The Secretary may periodically adjust the order limit stated above after consulting with the State Controller and the Office of Information Technology Services."

SECTION 15.6.(c) This act is effective when it becomes law.

Requested by: Senators Reeves, Plyler, Odom, Lee

North Carolina Information Highway Sites

SECTION 15.7.(a) Of the funds available in the Office of Information Technology Services reserves, the sum of three million twenty-four thousand one hundred eighty-five dollars ($3,024,185) shall be used for the 2001-2002 fiscal year to fund North Carolina Information Highway (NCIH) sites that received funding from the ITS reserves during the 2000-2001 fiscal year.

SECTION 15.7.(b) The Joint House of Representatives and Senate Appropriations Subcommittees on Education shall review the use of the North Carolina Information Highway and recommend a mechanism for funding the sites beyond the 2001-2002 fiscal year.

Requested by: Senators Plyler, Odom, Lee

Reduction in Expenditures Based on ITS Rate Reductions

SECTION 15.8. The Office of State Budget and Management shall administer reductions in the Telephone (532811), Telecommunications Data (532812), and Computer Data Processing (532821) expenditure accounts in an amount equal to eleven million dollars ($11,000,000) of General Fund appropriations through the allotment system established in G.S. 143-17. The reductions in expenditures shall be based on a percentage reduction in the rates for telephone/telecommunications and computer data processing services provided by the Office of Information Technology Services. The telephone/telecommunications rate reduction shall reduce agency General Fund expenditures by six million dollars ($6,000,000). The computer data processing rate reduction shall reduce agency General Fund expenditures by five million dollars ($5,000,000).

The Office of Information Technology Services shall have flexibility in establishing the rate reductions based upon a clear showing of cost reductions achieved through operational efficiencies or cost reductions achieved through less costly contractual arrangements. Based upon the rate reductions established by the Office of Information Technology Services, the Office of State Budget and Management shall have flexibility in allocating the reduction amounts among the Telephone (532811), Telecommunications Data (532812), and Computer Data Processing (532821) expenditure accounts. During Fiscal Years 2001-2002 and 2002-2003 allotments to each spending agency shall be reduced by a percentage of the General Fund amounts appropriated to that agency for telephone/telecommunications and computer data processing services.

The Office of Information Technology Services and the Office of State Budget and Management shall coordinate the rate reductions and agency expenditure accounts reductions to ensure that expenditure reductions match rate reductions. The Office of Information Technology Services shall report the rate reductions to the Information Resources Management Commission, the Chairs of the House of Representatives and Senate Appropriations Committees, the Chairs of the Joint Appropriations Subcommittee on Information Technology, and to the Fiscal Research Division within 30 days of the certification of the 2001-2003 biennial budget.

part XVI. housing finance agency

Requested by: Senators Martin of Pitt, Weinstein, Plyler, Odom, Lee

HOME PROGRAM MATCHING FUNDS

SECTION 16.1.(a) Funds appropriated in this act to the Housing Finance Agency for the federal HOME Program shall be used to match federal funds appropriated for the HOME Program. In allocating State funds appropriated to match federal HOME Program funds, the Agency shall give priority to HOME Program projects, as follows:

(1) First priority to projects that are located in counties designated as Tier One, Tier Two, or Tier Three Enterprise Counties under G.S. 105-129.3; and

(2) Second priority to projects that benefit persons and families whose incomes are fifty percent (50%) or less of the median family income for the local area, with adjustments for family size, according to the latest figures available from the United States Department of Housing and Urban Development.

The Housing Finance Agency shall report to the Joint Legislative Commission on Governmental Operations by April 1 of each year concerning the status of the HOME Program and shall include in the report information on priorities met, types of activities funded, and types of activities not funded.

SECTION 16.1.(b) If the United States Congress changes the HOME Program such that matching funds are not required for a given program year, then the Agency shall not spend the matching funds appropriated under this act for that program year.

SECTION 16.1.(c) Funds appropriated in this act to match federal HOME Program funds shall not revert to the General Fund on June 30, 2002, or on June 30, 2003.

part XVII. department of agriculture and consumer services

Requested by: Senators Martin of Pitt, Weinstein, Plyler, Odom, Lee

authorize promotion of nc farm products at rest areas and welcome centers

SECTION 17.1. Article 6D of Chapter 136 of the General Statutes is amended by adding a new section to read:

"§ 136-89.59A. Promotion of North Carolina farm products at rest areas and welcome centers.

Subject to the approval of the Department, the Department of Agriculture and Consumer Services may distribute promotional materials and free samples of North Carolina farm products at rest areas and welcome centers located on controlled-access facilities and operated by the State for the purpose of promoting North Carolina farm products."

Requested by: Senators Martin of Pitt, Weinstein, Plyler, Odom, Lee

TRansfer rural rehabilitation corporation to agricultural finance authority

SECTION 17.2.(a) G.S. 143A-63 reads as rewritten:

"§ 143A-63. North Carolina Rural Rehabilitation Corporation; transfer.

The North Carolina Rural Rehabilitation Corporation, and board of directors, as contained in Chapter 137 of the General Statutes and the laws of this State, is ~~hereby~~ transferred by a ~~Type II~~ Type I transfer to the North Carolina Agricultural Finance Authority in the Department of Agriculture and Consumer Services."

SECTION 17.2.(b) Article 2 of Chapter 137 of the General Statutes is repealed.

SECTION 17.2.(c) No later than January 15, 2002, the North Carolina Agricultural Finance Authority shall report to the Joint Legislative Commission on Governmental Operations, the Appropriations Subcommittees on Natural and Economic Resources in both the Senate and the House of Representatives, and the Fiscal Research Division on the status of the transfer required under this section. This report shall include any statutory changes that are needed to implement the transfer required under this section.

Requested by: Senators Cunningham, Martin of Pitt, Weinstein, Albertson, Plyler, Odom, Lee

farmland preservation funds

SECTION 17.3. The sum of two hundred fifty thousand dollars ($250,000) appropriated in this act to the Department of Agriculture and Consumer Services for the North Carolina Farmland Preservation Trust Fund established in G.S. 106-744 shall be used to continue the purposes for which the Fund was established.

PART XVIII. department of labor

Requested by: Senators Martin of Pitt, Weinstein, Plyler, Odom, Lee

labor department/ elevator inspection fee receipts

SECTION 18.1. If Senate Bill 897 or House Bill 1057 of the 2001 General Assembly becomes law, the Department of Labor shall allocate the increased elevator and amusement device inspection fee receipts to support the Elevator and Amusement Device Bureau, and the Director of the Budget shall reduce appropriations to the Department as provided in G.S. 143-25.

part XIX. department of environment and natural resources

Requested by: Senators Martin of Pitt, Weinstein, Plyler, Odom, Lee

statewide beaver damage control program funds

SECTION 19.1. Of the funds appropriated in this act to the Wildlife Resources Commission, the sum of five hundred thousand dollars ($500,000) for the 2001-2002 fiscal year and the sum of five hundred thousand dollars ($500,000) for the 2002-2003 fiscal year shall be used to provide the State share necessary to support the beaver damage control program established in G.S. 113-291.10, provided the sum of at least twenty-five thousand dollars ($25,000) in federal funds is available each fiscal year of the biennium to provide the federal share.

Requested by: Senators Martin of Pitt, Weinstein, Plyler, Odom, Lee

grassroots science program

SECTION 19.2. Of the funds appropriated in this act to the Department of Environment and Natural Resources for the Grassroots Science Program, the sum of three million four thousand five hundred twenty dollars ($3,004,520) for fiscal year 2001-2002 and the sum of three million four thousand five hundred twenty dollars ($3,004,520) for fiscal year 2002-2003 are allocated as grants-in-aid for each fiscal year as follows:

2001-2002 2002-2003

Aurora Fossil Museum $58,298 $58,298

Cape Fear Museum $201,103 $201,103

Catawba Science Center $161,968 $161,968

Colburn Gem and Mineral Museum, Inc. $70,274 $70,274

Discovery Place $667,632 $667,632

Granville County Museum Commission,

Inc. - Harris Gallery $60,978 $60,978

The Health Adventure Museum of Pack

Place Education, Arts and

Science Center, Inc. $151,963 $151,963

Imagination Station $92,584 $92,584

Iredell County Children's Museum $57,927 $57,927

Museum of Coastal Carolina $63,437 $63,437

Natural Science Center of Greensboro $240,852 $240,852

North Carolina Museum of Life

and Science $426,141 $426,141

Rocky Mount Children's Museum $86,921 $86,921

Schiele Museum of Natural History $333,578 $333,578

Sci Works Science Center and

Environmental Park of Forsyth County $172,528 $172,528

Western North Carolina Nature Center $158,336 $158,336

Total $3,004,520 $3,004,520

Requested by: Senators Martin of Pitt, Weinstein, Plyler, Odom, Lee

terms for members of the North Carolina Parks and recreation authority

SECTION 19.3.(a) G.S. 143B-313.2(b) reads as rewritten:

"(b) Terms. - Members shall serve ~~two-year terms~~staggered terms of office of three years. Members shall serve no more than two ~~full two-year terms~~consecutive three-year terms. After serving two consecutive three-year terms, a member is not eligible for appointment to the Authority for at least one year after the expiration date of that member's most recent term. Upon the expiration of a ~~two-year~~ three-year term, a member may continue to serve until a successor is appointed and duly qualified as provided by G.S. 128-7. The term of members appointed under odd-numbered subdivisions of subsection (a) of this section shall expire on 30 June of odd-numbered years. The term of members appointed under even-numbered subdivisions of subsection (a) of this section shall expire on 30 June of even-numbered years.The terms of members appointed under subdivision (1), (5), (7), or (9) of subsection (a) of this section shall expire on July 1 of years that are evenly divisible by three. The terms of members appointed under subdivision (2), (4), (8), or (11) of subsection (a) of this section shall expire on July 1 of years that follow by one year those years that are evenly divisible by three. The terms of members appointed under subdivision (3), (6), or (10) of subsection (a) of this section shall expire on July 1 of years that precede by one year those years that are evenly divisible by three."

SECTION 19.3.(b) In order to alter the length of the staggered terms from two years to three years for the North Carolina Parks and Recreation Authority and to provide for an orderly transition in membership of the Authority as specified in G.S. 143B-313.2, as amended by subsection (a) of this section, notwithstanding G.S. 143B-313.2(b), as amended by subsection (a) of this section, the following apply:

(1) John D. Runkle shall serve in the position established by G.S. 143B-313.2(a)(1) until July 1, 2001.

(2) Wendell Begley shall serve in the position established by G.S. 143B-313.2(a)(2) until July 1, 2002.

(3) Jonathon B. Howes shall serve in the position established by G.S. 143B-313.2(a)(3) until July 1, 2003.

(4) Ron Kincaid shall serve in the position established by G.S. 143B-313.2(a)(4) until July 1, 2002.

(5) Russell Robinson III shall serve in the position established by G.S. 143B-313.2(a)(5) until July 1, 2001.

(6) Roy Alexander shall serve in the position established by G.S. 143B-313.2(a)(6) until July 1, 2003.

(7) Kenneth Sadler shall serve in the position established by G.S. 143B-313.2(a)(7) until July 1, 2001.

(8) Leslie Anderson shall serve in the position established by G.S. 143B-313.2(a)(8) until July 1, 2002.

(9) Troy Boyd shall serve in the position established by G.S. 143B-313.2(a)(9) until July 1, 2001.

(10) Harriet L. Farrior shall serve in the position established by G.S. 143B-313.2(a)(10) until July 1, 2003.

(11) Eddie Holbrook shall serve in the position established by G.S. 143B-313.2(a)(11) until July 1, 2002.

Requested by: Senators Martin of Pitt, Weinstein, Plyler, Odom, Lee

receipts for NC Zoological park admission fee increase to be used for marketing purposes

SECTION 19.4. Subject to the approval of the Secretary of Environment and Natural Resources, up to four hundred thousand dollars ($400,000) of the receipts from the increase in admission fees to the North Carolina Zoological Park for the 2001-2002 fiscal year and up to four hundred thousand dollars ($400,000) of those receipts for the 2002-2003 fiscal year may be used for marketing activities related to promoting the North Carolina Zoological Park.

Requested by: Senators Martin of Pitt, Weinstein, Plyler, Odom, Lee

North carolina water quality workgroup initiative/rivernet monitoring system pilot program/research funds

SECTION 19.5. Article 21 of Chapter 143 of the General Statutes is amended by adding a new section to read:

"§ 143-215.8D. North Carolina Water Quality Workgroup; Rivernet.

(a) The Department of Environment and Natural Resources and North Carolina State University shall jointly establish the North Carolina Water Quality Workgroup. The Workgroup shall work collaboratively with the appropriate divisions of the Department of Environment and Natural Resources and North Carolina State University, the Scientific Advisory Council on Water Resources and Coastal Fisheries Management, the Environmental Management Commission, and the Environmental Review Commission to identify the scientific and State agency databases that can be used to formulate public policy regarding the State's water quality, evaluate those databases to determine the information gaps in those databases, and establish the priorities for obtaining the information lacking in those databases. The Workgroup shall have the following duties:

(1) To address specifically the ongoing need of evaluation, synthesis, and presentation of current scientific knowledge that can be used to formulate public policy on water quality issues.

(2) To identify knowledge gaps in the current understanding of water quality problems and fill these gaps with appropriate research projects.

(3) To maintain a web-based water quality data distribution site.

(4) To organize and evaluate existing scientific and State agency water quality databases.

(5) To prioritize recognized knowledge gaps in water quality issues for immediate funding.

(b) The North Carolina Water Quality Workgroup shall be composed of no more than 15 members. Those members shall be jointly appointed by the Chancellor of North Carolina State University and the Secretary of Environment and Natural Resources. Any person appointed as a member of the Workgroup shall be knowledgeable in one of the following areas:

(1) Water Quality Assessment, Water Quality Monitoring, and Water Quality Permitting.

(2) Nutrient Management.

(3) Water Pollution Control.

(4) Waste Management.

(5) Groundwater Resources.

(6) Stream Hydrology.

(7) Aquatic Biology.

(8) Environmental Education and Web-Based Data Dissemination.

(c) North Carolina State University shall provide meeting facilities for the North Carolina Water Quality Workgroup as requested by the Chair.

(d) The members of the North Carolina Water Quality Workgroup shall elect a Chair. The Chair shall call meetings of the Workgroup and set the meeting agenda.

(e) The Chair of the North Carolina Water Quality Workgroup shall report each year by January 30 to the Scientific Advisory Council on Water Resources and Coastal Fisheries Management, to the Environmental Review Commission, to the Cochairs of the House of Representatives and Senate Appropriations Subcommittees on Natural and Economic Resources, and to the Chancellor of North Carolina State University or the Chancellor's designee on the previous year's activities, findings, and recommendations of the North Carolina Water Quality Workgroup.

(f) The North Carolina Water Quality Workgroup shall develop a water quality monitoring system to be known as Rivernet that effectively uses the combined resources of North Carolina State University and State agencies. The Rivernet system shall be designed to implement advances in monitoring technology and information management systems with web-based data dissemination in the waters that are impaired based on the criteria of the State's basinwide water quality management plans. Water quality and nutrient parameters shall be continuously monitored at each station, and the data shall be sent back to a centralized computer server.

The Rivernet system shall be coordinated with related data collection and monitoring activities of the Department of Environment and Natural Resources, the Water Resources Research Institute, the North Carolina Water Quality Workgroup, and other research efforts pursued by academic institutions or State government entities. If the North Carolina Water Quality Workgroup chooses to employ a technology for which there are testing procedure guidelines promulgated by the United States Environmental Protection Agency, the American Public Health Association, the American Water Works Association, or the Water Environment Federation then the testing procedures shall comply with the appropriate guidelines. If the North Carolina Water Quality Workgroup chooses to employ a technology for which there are no testing procedure guidelines promulgated by any of the groups cited in this subsection, then the North Carolina Water Quality Workgroup may establish testing procedure guidelines.

The Rivernet system shall also have the capabilities to trigger alarms and notify the appropriate member of the Workgroup when monitoring stations exceed defined limits indicating a spill or a significant water quality or nutrient measurement event, which then can be comprehensively analyzed."

Requested by: Senators Martin of Pitt, Weinstein, Plyler, Odom, Lee

continue one-stop permit assistance pilot program

SECTION 19.6.(a) The Department of Environment and Natural Resources shall continue the one-stop environmental permit application assistance and tracking system pilot project established under Section 13.7 of S.L. 2000-67 during the 2001-2003 fiscal biennium. It is the intent of the General Assembly that the Department of Environment and Natural Resources expand this pilot program to a statewide program effective in all of the Department's regional offices if the resources are available to do so during the 2001-2003 fiscal biennium. The provisions of Section 13.7(a) through (d) of S.L. 2000-67 apply to the pilot program under this section.

SECTION 19.6.(b) The Department of Environment and Natural Resources shall report to the Appropriations Subcommittees on Natural and Economic Resources in both the Senate and the House of Representatives, the Fiscal Research Division, and the Environmental Review Commission no later than April 1, 2002, and again no later than April 1, 2003, regarding the results of the pilot project continued under this section. This report shall include the number of environmental permits in the pilot project that took more than 90 days to issue or deny; the types of permits those were; the reasons for the extended processing time of those permits; how the time within which the permit was actually issued or denied compared with the projected time frame provided to the applicant by the Department; based on the data gathered in the pilot project, any recommendations regarding what the permit time frames should be for all major permits issued by the Department; and to what extent, if any, the program has been expanded to a statewide program under this section.

SECTION 19.6.(c) The Department of Environment and Natural Resources may adopt temporary rules to implement this section.

Requested by: Senators Martin of Pitt, Weinstein, Plyler, Odom, Lee

Division of Radiation Protection Self-Sufficiency Plan

SECTION 19.7. The Department of Environment and Natural Resources shall develop a plan to make the Division of Radiation Protection of the Department of Environment and Natural Resources self-supporting within two years. The Department of Environment and Natural Resources shall report the details of this plan to the Appropriations Subcommittees on Natural and Economic Resources in both the Senate and the House of Representatives no later than January 15, 2002.

Requested by: Senators Martin of Pitt, Weinstein, Plyler, Odom, Lee

DENR to Study feasibility of Transferring Sedimentation Program to Local Governments

SECTION 19.8. The Department of Environment and Natural Resources shall study the feasibility of transferring the program within the Department of Environment and Natural Resources under the Sedimentation Pollution Control Act of 1973, Article 4 of Chapter 113A of the General Statutes, to local governments. The Department of Environment and Natural Resources shall consider the economic impact that the proposed transfer would have on local governments, any savings that would be generated for the State by the proposed transfer, and any statutory changes that would be needed to implement such a transfer. The Department of Environment and Natural Resources shall report its findings and recommendations, including legislative proposals, to the Appropriations Subcommittees on Natural and Economic Resources in both the Senate and the House of Representatives no later than April 1, 2002.

Requested by: Senators Martin of Pitt, Weinstein, Plyler, Odom, Lee

Submerged Lands Program/Secretary designate program manager

SECTION 19.9. The Secretary of Environment and Natural Resources shall designate from existing staff within the Department of Environment and Natural Resources a staff position to be responsible for managing the Submerged Lands Program. By August 1, 2001, the Secretary shall report to both the Senate and House of Representatives Cochairs of the Appropriations Subcommittees on Natural and Economic Resources what position will manage the Program.

Requested by: Senators Martin of Pitt, Weinstein, Plyler, Odom, Lee

DENR RECLASSIFICATION OF Senior Field Officer Positions REPORT

SECTION 19.10. The Department of Environment and Natural Resources shall report to the Senate and House of Representatives Cochairs of the full Appropriations Committee, and to the Senate and House of Representatives Cochairs of the Natural and Economic Resources Appropriations Subcommittees by October 1, 2001, on the Department’s reclassification of its regional office managers as directed by Section 26.12 of S.L. 1995-324. The report shall include the following: the location and title of the four remaining positions, a description of the duties and responsibilities assigned to each position, a description of the day-to-day activities of each of the positions, an explanation of the purposes each of the positions serve, an explanation of how the positions benefit the Department, and a description of the role that the positions play in each of the respective communities and regions in which the positions are located.

Requested by: Senators Martin of Pitt, Weinstein, Plyler, Odom, Lee

DENR Study of Environmental Permitting Process

SECTION 19.11.(a) The Department of Environment and Natural Resources shall study the permitting process in the Division of Water Quality, the Division of Coastal Management as it relates to CAMA permits, and the Division of Land Resources as it relates to the sedimentation and erosion control plans. The study shall at a minimum include the following:

(1) A description of how the permitting process currently works.

(2) The number and types of permits issued by each of these Divisions.

(3) The time frame within which each of the types of permits is issued.

(4) The adequacy of existing staff levels to complete the issuance of permits in a timely manner.

(5) Whether duplication in the permitting process exists between the regional office and the central office staff.

(6) Efficiencies to be gained from delegation of authority to regional offices.

(7) Efficiencies to be gained from issuing more general permits.

(8) The amount of revenue generated by the permits and retained as departmental receipts.

(9) Any other information or issue deemed relevant by the Fiscal Research Division to provide an accurate analysis of the issues.

SECTION 19.11.(b) In conducting this study, the Department shall record its tracking of the permits and the statistical data regarding those permits in a format that is easily accessible and usable for fiscal analysis by the Fiscal Research Division.

SECTION 19.11.(c) The Department shall make a report with its findings and recommendations to the Senate and House of Representatives Cochairs of the full Appropriations Committee and to the Senate and House of Representatives Cochairs of the Natural and Economic Resources Appropriations Subcommittees, on ways to improve, expedite, or simplify the permitting process no later than March 10, 2002.

part XX. department of commerce

Requested by: Senators Martin of Pitt, Weinstein, Plyler, Odom, Lee

TOURISM PROMOTION FUNDS

SECTION 20.1. Funds appropriated in this act to the Department of Commerce for tourism promotion grants shall be allocated according to per capita income, unemployment, and population growth in an effort to direct funds to counties most in need in terms of lowest per capita income, highest unemployment, and slowest population growth, in the following manner:

(1) Counties 1 through 20 are each eligible to receive a maximum grant of seven thousand five hundred dollars ($7,500) for each fiscal year, provided these funds are matched on the basis of one non-State dollar for every four State dollars.

(2) Counties 21 through 50 are each eligible to receive a maximum grant of three thousand five hundred dollars ($3,500) for two of the next three fiscal years, provided these funds are matched on the basis of one non-State dollar for every three State dollars.

(3) Counties 51 through 100 are each eligible to receive a maximum grant of three thousand five hundred dollars ($3,500) for alternating fiscal years, beginning with the 1991-92 fiscal year, provided these funds are matched on the basis of four non-State dollars for every State dollar.

Requested by: Senators Martin of Pitt, Weinstein, Plyler, Odom, Lee

WANCHESE SEAFOOD INDUSTRIAL PARK FUNDS/OREGON INLET FUNDS

SECTION 20.2.(a) Of the funds appropriated in this act to the Department of Commerce for the Wanchese Seafood Industrial Park, the sum of one hundred twenty-seven thousand eight hundred seventy dollars ($127,870) for the 2001-2002 fiscal year and the sum of one hundred twenty-seven thousand eight hundred seventy dollars ($127,870) for the 2002-2003 fiscal year may be expended by the North Carolina Seafood Industrial Park Authority for operations, maintenance, repair, and capital improvements in accordance with Article 23C of Chapter 113 of the General Statutes, in addition to funds available to the Authority for these purposes.

SECTION 20.2.(b) Funds appropriated to the Department of Commerce for the 2000-2001 fiscal year for the Oregon Inlet Project that are unexpended and unencumbered as of June 30, 2001, shall not revert to the General Fund on June 30, 2001, but shall remain available to the Department for legal costs associated with the Project. This subsection becomes effective June 30, 2001.

Requested by: Senators Martin of Pitt, Weinstein, Plyler, Odom, Lee

INDUSTRIAL RECRUITMENT COMPETITIVE FUND

SECTION 20.3.(a) Funds appropriated in this act to the Department of Commerce for the Industrial Recruitment Competitive Fund shall be used to continue the Fund. The purpose of the Fund is to provide financial assistance to those businesses or industries deemed by the Governor to be vital to a healthy and growing State economy and that are making significant efforts to establish or expand in North Carolina. Moneys allocated from the Fund shall be used for the following purposes:

(1) Installation or purchase of equipment;

(2) Structural repairs, improvements, or renovations of existing buildings to be used for expansion; and

(3) Construction of or improvements to new or existing water, sewer, gas or electric utility distribution lines, or equipment for existing buildings.

Moneys may also be used for construction of or improvements to new or existing water, sewer, gas or electric utility distribution lines, or equipment to serve new or proposed industrial buildings used for manufacturing and industrial operations. The Governor shall adopt guidelines and procedures for the commitment of moneys from the Fund.

SECTION 20.3.(b) The Department of Commerce shall report on or before October 1, 2001, and quarterly thereafter to the Joint Legislative Commission on Governmental Operations and to the Fiscal Research Division on the commitment, allocation, and use of funds allocated from the Industrial Recruitment Competitive Fund.

Requested by: Senators Martin of Pitt, Weinstein, Plyler, Odom, Lee

ABOLISH CENTER FOR ENTREPRENEURSHIP AND TECHNOLOGY

SECTION 20.4.(a) Effective July 1, 2001, the Center for Entrepreneurship and Technology (hereinafter Center) in the Department of Commerce (hereinafter Department) is abolished.

SECTION 20.4.(b) The Department shall not carryforward any unencumbered State funds for the Center to the 2001-2002 fiscal year. This subsection becomes effective June 30, 2001.

Requested by: Senators Martin of Pitt, Weinstein, Plyler, Odom, Lee

COMMERCE STUDY/ Consolidate BUSINESS AND INDUSTRY dIVISION regional offices AND regional ECONOMIC DEVELOPMENT COMMISSIONs

SECTION 20.5. The Department of Commerce (hereinafter Department) shall study the feasibility of consolidating each of the Business and Industry Division regional offices (hereinafter B&I) with a Regional Economic Development Commission (hereinafter Commission) office. In considering whether consolidation is feasible and would better advance the goals of both the B&I and the Commissions, the Department shall do at least the following:

(1) Evaluate the degree to which existing shared offices in Asheville, Edenton, Greensboro, and Research Triangle Park differ in organization, budget, and performance from the B&I offices in Charlotte, Greenville, and Fayetteville that do not share office space with Commissions.

(2) Evaluate the extent to which B&I staff responsibilities in each B&I office duplicate those performed by the Commission staff in their region regardless of whether the offices are shared or separate.

(3) Evaluate the extent to which existing B&I offices in Lenoir and Bryson City add value cost-effectively to the service provided by the Asheville office. In particular, the Department shall consider how the same level of service might be provided if the Lenoir and Bryson City offices were eliminated or merged into the Asheville office.

(4) Estimate any costs that would result from closing B&I offices in Charlotte, Greenville, and Fayetteville and consolidating them with Commissions in Charlotte, Kinston, and Elizabethtown, respectively. The Department shall also estimate any costs that would result from closing B&I offices in Lenoir and Bryson City and consolidating them with the Asheville office.

(5) Identify whether the actions described in subdivision (4) of this section would produce any net savings and, if affirmative, identify the sources of the savings. The Department shall document whether all current B&I regional staff would remain essential to program function if the closings and consolidations described in subdivision (4) of this section were carried out.

The Department shall report its findings and recommendations, including any estimates of efficiencies and cost savings that may be produced by consolidating the Charlotte, Greenville, and Fayetteville B&I regional offices with Commissions and consolidating the Lenoir and Bryson City offices with the existing shared office in Asheville, to the House of Representatives and Senate Appropriations Subcommittees on Natural and Economic Resources by January 15, 2002.

Requested by: Senators Martin of Pitt, Weinstein, Plyler, Odom, Lee

worker training trust fund appropriations

SECTION 20.6.(a) There is appropriated from the Worker Training Trust Fund to the Department of Commerce the sum of five million nine hundred thirty thousand sixteen dollars ($5,930,016) for the 2001-2002 fiscal year for the operation of local Employment Services and Workforce Development offices.

SECTION 20.6.(b) Notwithstanding the provisions of G.S. 96-5(f), there is appropriated from the Worker Training Trust Fund to the following agencies the following sums for the 2001-2002 fiscal year for the following purposes:

(1) Two million one hundred sixty-six thousand forty-seven dollars ($2,166,047) for the 2001-2002 fiscal year to the North Carolina Community Colleges System Office for its New and Expanded Industry Training Program;

(2) Nine hundred forty-one thousand seven hundred sixty dollars ($941,760) for the 2001-2002 fiscal year to the North Carolina Community Colleges System Office for customized training of the unemployed and the working poor for specific jobs needed by employers through the Office's Bureau for Training Initiatives;

(3) One million six hundred forty-four thousand three hundred twelve dollars ($1,644,312) for the 2001-2002 fiscal year to the North Carolina Community Colleges System Office to continue the Focused Industrial Training Program;

(4) Two hundred eleven thousand eight hundred ninety-six dollars ($211,896) for the 2001-2002 fiscal year to the Department of Commerce for the State Occupational Information Coordinating Committee to develop and operate an interagency system to track former participants in State education and training programs;

(5) Three hundred seventy-six thousand seven hundred four dollars ($376,704) for the 2001-2002 fiscal year to the North Carolina Community Colleges System Office for a training program in entrepreneurial skills to be operated by North Carolina REAL Enterprises;

(6) Fifty-six thousand five hundred six dollars ($56,506) for the 2001-2002 fiscal year to the Department of Commerce to maintain compliance with Chapter 96 of the General Statutes, which directs the Department of Commerce to employ the Common Follow-Up Management Information System to evaluate the effectiveness of the State's job training, education, and placement programs; and

(7) Nine hundred forty-one thousand seven hundred sixty dollars ($941,760) for the 2001-2002 fiscal year to the Department of Labor to continue the Apprenticeship Program.

Requested by: Senators Martin of Pitt, Weinstein, Plyler, Odom, Lee

biotechnology center

SECTION 20.7.(a) The North Carolina Biotechnology Center shall recapture funds spent in support of successful research and development efforts in the for-profit private sector.

SECTION 20.7.(b) The North Carolina Biotechnology Center shall provide funding for biotechnology, biomedical, and related bioscience applications under its Business and Science Technology Programs.

SECTION 20.7.(c) The North Carolina Biotechnology Center shall:

(1) By January 15, 2002, and more frequently as requested, report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division the following information:

a. State fiscal year 2000-2001 program activities, objectives, and accomplishments;

b. State fiscal year 2000-2001 itemized expenditures and fund sources;

c. State fiscal year 2001-2002 planned activities, objectives, and accomplishments including actual results through December 31, 2001; and

d. State fiscal year 2001-2002 estimated itemized expenditures and fund sources including actual expenditures and fund sources through December 31, 2001;

(2) By January 15, 2003, and more frequently as requested, report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division the following information:

a. State fiscal year 2001-2002 program activities, objectives, and accomplishments;

b. State fiscal year 2001-2002 itemized expenditures and fund sources;

c. State fiscal year 2002-2003 planned activities, objectives, and accomplishments including actual results through December 31, 2002; and

d. State fiscal year 2002-2003 estimated itemized expenditures and fund sources including actual expenditures and fund sources through December 31, 2002; and

(3) Provide to the Fiscal Research Division a copy of the organization's annual audited financial statement within 30 days of issuance of the statement.

SECTION 20.7.(d) The North Carolina Biotechnology Center shall provide a report containing detailed budget, personnel, and salary information to the Office of State Budget and Management and to the Fiscal Research Division in the same manner as State departments and agencies in preparation for biennium budget requests.

Requested by: Senators Martin of Pitt, Weinstein, Plyler, Odom, Lee

Biotechnology Center/Technological development authority, Inc., profit sharing with state

SECTION 20.8.(a) Prior to receiving any General Fund disbursements for the 2001-2003 biennium, the North Carolina Biotechnology Center (hereinafter Center) and the North Carolina Technological Development Authority, Inc., (hereinafter Authority) must each enter into a memorandum of understanding with the Attorney General's Office in which they commit to do all of the following:

(1) Work with the Attorney General's Office to craft a legal agreement that specifies the manner in which any profits from investments made with State funds shall be shared with the State.

(2) Negotiate the terms of the legal agreement in good faith.

(3) Submit the proposed legal agreement to the Joint Legislative Commission on Governmental Operations for review by January 15, 2002.

(4) Execute the legal agreement no later than 30 days after it is presented to the Joint Legislative Commission on Governmental Operations.

SECTION 20.8.(b) The Attorney General's Office shall consult with the Fiscal Research Division in crafting the memorandum of understanding and the legal agreement described in subsection (a) of this section.

SECTION 20.8.(c) The Center and the Authority shall submit a copy of the memorandum of understanding to the Fiscal Research Division prior to receiving any General Fund disbursements for the 2001-2003 biennium and shall submit a copy of the proposed legal agreement to the Division by January 15, 2002.

Requested by: Senators Martin of Pitt, Weinstein, Plyler, Odom, Lee

north carolina technological development authority, inc., reporting requirements

SECTION 20.9. The North Carolina Technological Development Authority, Inc., (TDA) shall do the following:

(1) By January 15, 2002, and more frequently as requested, report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division the following information:

a. State fiscal year 2001-2002 program activities, objectives, and accomplishments;

b. State fiscal year 2001-2002 itemized expenditures and fund sources;

c. State fiscal year 2002-2003 planned activities, objectives, and accomplishments including actual results through December 31, 2001; and

d. State fiscal year 2002-2003 estimated itemized expenditures and fund sources including actual expenditures and fund sources through December 31, 2001.

(2) Provide to the Fiscal Research Division a copy of the organization's annual audited financial statement within 30 days of issuance of the statement.

(3) Fourth quarter allotments shall not be released to TDA until it satisfies the reporting requirements for January 15, 2002.

Requested by: Senators Martin of Pitt, Weinstein, Plyler, Odom, Lee

REGIONAL ECONOMIC DEVELOPMENT COMMISSION ALLOCATIONS

SECTION 20.10.(a) Funds appropriated in this act to the Department of Commerce for regional economic development commissions shall be allocated to the following commissions in accordance with subsection (b) of this section: Western North Carolina Regional Economic Development Commission, Research Triangle Regional Commission, Southeastern North Carolina Regional Economic Development Commission, Piedmont Triad Partnership, Northeastern North Carolina Regional Economic Development Commission, Global TransPark Development Commission, and Carolinas Partnership, Inc.

SECTION 20.10.(b) Funds appropriated pursuant to subsection (a) of this section shall be allocated to each regional economic development commission as follows:

(1) First, the Department shall establish each commission's allocation by determining the sum of allocations to each county that is a member of that commission. Each county's allocation shall be determined by dividing the county's enterprise factor by the sum of the enterprise factors for eligible counties and multiplying the resulting percentage by the amount of the appropriation. As used in this subdivision, the term "enterprise factor" means a county's enterprise factor as calculated under G.S. 105-129.3;

(2) Next, the Department shall subtract from funds allocated to the Global TransPark Development Zone the sum of two hundred four thousand four hundred thirty-three dollars ($204,433) in each fiscal year, which sum represents the interest earnings in each fiscal year on the estimated balance of seven million five hundred thousand dollars ($7,500,000) appropriated to the Global TransPark Development Zone in Section 6 of Chapter 561 of the 1993 Session Laws; and

(3) Next, the Department shall redistribute the sum of two hundred four thousand four hundred thirty-three dollars ($204,433) in each fiscal year to the seven regional economic development commissions named in subsection (a) of this section. Each commission's share of this redistribution shall be determined according to the enterprise factor formula set out in subdivision (1) of this subsection. This redistribution shall be in addition to each commission's allocation determined under subdivision (1) of this subsection.

Requested by: Senators Martin of Pitt, Weinstein, Plyler, Odom, Lee

regional commission reports

SECTION 20.11.(a) Each regional economic development commission receiving a grant-in-aid from the Department of Commerce shall:

(1) By January 15, 2002, and more frequently as requested, report to the Joint Legislative Commission on Governmental Operations, the Fiscal Research Division, and the Department of Commerce the following information:

a. State fiscal year 2000-2001 program activities, objectives, and accomplishments;

b. State fiscal year 2000-2001 itemized expenditures and fund sources;

c. State fiscal year 2001-2002 planned activities, objectives, and accomplishments as specified in subdivisions (b)(1) through (b)(6) of this section including actual results through December 31, 2001;

d. State fiscal year 2001-2002 estimated itemized expenditures and fund sources including actual expenditures and fund sources through December 31, 2001.

(2) By January 15, 2003, and more frequently as requested, report to the Joint Legislative Commission on Governmental Operations, the Fiscal Research Division, and the Department of Commerce the following information:

a. State fiscal year 2001-2002 program activities, objectives, and accomplishments;

b. State fiscal year 2001-2002 itemized expenditures and fund sources;

c. State fiscal year 2002-2003 planned activities, objectives, and accomplishments as specified in subdivisions (b)(1) through (b)(6) of this section including actual results through December 31, 2002;

d. State fiscal year 2002-2003 estimated itemized expenditures and fund sources including actual expenditures and fund sources through December 31, 2002.

(3) Provide to the Fiscal Research Division and the Department of Commerce a copy of its annual audited financial statement within 30 days of issuance of the statement.

SECTION 20.11.(b) Each regional economic development commission receiving a grant-in-aid from the Department of Commerce in each fiscal year of the 2001-2003 biennium shall by January 15 of each fiscal year report to the Department of Commerce the following information for the most recently completed fiscal year:

(1) The number of and description of marketing outreach events including trade shows, recruitment missions, and related activities;

(2) The number of jobs saved;

(3) The amount of investment and number of jobs created by the direct efforts of a commission;

(4) Initiatives undertaken to establish certified sites and shell buildings;

(5) The number of referrals or leads handled that were generated by the Department of Commerce;

(6) The number and listing of available sites and buildings within the region served by a commission;

(7) A listing of major accomplishments.

Requested by: Senators Martin of Pitt, Weinstein, Plyler, Odom, Lee

Council of government funds

SECTION 20.12.(a) Of the funds appropriated in this act to the Department of Commerce, nine hundred thirty-five thousand dollars ($935,000) for the 2001-2002 fiscal year and nine hundred thirty-five thousand dollars ($935,000) for the 2002-2003 fiscal year shall only be used as provided by this section. Each regional council of government or lead regional organization is allocated up to fifty-five thousand dollars ($55,000) for each fiscal year, with the actual amount calculated as provided in subsection (b) of this section.

SECTION 20.12.(b) The funds shall be allocated as follows: A share of the maximum fifty-five thousand dollars ($55,000) each fiscal year shall be allocated to each county and smaller city, based on the most recent annual estimate of the Office of State Planning of the population of that county (less the population of any larger city within that county) or smaller city, divided by the sum of the total population of the region (less the population of larger cities within that region) and the total population of the region living in smaller cities. Those funds shall be paid to the regional council of government for the region in which that city or county is located upon receipt by the Department of Commerce of a resolution of the governing board of the county or city requesting release of the funds. If any city or county does not so request payment of funds by June 30 of a State fiscal year, that share of the allocation for that fiscal year shall revert to the General Fund.

SECTION 20.12.(c) A regional council of government may use funds appropriated by this section only to assist local governments in grant applications, economic development, community development, support of local industrial development activities, and other activities as deemed appropriate by the member governments.

SECTION 20.12.(d) Funds appropriated by this section shall not be used for payment of dues or assessments by the member governments and shall not supplant funds appropriated by the member governments.

SECTION 20.12.(e) As used in this section, "Larger City" means an incorporated city with a population of 50,000 or over. "Smaller City" means any other incorporated city.

SECTION 20.12.(f) Each council of government or lead regional organization shall do the following:

(1) By January 15, 2002, and more frequently as requested, report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division the following information:

a. State fiscal year 2000-2001 program activities, objectives, and accomplishments;

b. State fiscal year 2000-2001 itemized expenditures and fund sources;

c. State fiscal year 2001-2002 planned activities, objectives, and accomplishments, including actual results through December 31, 2001; and

d. State fiscal year 2001-2002 estimated itemized expenditures and fund sources, including actual expenditures and fund sources through December 31, 2001;

(2) By January 15, 2003, and more frequently as requested, report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division the following information:

a. State fiscal year 2001-2002 program activities, objectives, and accomplishments;

b. State fiscal year 2001-2002 itemized expenditures and fund sources;

c. State fiscal year 2002-2003 planned activities, objectives, and accomplishments, including actual results through December 31, 2002; and

d. State fiscal year 2002-2003 estimated itemized expenditures and fund sources, including actual expenditures and fund sources through December 31, 2002; and

(3) Provide to the Fiscal Research Division a copy of the organization's annual audited financial statement within 30 days of issuance of the statement.

Requested by: Senators Martin of Pitt, Weinstein, Plyler, Odom, Lee, Kerr, Warren

global transpark development commission membership changes

SECTION 20.13.(a) G.S. 158-35(a) reads as rewritten:

"(a) Commission Membership. - The governing body of the Zone is the Global TransPark Development Commission. The members of the Commission must be residents of the Zone and shall be appointed as follows:

(1) The board of commissioners of each county participating in the Zone shall appoint three voting members, one of whom shall be a minority person as defined in G.S. 143-128(f)(2) and one of whom may be a member of the board of commissioners.

(2) The ~~Authority~~ Commission shall appoint at least three but no more than seven voting members. By the appointment of these members, the ~~Authority~~ Commission shall ensure that the voting membership of the Commission includes at least seven women and seven members of a racial minority described in G.S. 143-128(f)(2). The ~~Authority~~ Commission shall appoint the fewest number of members necessary to achieve these minimums.

(3) Four nonvoting members shall be appointed as follows:

a. One appointed by the Chancellor of East Carolina University to represent the University.

b. One appointed by a majority vote of the presidents of the community colleges located in the Zone, to represent the community colleges.

c. One appointed by the chair of the State Ports Authority, to represent the sea ports of the State.

d. One member of the board of directors of the Global TransPark Foundation, Inc., appointed by that board."

SECTION 20.13.(b) G.S. 158-35(c) reads as rewritten:

"(c) Removal; Vacancies. - A member of the Commission may be removed with or without cause by the appointing body. In addition, a majority of the Commission members may, by majority vote, remove a member of the Commission if that member does not attend at least three-quarters of the regularly scheduled meetings of the Commission during any consecutive 12-month period of service of that member on the Commission, except that absences excused by the Commission due to serious medical or family circumstances shall not be considered. If the Commission votes to remove a member under this subsection, the vacancy shall be filled in the same manner as the original appointment. Appointments to fill vacancies shall be made for the remainder of the unexpired term by the respective appointing authority. All members shall serve until their successors are appointed and qualified, unless removed from office."

Requested by: Senators Martin of Pitt, Weinstein, Plyler, Odom, Lee

NONPROFIT REPORTING REQUIREMENTS

SECTION 20.14.(a) The N.C. Institute for Minority Economic Development, Inc., Land Loss Prevention Project, North Carolina Coalition of Farm and Rural Families, Inc., North Carolina Minority Support Center, North Carolina Community Development Initiative, Inc., North Carolina Association of Community Development Corporations, Inc., Partnership for the Sounds, Inc., and North Carolina REAL Enterprises shall do the following: