H345 [Edition 1]

GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1993

H 1

HOUSE BILL 345

Short Title: GPAC-Entire Package. (Public)

───────────────────────────────────────

Sponsors: Representative Balmer.

───────────────────────────────────────

Referred to: Appropriations.

───────────────────────────────────────

February 25, 1993

A BILL TO BE ENTITLED

AN ACT TO IMPLEMENT ALL OF THE RECOMMENDATIONS OF THE GOVERNMENT PERFORMANCE AUDIT COMMITTEE.

The General Assembly of North Carolina enacts:

---STATE STRATEGIC PLANNING PROCESS.

Section 1. (a) G.S. 143A-17 is repealed.

(b) G.S. 143-3.5 reads as rewritten:

"§ 143-3.5. Coordination of statistics.

It shall be the duty of the ~~Director~~ Director, through the Office of State Budget and Management and the Office of State Planning, to coordinate the efforts of governmental agencies in the collection, development, dissemination and analysis of official economic, demographic and social statistics pertinent to State budgeting. The ~~Office shall~~ Director shall:

(1) Prepare and release the official demographic and economic estimates and projections for the State;

(2) Conduct special economic and demographic analyses and studies to support statewide budgeting;

(3) Develop and coordinate cooperative arrangements with federal, State and local governmental agencies to facilitate the exchange of data to support State budgeting;

(4) Compile, maintain, and disseminate information about State programs which involve the distribution of State aid funds to local governments including those variables used in their allocation; and,

(5) Develop and maintain in cooperation with other State and local governmental agencies, an information system providing comparative data on resources and expenditures of local governments.

Every fiscal analysis prepared by the Director or the Office of State Budget and Management addressing the State budget outlook shall encompass the upcoming five-year period. Every fiscal analysis prepared by the Director or the Office of State Budget and Management addressing the impact of proposed legislation on the State budget shall estimate the impact for the first five fiscal years the legislation would be in effect. To minimize duplication of effort in collecting or developing new statistical series pertinent to State planning and budgeting, including contractual arrangements, State agencies must submit to the Director proposed procedures and funding requirements.

This section shall not apply to the General Assembly, any of its committees and subcommittees, the Legislative Research Commission, the Legislative Services Commission, or any other committee or commission in the legislative branch."

"§ 143-10.3. Strategic planning process.

The Director, through the Office of State Budget and Management and the Office of State Planning, shall establish and implement a strategic planning process for the State. The strategic planning process shall address the following elements:

(1) Vision. - The State shall consider alternative futures as they pertain to quality of life, safety, health, and the environment.

(2) Statewide Goals. - The State shall establish concrete goals for the entire State in those areas that matter most to citizens.

(3) External Assessment. - The State shall solicit ideas, opinions, and concerns from citizens, both as recipients of government services and as taxpayers, regarding how well the State is meeting its goals.

(4) Internal Assessment. - The process shall involve legislators, top executive branch management, and selected personnel at all levels of State government.

(5) Agency Goals. - State agencies shall develop clearly defined goals that are consistent with statewide goals.

(6) Objectives and Measurable Results. - The State shall develop performance measures and indicators of program results or outcome indicators to track the State's progress toward achieving statewide and agency goals.

(7) Planning/Budget Document. - The State's long-range plans shall be reflected in the budget proposed by the Governor, as provided in G.S. 143-10.4(b).

(8) Performance Measuring and Monitoring. - The State shall review the performance of State programs periodically."

(d) Article 1 of Chapter 143 of the General Statutes is amended by adding a new section to read:

"§ 143-10.4. Departmental plans.

(a) The Director, through the Office of State Budget and Management and the Office of State Planning, shall have prepared biennially in the even-numbered years, a comprehensive plan for each department, agency, and institution, for which the Director may recommend an appropriation of State funds in the next biennial period. The plans shall implement the statewide and agency goals contained in the strategic plans developed in accordance with G.S. 143-10.3. The plans shall provide the objectives, activities, strategies, and supporting statistics, for each department, agency, and institution for the current biennium and for the following three biennial periods. The plans shall also provide the performance measures and outcome indicators for each department, agency, and institution. These same performance measures and outcome indicators shall be used for ongoing program monitoring and reported in the Governor's biennial budget submission.

All organizational levels of each department, agency, and institution shall be involved in preparing the department, agency, or institution's plan. The Office of State Planning shall provide guidance to the departments, agencies, and institutions in the planning process, and shall provide on-site technical assistance and process leadership to the departments, agencies, and institutions, as needed in the course of the planning process.

(b) The Director shall provide unified planning and budgeting instructions to the departments, agencies, and institutions for use in developing long-range plans and biennial budgets. The plans shall serve as the basis for the development of biennial budgets for each department, agency, and institution of State government that the Director submits to the General Assembly. Departments, agencies, and institutions shall cooperate in the development of these plans and shall provide the necessary information and data required to prepare these plans, in the format prescribed by the Director."

(e) G.S. 143-11 reads as rewritten:

"§ 143-11. Survey of departments.

On or before the fifteenth day of December, biennially in the even-numbered years, the Director shall make a complete, careful survey of the operation and management of all the departments, bureaus, divisions, officers, boards, commissions, institutions, and agencies and undertakings of the State and all persons or corporations who use or expend State funds, in the interest of economy and efficiency, and of obtaining a working knowledge upon which to base recommendations to the General Assembly as to appropriations for maintenance and special funds and capital expenditures for the succeeding biennium. If the Director and the Commission shall agree in their recommendations for the budget for the next biennial period, he shall prepare their report in the form of a proposed budget, together with such comment and recommendations as they may deem proper to make. If the Director and Commission shall not agree in substantial particulars, the Director shall prepare the proposed budget based on his own conclusions and judgment, and the Commission or any of its members retain the right to submit separately to the General Assembly such statement of disagreement and the particulars thereof as representing their views. The budget report shall reflect the State's long-range plans, developed in accordance with G.S. 143-10.4. The budget report shall contain a complete and itemized plan of all proposed expenditures for each State department, bureau, board, division, institution, commission, State agency or undertaking, person or corporation who receives or may receive for use and expenditure any State funds, in accordance with the classification adopted by the State Controller, and of the estimated revenues and borrowings for each year in the ensuing biennial period beginning with the first day of July thereafter. Opposite each item of the proposed expenditures, the budget shall show in separate parallel columns the amount expended for the last preceding appropriation year, for the current appropriation year, and the increase or decrease. The budget shall clearly differentiate between general fund expenditures for operating and maintenance, special fund expenditures for any purpose, and proposed capital outlays.

The Director shall accompany the budget with:

(1) A budget message supporting his recommendations and outlining a financial policy and program for the ensuing biennium. The message will include an explanation of increase or decrease over past expenditures, a discussion of proposed changes in existing revenue laws and proposed bond issues, their purpose, the amount, rate of interest, term, the requirements to be attached to their issuance and the effect such issues will have upon the redemption and annual interest charges of the State debt.

(2) State Controller reports including:

a. An itemized and complete financial statement for the State at the close of the last preceding fiscal year ending June 30.

b. A statement of special funds.

(2a) A statement showing the itemized estimates of the condition of the State treasury as of the beginning and end of each of the next two appropriation years.

(3) A report on the fees charged by each State department, bureau, division, board, commission, institution, and agency during the previous fiscal year, the statutory or regulatory authority for each fee, the amount of the fee, when the amount of the fee was last changed, the number of times the fee was collected during the prior fiscal year, and the total receipts from the fee during the prior fiscal year.

(4) A statement showing the State Board of Education's request, in accordance with G.S. 115C-96, for sufficient funds to provide textbooks to public school students.

It shall be a compliance with this section by each incoming Governor, at the first session of the General Assembly in his term, to submit the budget report with the message of the outgoing Governor, if he shall deem it proper to prepare such message, together with any comments or recommendations thereon that he may see fit to make, either at the time of the submission of the said report to the General Assembly, or at such other time, or times, as he may elect and fix.

The function of the Advisory Budget Commission under this section applies only if the Director of the Budget consults with the Commission in preparation of the budget."

(f) This section becomes effective July 1, 1993.

---PROGRAM BUDGETING IMPLEMENTED.

Sec. 2. (a) The Director of the Budget shall develop a plan for preparing the budget for the 1995-97 fiscal biennium in a performance budget format. The plan shall define the major programs for which funding shall be provided. The Director of the Budget shall present the plan to the General Assembly prior to June 1, 1993.

(b) Effective for budgets developed for fiscal bienniums beginning with the 1995-97 fiscal biennium, G.S. 143-11 reads as rewritten:

"§ 143-11. Survey of departments.

(a) On or before the fifteenth day of December, biennially in the even-numbered years, the Director shall make a complete, careful survey of the operation and management of all the departments, bureaus, divisions, officers, boards, commissions, institutions, and agencies and undertakings of the State and all persons or corporations who use or expend State funds, in the interest of economy and efficiency, and of obtaining a working knowledge upon which to base recommendations to the General Assembly as to appropriations for maintenance and special funds and capital expenditures for the succeeding biennium. If the Director and the Commission shall agree in their recommendations for the budget for the next biennial period, he shall prepare their report in the form of a proposed budget, together with such comment and recommendations as they may deem proper to make. If the Director and Commission shall not agree in substantial particulars, the Director shall prepare the proposed budget based on his own conclusions and judgment, and the Commission or any of its members retain the right to submit separately to the General Assembly such statement of disagreement and the particulars thereof as representing their views. The budget report shall contain a complete and itemized plan of all proposed expenditures for each State department, bureau, board, division, institution, commission, State agency or undertaking, person or corporation who receives or may receive for use and expenditure any State funds, ~~in accordance with the classification adopted by the State Controller,~~ in a format to identify and evaluate each principal program within and among each department, bureau, board, division, institution, commission, State agency or undertaking, person or corporation, and of the estimated revenues and borrowings for each year in the ensuing biennial period beginning with the first day of July thereafter. Opposite each item of the proposed expenditures, the budget shall show in separate parallel columns the amount expended for the last preceding appropriation year, for the current appropriation year, and the increase or decrease. The budget shall clearly differentiate between general fund expenditures for operating and maintenance, special fund expenditures for any purpose, and proposed capital outlays. Except as provided in G.S. 143-10.1A, the budget document shall not include any distinction between continuation and expansion items; it shall include only the total amount proposed.

The classifications of expenditures adopted by the State Controller shall be for reporting purposes only.

(b) The Director shall accompany the budget with:

(2) State Controller reports including:

a. An itemized and complete financial statement for the State at the close of the last preceding fiscal year ending June 30.

b. A statement of special funds.

(2a) A statement showing the itemized estimates of the condition of the State treasury as of the beginning and end of each of the next two appropriation years.

(4) A statement showing the State Board of Education's request, in accordance with G.S. 115C-96, for sufficient funds to provide textbooks to public school students.

The function of the Advisory Budget Commission under this section applies only if the Director of the Budget consults with the Commission in preparation of the budget."

"§ 143-16.3. No expenditures for purposes for which the General Assembly has considered but not enacted an appropriation.

Notwithstanding any other provision of law, no funds from any source, except for gifts, grants, and funds allocated from the Contingency and Emergency Fund by the Council of State, may be expended for any purpose, position, or other expenditure for which the General Assembly has considered but not enacted an appropriation of funds for the current fiscal period. For the purpose of this section, the General Assembly has considered a purpose, position, or other expenditure when that purpose is included in a bill or petition or when any committee of the Senate or the House of Representatives deliberates on that purpose. If any State department, institution, or agency plans to spend funds for any purpose for which the General Assembly has considered but not enacted an appropriation of funds for the current fiscal period, the agency shall report its intent with supporting documentation of changes in program performance to the Joint Legislative Commission on Governmental Operations one month prior to the planned change. The changed expenditure shall not be continued for subsequent fiscal years without the approval of the General Assembly."

(d) Effective for programs for which the General Assembly enacted program budgets, G.S. 143-23 reads as rewritten:

"§ 143-23. All maintenance funds for ~~itemized~~ budgeted purposes; ~~transfers between objects or line items.~~ movement of funds.

(a) All appropriations now or hereafter made for the maintenance of the various departments, institutions and other spending agencies of the State, are for the ~~(i) purposes or programs and (ii) objects or line items enumerated in the itemized requirements of such departments, institutions and other spending agencies~~ budget purposes within the subprograms of the performance budget submitted to the General Assembly by the Director of the Budget and the Advisory Budget Commission, as amended by the General Assembly. The function of the Advisory Budget Commission under this subsection applies only if the Director of the Budget consults with the Commission in preparation of the budget.

(a1) No transfers may be made between objects or line items in the budget of any department, institution, or other spending agency; however, with the approval of the Director of the Budget, a department, institution, or other spending agency may spend more than was appropriated for an object or line item if the overexpenditure is:

~~(1)~~ In a purpose or program for which funds were appropriated for that fiscal period and the total amount spent for the purpose or program is no more than was appropriated for the purpose or program for the fiscal period;

~~(2)~~ ~~Required to continue a purpose or program because of unforeseen events, so long as the scope of the purpose or program is not increased;~~

~~(3)~~ ~~Required by a court, Industrial Commission, or administrative hearing officer's order or award or to match unanticipated federal funds;~~

~~(4)~~ ~~Required to respond to an unanticipated disaster such as a fire, hurricane, or tornado; or~~

~~(5)~~ ~~Required to call out the National Guard.~~

The Director of the Budget shall report on a quarterly basis to the Joint Legislative Commission on Governmental Operations and to the Fiscal Research Division of the Legislative Services Office the reason if the amount expended for a purpose or program is more than the amount appropriated for it from all sources. If the overexpenditure was authorized under subdivision (2) ~~of this subsection, the Director of the Budget shall identify in the report the unforeseen event that required the overexpenditure.~~

~~Funds appropriated for salaries and wages are also subject to the limitation that they may only be used for (i)~~ salaries and wages or for premium pay, overtime pay, longevity, unemployment compensation, workers' compensation, temporary wages, contracted personal services, moving expenses, payment of accumulated annual leave, certain awards to employees, tort claims, and employer's social security, retirement, and hospitalization payments; or (ii) uses for which over expenditures are permitted by subdivisions (3), (4), and (5) of this subsection but the Director of the Budget shall include such use and the reason for it in his quarterly report to the Joint Legislative Commission on Governmental Operations and to the Fiscal Research Division of the Legislative Services Office.

Lapsed salary funds that become available from vacant positions are also subject to the limitation that they may not be used for new permanent employee positions or to raise the salary of existing employees.

The requirements in this section that the Director of the Budget report to the Joint Legislative Commission on Governmental Operations shall not apply to expenditures of receipts by entities that are wholly receipt supported, except for entities supported by the Wildlife Resources Fund. The Director of the Budget may authorize the movement of funds from one budget purpose to another if both budget purposes are within the same subprogram of the performance budget and are within the same department. The Director of the Budget may also authorize the movement of funds from one program to another of up to five percent (5%) of the total appropriation for a program.

(b) Repealed by Session Laws 1985, c. 290, s. 8, effective July 1, 1985.

(c) Transfers or changes ~~as between objects or line items~~ in the budget of the Senate may be made by the President Pro Tempore of the Senate;

(d) Transfers or changes ~~as between objects or line items~~ in the budget of the House of Representatives may be made by the Speaker of the House of Representatives;

(e) Transfers or changes ~~as between objects or line items~~ in the budget of the General Assembly other than of the Senate and House of Representatives may be made jointly by the President Pro Tempore of the Senate and the Speaker of the House of Representatives.

~~(f)~~ ~~As used in this section:~~

~~(1)~~ " ~~Object or line item~~" means a budgeted expenditure or receipt in the budget enacted by the General Assembly that is designated by (i) a thirteen-digit code in the 1000-object code series or (ii) an eleven-digit code in all other object code series, in accordance with the Budget Code Structure and the State Accounting System Uniform Chart of Accounts set out in the Administrative Policies and Procedures Manual of the Office of the State Controller.

~~(2)~~ " ~~Purpose or program~~" means a group of objects or line items for support of a specific activity outlined in the budget adopted by the General Assembly that is designated by a nine-digit fund code in accordance with the Budget Code Structure and the State Accounting System Uniform Chart of Accounts set out in the Administrative Policies and Procedures Manual of the Office of the State Controller."

(e) Effective for programs for which the General Assembly enacted program budgets, G.S. 143-6 reads as rewritten:

"§ 143-6. Information from departments and agencies asking State aid.

(a) On or before the first day of September in the even-numbered years, each of the departments, bureaus, divisions, officers, boards, commissions, institutions, and other State agencies and undertakings receiving or asking financial aid from the State, or receiving or collecting funds under the authority of any general law of the State, shall furnish the Director all the information, data and estimates which he may request with reference to past, present and future appropriations and expenditures, receipts, revenue, and income.

The Director may require any department, bureau, division, officer, board, commission, institution, or other State agency or undertaking receiving or asking financial aid from the State, to submit its request for future appropriations within target levels established by the Director to reflect anticipated revenues and proposed expenditure priorities.

(b) 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 constructing or renovating any State building, utility, or other property development (except a railroad, highway, or bridge structure) shall, before making any such request for State financial aid, submit to the Department of Administration a statement of its needs in terms of space and other physical requirements, and shall furnish the Department with such additional information as it may request. The Department of Administration shall then prepare preliminary studies and cost estimates for the use of the requesting department, bureau, division, officer, board, commission, institution, or other State agency or undertaking in presenting its request to the Director of the Budget.

(c) On or before the first day of September in the even-numbered years, each of the departments, bureaus, divisions, officers, boards, commissions, institutions, and other State agencies receiving or asking financial aid or support from the State, under the authority of any general law of the State, shall furnish the Director with the following information:

(1) The amount of State funds disbursed in the immediately preceding two fiscal years and the purpose for which the funds were disbursed and used, the amount being requested ~~as continuation funds~~ for the upcoming fiscal year, and the justification for continued State support; and

(2) Justification for continued State support shall include information on the extent of the public benefit being derived from State support.

(d) The Office of State Budget and Management and the Director of the Budget shall provide to the General Assembly, on or before January 15 of each odd-numbered year, a report that adequately and fairly presents the information required in this section."

(f) Effective for programs for which the General Assembly enacted program budgets, G.S. 143-12.1(e) reads as rewritten:

"(e) Budgets for vending facilities prepared under subsection (d) of this section shall reflect total receipts from the facilities, and the total costs to staff, stock, and operate the vending facilities, shall set out the total net proceeds, and shall ~~contain, in line-item detail,~~ contain requests the departments and institutions have submitted to expend the net proceeds. If a State agency or institution receives payments on account of vending facilities but does not actually operate the facilities, the budget shall contain a statement of the payments and shall ~~contain, in line-item detail,~~ contain requests the departments and institutions have submitted to expend the net proceeds."

(g) This section is effective upon ratification.

---CHANGE CAPITAL BUDGET PROCESS.

Sec. 3. (a) G.S. 143-11 reads as rewritten:

"§ 143-11. Survey of departments.

On or before the fifteenth day of December, biennially in the even-numbered years, the Director shall make a complete, careful survey of the operation and management of all the departments, bureaus, divisions, officers, boards, commissions, institutions, and agencies and undertakings of the State and all persons or corporations who use or expend State funds, in the interest of economy and efficiency, and of obtaining a working knowledge upon which to base recommendations to the General Assembly as to appropriations for maintenance and special funds and capital expenditures for the succeeding biennium. If the Director and the Commission shall agree in their recommendations for the budget for the next biennial period, he shall prepare their report in the form of a proposed budget, together with such comment and recommendations as they may deem proper to make. If the Director and Commission shall not agree in substantial particulars, the Director shall prepare the proposed budget based on his own conclusions and judgment, and the Commission or any of its members retain the right to submit separately to the General Assembly such statement of disagreement and the particulars thereof as representing their views. The budget report shall contain a complete and itemized plan of all proposed expenditures for each State department, bureau, board, division, institution, commission, State agency or undertaking, person or corporation who receives or may receive for use and expenditure any State funds, in accordance with the classification adopted by the State Controller, and of the estimated revenues and borrowings for each year in the ensuing biennial period beginning with the first day of July thereafter. Opposite each item of the proposed expenditures, the budget shall show in separate parallel columns the amount expended for the last preceding appropriation year, for the current appropriation year, and the increase or decrease. The General Assembly urges the Director and the Commission to include in the budget a proposed appropriation for repairs and renovations equal to from one and one-half percent (1 1/2%) to three percent (3%) of the value of State-owned buildings. The budget shall clearly differentiate between general fund expenditures for operating and maintenance, special fund expenditures for any purpose, and proposed capital outlays.

The Director shall accompany the budget with:

(2) State Controller reports including:

a. An itemized and complete financial statement for the State at the close of the last preceding fiscal year ending June 30.

b. A statement of special funds.

(2a) A statement showing the itemized estimates of the condition of the State treasury as of the beginning and end of each of the next two appropriation years.

(4) A statement showing the State Board of Education's request, in accordance with G.S. 115C-96, for sufficient funds to provide textbooks to public school students.

The function of the Advisory Budget Commission under this section applies only if the Director of the Budget consults with the Commission in preparation of the budget."

(b) G.S. 143-15 reads as rewritten:

"§ 143-15. Reduction and increase of items by General Assembly.

The provisions of this Article shall continue to be the legislative policy with reference to the making of appropriations and shall be treated as rules of both branches of the General Assembly until and unless the same may be changed by the General Assembly either by express enactment or by rules adopted by either branch of the General Assembly.

The General Assembly may reduce or strike out such item in the Current Operations Appropriations Bill and the Capital Improvement Appropriations Bill as it may deem to be the interest of the public service, but neither House shall consider further or special appropriations until the Current Operations Appropriations Bill shall have been enacted in whole or part or rejected, unless the Governor shall submit and recommend an emergency appropriation bill or emergency appropriation bills, which may be amended in the manner set out herein, and such emergency appropriation bill, or bills, when enacted, shall continue in force only until the Current Operations Appropriations Bill and the Capital Improvement Appropriations Bill shall become effective, unless otherwise provided by the General Assembly. Provided that the Capital Improvement Appropriations Bill may be considered before the Current Operations Appropriations Bill has been adopted in whole or part or rejected. The General Assembly shall not decrease the amount appropriated for repairs and renovations to less than one and one-half percent (1 1/2%) of the value of State-owned buildings.

The General Assembly may also increase any appropriation set out in the Current Operations Appropriations Bill and the Capital Improvement Appropriations Bill and may provide additional appropriations for other purposes if additional revenue or revenues, equal to the amount of such additional appropriations and increases, are provided for by corresponding amendment to the Budget Revenue Bill. No bill carrying an appropriation shall thereafter be enacted by the General Assembly, unless it be for an object or objects therein described and shall provide an adequate source of revenue for defraying such appropriation, or unless it appears from the budget report or the Budget Revenue Bill that there is sufficient revenue available therefor. The appropriation, or appropriations, in such bills shall be in accordance with the classification used in the budget.

Reports to or of the appropriations committees or their subcommittees indicate action by the General Assembly when they are used in preparation of or amendment to appropriations acts."

"(a) Size Limitation. Except as otherwise provided in this section, the General Fund operating budget each fiscal year shall not be greater than seven percent (7%) of the projected total State personal income for that fiscal year. For the purpose of this section, the General Fund operating budget includes any appropriations for repairs and renovations and for local tax-sharing, but does not include appropriations for (i) capital expenditures or (ii) one-time expenditures due to natural disasters, federal mandates, or other emergencies."

(d) G.S. 143-341 is amended by adding a new subdivision to read:

"(4a) Capital Needs Assessment. -

To conduct a 10-year capital needs assessment for the State and to report the results of the assessment, before May 1, 1994, to the Governor and the General Assembly. The ten year capital needs assessment shall be updated and included in the Governor's biennial budget submission."

(e) The Capital Improvement Subcommittees of the Appropriations Committees of the House and the Senate shall develop a debt policy for funding State capital needs.

(f) Subsections (a), (b), and (c) of this section are effective upon ratification and apply to budgets for all fiscal years beginning with the 1995-96 fiscal year. Subsections (d) and (f) of this section are effective upon ratification. Subsection (e) of this section becomes effective upon the creation of Capital Improvements Subcommittees of the Appropriations Committees of the House and the Senate.

---EXPAND FUNDING FLEXIBILITY.

Sec. 4. (a) The Director of the Budget shall develop a plan for expanding the single sum appropriation pilot program, described in Part 2A of Article 1 of Chapter 116 of the General Statutes to other State agencies. The Director of the Budget shall report on the plan to the General Assembly prior to March 1, 1994.

(b) This section is effective upon ratification.

---DEVELOP OUTCOME MEASURES.

Sec. 5. (a) Article 1 of Chapter 143 of the General Statutes is amended by adding a new section to read:

"§ 143-10.5. Development of performance measures for major programs.

(a) The Director of the Budget, through the Office of State Budget, the Office of State Policy and Planning and State agencies, departments, and institutions, shall develop performance measures for the major programs for each State agency, department, and institution. These performance measures shall be developed as part of the biennial comprehensive plan and serve as the basis for the development of the biennial budget, beginning with the 1995-97 fiscal biennium.

(b) The Director shall institute a standard process for developing program performance measures and for monitoring performance results, uniform performance measurement terms, and a standardized format for presentation.

(1) Description of the key performance measures for the program. Performance measures should include: program efficiency or unit cost, outputs or program activity, and outcomes or performance results, with emphasis on the use of program outcome measures.

(2) Identification of the current level of performance.

(3) Targets for the desired level of performance.

(4) Identification of future performance measures that should be developed and a time frame for development.

(5) A methodology for regular monitoring of department, agency, and institution performance in relation to the measure.

(6) A methodology for assessing programs that have achieved desired performance targets through innovative management actions.

(d) The Director of the Budget shall prepare a comprehensive plan for implementation of a performance measurement system and present the plan to the General Assembly by October 1, 1993.

(e) The Director of the Budget shall report annually to the General Assembly on:

(1) The status of the development of the program performance measurement system.

(2) The programs that have not achieved the desired level of performance and the reasons performance targets were not achieved.

(3) The programs that have achieved performance targets through management innovation."

(b) This section is effective upon ratification.

---ANNUAL FINANCIAL MODEL REQUIRED.

Sec. 6. (a) G.S. 143-15.1 reads as rewritten:

"§ 143-15.1. Current Operations Appropriations Act.

The General Assembly shall enact the Current Operations Appropriations Act by June 15 of odd-numbered years and by June 30 of even-numbered years in which a Current Operations Appropriations Act is enacted. The Current Operations Appropriations Act shall state the amount of General Fund appropriations availability upon which the General Fund budget is based. The statement of availability shall list separately the beginning General Fund credit balance, General Fund revenues, and any other components of the availability amount.

The Current Operations Appropriations Act shall incorporate by reference the General Fund Financial Model. The General Assembly shall set out with the financial model the assumptions of the model and the impact over five years on the budget that is anticipated by the model.

The General Fund operating budget appropriations, including appropriations for local tax reimbursements and local tax sharing, for the second year in a Current Operations Appropriations Act that contains a biennial budget shall not be more than two percent (2%) greater than the General Fund operating budget appropriations for the first year of the biennial budget."

(b) This section is effective upon ratification.

---EVALUATION OF PROGRAM RESULTS.

Sec. 7. (a) G.S. 120-76(1) reads as rewritten:

"(1) To conduct program evaluation studies of the various components of State agency activity as they relate to:

a. Service benefits of each program relative to expenditures;

b. Achievement of program goals;

c. Use of indicators by which the success or failure of a program may be gauged; and

d. Conformity with legislative intent.

The Commission shall develop a schedule for systematic program evaluation studies of State agencies. In setting its priorities for program review and evaluation, the Commission shall consider reports from the Director of the Budget on programs that have not achieved the desired level of performance.

The Commission shall develop strategies for carrying out these program evaluation studies, after consultation with the State Auditor.

The Director of the Budget shall ensure that the results of these program evaluations are used by State agencies in the State's policy, planning, and budgeting processes.

The chairs of the Commission shall appoint a permanent subcommittee to assist the Commission in carrying out its duties under this subdivision."

(b) This section is effective upon ratification.

---ECONOMIC DEV. COUNCIL/PLAN.

Sec. 8. (a) The General Assembly finds that:

(1) The Department of Commerce's Economic Development Board is a 25-member advisory board charged, in part, with advising the Secretary of Commerce on formulating a program for the economic development of the State.

(2) The Economic Development Board has published a strategic business plan for quality growth, that sets out a series of strategies and initiatives to be taken by the State in economic development.

(3) North Carolina has received wide recognition for its economic development successes, although it has some development weaknesses.

(4) The Economic Development Board of the Department of Commerce, the Governor's Commission on Workforce Preparedness, the Rural Economic Development Center, and other organizations and agencies have developed strategic plans related to economic development.

(5) The economic development policy currently stated in G.S. 143B-428 and the resulting plan developed by the Economic Development Board are lacking key elements necessary for a truly comprehensive and effective economic development plan.

(6) North Carolina needs a statewide economic development plan that would do all of the following:

a. Identify the roles and responsibilities of the many diverse agencies and organizations involved in economic development.

b. Provide measurable objectives or performance indicators to assess the State's economic development progress.

c. Set out broad vision and mission statements and general goals and policies of the State with regard to economic development.

d. Reflect the input of all parties involved in economic development as well as the input of the public.

(7) The lack of an integrated, comprehensive statewide economic development plan creates several inefficiencies as follows:

a. Agencies involved in economic development have little direction regarding the types of programs and priorities they should focus on.

b. The General Assembly has limited guidance as to which economic development appropriations are the most effective.

c. There are no explicit performance indicators against which agencies' effectiveness can be measured.

d. Various agencies may be duplicating one another's programs or even serving at cross purposes.

(8) The Economic Development Board should be replaced by an Economic Development Council with additional responsibility for planning and authority to recommend economic development policy to the Secretary of Commerce, the Governor, and the General Assembly on a variety of issues. The Department of Commerce, through its Economic Development Council, should be the lead agency in coordinating all affected parties in developing and updating an integrated, comprehensive economic development plan.

(b) G.S. 143B-434 reads as rewritten:

"§ 143B-434. Economic Development ~~Board~~Council - creation, duties, membership.

(a) Creation and Duties. - There is created within the Department of Commerce an Economic Development ~~Board. The Board shall advise the Secretary of Commerce on:~~ Council. The Council shall have the following duties:

(1) To provide economic and community development planning for the State.

(2) To recommend economic development policy to the Secretary of Commerce, the General Assembly, and the Governor. The recommendations may cover the following issues as well as any other economic development policy issues:

a. Use of tax abatements and other incentives to motivate economic development.

b. Definition of which specific activities and programs should be considered economic development activities and programs for the purpose of receiving State appropriations.

c. The role of institutions of higher education in economic development.

d. The use of State funds to leverage private nonprofit economic development initiatives.

(3) To recommend annually to the Governor biennial and annual appropriations for economic development programs.

(4) To develop and update annually a statewide economic development plan, as provided in G.S. 143B-434.1.

~~(1)~~ ~~The formulation of a program for the economic development of the State of North Carolina; and~~

~~(2)~~ ~~The formulation of a budget and the hiring of the head of each division of the Department of Commerce concerned with the expansion of the travel and tourism industry.~~

~~The Secretary shall prepare the budget of the Department and shall hire the heads of the above-mentioned divisions who shall serve at his pleasure. The Board~~ The Council shall meet at least quarterly at the call of its ~~chairman~~ chair or the Secretary. Each quarter the Secretary shall report to the ~~Board~~ Council on the program and progress of this State's economic development.

(b) Membership. - The Economic Development ~~Board~~ Council shall consist of 26 20 members. The Governor shall serve ex officio as a member and as the chair of the Economic Development Council. The Secretary of Commerce shall serve ex officio as a member and as the secretary of the Economic Development Council. The Governor shall appoint the remaining members of the Council, as follows:

(1) One economic development representative each from three of the regional alliances that have been established around the State by local governments and that involve the private sector in economic development.

(2) One representative from each of the following State agencies:

a. The Department of Administration.

b. The Department of Agriculture.

c. The Department of Community Colleges.

d. The Employment Security Commission.

e. The Department of Labor.

f. The Department of the Secretary of State.

g. The Department of Transportation.

h. The Board of Governors of The University of North Carolina.

(3) One representative each from three of the private nonprofit organizations that have received economic development appropriations in the most recent fiscal biennium.

(4) Four members of the public.

The Secretary of Commerce, the President of the Senate or his appointee, and the Speaker of the House of Representatives or his appointee, shall be members of the Board. The Governor shall appoint 23 members of the Board. Of his appointees, the Governor shall appoint at least one member residing in each congressional district of the State.

The initial appointments by the Governor shall be made on or after the date of ratification, 11 terms to expire July 1, 1979, and 11 terms to expire on July 1, 1981. Thereafter, at the expiration of each stipulated term of office all appointments made by the Governor shall be for a term of four years. The initial term of the person appointed to represent the 12th Congressional District shall commence January 3, 1993, and expire June 30, 1995. Any vacancy occurring in the membership of the Economic Development Board appointed by the Governor shall be filled by the Governor for the unexpired term. The Governor shall have the authority to remove any member of the Economic Development Board appointed by the Governor.

The Governor shall designate from among the members of the Economic Development Board a chairman and a vice-chairman. The Secretary of Commerce or his designee shall serve as Secretary of the Economic Development Board. If a vacancy occurs in the office of the Lieutenant Governor, the President pro tempore shall fill the vacancy. If a vacancy occurs in the office of the Speaker of the House of Representatives, the Speaker pro tempore shall fill the vacancy.

The initial appointments to the Council shall be for terms beginning July 1, 1993. The Governor shall designate eight terms to expire July 1, 1995; the remaining terms shall expire July 1, 1997. Thereafter, all appointments shall be for a term of four years. The Governor shall make a replacement appointment to serve for the unexpired term in the case of a vacancy.

The members of the Economic Development ~~Board appointed by the Governor~~ Council shall receive per diem and necessary travel and subsistence expenses payable to members of State Boards and agencies generally pursuant to G.S. 138-5 and 138-6, as the case may be; provided, however, that the chairman of the Economic Development Board and the Lieutenant Governor shall not be entitled to receive per diem in addition to salary. The members of the Economic Development Board who are members of the General Assembly shall not receive per diem but shall receive necessary travel and subsistence expenses at rates prescribed by G.S. 120-3.1. be.

(c) Staff - The Department of Commerce shall provide clerical and professional staff support to the Economic Development Council.

~~(b)~~ ~~All clerical and other services required by the Economic Development Board shall be supplied by the Secretary of Commerce.~~

~~(c)~~ ~~It shall be the duty of the chairman of the Economic Development Board:~~

~~(1)~~ To organize the work of the Economic Development Board into committees with respect to the divisions of the Department of Commerce concerned with the expansion of existing industry, the recruitment of new industry and the expansion of the travel and tourism industries and

~~(2)~~ ~~To assign responsibilities to each committee~~."

"(a) (1) The North Carolina Alcoholic Beverage Control Commission,

(2) The North Carolina Utilities Commission,

(3) The Employment Security Commission,

(4) The North Carolina Industrial Commission,

(5) State Banking Commission,

(6) Savings and Loan Association Division,

(7) The State Savings Institutions Commission,

(8) Credit Union Commission,

(9) The North Carolina Milk Commission,

(10) The North Carolina Mutual Burial Association Commission,

(11) North Carolina Cemetery Commission,

(12) The North Carolina Rural Electrification Authority,

(13) Repealed by Session Laws 1985, c. 757, s. 179(d),

(14) North Carolina Science and Technology Research Center,

(15) The North Carolina State Ports Authority,

(16) North Carolina National Park, Parkway and Forests Development Council,

(17) Economic Development ~~Board,~~ Council,

(18) Labor Force Development Council,

(19) Energy Policy Council,

(20) Energy Division,

(21) Navigation and Pilotage Commissions established by Chapter 76 of the General ~~Statutes,~~ Statutes.

~~(22)~~ ~~The North Carolina Technological Development Authority~~."

(d) G.S. 120-123 is amended by adding a new subdivision to read:

"(6a) The Economic Development Council established by G.S. 143B-434."

(e) Beginning July 1, 1993, the Department of Commerce shall reallocate to the Economic Development Council created in this section funds and resources previously allocated to the Economic Development Board.

(f) Part 2 of Article 10 of Chapter 143B of the General Statutes is amended by adding a new section to read:

"§ 143B-434.1. Statewide economic development plan.

(a) Council to Prepare Plan. - The Economic Development Council shall prepare a statewide economic development plan by April 1, 1994. The Council shall review and update this plan by April 1 of each year. The original statewide economic development plan shall cover a period of several years and each annual update shall extend the time frame by one year so that a multiyear plan is always in effect. The Council shall provide copies of the plan and each annual update to the Governor and the Joint Legislative Commission on Governmental Operations. The statewide economic development plan shall encompass all of the components set out in this section.

(b) Public and Private Input. - At each stage as it develops and updates the plan, the Council shall solicit input from all parties involved in economic development in North Carolina, including:

(1) Each of the programs and organizations that, for State budget purposes, identify economic development as one of their global goals.

(2) Local economic development departments and regional economic development organizations.

(3) The Board of Governors of The University of North Carolina.

The Council shall also hold public hearings across the State to solicit public input on economic development before the initial statewide economic development plan is completed. The Council shall hold additional public hearings from time to time to solicit public input regarding economic development activities.

Each component of the plan shall be based on this broad input and, to the extent possible, upon a consensus among all affected parties. The Council shall coordinate its planning process with any State capital development planning efforts affecting State infrastructure such as roads and water and sewer facilities.

(c) Needs Assessment. - The first step in developing the statewide economic development plan shall be to develop a needs assessment based on the input from economic development parties and the public and on information about the economic environment in North Carolina. To prepare the assessment, the Council shall gather the following information. Thereafter, the information shall be updated periodically.

(1) Economic and demographic data on North Carolina by State, region, and county including population, population projections, employment and employment projections, income, poverty migration patterns, and other similar data.

(2) The cost of doing business in North Carolina and other competing states, as it may affect decisions by firms to locate in this State.

(3) Competitive assets within the State and by region and county, including infrastructure, tourist assets, natural resources, labor, educational and research resources, and transportation.

(4) Economic and industrial changes in competitive states by region, including new plant location information.

(5) Other information relating to economic development such as regulatory or legal matters and social considerations.

(d) Vision and Mission Statements. - The Council shall develop a vision statement for economic development that would describe the preferred future for North Carolina and what North Carolina would be like if all economic development efforts were successful. The Council shall then develop a mission statement that outlines the basic purpose of each of North Carolina's economic development programs. Because special purpose nonprofits are uniquely situated to conduct the entrepreneurial and high-risk activity of investing in and supporting new business creation in the State, they should be assigned a dominant role in this key component of economic development activity.

(e) Goals and Objectives. - The Council shall next identify the five to seven most important issues or problems that North Carolina must address regarding economic development. For each issue, the Council shall develop specific goals and strategies or approaches to achieving each goal. Goals shall be long-range and shall address both economically depressed areas and more prosperous areas.

So that the progress of North Carolina's economic development efforts can be monitored, the Council shall set objectives for each goal that allow measurement of progress toward the goal. Objectives should be quantifiable and time-specific in order to serve as performance indicators.

(f) Implementation Plan. - Based upon all of the foregoing steps, the Council shall establish an implementation plan assigning to the appropriate parties specific responsibilities for meeting measurable objectives. The implementation plan shall contain all necessary elements so that it may be used as a means to monitor performance, guide appropriations, and evaluate the outcomes of the parties involved in economic development in the State."

(g) The Department of Commerce shall establish a planning unit within its executive offices to support the Economic Development Council's ongoing role in economic and community development planning. The unit should consist of two professional staff plus necessary support staff. The planning unit shall assist the Council in coordinating the planning process, monitoring and updating the plan, and collecting and analyzing the data necessary for planning.

(h) There is appropriated from the General Fund to the Department of Commerce the sum of three hundred thousand dollars ($300,000) for the 1993-94 fiscal year and the sum of three hundred thousand dollars ($300,000) for the 1994-95 fiscal year for the Economic Development Council created in this section. It is the intent of the General Assembly that this will be a continuing appropriation.

(i) This section becomes effective July 1, 1993. The terms of all current members of the Economic Development Board shall expire July 1, 1993.

---DEVELOPMENT PERFORMANCE INDICATORS.

Sec. 9. (a) The General Assembly finds that:

(1) The term "economic development" encompasses all activities conducted for the express purpose of increasing and maintaining the economic vitality of North Carolina, including industrial and business recruiting, business retention, facilitating business creation, providing small business assistance, job training and work-force preparedness programs, and investing in infrastructure, both physical (roads, utilities, etc.), and technological (fiber optics networks and other information system links).

(2) State General Fund expenditures for the 1991-92 fiscal year for economic development were approximately eighty-four million dollars ($84,000,000).

(3) This eighty-four million dollar ($84,000,000) expenditure on economic development was allocated among 40 different State and State-associated programs and entities, which can be grouped into five broad categories:

a. Nonprofit agencies.

b. The Department of Community Colleges.

c. The Department of Commerce.

d. Other State Departments, including the Department of Agriculture, the Business Licensing Office of the Department of Secretary of State, the Department of Administration, and the Department of Environment, Health, and Natural Resources.

e. The University of North Carolina.

(3) The results of State economic development activities are not effectively monitored and evaluated because, although the State employs several conventional methods of ensuring accountability of agencies involved in economic development (such as budgets, department plans, and internal audits), these accountability measures focus on inputs or on programs and budget levels, rather than on outcomes-the results of their efforts.

(4) Most State agencies involved in economic development activities have not yet designed and implemented meaningful measures to evaluate and report on performance; as a result, the General Assembly has only a limited ability to evaluate the outcome of its significant investments in economic development.

(5) To implement a truly integrated approach to economic development, each key agency must be accountable for its contribution to meeting the overall economic development goals of the State; performance indicators would provide an effective and appropriate means to assure this accountability on a regular basis.

(6) The General Assembly should base its economic development budget allocations on outcomes, as measured by performance indicators.

(b) Each State agency involved in economic development shall develop, in conjunction with the Office of State Budget and Management, performance indicators that are appropriate and measurable criteria, including criteria that each agency can influence and criteria based on baseline data and reasonable recommendations. The performance indicators should articulate specific, measurable results for each agency and should be comprehensive, so that the General Assembly may base each agency's continued economic development appropriation on its effectiveness as measured by the performance indicators.

---ECONOMIC RESPONSIBILITY.

Sec. 10. (a) The General Assembly finds that:

(1) The term "economic development" encompasses all activities conducted for the express purpose of increasing and maintaining the economic vitality of North Carolina, including industrial and business recruiting, business retention, facilitating business creation, providing small business assistance, job training and work-force preparedness programs, and investing in infrastructure, both physical (roads, utilities, etc.,) and technological (fiber optics networks and other information system links).

(2) State General Fund expenditures for the 1991-92 fiscal year for economic development were approximately eighty-four million dollars ($84,000,000).

(3) This eighty-four million dollars ($84,000,000) expenditure on economic development was allocated among 40 different State and State-associated programs and entities, which can be grouped into five broad categories:

a. Nonprofit agencies.

b. The Department of Community Colleges.

c. The Department of Commerce.

d. Other State departments, including the Department of Agriculture, the Business Licensing Office of the Department of the Secretary of State, the Department of Administration, and the Department of Environment, Health, and Natural Resources.

e. The University of North Carolina.

(4) Thus, State economic development activity is highly fragmented; this fragmentation and lack of integration results in the potential for inadvertent duplication as well as lost opportunities for synergy and collaboration.

(5) Each key economic development player identified above makes a unique and significant contribution to the State's overall economic development program.

(6) To maximize the return on North Carolina's investment in economic development, each of these key players must focus on its strengths, rather than diffusing its efforts across several economic development strategies.

(b) Part 2 of Article 10 of Chapter 143B of the General Statutes is amended by adding a new section to read:

"§ 143B-437C. Allocation of economic development responsibilities.

The Department of Commerce shall coordinate economic development efforts among the various agencies and entities that receive economic development appropriations and shall recommend to the Governor and to the General Assembly the assignment of key responsibilities for different aspects of economic development within the following framework:

(1) The Department of Commerce shall take primary responsibility for recruitment, retention, and expansion of industry and tourism.

(2) The Department of Agriculture shall take primary responsibility for recruitment, retention, and expansion of agribusiness industry, in support of the Department of Commerce.

(3) The Department of Community Colleges shall take primary responsibility for implementation of worker training programs.

(4) The Department of Labor shall take primary responsibility for coordinating and planning worker training programs.

(5) The special purpose nonprofit organizations funded by the General Assembly for economic development activities shall take primary responsibility for facilitating business creation through financing, education, or other support.

The Economic Development Council created in G.S. 143B-434 shall recommend resource allocation and planning designed to encourage each agency to focus on its area of primary responsibility and not diffuse its resources by conducting activities assigned to other agencies."

---REVIEW FUTURE DEVELOPMENT NONPROFITS.

Sec. 11. (a) The General Assembly finds that:

(1) The General Assembly has established, directly or indirectly, the following four special purpose nonprofit agencies to conduct economic development activities:

a. The North Carolina Biotechnology Center.

b. The MCNC (Microelectronics Center of North Carolina).

c. The Rural Economic Development Center, Inc.

d. The Technological Development Authority, Inc.

(2) The mission of each of these nonprofits is as follows:

a. The mission of the Biotechnology Center is to provide long-term economic benefit to North Carolina through support of biotechnology research, development, and commercialization statewide.

b. The mission of the MCNC is to accelerate the use of emerging electronics technologies through innovation and market-driven applications that improve quality of life.

c. The mission of the Rural Economic Development Center is to develop and advocate innovative strategies to help stimulate economic growth and job creation throughout the State's rural areas.

d. The mission of the Technological Development Authority is to increase the rate at which new jobs are created in all regions of the State, by stimulating the development of existing and new small businesses.

(3) In the 1991-92 fiscal year, these four nonprofits expended almost thirty million dollars ($30,000,000) in General Fund revenues justified in the budget process as economic development.

(4) The use of nonprofits as a mechanism for State-initiated economic development is unusual but not unique among southeastern states.

(5) Each of these special purpose nonprofits has demonstrated success in its respective area of focus and, as a group, they have contributed significantly to North Carolina's reputation as a State committed to innovative, technology-based research and development.

(6) The nonprofit status of these entities allows them to use State dollars to leverage private investments, serve as an independent and objective liaison among public and private entities, and conduct objective, nonpartisan research.

(7) For these reasons, the State should continue to use nonprofits to deliver economic development services.

(8) However, legislation establishing nonprofits for economic development has not always specified the mission of the nonprofit or the outcomes it is supposed to attain; future legislation funding nonprofits should specify their mission and desired outcomes and should provide for a periodic, comprehensive review of the entity.

(b) It is the intent of the General Assembly that any future legislation establishing or funding a new nonprofit agency to conduct economic development activities will stipulate clearly the mission and purposes of the agency and will provide for periodic, comprehensive review of the agency.

---BIOTECH MICROELECTRONICS REC.

Sec. 12. (a) The General Assembly finds that:

(1) The General Assembly has established, directly or indirectly, the following four special purpose nonprofit agencies to conduct economic development activities:

a. The North Carolina Biotechnology Center.

b. The MCNC (Microelectronics Center of North Carolina).

c. The Rural Economic Development Center, Inc.

d. The Technological Development Authority, Inc.

(2) The mission of each of these nonprofits is as follows:

a. The mission of the Biotechnology Center is to provide long-term economic benefit to North Carolina through support of biotechnology research, development, and commercialization statewide.

b. The mission of the MCNC is to accelerate the use of emerging electronics technologies through innovation and market-driven applications that improve quality of life.

c. The mission of the Rural Economic Development Center is to develop and advocate innovative strategies to help stimulate economic growth and job creation throughout the State's rural areas.

(3) The Technological Development Authority was originally established as an independent State agency in 1983 but was reestablished as a nonprofit corporation in 1991.

(4) The underlying premise under which the Technological Development Authority was created was that it would become self-sufficient within 10 years; such self-sufficiency would validate the assumption that investment in high-technology companies is viable in North Carolina's market.

(5) The Technological Development Authority has indeed become self-sufficient so that, beginning with the 1993-94 fiscal year, it will not request State funding.

(6) The State should establish a goal of self-sufficiency for those economic development entities for which self-sufficiency is viable.

(7) The Center for Microelectronics Systems Technologies of the MCNC, which focuses on microelectronics technologies and markets use of the MCNC facility to users, and the Economic Development Program and the Institute for Biotechnology Information of the Biotechnology Center, which provide support to start-up biotechnology businesses, are especially well-situated to become self-sufficient.

(8) The following elements make self-sufficiency viable for these entities:

a. A significant level of interest from private funding sources in the work they conduct.

b. The growth projections for their respective technological focus areas.

c. The advancements toward self-sufficiency they have already achieved.

(b) It is the intent of the General Assembly to maintain funding for (i) the Center for Microelectronics Systems Technologies of the MCNC and (ii) the Economic Development Program and the Institute for Biotechnology Information of the Biotechnology Center at current levels for the next four years (the 1993-94 fiscal year through the 1996-97 fiscal year) and then phase out appropriations to these entities between the 1997-98 fiscal year and the 1999-2000 fiscal year.

(c) This intended phase-out of appropriations should result in savings of two million two hundred fifty thousand dollars ($2,250,000) in the 1997-98 fiscal year, four million five hundred thousand dollars ($4,500,000) in the 1998-99 fiscal year, and seven million dollars ($7,000,000) each year thereafter. These savings will result from the following intended budget reductions:

(1) For the Center for Microelectronics Systems Technologies of the MCNC, a reduction of two million dollars ($2,000,000) in the 1997-98 fiscal year, a further reduction of two million dollars ($2,000,000) in the 1998-99 fiscal year, and a further reduction of two million dollars ($2,000,000) in the 1999-2000 fiscal year.

(2) For the the Economic Development Program and the Institute for Biotechnology Information of the Biotechnology Center, a reduction of two hundred fifty thousand dollars ($250,000) in the 1997-98 fiscal year, a further reduction of two hundred fifty thousand dollars ($250,000) in the 1998-99 fiscal year, and a further reduction of five hundred thousand dollars ($500,000) in the 1999-2000 fiscal year.

(d) This section is effective upon ratification.

---NONPROFITS PERFORMANCE CONTRACTS.

Sec. 13. (a) The General Assembly finds that:

(1) The General Assembly has established, directly or indirectly, the following four special purpose nonprofit agencies to conduct economic development activities:

a. The North Carolina Biotechnology Center.

b. The MCNC (Microelectronics Center of North Carolina).

c. The Rural Economic Development Center, Inc.

d. The Technological Development Authority, Inc.

(2) The mission of each of these nonprofits is as follows:

a. The mission of the Biotechnology Center is to provide long-term economic benefit to North Carolina through support of biotechnology research, development, and commercialization statewide.

b. The mission of the MCNC is to accelerate the use of emerging electronics technologies through innovation and market-driven applications that improve quality of life.

c. The mission of the Rural Economic Development Center is to develop and advocate innovative strategies to help stimulate economic growth and job creation throughout the State's rural areas.

(3) In the 1991-92 fiscal year, these four nonprofits expended almost thirty million dollars ($30,000,000) in General Fund revenues justified in the budget process as economic development although, beginning in the 1993-94 fiscal year, the Technological Development Authority will no longer receive State funding.

(4) Each of these special purpose nonprofits has demonstrated success in its respective area of focus and, as a group, they have contributed significantly to North Carolina's reputation as a State committed to innovative, technology-based research and development.

(5) However, few mechanisms currently exist to ensure the accountability of these special purpose nonprofits to the State.

(6) The current accountability mechanisms are:

a. Annual and special published reports.

b. Quarterly reporting to the Joint Legislative Commission on Governmental Operations regarding the use of their funds.

c. Annual government financial audits.

(7) These conventional accountability measures focus on inputs, or programs and budget levels, rather than outcomes-the results of the nonprofits' efforts.

(8) Without outcome-based accountability measures, the extent to which the nonprofits are fulfilling their intended purposes cannot be fully assessed.

(9) The lack of meaningful measures to evaluate and report the nonprofits' performance leaves the General Assembly with only a limited ability to evaluate the outcome of its significant investments in economic development activities of nonprofits.

(10) Performance-based contracts would provide an effective and appropriate accountability mechanism to assess the performance of the nonprofits on a regular basis.

(11) Examples of performance-based indicators by which nonprofits' effectiveness could be measured include:

a. Achievement of an adequate ratio of private funding to State funding.

b. Long-term financial viability, measured in quantitative terms, of those start-up businesses which the nonprofits finance.

c. Number of patents received by applied researchers supported by the nonprofits.

d. Number of jobs created in businesses that the nonprofits finance.

(12) The General Assembly's economic development budget allocations to nonprofits should be based on outcomes, as measured by performance indicators designed by the nonprofits in conjunction with the Department of Commerce and the Economic Development Council.

(b) The Department of Commerce, in conjunction with the Office of State Budget and Management and each nonprofit agency involved in State-funded economic development activities, shall recommend for each nonprofit agency performance indicators that are appropriate and measurable criteria, including criteria that each agency can influence and criteria based on baseline data and reasonable recommendations. The performance indicators should articulate specific, measurable results for each agency and should be comprehensive, so that the General Assembly may base each agency's continued economic development appropriation on its effectiveness as measured by the performance indicators.

(c) The Department of Commerce and the Office of State Budget and Management, as appropriate, shall, when allocating economic development appropriations to nonprofit agencies, execute a contract incorporating the performance indicators and any conditions upon which the appropriation was based.

(d) This section is effective upon ratification.

---UNC STUDY EXTENSION ECONOMIC DEVELOPMENT.

Sec. 14. (a) The General Assembly finds that:

(1) The University of North Carolina system's campuses administer many programs related to economic development, as follows:

a. At Elizabeth City State University, the Small Business Development Technology Center and North Carolina Tomorrow.

b. At East Carolina University, the Regional Development Institution.

c. At Pembroke State University, the Economic Development Center.

d. At Western Carolina University, Western North Carolina Tomorrow.

e. At UNC Chapel Hill, the Small Business Technology Development Center and the Kenan Center of North Carolina.

f. At North Carolina State University, the Industrial Extension Service, Industrial Telecommunications, the International Trade Center, the North Carolina Japan Center, and the Textiles Extension Service.

(2) In addition, The University of North Carolina system supports economic development through basic and applied research, centers, institutes, and laboratories.

(3) The University of North Carolina system has a unique contribution to make to economic development due to its access to ongoing research.

(4) The extension service of The University of North Carolina system currently serves a function that is only indirectly related to economic development, although, given its regional infrastructure, it could be used for even more direct economic development activity.

(b) The Board of Governors of The University of North Carolina shall, in consultation with the Boards of Trustees of all affected constituent institutions and in consultation with the Economic Development Council created in G.S. 143B-434, study its extension activities and determine the proper role of extension activities in economic development. The Board of Governors shall reassign its extension activities a more active role in economic development if it finds such a role to be appropriate. The Board of Governors shall report to the General Assembly and the Joint Education Oversight Commission by July 1, 1994, on its findings and any action taken with respect to extension activities.

---RESTRUCTURE DEPT. OF COMMERCE.

Sec. 15. (a) The General Assembly finds that:

(1) The Department of Commerce has excess levels of management, excessively narrow spans of control, and some unnecessary positions in some units.

(2) The Agribusiness Division of the Department of Commerce has programs that are duplicated in the Department of Agriculture and the Department of Environment, Health, and Natural Resources.

(3) If the Weatherization Assistance Program of the Energy Division, which weatherizes houses for the needy, were combined with the Community Assistance Division's program that renovates houses for low-income persons, four positions could be eliminated.

(4) Twelve positions in the following units of the Department of Commerce are unnecessary because the units have a supervisor and an assistant supervisor who both have narrow spans on control:

a. Personnel Office

b. Energy Division

c. Banking Commission

d. Credit Union Commission

e. Finance and Budget (ESC)

f. Labor Market Information (ESC)

(5) Six positions in the following units of the Department of Commerce are unnecessary due to one-to-one reporting relationships:

a. International Trade Division

b. Banking Commission

c. Credit Union Division

d. Community Assistance

e. Personnel (ESC)

f. Labor Market Information (ESC)

(6) Sixteen positions in the following units of the Department of Commerce are unnecessary for various reasons:

a. Mutual Burial Association Commission

b. Cemetery Commission

c. Community Assistance Division

d. Security Administration (ESC)

e. Public Information Office (ESC)

f. " Manpower" Programs (ESC)

(7) The Utilities Commission has a secretarial position for each Commissioner, and some of its other secretarial positions are excessive in comparison to other divisions.

(b) Five positions in the Agribusiness Division of the Department of Commerce are eliminated because they are associated with programs that are duplicated in the Department of Agriculture and the Department of Environment, Health, and Natural Resources.

(c) Four positions from the Energy Division, the Community Assistance Division, or both are eliminated. In order to eliminate these positions, the Department of Commerce shall combine the Energy Division's Weatherization Assistance Program with a related program in the Community Assistance Division that renovates houses for low-income people.

(d) Twelve unnecessary supervisory positions from the following divisions or units of the Department of Commerce are eliminated:

a. Personnel Office

b. Energy Division

c. Banking Commission

d. Credit Union Commission

e. Finance and Budget (ESC)

f. Labor Market Information (ESC)

In each case where there is an excessive layer of management or a management position with a narrow span of control, the management positions are to be eliminated.

(e) Six positions that involve one-to-one reporting relationships in the following divisions of the Department of Commerce are eliminated:

a. International Trade Division

b. Banking Commission

c. Credit Union Division

d. Community Assistance

e. Personnel (ESC)

f. Labor Market Information (ESC)

(f) Sixteen positions in which the functions are unnecessary in the following units of the Department of Commerce are eliminated:

a. Mutual Burial Association Commission

b. Cemetery Commission

c. Community Assistance Division

d. Security Administration (ESC)

e. Public Information Office (ESC)

f. " Manpower" Programs (ESC)

(g) The Secretary of Commerce shall study the best way to merge the North Carolina Mutual Burial Association Commission and the North Carolina Cemetery Commission, including their memberships, powers, duties, functions, property, personnel, and funds. The Secretary shall report to the General Assembly by May 15, 1993, the results of its study including proposed legislation providing for the statutory merger of the two commissions.

(h) Seven secretarial positions in the Utilities Commission are eliminated. The Utilities Commission shall pool its support services.

(i) The base budget of the Department of Commerce is reduced by one million two hundred thousand dollars ($1,200,000) for the 1993-94 fiscal year and one million seven hundred thousand dollars ($1,700,000) for the 1994-95 fiscal year due to the decrease in personnel positions mandated by this section.

(j) Subsection (g) of this section is effective upon ratification; the remainder of this section becomes effective July 1, 1993.

---COMMERCE RECS.

Sec. 16. (a) The General Assembly makes the following findings:

(1) The Department of Commerce's Business and Industry Development Division (B&I) operates nine regional offices with a staff of 27 individuals and annual expenditures of about one million three hundred fifty thousand dollars ($1,350,000); the Department's Division of Community Assistance (DCA) operates seven regional offices with a staff of 29 individuals and annual expenditures of about one million six hundred thousand dollars ($1,600,000).

(2) The assignment of counties to regions is not consistent within B&I and DCA of the Department of Commerce, and the two divisions do not effectively coordinate their work.

(3) The current mission of the B&I offices is broad in scope and results in wide variations in workloads, priorities, and strategies across regional offices.

(4) B&I regional office staff are pursuing projects that would be more effectively handled by central office staff.

(5) Development of resources and community needs, and the emphasis on and quality of strategic planning, vary widely among regions and counties.

(6) Some regional and community personnel perceive central office staff as keeping new industry prospects to themselves and favoring certain areas for location.

(7) Dynamic multicounty alliances are neither congruent with regional office boundaries nor consistently addressed by B&I's strategy.

(8) The flow of information within B&I lacks strategic focus and does not effectively utilize computerized data processing techniques.

(9) A significant aspect of the regional office operations is obtaining information and services for existing and prospective industrial clients. Currently each office maintains its own file of contact information and deals with each request for information and service from other agencies as an individual case. Many of these requests are repetitive and could be handled by data system links or telephone access messages. Others require personal contact that could be facilitated by designation and publication of the individuals to be contacted.

(10) A single-source approach to answering questions about permits required for construction and expansion, training resources, potential financing, statutes, workplace regulations, and other subjects would greatly facilitate the ombudsman function. Also, structured interdepartmental techniques for following up and expediting requests for action could both save staff time and improve services to the citizenry.

(b) The Department of Commerce shall consolidate the nine regional offices of the Business and Industry Division and the seven regional offices of the Division of Community Assistance into a smaller number of larger regional offices. The Department shall determine the appropriate number of offices and shall define a single set of regional boundaries to carry out the responsibilities. The mission of the newly consolidated regional offices shall be long range community-oriented economic development, and the top priority of the offices shall be services to rural areas. Activities of the Department and the regional offices shall include:

(1) Implementation of strategies for providing leadership to multicounty economic alliances; such strategies might include exchange of information, joint planning within transportation corridors and aquifers, marketing initiatives, and coordination of services to existing industries.

(2) Development of an integrated, fully automated data system to support regional office functions, and design and implementation of interdepartmental techniques to follow up on and expedite requests for information and services.

(3) Consideration of the need for environmental engineering and other technical services; services might include utilizing the staff of regulatory agencies to provide technical assistance, budgeting funds for consultation fees, and technical training of regional staff.

(c) The base budget of the Department of Commerce, regional offices for business and industry and for community assistance, is reduced by not less than four hundred fifty-six thousand dollars ($456,000) for the 1993-94 fiscal year and reduced by not less than four hundred fifty-six thousand dollars ($456,000) for the 1994-95 fiscal year. These reductions include the elimination of between three and six support positions, between six and seven relocation positions, between two and three retention and expansion positions, and reductions of other regional office expenses.

(d) The Department of Commerce in conjunction with its newly consolidated regional offices of the Business and Industry Division and Division of Community Assistance shall develop and implement a single source approach to provide the basic information most often requested by businesses, industries, and other entities or economic development projects that may consider locating or relocating in the different areas of the State. In developing this single source approach, the Department and its regional offices shall consider what information is appropriately handled by data system links or telephone access to recorded messages; what information is more appropriately conveyed by personal contact, and whether that information could be facilitated by the designation and publication of the individuals to be contacted; and what information regarding permits, training resources, potential financing, State laws, workplace regulations, and any other relevant subjects can feasibly and effectively be conveyed through a single-source approach.

(e) This section becomes effective July 1, 1993.

---TRANSFER SCIENCE & TECH. BOARD.

Sec. 17. (a) The General Assembly finds that:

(1) The Department of Administration is not a key player in economic development, yet it has the North Carolina Board of Science and Technology.

(2) The North Carolina Board of Science and Technology and its attendant funding should be transferred to the Department of Commerce, whose major role is economic development.

(b) The statutory authority, powers, duties, and functions, records, personnel, property, and unexpended balances of appropriations, allocations, or other funds of the North Carolina Board of Science and Technology are transferred from the Department of Administration to the Department of Commerce.

The transfer directed by this subsection shall include eight certified positions under General Fund program code 14100-1871 in the Department of Administration as well as all positions certified for the Board under Special Fund program code 24100-2873 in the Department of Administration. The Office of State Budget and Management shall ensure that the transfer directed by this section is carried out.

(c) Part 27 of Article 9 of Chapter 143B of the General Statutes, which consists of G.S. 143B-426.1, is recodified as Part 6A of Article 10 of Chapter 143B of the General Statutes, to consist of G.S. 143B-445.1.

(d) G.S. 143B-445.1, as redesignated by subsection (b) of this section, reads as rewritten:

"§ 143B-445.1. North Carolina Board of Science and ~~Technology; membership; organization; compensation; staff services.~~ Technology.

(a) The North Carolina Board of Science and Technology consists of the Governor, the Science Advisor to the Governor, and 17 members appointed as follows: the Governor shall appoint one member from the University of North Carolina at Chapel Hill, one member from North Carolina State University at Raleigh, and two members from other components of the University of North Carolina, all nominated by the President of the University of North Carolina; one member from Duke University, nominated by the President of Duke University; one member from a private college or university, other than Duke University, in North Carolina, nominated by the President of the Association of Private Colleges and Universities; one member from the Research Triangle Institute, nominated by the executive committee of the board of that institute; one member from the ~~Microelectronics~~ MCNC (Microelectronics Center of North ~~Carolina,~~ Carolina), nominated by the executive committee of the board of that center; one member from the North Carolina Biotechnology Center, nominated by the executive committee of the board of that center; four members from private industry in North Carolina, at least one of whom shall be a professional engineer registered pursuant to Chapter 89C of the General Statutes or a person who holds at least a bachelors degree in engineering from an accredited college or university; and two members from public agencies in North Carolina. Two members shall be appointed by the General Assembly, one shall be appointed upon the recommendation of the President of the Senate, and one shall be appointed upon the recommendation of the Speaker of the House of Representatives in accordance with G.S. 120-121. The nominating authority for any vacancy on the Board among members appointed by the Governor shall submit to the Governor two nominations for each position to be filled, and the persons so nominated shall represent different disciplines.

(b) Members appointed to the Board by the General Assembly shall serve for two-year terms beginning 1 July of odd-numbered years. Vacancies in appointments made by the General Assembly shall be filled in accordance with G.S. 120-122. The two members from public agencies shall serve for terms expiring at the end of the term of the Governor appointing them. The other 13 members appointed to the Board by the Governor shall serve for four-year terms, and until their successors are appointed and qualified. Of those 13 members, six shall serve for terms that expire on 30 June of years that follow by one year those years that are evenly divisible by four, and seven shall serve for terms that expire on 30 June of years that follow by three years those years that are evenly divisible by four. Any appointment to fill a vacancy on the Board created by the resignation, dismissal, death, or disability of a member shall be for the balance of the unexpired term.

(c) The Governor shall serve as ~~chairman of the Board. The vice chairman of the Board shall be designated by the Governor~~ chair of the Board and shall designate the vice chair from among the members of the Board. The Science Advisor to the Governor shall serve as executive director of the Board. The Secretary of ~~Administration or his designee~~ Commerce or the Secretary's designee shall serve as secretary to the Board.

(d) The Governor may remove any member of the Board from office in accordance with the provisions of G.S. 143B-16.

(e) Members of the Board who are employees of State agencies or institutions shall receive subsistence and travel allowances authorized by G.S. 138-6. Legislative members of the Board shall receive subsistence and travel allowances authorized by G.S. 120-3.1.

(f) A majority of the Board constitutes a quorum for the transaction of business.

(g) The Secretary of ~~Administration~~ Commerce shall provide all clerical and other services required by the Board."

(e) This section is effective upon ratification.

---UPDATE STATE PURCHASING MANUAL

Sec. 18. (a) The Division of Purchase and Contract of the Department of Administration shall update the State Purchasing Manual so that it:

(1) Reflects current statutory and administrative requirements;

(2) Provides agencies that are carrying out purchasing activity under delegated authority with guidance on informal purchasing policies such as proposed dollar thresholds on oral and written quotes, the number of quotes required, and documentation requirements;

(3) Includes a buyer's code of ethics that sets out the conduct expected of State employees and prospective vendors; and

(4) Includes policies and procedures for the handling of bid protests.

(b) G.S. 143-53 reads as rewritten:

"§ 143-53. Rules.

The Secretary of Administration may adopt rules governing the following:

(1) Prescribing the routine and procedures to be followed in canvassing bids and awarding contracts, and for reviewing decisions made pursuant thereto, and the decision of the reviewing body shall be the final administrative review.

(2) Prescribing routine for securing bids on items that do not exceed the bid value benchmark established under the provisions of G.S. 143-53.1.

(3) Defining contractual services for the purposes of G.S. 143-49 (3).

(4) Prescribing items and quantities, and conditions and procedures, governing the acquisition of goods and services which may be delegated to departments, institutions and agencies, notwithstanding any other provisions of this Article.

(5) Prescribing conditions under which purchases and contracts for the purchase, rental or lease of equipment, materials, supplies or services may be entered into by means other than competitive bidding.

(6) Prescribing conditions under which partial, progressive and multiple awards may be made.

(7) Prescribing conditions and procedures governing the purchase of used equipment, materials and supplies.

(8) Providing conditions under which bids may be rejected in whole or in part.

(9) Prescribing conditions under which information submitted by bidders or suppliers may be considered proprietary or confidential.

(10) Prescribing procedures for making purchases under programs involving participation by two or more levels or agencies of government, or otherwise with funds other than State-appropriated.

(11) Prescribing procedures to encourage the purchase of North Carolina farm products, and products of North Carolina manufacturing enterprises.

(12) Repealed by Session Laws 1987, c. 827, s. 216.

(13) Prescribing procedures for handling bid protests.

The purpose of rules promulgated hereunder shall be to promote sound purchasing management.

Prior to adopting rules under this section, the Secretary of Administration may consult with the Advisory Budget Commission."

---IMPROVE GOV'T PURCHASE STDS

Sec. 19. (a) G.S. 143-49 reads as rewritten:

"§ 143-49. Powers and duties of Secretary.

The Secretary of Administration shall have power and authority, and it shall be his duty, subject to the provisions of this Article:

(1) To canvass sources of supply, and to purchase or to contract for the purchase, lease and lease-purchase of all supplies, materials, equipment and other tangible personal property required by the State government, or any of its departments, institutions or agencies under competitive bidding or otherwise as hereinafter provided.

(2) To establish and enforce specifications ~~which~~ or standards that shall apply to all supplies, materials and equipment to be purchased or leased for the use of the State government or any of its departments, institutions or agencies. The Secretary shall develop a program for prioritizing the commodities for which specifications or standards need to be developed according to the existing demand for the commodities and the current volume of purchases of the commodities. The Secretary shall also consider the adoption of specifications or standards that have been developed or adopted by other governmental entities.

(3) To purchase or to contract for, by sealed, competitive bidding or other suitable means, all contractual services and needs of the State government, or any of its departments, institutions, or agencies; or to authorize any department, institution or agency to purchase or contract for such services.

When the award of any contract for contractual services exceeding a cost of one hundred thousand dollars ($100,000) requires negotiation with prospective contractors, the Secretary shall request and the Attorney General shall assign a representative of the office of the Attorney General to assist in negotiation for the award of the contract. It shall be the duty of such representative to assist and advise in obtaining the most favorable contract for the State, to evaluate all proposals available from prospective contractors for that purpose, to interpret proposed contract terms and to advise the Secretary or his representatives of the liabilities of the State and validity of the contract to be awarded. All contracts and drafts of such contracts shall be prepared by the office of the Attorney General and copies thereof shall be retained by such office for a period of three years following the termination of such contracts. The term 'contractual services' as used in this subsection shall mean work performed by an independent contractor requiring specialized knowledge, experience, expertise or similar capabilities wherein the service rendered does not consist primarily of acquisition by this State of equipment or materials and the rental of equipment, materials and supplies. The term 'negotiation' as used herein shall not be deemed to refer to contracts entered into or to be entered into as a result of a competitive bidding process.

(4) To have general supervision of all storerooms and stores operated by the State government, or any of its departments, institutions or agencies and to have supervision of inventories of all tangible personal property belonging to the State government, or any of its departments, institutions or agencies. The duties imposed by this subdivision shall not relieve any department, institution or agency of the State government from accountability for equipment, materials, supplies and tangible personal property under its control.

(5) To make provision for or to contract for all State printing, including all printing, binding, paper stock and supplies or materials in connection with the same.

(6) To make available to nonprofit corporations operating charitable hospitals, to local nonprofit community sheltered workshops or centers that meet standards established by the Division of Vocational Rehabilitation of the Department of Human Resources, to private nonprofit agencies licensed or approved by the Department of Human Resources as child placing agencies or residential child-care facilities, and to counties, cities, towns, governmental entities and other subdivisions of the State and public agencies thereof in the expenditure of public funds, the services of the Department of Administration in the purchase of materials, supplies and equipment under such rules, regulations and procedures as the Secretary of Administration may adopt. In adopting rules and regulations any or all provisions of this Article may be made applicable to such purchases and contracts made through the Department of Administration, and in addition the rules and regulations shall contain a requirement that payment for all such purchases be made in accordance with the terms of the contract. Prior to adopting rules and regulations under this subdivision, the Secretary of Administration may consult with the Advisory Budget Commission."

(b) The Secretary of Administration shall evaluate the need to reassign standards engineers to the Division of Purchase and Contract and shall make the reassignments as he deems appropriate.

(c) Subsection (a) of this section is effective upon ratification. Subsection (b) of this section becomes effective July 1, 1993.

---IMPROVE GOV'T PROCUREMENT

Sec. 20. (a) G.S. 143-49 is amended by adding a new subdivision to read:

"(3b) To develop and implement innovative procurement practices so as to reduce the cost of ordering supplies and services, reduce the volume of inventory maintained by State departments and agencies, and increase the quality of products purchased. These innovative procurement practices shall include (i) requiring State departments and agencies to order items from prime vendors for delivery at the time the items are needed instead of ordering for stock, when it is advisable to do so, and (ii) urging State departments and agencies to place orders with vendors electronically.

The Secretary may appoint a task force to assist him in the implementation of this duty."

(b) This section is effective upon ratification.

---PRIVATIZATION OF STATE SERVICES

Sec. 21. (a) Prior to March 15, 1994, the Office of State Budget and Management shall develop and propose to the General Assembly a policy and a program for contracting out to the private sector services traditionally performed by State employees. The policy shall define the goals and objectives of a program for contracting out to the private sector, identify a strategy for implementation of the program, and assign responsibility for administration of the program to the Office of State Budget and Management.

The program to implement the policy shall consist of the following components:

(1) The identification of the current functions and activities performed by the State that have the greatest potential to benefit from contracting out. In making this determination, the Office of State Budget and Management shall consider whether (i) the service is available in the private sector, (ii) the demand for the service is increasing, decreasing, or remaining constant, (iii) management of the proposal can ensure quality, and (iv) outside cost is less expensive.

(2) A framework for determining whether the identified functions should be contracted out. This framework shall provide for (i) a study of the identified function by a task force made up of at least one representative of the Division of Purchase and Contract and one representative of each agency that will be using the service, (ii) the identification of direct service costs, overhead costs, and general administrative costs of the function being performed, (iii) the identification of the annual, one-time, and other costs to the State of contracting out, (iv) the disposition of any State assets used in the current process, and (v) the determination of whether contracting out of the function would be financially beneficial.

Except as otherwise provided by law, the Office of State Budget and Management shall not implement either the policy or program without the approval of the General Assembly.

(b) This section is effective upon ratification.

---IMPROVE STATE TERM CONTRACTS

Sec. 22. (a) G.S. 143-53 reads as rewritten:

"§ 143-53. Rules.

The Secretary of Administration may adopt rules governing the following:

(2) Prescribing routine for securing bids on items that do not exceed the bid value benchmark established under the provisions of G.S. 143-53.1.

(2a) Prescribing the terms and conditions under which the State enters into term contracts so that all term contracts shall permit State departments, institutions, and agencies to make (i) purchases of under fifty dollars ($50.00) off term contracts and (ii) large-volume purchases, which exceed limits established by the Secretary, under separate contracts.

(3) Defining contractual services for the purposes of G.S. 143-49 (3).

(6) Prescribing conditions under which partial, progressive and multiple awards may be made.

(7) Prescribing conditions and procedures governing the purchase of used equipment, materials and supplies.

(8) Providing conditions under which bids may be rejected in whole or in part.

(9) Prescribing conditions under which information submitted by bidders or suppliers may be considered proprietary or confidential.

(10) Prescribing procedures for making purchases under programs involving participation by two or more levels or agencies of government, or otherwise with funds other than State-appropriated.

(11) Prescribing procedures to encourage the purchase of North Carolina farm products, and products of North Carolina manufacturing enterprises.

(12) Repealed by Session Laws 1987, c. 827, s. 216.

The purpose of rules promulgated hereunder shall be to promote sound purchasing management.

Prior to adopting rules under this section, the Secretary of Administration may consult with the Advisory Budget Commission."

(b) This section is effective upon ratification.

---EXPEDITE STATE BID REVIEW

Sec. 23. (a) G.S. 143-52 reads as rewritten:

"§ 143-52. Competitive bidding procedure; consolidation of estimates by Secretary; bids; awarding of contracts.

As feasible, the Secretary of Administration ~~will~~ shall compile and consolidate all ~~such~~ estimates of supplies, materials, equipment and contractual services needed and required by State departments, institutions and agencies to determine the total requirements of any given commodity. Where ~~such~~ the total requirements ~~will~~ are projected to involve an expenditure in excess of the expenditure benchmark established under the provisions of G.S. 143-53.1 and where the competitive bidding procedure is employed as ~~hereinafter provided,~~ provided in this Article, sealed bids shall be solicited by advertisement in a newspaper of statewide circulation at least once and at least 10 days prior to the date designated for opening of the bids and awarding of the contract: Provided, other methods of advertisement may be adopted by the Secretary of Administration when such other method is deemed more advantageous for certain items or commodities. Regardless of the amount of the expenditure, under the competitive bidding procedure it shall be the duty of the Secretary of Administration to solicit bids direct by mail from qualified sources of supply. Except as otherwise provided under this Article, contracts for the purchase of supplies, materials or equipment shall be based on competitive bids and acceptance made of the lowest and best bid(s) most advantageous to the State as determined upon consideration of the following criteria: prices offered; the quality of the articles offered; the general reputation and performance capabilities of the bidders; the substantial conformity with the specifications and other conditions set forth in the request for bids; the suitability of the articles for the intended use; the personal or related services needed; the transportation charges; the date or dates of delivery and performance; and ~~such~~ any other ~~factor(s)~~ factors deemed pertinent or peculiar to the purchase in question, which if controlling shall be made a matter of record. Competitive bids on ~~such~~ the contracts shall be received in accordance with rules and regulations to be adopted by the Secretary of Administration, which rules and regulations shall prescribe for the manner, time and place for proper advertisement for ~~such~~ the bids, the time and place when bids will be received, the articles for which ~~such~~ the bids are to be submitted and the specifications prescribed for ~~such~~ the articles, the number of the articles desired or the duration of the proposed contract, and the amount, if any, of bonds or certified checks to accompany the bids. Bids shall be publicly opened. Any and all bids received may be rejected. Each and every bid conforming to the terms of the invitation, together with the name of the bidder, shall be tabulated or otherwise entered as a matter of record, and all such records with the name of the successful bidder indicated thereon shall, after the award of the contract, be open to public inspection. Provided, that trade secrets, test data and similar proprietary information may remain confidential. Bids shall not be provided to the ordering State departments, institutions, or agencies for their review before an award is made unless the ordering departments, institutions, or agencies request the opportunity to review them. Bids shall not be provided to the Board of Award for review prior to award unless the award is in excess of one hundred thousand dollars ($100,000) or the Secretary of Administration determines that review by the Board of Award is appropriate in a given case. A bond for the faithful performance of any contract may be required of the successful bidder at bidder's expense and in the discretion of the Secretary of Administration. After contracts have been awarded, the Secretary of Administration shall certify to the departments, institutions and agencies of the State government the sources of supply and the contract price of the supplies, materials and equipment so contracted for. Prior to adopting other methods of advertisement under this section, the Secretary of Administration may consult with the Advisory Budget Commission. Prior to adopting rules and regulations under this section, the Secretary of Administration may consult with the Advisory Budget Commission."

(b) This section becomes effective October 1, 1993.

---INFO. SYS./GOVT. PURCHASES

Sec. 24. (a) G.S. 143-49 is amended by adding a new subdivision to read:

"(3a) To monitor the purchasing activity of the State and its departments, institutions, and agencies and to require standardized periodic reporting on the volume of purchases by commodity, service, and vendor category, and the volume of purchases under term contract and open-market procedures. The Secretary shall compile and analyze the data no less than annually.

The Secretary shall also conduct a biennial management review of the purchasing operations in State government and in each of its departments, institutions, and agencies to assure that they are using effective and efficient purchasing practices in accordance with law. The Secretary may recommend measures to improve purchasing operations.

The Secretary shall report his findings and recommendations under this subdivision to the Governor and the General Assembly on an annual basis."

(b) The General Assembly finds that the Division of Purchase and Contract of the Department of Administration needs information on commodities purchased by State departments and agencies on the open market and under term contract so that the Office of State Controller can (i) determine expected volume of purchases by line items for new term contract solicitations, and (ii) oversee the use of term contracts and open-market purchases; therefore, the Office of State Controller shall give high priority to a management information system on purchase activity by State departments and agencies when it plans for the implementation of a new accounting system. Until the State Controller has such a system in operation, the Division of Purchase and Contract of the Department of Administration shall direct all State departments and agencies to report to it on commodities purchased on the open market and under term contract, in accordance with G.S. 143-49(3a), and all State departments and agencies shall report as directed by the Division of Purchase and Contract.

---CLARIFY CORRECTION ENTERPRISES

Sec. 25. (a) The Department of Administration, Purchase and Contracts Division, in consultation with the Department of Correction, shall develop policy concerning the manufacture of goods and the provision of services by Correction Enterprises. The policy shall be for distribution to all State agencies and departments and shall:

(1) Address the appropriate levels of production and services by Correction Enterprises;

(2) Provide guidelines for purchase by State agencies from Correction Enterprises whenever Correction Enterprises offers lower prices for quality products than other potential vendors; and

(3) Identify the potential benefits to prisoner rehabilitation as a result of the Correction Enterprises program.

The Department of Administration shall submit the policy for approval by the General Assembly by March 15, 1994.

(b) This section is effective upon ratification.

---COMBINE NC/US SURPLUS PROP

Sec. 25.1. (a) The Department of Administration shall study the feasibility of consolidating the property units of the State Surplus Property Section and the Federal Surplus Property Section at the federal facility site. In the course of the study the Department shall consider enhanced service the consolidation would provide to customers, the funds that the State would realize from the sale of the State facility, annual savings that would result from decreased staffing required by a consolidated facility, and the feasibility and cost of constructing sufficient additional space at the federal facility to house a consolidated facility.

The Department shall report to the General Assembly on the results of this study before March 15, 1994.

(b) This section is effective upon ratification.

---STATE SURPLUS MANAGEMENT SYSTEM

Sec. 26. (a) The Secretary of Administration shall, after consultation with the State Controller, develop a central automated inventory management system to facilitate agency and department access to information on surplus property. The system shall combine State and federal surplus inventory information and shall be accessible from all State agencies and local governments. The system shall provide information on the available surplus property inventory, the age and fair market value of the inventory, and the physical condition of the items and the dates they were reported as surplus.

The Secretary of Administration shall report to the General Assembly prior to March 15, 1994, on the system he develops pursuant to this section.

(b) This section is effective upon ratification.

---SURPLUS PROPERTY SALE PROCEEDS

Sec. 27. (a) G.S. 143-64.05 reads as rewritten:

"§ 143-64.05. Warehousing, transfer, etc., charges.

The State agency for surplus property may assess and collect service charges or fees for the acquisition, receipt, warehousing, distribution or transfer of any State surplus property. All receipts from the transfer or sale of surplus, obsolete, or unused equipment of State departments, institutions, and agencies, that are supported by appropriations from the General Fund, except where the receipts have been anticipated for, or budgeted against the cost of replacements, shall be credited by the Secretary to the Office of State Treasurer, Nontax Revenues. agencies, shall be available to the State departments, institutions, and agencies that reported the surplus for the purchase of fixed assets and shall be in addition to all other funds appropriated for fixed assets."

(b) This section becomes effective July 1, 1993.

---MINORITY BUSINESS COORDINATOR

Sec. 27.1. (a) G.S. 143-49 reads as rewritten:

"§ 143-49. Powers and duties of Secretary.

The Secretary of Administration shall have power and authority, and it shall be his duty, subject to the provisions of this Article:

(2) To establish and enforce specifications which shall apply to all supplies, materials and equipment to be purchased or leased for the use of the State government or any of its departments, institutions or agencies.

(5) To make provision for or to contract for all State printing, including all printing, binding, paper stock and supplies or materials in connection with the same.

(7) To designate an employee of the Purchase and Contract Division to serve as a coordinator for the conduct of outreach programs designed to encourage participation by small, minority, physically handicapped, and women contractors in State purchasing of goods and services. The minority business coordinator shall:

a. Conduct vendor fairs and seminars and prepare information packets that provide such businesses with instructions on doing business with the State; and

b. Coordinate with the Small Business Administration and the Minority Business Development Administration to facilitate participation by such businesses."

(b) This section is effective upon ratification.

---SINGLE PRIME/CAPITAL PROJECTS

Sec. 28. (a) Section 3 of Chapter 480 of the 1989 Session Laws reads as rewritten:

"Sec. 3. The State Construction Office of the Department of Administration, the Division of School Planning of the Department of Public Education, the Division of Facility Services of the Department of Human Resources, the North Carolina Association of County Commissioners, the North Carolina League of Municipalities, the School Board Association, and the North Carolina Hospital Association shall monitor and study the ~~separate prime~~ separate-prime and single-prime contract systems in the bidding of public building projects and shall compile data on the total verifiable contractual, legal, and administrative cost to the public.

The State Building Commission shall develop the necessary forms and procedures to survey the public contracts let. The public bodies responsible for the award of contracts shall submit all necessary records to the appropriate office, division, association, or individual as directed by the State Building Commission. The appropriate office, division, association, or individual shall maintain records of public contracts from bodies under their supervision or bodies that are their members.

The State Building Commission shall also develop additional forms and procedures to survey State agencies regarding the definitive and quantifiable impact in terms of State administrative costs, litigation costs, change orders, project completion, and occupancy costs resulting from using the separate-prime and single-prime contract systems.

An executive summary of data shall be submitted to the State Building Commission and such data shall be compiled and analyzed in a report to be made to the 1995 Session of the General Assembly. If the State Building Commission's analysis of the data on separate-prime and single-prime contracts indicates that it is financially beneficial to use single-prime contracting as the primary method of contracting, the State Building Commission shall recommend to the 1995 Session of the General Assembly that the State use single-prime as the primary method of contracting. The State Building Commission shall also identify the necessary steps, including statutory changes, that are needed to increase the use of single-prime contracts."

(b) This section is effective upon ratification.

---IMPROVE BLDG. DESIGNER SELECTION

Sec. 29. (a) G.S. 143-341(3) reads as rewritten:

"(3) Architecture and Engineering:

a. To examine and approve all plans and specifications for the construction or renovation of:

1. All State buildings; and

2. All community college buildings requiring the estimated expenditure for construction or repair work for which public bidding is required under G.S. 143-129

prior to the awarding of a contract for such work; and to examine and approve all changes in those plans and specifications made after the contract for such work has been awarded. To reduce the cost to the State of change orders, the Office of State Construction shall reevaluate the use of designers to issue construction change orders when the change orders may result from design defects.

b. To prepare preliminary studies and cost estimates and otherwise to assist all agencies in the preparation of requests for appropriations for the construction or renovation of all State buildings.

c. To supervise the letting of all contracts for the design, construction or renovation of all State buildings and all community college buildings whose plans and specifications must be examined and approved under a.2. of this subdivision.

The Office of State Construction shall develop detailed estimates of the expected design costs for capital projects to provide a basis for (i) evaluating the reasonableness of fees proposed by selected design firms and (ii) negotiating changes in contract fees when there is a change in the scope of work. If the Office of State Construction uses an outside contractor to develop the estimates of expected design costs, that contractor shall not be eligible for selection as the project designer.

d. To supervise and inspect all work done and materials used in the construction or renovation of all State buildings and all community college buildings whose plans and specifications must be examined and approved under a.2. of this subdivision; and no such work may be accepted by the State or by any State agency until it has been approved by the Department. The contract with a designer shall require that the designer provide a specific plan for inspection during the construction phase of a project."

(b) This section is effective upon ratification.

---REDIRECT GOV'T. PURCHASING STAFF.

Sec. 30. (a) The Secretary of Administration shall abolish 11 personnel positions for buyers in the Purchasing Section of the Division of Purchase and Contract of the Department of Administration or redirect those positions to carry out any or all of the following:

(1) Provide for the development and implementation of a management information system on purchase activity by State departments and agencies;

(2) Update the State purchasing manual; and

(3) Improve the program under which specification standards are developed for commodities purchased by the State.

(b) This section becomes effective July 1, 1993.

---REDUCE STAFF/PURCHASE & CONTRACT

Sec. 31. (a) The number of personnel positions for buyers in the Purchasing Section of the Division of Purchase and Contract of the Department of Administration is reduced by 11 positions.

(b) The base budget of the Purchasing Section of the Division of Purchase and Contract of the Department of Administration is reduced by four hundred forty thousand dollars ($440,000) for the 1993-94 fiscal year and four hundred forty thousand dollars ($440,000) for the 1994-95 fiscal year due to the decrease in personnel positions mandated by Section 1 of this act.

---STATE HUMAN RESOURCES PLANNING

Sec. 32. (a) Article 1 of Chapter 126 of the General Statutes is amended by adding a new section to read:

"§ 126-3.1. State human resources management planning.

(a) The Office of State Personnel shall be responsible for the State's ongoing human resources management planning effort. The purpose of human resources management planning shall be to assist in the determination of the mission and future of the State's human resources management programs and functions. Human resources management planning shall include planning with regard to the recruitment, selection, organization, training, and development of the State employee work force.

(b) The Office of State Personnel shall coordinate the State's management of human resources so as to ensure that all State human resources management programs are integrated fully within a comprehensive overall human resources management plan. Each State department, agency, and institution, and the judicial and legislative branches, shall be monitored by the Office of State Personnel to ensure that human resources planning at the departmental, agency, and institutional level is in compliance with the comprehensive plan and effective human resources management practices."

(b) This section is effective upon ratification.

---MONITOR STATE EMPLOYEE MANAGEMENT

Sec. 33. (a) Article 1 of Chapter 126 of the General Statutes is amended by adding a new section to read:

"§ 126-4.1. State human resource management monitored.

(a) The Office of State Personnel shall monitor the overall effectiveness of State policies and programs pertaining to human resources management and shall determine appropriate measures to monitor the condition and goal achievement of the human resource management function. The effectiveness of the human resources management function shall be measured in reference to each of the following:

(1) Fiscal Trends. - Measures that relate budget and fiscal issues to the employee cost for compensation, benefits, and the human resource department expenses and employees.

(2) Employee Benefits. - Measures to assess the usage of all benefit programs, participation patterns or optional programs, and costs per full-time employee for benefits programs.

(3) Absence and Turnover. - Measures to signal potential problems with workforce absenteeism and dissatisfaction with pay and turnover rates. Prerequisites to these measures are accurate attendance records and data to document why employees are leaving State employment.

(4) Hiring and Staffing. - Measures to evaluate the rate at which persons are entering State employment, the cost of hiring, the time taken to fill jobs, and the ratio of job offer to acceptances.

(5) Equal Employment. - Measures to evaluate inequities in hiring, promotions, and compensation as it relates to minorities, women, and the disabled.

(6) Training and Development. - Measures to evaluate the cost per unit of training delivered, change in knowledge and skill based on pre- and post-test scores, and the number of hours of training available to trainees.

(b) The Office of State Personnel shall develop an automated system to track and monitor on an ongoing basis the human resources management function.

(c) Each State department, agency, and institution shall utilize the automated system to assess the effectiveness of the human resources management of the department, agency, or institution.

(d) The human resources management function performance measures shall be benchmarked in relation to individual agencies, departments, and institutions as well as against other state governments. The Office of State Personnel may solicit other state and local governments to participate in a survey of performance measures."

(b) This section is effective upon ratification.

---PERSONNEL DIRECTOR HIRING

Sec. 34. (a) G.S. 126-4 reads as rewritten:

"§ 126-4. Powers and duties of State Personnel Commission.

Subject to the approval of the Governor, the State Personnel Commission shall establish policies and rules governing each of the following:

(1) Position classification plans which shall provide for the classification and reclassification of all positions subject to this Chapter according to the duties and responsibilities of the positions.

(2) Compensation plans which shall provide for minimum, maximum, and intermediate rates of pay for all employees subject to the provisions of this Chapter.

(3) For each class of positions, reasonable qualifications as to education, experience, specialized training, licenses, certifications, and other job-related requirements pertinent to the work to be performed.

(4) Recruitment programs designed to promote public employment, communicate current hiring activities within State government, and attract a sufficient flow of internal and external applicants; and determine the relative fitness of applicants for the respective positions.

(5) Hours and days of work, holidays, vacation, sick leave, and other matters pertaining to the conditions of employment. The legal public holidays established by the Commission as paid holidays for State employees shall include Martin Luther King, Jr.'s, Birthday and Veterans Day. The Commission shall not provide for more than 11 paid holidays per year except that in those years in which Christmas Day falls on a Tuesday, Wednesday, or Thursday, the Commission shall not provide for more than 12 paid holidays.

(6) The appointment, promotion, transfer, demotion and suspension of employees.

(6a) The establishment of guidelines for the recruitment, appointment, and retention of the State Personnel Director and of the personnel directors of State departments, agencies, and institutions.

(7) Cooperation with the Department of Public Education, the University of North Carolina, and the Community Colleges of the State and other appropriate resources in developing programs in, including but not limited to, management and supervisory skills, performance evaluation, specialized employee skills, accident prevention, equal employment opportunity awareness, and customer service; and to maintain an accredited Certified Public Manager program.

(7a) The separation of employees.

(8) The evaluation of employee performance, the granting of performance salary increases, and a program of meritorious service awards.

(9) The investigation of complaints and the issuing of such binding corrective orders or such other appropriate action concerning employment, promotion, demotion, transfer, discharge, reinstatement, and any other issue defined as a contested case issue by this Chapter in all cases as the Commission shall find justified.

(10) Programs of safety, health, employee assistance, productivity incentives, equal opportunity and such other programs and procedures as may be necessary to promote efficiency of administration and provide for a fair and modern system of personnel administration. This subdivision may not be construed to authorize the establishment of an incentive pay program.

(11) In cases where the Commission finds discrimination or orders reinstatement or back pay whether (i) heard by the Commission or (ii) appealed for limited review after settlement or (iii) resolved at the agency level, the assessment of reasonable attorneys' fees and witnesses' fees against the State agency involved.

(12) Repealed by Session Laws 1987, c. 320, s. 2.

(13) Repealed by Session Laws 1987, c. 320, s. 3.

(14) The implementation of G.S. 126-5(e).

(15) Recognition of State employees, public personnel management, and management excellence.

Such policies and rules shall not limit the power of any elected or appointed department head, in his discretion and upon his determination that it is in the best interest of the Department, to transfer, demote, or separate a State

(1) Employee in a grade 60 or lower position who has not been continuously employed by the State of North Carolina for the immediate 12 preceding months;

(2) Employee in a grade 61 to grade 65 position who has not been continuously employed by the State of North Carolina for the immediate 36 preceding months;

(3) Employee in a grade 66 to grade 70 position who has not been continuously employed by the State of North Carolina for the immediate 48 preceding months; or

(4) Employee in a grade 71 or higher position who has not been continuously employed by the State of North Carolina for the immediate 60 preceding months."

(b) G.S. 126-3 reads as rewritten:

"§ 126-3. Office of State Personnel established; administration and supervision; appointment, compensation and tenure of Director.

There is hereby established the Office of State Personnel (hereinafter referred to as 'the Office') which shall be placed for organizational purposes within the Department of Administration. Notwithstanding the provisions of North Carolina State government reorganization as of January 1, 1975, and specifically notwithstanding the provisions of Chapter 864 of the 1971 North Carolina Session Laws [Chapter 143A], the Office of State Personnel shall exercise all of its statutory powers in this Chapter independent of control by the Secretary of Administration and shall be under the administration and supervision of a State Personnel Director (hereinafter referred to as 'the Director') appointed by the Governor and subject to the supervision of the Commission for purposes of this Chapter. The Commission shall develop job requirements for the Director that include education and experience requirements. The Director shall be appointed to serve a term concurrent with the term of the appointing Governor and shall be removed only for cause. The salary of the Director shall be fixed by the General Assembly in the Current Operations Appropriations Act. The Director shall serve at the pleasure of the Governor."

"§ 143B-9. Appointment of officers and employees.

The head of each principal State department, except those departments headed by popularly elected officers, shall be appointed by the Governor and serve at his pleasure.

The salary of the head of each of the principal State departments and of elected officials shall be as provided by law.

The head of a principal State department shall appoint a chief deputy or chief assistant, and such chief deputy or chief assistant shall not be subject to the State Personnel Act. The salary of such chief deputy or chief assistant shall, upon the recommendation of the Governor, be set by the General Assembly. Unless otherwise provided for in the Executive Organization Act of 1973, and subject to the provisions of the Personnel Act, the head of each principal State department shall designate the administrative head of each transferred agency and all employees of each division, section, or other unit of the principal State department.

The head of a principal State department shall appoint a personnel director following a competitive process based upon educational and experience guidelines established by the State Personnel Commission."

(d) Departments headed by a member of the Council of State, other than the Governor and Lieutenant Governor, shall employ a personnel director appointed following a competitive process based upon educational and experience guidelines established by the State Personnel Commission.

(e) This section is effective upon ratification.

---POLITICAL HIRING LIMITED

Sec. 35. (a) Chapter 126 of the General Statutes is amended by adding a new section to read:

"§ 126-14.2. Political hirings limited; policy; rules.

(a) It is the policy of this State that State departments, agencies, and institutions select the most qualified persons for State government employment based upon job-related qualifications of applicants for employment and not based upon political affiliation, except that certain policy-making positions in State government employment may be filled on bases including political affiliation where the General Assembly has expressly authorized such hirings.

(b) The personnel policies and procedures of each State department, agency, and institution shall be updated to implement the policy of nonpolitical hiring set forth in subsection (a) of this section.

(c) The personnel policies and procedures of the legislative and judicial branches shall be updated to implement nonpolitical hirings in accordance with subsection (a) of this section.

(d) The Office of State Personnel shall provide training to State supervisory personnel that is designed to carry out the intent of subsection (a) of this section.

(e) The State Personnel Commission shall adopt rules to:

(1) Assure that State departments, agencies, and institutions follow the same selection process when hiring State employees;

(2) Encourage open competition for positions in State government employment;

(3) Broaden the advertisement of job openings in State government employment and lengthen the period for submitting applications for State government employment; and

(4) Require that State supervisory personnel responsible for hiring State employees must execute for each new hire a certification indicating that the hiring decision was made in accordance with State personnel policies and was not made on the basis of patronage."

(b) G.S. 126-5 is amended by adding a new subsection to read:

"( c6) Notwithstanding any other provision of this Chapter, G.S. 126-14.2 shall apply to all State employees, public school employees, and community colleges employees."

---ANNUAL STATE EMPLOYEE SURVEY

Sec. 36. (a) Article 1 of Chapter 126 of the General Statutes is amended by adding a new section to read:

"§ 126-4.1. Annual employee survey.

(a) The Office of State Personnel shall conduct an annual employee opinion survey with input from and in cooperation with the personnel directors of each State department, agency, and institution. The information received from this survey shall be provided, in a timely manner, to State employees in order to increase awareness and understanding and to gain greater commitment to the State's goals and objectives. The dissemination of annual survey results to employees shall be done in a manner calculated to foster improved job performance, enhanced job satisfaction, and increased employee motivation.

(b) The annual employee opinion survey shall differentiate between managers and staff and shall include all three branches of government. The Office shall establish an appropriate year-to-year benchmarking process that will provide for the effective utilization of survey data. The Office shall establish appropriate baseline survey questions and shall use other appropriate surveying methods to ensure from year to year the accurate and meaningful comparison of employee opinion survey results."

(b) Article 29 of Chapter 7A of the General Statutes is amended by adding a new section to read:

"§ 7A-342.1. Annual employee survey.

Subject to the approval of the Chief Justice, the Administrative Officer of the Courts shall establish for the purpose of effective human resources management policies and procedures to implement an annual opinion survey of employees of the judicial branch in cooperation with the Office of State Personnel."

"§ 120-32. Commission duties.

The Legislative Services Commission is hereby authorized to:

(1) Determine the number, titles, classification, functions, compensation, and other conditions of employment of the joint legislative service employees of the General Assembly, including but not limited to the following departments:

a. Legislative Services Officer and personnel,

b. Electronic document writing system,

c. Proofreaders,

d. Legislative printing,

e. Enrolling clerk and personnel,

f. Library,

g. Research and bill drafting,

h. Printed bills,

i. Disbursing and supply;

(2) Determine the classification and compensation of employees of the respective houses other than staff elected officers; however, the hiring of employees of each house and their duties shall be prescribed by the rules and administrative regulations of the respective house;

(2a) Conduct an annual opinion survey of legislative branch employees for the purpose of effective human resources management in cooperation with the Office of State Personnel;

(3) Acquire and dispose of furnishings, furniture, equipment, and supplies required by the General Assembly, its agencies and commissions and maintain custody of same between sessions. It shall be a misdemeanor for any person(s) to remove any State-owned furniture, fixtures, or equipment from the State Legislative Building for any purpose whatsoever, except as approved by the Legislative Services Commission;

(4) Contract for services required for the operation of the General Assembly, its agencies, and commissions; however, any departure from established operating procedures, requiring a substantial expenditure of funds, shall be approved by appropriate resolution of the General Assembly;

(5) a. Provide for engrossing and enrolling of bills,

b. Appoint an enrolling clerk to act under its supervision in the enrollment and ratification of acts;

(6) a. Provide for the duplication and limited distribution of copies of ratified laws and joint resolutions of the General Assembly and forward such copies to the persons authorized to receive same,

b. Maintain such records of legislative activities and publish such documents as it may deem appropriate for the operation of the General Assembly;

(7) a. Provide for the indexing and printing of the session laws of each regular, extra or special session of the General Assembly and provide for the printing of the journal of each house of the General Assembly,

b. Provide and supply to the Secretary of State such bound volumes of the journals and session laws as may be required by him to be distributed under the provisions of G.S. 147-45, 147-46.1 and 147-48.

(8) Repealed by Session Laws 1985 (Reg. Sess., 1986), c. 1014, s. 40.

(9) To establish a bill drafting division to draft bills at the request of members or committees of the General Assembly.

(10) To select the locations for buildings occupied by the General Assembly, and to name any building occupied by the General Assembly.

(11) To specify the uses within the General Assembly budget of funds appropriated to the General Assembly which remain available for expenditure after the end of the biennial fiscal period, and to revert funds under G.S. 143-18.

(12) Provide insurance to provide excess indemnity for any occurrence which results in a claim against any member of the General Assembly, as provided in G.S. 143-300.2 through G.S. 143-300.6. That insurance may not provide for any indemnity to be payable for any claim not covered by the above cited statutes, nor for any criminal act by a member, nor for any act committed by a member or former member prior to the inception of insurance.

(13) Provide insurance to provide excess indemnity for any occurrence that results in a claim against any employee, officer, or committee, subcommittee, or commission member in the legislative branch other than a member of the General Assembly, as provided in G.S. 143-300.2 through G.S. 143-300.6. That insurance may not provide for any indemnity to be payable for any claim not covered by the above cited statutes, nor for any criminal act, nor for any act committed prior to the inception of insurance."

(d) This section is effective upon ratification.

---STATE EEO MONITORING

Sec. 37. (a) Chapter 126 of the General Statutes is amended by adding a new section to read:

"§ 126-16.2. Equal employment opportunity monitoring; reporting.

The Equal Employment Opportunity Division of the Office of State Personnel shall monitor pay increases awarded to State employees by State departments, agencies, and institutions in order to ensure that pay increases are granted by State departments, agencies, and institutions in a nondiscriminatory manner. The Equal Employment Opportunity Division shall report periodically to the State Personnel Commission information relating to pay increases awarded to State employees. The Office of State Personnel shall report pay increases awarded by equal employment opportunity protected class categories. The State Personnel Commission shall monitor performance pay increases in conjunction with monitoring hirings, promotions, demotions, and separations by equal employment opportunity protected class categories."

(b) This section is effective upon ratification.

---COMPREHENSIVE EMPLOYEE TRAINING

Sec. 38. (a) G.S. 126-4 reads as rewritten:

"§ 126-4. Powers and duties of State Personnel Commission.

Subject to the approval of the Governor, the State Personnel Commission shall establish policies and rules governing each of the following:

(2) Compensation plans which shall provide for minimum, maximum, and intermediate rates of pay for all employees subject to the provisions of this Chapter.

(6) The appointment, promotion, transfer, demotion and suspension of employees.

(6a) The establishment of a comprehensive employee training system and the monitoring of costs associated with the State's investment in employee training and development.

(7a) The separation of employees.

(8) The evaluation of employee performance, the granting of performance salary increases, and a program of meritorious service awards.

(12) Repealed by Session Laws 1987, c. 320, s. 2.

(13) Repealed by Session Laws 1987, c. 320, s. 3.

(14) The implementation of G.S. 126-5(e).

(15) Recognition of State employees, public personnel management, and management excellence.

(1) Employee in a grade 60 or lower position who has not been continuously employed by the State of North Carolina for the immediate 12 preceding months;

(2) Employee in a grade 61 to grade 65 position who has not been continuously employed by the State of North Carolina for the immediate 36 preceding months;

(3) Employee in a grade 66 to grade 70 position who has not been continuously employed by the State of North Carolina for the immediate 48 preceding months; or

(4) Employee in a grade 71 or higher position who has not been continuously employed by the State of North Carolina for the immediate 60 preceding months."

(b) Article 1 of Chapter 126 of the General Statutes is amended by adding a new section to read:

"§ 126-3.1. Comprehensive employee training system.

(a) The Office of State Personnel shall coordinate a comprehensive statewide system for the training of State employees including training programs, courses, and materials for management and supervisory training, Equal Employment Opportunity training, computer training, and other areas of employee training that are of statewide applicability. The system of comprehensive employee training shall be administered so as to enhance the performance of employees and the effectiveness of State departments, agencies, and institutions.

(b) The Office of State Personnel shall identify the training and development needs of State employees by performing an annual training needs analysis in conjunction with State agencies that includes the study of the job requirements of the respective positions held by State employees, the forecasting of changes in job requirements, the determination of skills and essential job functions, and the assessment of the status of employee training.

(c) Each State department, agency, and institution shall provide to their respective employees training programs, courses, and materials of special relevance to the performance of job requirements within the department, agency, or institution.

(d) State employee training programs shall be evaluated by the Office of State Personnel as to content, course administration, facilities, and trainers in order to ensure that training programs are needed for current job requirements. Each State department, agency, and institution shall provide to the Office of State Personnel information related to the costs of employee training programs, courses, and materials including the salaries of trainers, the cost of supplies and materials, facilities costs, and the fees charged for training programs and courses."

"(c5) Notwithstanding any other provision of this Chapter, Article 14 of this Chapter and G.S. 126-4(6a) shall apply to all State employees, public school employees, and community colleges employees."

(d) This section is effective upon ratification.

---STATE EMP. CLASSIFICATION/FUNDS.

Sec. 39. (a) Article 1 of Chapter 126 of the General Statutes is amended by adding a new section to read:

"§ 126-4.1. State employee classifications system.

(a) The Office of State Personnel shall study employee job classifications and implement a revised classification system that is coordinated as an integral part of the compensation system for State employees.

(b) The classification and compensation study conducted by the Office of State Personnel shall include the development and implementation of the following study components: compensation philosophy, salary structure, pay delivery, job descriptions, and external and internal job evaluations. The classification study shall determine which State jobs are paid below, at, or above the competitive private market rates.

(c) The Office of State Personnel shall conduct an ongoing review of the State employee classification system to facilitate the consolidation of titles within classes, the creation of generic job titles, and the provision of dual career tracks to provide employees with opportunities for vertical growth in nonmanagement positions."

(b) There is appropriated from the General Fund to the Office of State Personnel the sum of two hundred twenty-five thousand dollars ($225,000) for the 1993-94 fiscal year and the sum of two hundred twenty-five thousand dollars ($225,000) for the 1994-95 fiscal year for implementation of the review of the State employee classification system. The Office of State Personnel shall complete the classification study within no more than 24 months.

(c) Subsection (a) of this section is effective upon ratification. Subsection (b) of this section becomes effective July 1, 1993.

---STATE PERFORMANCE PAY.

Sec. 40. (a) G.S. 126-7(c) reads as rewritten:

"(c) Performance ~~increases, if awarded,~~ increases shall be based on performance appraisals of all employees conducted by each department, agency, and institution. The State Personnel Commission, under the authority of G.S.126-4(8), shall adopt policy and regulations for performance appraisal. The policy and regulations shall include the following:

(1) The performance appraisal system of each department, agency, or institution shall be designed and administered to ensure that performance increases are distributed fairly ~~and reward only performance that exceeds performance requirements.~~ and to reward performance that meets or exceeds performance requirements. Employee performance exceeding requirements will receive greater rewards than performance that only meets performance requirements.

(1a) Employees shall progress through salary grades based upon performance and an employee's location in the salary grade in accordance with guideline charts that identify an employee's current performance rating and location in the pay grade. Guideline charts shall determine the amount of an employee pay increase.

(2) To be eligible to distribute its share of the performance increase allocation, a department, agency, or institution shall have an operative performance appraisal system which has been approved by the State Personnel Director. The performance appraisal system adopted shall use a rating scale of:

a. Five levels, with the top ~~two levels~~ three levels qualifying for performance increases; or

b. Other than five levels, with the levels qualifying for performance increases to be designated by the State Personnel Commission, for those job classifications in those employing units where a department, agency, or institution demonstrates to the State Personnel Commission that some number of levels other than five would be appropriate, and the State Personnel Commission, after conducting a public hearing, determines that a rating scale of other than five levels is more appropriate than five levels for a particular job classification within a particular employing unit.

There shall be a presumption that a five-level system is the most appropriate system, and the department, agency, or institution must demonstrate with clear and convincing evidence that a different system is more appropriate. The performance appraisal system adopted shall adhere to modern personnel management techniques and practices in common use in the public and private sectors. Departments, agencies, and institutions with existing performance appraisal systems which use a rating scale which is not consistent with the system described above shall have until July 1, 1991, to bring their systems into compliance with this subsection.

(3) The State Personnel Director shall ~~help~~ coordinate the efforts of departments, agencies, and institutions to establish and administer their performance appraisal systems and shall provide initial and ongoing training in performance appraisal and performance system administration. Training sessions for supervisory personnel on the performance appraisal system, effective methods of employee appraisal, and assessment of individual employee training and development needs shall be held on a regular basis.

(3a) Each department, agency, and institution shall determine the individual training needs of each of its employees in order to provide effective employee training calculated to foster enhanced employee performance and to afford each employee the training needed to achieve performance levels that will result in the award of performance pay. Individual employee training needs shall be identified as part of an employee's performance appraisal.

(4) An employee whose performance ~~exceeds~~ meets or exceeds performance requirements shall receive a performance increase unless the employee's supervisor justifies in writing to the employee the decision not to award the performance increase. An employee whose performance does not ~~exceed~~ meet or exceed performance requirements shall not receive a performance increase. Standards for performance and standards for performance pay increases may be established for each department, agency, or institution. These standards may not set limits so as to preclude an employee whose performance ~~exceeds~~ meets or exceeds performance requirements from consideration for an increase.

(5) The State Personnel Director shall set the performance increase ranges allowable for levels of performance that exceed performance requirements. An employee whose performance exceeds expectations shall receive a percentage increase equal to the midrange value for his rating, unless the supervisor can justify an increase above or below the midrange value within the allowable range. The supervisor shall give an employee written justification of his decision to award an increase above or below the midrange value when the employee requests written justification. A supervisor's performance appraisal plan, evaluation standards for each employee, and individual employee ratings and recommended performance increase amounts, with justification, shall be reviewed and approved by that supervisor's next higher level supervisor.

(5a) If an employee is otherwise eligible for a performance increase and is at the top of (but does not exceed) a pay scale, the employee shall receive a performance increase in the form of a performance bonus. This performance bonus shall be a one-time, lump-sum award paid separately from any other payment to the employee for the year. Such award shall not serve to increase the base pay of such employee. An award of this bonus pursuant to this subdivision does not affect:

a. The value of the top of any pay scale; and

b. The employee's current salary, which will remain at the top of the pay scale.

Except as provided in this subdivision, all other provisions of this subsection shall apply to an employee at the top of a pay scale.

(6) The State Personnel Director may suspend any performance increase that does not appear to meet the intent of the provisions of the performance pay system and require the originating department, agency, or institution to reconsider or justify the increase.

(7) An employee who disputes the fairness of his performance evaluation or the sufficiency of the increase awarded or who believes that he was unfairly denied a performance increase shall first discuss the problem with his supervisor. Appeals of the supervisor's decision shall be made only to the grievance committee or internal performance review board of the department, agency, or institution which shall make a recommendation to the head of the department, agency, or institution for final decision. The State Personnel Director shall help a department, agency, or institution establish an internal performance review board or, if it includes employee members, to use its existing grievance committee to hear performance pay disputes. Notwithstanding G.S. 150B-2(2) and G.S. 126-22, 126-25, and 126-34, performance pay disputes, including disputes about individual performance appraisals, shall not be considered contested case issues.

(7a) Each department, agency, and institution shall establish a performance management and pay advisory committee as part of the performance appraisal system. The purpose of the committee is to ensure that performance pay increases are made in an equitable ~~manner.~~ manner and in compliance with the performance appraisal system coordinated by the Office of State Personnel. The committee shall be responsible for reviewing:

a. Agency performance pay policies and performance pay plan to determine whether this section and any guidelines promulgated by the Office of State Personnel have been adhered to;

b. Agency training and education programs to determine whether all employees receive appropriate information; and

c. Performance ratings within the department, agency, or institution to determine whether an equitable distribution has been made.

The committee must have a minimum of five members. The head of each department, agency, and institution shall appoint the members of the committee with equal representation of nonsupervisory, supervisory, and management employees. The committee shall elect its own chair.

The performance management and pay advisory committee shall meet at least two times each year. The committee shall submit a written report following each meeting to the head of the department, agency, or institution. The report shall include recommendations for changes and corrections in the administration of the performance management system. The recommendations of the committee shall be advisory only. The head of the department, agency, or institution shall respond to the committee within three months. Copies of the report shall be included in the report to the Office of State Personnel that is required of that agency, department, or institution. Summaries of the report shall be included in the annual reports that are mandated by this subsection.

~~Nothing in subdivision (7a) and each subpart hereof shall be construed to obligate the General Assembly to appropriate funds to implement the provisions of this subdivision.~~

(8) The State Personnel Director shall monitor the performance appraisal system and performance increase distribution of each employing unit within each department, agency, and institution. Each department, agency, and institution shall submit to the Director annual reports which shall include data on the demographics of performance ratings, the frequency of evaluations, the performance pay increases awarded, and the implementation schedule for performance pay increases. The Director shall analyze the data to ensure that performance increases are distributed fairly within each department, agency, and institution and across all departments, agencies, and institutions of State government and shall report back to each department, agency, and institution on its appraisal and distribution performance.

(9) The State Personnel Director shall report annually on the performance pay program to the Commission. The report shall evaluate the performance of each department, agency, and institution in the administration of its appraisal system and the distribution of performance increases within each department, agency, and institution and across State government. The report shall include recommendations for improving the performance appraisal system and alleviating inequities. Copies of the report shall be sent to the State Auditor.

(10) The Commission shall report annually to the Governor, the Lieutenant Governor, the President Pro Tempore of the Senate, the Speaker of the House of Representatives, and the Standing Personnel Committees of the House and the Senate. The Commission report shall include an evaluation of the administration of the appraisal system and distribution of performance increases by each department, agency, and institution. The State Personnel Director shall recommend to the General Assembly for its approval sanctions to be levied against departments, agencies, and institutions that have deficient appraisal systems or that do not link performance increases to performance. These sanctions may include withholding performance increases from the managers and supervisors of individual employing units of departments, agencies, and institutions in which discrepancies exist."

(b) This section is effective upon ratification.

---TEMP. EMPLOYEES EQUALIZED.

Sec. 41. (a) G.S. 120-32.5 reads as rewritten:

"§ 120-32.5. ~~Leave for~~ Benefits for temporary employees.

Temporary part-time or full-time employees of the General Assembly who have four years of aggregate employment with the General Assembly (temporary or permanent) shall receive the same holidays, vacation leave, and sick leave as permanent part-time or full-time employees of the General Assembly respectively, or as may be determined by the Legislative Services Commission. Notwithstanding any other provision of law, temporary employees of the General Assembly shall receive health benefits, retirement benefits, and paid leave benefits equal to those benefits provided to temporary employees of the executive branch who are subject to the State Personnel Act. This section shall not be construed to reduce the vested retirement benefits of temporary employees or former employees of the General Assembly."

(b) This section is effective upon ratification.

---REPEAL HP MERIT PAY.

Sec. 42. (a) The General Assembly finds that:

(1) The special merit pay increase for Highway Patrol officers has created morale problems among other State law enforcement officers. Morale problems arise when those other law enforcement officers whose performance would otherwise merit an increase do not receive increases when the budget does not provide funding for merit raises.

(2) The special merit pay provision violates the principle that employees in similar jobs and operating at comparable levels of performance should be compensated similarly.

(b) G.S. 20-187.3(a) reads as rewritten:

"(a) The Secretary of Crime Control and Public Safety shall not make or permit to be made any order, rule, or regulation requiring the issuance of any minimum number of traffic citations, or ticket quotas, by any member or members of the State Highway Patrol. Pay and promotions of members of the Highway Patrol shall be based on their overall job performance and not on the basis of the volume of citations issued or arrests made. The provisions of G.S. 126-7 shall not apply to members of the State Highway Patrol. Members of the Highway Patrol shall, however, be subject to salary classes, ranges and longevity pay for service as are applicable to other State employees generally. Beginning July 1, 1985, and annually thereafter, each member of the Highway Patrol shall be granted a salary increase in an amount corresponding to the increments between steps within the salary range established for the class to which the member's position is assigned by the State Personnel Commission, not to exceed the maximum of each applicable salary range. Beginning July 1, 1993, the provisions of G.S. 126-7 shall apply to members of the State Highway Patrol."

(c) The base budget of the Department of Crime Control and Public Safety is reduced by one million one hundred thirty-seven thousand three hundred eighty-six dollars ($1,137,386) for the 1993-94 fiscal year and by two million three hundred seventy-nine thousand four hundred twelve dollars ($2,379,412) for the 1994-95 fiscal year due to the repeal of the automatic merit pay increase in subsection (b) of this section.

(d) This section becomes effective July 1, 1993.

---LAW OFFICER POSITION RULES.

Sec. 43. (a) Article 12D of Chapter 143 of the General Statutes is amended by adding a new section to read:

"§ 143-166.40B. When sworn law enforcement officer required.

The State Personnel Commission shall issue rules and procedures for determining when a vacant position in State government employment shall be filled by a State employee who is a sworn law enforcement officer and who requires the powers of a sworn law enforcement officer in order to carry out the essential duties of his or her position."

(b) This section is effective upon ratification.

---CIVILIANIZATION.

Sec. 44. (a) Article 12D of Chapter 143 of the General Statutes is redesignated "Law Enforcement Officers," and is amended by adding the following new section:

"§ 143-166.40A. Civilianization.

(a) For the purposes of this section, 'Law enforcement officer' means a person who:

(1) Requires the power of arrest to perform the essential duties of his or her position;

(2) Must be armed to carry out the essential functions of his or her position; and

(3) Is required by the Criminal Justice Education and Training Standards Commission to be certified, and as such, must attend and pass a core law enforcement curriculum.

(b) A person who has attained the status of a law enforcement officer shall not transfer or continue that status to a new position if he or she fills a position in State government employment that does not meet the definition of a State law enforcement officer as set forth in this section.

(c) The job classes of law enforcement officers set forth in this subsection shall be civilianized upon vacancy. A position vacancy in any of these classifications shall be filled by an employee who shall not hold the status of a law enforcement officer while serving in a position in these job classes. These job classes are deemed not to require that a State employee be a law enforcement officer in order to discharge the essential duties of positions in these classifications:

(1) Security Chief - Department of Agriculture

(2) Security Officers - Department of Cultural Resources, Archives Division

(3) Security Officers - Department of Cultural Resources, Arts Division

(4) Security Officers of State Schools and Hospitals

(5) Security Officers - Department of Justice

(6) Security Officers - Department of Justice, Training and Standards Division

(7) Hunter and Boater Safety Coordinator

(8) Insurance Investigators and Supervisors

(9) Securities and Commodities Investigators and Supervisors

(10) Port Police

(11) General Assembly Police

(12) Motor Vehicle Process Officers and Supervisors

(13) Motor Vehicle Law Enforcement - Inspectors and Supervisors

(14) Historic Site Manager

(15) Safety Officers

(16) Parks Operations Chief

(17) SBI Forensic Photographer

(18) SBI Forensic Chemist

(19) SBI Forensic Chemist II

(20) SBI Forensic Chemist III

(21) SBI Forensic Chemist Supervisor III

(22) SBI Forensic Chemist Supervisor IV

(23) SBI Forensic Serologist I

(24) SBI Forensic Serologist II

(25) SBI Forensic Serologist Supervisor

(26) SBI Forensic Analyst I

(27) SBI Latent Evidence Technician

(28) SBI Latent Evidence Supervisor

(29) Special Investigator - Medicaid Fraud

(30) SBI Latent Evidence Assistant Supervisor

(31) Wildlife Enforcement Training Director

(32) Special Investigation Supervisor

(33) Assistant Director of Crime Laboratory

(34) SBI Fingerprint Identification Supervisor

(35) Criminal Information Auditor

(36) Criminal Information Audit Supervisor

(37) Criminal Information Training Specialist

(38) Scales Mechanic

(39) Administrative Assistant

(40) Parking Control Supervisor

(41) Medicaid Fraud Investigator Supervisor

(42) SBI Assistant Director - Administrative Services

(43) Locksmith II

(44) Motor Vehicle Training Coordinator

(45) Automated Fingerprint ID Systems Manager

(46) Driver Service Training Officer

(47) Staff Development Specialist I

(48) Departmental Purchasing Agent II

(49) Computer System Coordinator I

(50) Fingerprint ID Technician II

(51) Fingerprint ID Processing Supervisor

(52) Deputy Director Medicaid Fraud

(53) ALE Training Coordinator

(54) Wildlife Telecommunication Manager."

(b) G.S. 135-1(11b) reads as rewritten:

"(11b) 'Law-Enforcement Officer' means a full-time paid employee of an employer who is actively serving in a position with assigned primary duties and responsibilities for prevention and detection of crime or the general enforcement of the criminal laws of the State of North Carolina or serving civil processes, and who possesses the power of arrest by virtue of an oath administered under the authority of the State. requires the power of arrest to perform the essential duties of his or her position, must be armed to carry out the essential functions of his or her position, and is certified by the Criminal Justice Education and Training Standards Commission to be certified, and as such, must attend and pass a core law enforcement curriculum."

---LAW OFF. FUNDS RESTRICTED.

Sec. 45. (a) State departments, agencies, and institutions shall not use budgeted funds to pay law enforcement officer benefits to persons filling positions that do not require the status of law enforcement officer as a basic requirement of the position. Law enforcement officer benefits shall be paid only to employees who require the power of arrest to perform the essential duties of a position, who must be armed to perform the essential duties of the position, and who are certified by the Criminal Justice Education and Training Standards Commission to be certified.

(b) This section becomes effective July 1, 1993.

---LAW ENFORCEMENT RETIRE. GOAL.

Sec. 46. (a) Effective January 1, 1994, G.S. 143-166.41 reads as rewritten:

"§ 143-166.41. Special separation allowance.

(a) Notwithstanding any other provision of law, every sworn law-enforcement officer as defined by G.S. 135-1(11b) or G.S. 143-166.30(a)(4) employed by a State department, agency, or institution who qualifies under this section shall receive, beginning on the last day of the month in which he retires on a basic service retirement under the provisions of G.S. 135-5(a) or G.S. 143-166(y), an annual separation allowance equal to eighty-five hundredths percent (0.85%) of ~~the annual equivalent of the base rate of compensation most recently applicable to him~~ his base salary for each year of creditable service as a law enforcement officer, reduced by a determined maximum life annuity value of benefits payable at the time of retirement from contributions other than his own and earnings thereon whether withdrawn or not during the career of the officer from the Supplemental Retirement Income Plan pursuant to Chapters 135 and 143 of the General Statutes, as may be determined by the Department of the State Treasurer and the Plan's Board of Trustees. However, in the event that the benefit provided by this section, when added to the maximum benefits from the Teachers' and State Employees' Retirement System and the Supplemental Income Plan, exceeds seventy-five percent (75%) of the law enforcement officer's base salary, the benefits provided by this section shall be reduced to the extent possible so that the total does not exceed seventy-five percent (75%) of base salary. For purposes of this section, 'base salary' means the annual equivalent of the base rate of compensation most recently applicable to the law enforcement officer, not including pay for overtime or other types of extraordinary pay.

The allowance shall be paid in 12 equal installments on the last day of each month. To qualify for the allowance the officer shall:

(1) Have (i) completed 30 or more years of creditable service or, (ii) have attained 55 years of age and completed five or more years of creditable service; and

(2) Not have attained 62 years of age; and

(3) Have completed at least five years of continuous service as a law enforcement officer as herein defined immediately preceding a service retirement. Any break in the continuous service required by this subsection because of disability retirement or disability salary continuation benefits shall not adversely affect an officer's qualification to receive the allowance, provided the officer returns to service within 45 days after the disability benefits cease and is otherwise qualified to receive the allowance.

(b) As used in this section, 'creditable service' means the service for which credit is allowed under the retirement system of which the officer is a member, provided that at least fifty percent (50%) of the service is as a law enforcement officer as herein defined.

(c) Payment to a retired officer under the provisions of this section shall cease at the death of the individual or on the last day of the month in which he attains 62 years of age or upon the first day of reemployment by any State department, agency, or ~~institution~~institution, or by any unit of local government within the State.

(d) This section does not affect the benefits to which an individual may be entitled from State, federal, or private retirement systems. The benefits payable under this section shall not be subject to any increases in salary or retirement allowances that may be authorized by the General Assembly for employees of the State or retired employees of the State.

(e) The head of each State department, agency, or institution shall determine the eligibility of employees for the benefits provided herein.

(f) The Director of the Budget may authorize from time to time the transfer of funds within the budgets of each State department, agency, or institution necessary to carry out the purposes of this Article. These funds shall be taken from those appropriated to the department, agency, or institution for salaries and related fringe benefits.

(g) The head of each State department, agency, or institution shall make the payments set forth in subsection (a) to those persons certified under subsection (e) from funds available under subsection (f)."

(b) Effective January 1, 1994, G.S. 143-166.42 reads as rewritten:

"§ 143-166.42. Special separation allowances for local officers.

On and after January 1, 1987, the provisions of G.S. 143-166.41 shall apply to all eligible law-enforcement officers as defined by G.S. 128-21(11b) or G.S. 143-166.50(a)(3) except sheriffs who are employed by local government employers, except as may be provided by this section. As to the applicability of the provisions of G.S. 143-166.41 to locally employed officers, the governing body for each unit of local government shall be responsible for making determinations of eligibility for their local officers retired under the provisions of G.S. 128-27(a) or an equivalent locally sponsored retirement plan and for making payments to their eligible officers under the same terms and conditions, other than the source of payment, as apply to each State department, agency, or institution in payments to State officers according to the provisions of G.S. 143-166.41. For the purposes of determining the net amount of separation allowances payable to local officers under the provisions of G. S. 143-166.41, benefits payable by any locally sponsored retirement plan that supplement retirement benefits payable under Article 3 of Chapter 128 of the General Statutes shall be treated the same as a determined maximum life annuity payable from the Supplemental Retirement Income Plan."

---PREVENTIVE HEALTH BENEFITS.

Sec. 47. (a) G.S. 135-40.5 is amended by adding a new subsection to read:

"( e) The Plan will cover the expenses in order to detect and initiate early treatment for:

(1) Prenatal management of high-risk pregnancies;

(2) Chronic diseases; and

(3) Cancer

to prevent catastrophic and costly incidence of these conditions.

This will include the preparation and issuance of individual custom preventative health care plans. The care plans will be prepared for all beneficiaries for whom the plans are likely to produce savings in excess of costs. The care plans will define custom preventative protocols, therapeutic programs, and appropriate special orders.

The care program will provide a customized patient and physician reminder system including, as deemed cost-effective, letters, phone calls, and therapeutic consultations. The care program will issue customized patient education materials, incentives, and compliance support materials including disease-specific and patient-specific printed information, videos, reminder cards, pill reminders, tape recordings, newsletters, and the like, to enhance compliance. The care program shall independently monitor the cost-effectiveness of all such measures and provide an annual report to the Governor and the General Assembly detailing the cost of the care program and its cost-effectiveness."

(b) G.S. 135-39.5 is amended by adding a new subdivision to read:

"(22) Implementing a program to reduce catastrophic care by identifying employees and retirees who are at risk for reasonably preventable catastrophic illnesses due to reasons such as:

a. Noncompliance with their medically prescribed treatment program;

b. Lack of financial resources to purchase medicines as prescribed; or

c. Not seeking testing for such illnesses,

and implementing individually tailored programs to improve compliance. This program may be purchased or developed for internal use by the Claims Processor or contracted to an outside vendor subject to the same approvals as required for selection of a claims processor."

(c) Appropriations from the General Fund for Employee and Retiree Health Benefits are reduced by sixty-two million dollars ($62,000,000) for the 1993-94 fiscal year and sixty-two million dollars ($62,000,000) for the 1994-95 fiscal year due to controlling the costs of employee and retiree health benefits provided by this act. Appropriations from the Highway Fund for Employee and Retiree Health Benefits are reduced by five million dollars ($5,000,000) for the 1993-94 fiscal year and five million dollars ($5,000,000) for the 1994-95 fiscal year due to controlling the costs of employee and retiree health benefits provided by this section.

(d) It is the intent of the General Assembly to further reduce the General Fund base budget appropriations for Employee and Retiree Health Benefits, in subsequent years, according to the following schedule, due to controlling the costs of employee and retiree health benefits:

Fiscal Year Amount

1995-96 $30,000,000

1996-97 $60,000,000.

(e) It is the intent of the General Assembly to further reduce the Highway Fund base budget appropriations for Employee and Retiree Health Benefits, in subsequent years, according to the following schedule, due to controlling the costs of employee and retiree health benefits:

Fiscal Year Amount

1995-96 $2,000,000

1996-97 $4,000,000.

(f) The Executive Administrator and Board of Trustees of the Teachers' and State Employees' Comprehensive Major Medical Plan shall effect, beginning October 1, 1993, a fifteen percent (15%) reduction in premiums paid by employees for their dependents due to controlling the costs of dependent health benefits provided by this section.

(g) This section becomes effective July 1, 1993.

---HEALTH BENEFITS-PREMIUMS.

Sec. 48. (a) Effective October 1, 1993, G.S. 135-40.2 reads as rewritten:

"§ 135-40.2. Eligibility.

(a) The following persons are eligible for coverage under the Plan, on a ~~noncontributory~~ partially contributory basis, subject to the provisions of G.S. 135-40.3:

(1) All permanent full-time employees of an employing unit who meet the following conditions:

a. Paid from general or special State funds, or

b. Paid from non-State funds and in a group for which his or her employing unit has agreed to provide coverage.

Employees of State agencies, departments, institutions, boards, and commissions not otherwise covered by the Plan who are employed in permanent job positions on a recurring basis and who work 30 or more hours per week for nine or more months per calendar year are covered by the provisions of this subdivision.

(1a) Permanent hourly employees as defined in G.S. 126-5(c4) who work at least one-half of the workdays of each pay period.

(2) Retired teachers, State employees, members of the General Assembly, and retired State law enforcement officers who retired under the Law Enforcement Officers' Retirement System prior to January 1, 1985, when Medicare is not eligible to be the primary payer of health benefits, and when the aforementioned teachers, State employees, members of the General Assembly, and State law enforcement officers had 10 or more but less than 30 years of retirement service credit at retirement.

(2a) ~~Surviving~~ When Medicare is not the primary payer of health benefits, and when the referenced deceased teachers, State employees, members of the General Assembly, and deceased retired employees had 10 or more but less than 30 years of retirement service credit at retirement, the surviving spouses of:

a. Deceased retired employees, provided the death of the former Plan member occurred prior to October 1, 1986; and

b. Deceased teachers, State employees, and members of the General Assembly who are receiving a survivor's alternate benefit under any of the State-supported retirement programs, provided the death of the former plan member occurred prior to October 1, 1986.

(3) Repealed by Session Laws 1985 (Reg. Sess., 1986), c. 1020, s. 29(b), effective January 1, 1988.

(3a) Employees of the General Assembly, not otherwise covered by this section, as determined by the Legislative Services Commission, except for legislative interns and pages.

(4) Members of the General Assembly.

(b) The following person shall be eligible for coverage under the Plan, on a fully contributory basis, subject to the provisions of G.S. 135-40.3:

(1) Repealed by Session Laws 1983, c. 761, s. 255, effective upon the convening of the 1985 Regular Session.

(2) Former members of the General Assembly who enroll before October 1, 1986.

(2a) For enrollments after September 30, 1986, former members of the General Assembly if covered under the Plan at termination of membership in the General Assembly.

(3) Surviving spouses of deceased former members of the General Assembly who enroll before October 1, 1986.

(3a) Employees of the General Assembly, not otherwise covered by this section, as determined by the Legislative Services Commission, except for legislative interns and pages.

(3b) For enrollments after September 30, 1986, surviving spouses of deceased former members of the General Assembly, if covered under the Plan at the time of death of the former member of the General Assembly.

(4) All permanent part-time employees (designated as half-time or more) of an employing unit who meets the conditions outlined in subdivision (a)(1)a above, and who are not covered by the provisions of G.S. 135-40.2(a)(1).

(4a) Permanent hourly employees as defined in G.S. 126-5(c4) who work less than one-half of the workdays of each pay period.

(5) The spouses and eligible dependent children of enrolled employees, retirees, and members of the General Assembly.

(6) Blind persons licensed by the State to operate vending facilities under contract with the Department of Human Resources, Division of Services for the Blind and its successors, who are:

a. Operating such a vending facility;

b. Former operators of such a vending facility whose service as an operator would have made these operators eligible for an early or service retirement allowance under Article 1 of this Chapter had they been members of the Retirement System; and

c. Former operators of such a vending facility who attain five or more years of service as operators and who become eligible for and receive a disability benefit under the Social Security Act upon cessation of service as an operator.

(7) Repealed by Session Laws 1985 (Reg. Sess., 1986), c. 1020, s. 29(j), effective October 1, 1986.

(8) Surviving spouses of deceased retirees and surviving spouses of deceased teachers, State employees, and members of the General Assembly provided the death of the former Plan member occurred after September 30, 1986, and the surviving spouse was covered under the Plan at the time of death.

(9) Repealed by Session Laws 1987, c. 857, s. 11.1.

(10) Any eligible dependent child of the deceased retiree, teacher, State employee, or member of the General Assembly, provided the child was covered at the time of death of the retiree, teacher, State employee, or member of the General Assembly (or was in posse at the time and is covered at birth under this Part), or was covered under the Plan on September 30, 1986. Any eligible spouse or dependent child of a person eligible under subdivision (8) of this subsection if the spouse or dependent child was enrolled before October 1, 1986.

(11) Retired teachers, State employees, members of the General Assembly, and retired State law enforcement officers who retired under the Law Enforcement Officers' Retirement System prior to January 1, 1985, who had less than 10 years of retirement service credit at retirement.

(12) Surviving spouses of deceased teachers, State employees, members of the General Assembly, and deceased retired employees with less than 10 years of retirement service credit at retirement when the spouses survived:

a. Deceased retired employees, provided the death of the former Plan member occurred prior to October 1, 1986; and

(b1) The following persons shall be eligible for coverage under the Plan, on a noncontributory basis, subject to the provisions of G.S. 135-40.3, when Medicare is the primary payer of health benefits, and when the referenced retired or deceased teachers, State employees, members of the General Assembly, and State law enforcement officers had 30 or more years of retirement service credit at retirement or at the time of death:

(1) Retired teachers, State employees, members of the General Assembly, and retired State law enforcement officers who retired under the Law Enforcement Officers' Retirement System prior to January 1, 1985.

(2) Surviving spouses of:

a. Deceased retired employees, provided the death of the former Plan member occurred prior to October 1, 1986; and

(c) No person shall be eligible for coverage as an employee or retired employee and as a dependent of an employee or retired employee at the same time. In addition, no person shall be eligible for coverage as a dependent of more than one employee or retired employee at the same time.

(d) Former employees who are receiving disability retirement benefits or disability income benefits pursuant to Article 6 of Chapter 135 of the General Statutes, provided the former employee has at least five years of retirement membership service at the time of disability, shall be eligible for the benefit provisions of this Plan, as set forth in this Part, on the same basis as a retired employee. Such coverage shall terminate as of the end of the month in which such former employee is no longer eligible for disability retirement benefits or disability income benefits pursuant to Article 6 of this Chapter.

(e) Employees on official leave of absence without pay may elect to continue this group coverage at group cost provided that they pay the full employee and employer contribution through the employing unit during the leave period.

(f) For the support of the benefits made available to any member vested at the time of retirement, their spouses or surviving spouses, and the surviving spouses of employees who are receiving a survivor's alternate benefit under G.S. 135-5(m) of those associations listed in G.S. 135-27(a), licensing and examining boards under G.S. 135-1.1, the North Carolina Art Society, Inc., and the North Carolina Symphony Society, Inc., each association, organization or board shall pay to the Plan the full cost of providing these benefits under this section as determined by the Board of Trustees of the Teachers' and State Employees' Comprehensive Major Medical Plan. In addition, each association, organization or board shall pay to the Plan an amount equal to the cost of the benefits provided under this section to presently retired members of each association, organization or board since such benefits became available at no cost to the retired member.

(g) An eligible surviving spouse and any eligible dependent child of a deceased retiree, teacher, State employee, or member of the General Assembly shall be eligible for group benefits under this section without waiting periods for preexisting conditions provided coverage is elected within 90 days after the death of the former plan member.

(h) No person shall be eligible for coverage as an employee or retired employee or as a dependent of an employee or retired employee upon a finding by the Executive Administrator or Board of Trustees or by a court of competent jurisdiction that the employee or dependent knowingly and willfully made or caused to be made a false statement or false representation of a material fact in a claim for reimbursement of medical services under the Plan."

(b) Effective October 1, 1993, G.S. 135-39.6A reads as rewritten:

"§ 135-39.6A. Premiums set.

(a) The Executive Administrator and Board of Trustees shall, from time to time, establish premium rates for the Comprehensive Major Medical Plan except as they may be established by the General Assembly in the Current Operations Appropriations Act, and establish regulations for payment of the premiums. Premium rates shall be established for coverages where Medicare is the primary payer of health benefits separate and apart from the rates established for coverages where Medicare is not the primary payer of health benefits.

(b) Notwithstanding subsection (a) of this section, individuals covered by the provisions of G.S. 135-40.2(a) shall pay the following amounts for their own coverage:

(1) For individuals covered by the provisions of G.S. 135-40.2(a)(1), (1a), (3a), and (4), the contributory amount of their monthly premium shall be equal to one-half of one percent (0.5%) of their monthly gross salary amount, but not less than ten dollars ($10.00) nor more than one hundred dollars ($100.00).

(2) For individuals covered by the provisions of G.S. 135-40.2(a)(2) and (2a), the contributory amount of their monthly premium shall be equal to the Medicare Part B Medical monthly premium amount.

(c) Notwithstanding subsection (a) of this section, the spouses and eligible dependent children of enrolled employees and members of the General Assembly covered by the provisions of G.S. 135-40.2(b) shall be provided coverage by the enrolled employee and member of the General Assembly paying a monthly premium amount equal to five and one-half percent (5.5%) of their monthly gross salary amount for Employee and Child(ren) coverage, but not more than five hundred dollars ($500.00) and a monthly premium amount equal to nine and one-half percent (9.5%) of their monthly gross salary amount, but not more than five hundred dollars ($500.00) for Employee and Family Coverage. These monthly contributory premium amounts are in addition to the monthly contributory premium amounts contained in subdivision (b)(1) of this section."

(c) Effective October 1, 1993, the State's employer contributions for the Teachers' and State Employees' Comprehensive Major Medical Plan as contained in the Current Operations Appropriations Act shall be no more than fifty percent (50%) of the total applicable individual employee rate for retired teachers, State employees, and members of the General Assembly with 10 or more but less than 20 years of retirement service credit at retirement, and no more than seventy-five percent (75%) of the total applicable individual employee rate for retired teachers, State employees, and members of the General Assembly with 20 or more but less than 30 years of retirement service credit at retirement.

(d) Appropriations from the General Fund for Employee and Retiree Health Benefits are reduced by twenty million dollars ($20,000,000) for the 1993-94 fiscal year and twenty million dollars ($20,000,000) for the 1994-95 fiscal year due to controlling the costs of employee and retiree health benefits provided by this section. Appropriations from the Highway Fund for Employee and Retiree Health Benefits are reduced by two million dollars ($2,000,000) for the 1993-94 fiscal year and two million dollars ($2,000,000) for the 1994-95 fiscal year due to controlling the costs of employee and retiree health benefits provided by this section.

(e) It is the intent of the General Assembly to further reduce the General Fund base budget appropriations for Employee and Retiree Health Benefits, in subsequent years, according to the following schedule, due to controlling the costs of employee and retiree health benefits:

Fiscal Year Amount

1995-96 $10,000,000

1996-97 $20,000,000.

(f) It is the intent of the General Assembly to further reduce the Highway Fund base budget appropriations for Employee and Retiree Health Benefits, in subsequent years, according to the following schedule, due to controlling the costs of employee and retiree health benefits:

Fiscal Year Amount

1995-96 $1,000,000

1996-97 $2,000,000.

(g) This section becomes effective October 1, 1993.

---LONGEVITY EQUALIZED

Sec. 49. (a) G.S. 7A-10(c) reads as rewritten:

"(c) In lieu of merit and other increment raises paid to regular State employees, the Chief Justice and each of the Associate Justices shall receive as longevity pay on the same basis as is provided to employees of the State who are subject to the State Personnel Act. an annual amount equal to four and eight-tenths percent (4.8%) of the annual salary set forth in the Current Operations Appropriations Act payable monthly after five years of service, nine and six-tenths percent (9.6%) after 10 years of service, fourteen and four-tenths percent (14.4%) after 15 years of service, and nineteen and two-tenths percent (19.2%) after 20 years of service. 'Service' means service as a justice or judge of the General Court of Justice or as a member of the Utilities Commission. Service shall also mean service as a district attorney or as a clerk of superior court. If the Chief Justice or an Associate Justice was receiving longevity pay on June 30, 1993, that officer shall continue receiving longevity pay during that officer's continuance in that office at the rate applicable on June 30, 1993, as required by Article IV, Section 21 of the Constitution. No increase in salary granted to such officer subsequent to June 30, 1993, shall apply to a person receiving longevity pay during that officer's continuance in office until the total amount of salary increases subsequent to June 30, 1993, exceeds the amount of longevity pay, in which case the officer shall receive the excess."

(b) G.S. 7A-18(b) reads as rewritten:

"(b) In lieu of merit and other increment raises paid to regular State employees, a judge of the Court of Appeals shall receive as longevity pay on the same basis as is provided to employees of the State who are subject to the State Personnel Act. an annual amount equal to four and eight-tenths percent (4.8%) of the annual salary set forth in the Current Operations Appropriations Act payable monthly after five years of service, nine and six-tenths percent (9.6%) after 10 years of service, fourteen and four-tenths percent (14.4%) after 15 years of service, and nineteen and two-tenths percent (19.2%) after 20 years of service. 'Service' means service as a justice or judge of the General Court of Justice or as a member of the Utilities Commission. Service shall also mean service as a district attorney or as a clerk of superior court. If the judge was receiving longevity pay on June 30, 1993, that officer shall continue receiving longevity pay during that officer's continuance in that office at the rate applicable on June 30, 1993, as required by Article IV, Section 21 of the Constitution. No increase in salary granted to such officer subsequent to June 30, 1993, shall apply to a person receiving longevity pay during that officer's continuance in office until the total amount of salary increases subsequent to June 30, 1993, exceeds the amount of longevity pay, in which case the officer shall receive the excess."

"(b) In lieu of merit and other increment raises paid to regular State employees, a judge of the superior court, regular or special, shall receive as longevity pay on the same basis as is provided to employees of the State who are subject to the State Personnel Act. an annual amount equal to four and eight-tenths percent (4.8%) of the annual salary set forth in the Current Operations Appropriations Act payable monthly after five years of service, nine and six-tenths percent (9.6%) after 10 years of service, fourteen and four-tenths percent (14.4%) after 15 years of service, and nineteen and two-tenths percent (19.2%) after 20 years of service. 'Service' means service as a justice or judge of the General Court of Justice or as a member of the Utilities Commission or as director or assistant director of the Administrative Office of the Courts. Service shall also mean service as a district attorney or as a clerk of superior court. If the judge was receiving longevity pay on June 30, 1993, that officer shall continue receiving longevity pay during that officer's continuance in office at the rate applicable on June 30, 1993, as required by Article IV, Section 21 of the Constitution. No increase in salary granted to such officer subsequent to June 30, 1993, shall apply to a person receiving longevity pay during that officer's continuance in office until the total amount of salary increases subsequent to June 30, 1993, exceeds the amount of longevity pay, in which case the officer shall receive the excess."

(d) G.S. 7A-65 reads as rewritten:

"§ 7A-65. Compensation and allowances of district attorneys and assistant district attorneys.

(a) The annual salary of district attorneys and full-time assistant district attorneys shall be as provided in the Current Operations Appropriations Act. When traveling on official business, each district attorney and assistant district attorney is entitled to reimbursement for his subsistence and travel expenses to the same extent as State employees generally.

(b) Repealed by Session Laws 1985, c. 689, s. 2, effective July 11, 1985.

(c) In lieu of merit and other increment raises paid to regular State employees, a district attorney shall receive as longevity pay on the same basis as is provided to employees of the State who are subject to the State Personnel Act. an amount equal to four and eight-tenths percent (4.8%) of the annual salary set forth in the Current Operations Appropriations Act payable monthly after five years of service, and nine and six-tenths percent (9.6%) after 10 years of service, fourteen and four-tenths percent (14.4%) after 15 years of service, and nineteen and two-tenths percent (19.2%) after 20 years of service. Service shall mean service in the elective position of a district attorney and shall not include service as a deputy or acting district attorney. Service shall also mean service as a justice or judge of the General Court of Justice, as a clerk of superior court, or as an assistant district attorney.

(d) In lieu of merit and other increment raises paid to regular State employees, an assistant district attorney shall receive as longevity pay on the same basis as is provided to employees of the State who are subject to the State Personnel Act. an amount equal to four and eight-tenths percent (4.8%) of the annual salary set forth in the Current Operations Appropriations Act payable monthly after five years of service, nine and six-tenths percent (9.6%) after 10 years of service, and fourteen and four-tenths percent (14.4%) after 15 years of service. 'Service' means service as an assistant district attorney."

(e) G.S. 7A-101(c) reads as rewritten:

"(c) In lieu of merit and other increment raises paid to regular State employees, a clerk of superior court shall receive as longevity pay on the same basis as is provided to employees of the State who are subject to the State Personnel Act. an amount equal to four and eight-tenths percent (4.8%) of the annual salary set forth in the Budget Appropriation Act payable monthly after five years of service, nine and six-tenths percent (9.6%) after 10 years of service, fourteen and four-tenths percent (14.4%) after 15 years of service, and nineteen and two-tenths percent (19.2%) after 20 years of service. Service shall mean service in the elective position of clerk of superior court, as an assistant clerk of court and as a supervisor of clerks of superior court with the Administrative Office of the Courts and shall not include service as a deputy or acting clerk. Service shall also mean service as a justice or judge of the General Court of Justice or as a district attorney."

(f) G.S. 7A-144(b) reads as rewritten:

"(b) Notwithstanding merit, longevity and other increment raises paid to regular State employees, a judge of the district court shall receive as longevity pay on the same basis as is provided to employees of the State who are subject to the State Personnel Act. an annual amount equal to four and eight-tenths percent (4.8%) of the annual salary set forth in the Current Operations Appropriations Act payable monthly after five years of service, nine and six-tenths percent (9.6%) after 10 years of service, fourteen and four-tenths percent (14.4%) after 15 years of service, and nineteen and two-tenths percent (19.2%) after 20 years of service. 'Service' means service as a justice or judge of the General Court of Justice or as a member of the Utilities Commission or as director or assistant director of the Administrative Office of the Courts. Service shall also mean service as a district attorney or as a clerk of superior court. If the judge was receiving longevity pay on June 30, 1993, that officer shall continue receiving longevity pay during that officer's continuance in office at the rate applicable on June 30, 1993, as required by Article IV, Section 21 of the Constitution. No increase in salary granted to such officer subsequent to June 30, 1993, shall apply to a person receiving longevity pay during that officer's continuance in office until the total amount of salary increases subsequent to June 30, 1993, exceeds the amount of longevity pay, in which case the officer shall receive the excess."

(g) G.S. 7A-341 reads as rewritten:

"§ 7A-341. Appointment and compensation of Director.

(h) G.S. 7A-342 reads as rewritten:

"§ 7A-342. Appointment and compensation of assistant director and other employees.

The Director may appoint such other assistant and employees as are necessary to enable him to perform the duties of his office."

(i) G.S. 7A-465(b) reads as rewritten:

"(b) The public defender shall be an attorney licensed to practice law in North Carolina, and shall devote his full time to the duties of his office.

In lieu of merit and other increment raises paid to regular State employees, a public defender shall receive as longevity pay on the same basis as is provided to employees of the State who are subject to the State Personnel Act. an amount equal to four and eight-tenths percent (4.8%) of the annual salary set forth in the Current Operations Appropriations Act payable monthly after five years of service, nine and six-tenths percent (9.6%) after 10 years of service, fourteen and four-tenths percent (14.4%) after 15 years of service, and nineteen and two-tenths percent (19.2%) after 20 years of service. 'Service' means service as a public defender."

(j) G.S. 7A-467(d) reads as rewritten:

"(d) In lieu of merit and other increment raises paid to regular State employees, an assistant public defender shall receive as longevity pay on the same basis as is provided to employees of the State who are subject to the State Personnel Act. an amount equal to four and eight-tenths percent (4.8%) of the annual salary set forth in the Current Operations Appropriations Act payable monthly after five years of service, nine and six-tenths percent (9.6%) after 10 years of service, and fourteen and four-tenths percent (14.4%) after 15 years of service. 'Service' means service as an assistant public defender."

(k) G.S. 62-10(h) reads as rewritten:

"(h) The salary of each commissioner shall be the same as that fixed from time to time for judges of the superior court except that the commissioner designated as chairman shall receive one thousand dollars ($1,000) additional per annum. In lieu of merit and other increment raises paid to regular State employees, each commissioner, including the commissioner designated as chairman, shall receive as longevity pay on the same basis as is provided to employees of the State who are subject to the State Personnel Act. an amount equal to four and eight-tenths percent (4.8%) of the annual salary set forth in the Current Operations Appropriations Act payable monthly after five years of service, and nine and six-tenths percent (9.6%) after 10 years of service. 'Service' means service as a member of the Utilities Commission."

(l) Chapter 126 of the General Statutes is amended by adding a new section to read:

"§ 126-4.1. No longevity pay.

(a) The longevity pay system adopted by the State Personnel Commission may not provide any benefits greater than those in effect on November 1, 1992. No agency other than the State Personnel Commission may have in force any longevity schedule providing greater benefits than those provided to employees of the State who are subject to the State Personnel Act, except as provided for certain justices and judges under G.S. 7A-10, 7A-18, 7A-44, or 7A-144, This section applies to all State employees, whether or not otherwise exempted from this Chapter.

(b) As used in G.S. 7A-10(c), 7A-18(b), 7A-44(b) and 7A-144(b), in calculating the amount by which future salary increases are limited by the amount of longevity pay being received on June 30, 1993, only the excess of longevity pay received or that which would have been provided under the State Personnel Act shall be considered."

(m) This section becomes effective June 30, 1993.

---LONGEVITY EQUALIZED/FREEZE.

Sec. 50. (a) G.S. 7A-10(c) reads as rewritten:

(b) G.S. 7A-18(b) reads as rewritten:

(d) G.S. 7A-65 reads as rewritten:

"§ 7A-65. Compensation and allowances of district attorneys and assistant district attorneys.

(b) Repealed by Session Laws 1985, c. 689, s. 2, effective July 11, 1985.

(c) In lieu of merit and other increment raises paid to regular State employees, a district attorney shall receive as longevity pay on the same basis as is provided to employees of the State who are subject to the State Personnel Act. Any person who, on June 29, 1993, was entitled to longevity pay under this section shall continue receiving longevity pay at the rate in effect for that person on June 29, 1993, as long as that person continues the same office. No such person shall receive any increase in longevity rate after June 29, 1993. an amount equal to four and eight-tenths percent (4.8%) of the annual salary set forth in the Current Operations Appropriations Act payable monthly after five years of service, and nine and six-tenths percent (9.6%) after 10 years of service, fourteen and four-tenths percent (14.4%) after 15 years of service, and nineteen and two-tenths percent (19.2%) after 20 years of service. Service shall mean service in the elective position of a district attorney and shall not include service as a deputy or acting district attorney. Service shall also mean service as a justice or judge of the General Court of Justice, as a clerk of superior court, or as an assistant district attorney.

(d) In lieu of merit and other increment raises paid to regular State employees, an assistant district attorney shall receive as longevity pay on the same basis as is provided to employees of the State who are subject to the State Personnel Act. Any person who, on June 29, 1993, was entitled to longevity pay under this section shall continue receiving longevity pay at the rate in effect for that person on June 29, 1993, as long as that person continues the same office. No such person shall receive any increase in longevity rate after June 29, 1993. an amount equal to four and eight-tenths percent (4.8%) of the annual salary set forth in the Current Operations Appropriations Act payable monthly after five years of service, nine and six-tenths percent (9.6%) after 10 years of service, and fourteen and four-tenths percent (14.4%) after 15 years of service. 'Service' means service as an assistant district attorney."

(e) G.S. 7A-101(c) reads as rewritten:

"(c) In lieu of merit and other increment raises paid to regular State employees, a clerk of superior court shall receive as longevity pay on the same basis as is provided to employees of the State who are subject to the State Personnel Act. Any person who, on June 29, 1993, was entitled to longevity pay under this section shall continue receiving longevity pay at the rate in effect for that person on June 29, 1993, as long as that person continues the same office. No such person shall receive any increase in longevity rate after June 29, 1993. an amount equal to four and eight-tenths percent (4.8%) of the annual salary set forth in the Budget Appropriation Act payable monthly after five years of service, nine and six-tenths percent (9.6%) after 10 years of service, fourteen and four-tenths percent (14.4%) after 15 years of service, and nineteen and two-tenths percent (19.2%) after 20 years of service. Service shall mean service in the elective position of clerk of superior court, as an assistant clerk of court and as a supervisor of clerks of superior court with the Administrative Office of the Courts and shall not include service as a deputy or acting clerk. Service shall also mean service as a justice or judge of the General Court of Justice or as a district attorney."

(f) G.S. 7A-144(b) reads as rewritten:

(g) G.S. 7A-341 reads as rewritten:

"§ 7A-341. Appointment and compensation of Director.

The Director shall be appointed by the Chief Justice of the Supreme Court, to serve at his pleasure. He shall receive the annual salary provided in the Current Operations Appropriations Act, payable monthly, and reimbursement for travel and subsistence expenses at the same rate as State employees generally and longevity pay ~~at the rates and for the service designated in G.S. 7A-44(b)~~ ~~for a judge of the superior court~~ on the same basis as is provided to employees of the State who are subject to the State Personnel Act. Any person who, on June 29, 1993, was entitled to longevity pay under this section shall continue receiving longevity pay at the rate in effect for that person on June 29, 1993, as long as that person continues the same office. No such person shall receive any increase in longevity rate after June 29, 1993. Service as Director shall be equivalent to service as a superior court judge for the purposes of entitlement to retirement pay or to retirement for disability."

(h) G.S. 7A-342 reads as rewritten:

"§ 7A-342. Appointment and compensation of assistant director and other employees.

The assistant director shall also be appointed by the Chief Justice, to serve at his pleasure. The assistant director shall receive the annual salary provided in the Current Operations Appropriations Act, payable monthly, and reimbursement for travel and subsistence expenses at the same rate as State employees generally and longevity pay ~~at the rates and for the service designated in G.S. 7A-144(b)~~ ~~for a judge of the district court~~ on the same basis as is provided to employees of the State who are subject to the State Personnel Act. Any person who, on June 29, 1993, was entitled to longevity pay under this section shall continue receiving longevity pay at the rate in effect for that person on June 29, 1993, as long as that person continues the same office. No such person shall receive any increase in longevity rate after June 29, 1993.

The Director may appoint such other assistant and employees as are necessary to enable him to perform the duties of his office."

(i) G.S. 7A-465(b) reads as rewritten:

"(b) The public defender shall be an attorney licensed to practice law in North Carolina, and shall devote his full time to the duties of his office.

In lieu of merit and other increment raises paid to regular State employees, a public defender shall receive as longevity pay on the same basis as is provided to employees of the State who are subject to the State Personnel Act. Any person who, on June 29, 1993, was entitled to longevity pay under this section shall continue receiving longevity pay at the rate in effect for that person on June 29, 1993, as long as that person continues the same office. No such person shall receive any increase in longevity rate after June 29, 1993. an amount equal to four and eight-tenths percent (4.8%) of the annual salary set forth in the Current Operations Appropriations Act payable monthly after five years of service, nine and six-tenths percent (9.6%) after 10 years of service, fourteen and four-tenths percent (14.4%) after 15 years of service, and nineteen and two-tenths percent (19.2%) after 20 years of service. 'Service' means service as a public defender."

(j) G.S. 7A-467(d) reads as rewritten:

"(d) In lieu of merit and other increment raises paid to regular State employees, an assistant public defender shall receive as longevity pay on the same basis as is provided to employees of the State who are subject to the State Personnel Act. Any person who, on June 29, 1993, was entitled to longevity pay under this section shall continue receiving longevity pay at the rate in effect for that person on June 29, 1993, as long as that person continues the same office. No such person shall receive any increase in longevity rate after June 29, 1993. an amount equal to four and eight-tenths percent (4.8%) of the annual salary set forth in the Current Operations Appropriations Act payable monthly after five years of service, nine and six-tenths percent (9.6%) after 10 years of service, and fourteen and four-tenths percent (14.4%) after 15 years of service. 'Service' means service as an assistant public defender."

(k) G.S. 62-10(h) reads as rewritten:

"(h) The salary of each commissioner shall be the same as that fixed from time to time for judges of the superior court except that the commissioner designated as chairman shall receive one thousand dollars ($1,000) additional per annum. In lieu of merit and other increment raises paid to regular State employees, each commissioner, including the commissioner designated as chairman, shall receive as longevity pay on the same basis as is provided to employees of the State who are subject to the State Personnel Act. Any person who, on June 29, 1993, was entitled to longevity pay under this section shall continue receiving longevity pay at the rate in effect for that person on June 29, 1993, as long as that person continues the same office. No such person shall receive any increase in longevity rate after June 29, 1993. an amount equal to four and eight-tenths percent (4.8%) of the annual salary set forth in the Current Operations Appropriations Act payable monthly after five years of service, and nine and six-tenths percent (9.6%) after 10 years of service. 'Service' means service as a member of the Utilities Commission."

(l) Chapter 126 of the General Statutes is amended by adding a new section to read:

"§ 126-4.1. No longevity pay.

(b) Any person who, on June 30, 1993, was entitled to longevity pay under any policy, which was in effect on November 1, 1992, of the State Personnel Commission or any other State agency, shall continue receiving longevity pay at the rate in effect for that person on June 29, 1993, as long as that person continues employment with the same branch of government. No such person shall receive any increase in longevity rate after June 29, 1993.

(d) As used in G.S. 7A-10(c), 7A-18(b), 7A-44(b), and 7A-144(b), in calculating the amount by which future salary increases are limited by the amount of longevity pay being received on June 30, 1993, only the excess of longevity pay received over that which would have been provided under the State Personnel Act shall be considered."

(m) This section becomes effective June 30, 1993.

---LONGEVITY ELIMINATED.

Sec. 51. (a) G.S. 7A-10(c) reads as rewritten:

"(c) In lieu of merit and other increment raises paid to regular State employees, the Chief Justice and each of the Associate Justices shall receive as longevity pay an annual amount equal to four and eight-tenths percent (4.8%) of the annual salary set forth in the Current Operations Appropriations Act payable monthly after five years of service, nine and six-tenths percent (9.6%) after 10 years of service, fourteen and four-tenths percent (14.4%) after 15 years of service, and nineteen and two-tenths percent (19.2%) after 20 years of service. 'Service' means service as a justice or judge of the General Court of Justice or as a member of the Utilities Commission. Service shall also mean service as a district attorney or as a clerk of superior court. If the Chief Justice or an Associate Justice was receiving longevity pay on June 30, 1993, that officer shall continue receiving longevity pay during that officer's continuance in that office at the rate applicable on June 30, 1993, as required by Article IV, Section 21 of the Constitution. No increase in salary granted to such officer subsequent to June 30, 1993, shall apply to a person receiving longevity pay during that officer's continuance in office until the total amount of salary increases subsequent to June 30, 1993, exceeds the amount of longevity pay, in which case the officer shall receive the excess. Longevity pay shall be considered part of total annual compensation for the purpose of G.S. 7A-39.2."

(b) G.S. 7A-18(b) reads as rewritten:

"(b) In lieu of merit and other increment raises paid to regular State employees, a judge of the Court of Appeals shall receive as longevity pay an annual amount equal to four and eight-tenths percent (4.8%) of the annual salary set forth in the Current Operations Appropriations Act payable monthly after five years of service, nine and six-tenths percent (9.6%) after 10 years of service, fourteen and four-tenths percent (14.4%) after 15 years of service, and nineteen and two-tenths percent (19.2%) after 20 years of service. 'Service' means service as a justice or judge of the General Court of Justice or as a member of the Utilities Commission. Service shall also mean service as a district attorney or as a clerk of superior court. If the judge was receiving longevity pay on June 30, 1993, that officer shall continue receiving longevity pay during that officer's continuance in that office at the rate applicable on June 30, 1993, as required by Article IV, Section 21 of the Constitution. No increase in salary granted to such officer subsequent to June 30, 1993, shall apply to a person receiving longevity pay during that officer's continuance in office until the total amount of salary increases subsequent to June 30, 1993, exceeds the amount of longevity pay, in which case the officer shall receive the excess. Longevity pay shall be considered part of total annual compensation for the purpose of G.S. 7A-39.2."

"§ 7A-39.2. Age and service requirements for retirement of justices of the Supreme Court and judges of the Court of Appeals.

(a) Any justice of the Supreme Court or judge of the Court of Appeals who has attained the age of 65 years, and who has served for a total of 15 years, whether consecutive or not, on the Supreme Court, the Court of Appeals, or the superior court, or as Administrative Officer of the Courts, or in any combination of these offices, may retire from his present office and receive for life compensation equal to two thirds of the total annual compensation, ~~including longevity,~~ but excluding any payments in the nature of reimbursement for expenses, from time to time received by the occupant or occupants of the office from which he retired.

(b) Any justice of the Supreme Court or judge of the Court of Appeals who has attained the age of 65 years, and who has served as justice or judge, or both, in the Appellate Division for 12 consecutive years may retire and receive for life compensation equal to two thirds of the total annual compensation, ~~including longevity,~~ but excluding any payments in the nature of reimbursement for expenses, from time to time received by the occupant or occupants of the office from which he retired.

(c) Any justice or judge of the Appellate Division, who has served for a total of 24 years, whether continuously or not, as justice of the Supreme Court, judge of the Court of Appeals, judge of the superior court, or Administrative Officer of the Courts, or in any combination of these offices, may retire, regardless of age, and receive for life compensation equal to two thirds of the total annual compensation, ~~including longevity,~~ but excluding any payments in the nature of reimbursement for expenses, from time to time received by the occupant or occupants of the office from which he retired. In determining eligibility for retirement under this subsection, time served as a district solicitor of the superior court prior to January 1, 1971, may be included, provided the person has served at least eight years as a justice, judge, or Administrative Officer of the Courts, or in any combination of these offices.

(d) For purposes of this section, the 'occupant or occupants of the office from which' the retired judge retired will be deemed to be a judge or justice of the Appellate Division holding the same office and with the same service as the retired judge had immediately prior to retirement."

(d) G.S. 7A-44(b) reads as rewritten:

"(b) In lieu of merit and other increment raises paid to regular State employees, a judge of the superior court, regular or special, shall receive as longevity pay an annual amount equal to four and eight-tenths percent (4.8%) of the annual salary set forth in the Current Operations Appropriations Act payable monthly after five years of service, nine and six-tenths percent (9.6%) after 10 years of service, fourteen and four-tenths percent (14.4%) after 15 years of service, and nineteen and two-tenths percent (19.2%) after 20 years of service. 'Service' means service as a justice or judge of the General Court of Justice or as a member of the Utilities Commission or as director or assistant director of the Administrative Office of the Courts. Service shall also mean service as a district attorney or as a clerk of superior court. If the judge was receiving longevity pay on June 30, 1993, that officer shall continue receiving longevity pay during that officer's continuance in office at the rate applicable on June 30, 1993, as required by Article IV, Section 21 of the Constitution. No increase in salary granted to such officer subsequent to June 30, 1993, shall apply to a person receiving longevity pay during that officer's continuance in office until the total amount of salary increases subsequent to June 30, 1993, exceeds the amount of longevity pay, in which case the officer shall receive the excess. Longevity pay shall be considered part of total annual compensation for the purpose of G.S. 7A-51."

(e) G.S. 7A-51 reads as rewritten:

"§ 7A-51. Age and service requirements for retirement of judges of the superior court and of the Administrative Officer of the Courts.

(a) Any judge of the superior court, or Administrative Officer of the Courts, who has attained the age of sixty-five years, and who has served for a total of fifteen years, whether consecutive or not, as a judge of the superior court, or as Administrative Officer of the Courts, or as judge of the superior court and as Administrative Officer of the Courts combined, may retire and receive for life compensation equal to two thirds of the total annual compensation, ~~including longevity~~ and additional payment for service as senior resident superior court judge, but excluding any payments in the nature of reimbursement for expenses or subsistence allowances, from time to time received by the occupant of the office from which he retired.

(b) Any judge of the superior court, or Administrative Officer of the Courts, who has served for twelve years, whether consecutive or not, as a judge of the superior court, or as Administrative Officer of the Courts, or as judge of the superior court and as Administrative Officer of the Courts combined may, at age sixty-eight, retire and receive for life compensation equal to two thirds of the total annual compensation, ~~including longevity~~ and additional payment for service as senior resident superior court judge, but excluding any payments in the nature of reimbursement for expenses or subsistence allowances, from time to time received by the occupant of the office from which he retired.

(c) Any person who has served for a total of twenty-four years, whether continuously or not, as a judge of the superior court, or as Administrative Officer of the Courts, or as judge of the superior court and as Administrative Officer of the Courts combined, may retire, regardless of age, and receive for life compensation equal to two thirds of the total annual compensation, ~~including longevity~~ and additional payment for service as senior resident superior court judge, but excluding any payments in the nature of reimbursement for expenses or subsistence allowances, from time to time received by the occupant of the office from which he retired. In determining whether a person meets the requirements of this subsection, time served as district attorney of the superior court prior to January 1, 1971, may be included, so long as the person has served at least eight years as a judge of the superior court, or as Administrative Officer of the Courts, or as judge of the superior court and Administrative Officer of the Courts combined.

(d) Repealed by Session Laws 1971, c. 508, s. 3.

(e) For purposes of this section, the 'occupant or occupants of the office from which' the retired judge retired will be deemed to be a superior court judge holding the same office and with the same service as the retired judge had immediately prior to retirement."

(f) G.S. 7A-65 reads as rewritten:

"§ 7A-65. Compensation and allowances of district attorneys and assistant district attorneys.

(b) Repealed by Session Laws 1985, c. 689, s. 2, effective July 11, 1985.

~~(c)~~ In lieu of merit and other increment raises paid to regular State employees, a district attorney shall receive as longevity pay an amount equal to four and eight-tenths percent (4.8%) of the annual salary set forth in the Current Operations Appropriations Act payable monthly after five years of service, and nine and six-tenths percent (9.6%) after 10 years of service, fourteen and four-tenths percent (14.4%) after 15 years of service, and nineteen and two-tenths percent (19.2%) after 20 years of service. Service shall mean service in the elective position of a district attorney and shall not include service as a deputy or acting district attorney. Service shall also mean service as a justice or judge of the General Court of Justice, as a clerk of superior court, or as an assistant district attorney.

~~(d)~~ In lieu of merit and other increment raises paid to regular State employees, an assistant district attorney shall receive as longevity pay an amount equal to four and eight-tenths percent (4.8%) of the annual salary set forth in the Current Operations Appropriations Act payable monthly after five years of service, nine and six-tenths percent (9.6%) after 10 years of service, and fourteen and four-tenths percent (14.4%) after 15 years of service. 'Service' means service as an assistant district attorney."

(g) G.S. 7A-101(c) is repealed.

(h) G.S. 7A-144(b) reads as rewritten:

"(b) Notwithstanding merit, longevity and other increment raises paid to regular State employees, a judge of the district court shall receive as longevity pay an annual amount equal to four and eight-tenths percent (4.8%) of the annual salary set forth in the Current Operations Appropriations Act payable monthly after five years of service, nine and six-tenths percent (9.6%) after 10 years of service, fourteen and four-tenths percent (14.4%) after 15 years of service, and nineteen and two-tenths percent (19.2%) after 20 years of service. 'Service' means service as a justice or judge of the General Court of Justice or as a member of the Utilities Commission or as director or assistant director of the Administrative Office of the Courts. Service shall also mean service as a district attorney or as a clerk of superior court. If the judge was receiving longevity pay on June 30, 1993, that officer shall continue receiving longevity pay during that officer's continuance in office at the rate applicable on June 30, 1993, as required by Article IV, Section 21 of the Constitution. No increase in salary granted to such officer subsequent to June 30, 1993, shall apply to a person receiving longevity pay during that officer's continuance in office until the total amount of salary increases subsequent to June 30, 1993, exceeds the amount of longevity pay, in which case the officer shall receive the excess."

(i) G.S. 7A-171.1(a)(5) is repealed.

(j) G.S. 7A-341 reads as rewritten:

"§ 7A-341. Appointment and compensation of Director.

(k) G.S. 7A-342 reads as rewritten:

"§ 7A-342. Appointment and compensation of assistant director and other employees.

The Director may appoint such other assistant and employees as are necessary to enable him to perform the duties of his office."

(l) G.S. 7A-465(b) reads as rewritten:

"(b) The public defender shall be an attorney licensed to practice law in North Carolina, and shall devote his full time to the duties of his office.

In lieu of merit and other increment raises paid to regular State employees, a public defender shall receive as longevity pay an amount equal to four and eight-tenths percent (4.8%) of the annual salary set forth in the Current Operations Appropriations Act payable monthly after five years of service, nine and six-tenths percent (9.6%) after 10 years of service, fourteen and four-tenths percent (14.4%) after 15 years of service, and nineteen and two-tenths percent (19.2%) after 20 years of service. 'Service' means service as a public defender."

(m) G.S. 7A-467(d) is repealed.

(n) G.S. 7A-751 reads as rewritten:

"§ 7A-751. Agency head; powers and duties.

The head of the Office of Administrative Hearings is the Chief Administrative Law Judge. He shall serve as Director and have the powers and duties conferred on him by this Chapter and the Constitution and laws of this State. His salary shall be fixed by the General Assembly in the Current Operations Appropriations Act.

In lieu of merit and other increment raises, the Chief Administrative Law Judge shall receive longevity pay on the same basis as is provided to employees of the State who are subject to the State Personnel Act."

(o) G.S. 20-187.3(a) reads as rewritten:

"(a) The Secretary of Crime Control and Public Safety shall not make or permit to be made any order, rule, or regulation requiring the issuance of any minimum number of traffic citations, or ticket quotas, by any member or members of the State Highway Patrol. Pay and promotions of members of the Highway Patrol shall be based on their overall job performance and not on the basis of the volume of citations issued or arrests made. The provisions of G.S. 126-7 shall not apply to members of the State Highway Patrol. Members of the Highway Patrol shall, however, be subject to salary classes~~, ranges and longevity pay~~ and ranges for service as are applicable to other State employees generally. Beginning July 1, 1985, and annually thereafter, each member of the Highway Patrol shall be granted a salary increase in an amount corresponding to the increments between steps within the salary range established for the class to which the member's position is assigned by the State Personnel Commission, not to exceed the maximum of each applicable salary range."

(p) G.S. 58-2-10 reads as rewritten:

"§ 58-2-10. Salary of Commissioner.

The salary of the Commissioner shall be set by the General Assembly in the Current Operations Appropriations Act. In addition to the salary set by the General Assembly in the Current Operations Appropriations Act, longevity pay shall be paid on the same basis as is provided to employees of the State who are subject to the State Personnel Act. If the Commissioner was receiving longevity pay on June 30, 1993, that officer shall continue receiving longevity pay until December 31, 1996, during continuance in office at the rate applicable on June 30, 1993, as required by Article III, Section 9 of the Constitution. No increase in salary granted to such officer subsequent to June 30, 1993, shall apply to a person receiving longevity pay during that officer's continuance in office until the total amount of salary increases subsequent to June 30, 1993, exceeds the amount of longevity pay, in which case the officer shall receive the excess."

(q) G.S. 62-10(h) reads as rewritten:

(r) G.S. 95-2 reads as rewritten:

"§ 95-2. Election of Commissioner; term; salary; vacancy.

The Commissioner of Labor shall be elected by the people in the same manner as is provided for the election of the Secretary of State. The term of office of the Commissioner of Labor shall be four years, and the salary of the Commissioner of Labor shall be set by the General Assembly in the Current Operations Appropriations Act. Any vacancy in the office shall be filled by the Governor, until the next general election. The office of the Department of Labor shall be kept in the City of Raleigh and shall be provided for as are other public offices of the State. In addition to the salary set by the General Assembly in the Current Operations Appropriations Act, longevity pay shall be paid on the same basis as is provided to employees of the State who are subject to the State Personnel Act. If the Commissioner was receiving longevity pay on June 30, 1993, that officer shall continue receiving longevity pay until December 31, 1996, during continuance in office at the rate applicable on June 30, 1993, as required by Article III, Section 9 of the Constitution. No increase in salary granted to such officer subsequent to June 30, 1993, shall apply to a person receiving longevity pay during that officer's continuance in office until the total amount of salary increases subsequent to June 30, 1993, exceeds the amount of longevity pay, in which case the officer shall receive the excess."

(s) G.S. 106-11 reads as rewritten:

"§ 106-11. Salary of Commissioner of Agriculture.

The salary of the Commissioner of Agriculture shall be set by the General Assembly in the Current Operations Appropriations Act. In addition to the salary set by the General Assembly in the Current Operations Appropriations Act, longevity pay shall be paid on the same basis as is provided to employees of the State who are subject to the State Personnel Act. If the Commissioner was receiving longevity pay on June 30, 1993, that officer shall continue receiving longevity pay until December 31, 1996, during continuance in office at the rate applicable on June 30, 1993, as required by Article III, Section 9 of the Constitution. No increase in salary granted to such officer subsequent to June 30, 1993, shall apply to a person receiving longevity pay during that officer's continuance in office until the total amount of salary increases subsequent to June 30, 1993, exceeds the amount of longevity pay, in which case the officer shall receive the excess."

(t) G.S. 114-7 reads as rewritten:

"§ 114-7. Salary of the Attorney General.

The salary of the Attorney General shall be set by the General Assembly in the Current Operations Appropriations Act. In addition to the salary set by the General Assembly in the Current Operations Appropriations Act, longevity pay shall be paid on the same basis as is provided to employees of the State who are subject to the State Personnel Act. If the Attorney General was receiving longevity pay on June 30, 1993, that officer shall continue receiving longevity pay until December 31, 1996, during continuance in office at the rate applicable on June 30, 1993, as required by Article III, Section 9 of the Constitution. No increase in salary granted to such officer subsequent to June 30, 1993, shall apply to a person receiving longevity pay during that officer's continuance in office until the total amount of salary increases subsequent to June 30, 1993, exceeds the amount of longevity pay, in which case the officer shall receive the excess."

(u) G.S. 115C-20 reads as rewritten:

"§ 115C-20. Office and salary.

The Superintendent of Public Instruction shall keep his office in the Education Building in Raleigh, and his salary shall be set by the General Assembly in the Current Operations Appropriations Act. In addition to the salary set by the General Assembly in the Current Operations Appropriations Act, longevity pay shall be paid on the same basis as is provided to employees of the State who are subject to the State Personnel Act. If the Superintendent was receiving longevity pay on June 30, 1993, that officer shall continue receiving longevity pay until December 31, 1996, during continuance in office at the rate applicable on June 30, 1993, as required by Article III, Section 9 of the Constitution. No increase in salary granted to such officer subsequent to June 30, 1993, shall apply to a person receiving longevity pay during that officer's continuance in office until the total amount of salary increases subsequent to June 30, 1993, exceeds the amount of longevity pay, in which case the officer shall receive the excess."

(v) G.S. 115C-302(d) is repealed.

(w) G.S. 115C-316(c) is repealed.

(x) G.S. 126-7(d) is repealed.

(y) G.S. 138-4 reads as rewritten:

"§ 138-4. Governor to set salaries of administrative officers; exceptions~~; longevity pay~~.

The salaries of all State administrative officers not subject to the State Personnel Act shall be set by the Governor, unless a law provides otherwise.

Whenever by law it is provided that a salary shall be fixed or set by the General Assembly in the Current Operations Appropriations Act, and that office or position is filled by appointment of the Governor, or the appointment is subject to the approval of the Governor, or is made by a commission a majority of whose members are appointed by the Governor, then the Governor may, increase or decrease the salary of a new appointee by a maximum of ten percent (10%) over or under the salary of that position as provided in the Current Operations Appropriations Act, such increased or decreased salary to remain in effect until changed by the General Assembly or until the end of the fiscal year, whichever occurs first. The Governor under this paragraph may not increase the salary of any nonelected official above the level set in the Current Operations Appropriations Act for any member of the Council of State. This section does not apply to any office filled by election by the people, and does not apply to any office in the legislative or judicial branches.

Prior to taking any action under this section, the Governor may consult with the Advisory Budget Commission.

Officials whose salaries are covered by the provisions of this section shall be eligible for longevity pay on the same basis as is provided to employees of the State who are subject to the State Personnel Act."

(z) G.S. 143-23(a1) reads as rewritten:

"(a1) No transfers may be made between objects or line items in the budget of any department, institution, or other spending agency; however, with the approval of the Director of the Budget, a department, institution, or other spending agency may spend more than was appropriated for an object or line item if the overexpenditure is:

(1) In a purpose or program for which funds were appropriated for that fiscal period and the total amount spent for the purpose or program is no more than was appropriated for the purpose or program for the fiscal period;

(2) Required to continue a purpose or program because of unforeseen events, so long as the scope of the purpose or program is not increased;

(3) Required by a court, Industrial Commission, or administrative hearing officer's order or award or to match unanticipated federal funds;

(4) Required to respond to an unanticipated disaster such as a fire, hurricane, or tornado; or

(5) Required to call out the National Guard.

The Director of the Budget shall report on a quarterly basis to the Joint Legislative Commission on Governmental Operations and to the Fiscal Research Division of the Legislative Services Office the reason if the amount expended for a purpose or program is more than the amount appropriated for it from all sources. If the overexpenditure was authorized under subdivision (2) of this subsection, the Director of the Budget shall identify in the report the unforeseen event that required the overexpenditure.

Funds appropriated for salaries and wages are also subject to the limitation that they may only be used for (i) salaries and wages or for premium pay, overtime pay, longevity to the extent authorized by law for certain elected officials holding office on June 30, 1993, unemployment compensation, workers' compensation, temporary wages, contracted personal services, moving expenses, payment of accumulated annual leave, certain awards to employees, tort claims, and employer's social security, retirement, and hospitalization payments; or (ii) uses for which over expenditures are permitted by subdivisions (3), (4), and (5) of this subsection but the Director of the Budget shall include such use and the reason for it in his quarterly report to the Joint Legislative Commission on Governmental Operations and to the Fiscal Research Division of the Legislative Services Office.

(aa) G.S. 143-34.1(b) reads as rewritten:

"(b) Required employer salary-related contributions for retirement benefits, death benefits, disability salary continuation and Social Security for employees whose salaries are paid from general fund or highway fund revenues, or from department, office, institutional or agency receipts, or from nonstate funds, shall be paid from the same source as the source of the employees' salaries. In those instances in which an employee's salary is paid in part from the general fund, or the highway fund, and in part from the department, office, institutional or agency receipts, or from nonstate funds, the required salary-related contributions shall be paid from the general fund, or the highway fund, only to the extent of the proportionate part paid from the general fund, or highway fund, in support of the salary of such employee, and the remainder of the employer's contribution requirements shall be paid from the same source which supplies the remainder of such employee's salary. The requirements of this section as to the source of payment are also applicable to payments on behalf of the employee for hospital-medical insurance, longevity payments to the extent authorized by law for certain elected officials holding office on June 30, 1993, salary increments, and legislative salary increases. The State Controller shall approve the method of payment by State departments, offices, institutions and agencies for employer salary-related requirements of this section, and determine the applicability of the section to an employer's salary-related contribution or payment in behalf of an employee."

(bb) G.S. 147-35 reads as rewritten:

"§ 147-35. Salary of Secretary of State.

The salary of the Secretary of State shall be set by the General Assembly in the Current Operations Appropriations Act. In addition to the salary set by the General Assembly in the Current Operations Appropriations Act, longevity pay shall be paid on the same basis as is provided to employees of the State who are subject to the State Personnel Act. If the Secretary of State was receiving longevity pay on June 30, 1993, that officer shall continue receiving longevity pay until December 31, 1996, during continuance in office at the rate applicable on June 30, 1993, as required by Article III, Section 9 of the Constitution. No increase in salary granted to such officer subsequent to June 30, 1993, shall apply to a person receiving longevity pay during that officer's continuance in office until the total amount of salary increases subsequent to June 30, 1993, exceeds the amount of longevity pay, in which case the officer shall receive the excess."

(cc) G.S. 147-64.1(b) reads as rewritten:

"(b) In addition to the salary set by the General Assembly in the Current Operations Appropriations Act, longevity pay shall be paid on the same basis as is provided to employees of the State who are subject to the State Personnel Act. If the State Auditor was receiving longevity pay on June 30, 1993, that officer shall continue receiving longevity pay until December 31, 1996, during continuance in office at the rate applicable on June 30, 1993, as required by Article III, Section 9 of the Constitution. No increase in salary granted to such officer subsequent to June 30, 1993, shall apply to a person receiving longevity pay during that officer's continuance in office until the total amount of salary increases subsequent to June 30, 1993, exceeds the amount of longevity pay, in which case the officer shall receive the excess."

(dd) G.S. 147-65 reads as rewritten:

"§ 147-65. Salary of State Treasurer.

The salary of the State Treasurer shall be as established in the Current Operations Appropriations Act. In addition to the salary set by the General Assembly in the Current Operations Appropriations Act, longevity pay shall be paid on the same basis as is provided to employees of the State who are subject to the State Personnel Act. If the State Treasurer was receiving longevity pay on June 30, 1993, that officer shall continue receiving longevity pay until December 31, 1996, during continuance in office at the rate applicable on June 30, 1993, as required by Article III, Section 9 of the Constitution. No increase in salary granted to such officer subsequent to June 30, 1993, shall apply to a person receiving longevity pay during that officer's continuance in office until the total amount of salary increases subsequent to June 30, 1993, exceeds the amount of longevity pay, in which case the officer shall receive the excess."

(ee) Section 72(a) of Chapter 900 of the 1991 Session Laws reads as rewritten:

"(a) The Director of the Budget may transfer from the Reserve for Salary Increases for the 1992-93 fiscal year funds necessary to implement the teacher salary schedule set out in subsection (b) of this section, including funds for the employer's retirement and social security contributions and funds for annual longevity payments at one percent (1%) of base salary for 10 to 14 years of State service, one and one-half percent (1.5%) of base salary for 15 to 19 years of State service, two percent (2%) of base salary for 20 to 24 years of State service, and two and one-half percent (2.5%) of base salary for 25 years of State service, commencing July 1, 1992, for all teachers whose salaries are supported from the State's General Fund. These funds shall be allocated to individuals according to rules adopted by the State Board of Education and the Superintendent of Public Instruction. ~~The longevity payment shall be paid in a lump sum once a year.~~"

(ff) Chapter 126 of the General Statutes is amended by adding a new section to read:

"§ 126-4.1. No longevity pay.

No longevity pay system may apply to any State employee or State-paid teacher after June 30, 1993, notwithstanding whether such employee is otherwise subject to the provisions of this Chapter."

(gg) Each agency, institution, or department may use any funds appropriated for longevity pay, the authority for which was repealed by Sections 14, 22, or 23 of this act, to increase the salary of employees of that agency, institution, or department.

(hh) This section becomes effective June 30, 1993.

---LONGEVITY ELIMINATED/FREEZE

Sec. 52. (a) G.S. 7A-10(c) reads as rewritten:

"(c) In lieu of merit and other increment raises paid to regular State employees, the Chief Justice and each of the Associate Justices shall receive as longevity pay an annual amount equal to four and eight-tenths percent (4.8%) of the annual salary set forth in the Current Operations Appropriations Act payable monthly after five years of service, nine and six-tenths percent (9.6%) after 10 years of service, fourteen and four-tenths percent (14.4%) after 15 years of service, and nineteen and two-tenths percent (19.2%) after 20 years of service. 'Service' means service as a justice or judge of the General Court of Justice or as a member of the Utilities Commission. Service shall also mean service as a district attorney or as a clerk of superior court. If the Chief Justice or an Associate Justice was receiving longevity pay on June 30, 1993, that officer shall continue receiving longevity pay during their continuance in that office at the rate applicable on June 30, 1993, as required by Article IV, Section 21 of the Constitution. Longevity pay shall be considered part of total annual compensation for the purpose of G.S. 7A-39.2."

(b) G.S. 7A-18(b) reads as rewritten:

"(b) In lieu of merit and other increment raises paid to regular State employees, a judge of the Court of Appeals shall receive as longevity pay an annual amount equal to four and eight-tenths percent (4.8%) of the annual salary set forth in the Current Operations Appropriations Act payable monthly after five years of service, nine and six-tenths percent (9.6%) after 10 years of service, fourteen and four-tenths percent (14.4%) after 15 years of service, and nineteen and two-tenths percent (19.2%) after 20 years of service. 'Service' means service as a justice or judge of the General Court of Justice or as a member of the Utilities Commission. Service shall also mean service as a district attorney or as a clerk of superior court. If the judge was receiving longevity pay on June 30, 1993, that officer shall continue receiving longevity pay during their continuance in that office at the rate applicable on June 30, 1993, as required by Article IV, Section 21 of the Constitution. Longevity pay shall be considered part of total annual compensation for the purpose of G.S. 7A-39.2."

"§ 7A-39.2. Age and service requirements for retirement of justices of the Supreme Court and judges of the Court of Appeals.

(d) G.S. 7A-44(b) reads as rewritten:

"(b) In lieu of merit and other increment raises paid to regular State employees, a judge of the superior court, regular or special, shall receive as longevity pay an annual amount equal to four and eight-tenths percent (4.8%) of the annual salary set forth in the Current Operations Appropriations Act payable monthly after five years of service, nine and six-tenths percent (9.6%) after 10 years of service, fourteen and four-tenths percent (14.4%) after 15 years of service, and nineteen and two-tenths percent (19.2%) after 20 years of service. 'Service' means service as a justice or judge of the General Court of Justice or as a member of the Utilities Commission or as director or assistant director of the Administrative Office of the Courts. Service shall also mean service as a district attorney or as a clerk of superior court. If the judge was receiving longevity pay on June 30, 1993, that officer shall continue receiving longevity pay during their continuance in office at the rate applicable on June 30, 1993, as required by Article IV, Section 21 of the Constitution. Longevity pay shall be considered part of total annual compensation for the purpose of G.S. 7A-51."

(e) G.S. 7A-51 reads as rewritten:

"§ 7A-51. Age and service requirements for retirement of judges of the superior court and of the Administrative Officer of the Courts.

(d) Repealed by Session Laws 1971, c. 508, s. 3.

(f) G.S. 7A-65 reads as rewritten:

"§ 7A-65. Compensation and allowances of district attorneys and assistant district attorneys.

(b) Repealed by Session Laws 1985, c. 689, s. 2, effective July 11, 1985.

(g) G.S. 7A-101(c) is repealed.

(h) G.S. 7A-144(b) reads as rewritten:

"(b) Notwithstanding merit, longevity and other increment raises paid to regular State employees, a judge of the district court shall receive as longevity pay an annual amount equal to four and eight-tenths percent (4.8%) of the annual salary set forth in the Current Operations Appropriations Act payable monthly after five years of service, nine and six-tenths percent (9.6%) after 10 years of service, fourteen and four-tenths percent (14.4%) after 15 years of service, and nineteen and two-tenths percent (19.2%) after 20 years of service. 'Service' means service as a justice or judge of the General Court of Justice or as a member of the Utilities Commission or as director or assistant director of the Administrative Office of the Courts. Service shall also mean service as a district attorney or as a clerk of superior court. If the judge was receiving longevity pay on June 30, 1993, that officer shall continue receiving longevity pay during their continuance in office at the rate applicable on June 30, 1993, as required by Article IV, Section 21 of the Constitution."

(i) G.S. 7A-171.1(a)(5) is repealed.

(j) G.S. 7A-341 reads as rewritten:

"§ 7A-341. Appointment and compensation of Director.

(k) G.S. 7A-342 reads as rewritten:

"§ 7A-342. Appointment and compensation of assistant director and other employees.

The Director may appoint such other assistant and employees as are necessary to enable him to perform the duties of his office."

(l) G.S. 7A-465(b) reads as rewritten:

"(b) The public defender shall be an attorney licensed to practice law in North Carolina, and shall devote his full time to the duties of his office.

(m) G.S. 7A-467(d) is repealed.

(n) G.S. 7A-751 reads as rewritten:

"§ 7A-751. Agency head; powers and duties.

(o) G.S. 20-187.3(a) reads as rewritten:

"(a) The Secretary of Crime Control and Public Safety shall not make or permit to be made any order, rule, or regulation requiring the issuance of any minimum number of traffic citations, or ticket quotas, by any member or members of the State Highway Patrol. Pay and promotions of members of the Highway Patrol shall be based on their overall job performance and not on the basis of the volume of citations issued or arrests made. The provisions of G.S. 126-7 shall not apply to members of the State Highway Patrol. Members of the Highway Patrol shall, however, be subject to salary classes~~, ranges and longevity pay~~ and ranges for service as are applicable to other State employees generally. Beginning July 1, 1985, and annually thereafter, each member of the Highway Patrol shall be granted a salary increase in an amount corresponding to the increments between steps within the salary range established for the class to which the member's position is assigned by the State Personnel Commission, not to exceed the maximum of each applicable salary range."

(p) G.S. 58-2-10 reads as rewritten:

"§ 58-2-10. Salary of Commissioner.

(q) G.S. 62-10(h) reads as rewritten:

(r) G.S. 95-2 reads as rewritten:

"§ 95-2. Election of Commissioner; term; salary; vacancy.

(s) G.S. 106-11 reads as rewritten:

"§ 106-11. Salary of Commissioner of Agriculture.

(t) G.S. 114-7 reads as rewritten:

"§ 114-7. Salary of the Attorney General.

(u) G.S. 115C-20 reads as rewritten:

"§ 115C-20. Office and salary.

(v) G.S. 138-4 reads as rewritten:

"§ 138-4. Governor to set salaries of administrative officers; exceptions~~; longevity pay~~.

The salaries of all State administrative officers not subject to the State Personnel Act shall be set by the Governor, unless a law provides otherwise.

Prior to taking any action under this section, the Governor may consult with the Advisory Budget Commission.

(w) G.S. 143-23(a1) reads as rewritten:

(2) Required to continue a purpose or program because of unforeseen events, so long as the scope of the purpose or program is not increased;

(3) Required by a court, Industrial Commission, or administrative hearing officer's order or award or to match unanticipated federal funds;

(4) Required to respond to an unanticipated disaster such as a fire, hurricane, or tornado; or

(5) Required to call out the National Guard.

The Director of the Budget shall report on a quarterly basis to the Joint Legislative Commission on Governmental Operations and to the Fiscal Research Division of the Legislative Services Office the reason if the amount expended for a purpose or program is more than the amount appropriated for it from all sources. If the overexpenditure was authorized under subdivision (2) of this subsection, the Director of the Budget shall identify in the report the unforeseen event that required the overexpenditure.

Funds appropriated for salaries and wages are also subject to the limitation that they may only be used for (i) salaries and wages or for premium pay, overtime pay, longevity to the extent authorized by law for certain persons holding office or employment on June 30, 1993, unemployment compensation, workers' compensation, temporary wages, contracted personal services, moving expenses, payment of accumulated annual leave, certain awards to employees, tort claims, and employer's social security, retirement, and hospitalization payments; or (ii) uses for which over expenditures are permitted by subdivisions (3), (4), and (5) of this subsection but the Director of the Budget shall include such use and the reason for it in his quarterly report to the Joint Legislative Commission on Governmental Operations and to the Fiscal Research Division of the Legislative Services Office.

(x) G.S. 143-34.1(b) reads as rewritten:

"(b) Required employer salary-related contributions for retirement benefits, death benefits, disability salary continuation and Social Security for employees whose salaries are paid from general fund or highway fund revenues, or from department, office, institutional or agency receipts, or from nonstate funds, shall be paid from the same source as the source of the employees' salaries. In those instances in which an employee's salary is paid in part from the general fund, or the highway fund, and in part from the department, office, institutional or agency receipts, or from nonstate funds, the required salary-related contributions shall be paid from the general fund, or the highway fund, only to the extent of the proportionate part paid from the general fund, or highway fund, in support of the salary of such employee, and the remainder of the employer's contribution requirements shall be paid from the same source which supplies the remainder of such employee's salary. The requirements of this section as to the source of payment are also applicable to payments on behalf of the employee for hospital-medical insurance, longevity payments to the extent authorized by law for certain persons holding office or employment on June 30, 1993, salary increments, and legislative salary increases. The State Controller shall approve the method of payment by State departments, offices, institutions and agencies for employer salary-related requirements of this section, and determine the applicability of the section to an employer's salary-related contribution or payment in behalf of an employee."

(y) G.S. 147-35 reads as rewritten:

"§ 147-35. Salary of Secretary of State.

(z) G.S. 147-64.1(b) reads as rewritten:

(aa) G.S. 147-65 reads as rewritten:

"§ 147-65. Salary of State Treasurer.

(bb) Section 72(a) of Chapter 900 of the 1991 Session Laws reads as rewritten:

(cc) Chapter 126 of the General Statutes is amended by adding a new section to read:

"§ 126-4.1. No longevity pay, freeze on existing schedules.

(a) Except as otherwise provided by this section, no longevity pay system may apply to any State employee or State-paid teacher after June 30, 1993, notwithstanding whether such employee is otherwise subject to the provisions of this Chapter.

(b) Any person who, on June 29, 1993, was entitled to longevity pay under:

(1) G.S. 7A-65, 7A-101(c), 7A-171.1(a)(5), 7A-341, 7A-342, 7A-465(b), 7A-467(d), 7A-751, 20-187.3(a), 62-10(h), G.S. 138-4;

(2) Section 72(a) of Chapter 900 of the 1991 Session Laws; or

(3) Any policy, which was in effect on November 1, 1992, of the State Personnel Commission or any other State agency,

shall continue receiving longevity pay at the rate in effect for that person on June 29, 1993, as long as that person continues employment with the same branch of government. For the purpose of this subsection, the branches of government are legislative, executive, judicial, public schools, The University of North Carolina, and the community college system. No person shall receive any increase in longevity rate after June 29, 1993."

(dd) This section becomes effective June 30, 1993.

---COMPENSATION AND BENEFITS EVALUATIONS

Sec. 53. (a) Article 1 of Chapter 143 of the General Statutes is amended by adding a new section to read:

"§ 143-11.1. Comprehensive compensation and benefit program evaluation.

(a) On or before the fifteenth day of December of each year, the Director shall have conducted a comprehensive compensation and benefit program evaluation for all full-time, part-time, and temporary employees supported by funds appropriated by the State, either through direct appropriations to State departments, agencies, boards, and commissions for salary and benefit purposes, or through appropriations to State departments, agencies, boards, and commissions for State aid to political subdivisions of the State. This comprehensive evaluation shall include, but not be limited to, a review of:

(1) Benefit programs offered by other states and employers within the Southeast region;

(2) Employer costs associated with benefit programs provided;

(3) Benefit levels provided by the programs (i.e. life insurance equal to two times annual compensation); and

(4) Compensation program and respective salary levels.

(b) This evaluation should include health, retirement, payment for time not worked (i.e. vacations, holidays, sick leave, etc.), and salary levels. This evaluation should provide the information needed for the State to determine whether its total benefit package is competitive in relation to programs offered, benefit levels provided, and costs associated with providing employee benefits.

(c) The annual evaluation provides the necessary information to determine a Total Benefits Index. This index will enable the State to review its total compensation and benefit package in relation to compensation and benefit programs offered, compensation and benefit levels provided, and costs associated with providing employee pay and benefits by employers of similar scope and size as the State.

(d) The indexing assigns a numeric value to the standardized middle of the market values for competitive compensation and benefit programs. The State can then review its own total compensation and benefit program and determine its similar standardized value. In this way, the State can measure incremental differences on a quantifiable basis between its own and the market's programs."

(b) The Director of the Budget shall retain a consultant to conduct a study of the administration of the flexible compensation programs available to eligible officers and employees of State departments, agencies, and institutions, local school administrative units, the constituent institutions of the North Carolina Community College System, and The University of North Carolina under sections 125, 129, and related sections of the Internal Revenue Code of 1986, as amended. The study shall determine the most cost-effective manner of administering the programs and the most cost-effective method of maximizing savings to the State and its officers and employees. The consultant shall be selected through a competitive procurement process.

(c) The Director of the Budget shall report the results of the flexible compensation program study to the General Assembly on or before May 1, 1993. Copies of the report shall be transmitted to the Speaker of the House of Representatives, to the President Pro Tempore of the Senate, and to the Fiscal Research Division.

(d) This section is effective upon ratification.

---ELIMINATE DOT POSITIONS.

Sec. 54. (a) The General Assembly finds that the Department of Transportation has 85 positions involving excess layers of management, excessively narrow spans of control, overlapping functions, and unnecessary positions. There are 51 positions in the Department of Transportation that involve one-to-one reporting relationships, nearly half of which are in the Division of Motor Vehicles. Specifically, Department of Transportation sections with one-to-one reporting relationships include:

(1) General Services;

(2) Internal Audit;

(3) Governor's Highway Safety Program;

(4) Hydraulics;

(5) Right-of-Way;

(6) Occupational Safety and Emergency Planning;

(7) Roadside Environmental;

(8) Bridge Maintenance;

(9) Roadway Maintenance;

(10) Equipment; and

(11) Materials and Tests.

Most of the one-to-one relationships in the Division of Motor Vehicles are in the 10 district Drivers License offices that have a supervisor and an assistant supervisor, which is considered excessive. Other sections in the Division of Motor Vehicles with one-to-one relationships are:

(1) International Registration Plan;

(2) School Bus & Traffic Safety; and

(3) Vehicle Registration.

(b) An additional 31 positions are considered excessive because of narrow spans of control. These are management and supervisory positions where the span of control is frequently two or three, which is very narrow given the duties performed. In many cases, the affected units have small numbers of staff which represent further opportunity to consolidate staff to achieve broader spans of control.

Department of Transportation sections with narrow spans of control include:

(1) General Services;

(2) Fiscal;

(3) Photogrammetry;

(4) Design Services;

(5) Location and Surveys;

(6) Structure Design;

(7) Pavement Management;

(8) Traffic Engineering;

(9) Equipment Inventory Control; and

(10) Program, Policy and Budget.

(c) There are 11 positions that have overlapping or similar functions, some of which are in the External Audit Branch and the Internal Audit Section. If they were combined, certain supervisory and secretarial support positions could be eliminated.

The Civil Rights Office monitors the Disadvantaged Business Enterprise Program. Certain positions in other units also monitor similar activities; these units include Management Assessment and Compliance, the Construction Branch, and Right-of-Way Branch. The monitoring of civil rights-related matters in the Department of Transportation should be centralized in the Civil Rights Office, and the overlap of these functions in other offices should be eliminated.

(d) Seven positions in the Secretary's Office and the Fiscal Section, including the Special Assistants for Regional Affairs, are unnecessary and should be eliminated.

(e) The Secretary of Transportation shall report to the General Assembly, by August 1, 1993, with a plan identifying the 85 positions to be eliminated pursuant to Section 1 of this act and providing that all identified positions that can be eliminated during the 1993-94 fiscal year shall be eliminated by July 1, 1994.

(f) The base budget of the Department of Transportation is reduced by two million nine hundred thousand dollars ($2,900,000) for the 1993-94 fiscal year and by two million nine hundred thousand dollars ($2,900,000) for the 1994-95 fiscal year due to the decrease in personnel positions mandated by subsection (b) of this section.

(g) This section is effective upon ratification.

---REORGANIZE DOT.

Sec. 55. (a) The General Assembly finds that certain organizational units within the Department of Transportation are organizationally misplaced:

(1) Internal Audit Section. - The mission of the Internal Audit Section is to promote and ensure that proper operational procedures are fair, accurate financial operations within the Department of Transportation, by conducting internal compliance, fiscal, and operational audits, and by monitoring fiscal records and operational procedures. This Section reports to the Assistant Secretary of Administration which weakens the independence of the function. Ordinarily, an internal audit function should report to the chief executive officer, audit committee, or the equivalent. The placement of this Section is not effective.

(2) Beautification Program. - The purpose of the Beautification Program is to serve the citizens by improving the appearance of North Carolina highways. Its goals are to establish and maintain effective litter cleanup and litter prevention programs, and to increase public support for the Wildflower Program. This unit reports to both the Deputy Secretary of Operations and the Deputy Secretary of Programs. The dual reporting responsibility and placement of the Beautification Program is not effective.

(3) Charlotte International Registration Plan (IRP) Office. - The International Registration Plan Section administers a registration reciprocity compact covering member states and one Canadian province. All IRP activities, except the Charlotte IRP Office, are included in the IRP Section. The Charlotte Office is under the Vehicle Registration Section. The placement of the Office is not effective.

(b) The Internal and External Audit units are to be consolidated into one Audit Section and that Section is transferred to the Office of the Secretary of Transportation.

(d) The Charlotte International Registration Plan Office is transferred to the International Registration Plan Section.

(e) This section becomes effective July 1, 1993.

---PRECONSTRUCTION PERSONNEL LIMIT.

Sec. 56. (a) The General Assembly finds that the Department of Transportation is currently seeking funding for 298 more staff positions in its preconstruction units during the next 15 years to handle the work load from the Highway Trust Fund. The majority of these positions are to be filled during the next four years in the Highway Design and Planning Branch and the Environmental Branches.

The use of private engineering firms to handle peak work load requirements is a well-founded strategy for avoiding the public-sector problems of staffing up and down for varying work loads.

The Department of Transportation is currently contracting out twenty percent (20%) to twenty-five percent (25%) of preconstruction work to private engineering firms. If outside contract forces were used to address the preconstruction work load associated with the additional 298 positions, then the level of preconstruction work contracted out would rise to about thirty-two percent (32%) to thirty-six percent (36%).

This increase in contracting out work load, from twenty percent (20%) to twenty-five percent (25%), to thirty-two percent (32%) to thirty-six percent (36%) would be a reasonable level of increase because the Highway Trust Fund represents a 78 percent increase in the pre-1989 preconstruction work load of the Department.

(b) The Secretary of Transportation shall submit a plan to the General Assembly, by September 1, 1993, to implement the recommendation in subsection (a) of this section to freeze preconstruction positions and contract out the balance of its preconstruction work to private engineering firms.

---CONSTRUCTION PERSONNEL LIMIT.

Sec. 57. (a) The General Assembly finds that the Department of Transportation's ongoing strategy to increasingly rely on the use of private engineering firms to perform surveys, process control, and construction engineering and inspection functions should be continued.

With the Highway Trust Fund program entering a phase of expanded construction activity, having completed a number of project plans, the Department will need to further leverage its in-house construction staff to meet the requirements of the program.

(b) The increased use of outside contract forces to perform quality control and quality assurance functions will require continued Department of Transportation construction staff involvement in project oversight and verification, careful selection of vendors, and rigorous contract administration of these projects. The level of this outside contracting should be based on the following considerations:

(1) Focus outside contract activity on the peak load requirements of the Highway Trust Fund construction program;

(2) Retain sufficient in-house capability to address the base load requirements of the Highway Trust Fund construction program and properly administer the outside construction engineering and inspection-related contracts; and

(3) Select contractors with significant experience in performing construction engineering and inspection for major road and bridge projects and familiarity with Department of Transportation engineering standards and construction specifications.

(c) By using private engineering firms to handle more of the Highway Trust Fund program construction work load, the Department of Transportation can reduce the number of new in-house staff required to support the construction portion of the program.

(d) The Secretary of Transportation shall report to the General Assembly, no later than September 1, 1993, a plan meeting the construction needs of the Highway Trust Fund program with a minimum of new construction staff in the Department of Transportation and increasing the use of outside contract forces while meeting the criteria in subsections (a) through (c) of this section.

(e) This section is effective upon ratification.

---DIST. EQPT. SUPS. ELIMINATED.

Sec. 58. (a) The General Assembly finds that the Division Equipment Operations Supervisors positions represent a redundant layer of management. Each of the 14 Highway Divisions has a Division Equipment Operations Supervisor who has a one-to-one reporting relationship to the Division Equipment Superintendent and manages the Auto Parts Supervisor and Mechanic Supervisors. This one-to-one reporting relationship creates uncertainty regarding the management responsibilities of the Division Equipment Superintendent, inhibits the efficient delegation of responsibilities within the Division Equipment units, and complicates management reporting within the unit.

(b) The Division Equipment Operations Supervisor positions in the Department of Transportation are eliminated.

(c) The base budget of the Department of Transportation is reduced by four hundred thirty-four thousand dollars ($434,000) for the 1993-94 fiscal year and by four hundred thirty-four thousand dollars ($434,000) for the 1994-95 fiscal year due to the decrease in personnel positions mandated by subsection (b) of this section.

(d) This section becomes effective July 1, 1993.

---CONSOL. EQUIPMENT SECTIONS.

Sec. 59. (a) The General Assembly finds that the Equipment Sections of the 14 highway divisions perform maintenance and repair functions for all Department of Transportation equipment, except for sedans which are maintained through the Department of Administration. Each division has between five and 10 garages, including one major division garage. In some cases, two-person garages continue to operate in certain rural areas of the State, where the distance between garages is fairly large (40 to 50 miles). In addition, there are local county garages colocated near the division garages. These latter garages represent a potential opportunity for consolidation, to reduce the overall number of garage facilities maintained by the Department of Transportation.

(b) The Department of Transportation shall develop a plan to consolidate the equipment section resources associated with the 14 division garages and those 14 Department county garages located nearby for submission to the General Assembly by July 1, 1993. This plan shall provide for the completion of the consolidation on or before January 1, 1994.

---DIVISION-BASED STAFF REDUCED.

Sec. 60. (a) The General Assembly finds that eliminating the district layer of management will increase the span of control of the Division Maintenance Engineer in each Division. Each Division should have a Division Operations Engineer, with the Traffic Services unit, the Roadside Environment unit, the Equipment unit, and the Bituminous Operations unit reporting to that Division Operations Engineer.

(b) The Secretary of Transportation shall report to the General Assembly, no later than September 1, 1993, on the elimination of all positions within the "district" layer of management.

(c) The Secretary of Transportation shall report to the General Assembly, no later than September 1, 1993, on the creation of the position of "Division Operations Engineer" in Divisions 1 and 12 and the realignment of responsibilities so that the Traffic Services unit, the Roadside Environment unit, the Equipment unit, and the Bituminous Operations unit shall report to the Division Operations Engineer in each Division.

(d) The base budget of the Department of Transportation is reduced by three million four hundred thousand dollars ($3,400,000) for the 1993-94 fiscal year and by four million five hundred seventy-five thousand dollars ($4,575,000) for the 1994-95 fiscal year due to the decrease in personnel positions mandated by subsection (b) of this section.

(e) This section is effective upon ratification.

---DIVISION TRAFFIC SERVICES.

Sec. 61. (a) The General Assembly finds that Division Traffic Services units are variously organized, with some units having all field forces reporting to the Division Traffic Services Supervisor and others having signal-related forces assigned to the Assistant Division Traffic Engineer in a Traffic Control Technical Services unit. The latter arrangement provides a better balance of technical and nontechnical traffic services personnel among the middle management positions within this unit, resulting in a more equitable span of control among these supervisory personnel. This alignment recognizes the increasingly technical aspects of traffic signal planning and implementation, while also providing for a more balanced distribution of Traffic Services staff among the Traffic Services supervisors.

(b) The Secretary of Transportation shall realign the Traffic Services sections of the 14 Traffic Divisions so that the signal/traffic control personnel report to the Assistant Traffic Engineer and pavement markings/signs personnel report to the Traffic Services Supervisor.

---CONTRACTED ROAD MAINTENANCE.

Sec. 62. (a) The General Assembly finds that the overall level of staffing for the Department of Transportation should be based on:

(1) The determination of resources needed to provide an acceptable level of service, accomplish the annual maintenance program efficiently, and erase the existing maintenance backlog; and

(2) The determination of the most appropriate mix of contract and in-house resources.

As the maintenance has increased, the Department of Transportation has been able to handle a portion of the increased work through contracting. The Department of Transportation can make additional use of private contractors.

(b) The Department of Transportation shall report to the General Assembly, on or before November 1, 1993, a plan to maintain its current maintenance staffing and accomplish the increased maintenance program work load through expanded use of outside contract forces. The plan may include:

(1) The continued contracting out of construction activities, as well as those maintenance functions, such as mowing, roadside rest area maintenance, building maintenance, signal installation, and signal maintenance, that it currently contracts;

(2) The contracting out of all of the Secondary Road Construction program and free up the in-house maintenance staff now performing this function to concentrate on backlogged and expanding maintenance needs; and

(3) Expanding the Department's efforts to contract out maintenance functions, by increasing the proportion of contracted work in such areas as: ditch cleaning, landscaping, and bituminous surface treatment resurfacing.

---CLOSE SOME DMV OFFICES.

Sec. 63. (a) The General Assembly finds that the actual work load performed by the Division of Motor Vehicles field offices varies substantially from location to location. An analysis of Division of Motor Vehicles activity reports indicates that the average number of drivers license applications processed per person per day is 24, but that forty-six percent (46%) of the offices process significantly fewer applications than the average, and many of the field offices are located within close proximity of each other and serve common communities. These closures would result in a Division of Motor Vehicles field office being within 15 miles of every driver, except those who now drive longer distances to reach a field office.

(b) The Commissioner of Motor Vehicles shall submit to the General Assembly, on or before September 1, 1993, a plan to close the Division of Motor Vehicles field offices that process fewer than the State average of drivers licenses per day, on or before June 30, 1995, and to increase the overall productivity of the remaining field offices by ten percent (10%).

(c) The base budget of the Division of Motor Vehicles, Department of Transportation, is reduced by one million three hundred ninety-eight thousand eight hundred sixty dollars ($1,398,860) for the 1993-94 fiscal year and by one million eight hundred fifty-five thousand ten dollars ($1,855,010) for the 1994-95 fiscal year due to the closing of the Division of Motor Vehicles field offices and attendant reduction in personnel positions mandated by subsection (b) of this section.

(d) This section is effective upon ratification.

---PRIVATIZE REGISTRATION OFFICES.

Sec. 64. (a) The General Assembly finds that it costs approximately two dollars and twenty-six cents ($2.26) more to process a transaction in a State-run motor vehicle registration office than in a contract office. When the "variable costs" of the operations, including salaries, benefits, rent, and utilities for State-operated offices and branch agency fees, field supervisors' salaries, and travel for contract offices, were compared, the two dollars and twenty-six cents ($2.26) difference was determined.

(b) The Commissioner of Motor Vehicles shall submit a plan to the General Assembly, on or before August 1, 1993, for the privatization of the State-operated vehicle registration offices in Raleigh and Charlotte to reduce costs and improve productivity.

(c) The base budget of the Division of Motor Vehicles, Department of Transportation is reduced by six hundred thousand dollars ($600,000) for the 1993-94 fiscal year and by one million two hundred thousand dollars ($1,200,000) for the 1994-95 fiscal year due to the decrease in personnel and costs attributable to the privatization of the State-operated vehicle registration offices in Raleigh and Charlotte mandated by subsection (b) of this section.

(d) This section is effective upon ratification.

---DMV PRODUCTIVITY ENHANCEMENT.

Sec. 65. (a) The Commissioner of Motor Vehicles shall submit a report to the General Assembly, not later than November 1, 1993, containing proposals for enhancing the efficiency of the motor vehicle registration process. The report shall contain consideration of:

(1) Encouraging vehicle owners to mail in their vehicle registration materials, thereby reducing the need for 126 registration offices.

(2) Purchasing a computer system that will accommodate direct transmission of registration information by contractors and branch offices to a central system at least on a daily basis.

(3) Accommodating possible future applications such as direct customer telephone input through automated teller machines and using credit cards.

(b) This section is effective upon ratification.

---REASSESS HIGHWAY TRUST FUND PROGRAM.

Sec. 66. (a) The General Assembly finds that financial conditions and highway program priorities are constantly changing and there should be a mechanism for the periodic reassessment for the financial feasibility of the Highway Trust Fund.

(b) G.S. 120-70.51(a) reads as rewritten:

"(a) The Joint Legislative Highway Oversight Committee shall:

(1) Review reports prepared by the Department of Transportation under G.S. 136-184.

(2) Monitor the funds deposited in and expenditures from the North Carolina Highway Trust Fund and the Highway Fund.

(3) Determine whether funds in the Trust Fund are spent in accordance with G.S. 136-17.2A and Article 14 of Chapter 136.

(4) Determine whether any revisions are needed in the funding for a program for which funds in the Trust Fund may be used, including revisions needed to meet any statutory timetable for the program.

(5) Report to the General Assembly at the beginning of each regular session concerning its determinations of needed changes in the funding for programs funded from the Trust Fund.

(6) Report periodically, when changing fiscal conditions and highway priorities require, and at least every five years, on a reassessment of the justification for and the financial feasibility of construction projects funded from the Highway Trust Fund."

(c) This act is effective upon ratification. The first report required by subsection (b) of this section shall be filed prior to the first day of the 1994 Session of the General Assembly.

---TRANSPORTATION FINANCING STUDY.

Sec. 67. (a) The General Assembly finds that there is a highway maintenance backlog and that added funding may be necessary to meet future highway maintenance needs and other obligations associated with the Highway Trust Fund program. General Fund transfers, interagency transfers, and program allocations of highway fund revenues increasingly dilute the revenues available for needed roadway capital improvement, maintenance, and operations. With the passage of landmark federal surface transportation funding legislation by Congress in 1991 (The Intermodal Surface Transportation Efficiency Act of 1991 - ISTEA), the level and allocation of federal transportation funding has significantly changed. The changes in national and State administrations are likely to generate further changes to the funding and program priorities for transportation at the federal and State level.

(b) The Joint Legislative Highway Oversight Committee shall study comprehensive transportation funding, including:

(1) All modes of transportation receiving State funding;

(2) Short-term and long-term program needs and life-cycle costs;

(3) Currently available and alternative funding sources; and

(4) Possible legislation needed to ensure that designated revenue sources are properly used to support program priorities in a comprehensive and equitable fashion.

(c) The Joint Legislative Highway Oversight Committee shall report the results of the study mandated by subsection (b) of this section to the General Assembly prior to the first day of the 1994 Session of the General Assembly.

(d) This section becomes effective July 1, 1993.

---MUNICIPAL AGREEMENTS INCREASED.

Sec. 68. (a) The General Assembly finds that the Department of Transportation should expand efforts to turn over operations-related functions, such as signal maintenance, signal system operation, sign maintenance, and pavement marking maintenance, to local urbanized communities through municipal agreements. The effect of these agreements will be to place operational responsibility closer to the group most impacted by the function while potentially relieving the Department of Transportation of part of the associated costs.

(b) The Department of Transportation shall report to the General Assembly, on or before December 1, 1993, a plan to increase the use of municipal agreements to turn over operations-related functions to local urbanized communities.

---NEW DOWNSIZED MH INSTITUTIONS PLAN.

Sec. 69. (a) The Department of Human Resources shall develop a 10-year plan to construct four new and efficient mental health hospitals to accommodate the downsizing in the mental health institutions. This plan shall include consideration of the following:

(1) After phasing down inpatient mental health services, construction on a 200-bed hospital in the east;

(2) As more clients are treated in the community-based programs, closing hospitals;

(3) With funds saved from downsizing and eliminating State hospitals, building smaller more modern hospitals in years 2, 5, 7, and 9 of the ten-year plan; and

(4) At the end of the 10 years, hiring a private nonprofit entity to operate the four newly constructed mental health hospitals.

This plan shall be submitted to the General Assembly by September 2, 1993.

(b) There is appropriated from the General Fund to the Department of Human Resources, the sum of three million seven hundred thousand dollars ($3,700,000) for the 1993-94 fiscal year and the sum of three million seven hundred thousand dollars ($3,700,000) for the 1994-95 fiscal year, to implement this section.

(c) It is the intent of the General Assembly to appropriate additional funds to the Department of Human Resources, in subsequent fiscal years, to implement this act, according to the following schedule:

Fiscal Year Amount

1995-96 $3,700,000

1996-97 $10,400,000

1997-98 $17,100,000

1998-99 $23,700,000

1999-00 $17,100,000

2000-01 $23,800,000

2001-02 $17,000,000.

(d) The base budget of the Department of Human Resources is reduced by twelve million two hundred thousand dollars ($12,200,000) in the 1993-94 fiscal year and by twenty-four million four hundred thousand dollars ($24,400,000) for the 1994-95 fiscal year due to the savings resulting from the implementation of this section.

(e) It is the intent of the General Assembly to reduce the base budget of the Department of Human Resources in subsequent fiscal years due to the implementation of this act, according to the following schedule:

Fiscal year Amount

1995-96 $12,100,000

1996-97 $24,300,000

1997-98 $12,200,000

1998-99 $24,400,000

1999-00 $12,100,000

2000-01 $24,300,000

2001-02 $12,200,000.

(f) This section becomes effective July 1, 1993.

---MH/CB INITIATIVES.

Sec. 70. (a) Effective July 1, 1993, the Department of Human Resources shall begin expanding community-based services and downsizing institutional services for the mentally ill. In order to accomplish this goal, the Department shall develop and implement a multiyear pilot program to implement a single stream of funding system for the State's mental hospitals. The program shall include a gradual transfer of funds from the mental hospitals to the community area mental health authorities concomitant with the transfer to the area authorities of the responsibility of providing appropriate services to those persons in need of hospitalization and the implementation of a single portal of entry State policy for all admissions to the mental hospitals. The pilot program shall provide technical assistance to area authorities to prepare them for the implementation of the single stream of funding system.

(b) For each fiscal year of the 1993-95 fiscal biennium, three million seven hundred thousand dollars ($3,700,000) shall be transferred from the continuation budget of the mental hospitals to community area mental health authorities to expand community-based mental health services during the multiyear pilot programs's existence.

(c) It is the intent of the General Assembly to continue to transfer three million seven hundred thousand dollars ($3,700,000) from the continuation budget of the mental hospitals to community area mental health authorities in each remaining fiscal year of the multiyear pilot program's existence.

(d) This section becomes effective July 1, 1993.

---MRC DOWNSIZING.

Sec. 71. (a) The General Assembly finds that North Carolina currently offers residential services for the developmentally disabled population and that residential programs are the most costly and most restrictive methods of caring for this population. The General Assembly further finds that persons with developmental disabilities can be served far more effectively through a broad array of residential and nonresidential services. Therefore, the General Assembly establishes a clear commitment to increase the use of community-based programs to serve the developmentally disabled, and to downsize State-operated mental retardation centers.

(b) This section is effective upon ratification.

---MRC REDUCTION.

Sec. 72. (a) The Department of Human Resources shall develop a plan to reduce the total number of people served in State-operated Mental Retardation Centers by 500 people by the end of 1994 and 100 per year afterwards. In developing this plan, the Department shall consider:

(1) An immediate moratorium on new admissions of school age children and youth to mental retardation centers;

(2) A fifty percent (50%) reduction of all new admissions in 1993;

(3) A moratorium on all new admissions in 1994;

(4) Increased development of community placement slots for school age children and adults;

(5) Establishment of 100 new community-based respite care slots per year;

(6) Closing of Black Mountain Center by 1995;

(7) Development of a comprehensive quality assurance plan for community services; and

(8) Any other issues it considers necessary.

(b) There is appropriated from the General Fund to the Department of Human Resources, the sum of fourteen million dollars ($14,000,000) for the 1993-94 fiscal year and the sum of twenty-six million six hundred thousand dollars ($26,600,000) for the 1994-95 fiscal year, to implement this section.

Fiscal Year Amount

1995-96 $9,300,000

1996-97 $18,600,000

1997-98 $7,700,000

1998-99 $17,000,000

1999-00 $9,400,000

2000-01 $18,700,000

2001-02 $9,300,000.

(d) The base budget of the Department of Human Resources is reduced by twenty-three million nine hundred thousand dollars ($23,900,000) for the 1993-94 fiscal year and by thirty-seven million four hundred thousand dollars ($37,400,000) for the 1994-95 fiscal year due to the implementation of this section.

Fiscal Year Amount

1995-96 $10,300,000

1996-97 $20,700,000

1997-98 $9,000,000

1998-99 $19,300,000

1999-00 $10,400,000

2000-01 $20,700,000

2001-02 $10,400,000.

(f) This section becomes effective July 1, 1993.

---DD NEEDS ASSESSMENT.

Sec. 73. (a) The Department of Human Resources shall develop a comprehensive assessment of service and program needs for all people with developmental disabilities. This needs assessment shall be preceded by the use of an effective data collection system. The needs assessment shall include:

(1) Consideration of individuals who are unserved and underserved;

(2) Establishment of a statewide automated tracking system for all people with disabilities; and

(3) Evaluation of the needs of people with developmental disabilities living in domiciliary care facilities.

(b) The Department shall report the needs assessment to the appropriate House and Senate Appropriations subcommittees of the 1993 General Assembly by May 1, 1994.

---PRIVATE ICF/MR STANDARDS.

Sec. 74. (a) The General Assembly finds that public policy for residential services for people with disabilities has experienced change of nearly revolutionary proportions during the period from 1970 through 1990 and that services have gone from a system of almost exclusive institutional care to a broad array of service options. The General Assembly further finds that, unless North Carolina changes its current practices, the future of costs and programmatic implications for services are sadly predictable. Therefore, the General Assembly intends to establish a policy whereby people with developmental disabilities will be more effectively served through use of a broad array of residential and nonresidential services.

(b) The Department of Human Resources shall develop directly or contract for the development of reimbursement rates and payment standards for privately operated intermediate care facilities for the mentally retarded, which shall include:

(1) " Quality of Service" incentive payments and assessments;

(2) Specific allowable costs within each cost center;

(3) Limits and guidelines for rents and capital costs;

(4) Specific standards for determining active treatment costs;

(5) Special adjustments and exceptions;

(6) Allowable profit margins; and

(7) A reimbursement policy for training and technical assistance.

(c) The Department of Human Resources shall present to the General Assembly the developments required by Section 1 of this act, together with the complete plan and implementation schedule to address the escalating use and costs of intermediate care facilities for the mentally retarded/developmentally disabled community facilities required by Section 135 of Chapter 900 of the 1991 Session Laws, by March 1, 1993.

(d) This section is effective upon ratification.

---ADATC SINGLE-STREAM FUND PILOT.

Sec. 74.1. (a) The Department of Human Resources shall develop a multiyear pilot program to implement a single stream of funding system for the State's Alcohol Drug Abuse Treatment Centers (ADATC's). The program shall include a gradual transfer of funds from the ADATC's to the community area mental health authorities concomitant with the transfer to the area authorities of the responsibility of providing appropriate services to those persons in need of residential alcohol/drug abuse treatment services and the implementation of a single portal of entry State policy for all admissions to the ADATC's. The pilot program shall provide technical assistance to area authorities to prepare them for the implementation of the single stream of funding system.

(b) Of the funds appropriated in the 1993-94 fiscal year and the 1994-95 fiscal year to the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services for Alcohol Drug Abuse Treatment Centers (ADATC's), fourteen percent (14%), or one million four hundred fifty-four thousand two hundred ninety-nine dollars ($1,454,299), are transferred each fiscal year to area mental health authorities, to implement the pilot project established by this section.

(c) It is the intent of the General Assembly to transfer from the funds appropriated to the Division of Mental Health, Mental Retardation, and Substance Abuse Services, Department of Human Resources, for the ADATC's for the 1995-96 fiscal year, for the 1996-97 fiscal year, and for the 1997-98 fiscal year, fourteen percent (14%), or one million four hundred fifty-four thousand two hundred ninety-nine dollars ($1,454,299), each fiscal year to area mental health authorities, to implement the pilot program established in this section.

(d) This section becomes effective July 1, 1993.

---DD IN-HOME CARE INITIATIVES.

Sec. 75. (a) The General Assembly finds that, in the movement to reduce the number of people living in institutions, the most under-utilized approach is the prevention or the reduction of the need for out-of-home care and support. The General Assembly further finds that, quite often, a relatively small amount of support at the family level can prevent long-term, costly services in a residential facility.

(b) The Department of Human Resources shall forward its application for an expanded Medicaid Home- and Community-Based Waiver as soon as possible, in order to enable the Department to fund in-home support programs and comprehensive case management services essential to the increase in family support programs for people with disabilities pursuant to this act.

(c) There is appropriated from the General Fund to the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, the sum of thirty-one million nine hundred thousand dollars ($31,900,000) for the 1993-94 fiscal year and the sum of forty million one hundred thousand dollars ($40,100,000) for the 1994-95 fiscal year to implement the Medicaid Home- and Community-Based Waiver and to fund programs that support families of people with developmental disabilities that cannot be funded through the Medicaid Home- and Community-Based Waiver. These programs shall include direct family subsidies and family support coordination networks.

(d) This section becomes effective July 1, 1993.

---HEALTH RECS.

Sec. 76. (a) Chapter 120 of the General Statutes is amended by adding the following new Article to read:

"ARTICLE 22.

"Study Commission on the Organization

of Public Health Programs.

"§ 120-190. Commission established; appointment of members.

There is established the Study Commission on the Organization of Public Health Programs, which shall consist of 14 members. The membership of the Commission shall be as follows: four Senators and one physician who is not a local health director but who provides health services to citizens through a local or district health department, appointed by the President Pro Tempore of the Senate; four Representatives and one local health director appointed by the Speaker of the House of Representatives; the Secretary of Environment, Health, and Natural Resources or his delegate; the Secretary of Human Resources or his delegate; the State Health Director or his delegate, and one public member appointed by the Governor.

"§ 120-191. Time of appointments; terms of office.

Appointments to the Commission shall be made within 15 days subsequent to the close of each regular session of the General Assembly. The term of office shall begin on the day of appointment and shall end on the date when the next appointments are made. Vacancies occurring during a term shall be filled for the unexpired term by the officer who made the original appointment.

"§ 120-192. Organization of Commission.

Upon its appointment the Commission shall organize by electing from its membership a chair. The President Pro Tempore of the Senate or the Speaker of the House of Representatives shall preside over the Commission until the Commission has elected a chair. The Commission shall meet at such times and places as the chair shall designate. The facilities of the State Legislative Building and the Legislative Office Building shall be available to the Commission. The Commission is authorized to conduct hearings and to employ such clerical and other assistance, professional advice, and services as may be deemed necessary in the performance of its duties, with the approval of the Legislative Services Commission.

"§ 120-193. Members to serve without compensation; subsistence and travel expenses.

Members of the Commission shall serve without compensation but they shall be paid such per diem and travel expenses as are provided for members of State boards and commissions generally, pursuant to G.S. 138-5. The Commission shall be funded by the Legislative Services Commission from appropriations made to the General Assembly for that purpose.

"§ 120-194. Assistance to Commission.

The Commission, in the performance of its duties, may request and shall receive from every department, board, bureau, agency, commission, or institution of this State, or from any political subdivision of the State, information, cooperation, and assistance.

"§ 120-195. Duties of the Commission.

The Commission's study shall include the following:

(1) The feasibility of streamlining the regional organizational structure for public health programs;

(2) Whether the regional office staffing structure adequately meets the needs of local and district health departments;

(3) Whether technical assistance offered by regional offices adequately meets the needs of local and district health departments;

(4) The organizational structure of public health programs in other states and whether any of those structures would be better suited to North Carolina's public health needs than the current State structure;

(5) Monitor the efficiency and effectiveness of the current organizational structure of public health programs as provided through the Department of Environment, Health, and Natural Resources;

(6) During the third year of its study, reexamine the organizational placement of public health programs, including, but not limited to, the following:

a. Whether public health programs should be jointly provided with environmental health programs, and

b. Whether public health programs currently provided by the Department of Environment, Health, and Natural Resources should be reunited with health-related programs in the Department of Human Resources, taking into consideration constituencies served by the programs.

"§ 120-196. Reports to the General Assembly.

The Commission shall make a report to the General Assembly and to the Fiscal Research Division of the Legislative Services Office not later than January 1, 1994, and January 1 of each subsequent year of the Commission's tenure. The Commission's first report shall include the Commission's findings and recommendations pertaining to its duties under subdivisions (1) through (5) of G.S. 120-195. The Commission's report of February 1, 1997, shall include the Commission's findings and recommendations pertaining to its duties under subdivision (6) of G.S. 120-195."

(b) There is allocated from funds appropriated to the General Assembly's Legislative Services Commission to the Commission established under this act the sum of fifteen thousand dollars ($15,000) for the 1993-94 fiscal year and the sum of fifteen thousand dollars ($15,000) for the 1994-95 fiscal year to be used for carrying out the purposes of this act.

---CHILD SUPPORT REFORM

Sec. 77. (a) This section is the Child Support Reform Act of 1993.

(b) G.S. 110-128 reads as rewritten:

"§ 110-128. ~~Purposes.~~ Purposes; phasing in of State-supervised child support enforcement system.

(a) The purposes of this Article are to provide for the financial support of dependent children; to enforce spousal support when a child support order is being enforced; to provide that public assistance paid to dependent children is a supplement to the support required to be provided by the responsible parent; to provide that the payment of public assistance creates a debt to the State; to provide that the acceptance of public assistance operates as an assignment of the right to child support; to provide for the location of absent parents; to provide for ~~a determination~~ determinations that responsible ~~parent is~~ parents are able to support ~~his~~ their children; and to provide for enforcement of the responsible parent's obligation to furnish support and to provide for the establishment and administration of a program of child support enforcement in North Carolina.

(b) By October 1, 1993, the Secretary of the Department of Human Resources and the Director of the Administrative Office of the Courts shall select up to six counties in which to begin implementing a restructured child support system under this Article on a demonstration basis, to determine the actual cost of providing child support services under that system and to assess the mechanics of further transition to statewide implementation of that system.

(c) On or before August 15, 1994, the Secretary of the Department of Human Resources and the Director of the Administrative Office of the Courts shall submit to the Child Support Oversight Commission a report of the results of operating the new system in the counties selected under this section. Based on that report, budgets and plans will be made to phase in the new system statewide by July 1, 1996. Before July 1, 1996, the new system may be implemented in any other counties selected by the Secretary of the Department of Human Resources and the Director of the Administrative Office of the Courts and with the approval of the county commissioners of those counties, and that implementation shall be reported to the Commission. The new system shall be implemented in the remaining counties of the State no later than July 1, 1996."

"§ 110-141. Effectuation of intent of Article.

(a) The North Carolina Department of Human Resources shall supervise the administration of this program in accordance with federal law and shall cause the provisions of this Article to be effectuated and to secure child support from absent, deserting, abandoning and nonsupporting parents.

(b) Effective July 1, 1986, the entity, whether the board of county commissioners or the Department of Human Resources, that is administering, or providing for the administration of, this program in each county on June 30, 1986, shall continue to administer, or provide for the administration of, this program in that county, with one exception. If a county program is being administered by the Department of Human Resources on June 30, 1986, and if the board of county commissioners of this county desires on or after that date to assume responsibility for the administration of the program, the board of county commissioners shall notify the Department of Human Resources between July 1 and September 1 of the current fiscal year. The obligations of the board of county commissioners to assume responsibility for the administration of the program shall not begin before July 1 of the subsequent fiscal year. Until that time, it is the responsibility of the Department of Human Resources to administer or provide for the administration of the program in the county.

~~A county may negotiate alternative arrangements to the procedure outlined in G.S. 110-130 for designating a local person or agency to administer the provisions of this Article in that county.~~

(c) Effective July 1, 1996, the entity, whether the board of county commissioners or the Department of Human Resources, that is providing for the administration of this program in each county shall continue to provide for the administration of the program in the county. When a board of county commissioners administers the county program, the board shall enter into a cooperative agreement with the Department of Human Resources in accordance with G.S. 120-70.86(e). This cooperative agreement shall set forth minimum statewide performance criteria and compliance remedies.

(d) The Department of Human Resources shall adopt rules to implement the State-supervised child support enforcement system, and shall make regular reports to the Child Support Oversight Commission on rules and uniform standards being developed as a part of this process."

(d) Chapter 50 of the General Statutes is amended by adding the following Article:

"ARTICLE 3.

"Enforcement of Child Support in Certain Counties.

"§ 50-40. Purpose and applicability.

(a) The purpose of this Article is to establish the procedures for the enforcement of child support in counties selected under G.S. 110-128 for the early implementation of a universal, reformed State-supervised child support system on a demonstration basis.

(b) This Article shall apply only in the selected counties. In those counties, this Article shall apply on and after the implementation date to all cases in existence on that date or beginning on or after that date.

(c) Except to the extent that this Article specifically provides otherwise, all other child support laws of this State, including those in Articles 1 and 2 of this Chapter, of Chapter 49, of Chapter 52A, and of Article 9 of Chapter 110 of the General Statutes, shall apply in those counties with the same force and effect as if this Article had not been enacted; provided that:

(1) All child support cases in which payment through the clerk as defined in this Article is in effect shall be treated as 'IV-D Cases' under G.S. 50-13.9 and under Article 9 of Chapter 110 of the General Statutes;

(2) G.S. 50-33(a) shall not apply to any county to which this Article applies, and G.S. 50-33(b) shall apply to each of those counties as if a waiver of the federal expedited process requirement had never been obtained;

(3) G.S. 50-13.9(a) and (b) shall not apply to any case, and in cases in which payment through the clerk is in effect, the information required by G.S. 50-13.9(c) shall be given to the child support enforcement agency; and

(4) The term 'judge' when used in G.S. 110-131, 110-132, 110-133, and 110-136, and the term 'court' when used in G.S. 110-136(c) and G.S. 110-136.1 shall include district court judge and child support hearing officer.

"§ 50-41. Definitions.

(a) The definitions in G.S. 50-31 and in G.S. 110-129 apply in this Article.

(b) The following definitions apply in this Article:

(1) Implementation Date. - The date on which a State-supervised child support system is implemented in a county under G.S. 110-128.

(2) Child Support Enforcement Agency. - An agency that administers the State-supervised child support system in any county under the provisions of Article 9 of Chapter 110 of the General Statutes and Title IV-D of the Social Security Act.

(3) Payment Through the Clerk. - A method of paying child support under which all payments made by or for an obligor are paid to the clerk of superior court for transmission to the Department of Human Resources under G.S. 50-43(b).

(4) Direct Payment. - A method of paying child support under which all payments made by or for an obligor are paid directly to and received directly by the obligee and are not paid through the clerk.

"§ 50-42. Methods of paying child support and enforcing child support orders in existing cases.

(a) In each child support case that is in existence on the implementation date:

(1) The operative child support order and any income withholding that has been implemented in the case shall remain in full force and effect unless and until it is specifically modified by the court or until it expires by its own terms or by operation of law.

(2) All payments received by the clerk of superior court under that order shall be transmitted to the Department of Human Resources or disbursed to the custodial parent or other obligee, as they were being transmitted or disbursed immediately before the implementation date.

(b) When the child support in a case is being transmitted to the Department of Human Resources, the procedures of G.S. 50-43(b) shall be followed.

(1) Any proceedings to enforce the child support orders shall be initiated by the obligee personally or through a private attorney until the obligee begins to receive child support services from a child support enforcement agency as provided in G.S. 110-130.1;

(2) The clerk shall have no further responsibility or authority to monitor the obligor's compliance with the operative child support order or to initiate any enforcement proceedings;

(3) If any obligee begins to receive child support services from a child support enforcement agency as provided in G.S. 110-130.1, the agency shall notify the clerk. The clerk, without further court order, shall transmit to the Department of Human Resources all child support payments received after notification, and the procedures that apply under G.S. 50-43(b) to a case in which payment through the clerk is in effect shall be followed;

(4) If income withholding is implemented under Article 9 of Chapter 110 of the General Statutes by court order, the order shall provide for payment through the clerk unless the requirements for direct payment set forth in G.S. 50-43(c) are satisfied; and

(5) As soon as practical after the implementation date, the clerk and the child support enforcement agency shall give all parties notice of the matters set forth in this subsection and of any other information that they consider relevant, and in so doing shall comply with any procedures or guidelines that the Department of Human Resources and the Administrative Office of the Courts may prescribe.

"§ 50-43. Methods of paying child support and enforcing child support orders in new cases and in existing cases when a modified order is entered.

(a) In each child support case that is in existence on the implementation date or begun on or after that date, all child support orders, whether original or modified, shall provide for payment through the clerk unless the court orders direct payment under subsection (c) of this section; those orders shall also contain the provisions required by G.S. 110-136.3(a).

(b) When payment through the clerk is in effect in any case:

(1) All child support payments of child support made by or for the obligor shall be paid to the clerk of superior court;

(2) Upon receipt of any child support payment, the clerk shall promptly transmit the payment to the Department of Human Resources, and the Department shall promptly disburse the payment to the obligee;

(3) The child support enforcement agency for the county shall have sole responsibility and authority for monitoring the obligor's compliance with all child support orders in the case and for initiating any enforcement procedures that it considers appropriate;

(4) The clerk shall maintain all official records in the case, including records showing the amount of each payment of child support received from or on behalf of the obligor, along with the dates on which each payment was received and was transmitted to the Department of Human Resources; and

(5) The child support enforcement agency shall maintain any other records needed to monitor the obligor's compliance with or to enforce the child support orders in the case.

(1) The court may order direct payment when a consent to direct payment and a waiver of immediate income withholding are in effect;

(2) Consent to direct payment and waiver of immediate income withholding are in effect only if stated in a written agreement signed by each party and by the attorney of record, if any, for each party, and filed with the clerk;

(3) When direct payment is in effect:

a. Any proceedings to enforce the child support orders in the case must be initiated by the obligee personally or through a private attorney until the obligee begins to receive child support services from a child support enforcement agency as provided in G.S. 110-130.1;

b. Income withholding shall not be implemented, but the obligor remains subject to income withholding as provided in G.S. 110-136.3(b); and

c. If any obligee begins to receive child support services from a child support enforcement agency as provided in G.S. 110-130.1, the agency shall notify the clerk.

(4) The clerk, without further notice or hearing, shall promptly enter an order for payment through the clerk whenever:

a. A copy of a notice of obligation to withhold, with a copy of a certificate showing proper service on the payor named in the notice, is filed with the clerk under G.S. 110-136.4;

b. The records of the court otherwise show that income withholding has been implemented under Article 9 of Chapter 110 of the General Statutes; or

c. A child support enforcement agency notifies the clerk that any obligee is receiving child support services under G.S. 110-130.1."

(e) Effective July 1, 1994, G.S. 52A-3 reads as rewritten:

"§ 52A-3. Definitions.

As used in this Chapter unless the context requires otherwise:

(1) 'Court' means any court of record in this State having jurisdiction to determine liability of persons for the support of dependents in any criminal proceeding, and when the context requires, means the court of any other state as defined in substantially similar reciprocal law.

(2) 'Duty of support' means a duty of support whether imposed or imposable by law or by order, decree, or judgment of any court whether interlocutory or final or whether incidental to an action for divorce, separation, separate maintenance, or otherwise and includes the duty to pay arrearages of support past due and unpaid.

(3) 'Governor' includes any person performing the functions of Governor or the executive authority of any state covered by this Chapter.

(4) 'Initiating state' means a state in which a proceeding pursuant to this or a substantially similar reciprocal law is commenced. 'Initiating court' means the court in which a proceeding is commenced.

(5) 'Law' includes both common and statute law.

(6) 'Obligee' means a person including a state or political subdivision to whom a duty of support is owed or a person including a state or political subdivision that has commenced a proceeding for enforcement of an alleged duty of support or for registration of a support order. It is immaterial if the person to whom a duty of support is owed is a recipient of public assistance.

(7) 'Obligor' means any person owing a duty of support or against whom a proceeding for the enforcement of a duty of support or registration of a support order is commenced.

(8) 'Prosecuting attorney' means ~~the district attorney in the appropriate place who has the duty to enforce criminal laws relating to the failure to provide for the support of any person~~ any attorney who represents a child support enforcement agency under Title IV-D of the Social Security Act and Article 9 of Chapter 110 of the General Statutes in any county of this State.

(9) 'Register' means to record and file in the Registry of Foreign Support Orders.

(10) 'Registering court' means any court of this State in which a support order of a rendering state is registered.

(11) 'Rendering state' means a state in which the court has issued a support order for which registration is sought or granted in the court of another state.

(12) 'Responding state' means a state in which any responsive proceeding pursuant to the proceeding in the initiating state is commenced. 'Responding court' means the court in which the responsive proceeding is commenced.

(13) 'State' includes a state, territory, or possession of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the provinces of Canada in which reciprocity can be effected by administrative action, and any foreign jurisdiction in which this or a substantially similar reciprocal law is in effect.

(14) 'Support order' means any judgment, decree, or order of support in favor of an obligee whether temporary or final, or subject to modification, revocation, or remission, regardless of the kind of action or proceeding in which it is entered."

(f) Effective July 1, 1994, G.S. 52A-9 reads as rewritten:

"§ 52A-9. How duties of support are enforced.

All duties of support including the duty to pay arrearages are enforceable by action irrespective of relationship between the obligor and obligee. Jurisdiction of all proceedings hereunder shall be vested in any court of record in this State having jurisdiction to determine liability of persons for the support of dependents in any ~~criminal~~ proceeding."

(g) Effective July 1, 1994, G.S. 52A-10.1 reads as rewritten:

"§ 52A-10.1. Official to represent obligee; responding and initiating.

It shall be the duty of the ~~official who prosecutes criminal actions for the State in the court acquiring jurisdiction~~ prosecuting attorney to appear on behalf of the obligee in proceedings under this ~~Chapter.~~ Chapter, both when this State is the responding state and when this State is the initiating state. In the ~~event of appeal from a support order entered under this Chapter,~~ Appellate Division, the Attorney General shall represent the obligee."

(h) Effective July 1, 1994, G.S. 52A-10.3 is repealed.

(i) Effective July 1, 1995, G.S. 14-322 reads as rewritten:

"§ 14-322. Abandonment and failure to support spouse and children.

(a) For purposes of this Article:

(1) 'Supporting spouse' means a spouse, whether husband or wife, upon whom the other spouse is actually substantially dependent or from whom ~~such~~ the other spouse is substantially in need of maintenance and support.

(2) 'Dependent spouse' means a spouse, whether husband or wife, who is actually substantially dependent upon the other spouse for his or her maintenance and support or is substantially in need of maintenance and support from the other spouse.

(b) Any supporting spouse who shall willfully abandon a dependent spouse without providing that spouse with adequate support shall be guilty of a misdemeanor and upon conviction shall be punished according to subsection (f).

(c) Any supporting spouse who, while living with a dependent spouse, shall willfully neglect to provide adequate support for that dependent spouse shall be guilty of a misdemeanor and upon conviction shall be punished according to subsection (f).

~~(d)~~ Any parent who shall willfully neglect or refuse to provide adequate support for that parent's child, whether natural or adopted, and whether or not the parent abandons the child shall be guilty of a misdemeanor and upon conviction shall be punished according to subsection (f). Willful neglect or refusal to provide adequate support of a child shall constitute a continuing offense and shall not be barred by any statute of limitations until the youngest living child of the parent shall reach the age of 18 years.

(e) Upon conviction for an offense under this section, the court may make ~~such~~ an order as that will best provide for the support, as far as may be necessary, of the abandoned spouse or child or both, from the property or labor of the defendant. If the court requires the payment of child support, the amount of the payments shall be determined as provided in G.S. 50-14.4(e).

(f) A first offense under this section shall be punishable by a fine not exceeding five hundred dollars ($500.00), or by imprisonment for not more than six months or both. A second or subsequent offense shall be a misdemeanor punishable by fine, or by imprisonment for not more than two years, or both."

(j) Effective July 1, 1995, Article 1 of Chapter 49 of the General Statutes and G.S. 110-138.1 are repealed.

(k) Effective July 1, 1995, G.S. 49-14 reads as rewritten:

"§ 49-14. Civil action to establish paternity.

(a) The paternity of a child born out of wedlock may be established by civil action at any time ~~prior to such~~ before the child's eighteenth birthday. A certified copy of a certificate of birth of the child shall be attached to the complaint. ~~Such~~ The establishment of paternity shall not have the effect of legitimation.

(b) Proof of paternity ~~pursuant to~~ under this section shall be beyond a reasonable doubt.

(d) If the action to establish paternity is brought more than three years after birth of a child, paternity shall not be established in a contested case without evidence from a blood grouping test, or evidence that the putative father has declined an opportunity for such testing. In a contested case the court shall, on motion of any party, order that the alleged-parent defendant, the known natural parent, and the child submit to any blood, DNA, genetic, or other similar tests and comparisons that have been developed and adapted for purposes of establishing or disproving parentage and that are reasonably accessible to the alleged-parent defendant, the known natural parent, and the child. The results of those tests and comparisons including the statistical likelihood of the alleged parent's parentage, if available, shall be admitted in evidence when offered by a duly qualified licensed practicing physician, duly qualified immunologist, duly qualified geneticist, or other duly qualified person. The evidentiary effect of those tests and comparisons and the manner in which the expenses therefor are to be taxed as costs shall be prescribed in G.S. 8-50.1. If a jury tries the issue of parentage, the jury shall be instructed as set out in G.S. 8-50.1. There shall be no interlocutory appeal from a finding on the issue of parentage, but any error in the finding may be assigned in any appeal from, or other appellate review of, the final judgment entered in an action under this Article."

(l) Article 12 of Chapter 7A of the General Statutes is amended by adding two new sections to read:

"§ 7A-114. Clerk of superior court as child support hearing officer.

A clerk of superior court or an assistant clerk who meets the qualifications of G.S. 50-39 and is properly designated under Article 2 of Chapter 50 of the General Statutes as a child support hearing officer, may serve in that capacity and exercise ex officio the authority and responsibilities conferred upon child support hearing officers by that Article, and in so doing is a judicial officer of the District Court Division of the General Court of Justice.

"§ 7A-133.1. Magistrates designated as child support hearing officers not included in minimum or maximum for county.

When a magistrate has been designated as a child support hearing officer under Article 2 of Chapter 50 of the General Statutes, that magistrate shall not be considered in determining whether the county in which he or she was appointed has the minimum or maximum number of magistrates provided for in G.S. 7A-133, if the Director of the Administrative Office of the Courts determines that the magistrate's duties as a child support hearing officer have required or are likely to require, on the average, half or more of that magistrate's time each month."

(m) G.S. 7A-178 reads as rewritten:

"§ 7A-178. Magistrate as child support hearing officer.

A magistrate who meets the qualifications of G.S. 50-39 and is properly designated ~~pursuant to~~ under G.S. Chapter 50, Article 2 ~~to serve~~ as a child support hearing officer, may serve in that capacity and ~~has the~~ may exercise ex officio the authority and responsibilities ~~assigned to~~ conferred upon child support hearing officers by Chapter 50."

(n) G.S. 50-13.4 reads as rewritten:

"§ 50-13.4. Action for support of minor child.

(a) Any parent, or any person, agency, organization or institution having custody of a minor child, or bringing an action or proceeding for the custody of ~~such~~ the child, or a minor child by ~~his~~ the child's guardian may institute an action for the support of ~~such~~ the child as ~~hereinafter provided.~~ provided in this section.

(b) In the absence of pleading and proof that the circumstances otherwise warrant, the father and mother shall be primarily liable for the support of a minor child, and any other person, agency, organization or institution standing in loco parentis shall be secondarily liable for ~~such~~ support. Such other circumstances may include, but shall not be limited to, the relative ability of all the above-mentioned parties to provide support or the inability of one or more of them to provide support, and the needs and estate of the child. The judge may enter an order requiring any one or more of the above-mentioned parties to provide for the support of the child as may be appropriate in the particular case, and if appropriate the court may authorize the application of any separate estate of the child to ~~his~~ the child's support. However, the judge may not order support to be paid by a person who is not the child's parent or an agency, organization or institution standing in loco parentis absent evidence and a finding that ~~such~~ that person, agency, organization or institution has voluntarily assumed the obligation of support in writing. The preceding sentence shall not be construed to prevent any court from ordering the support of a child by an agency of the State or county which agency may be legally responsible ~~under law~~ for ~~such~~ support.

(c) Payments ordered for the support of a minor child shall be in such amount as to meet the reasonable needs of the child for health, education, and maintenance, having due regard to the estates, earnings, conditions, accustomed standard of living of the child and the parties, the child care and homemaker contributions of each party, and other facts of the particular case.

The court shall determine the amount of child support payments by applying the presumptive guidelines established ~~pursuant to~~ under subsection (cl). However, upon request of any party, the Court shall hear evidence, and from the evidence, find the facts relating to the reasonable needs of the child for support and the relative ability of each parent to provide support. If, after considering the evidence, the Court finds by the greater weight of the evidence that the application of the guidelines would not meet or would exceed the reasonable needs of the child considering the relative ability of each parent to provide support or would be otherwise unjust or inappropriate the Court may vary from the guidelines. If the court orders an amount other than the amount determined by application of the presumptive guidelines, the court shall make findings of fact as to the criteria that justify varying from the guidelines and the basis for the amount ordered.

Payments ordered for the support of a child shall terminate when the child reaches the age of 18 except:

(1) If the child is otherwise emancipated, payments shall terminate at that time;

(2) If the child is still in primary or secondary school when he reaches age 18, the court in its discretion may order support payments to continue until he graduates, otherwise ceases to attend school on a regular basis, or reaches age 20, whichever comes first.

(3) The court may order any obligor to make support payments after the child reaches the age of 18, when the payments are necessary to pay any child support arrearage that accrued before the child reached the age of 18.

(c1) Effective July 1, 1990, the Conference of Chief District Judges shall prescribe uniform statewide presumptive guidelines for the computation of child support obligations of each parent as provided in Chapter 50 or elsewhere in the General Statutes and shall develop criteria for determining when, in a particular case, application of the guidelines would be unjust or inappropriate. Prior to May 1, 1990 these guidelines and criteria shall be reported to the General Assembly by the Administrative Office of the Courts by delivering copies to the President Pro Tempore of the Senate and the Speaker of the House of Representatives. The purpose of the guidelines and criteria shall be to ensure that payments ordered for the support of a minor child are in such amount as to meet the reasonable needs of the child for health, education, and maintenance, having due regard to the estates, earnings, conditions, accustomed standard of living of the child and the parties, the child care and homemaker contributions of each party, and other facts of the particular case. The guidelines shall include a procedure for setting child support, if any, in a joint or shared custody arrangement which shall reflect the other statutory requirements herein.

Periodically, but at least once every four years, the Conference of Chief District Judges shall review the guidelines to determine whether their application results in appropriate child support award amounts. The Conference may modify the guidelines accordingly. The Conference shall give the Department of Human Resources, the Administrative Office of the Courts, and the general public an opportunity to provide the Conference with information relevant to the development and review of the guidelines. Any modifications of the guidelines or criteria shall be reported to the General Assembly by the Administrative Office of the Courts before they become effective by delivering copies to the President Pro Tempore of the Senate and the Speaker of the House of Representatives. The guidelines, when adopted or modified, shall be provided to the Department of Human Resources and the Administrative Office of the Courts, which shall disseminate them to the public through local IV-D offices, clerks of court, and the media.

Until July 1, 1990, the advisory guidelines adopted by the Conference of Chief District Judges pursuant to this subsection as formerly written shall operate as presumptive guidelines and the factors adopted by the Conference of Chief District Judges pursuant to this subsection as formerly written shall constitute criteria for varying from the amount of support determined by the guidelines.

(d) Payments for the support of a minor child shall be ordered to be paid to the person having custody of the child or any other proper person, agency, organization or institution, or to the court, for the benefit of ~~such~~ the child.

(e) Payment for the support of a minor child shall be paid by lump sum payment, periodic payments, or by transfer of title or possession of personal property of any interest therein, or a security interest in or possession of real property, as the court may order. In every case in which payment for the support of a minor child is ordered and alimony or alimony pendente lite is also ordered, the order shall separately state and identify each allowance.

(f) Remedies for enforcement of support of minor children shall be available as herein provided.

(1) The court may require the person ordered to make payments for the support of a minor child to secure the same by means of a bond, mortgage or deed of trust, or any other means ordinarily used to secure an obligation to pay money or transfer property, or by requiring the execution of an assignment of wages, salary or other income due or to become due.

(2) If the court requires the transfer of real or personal property or an interest therein as provided in subsection (e) as a part of an order for payment of support for a minor child, or for the securing thereof, the court may also enter an order which shall transfer title as provided in G.S. 1A-1, Rule 70 and G.S. 1-228.

(3) The remedy of arrest and bail, as provided in Article 34 of Chapter 1 of the General Statutes, shall be available in actions for child-support payments as in other cases.

(4) The remedies of attachment and garnishment, as provided in Article 35 of Chapter 1 of the General Statutes, shall be available in an action for child-support payments as in other cases, and for ~~such~~ those purposes the child or person bringing an action for child support shall be deemed a creditor of the defendant. Additionally, in accordance with the provisions of G.S. 110-136, a continuing wage garnishment proceeding for wages due or to become due may be instituted by motion in the original child support proceeding or by independent action through the filing of a petition.

(5) The remedy of injunction, as provided in Article 37 of Chapter 1 of the General Statutes and G.S. 1A-1, Rule 65, shall be available in actions for child support as in other cases.

(6) Receivers, as provided in Article 38 of Chapter 1 of the General Statutes, may be appointed in action for child support as in other cases.

(7) A minor child or other person for whose benefit an order for the payment of child support has been entered shall be a creditor within the meaning of Article 3 of Chapter 39 of the General Statutes pertaining to fraudulent conveyances.

(8) A judgment for child support shall not be a lien against real property unless the judgment expressly so provides, sets out the amount of the lien in a sum certain, and adequately describes the real property affected; but past due periodic payments may by motion in the cause or by a separate action be reduced to judgment which shall be a lien as other judgments.

(9) An order for the periodic payments of child support is enforceable by proceedings for civil contempt, and its disobedience may be punished by proceedings for criminal contempt, as provided in Chapter 5A of the General Statutes.

Notwithstanding the provisions of G.S. 1-294, an order for the payment of child support ~~which~~ that has been appealed to the appellate division is enforceable in the trial court by proceedings for civil contempt during the pendency of the appeal. Upon motion of an aggrieved party, the court of the appellate division in which the appeal is pending may stay any order for civil contempt entered for child support until the appeal is decided, if justice requires.

(10) The remedies provided by Chapter 1 of the General Statutes, Article 28, Execution; Article 29B, Execution Sales; and Article 31, Supplemental Proceedings, shall be available for the enforcement of judgments for child support as in other cases, but amounts so payable shall not constitute a debt as to which property is exempt from execution as provided in Article 16 of Chapter 1C of the General Statutes.

(10a) Income withholding as provided in Article 9 of Chapter 110 of the General Statutes shall be available for enforcement of child support either by motion in the cause in the original child support case or by any independent action or proceeding provided for in that Article.

(11) The specific enumeration of remedies in this section shall not constitute a bar to remedies otherwise available. Each enumerated remedy may be imposed in addition to or in substitution for any other enumerated remedy, and one or more remedies may be imposed together, separately, or in the alternative."

(o) G.S. 52A-30.1 reads as rewritten:

"§ 52A-30.1. Income withholding.

Income withholding ~~pursuant to~~ under G.S. 110-136.3 through 110-36.10 is available as a remedy to allow withholding from income derived in this State to enforce support orders from other states. This Chapter shall not apply when income withholding is the sole remedy being requested, but G.S. 110-136.3(d) shall apply."

(p) G.S. 110-129 reads as rewritten:

"§ 110-129. Definitions.

As used in this Article:

(1) 'Court order' means any judgment or order of the courts of this State or of another state.

(2) 'Dependent child' means any person under the age of 18 who is not otherwise emancipated, married or a member of the armed forces of the United States, or any person over the age of 18 for whom a court orders that support payments continue as provided in G.S. 50-13.4(c).

(3) 'Responsible parent' means the natural or adoptive parent of a dependent child who has the legal duty to support ~~said~~ that child and includes the father of an illegitimate child.

(4) 'Program' means the Child Support Enforcement Program established and administered ~~pursuant to~~ under the provisions of this Article and Title IV-D of the Social Security Act.

(5) 'Designated representative' means any person or agency designated by a board of county commissioners or the Department of Human Resources to administer a program of child support enforcement for a county or region of the State.

(6) 'Disposable income' means any form of periodic payment to an individual, regardless of sources, including but not limited to wages, salary, commission, self-employment income, bonus pay, severance pay, sick pay, incentive pay, vacation pay, compensation as an independent contractor, worker's compensation, unemployment compensation benefits, disability, annuity, survivor's benefits, pension and retirement benefits, interest, dividends, rents, royalties, trust income and other similar payments, which remain after the deduction of amounts for federal, State, and local taxes, Social Security, and involuntary retirement contributions. However, Supplemental Security Income, Aid for Dependent Children, and other public assistance payments shall be excluded from disposable income. For employers, disposable income means 'wage' as it is defined by G.S. 95-25.2(16). Unemployment compensation benefits shall be treated as disposable income only for the purposes of income withholding under the provisions of G.S. 110-136.4, and the amount withheld shall not exceed twenty-five percent (25%) of the unemployment compensation benefits.

(7) 'IV-D case' means a case in which services have been applied for or are being provided by a child support enforcement agency established ~~pursuant to~~ under Title IV-D of the Social Security Act as amended and this Article.

(8) 'Non-IV-D case' means any case, other than a IV-D case, in which child support is legally obligated to be paid.

(9) 'Initiating party' means the party, the attorney for a party, a child support enforcement agency, or the clerk of superior court who initiates an action, proceeding, or procedure as allowed or required by law for the establishment or enforcement of a child support obligation.

(10) 'Mistake of fact' means that the obligor:

(a) Is not in arrears in an amount equal to the support payable for one month; or

(b) Did not request that withholding begin, if withholding is pursuant to a purported request by the obligor for withholding; or

(d) Does not owe the amount of current support or arrearages specified in the advance notice or motion of ~~withholding.~~ withholding; or

(e) Should have less withheld because the rate of withholding exceeds the amount of child support in the operative child support order.

(11) 'Obligee', in a IV-D case, means the child support enforcement agency, and in a non-IV-D case means the individual to whom a duty of support is owed or the individual's legal representative.

(12) 'Obligor' means the individual who owes a duty to make child support payments under a court order.

(13) 'Payor' means any payor, including any federal, State, or local governmental unit, of disposable income to an obligor. When the payor is an employer, payor means employer as is defined at 29 USC § 203(d) in the Fair Labor Standards Act."

(q) G.S. 110-136.3(d) reads as rewritten:

"(d) Interstate cases. An interstate case is one in which a child support order of one state is to be enforced in another state.

(1) In interstate cases withholding provisions shall apply to a child support order of this or any other state. A petition addressed to this State to enforce a child support order of another state or a petition from an initiating party in this State addressed to another state to enforce a child support order entered in this State shall include:

a. A certified copy of the support order with all modifications, including any income withholding notice or order still in effect;

b. A copy of the income withholding law of the jurisdiction ~~which~~ that issued the support order, ~~provided that such~~ if the jurisdiction has a withholding law;

c. A sworn statement of arrearages;

d. The name, address, and social security number of the obligor, if known;

e. The name and address of the obligor's employer or of any other source of income of the obligor derived in the state in which withholding is sought; and

f. The name and address of the agency or person to whom support payments collected by income withholding shall be transmitted.

~~For purposes of enforcing a petition under this subsection, jurisdiction is limited to the purposes of income withholding.~~

(2) The law of the state in which the support order was entered shall apply in determining when withholding shall be implemented and interpreting the child support order. The law and procedures of the state where the obligor is employed shall apply in all other respects.

(3) Except as otherwise provided by subdivision (2), income withholding initiated under this subsection is subject to all of the notice, hearing and other provisions of Chapter 110.

(4) In all interstate cases notices and orders to withhold shall be served upon the payor by a North Carolina agency or judicial officer. In all interstate non-IV-D cases, the advance notice to the obligor shall be served ~~pursuant to~~ under G.S. 1A-1, Rule 4, Rules of Civil Procedure.

(5) For purposes of enforcing a petition under this subsection, jurisdiction is limited to income withholding and Chapter 52A shall not apply, but nothing in this subsection shall preclude any remedy otherwise available in a proceeding under Chapter 52A."

(r) Chapter 120 of the General Statutes is amended by adding a new Article to read:

"ARTICLE 12J.

"Child Support Oversight Commission.

"§ 120-70.85. Creation and membership of Child Support Oversight Commission.

(a) The Child Support Oversight Commission is established. The Commission consists of 19 members as follows:

(1) Five members appointed by the President Pro Tempore of the Senate, each of whom shall be a member of the Senate.

(2) Five members appointed by the Speaker of the House of Representatives, each of whom shall be a member of the House of Representatives.

(3) Four members appointed by the Director of the Administrative Office of the Courts, one of whom shall be a district court judge and one of whom shall be a clerk of superior court.

(4) Four members appointed by the Secretary of Human Resources, one of whom shall be a county director of social services and one of whom shall be a director of a designated representative, as defined in G.S. 110-129, that is not a county department of social services.

(5) One member appointed by the North Carolina Association of County Commissioners.

(b) Terms on the Commission are for two years and begin on the convening of the General Assembly in each odd-numbered year, except that the terms of the initial members begin on appointment and end on the date of the convening of the 1995 General Assembly. Members may complete a term of service on the Commission even if they do not seek reelection or are not reelected to the General Assembly, but resignation or removal from service in the General Assembly constitutes resignation or removal from service on the Commission.

"§ 120-70.86. Purpose and powers of Commission.

(a) The Legislative Child Support Oversight Commission shall examine, on a continuing basis, the child support enforcement system in North Carolina, to make ongoing recommendations to the General Assembly on ways to improve the enforcement of child support.

(b) The Commission's oversight duties shall include:

(1) A continuing oversight review of the phasing-in of the State-supervised child support system established under G.S. 110-128(b);

(2) A continuing fiscal analysis of the cost of implementation of the phasing-in with a report on funding and other legislative recommendations to the 1995 General Assembly;

(3) A long-term fiscal analysis of an equitable plan for State and county sharing consistent with the Social Services Plan;

(4) An exploration of State and local cooperative agreements that would maximize federal reimbursement, particularly in regard to obtaining federal participation in the cost of the following services: (i) sheriff's service of process costs, (ii) district attorney costs, (iii) Administrative Office of the Courts systems costs and (iv) Administrative Office of the Courts blood testing costs, as these costs are affected by the phasing-in and transferring of court roles to the Department of Human Resources; and

(5) Continuing consultation with all State and local agencies and individuals involved in child support enforcement as the restructured system prescribed by G.S. 110-128(b) is being implemented, and continuing consideration of problem areas and possible inequities.

(c) The Commission may make interim reports, with any recommended legislation, to the General Assembly on matters on which it may report to a regular session of the General Assembly.

(d) No later than February 1, 1995, the Commission shall submit to the General Assembly proposed legislation to recodify all North Carolina laws relating to child support, including the child support and related provisions of Chapters 49, 50, 52A, and 110 of the General Statutes. The purpose of the recodification shall be to organize in one Chapter of the General Statutes all provisions of law relating to child support so as to make that law as clear, consistent, and comprehensive as possible. To assist the Commission in preparing the legislation, the Commission shall appoint a drafting committee, whose members need not be members of the Commission. The chair of the drafting committee shall be named by the cochairs of the Commission.

(e) No later than February 1, 1995, the Commission shall submit to the General Assembly proposed legislation to specify or clarify the terms of the cooperative agreement provided for in G.S. 110-141(c), or to clarify or limit the rule-making power of the Department of Human Resources under G.S. 110-141(d). The legislation shall address the following issues:

(1) Performance criteria;

(2) Procedures for auditing and evaluating the parties' performance;

(3) Methods for improving the parties' performance through incentives, including the use of any available State or federal funds;

(4) Appropriate remedies for any party's failure to meet performance criteria, including the sequence and procedures for applying the remedies;

(5) The mutuality of the terms of cooperative agreements;

(6) The uniform application of performance criteria to child support enforcement programs administered by the State, and to those administered by a county or its designees; and

(7) Any other issues that the Commission considers appropriate.

"§ 120-70.87. Organization of Commission.

(a) The President Pro Tempore of the Senate and the Speaker of the House of Representatives shall each designate a cochair of the Child Support Oversight Commission. The Commission shall meet at least once a quarter and may meet at other times upon the call of the cochairs.

(b) A quorum of the Commission is 10 members. No action may be taken except by a majority vote at a meeting at which a quorum is present. While discharging its official duties, the Commission has the powers of a commission under G.S. 120-19 and G.S. 120-19.1 through G.S. 120-19.4.

(c) Legislative members of the Commission and of its drafting committee shall receive subsistence and travel allowances at the rates established by G.S. 138-5. The Legislative Services Commission through the Legislative Administrative Officer shall assign professional staff to assist the Commission in its work. Upon the direction of the Legislative Services Commission, the Supervisors of Clerks of the Senate and of the House of Representatives shall provide clerical assistance to the Commission. The expenses for clerical employees shall be borne by the Commission. All expenses of the Commission shall be paid from the Child Support Reform Implementation Fund."

(s) (a) The General Assembly finds that, as a result of the enactment of The Child Support Reform Act of 1993, if enacted, the Department of Human Resources and the Administrative Office of the Courts and the county-administered child support programs will incur certain personnel and other operating expenses, which are not provided for in this act, in implementing a restructured State-supervised child support system in the counties selected under G.S. 110-128, as amended by Section 1 of The Child Support Reform Act of 1993, if enacted, and in preparing the report required by that section; these expenses are referred to in this section as "child support reform implementation expenses".

(b) There is created in the Department of Human Resources a nonreverting special fund to be known as the "Child Support Reform Implementation Fund". The "Child Support Reform Implementation Fund" includes all federal grants and other funds available to match the costs incurred by the State in operating the Administrative Office of the Courts' Child Support Computer System, in having district attorneys pursue URESA cases, in receipting and accounting for payments in all IV-D cases newly opened by, or transferred from clerks of superior court to, the child support enforcement agencies in the counties in which the restructured child support system is implemented pursuant to G.S. 110-128, and any other State costs for which new federal IV-D receipts can be identified and collected. This fund shall be used solely to pay child support reform implementation expenses at the State and county levels, and funds shall be transferred from this fund to the Department of Human Resources as they are required to pay those expenses.

(c) The Department of Human Resources and the Administrative Office of the Courts shall take all steps necessary to separate out and to document all the expenses for which federal receipts may be obtained for the Child Support Reform Implementation Fund and to apply for any federal funds which may be available.

(d) Notwithstanding the provisions of G.S. 143-23, the Secretary of the Department of Human Resources, with the approval of the Office of State Budget and Management, shall make use, to the extent possible, of any funds appropriated or otherwise available for the 1993-95 fiscal years to make up any difference between the funds available to it from the Child Support Reform Implementation Fund and the actual child support reform implementation expenses it incurs.

(e) To account for any funds transferred from the Child Support Reform Implementation Fund under subsection (b) and for funds transferred under subsection (d), and to account for all child support reform implementation expenses paid from any funds so transferred, the operating budgets of the Department of Human Resources for the 1993-95 biennium shall include a budget purpose entitled "Child Support Reform Implementation".

(f) Funds in this account shall be used to help offset increased costs to the IV-D agencies for implementation of the reformed child support system.

(t) (1) There is appropriated from the General Fund to the Division of Social Services, Department of Human Resources, the sum of seven hundred thousand dollars ($700,000) for the 1993-94 fiscal year and the sum of seven hundred thousand dollars ($700,000) for the 1994-95 fiscal year, to implement this act.

(2) There is appropriated from the General Fund to the Administrative Office of the Courts the sum of one hundred thousand dollars ($100,000) for the 1993-94 fiscal year, for automation costs to implement the restructured systems mandated by this act.

(u) The base budget of the Division of Social Services, Department of Human Resources, is reduced by eight million one hundred thousand dollars ($8,100,000) for the 1993-94 fiscal year and by eight million one hundred thousand dollars ($8,100,000) for the 1994-95 fiscal year, due to the savings resulting from the implementation of this act.

(v) Except as otherwise provided, this section becomes effective July 1, 1993.

---STUDY SCHOOL FOR DEAF FUNDING.

Sec. 78. (a) The General Assembly finds that North Carolina has excess capacity in its schools for the deaf, that North Carolina's public schools serve almost three times the number of deaf children as do the schools for the deaf, and that the cost for educating children in the schools for the deaf is significantly higher than the cost of educating these children in North Carolina's public schools.

(b) It is the intent of the General Assembly to examine the funding and the utilization of the schools for the deaf to determine how best to serve the needs of North Carolina children who are hearing-impaired in the most cost-efficient manner.

---TWENTY POSITIONS ELIMINATED/DHR.

Sec. 79. (a) The General Assembly finds that a well-structured organization can operate with a managerial/supervisory span of control of between three and six positions. A higher supervisor-to-staff ratio that occurs from narrow spans of control can result in increased operating costs, and the creation of a middle layer of management that can impede organizational efficiency. The General Assembly further finds that 20 positions in the Secretary's Office, many of which are managerial/supervisory positions, have three or fewer positions directly reporting to them, and involve one-to-one reporting requirements.

(b) The 20 excess positions in the Office of the Secretary of the Department of Human Resources that have three or fewer positions reporting to them are eliminated. These positions are in the following organizational units of the Secretary's Office:

Office of Governmental Liaison Services

Council on Developmental Disabilities

Division of Information Systems

Division of Economic Opportunity

Division of Public Affairs

Division of Personnel Management Services

Division of Budget and Analysis

Office of the Controller

The Secretary of the Department of Human Resources shall identify those 20 positions to be eliminated in accordance with the finding in subsection (a) of this section and with this subsection.

(c) After identifying the positions to be eliminated by subsection (b) of this section, the Secretary of Human Resources shall combine the Office of Government Liaison Services and the Office of Public Affairs into an Office of External Affairs, under a director whom the Secretary shall appoint. This director shall report directly to the Secretary.

(d) The base budget of the Department of Human Resources is reduced by six hundred six thousand dollars ($606,000) for the 1993-94 fiscal year and by six hundred six thousand dollars ($606,000) for the 1994-95 fiscal year due to the implementation of this section.

(e) This section becomes effective July 1, 1993.

---ASS'T. SEC. POS. ELIM./DHR.

Sec. 80. (a) The General Assembly finds that an efficient organization has minimal layers of management to ensure that there are clear lines of communication throughout the organization structure, to facilitate organizational structure, and to facilitate organizational decision-making efficiency. The General Assembly further finds that there are three Assistant Secretary positions in the Department of Human Resources that are not performing the functions that their titles imply but, in effect, represent an unneeded layer of management in the Department.

(b) The positions of Assistant Secretary for Budget and Management, of Assistant Secretary for Administration and Liaison Services, and the Assistant Secretary for Aging are eliminated. The Secretary of Human Resources shall ensure that the organizational units within the span of control of these assistant secretaries are reorganized so as to report directly to the Secretary or Deputy Secretary or to be moved into the appropriate program divisions.

(d) The base budget of the Department of Human Resources is reduced by eighty-nine thousand dollars ($89,000) for the 1993-94 fiscal year and by eighty-nine thousand dollars ($89,000) for the 1994-95 fiscal year due to the implementation of this section.

(e) This section becomes effective July 1, 1993.

---DHR FTE POSITIONS ELIMINATED.

Sec. 81. (a) The General Assembly finds that there are approximately 26 positions in the Department of Human Resources that are considered excessive because of narrow spans of control or having fewer than three positions reporting to them, because of duplicate work being performed by similar positions, because of performance of unnecessary functions, or because of a level of work load that does not justify a full-time position. The General Assembly further finds that an additional 12 positions are considered excessive because they represent an additional layer of management or supervision that is not warranted.

(b) The 38 positions in the Department of Human Resources that involve excessive layers of management, excessively narrow spans of control, or having fewer than three positions reporting to them, overlapping functions, or unnecessary positions are eliminated.

The Secretary of Human Resources shall identify the positions to be eliminated as indicated in this subsection.

The 26 positions that are considered excessive because of narrow spans of control, duplicate work being performed by similar positions, performance of unnecessary functions, or level of work load that does not justify a full-time position shall be identified for elimination from the following divisions and organizational units:

(1) Division of Mental Health, Developmental Disabilities, and Substance Abuse Services:

a. Quality Improvement Section;

b. Alcohol and Drug Abuse Section;

c. Developmental Disabilities Section;

(2) Division of Personnel Management Services:

a. Operations Section;

(3) Division of Youth Services:

a. Community Services;

b. Institutional Services;

(4) Division of Social Services:

a. Information Systems;

b. Regional Administration;

c. Child Support Enforcement;

d. Employment Programs;

e. Public Assistance;

f. Children's Services; and

(5) Division of Vocational Rehabilitation:

a. Staff Development;

b. Support Services;

c. Administrative Services;

d. Planning and Evaluation Services.

(c) The 12 positions that are considered to be excessive because they represent an additional layer of management or supervision that is not warranted are to be identified for elimination from the following divisions and organizational units:

(1) Division of Mental Health, Developmental Disabilities, and Substance Abuse Services:

a. Mental Health Section;

b. Alcohol and Drug Abuse Section;

c. Developmental Disabilities Section;

d. Willie M Services Section;

(2) Division of Social Services:

a. Child Support Enforcement;

b. Employment Programs; and

c. Public Assistance.

(d) The base budget of the Department of Human Resources is reduced by one million one hundred fifty thousand dollars ($1,150,000) for the 1993-94 fiscal year and by one million one hundred fifty thousand dollars ($1,150,000) for the 1994-95 fiscal year due to the implementation of this section.

(e) This section becomes effective July 1, 1993.

---DHR DECENTRALIZATION.

Sec. 82. (a) The General Assembly finds that a Cabinet Secretary's Office should act as a policy and administrative oversight function and should rarely if ever be directly involved with program service delivery. There should, generally, be no programmatic functions located in the Secretary's office and all pertinent functions should be decentralized and performed at the program division level. The General Assembly further finds that a considerable number of programmatic functions is currently inappropriately placed in the Office of the Secretary of the Department of Human Resources.

(b) The following programmatic functions are transferred from the Office of the Secretary of the Department of Human Resources to the specified divisions:

(1) The Division of Economic Opportunities, which administers grant programs that provide opportunities for low-income individuals and families, to the Division of Social Services;

(2) The Council on Developmental Disabilities, which is a federal program designed to assist states in developing and implementing plans for the developmentally disabled, to the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services;

(3) The North Carolina Interagency Coordinating Council, which provides the necessary management and interagency coordination for the planning, development, and evaluation of services to developmentally disabled and at-risk infants, the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services;

(4) The volunteer services provided by the Office of Volunteer Development Services, to the respective program divisions being served; and

(5) Effective July 1, 1995, when the program is fully operational, the Director of Family-Centered Services, which is a newly created program that provides policy and resource coordination among the various divisions within the Department of Human Resources to strengthen family-centered services, to the Division of Social Services.

(c) The position of Special Assistance for Education in the Office of the Secretary of the Department of Human Resources is eliminated and its position responsibilities are transferred to the Deputy Secretary of the Department of Human Resources.

(d) All of the powers, duties, and functions of the Office of Rural Health and Resource Development are transferred from the Department of Human Resources to the Department of Environment, Health, and Natural Resources. This transfer shall include all elements of a Type I transfer, as defined in G.S. 143A-6.

(e) Effective upon the transfers mandated by subsection (b) of this section being effected, the following organizational units in the Department of Human Resources shall report to the Secretary:

(1) Deputy Secretary;

(2) DHR Counsel/Office of Legal Affairs;

(3) Office of External Affairs;

(4) Division of Information Systems;

(5) Division of Personnel Management Services;

(6) Division of Budget and Analysis; and

(7) Office of the Controller.

(f) Effective upon the transfers mandated by subsection (b) of this section, the program divisions shall report to the Deputy Secretary.

(g) The base budget of the Department of Human Resources is reduced by two hundred forty-three thousand dollars ($243,000) for the 1993-94 fiscal year and by two hundred forty-three thousand dollars ($243,000) for the 1994-95 fiscal year due to the implementation of this section.

(h) The base budget of the Department of Environment, Health, and Natural Resources is reduced by --- for the 1993-94 fiscal year and by -- for the 1994-95 fiscal year due to the transfer of the budget of the Office of Rural Health and Resource Development.

(i) This section becomes effective July 1, 1993.

---DHR UNIT REORG.

Sec. 83. (a) The General Assembly finds that, if organizational units within departments are misplaced, vital fiscal and human resources are wasted in unnecessary management positions and in excessive coordination of services. The General Assembly further finds that several organizational units and positions are organizationally misplaced in the Department of Human Resources.

(b) All of the powers, duties, budget, and functions of the Charitable Solicitation Unit of the Division of Facility Services, Department of Human Resources, are transferred to the Department of Justice, Office of the Attorney General, Consumer Protection Section. This transfer has all the elements of a Type I transfer, as defined in G.S. 143A-6.

(d) G.S. 131C-3(5) reads as rewritten:

"(5) 'Department' means the Department of ~~Human Resources.~~ Justice."

(e) G.S. 131C-4(a) reads as rewritten:

"(a) Any person who solicits charitable contributions shall apply for and obtain an annual license from the ~~Department of Human Resources.~~ Department. A person who is authorized to solicit on behalf of a licensed or exempt person is not required to obtain a license under this section."

(f) G.S. 131C-7(a)(6) reads as rewritten:

"(6) A copy of a financial statement in a consolidated report audited by an independent public accountant for the person's immediately preceding fiscal year or, if none, for the present fiscal year or part thereof; provided that if total support and revenue exceeds two hundred fifty thousand dollars ($250,000) for the fiscal year or part thereof, the report shall be audited by a certified public accountant. Information as to the total support and revenue and all of the fund-raising activities including the balance sheet, kind and amounts of funds raised, costs and expenses incidental thereto, allocation or disbursement of funds raised, changes in fund balances, notes to the audit and the opinion as to the fairness of the presentation by the accountant shall be included. This report shall conform to the accounting and reporting procedures established by the ~~Commission.~~ Attorney General. The ~~Commission~~ Attorney General shall adopt rules for simplified reporting by persons whose total support and revenue is one hundred thousand dollars ($100,000) or less."

(g) G.S. 131C-8(a) reads as rewritten:

"(a) An application for licensure shall be in writing, verified under oath or affirmation and shall contain such information as specified in G.S. 131C-7 as the ~~Commission~~ Attorney General shall require. In addition, the application shall contain:

(1) The name and address of all officers, employees and agents;

(2) The name and address of all persons who own a ten percent (10%) or more interest in the applicant; and

(3) A description of any other business conducted by the applicant or any person who owns a ten percent (10%) or more interest in the applicant."

(h) G.S. 131C-9(a) reads as rewritten:

"(a) An application for licensure under G.S. 131C-4 or 131C-6 shall be accompanied by a fee not to exceed one hundred dollars ($100.00) in accordance with a fee schedule established by the ~~Commission.~~ Attorney General."

(i) G.S. 131C-10 reads as rewritten:

"§ 131C-10. Bond.

An applicant under G.S. 131C-6 shall, at the time of making application, file with and have approved by the Department a bond in which the applicant shall be the principal obligor in the sum of twenty thousand dollars ($20,000) with one or more sureties satisfactory to the Department, whose liability in the aggregate as such sureties will at least equal the said sum; and the applicant shall maintain said bond in effect so long as the license is in effect. The bond shall run to the State for the use of said bond for any penalties and to any person who may have a cause of action against the obligor of the bond for any losses resulting from the obligor's conduct of any and all activities subject to this Chapter or arising out of a violation of this Chapter or any rule of the ~~Commission.~~ Attorney General. A bond shall not be required of any applicant who does not personally receive any of the contributions collected and who does not personally handle any of the contributions expended. In lieu of the bond required under this section, an applicant may submit a certificate of deposit in the amount of twenty thousand dollars ($20,000) that is either payable to the State and unrestrictively endorsed to the Department; or in the case of a negotiable certificate of deposit, is unrestrictively endorsed to the Department; or, in the case of a nonnegotiable certificate of deposit, is assigned to the Department in a form satisfactory to the Department. Access to the certificate of deposit in favor of the State is subject to the same conditions as for a bond under this section and shall extend for a period not less than four years after the licensee ceases activities that are subject to this Chapter. The Department shall deliver to the State Treasurer certificates of deposit submitted under this section."

(i1) G.S. 131C-12 reads as rewritten:

"§ 131C-12. Rule-making authority.

The ~~Social Services Commission shall have the authority to~~ Attorney General shall adopt rules necessary for the implementation of this Chapter and to prevent false and deceptive statements and conduct in the solicitation of charitable contributions."

(j) G.S. 131C-13 reads as rewritten:

"§ 131C-13. Fiscal records.

Any person subject to licensure under this Chapter shall maintain accurate fiscal records in accordance with rules adopted by the ~~Commission.~~ Attorney General."

(k) G.S. 131C-18 reads as rewritten:

"§ 131C-18. Duty of ~~Secretary of Human Resources~~ Attorney General to investigate.

The ~~Secretary of Human Resources shall have the power, and it shall be his duty, to~~ Attorney General shall investigate, from time to time, the activities of all persons soliciting charitable contributions in this State, which are or may in his opinion be subject to this Chapter, or which have or may have violated the provisions of this Chapter. Such investigation shall be with a view of ascertaining whether this Chapter is being or has been violated by any such person, and if so, in what respect, with the purpose of acquiring such information as may be necessary to enable ~~him~~ the Attorney General to grant or deny an application for licensure, to revoke a license, to seek an injunction against any person, or to take any other action pursuant to this Chapter."

(l) G.S. 131C-19 reads as rewritten:

"§ 131C-19. Power to compel examination.

In performing the duty required in G.S. 131C-18, the ~~Secretary shall have the power,~~ Attorney General may, at all times, to require the officers, agents or employees of any person soliciting charitable contributions in this State and all other persons having knowledge with respect to the matters and activities of such persons, to submit themselves to ~~examination by him,~~ examination, and produce for ~~his~~ inspection any of the books and papers of any such persons, or which are in any way connected with the business thereof; and the ~~Secretary is hereby given the right to~~ Attorney General may administer oath to any person ~~whom he may desire to examine.~~ under examination. ~~He shall also, if it may become necessary, have the right to~~ The Attorney General may apply to any justice or judge of the appellate or superior court divisions, after five days notice of ~~such~~ application, for an order on any ~~such~~ person ~~he may desire to examine~~ under examination to appear ~~and subject himself or itself to such examination,~~ and be examined, and disobedience of such order shall constitute contempt, and shall be punishable as in other cases of disobedience of a proper order of such judge."

(m) G.S. 131C-21 reads as rewritten:

"§ 131C-21. Injunction.

If any person shall violate or threaten to violate any provision of this Chapter, the ~~Secretary of Human Resources~~ Attorney General may institute an action in the Superior Court of Wake County for injunctive relief against such violation or threatened violation."

(n) Rules adopted by the Social Services Commission regulating the Charitable Solicitation Act remain in effect until rewritten or repealed by the Attorney General.

(o) This section becomes effective October 1, 1993, and applies to charitable solicitations required on or after that date.

(p) All of the powers, duties, and functions of the Employee Assistance Program (EAP) Branch, Department of Human Resources, that are responsible for identifying troubled employees throughout the Department of Human Resources and assisting them to find personal counseling help or to access the appropriate referral resources and that also assist the area mental health programs through promotion, training, and support of area EAP procedures, are transferred to the Division of Personnel Management Services in the Office of the Secretary.

(q) All of the powers, duties, and functions of the Adult Services Branch/Controlled Substance Regulatory Unit, Department of Human Resources, that is responsible for implementing the regulatory responsibilities of the North Carolina Controlled Substance Act and that does licensing and inspection of drug-related facilities in order to prevent legitimately manufactured, distributed, or dispensed controlled substances from being delivered into the illicit market, are transferred to the Division of Facility Services.

(r) The Computer Systems Analyst IV position in the Division of Vocational Rehabilitation, Department of Human Resources, is transferred to the Division's Administrative Services Section for better coordination in implementing the Division's computer system.

(s) The Staff Development Specialist position located in the Program Operations and Support Section of the Division of Vocational Rehabilitation, Department of Human Resources, is transferred to the Division's Administrative Services Section to eliminate fragmentation of the computer program automation function.

(t) This section becomes effective July 1, 1993.

---MEDICAID COST CONTROL POLICY.

Sec. 84. (a) The General Assembly finds that certain drastic measures could be taken to reduce the level of Medicaid expenditures, such as by eliminating eligibles and services, and imposing restrictive service limits. The General Assembly finds, however, that these measures are effective only in the short term. In the long term, they do not decrease demand for services. The cost of care provided to newly ineligible clients may be shifted to other payors as hospitals and other providers attempt to recover the costs of uncompensated care. Eliminating services that allow individuals to remain at home will eventually increase the use and costs of more expensive facility-based care. Eliminating coverage of primary care services will result in many individuals postponing care. Eventually, more expensive institutional services are needed. Thus, these drastic measures may result in the ultimate increase of expenditures for health care. Also, by shifting costs to other payors, State expenditures for health care will increase because federal matching funds will be forfeited.

It is the intent of the General Assembly that State Medicaid policy should incorporate more creative strategies for controlling Medicaid costs, such as by the development of a managed care program. This policy shall also make clear that drastic measures such as the elimination of eligible groups and optional services or the imposition of restrictive service limits shall be employed only as options of last resort.

(b) The Division of Medical Assistance, Department of Human Resources, shall conform its State Medicaid policy to the requirements of subsection (a) of this section.

---MEDICAID BUDGET CONSENSUS.

Sec. 85. (a) The General Assembly finds that it is in the best interests of the State to develop a formal communications process among State staff to develop and monitor Medicaid budget projections.

(b) The Secretary of the Department of Human Resources, the Director of the Office of State Budget and Management, and the Cochair of the Legislative Services Commission shall ensure that the finding made by Section 1 of this act is effected to serve the best interests of the State.

---MEDICAID SERVICES COPAYMENTS.

Sec. 86. (a) Effective January 1, 1993, the Division of Medical Assistance, Department of Human Resources, shall impose copayments for the following services: home health, hospital inpatient, ambulatory surgical center, personal care, and durable medical equipment. The copayments shall be established by rule and shall not exceed the limits allowed by federal law and regulation.

(b) The base budget of the Division of Medical Assistance, Department of Human Resources, is reduced by five million seven hundred thousand dollars ($5,700,000) for the 1993-94 fiscal year and by six million one hundred thousand dollars ($6,100,000) for the 1994-95 fiscal year due to the imposition of copayments mandated by subsection (a) of this section.

(c) It is the intent of the General Assembly to reduce the base budget of the Division of Medical Assistance, Department of Human Resources, in subsequent fiscal years due to this act's imposition of copayments, according to the following schedule:

Fiscal Year Amount

1995-96 $6,500,000

1996-97 $7,000,000

1997-98 $7,600,000

1998-99 $8,100,000

1999-00 $8,700,000

2000-01 $9,300,000

2001-02 $9,800,000.

(d) This section becomes effective July 1, 1993.

---DRG-BASED PAYMENT.

Sec. 87. (a) Effective July 1, 1994, the Division of Medical Assistance, Department of Human Resources, shall implement a Diagnosis-Related Groups (DRG)-Based Medicaid reimbursement system that uses peer groups to establish base payment amounts for hospitals.

(b) There is appropriated from the General Fund to the Division of Medical Assistance, Department of Human Resources, the sum of three hundred sixty-two thousand five hundred dollars ($362,500) for the 1993-94 fiscal year for administrative costs incurred in implementing this section.

(c) The base budget of the Division of Medical Assistance, Department of Human Resources, is reduced by six million eight hundred thousand dollars ($6,800,000) for the 1994-95 fiscal year due to the savings incurred by implementing subsection (a) of this section.

(d) It is the intent of the General Assembly to reduce the base budget of the Division of Medical Assistance, Department of Human Resources, in subsequent fiscal years due to the savings incurred by implementing subsection (a) of this section, according to the following schedule:

Fiscal Year Amount

1995-96 $7,000,000

1996-97 $7,300,000

1997-98 $7,500,000

1998-99 $7,800,000

1999-00 $8,100,000

2000-01 $8,300,000

2001-02 $8,600,000.

(e) This section becomes effective July 1, 1993.

---MEDICAID CONTRACTING.

Sec. 88. (a) Effective July 1, 1994, in order to encourage facilities to operate efficiently and reduce Medicaid expenditures for inpatient hospital services, the Division of Medical Assistance, Department of Human Resources, shall implement selective contracting programs for Medicaid in geographically feasible regions of the State. The Division may consider these programs for areas where competition among hospitals exists, such as in Durham, Charlotte, and Raleigh. If the Division does implement selective contracting programs in these areas, the Division shall negotiate with facilities to obtain better rates. The Division shall also develop mechanisms that encourage physicians to send Medicaid recipients to these low-cost facilities whenever possible.

(b) There is appropriated from the General Fund to the Division of Medical Assistance, Department of Human Resources, the sum of one hundred thirty-five thousand dollars ($135,000) for the 1993-94 fiscal year, as administrative costs incurred in implementing subsection (a) of this section.

(c) The base budget of the Division of Medical Assistance, Department of Human Resources, is reduced by six million nine hundred thousand dollars ($6,900,000) for the 1994-95 fiscal year due to savings incurred by the implementation of subsection (a) of this section.

(d) This section becomes effective July 1, 1993.

---MEDICAID "BUNDLED" PAYMENT.

Sec. 89. (a) The General Assembly finds that prospective reimbursement of outpatient hospital services encourages hospitals to control costs and efficiently use resources. "Bundled" prospective payment relies on a fee schedule for specific service "bundles", which are groups of services that are provided on the same day or as part of the same incident of care.

(b) Effective July 1, 1994, the Division of Medical Assistance shall implement a "bundled" prospective payment approach for Medicaid outpatient hospital services. The development of this approach shall include consideration of the following:

(1) Use of peer grouping to address the problem that facilities that serve more seriously ill patients may be underpaid;

(2) Consideration of prospective fee-for-service payment versus current cost-settled arrangements;

(3) Payment of nonemergency care at comparable clinic or office visit rates;

(4) Flat rate payment for all facilities versus current facility-specific percentage of costs;

(5) Rates set based on relative cost of "bundled" services versus current service-specific costs;

(6) Payment for outpatient surgeries at rates based on Medicare's Ambulatory Surgery Center (ASC) Groups; and

(7) Rebasing on a multiyear cycle, with annual updates based on an inflator.

(c) The Division shall report on its progress towards implementing a "bundled" prospective payment approach for Medicaid hospital outpatient services to the appropriate subcommittees of the House and Senate Appropriations Committees of the 1993 General Assembly, Regular Session 1994.

(d) There is appropriated from the General Fund to the Division of Medical Assistance, Department of Human Resources, the sum of one hundred fifty thousand dollars ($150,000) for the 1993-94 fiscal year, as administrative costs incurred in developing the "bundled" prospective payment approach mandated by this section.

(e) The base budget of the Division of Medical Assistance, Department of Human Resources, is reduced by eight hundred thousand dollars ($800,000) for the 1994-95 fiscal year due to implementation of the "bundled" prospective payment approach mandated by this section.

(f) It is the intent of the General Assembly to reduce the base budget of the Division of Medical Assistance, Department of Human Resources, in subsequent fiscal years due to implementation of the "bundled" prospective payment approach mandated by this section, according to the following schedule:

Fiscal Year Amount

1995-96 $900,000

1996-97 $1,000,000

1997-98 $1,200,000

1998-99 $1,400,000

1999-00 $1,600,000

2000-01 $1,800,000

2001-02 $2,000,000.

(g) This section becomes effective July 1, 1993.

---MEDICAID NURSING HOME PAYMENT.

Sec. 90. (a) The General Assembly finds that peer grouping identifies facilities that can be expected to incur similar costs based on certain statistically valid variables such as geographic location, bed size, and occupancy levels. A peer group ceiling rate, generally based on a percentile of costs or on the median cost, establishes the standard for efficient and economic facilities. The General Assembly finds that peer grouping will achieve savings for North Carolina because facilities with costs above the ceiling will have payments capped at the ceiling level. To encourage facilities with costs below the ceiling to maintain these costs, an efficiency incentive can be paid.

The General Assembly further finds that separate peer group ceilings should be established for each cost component. North Carolina's current policy to allow more generous reimbursement of direct patient care costs to ensure quality of care should continue, but costs such as housekeeping and laundry and linen, which do not reflect the costs of hands-on patient care, should be moved into another component with more stringent ceilings.

(b) Effective July 1, 1994, the Division of Medical Assistance, Department of Human Resources, shall implement a prospective peer-grouped, case mix-based Medicaid reimbursement methodology for nursing homes, not only to achieve savings but also to promote access for patients requiring a higher level of care, because this reimbursement is more closely tied to patient needs than the one currently employed. This methodology shall address the findings made in subsection (a) of this section and, in addition, shall:

(1) Update rates each year by an appropriate inflation factor, in order to allow greater predictability in estimating nursing facility expenditures;

(2) Adjust payments by the case mix, to reflect the varying levels of resources required to treat patients; and

(3) Incorporate the input of nursing facilities in the development of the methodology, to promote greater understanding of its goals and objectives.

(c) There is appropriated from the General Fund to the Division of Medical Assistance, Department of Human Resources, the sum of one hundred eighty thousand dollars ($180,000) for the 1993-94 fiscal year in administrative costs incurred in implementing this section.

(d) The base budget of the Division of Medical Assistance, Department of Human Resources, is reduced by nine million six hundred thousand dollars ($9,600,000) for the 1994-95 fiscal year due to the implementation of this section.

(e) It is the intent of the General Assembly to reduce the base budget of the Division of Medical Assistance, Department of Human Resources, in subsequent fiscal years due to the implementation of this section, according to the following schedule:

Fiscal Year Amount

1995-96 $10,200,000

1996-97 $10,800,000

1997-98 $11,400,000

1998-99 $12,100,000

1999-00 $12,800,000

2000-01 $13,600,000

2001-02 $14,400,000.

(f) This section becomes effective July 1, 1993.

---CON REIMBURSEMENT.

Sec. 91. (a) The General Assembly finds that the Certificate of Need process remains justified for long-term care beds but that the Medicaid reimbursement system for these beds should be adjusted to promote savings.

(b) Effective July 1, 1993, the Division of Medical Assistance, Department of Human Resources shall make those changes in the Medicaid reimbursement system for long-term care facilities that will promote savings.

---MEDICAID INDIRECT CARE CAP.

Sec. 92. (a) The General Assembly finds that, under the current Medicaid reimbursement policy, nursing facilities retain the entire difference between actual indirect costs and the flat indirect rate. Differences between indirect costs and the flat indirect rate are substantial for some facilities. The General Assembly finds that establishing a ceiling amount on these payments does not impair the State's ability to encourage facilities to operate efficiently.

(b) Effective January 1, 1993, the Division of Medical Assistance, Department of Human Resources, shall establish a cap of two dollars ($2.00) on Medicaid indirect care efficiency payments for nursing facilities, to eliminate excessive nursing facility "profits" and to reduce Medicaid expenditures with little impact on incentives to control indirect care costs.

(c) The base budget of the Division of Medical Assistance, Department of Human Resources, is reduced by one million two hundred thousand dollars ($1,200,000) for the 1993-94 fiscal year and by two million four hundred thousand dollars ($2,400,000) for the 1994-95 fiscal year due to the implementation of this section.

(d) This section becomes effective July 1, 1993.

---ELIM. RETURN-ON-EQUITY PAY.

Sec. 93. (a) The General Assembly finds that many states have eliminated Medicaid return-on-equity payments to private nursing facilities because current reimbursement policy permits facilities to retain the difference between the facilities' indirect costs and the statewide flat rates. The General Assembly finds that, for this reason, nursing facilities already receive a "profit" and that eliminating the extra return-on-equity payments in North Carolina would reduce Medicaid expenditures and be consistent with other states' policies.

(b) Effective July 1, 1993, G.S. 108A-55 is amended by adding a new subsection to read:

"( e) No payment shall be made as 'return-on-equity' reimbursement to nursing homes and no such payment shall be included in the State Health Plan."

(c) The base budget of the Division of Medical Assistance, Department of Human Resources, is reduced by one million three hundred thousand dollars ($1,300,000) for the 1994-95 fiscal year due to the implementation of this section.

(d) This section becomes effective July 1, 1993.

---FREEZE DRUG DISPENSING FEE.

Sec. 94. (a) The General Assembly finds that North Carolina's Medicaid prescription drug dispensing fee is the highest in the country and that it has increased by fifty percent (50%) since 1985, from three dollars and sixty-seven cents ($3.67) in 1986 to five dollars and sixty cents ($5.60) in 1992. The General Assembly further finds that North Carolina Medicaid spent more than thirty-five million dollars ($35,000,000) in the 1992-93 fiscal year for dispensing fees alone. The most recent increase approved by the General Assembly resulted in additional Medicaid expenditures of four million five hundred thousand dollars ($4,500,000).

(b) Effective July 1, 1993, through June 30, 1995, the Division of Medical Assistance, Department of Human Resources, shall freeze the Medicaid prescription drug dispensing fee at its July 1992 amount of five dollars sixty cents ($5.60) and shall not pay a higher amount.

(c) It is the intent of the General Assembly to continue the freeze mandated by subsection (b) of this section through fiscal year 2002.

(d) The base budget of the Division of Medical Assistance, Department of Human Resources, is reduced by the sum of five million dollars ($5,000,000) for the 1993-94 fiscal year and the sum of five million seven hundred thousand dollars ($5,700,000) for the 1994-95 fiscal year due to savings incurred by the implementation of this section.

Fiscal Year Amount

1995-96 $6,500,000

1996-97 $7,400,000

1997-98 $8,400,000

1998-99 $9,500,000

1999-00 $10,900,000

2000-01 $12,400,000

2001-02 $14,100,000.

(f) This section becomes effective July 1, 1993.

---MEDICAID DRUG-PURCHASING.

Sec. 95. (a) The General Assembly finds that North Carolina Medicaid expenditures per prescription are among the highest in the country, that, in 1990, they were nearly three dollars ($3.00) higher than the national average, and that the growth in expenditure is due to increases in the number of prescriptions as well as increases in the cost per prescription. The General Assembly further finds that North Carolina has implemented other prescription drug cost containment strategies, including a six prescription limit per month and a copayment amount of one dollar ($1.00) per prescription.

(b) Effective July 1, 1994, the Division of Medical Assistance, Department of Human Resources, shall implement alternative purchasing approaches for Medicaid prescription drugs. In developing these approaches, the Division shall consider:

(1) Purchasing maintenance-level medications through mail order pharmacies or community pharmacies and involving local pharmacists in managing this program, as the core of this managed drug plan is a trial therapy period that limits the supply of the drug during its initial period of use in order to ensure that the drug is tolerated and effective before a maintenance supply is dispensed;

(2) Developing a State network to supply the maintenance drug or contracting with existing networks currently providing services in the State;

(3) Acquiring the necessary freedom-of-choice waiver, because recipients would not be able to obtain services from all pharmacists, but only from those who agree to supply the maintenance-level drugs at an agreed upon, discounted price;

(4) Working closely with the Health Care Financing Administration;

(5) Making sure that certain portions of the State are not excluded from the program because of the lack of presence of competing community pharmacies;

(6) Making sure that recipients are not excluded because they do not have regular mailing addresses; and

(7) Continuing current dispensing procedures with local pharmacists to assure availability of nonmaintenance prescription drugs.

(c) There is appropriated from the General Fund to the Division of Medical Assistance, Department of Human Resources, the sum of one hundred twenty-five thousand dollars ($125,000) for the 1993-94 fiscal year, for administrative costs incurred in implementing this section.

(d) The base budget of the Division of Medical Assistance, Department of Human Resources, is reduced by one million five hundred thousand dollars ($1,500,000) for the 1994-95 fiscal year due to the implementation of this section.

Fiscal Year Amount

1995-96 $1,600,000

1996-97 $1,700,000

1997-98 $1,800,000

1998-99 $2,000,000

1999-00 $2,100,000

2000-01 $2,200,000

2001-02 $2,400,000.

(f) This section becomes effective July 1, 1993.

---CAROLINA ACCESS/RISK-SHARING.

Sec. 96. (a) The General Assembly finds that its recently implemented Carolina Access program, modeled after successful primary care case management programs of other states and currently serving 12 counties, effectively improves access to primary care services, encourages development of physician/patient relationships, and encourages appropriate utilization of all health care services. The General Assembly finds that it is important to move quickly to phase in statewide implementation of the program so that it is available by July 1, 1994. The General Assembly further finds that the additional administrative costs incurred in early statewide implementation will be more than offset by savings and that improved quality of care will also contribute to long-term savings, that access for Medicaid patients will be significantly enhanced, and that physicians and patients statewide will be introduced to coordinated care concepts. The General Assembly further finds that the State should introduce risk-sharing into its Medicaid reimbursement system.

(b) Effective July 1, 1994, the Division of Medical Assistance, Department of Human Resources, shall introduce elements of risk-sharing into its Medicaid reimbursement system. These elements shall include at least one of the following:

(1) A savings-sharing policy, in which primary care providers share in the savings that result from appropriate and cost-effective utilization of other health services, including physician specialty services, prescription drugs, and outpatient hospital services;

(2) The capitation of payments for physician services to guarantee certain savings levels and for outpatient hospital services and prescription drugs to guarantee even greater savings.

(c) Effective July 1, 1994, the Division of Medical Assistance, Department of Human Resources, shall have phased in Medicaid Carolina Access statewide.

(d) There is appropriated from the General Fund to the Division of Medical Assistance, Department of Human Resources, the sum of twenty-five thousand dollars ($25,000) for the 1993-94 fiscal year and the sum of one million seven hundred ten thousand dollars ($1,710,000) for the 1994-95 fiscal year, to implement this section.

(e) It is the intent of the General Assembly to appropriate additional funds to the Division of Medical Assistance, Department of Human Resources, in subsequent fiscal years, to implement this act, according to the following schedule:

Fiscal Year Amount

1995-96 $1,900,000

1996-97 $2,000,000

1997-98 $2,000,000

1998-99 $2,100,000

1999-00 $2,200,000

2000-01 $2,300,000

2001-02 $2,400,000.

(f) This section becomes effective July 1, 1993.

---STATEWIDE MANAGED CARE.

Sec. 97. (a) The General Assembly finds that managed care programs offer several advantages over traditional fee-for-service arrangements.

(b) Effective July 1, 1993, the Division of Medical Assistance, Department of Human Resources, shall develop a statewide managed care system to contract with existing provider networks. This system shall address the following objectives:

(1) Promote early diagnosis and treatment for preventive health care;

(2) Shift care from hospitals to physicians' offices and clinics;

(3) Stabilize and contain the escalation of Medicaid costs;

(4) Enable clients to form primary care contact with physicians;

(5) Ensure patient access to care; and

(6) Improve the quality of care.

Facilities that serve as contractors for the system shall provide all health care services and shall receive a capitated payment per Medicaid patient per month. In developing the system, the Division shall consider whether to limit the financial risk of the contractors by implementing a stop-loss provision in which each contractor's losses are limited to a fixed amount of aggregate capitation payments. The Division shall encourage Carolina Access providers to participate through their inclusion in provider networks.

(c) The Division of Medical Assistance, Department of Human Resources, shall evaluate the feasibility of statewide managed care programs for certain populations and certain regions of the State. The Division shall report the results of its feasibility study to the General Assembly by May 1, 1994. This study shall include:

(1) How best to ensure physician and hospital acceptance and involvement;

(2) Consideration of the theory that the greater the financial risk borne by the managed care program and providers the greater the success in controlling utilization and cost;

(3) Consideration of long-term care; and

(4) How to ensure that the State and counties will make investments in establishing the appropriate administrative systems for internal operations and external oversight.

(d) There is appropriated from the General Fund to the Division of Medical Assistance, Department of Human Resources, the sum of four hundred thousand dollars ($400,000) for the 1993-94 fiscal year and the sum of six hundred thousand dollars ($600,000) for the 1994-95 fiscal year, as administrative costs incurred in implementing subsection (b) of this section.

(e) There is appropriated from the General Fund to the Division of Medical Assistance, Department of Human Resources, the sum of one hundred thousand dollars ($100,000) for the 1993-94 fiscal year to implement subsection (c) of this section.

(f) This section becomes effective July 1, 1993.

---MEDICAID MANAGED CARE.

Sec. 98. (a) The General Assembly finds that the use of managed care encourages physicians to coordinate and monitor utilization of services and provides physicians with incentives to use low-cost facilities and make referrals to cost-effective hospitals.

(b) Effective July 1, 1994, the Division of Medical Assistance, Department of Human Resources, shall expand its use of Medicaid managed care options to include implementation of a savings sharing program or capitation of all primary care services. In developing its expanded options the Division shall:

(1) Continue to work with physicians to educate them regarding the importance of managed care programs, as these programs can improve quality of care as well as achieve cost savings and can provide physicians with greater incentives to monitor and control utilization;

(2) In order to develop savings-sharing options, collect extensive data regarding utilization of services in order to determine savings payment amounts and to ensure that the Medicaid Management Information System (MMIS) tracks utilization of groups of services used by specific recipients assigned to primary care physicians;

(3) Work with rural hospitals and health care clinics;

(4) Develop enhanced utilization review to ensure that quality of care and access to services are not compromised;

(5) Consider ways to limit a physician's risk, such as limiting it to ten percent (10%) above the total amount of capitated payments;

(6) Consider exempting patients requiring large amounts of health care from the capitation plan; and

(7) Implement other mechanisms that encourage appropriate care, including a disenrollment process and patient control process.

(c) There is appropriated from the General Fund to the Division of Medical Assistance, Department of Human Resources, the sum of twenty-five thousand dollars ($25,000) for the 1993-94 fiscal year and the sum of twenty-five thousand dollars ($25,000) for the 1994-95 fiscal year, to implement this section.

(d) The base budget of the Division of Medical Assistance, Department of Human Resources, is reduced by one million six hundred eighty-five thousand dollars ($1,685,000) for the 1994-95 fiscal year due to the savings incurred in implementing this section.

(e) It is the intent of the General Assembly to reduce the base budget of the Division of Medical Assistance, Department of Human Resources, in subsequent fiscal years due to implementation of this section, according to the following schedule:

Fiscal Year Amount

1995-96 $1,900,000

1996-97 $2,000,000

1997-98 $2,000,000

1998-99 $2,100,000

1999-00 $2,200,000

2000-01 $2,300,000

2001-02 $2,400,000.

(f) This section becomes effective July 1, 1993.

---MMIS REPLACEMENT PLAN.

Sec. 99. (a) The General Assembly finds that, when the current base contract with the Medicaid fiscal agent ends on June 30, 1993, the State should begin to develop a plan to replace the existing Medicaid Management Information System. The General Assembly finds that, under the current system, useful data on health care services and expenditures are limited.

(b) The Division of Medical Assistance, Department of Human Resources, shall develop a plan for the replacement of the current Medicaid Management Information System. Development of the plan shall:

(1) Focus on Medicaid future directions, such as expanded managed care;

(2) Have as the highest priority the design of a system capable of supporting many, if not all, of North Carolina's publicly administered health care programs;

(3) Be in concert with, but in advance of, federal health care reform planning, to provide North Carolina with the full opportunity to define and promote a strategy consistent with State political and social objectives; and

(4) Include representation from each agency involved in health care claims processing.

The Division shall report the plan, implementation schedule, and detailed fiscal analysis to the 1993 General Assembly by January 1, 1995.

(c) There is appropriated from the General Fund to the Division of Medical Assistance, Department of Human Resources, the sum of two hundred twenty-seven thousand five hundred dollars ($227,500) for the 1993-94 fiscal year to implement this section.

(d) This section becomes effective July 1, 1993.

---STATE WORKERS' COMP.

Sec. 100. (a) Chapter 143 of the General Statutes is amended by adding a new Article to read:

"ARTICLE 64.

"State Government Workers' Compensation Office.

"§ 143-590. State Government Workers' Compensation Office established; administration; appointment, compensation and tenure of Director.

There is hereby established the State Government Workers' Compensation Office (hereinafter referred to as 'Office') which shall be placed for organizational purposes within the Department of Administration. Notwithstanding any other provision of law, the Office shall be under the administrative supervision of a Director appointed by the Governor. The salary of the Director shall be fixed by the General Assembly in the Current Operations Appropriations Act. The Director shall serve at the pleasure of the Governor.

"§ 143-591. Functions of the State Government Workers' Compensation Office; claims; assistance of Attorney General.

(a) The State Government Workers' Compensation Office shall administer the State workers' compensation program in accordance with rules and procedures to be adopted by the Office, including rules and procedures related to the following:

(1) Processing all State government employee claims; including employees in the judicial, legislative, and executive branches of government and all public school employees paid from State funds;

(2) Authorizing payment of benefits to employees pursuant to the Workers' Compensation Act and the rules and regulations of the North Carolina Industrial Commission; and

(3) Settling workers' compensation claims made against the State.

(b) The Workers' Compensation Office shall collect all money owed to the State as a result of the subrogation of third-party claims pursuant to G.S. 97-10.2 and reimburse the appropriate State department, agency, or institution for benefits paid to employees.

(c) The Attorney General shall assign counsel to the State Government Workers' Compensation Office to represent the State in connection with claims asserted against the State pursuant to Chapter 97 of the General Statutes."

(b) The State Government Workers' Compensation Office (hereinafter referred to as "Office" ) shall complete a review of the following:

(1) Whether there should be established a reserve fund from which to disburse payments for workers' compensation claims regardless of the processing method elected by the State.

(2) The extent of the unfunded liability that exists on current open claims so that State agencies may be held accountable for expenditures based on claims experience-rating factors.

(3) The allocation process for funding workers' compensation expenditures.

(4) Whether State agencies should be required to either reserve or encumber funds to pay workers' compensation claims based on prior expenditures plus anticipated increases.

(b) The Office shall complete the review required in subsection (a) of this section by May 1, 1994. The Office shall report its findings and any recommendations to the General Assembly on or before the first day of the 1994 General Assembly by filing the report and any recommendations with the Speaker of the House of Representatives, the President Pro Tempore of the Senate, the Joint Legislative Commission on Governmental Operations, and the Fiscal Research Division.

(c) There is appropriated from the General Fund to the Department of Administration the sum of nine hundred four thousand seven hundred seventy-one dollars ($904,771) for fiscal year 1993-94 and the sum of nine hundred four thousand seven hundred seventy-one dollars ($904,771) for fiscal year 1994-95 to establish 33 positions in the State Government Workers' Compensation Office for the purpose of administering the State's workers' compensation program. It is the intent of the General Assembly to reduce appropriations from the General and Highway Funds for fiscal year 1993-94 and fiscal year 1994-95, by the total of one million one hundred forty-four thousand seven hundred seventy-one dollars ($1,144,771) for fiscal year 1993-94 and one million one hundred forty-four thousand seven hundred seventy-one dollars ($1,144,771) for fiscal year 1994-95, to produce net savings to the State in the amount of two hundred forty thousand dollars ($240,000) for fiscal year 1993-94 and two hundred forty thousand dollars ($240,000) for fiscal year 1994-95 by reducing the work force of each State department, agency, and institution by the number of full-time equivalent employees who previously processed workers' compensation claims.

(d) This section becomes effective July 1, 1993.

---ICF/MR CON MORATORIUM.

Sec. 101. (a) The General Assembly finds that intermediate care facilities for the mentally retarded (ICFs/MR) continue to be developed in North Carolina even though most states have decreased the number of individuals residing in these facilities and that North Carolina continues to admit a significant number of individuals to State-operated ICFs/MR while most other states are moving to deinstitutionalize the mentally retarded. The General Assembly further finds that North Carolina rates for private ICFs/MR are ranked among the highest in the country.

(b) Effective July 1, 1993, through June 30, 1995, the Division of Facility Services, Department of Human Resources, shall not grant a Certificate of Need for the development of any new intermediate care facility for the mentally retarded. The Department of Human Resources shall ensure that stringent screening and assessment take place to ensure appropriate utilization of home- and community-based services that will be required during the moratorium and to avoid a sudden surge in the growth of new beds, after the moratorium is lifted.

(c) The base budget of the Division of Medical Assistance, Department of Human Resources, is reduced by two million four hundred thousand dollars ($2,400,000) for the 1994-95 fiscal year due to the implementation of this section.

(d) This section becomes effective July 1, 1993, and applies to applications for new certificates of need received on or after that date.

---CON BED NEED FORMULA CHANGE.

Sec. 102. (a) The General Assembly finds that the Certificate of Need process has not been effective in controlling the development and expansion of hospital beds and that its current methodology for projecting need for additional long-term care facilities beds can be improved.

(b) Effective July 1, 1994, the Division of Facility Services, Department of Human Resources, shall implement a changed Certificate of Need bed need formula. This changed formula shall be developed by expanding the size of the current health planning areas to include larger geographic regions and by expanding beyond the need to rely solely on current rates of institutionalization, in order to take cognizance of people who have been identified as actually needing services or who should be directed away from intermediate care facilities for the mentally retarded (ICFs/MR) care to home- and community-based services, thus providing a more actual projection of bed need.

---CON CAPITAL EXPENDITURE LIMIT.

Sec. 103. (a) The General Assembly finds that North Carolina's Certificate of Need capital expenditure threshold does not address major medical equipment purchases and that costly new technologies such as lithotripters, magnetic resonance imaging scanners, and linear accelerators are not subject to Certificate of Need review because expenditures for these services can fall under the two million dollar ($2,000,000) capital expenditures threshold. The General Assembly further finds that these technologies are costly services and increase the cost of medical services to all consumers.

(b) G.S. 131E-176(16)b. reads as rewritten:

"(16) b. The obligation by any person of any capital expenditure on behalf of or for a health service facility as defined in subsection (9b) of this section exceeding ~~two million dollars ($2,000,000),~~ five hundred thousand dollars ($500,000), other than one to acquire an existing health service facility or to replace such a facility destroyed or irreparably damaged by accident or natural disaster. The cost of any studies, surveys, designs, plans, working drawings, specifications, and other activities, including staff effort and consulting and other services, essential to the acquisition, improvement, expansion, or replacement of any plant or equipment with respect to which an expenditure is made shall be included in determining if the expenditure exceeds ~~two million dollars ($2,000,000);~~ five hundred thousand dollars ($500,000);".

(c) This section becomes effective October 1, 1993, and applies to applications for Certificate of Need requested on or after that date.

---CON SELF-FUNDED.

Sec. 104. (a) The General Assembly finds that, while other states with Certificate of Need agencies have increased fees or downsized staff to fund their programs without state revenue, the application fees generated by North Carolina's Certificate of Need process currently cover only seventy-five percent (75%) of program expenses.

(b) Effective October 1, 1993, the Division of Facility Services, Department of Human Resources, shall increase all application fees for a Certificate of Need by fifty percent (50%).

"(9) Establish and collect fees for submitting applications for ~~certificates-of-need,~~ certificates of need, which fees shall be based on the total cost of the project for which the applicant is applying. This fee ~~may~~ shall not exceed ~~fifteen thousand dollars ($15,000)~~ twenty-two thousand five hundred dollars ($22,500) and ~~may~~ shall not be less than ~~four hundred dollars ($400.00).~~ six hundred dollars ($600.00)."

(d) The base budget of the Division of Facility Services, Department of Human Resources, is reduced by two hundred thousand dollars ($200,000) for the 1993-94 fiscal year due to the implementation of this section.

(e) Unless otherwise stated, this section becomes effective July 1, 1993, and applies to application fees for applications requested on or after October 1, 1993.

---TRANSITION ICF/MR RES.

Sec. 105. (a) The General Assembly finds that North Carolina continues to admit a significant number of individuals to State-operated intermediate care facilities for the mentally retarded (ICFs/MR), while most other states are moving to deinstitutionalize the mentally retarded and that there are 236 individuals inappropriately placed in ICFs/MR settings.

(b) Effective July 1, 1995, the Department of Human Resources shall ensure that the individuals inappropriately placed in ICFs/MR are transitioned to home- and community-based settings, where they will receive services in a more appropriate setting. The process of transition shall include:

(1) Ensuring that stringent criteria will be applied so that the excess capacity in ICFs/MR created by the transition is not refilled inappropriately again; and

(2) Consideration of a capital reimbursement system to ensure that capital costs, which could be reallocated among remaining residents, are not reimbursed.

---ICF/MR REIMBURSEMENT METHOD CHANGE.

Sec. 106. (a) The General Assembly finds that the current Medicaid reimbursement policy for intermediate care facilities for the mentally retarded (ICFs/MR), based on facility-specific costs, results in wide variance of rates paid across facilities. North Carolina's rates are relatively high compared to the rest of the nation. The current reimbursement policy does not allow the State to determine whether some facilities face higher costs because of more patient needs or because of inefficient operation. Because cost-based reimbursement methodologies do not address the relative needs of patients in establishing rates, the General Assembly finds that the current system limits the State's ability to control costs by encouraging facilities to operate efficiently.

(b) Effective July 1, 1994, the Division of Medical Assistance, Department of Human Resources, shall implement a prospective case-mix methodology for Medicaid reimbursement for ICFs/MR. This methodology shall compensate facilities according to the needs of its residents and shall ensure that facilities will receive payment sufficient to meet residents' staffing needs. In addition, the methodology shall include:

(1) Ensuring that it will distribute payments equitably among providers according to the relative needs of their patients;

(2) Ensuring that it will effect efficient provision of care by making use of peer grouping and cost ceilings, when appropriate;

(3) Ensuring that it improves access for patients requiring more intense levels of care;

(4) Consideration of whether to move towards a capital reimbursement policy, which standardizes payments across facilities, provides incentives for facilities to control capital costs, and ensures the appropriate amount of investment in the ICFs/MR industry; and

(5) Consideration of whether additional resources may be necessary to maintain the system because case-mix systems require periodic patients' assessments.

(c) There is appropriated from the General Fund to the Division of Medical Assistance, Department of Human Resources, the sum of six hundred forty-five thousand dollars ($645,000) for the 1993-94 fiscal year for administrative costs incurred in implementing this section.

(d) The base budget of the Division of Medical Assistance, Department of Human Resources, is reduced by five million dollars ($5,000,000) for the 1994-95 fiscal year due to the implementation of this section.

(e) This section becomes effective July 1, 1993.

---GOV. HEALTH OFFICE.

Sec. 107. (a) Chapter 143 of the General Statutes is amended by adding the following new Article to read:

"ARTICLE 64.

"Office for Health Care.

"§ 143-590. Office for Health Services Planning established.

There is established in the Office of the Governor an Office for Health Services Planning. The purpose of this office is to act as the central agent for the design, coordination, and implementation of a strategy to meet the health care needs of the State.

"§ 143-591. Office for Health Services Planning - organization; powers and duties.

(a) The Office for Health Services Planning shall be organized as prescribed by the Governor and shall exercise the following powers and duties:

(1) Develop a long-range strategic plan for the efficient and effective delivery of health care services in the State;

(2) Initiate formal collaborative efforts among State agencies and programs that purchase or deliver health care services in order to address the problems of duplication and cost-shifting;

(3) Create a central database of purchased health care services for use in policy formulation, reimbursement analysis, and negotiating better arrangements with health care providers;

(4) Other activities deemed by the Governor to be necessary and appropriate for carrying out the purpose of the Office.

(b) The Governor shall report annually to the General Assembly on the activities, progress, findings, and recommendations of the Office for Health Care Planning."

(b) Nothing in this act shall obligate the General Assembly to appropriate additional funds to the Office of the Governor for the purpose of implementing this act.

---PRISON CONSOLIDATION.

Sec 108. (a) The General Assembly finds that:

(1) North Carolina has the eighth highest corrections staffing level in the nation, and the State's prison efficiency is low as measured by inmates per correction officer in prisons in the southeastern United States;

(2) Other states manage an equivalent number of inmates with one-third less staff;

(3) North Carolina has four to six times as many prisons as the national state average;

(4) The average state prison holds more than two and one-half times more inmates than the average North Carolina prison;

(5) Over one-third of North Carolina's prisons have standard operating capacities that are inefficient and costly;

(6) The number of small prisons and a lack of autonomy in prison superintendents creates excessive layers of management, inefficiencies, unnecessary paperwork, and a reduction in accountability;

(7) The Eastern and Western Commands of North Carolina's Division of Prisons have approximately 330 staff in their area offices that provide supervision and centralized support to 66 small and medium prisons.

(b) The Department of Correction shall construct three new prison facilities and expand two existing prison facilities. The designs for the new facilities and the expanded facilities shall include an estimate of the inmate-to-staff ratio that will be required by the facility when it is fully operational. The new and expanded facilities should be large enough to achieve an inmate-to-correctional officer ratio of approximately 5:1 and an inmate-to-total uniformed staff ratio of approximately 4:1.

(c) The Department of Correction shall consolidate the populations of the following institutions into the facilities constructed and expanded pursuant to this section: Warren Correctional Center, Halifax Correctional Center, Washington Correctional Center, Scotland Correctional Center, Yadkin Correctional Center, McDowell Correctional Center, Yancey Correctional Center, Moore Correctional Center, Alamance Correctional Center, Avery Correctional Center, Union Correctional Center, Stanley Correctional Center, Granville Correctional Center, Alexander Correctional Center, Currituck Correctional Center, Wilmington Residential Facility for Women, Davie Correctional Center, Rockingham Correctional Center, Watauga Correctional Center, Cleveland Correctional Center, Haywood Correctional Center, Person Correctional Center, Black Mountain Correctional Center for Women, Mecklenburg Correctional Center, Umstead Correctional Center, Martin Correctional Center, Henderson Correctional Center, Gates Correctional Center, Buncombe Correctional Center, and Stokes Correctional Center.

(d) The Division of Prisons of the Department of Correction shall redraw its area command regions in conjunction with the consolidation accomplished in this section. The Division shall develop new policies to minimize approval and review functions at the area command. Central support services shall be consolidated under the area boundaries.

(e) As a result of the prison consolidation and improved organizational functions provided for in this section, the Division of Prisons of the Department of Correction shall reduce its staff by a net of 660 uniformed staff and 132 area office staff.

(f) The base budget of the Department of Correction is reduced by four hundred sixty-two thousand dollars ($462,000) for the 1993-94 fiscal year, by nine hundred fifty-two thousand dollars ($952,000) for the 1994-95 fiscal year, by seven million three hundred one thousand dollars ($7,301,000) for the 1995-96 fiscal year, by fourteen million six hundred thousand dollars ($14,600,000) for the 1996-97 fiscal year, and by seven million three hundred one thousand dollars ($7,301,000) for the 1997-98 fiscal year, as a result of the consolidation and staff reductions accomplished in this section on the timetable set by the Government Performance Audit Committee.

(g) There is appropriated from the General Fund to the Department of Correction the sum of seventy-five million dollars ($75,000,000) for the 1993-94 fiscal year for the construction of new prison facilities and the expansion of existing facilities pursuant to the provisions of this section.

(h) This section becomes effective July 1, 1993.

---GPAC/DOC CLAIMS PROCESSING.

Sec. 109. (a) The General Assembly finds that medical claims processing within the the Department of Correction for health care services provided to inmates is handled manually.

(b) The Division of Medical Assistance of the Department of Human Resources and the Teachers' and State Employees' Comprehensive Major Medical Plan shall assist the Department of Correction in discussions and possible negotiations with the claims processing contractors used by those agencies in order to secure a contractor to provide automated processing of medical claims for the Department of Correction.

---PHASE OUT DMV LAW ENFORCEMENT.

Sec. 110. (a) The General Assembly finds:

(1) That the Division of Motor Vehicles process service officers positions should be phased out and that any collection activities for bad checks or process service fees should be transferred to the Attorney General's collection section or contracted to a private collection agency.

(2) The Division of Motor Vehicles inspectors should be converted from law enforcement officers to civilians and perform only regulatory activities with the number of personnel limited to 55 inspectors and five support persons.

(3) The law enforcement activities performed by the Division of Motor Vehicles inspectors assigned to the major crimes unit and an equivalent number of positions should be transferred to the State Bureau of Investigation with the State Bureau of Investigation being given original jurisdiction to investigate multijurisdictional auto-related crimes.

(4) The Division of Motor Vehicles should take all necessary actions to ensure that data on auto-related crimes is shared with the State Bureau of Investigation in order to support investigation of these crimes.

(5) The Motor Carrier Safety and Weight functions of the Division of Motor Vehicles enforcement should be transferred to the Highway Patrol at the end of an 18-month transition period.

(b) The Secretary of Crime Control and Public Safety, in conjunction with the Commissioner of Motor Vehicles and the Director of the State Bureau of Investigation, shall report to the General Assembly, no later than August 1, 1993, with a plan to implement, within 18 months, the transfers of personnel and duties contained in Section 1 of this act.

---CONSOLIDATE COMM. CORRECTIONS.

Sec. 111. (a) The General Assembly finds that community corrections programs in North Carolina suffer from program fragmentation and redundant administrations. In order to make more effective use of existing resources, to improve service delivery, and to provide uniform management of community corrections programs, the administration of those programs should be consolidated under the Department of Correction.

(b) The statutory authority, powers, duties, and functions, records, personnel, property, unexpended balances of appropriations, allocations or other funds, including the functions of budgeting and purchasing, of the Department of Crime Control and Public Safety, Division of Victim and Justice Services, to conduct the Community Service Work Program, are transferred to the Department of Correction, Division of Adult Probation and Parole.

(c) The Department of Correction shall eliminate the separate administrative structures of the Division of Adult Probation and Parole and the Community Service Work Program, and shall consolidate the planning, coordination, and management of all community corrections programs under a single administrative structure using regional offices. The Department shall establish court intake positions to reduce court intake fragmentation among the community corrections programs consolidated pursuant to this act.

(d) G.S. 20-179.4 reads as rewritten:

"§ 20-179.4. Community service alternative punishment; responsibilities of the Department of ~~Crime Control and Public Safety;~~ Correction fee.

(a) The Department of ~~Crime Control and Public Safety~~ Correction must conduct a community service alternative punishment program for persons sentenced under G.S. 20-179(i), (j) or (k).

(b) The Secretary of ~~Crime Control and Public Safety~~ Correction must assign at least one coordinator to each district court district as defined in G.S. 7A-133 to assure and report to the court the person's compliance with the community service sentence. The appointment of each coordinator shall be made in consultation with and is subject to the approval of the chief district court judge in the district to which the coordinator is assigned. Each county must provide office space in the courthouse or other convenient place, necessary equipment, and secretarial service for the use of each coordinator assigned to that county.

(c) A fee of one hundred dollars ($100.00) must be paid by all persons serving a community service sentence. That fee must be paid to the clerk of court in the county in which the person is convicted. The fee must be paid in full within two weeks unless the court, upon a showing of hardship by the person, allows him additional time to pay the fee. The person may not be required to pay the fee before he begins the community service unless the court specifically orders that he do so. If the person is also ordered to attend an Alcohol and Drug Education Traffic School established pursuant to G.S. 20-179.2, the fee for supervision of community service punishment is fifty dollars ($50.00).

(d) Fees collected under this section must be deposited in the general fund.

(e) The coordinator must report to the court in which the community service was ordered a significant violation of the terms of the probation judgment related to community service. In such cases, the court must conduct a hearing to determine if there is a willful failure to comply. If the court determines there is a willful failure to pay the prescribed fee or to complete the work as ordered by the coordinator within the applicable time limits, the court must revoke any limited driving privilege issued in the impaired driving case, and in addition may take any further action authorized by Article 82 of General Statutes Chapter 15A for violation of a condition of probation."

(e) This section becomes effective July 1, 1993.

---ELIMINATE DEPT. OF CCPS.

Sec. 112. (a) The General Assembly finds that the Department of Crime Control and Public Safety is a diverse grouping of law enforcement and emergency service functions that overlap significantly with the missions of several other State departments. The Department of Crime Control and Public Safety should be eliminated and its divisions placed within the appropriate departments.

(b) The statutory authority, powers, duties, and functions, records, personnel, property, unexpended balances of appropriations, allocations or other funds, including the functions of budgeting and purchasing, of the Crime Prevention Division of the Department of Crime Control and Public Safety are transferred to the Department of Justice.

(c) The statutory authority, powers, duties, and functions, records, personnel, property, unexpended balances of appropriations, allocations or other funds, including the functions of budgeting and purchasing, of the Highway Patrol Division of the Department of Crime Control and Public Safety are transferred to the Department of Transportation.

(d) The statutory authority, powers, duties, and functions, records, personnel, property, unexpended balances of appropriations, allocations or other funds, including the functions of budgeting and purchasing, of the Department of Crime Control and Public Safety, Division of Victim and Justice Services, to conduct the Community Service Work Program, are transferred to the Department of Correction, Division of Adult Probation and Parole.

(e) The statutory authority, powers, duties, and functions, records, personnel, property, unexpended balances of appropriations, allocations or other funds, including the functions of budgeting and purchasing, of the Department of Crime Control and Public Safety, Division of Victim and Justice Services, to conduct the Crime Victims Compensation Program, are transferred to the Administrative Office of the Courts.

(f) The statutory authority, powers, duties, and functions, records, personnel, property, unexpended balances of appropriations, allocations or other funds, including the functions of budgeting and purchasing, of the Alcohol Law Enforcement Division of the Department of Crime Control and Public Safety are transferred to the Alcoholic Beverage Control Commission.

(g) The statutory authority, powers, duties, and functions, records, personnel, property, unexpended balances of appropriations, allocations or other funds, including the functions of budgeting and purchasing, of the Emergency Management Division of the Department of Crime Control and Public Safety are transferred to the Office of the Governor.

(h) The statutory authority, powers, duties, and functions, records, personnel, property, unexpended balances of appropriations, allocations or other funds, including the functions of budgeting and purchasing, of the National Guard Division of the Department of Crime Control and Public Safety are transferred to the Office of the Governor.

(i) The statutory authority, powers, duties, and functions, records, personnel, property, unexpended balances of appropriations, allocations or other funds, including the functions of budgeting and purchasing, of the Civil Air Patrol Division of the Department of Crime Control and Public Safety are transferred to the Office of the Governor.

(j) The statutory authority, powers, duties, and functions, records, personnel, property, unexpended balances of appropriations, allocations or other funds, including the functions of budgeting and purchasing, of the Governor's Crime Commission of the Department of Crime Control and Public Safety are transferred to the Office of the Governor.

(k) The statutory authority, powers, duties, and functions, records, personnel, property, unexpended balances of appropriations, allocations or other funds, including the functions of budgeting and purchasing, of the Butner Public Safety Division of the Department of Crime Control and Public Safety are transferred to the Department of Human Resources.

(l) G.S. 143B-475.1 is recodified as G.S. 143B-264.1. The Revisor of Statutes shall change any reference in that section to "Crime Control and Public Safety" to "Correction".

(m) Part 3A of Article 11 of Chapter 143B of the General Statutes, G.S. 143B-480.1 through G.S. 143B-480.3, is recodified as Subchapter XIV, Article 62 of Chapter 7A of the General Statutes, G.S.7A-778 through G.S. 7A-780. The Revisor of Statutes shall change any reference to "Department of Crime Control and Public Safety" to "Administrative Office of the Courts" and any reference to "Secretary" to "Director of the Administrative Office of the Courts".

(n) Chapter 147 of the General Statutes is amended by adding a new Article 3C to be entitled "Office of the Governor".

(o) Part 5A of Article 11 of Chapter 143B of the General Statutes, G.S. 143B-495 through G.S. 143B-499.6, is recodified as Part 1 of Article 3C of Chapter 147 of the General Statutes, G.S. 147-33.30 through G.S. 147-33.40. The Revisor of Statutes shall change any reference to "Department of Crime Control and Public Safety" to "Office of the Governor" and shall change any reference to "Secretary" or "Secretary of Crime Control and Public Safety"to "Governor".

(p) Part 5 of Article 11 of Chapter 143B of the General Statutes, G.S. 143B-490 through G.S. 143B-492, is recodified as Part 2 of Article 3C of Chapter 147 of the General Statutes, G.S. 147-33.45 through G.S. 147-33.47. The Revisor of Statutes shall change any reference to "Department of Crime Control and Public Safety" to "Office of the Governor" and shall change any reference to "Secretary" to "Governor".

(q) Part 3 of Article 11 of Chapter 143B of the General Statutes, G.S. 143B-478 through G.S. 143B-480, is recodified as Part 3 of Article 3C of Chapter 147 of the General Statutes, G.S. 147-33.50 through G.S. 147-33.52.

(r) Article 11 of Chapter 143B is repealed, and the Department of Crime Control and Public Safety is abolished.

(s) G.S. 143B-478, as recodified as G.S. 147-33.50 by Section 17 of this act, reads as rewritten:

"~~§ 143B~~screation; composition; terms; meetings, etc.

(a) There is hereby created the Governor's Crime Commission of the ~~Department of Crime Control and Public Safety.~~ Office of the Governor. The Commission shall consist of 34 voting members and six nonvoting members. The composition of the Commission shall be as follows:

(1) The voting members shall be:

a. The Governor, the Chief Justice of the Supreme Court of North Carolina (or his alternate), the Attorney General, the Director of the Administrative Office of the Courts, the Secretary of the Department of Human Resources, the Secretary of the Department of Correction, and the Superintendent of Public Instruction;

b. A judge of superior court, a judge of district court specializing in juvenile matters, a chief district court judge, and a district attorney;

c. A defense attorney, three sheriffs (one of whom shall be from a 'high crime area'), three police executives (one of whom shall be from a 'high crime area'), six citizens (two with knowledge of juvenile delinquency and the public school system, two of whom shall be under the age of 21 at the time of their appointment, one representative of a 'private juvenile delinquency program,' and one in the discretion of the Governor), three county commissioners or county officials, and three mayors or municipal officials;

d. Two members of the North Carolina House of Representatives and two members of the North Carolina Senate.

(2) The nonvoting members shall be the Director of the State Bureau of Investigation, ~~the Secretary of the Department of Crime Control and Public Safety,~~ the Director of the Division of Youth Services of the Department of Human Resources, the Administrator for Juvenile Services of the Administrative Office of the Courts, the Director of the Division of Prisons and the Director of the Division of Adult Probation and Paroles.

(b) The membership of the Commission shall be selected as follows:

(1) The following members shall serve by virtue of their office: the Governor, the Chief Justice of the Supreme Court, the Attorney General, the Director of the Administrative Office of the Courts, the Secretary of the Department of Human Resources, the Secretary of the Department of Correction, the Director of the State Bureau of Investigation, ~~the Secretary of the Department of Crime Control and Public Safety,~~ the Director of the Division of Prisons, the Director of the Division of Adult Probation and Paroles, the Director of the Division of Youth Services, the Administrator for Juvenile Services of the Administrative Office of the Courts, and the Superintendent of Public Instruction. Should the Chief Justice of the Supreme Court choose not to serve, his alternate shall be selected by the Governor from a list submitted by the Chief Justice which list must contain no less than three nominees from the membership of the Supreme Court.

(2) The following members shall be appointed by the Governor: the district attorney, the defense attorney, the three sheriffs, the three police executives, the six citizens, the three county commissioners or county officials, the three mayors or municipal officials.

(3) The following members shall be appointed by the Governor from a list submitted by the Chief Justice of the Supreme Court, which list shall contain no less than three nominees for each position and which list must be submitted within 30 days after the occurrence of any vacancy in the judicial membership: the judge of superior court, the judge of district court specializing in juvenile matters, and the chief district court judge.

(4) The two members of the House of Representatives provided by subdivision (a)(1)d. of this section shall be appointed by the Speaker of the House of Representatives and the two members of the Senate provided by subdivision (a)(1)d. of this section shall be appointed by the President Pro Tempore of the Senate. These members shall perform the advisory review of the State plan for the General Assembly as permitted by section 206 of the Crime Control Act of 1976 (Public Law 94-503).

(5) The Governor may serve as chairman, designating a vice-chairman to serve at his pleasure, or he may designate a chairman and vice-chairman both of whom shall serve at his pleasure.

(c) The initial members of the Commission shall be those appointed pursuant to subsection (b) above, which appointments shall be made by March 1, 1977. The terms of the present members of the Governor's Commission on Law and Order shall expire on February 28, 1977. Effective March 1, 1977, the Governor shall appoint members, other than those serving by virtue of their office, to serve staggered terms; seven shall be appointed for one-year terms, seven for two-year terms, and seven for three-year terms. At the end of their respective terms of office their successors shall be appointed for terms of three years and until their successors are appointed and qualified. The Commission members from the House and Senate shall serve two-year terms effective March 1, of each odd-numbered year; and they shall not be disqualified from Commission membership because of failure to seek or attain reelection to the General Assembly, but resignation or removal from office as a member of the General Assembly shall constitute resignation or removal from the Commission. Any other Commission member no longer serving in the office from which he qualified for appointment shall be disqualified from membership on the Commission. Any appointment to fill a vacancy on the Commission created by the resignation, dismissal, death, disability, or disqualification of a member shall be for the balance of the unexpired term.

(d) The Governor shall have the power to remove any member from the Commission for misfeasance, malfeasance or nonfeasance.

(e) The Commission shall meet quarterly and at other times at the call of the chairman or upon written request of at least eight of the members. A majority of the voting members shall constitute a quorum for the transaction of business."

(t) G.S. 143B-479, as recodified as G.S.147-33.51 by Section 17 of this act, reads as rewritten:

"~~§ 143B~~sand duties.

(a) The Governor's Crime Commission shall have the following powers and duties:

(1) To serve, along with its adjunct committees, as the chief advisory board to the Governor ~~and to the Secretary of the Department of Crime Control and Public Safety~~ on matters pertaining to the criminal justice system.

(2) To recommend a comprehensive statewide plan for the improvement of criminal justice throughout the State which is consistent with and serves to foster the following established goals of the criminal justice system:

a. To reduce crime,

b. To protect individual rights,

c. To achieve justice,

d. To increase efficiency in the criminal justice system,

e. To promote public safety,

f. To provide for the administration of a fair and humane system which offers reasonable opportunities for adjudicated offenders to develop progressively responsible behavior, and

g. To increase professional skills of criminal justice officers.

(3) To advise State and local law-enforcement agencies in improving law enforcement and the administration of criminal justice;

(4) To make studies and recommendations for the improvement of law enforcement and the administration of criminal justice;

(5) To encourage public support and respect for the criminal justice system in North Carolina;

(6) To seek ways to continue to make North Carolina a safe and secure State for its citizens;

(7) Repealed by Session Laws 1981 (Regular Session, 1982), c. 1191, s. 15.

(8) To recommend objectives and priorities for the improvement of law enforcement and criminal justice throughout the State;

(9) To recommend recipients of grants for use in pursuing its objectives, under such conditions as are deemed to be necessary;

(9a) Repealed by Session Laws 1981 (Regular Session, 1982), c. 1191, s. 15.

(10) To serve as a coordinating committee and forum for discussion of recommendations from its adjunct committees formed pursuant to G.S. 143B-480; and

(11) To serve as the primary channel through which local law-enforcement departments and citizens can lend their advice, and state their needs, to the ~~Department of Crime Control and Public Safety.~~ Office of the Governor.

(b) All directives of the Governor's Crime Commission shall be administered by the ~~Director, Crime Control Division of the Department of Crime Control and Public Safety.~~ Office of the Governor."

(u) The Revisor of Statutes shall change any reference to "Department of Crime Control and Public Safety" to "Alcoholic Beverage Control Commission" and any references to "Secretary of Crime Control and Public Safety" to "Chairman of Alcoholic Beverage Control Commission"whenever they appear in each of the following sections of the General Statutes:

(1) G.S. 18B-101. Definitions.

(2) G.S. 18B-500. Alcohol law-enforcement agents.

(3) G.S. 20-39. Administering and enforcing law; rules and regulations; agents, etc.; seal; fees; licenses and plates for undercover officers.

(v) The Revisor of Statutes shall change any references to "Crime Control and Public Safety" to "Transportation" whenever they appear in each of the following sections of the General Statutes:

(1) G.S. 8-50.2. Results of speed-measuring instruments; admissibility.

(2) G.S. 17C-6. Powers of Commission.

(3) G.S. 20-184. Patrol under supervision of Department of Crime Control and Public Safety.

(4) G.S. 20-185. Personnel; appointment; salaries.

(5) G.S. 20-186. Oath of office.

(6) G.S. 20-187. Orders and rules for organization and conduct.

(7) G.S. 20-187.1. Awards.

(8) G.S. 20-187.3. Quotas prohibited.

(9) G.S. 20-188. Duties of Highway Patrol.

(10) G.S. 20-189. Patrolmen assigned to Governor's office.

(11) G.S. 20-190. Uniforms; motor vehicles and arms; expense incurred; color of vehicle.

(12) G.S. 20-192. Shifting of patrolmen from one district to another.

(13) G.S. 20-195. Cooperation between patrol and local officers.

(14) G.S. 20-196. Statewide radio system authorized; use of telephone lines in emergencies.

(15) G.S. 20-196.3. Who may hold supervisory positions over uniformed personnel.

(w) The Revisor of Statutes shall change any references to "Secretary of Crime Control and Public Safety", "Department of Crime Control and Public Safety", "Department", or "Secretary"to "Office of the Governor"whenever they appear in each of the following sections of the General Statutes:

(1) G.S. 104E-8. Radiation Protection Commission - Members; selections; removal; compensation; quorum; services.

(2) G.S. 127A-17.1. Confidentiality of national guard records.

(3) G.S. 127A-80. Authority to organize and maintain State defense militia of North Carolina.

(4) G.S. 127A-81. State defense militia cadre.

(5) G.S. 127A-107. Rate of pay for other service.

(6) G.S. 127A-139. Allowance made to different organizations and personnel.

(7) G.S. 127A-162. Authority to foster development of armories and facilities.

(8) G.S. 127A-163. Powers of Department specified.

(9) G.S. 127A-164. Power to acquire land, make contracts, etc.

(10) G.S. 166A-6. State of disaster.

(11) G.S. 166A-6.1. Emergency planning; charge.

(x) The Revisor of Statutes shall delete any references to "the Secretary of Crime Control and Public Safety", "Secretary of the Department of Crime Control and Public Safety"or "Crime Control and Public Safety", and delete any extraneous punctuation, whenever these references appear in the following sections of the General Statutes:

(1) G.S. 58-78-1. State Fire and Rescue Commission created: membership.

(2) G.S. 126-5. Employees subject to Chapter; exemptions.

(3) G.S. 127A-35. Elimination and disposition of officers; efficiency board; transfer to inactive status.

(4) G.S. 127A-42. Distinguished Service Medal by Governor of North Carolina.

(5) G.S. 143-341. Powers and duties of Department.

(6) G.S. 143B-2. Interim applicability of the Executive Organization Act of 1973.

(7) G.S. 143B-417. North Carolina Internship Council - creation; powers and duties.

(8) G.S. 143B-426.22. Governor's Management Council.

(y) G.S. 7A-343.1 reads as rewritten:

"§ 7A-343.1. Distribution of copies of the appellate division reports.

The Administrative Officer of the Courts shall, at the State's expense distribute such number of copies of the appellate division reports to federal, State departments and agencies, and to educational institutions of instruction, as follows:

Governor, Office of the 1

Lieutenant Governor, Office of the 1

Secretary of State, Department of the 2

Treasurer, Department of the State 1

Superintendent of Public Instruction 1

Office of the Attorney General 11

State Bureau of Investigation 1

Agriculture, Department of 1

Labor, Department of 1

Insurance, Department of 1

Budget Bureau, Department of Administration 1

Property Control, Department of Administration 1

State Planning, Department of Administration 1

Board of Environment, Health, and Natural Resources 1

Revenue, Department of 1

Board of Human Resources 1

Commission for the Blind 1

Board of Transportation 1

Motor Vehicles, Division of 1

Utilities Commission 8

Industrial Commission 11

Office of Administrative Hearings 2

Community Colleges, Department of 38

Employment Security Commission 1

Commission of Correction 1

Parole Commission 1

Archives and History, Division of 1

~~Crime Control and Public Safety, Department of~~ 2

Department of Cultural Resources 3

Legislative Building Library 2

Justices of the Supreme Court 1 ea.

Judges of the Court of Appeals 1 ea.

Judges of the Superior Court 1 ea.

Clerks of the Superior Court 1 ea.

District Attorneys 1 ea.

Emergency and Special Judges of the Superior Court 1 ea.

Supreme Court Library AS MANY AS REQUESTED

Appellate Division Reporter 1

University of North Carolina, Chapel Hill 71

University of North Carolina, Charlotte 1

University of North Carolina, Greensboro 1

University of North Carolina, Asheville 1

North Carolina State University, Raleigh 1

Appalachian State University 1

East Carolina University 1

Fayetteville State University 1

North Carolina Central University 17

Western Carolina University 1

Duke University 17

Davidson College 2

Wake Forest University 25

Lenoir Rhyne College 1

Elon College 1

Campbell College 25

Federal, Out-of-State and Foreign

Secretary of State 1

Secretary of Defense 1

Secretary of Health, Education and Welfare 1

Secretary of Housing and Urban Development 1

Secretary of Transportation 1

Attorney General 1

Department of Justice 1

Internal Revenue Service 1

Veterans' Administration 1

Library of Congress 5

Federal Judges resident in North Carolina 1 ea.

Marshal of the United States Supreme Court 1

Federal District Attorneys resident in North Carolina 1 ea.

Federal Clerks of Court resident in North Carolina 1 ea.

Supreme Court Library exchange list 1

Each justice of the Supreme Court and judge of the Court of Appeals shall receive for his private use, one complete and up-to-date set of the appellate division reports. The copies of reports furnished each justice or judge as set out in the table above may be retained by him personally to enable him to keep up-to-date his personal set of reports."

(z) G.S. 14-86.1 reads as rewritten:

"§ 14-86.1. Seizure and forfeiture of conveyances used in committing larceny and similar crimes.

(a) All conveyances, including vehicles, watercraft or aircraft, used to unlawfully conceal, convey or transport property in violation of G.S. 14-71, 14-71.1, or 20-106, or used by any person in the commission of armed or common-law robbery, or used by any person in the commission of any larceny when the value of the property taken is more than two thousand dollars ($2,000) shall be subject to forfeiture as provided herein, except that:

(1) No conveyance used by any person as a common carrier in the transaction of the business of the common carrier shall be forfeited under the provisions of this section unless it shall appear that the owner or other person in custody or control of such conveyance was a consenting party or privy to a violation that may subject the conveyance to forfeiture under this section;

(2) No conveyance shall be forfeited under the provisions of this section by reason of any act or omission committed or omitted while such conveyance was unlawfully in the possession of a person other than the owner in violation of the criminal laws of the United States, or any state;

(3) No conveyance shall be forfeited pursuant to this section unless the violation involved is a felony;

(4) A forfeiture of a conveyance encumbered by a bona fide security interest is subject to the interest of the secured party who neither had knowledge of nor consented to the act or omission;

(5) No conveyance shall be forfeited under the provisions of this section unless the owner knew or had reason to believe the vehicle was being used in the commission of any violation that may subject the conveyance to forfeiture under this section;

(6) The trial judge in the criminal proceeding which may subject the conveyance to forfeiture may order the seized conveyance returned to the owner if he finds forfeiture inappropriate. If the conveyance is not returned to the owner the procedures provided in subsection (e) shall apply.

(b) Any conveyance subject to forfeiture under this section may be seized by any law-enforcement officer upon process issued by any district or superior court having original jurisdiction over the offense except that seizure without such process may be made when:

(1) The seizure is incident to an arrest or subject to a search under a search warrant; or

(2) The property subject to seizure has been the subject of a prior judgment in favor of the State in a criminal injunction or forfeiture proceeding under this section.

(c) The conveyance shall be deemed to be in custody of the law-enforcement agency seizing it. The law-enforcement agency may remove the property to a place designated by it or request that the North Carolina Department of Justice ~~or Department of Crime Control and Public Safety~~ take custody of the property and remove it to an appropriate location for disposition in accordance with law; provided, the conveyance shall be returned to the owner upon execution by him of a good and valid bond, with sufficient sureties, in a sum double the value of the property, which said bond shall be approved by an officer of the agency seizing the conveyance and shall be conditioned upon the return of said property to the custody of said officer on the day of trial to abide the judgment of the court.

(d) Whenever a conveyance is forfeited under this section, the law-enforcement agency having custody of it may:

(1) Retain the conveyance for official use; or

(2) Transfer the conveyance which was forfeited under the provisions of this section to the North Carolina Department of Justice ~~or to the North Carolina Department of Crime Control and Public Safety~~ when, in the discretion of the presiding judge and upon application of the North Carolina Department of ~~Justice or the North Carolina Department of Crime Control and Public Safety,~~ Justice, said conveyance may be of official use to the North Carolina Department of ~~Justice~~ Justice; ~~or the North Carolina Department of Crime Control and Public Safety;~~ or

(3) Upon determination by the director of any law-enforcement agency that a conveyance transferred pursuant to the provisions of this section is of no further use to said agency, such conveyance may be sold as surplus property in the same manner as other conveyances owned by the law-enforcement agency. The proceeds from such sale, after deducting the cost thereof, shall be paid to the school fund of the county in which said conveyance was seized. Any conveyance transferred to any law-enforcement agency under the provisions of this section which has been modified or especially equipped from its original manufactured condition so as to increase its speed shall be used in the performance of official duties only. Such conveyance shall not be resold, transferred or disposed of other than as junk unless the special equipment or modification has been removed and destroyed, and the vehicle restored to its original manufactured condition.

(e) All conveyances subject to forfeiture under the provisions of this section shall be forfeited pursuant to the procedures for forfeiture of conveyances used to conceal, convey, or transport intoxicating beverages found in G.S. 18B-504. Provided, nothing in this section or G.S. 18B-504 shall be construed to require a conveyance to be sold when it can be used in the performance of official duties of the law-enforcement agency."

(aa) G.S. 15B-3 reads as rewritten:

"§ 15B-3. Crime Victims Compensation Commission.

(a) There is established the Crime Victims Compensation Commission of the ~~Department of Crime Control and Public Safety,~~ Administrative Office of the Courts, consisting of five members as follows:

(1) One member to be appointed by the Governor;

(2) One member to be appointed by the General Assembly upon the recommendation of the President of the Senate under G.S. 120-121;

(3) One member to be appointed by the General Assembly upon the recommendation of the Speaker of the House of Representatives under G.S. 120-121;

(4) The Attorney General or his designee; and

(5) The ~~Secretary of the Department of Crime Control and Public Safety~~ Director of the Administrative Office of the Courts or his designee.

(b) Members shall serve terms of four years. A member shall continue to serve until his successor is duly appointed, but a holdover under this provision does not affect the expiration date of the succeeding term.

(c) In case of a vacancy on the Commission before the expiration of a member's term, a successor shall be appointed within 30 days of the vacancy for the remainder of the unexpired term by the appropriate official pursuant to subsection (a). Vacancies in legislative appointments shall be filled under G.S. 120-122.

(d) The Commission shall elect one of its members as chairman to serve until the expiration of his term.

(e) A majority of the Commission constitutes a quorum to transact business.

(f) Members shall receive compensation and reimbursement for expenses as provided in G.S. 138-5.

(g) The Commission shall name a Director upon the recommendation of the ~~Secretary of Crime Control and Public Safety.~~ Director of the Administrative Office of the Courts. The Director shall serve at the pleasure of the Commission. The ~~Department of Crime Control and Public Safety~~ Administrative Office of the Courts shall provide for the compensation of the Director and shall provide professional and clerical staff necessary for the work of the Commission."

(bb) G.S.15B-6(a)(2) reads as rewritten:

"(2) Establish general policies and guidelines for awarding compensation and provide guidance to the staff assigned by the ~~Secretary of the Department of Crime Control and Public Safety~~ Director of the Administrative Office of the Courts to administer the program;".

(cc) G.S. 17C-3 reads as rewritten:

"§ 17C-3. North Carolina Criminal Justice Education and Training Standards Commission established; members; terms; vacancies.

(a) There is established the North Carolina Criminal Justice Education and Training Standards Commission, hereinafter called 'the Commission,' in the Department of Justice. The Commission shall be composed of 26 25 members as follows:

(1) Police Chiefs. - Three police chiefs selected by the North Carolina Association of Chiefs of Police and one police chief appointed by the Governor.

(2) Police Officers. - Three police officials appointed by the North Carolina Police Executives Association and two criminal justice officers certified by the Commission as selected by the North Carolina Law-Enforcement Officers' Association.

(3) Departments. - The Attorney General of the State of North Carolina; ~~the Secretary of the Department of Crime Control and Public Safety;~~ the Secretary of the Department of Human Resources; the Secretary of the Department of Correction; the President of the Department of Community Colleges.

(4) At-large Groups. - One individual representing and appointed by each of the following organizations: one mayor selected by the League of Municipalities; one law-enforcement training officer selected by the North Carolina Law-Enforcement Training Officers' Association; one criminal justice professional selected by the North Carolina Criminal Justice Association; one sworn law-enforcement officer selected by the North State Law-Enforcement Officers' Association; one member selected by the North Carolina Law-Enforcement Women's Association; and one District Attorney selected by the North Carolina Association of District Attorneys.

(5) Citizens and Others. - The President of The University of North Carolina; the Director of the Institute of Government; and two citizens, one of whom shall be selected by the Governor and one of whom shall be selected by the Attorney General. The General Assembly shall appoint two persons, one upon the recommendation of the Speaker of the House of Representatives and one upon the recommendation of the President of the Senate. Appointments by the General Assembly shall be made in accordance with G.S. 120-122. Appointments by the General Assembly shall serve two-year terms to conclude on June 30th in odd-numbered years.

(b) The members shall be appointed for staggered terms. The initial appointments shall be made prior to September 1, 1983, and the appointees shall hold office until July 1 of the year in which their respective terms expire and until their successors are appointed and qualified as provided hereafter:

For the terms of one year: one member from subdivision (1) of subsection (a), serving as a police chief; three members from subdivision (2) of subsection (a), one serving as a police official, and two criminal justice officers; one member from subdivision (4) of subsection (a), appointed by the North Carolina Law-Enforcement Training Officers' Association; and two members from subdivision (5) of subsection (a), one appointed by the Governor and one appointed by the Attorney General.

For the terms of two years: one member from subdivision (1) of subsection (a), serving as a police chief; one member from subdivision (2) of subsection (a), serving as a police official; and two members from subdivision (4) of subsection (a), one appointed by the League of Municipalities and one appointed by the North Carolina Association of District Attorneys.

For the terms of three years: two members from subdivision (1) of subsection (a), one police chief appointed by the North Carolina Association of Chiefs of Police and one police chief appointed by the Governor; one member from subdivision (2) of subsection (a), serving as a police official; and three members from subdivision (4) of subsection (a), one appointed by the North Carolina Law-Enforcement Women's Association, one appointed by the North Carolina Criminal Justice Association, and one appointed by the North State Law-Enforcement Officers' Association.

Thereafter, as the term of each member expires, his successor shall be appointed for a term of three years. Notwithstanding the appointments for a term of years, each member shall serve at the will of the appointing authority.

The Attorney General, ~~the Secretary of the Department of Crime Control and Public Safety,~~ the Secretary of the Department of Human Resources, the Secretary of the Department of Correction, the President of The University of North Carolina, the Director of the Institute of Government, and the President of the Department of Community Colleges shall be continuing members of the Commission during their tenure. These members of the Commission shall serve ex officio and shall perform their duties on the Commission in addition to the other duties of their offices. The ex officio members may elect to serve personally at any or all meetings of the Commission or may designate, in writing, one member of their respective office, department, university or agency to represent and vote for them on the Commission at all meetings the ex officio members are unable to attend.

Vacancies in the Commission occurring for any reason shall be filled, for the unexpired term, by the authority making the original appointment of the person causing the vacancy. A vacancy may be created by removal of a Commission member by majority vote of the Commission for misconduct, incompetence, or neglect of duty. A Commission member may be removed only pursuant to a hearing, after notice, at which the member subject to removal has an opportunity to be heard."

(dd) G.S. 18B-110 reads as rewritten:

"§ 18B-110. Emergency.

When the Governor finds that a 'state of emergency,' as defined in G.S. 14-288.1, exists anywhere in this State, he may

(1) Order the closing of all ABC stores, and

(2) Order the cessation of all sales, transportation, manufacture, and bottling of alcoholic beverages.

The Governor's order shall apply in those portions of the State designated in the order, for the duration of the state of emergency. Any order by the Governor under this section shall be directed to the Chairman of the ~~Commission~~ Commission. ~~and to the Secretary of Crime Control and Public Safety.~~"

(ee) G.S. 20-79.5(a) reads as rewritten:

"(a) Plates. - The State government officials listed in this section are eligible for a special registration plate under G.S. 20-79.4. The plate shall bear the number designated in the following table for the position held by the official.

Position Number on Plate

Governor 1

Lieutenant Governor 2

Speaker of the House of Representatives 3

President Pro Tempore of the Senate 4

Secretary of State 5

State Auditor 6

State Treasurer 7

Superintendent of Public Instruction 8

Attorney General 9

Commissioner of Agriculture 10

Commissioner of Labor 11

Commissioner of Insurance 12

Speaker Pro Tempore of the House 13

Legislative Administrative Officer 14

Secretary of Administration 15

Secretary of Environment, Health, and Natural Resources 16

Secretary of Revenue 17

Secretary of Human Resources 18

Secretary of Commerce 19

Secretary of Correction 20

Secretary of Cultural Resources 21

~~Secretary of Crime Control and Public Safety~~ 22

Governor's Staff 23-29

State Budget Officer 30

State Personnel Director 31

Advisory Budget Commission Nonlegislative Member 32-41

Chair of the State Board of Education 42

President of the U.N.C. System 43

Alcoholic Beverage Control Commission 44-46

Assistant Commissioners of Agriculture 47-48

Deputy Secretary of State 49

Deputy State Treasurer 50

Assistant State Treasurer 51

Deputy Commissioner for the Department of Labor 52

Chief Deputy for the Department of Insurance 53

Assistant Commissioner of Insurance 54

Deputies and Assistant to the Attorney General 55-65

Board of Economic Development Nonlegislative Member 66-88

State Ports Authority Nonlegislative Member 89-96

Utilities Commission Member 97-104

Parole Commission Member 105-109

State Board Member, Commission Member, or State Employee 110-200".

Not Named in List

(ff) G.S. 20-125(b) reads as rewritten:

"(b) Every vehicle owned and operated by a police ~~department~~ department, ~~or by the Department of Crime Control and Public Safety including~~ the State Highway ~~Patrol or by~~ Patrol, the Alcohol Beverage Control Commission, the Butner Public Safety Division of the Department of Human Resources, the Wildlife Resources ~~Commission~~ Commission, or the Division of Marine Fisheries and used exclusively for law enforcement purposes, or by a fire department, either municipal or rural, or by a fire patrol, whether such fire department or patrol be a paid organization or a voluntary association, vehicles used by an organ procurement organization or agency for the recovery and transportation of human tissues and organs for transplantation, and every ambulance or emergency medical service emergency support vehicle used for answering emergency calls, shall be equipped with special lights, bells, sirens, horns or exhaust whistles of a type approved by the Commissioner of Motor Vehicles.

The operators of all such vehicles so equipped are hereby authorized to use such equipment at all times while engaged in the performance of their duties and services, both within their respective corporate limits and beyond.

In addition to the use of special equipment authorized and required by this subsection, the chief and assistant chiefs of any police department or of any fire department, whether the same be municipal or rural, paid or voluntary, county fire marshals, assistant fire marshals, transplant coordinators, and emergency management coordinators, are hereby authorized to use such special equipment on privately owned vehicles operated by them while actually engaged in the performance of their official or semiofficial duties or services either within or beyond their respective corporate limits.

And vehicles driven by law enforcement officers of the North Carolina Division of Motor Vehicles shall be equipped with a bell, siren, or exhaust whistle of a type approved by the Commissioner, and all vehicles owned and operated by the State Bureau of Investigation for the use of its agents and officers in the performance of their official duties may be equipped with special lights, bells, sirens, horns or exhaust whistles of a type approved by the Commissioner of Motor Vehicles.

Every vehicle used or operated for law enforcement purposes by the sheriff or any salaried deputy sheriff or salaried rural policeman of any county, whether owned by the county or not, may be, but is not required to be, equipped with special lights, bells, sirens, horns or exhaust whistles of a type approved by the Commissioner of Motor Vehicles. Such special equipment shall not be operated or activated by any person except by a law enforcement officer while actively engaged in performing law enforcement duties.

In addition to the use of special equipment authorized and required by this subsection, the chief and assistant chiefs of each emergency rescue squad which is recognized or sponsored by any municipality or civil preparedness agency, are hereby authorized to use such special equipment on privately owned vehicles operated by them while actually engaged in their official or semiofficial duties or services either within or beyond the corporate limits of the municipality which recognizes or sponsors such organization."

(gg) G.S. 20-179.4 reads as rewritten:

"§ 20-179.4. Community service alternative punishment; responsibilities of the Department of ~~Crime Control and Public Safety;~~ Correction; fee.

(a) The Department of ~~Crime Control and Public Safety~~ Correction must conduct a community service alternative punishment program for persons sentenced under G.S. 20-179(i), (j) or (k).

(d) Fees collected under this section must be deposited in the general fund.

(hh) G.S. 20-191 is repealed.

(ii) G.S. 58-32-1 reads as rewritten:

"§ 58-32-1. Commission created; membership.

There is hereby created within the Department a Public Officers and Employees Liability Insurance Commission. The Commission shall consist of 11 10 members who shall be appointed as follows: the Commissioner shall appoint six members as follows: two members who are members of the insurance industry who may be chosen from a list of three nominees submitted to the Commissioner by the Independent Insurance Agents of North Carolina, Inc., and a list of three nominees submitted by the Carolinas Association of Professional Insurance Agents, North Carolina Division; one member who is employed by a police department who may be chosen from a list of three nominees submitted to the Commissioner jointly by the North Carolina Police Chiefs Association and North Carolina Police Executives Association, and one member who is employed by a sheriff's department who may be chosen from a list of three nominees submitted to the Commissioner by the North Carolina Sheriff's Association; one member representing city government who may be chosen from a list of three nominees submitted to the Commissioner by the North Carolina League of Municipalities; and one member representing county government who may be chosen from a list of three nominees submitted to the Commissioner by the North Carolina Association of County Commissioners; and the General Assembly shall appoint two persons, one upon the recommendation of the Speaker of the House of Representatives, and one upon the recommendation of the President of the Senate. The Commissioner or his designate shall be an ex officio member. Appointments by the General Assembly shall be made in accordance with G.S. 120-121, and vacancies in those appointments shall be filled in accordance with G.S. 120-122. The terms of the initial appointees by the General Assembly shall expire on June 30, 1983. ~~The Secretary of the Department of Crime Control and Public Safety or his designate shall be an ex officio member.~~ The Attorney General or his designate shall be an ex officio member. One insurance industry member appointed by the Commissioner shall be appointed to a term of two years and one insurance industry member shall be appointed to a term of four years. The police department member shall be appointed to a term of two years and the sheriff's department member shall be appointed to a term of four years. The representative of county government shall be appointed to a term of two years and the representative of city government to a term of four years. Beginning July 1, 1983, the appointment made by the General Assembly upon the recommendation of the Speaker shall be for two years, and the appointment made by the General Assembly upon the recommendation of the President of the Senate shall be for four years. Except as provided in this section, if any vacancy occurs in the membership of the Commission, the appointing authority shall appoint another person to fill the unexpired term of the vacating member. After the initial terms established herein have expired, all appointees to the Commission shall be appointed to terms of four years.

The Commission members shall elect the chairman and vice-chairman of the Commission. The Commission may, by majority vote, remove any member of the Commission for chronic absenteeism, misfeasance, malfeasance or other good cause."

(jj) G.S. 66-165 reads as rewritten:

"§ 66-165. Permits required.

(a) Except as provided in subsection (c), it shall be unlawful for any person to engage as a dealer in the business of purchasing precious metals either as a separate business or in connection with other business operations without first obtaining a permit for the business from the local law-enforcement agency. The form of the permit and application therefor shall be as approved by the ~~Department of Crime Control and Public Safety.~~ State Bureau of Investigation. The application shall be given under oath and shall be notarized. A 30-day waiting period from the date of filing of the application is required prior to initial issuance of a permit. A separate permit shall be issued for each location, place, or premises within the jurisdiction of the local law-enforcement agency which is used for the conduction of a precious metals business, and each permit shall designate the location, place or premises to which it applies. Such business shall not be conducted in any other place than that designated in the permit, and no business shall be conducted in a mobile home, trailer, camper, or other vehicle, or structure not permanently affixed to the ground or in any room customarily used for lodging in any hotel, motel, tourist court, or tourist home as defined in G.S. 105-61. The permit shall be posted in a prominent place on the designated premises. Permits shall be valid for a period of 12 months from the date issued and may be renewed without a waiting period upon filing of an application and payment of the annual fee. The annual fee for each dealer's permits within each jurisdiction shall be ten dollars ($10.00) to provide for the administrative costs of the local law-enforcement agency, including purchase of required forms. The fee shall not be refundable even if the permits are denied or later suspended or revoked. Such permits shall be in addition to and not in lieu of other business licenses and are not transferable.

Any dealer applying to the local law-enforcement agency for a permit shall furnish the local law-enforcement agency with the following information:

(1) His full name, and any other names used by the applicant during the preceding five years. In the case of a partnership, association, or corporation, the applicant shall list any partnership, association, or corporate names used during the preceding five years;

(2) Current address, and all addresses used by the applicant during the preceding five years;

(3) Physical description;

(4) Age;

(5) Driver's license number, if any, and state of issuance;

(6) Recent photograph;

(7) Record of felony convictions; and

(8) Record of other convictions during the preceding five years.

If the applicant for a dealer's permit is a partnership or association, all persons owning a ten percent (10%) or more interest in the partnership or association shall comply with the provisions of this subsection. Any such permits shall be issued in the name of the partnership or association.

If the applicant for a dealer's permit is a corporation, each officer, director and stockholder owning ten percent (10%) or more of the corporation's stock, of any class, shall comply with the provisions of this subsection. Any such permits shall be issued in the name of the corporation.

No permit shall be issued to an applicant who, within five years prior to the date of application, has been convicted of a felony involving a crime of moral turpitude, or larceny, or receiving stolen goods or of similar charges in any federal court or a court of this or any other state. In the case of a partnership, association, or corporation, no permit shall be issued to any applicant with an officer, partner, or director who has, within five years prior to the date of application, been convicted of a felony involving a crime of moral turpitude, or larceny, or receiving stolen goods or of similar charges in any federal court or a court of this or any other state.

(b) Every employee engaged in the precious metal business shall, within two days of being so engaged, register his name and address with the local law-enforcement agency and have his photograph taken by the agency. The agency shall issue to him a certificate of compliance with this section upon the applicant's payment of the sum of three dollars ($3.00) to the agency. The permit shall be posted in the work area of the permit holder.

(c) A special occasion permit authorizes the permittee to purchase precious metals as a dealer participating in any trade shows, antique shows, and crafts shows conducted within the State. A special occasion permit shall be issued by any local law-enforcement agency; provided, however, that a permittee under subsection (a) shall apply for a special occasion permit with the local law-enforcement agency which issued such dealer's permit. An application for a permit shall be on a form as approved by the ~~Department of Crime Control and Public Safety~~ State Bureau of Investigation and shall be given under oath and notarized. A 30-day waiting period from the date of filing of the application is required prior to initial issuance of a permit.

Any dealer applying to a local law-enforcement agency for a special occasion permit shall furnish the local law-enforcement agency with the information required in an application for a dealer's permit as set forth in (a).

If the applicant for a special occasion permit is a partnership or association, all persons owning a ten percent (10%) or more interest in the partnership or association shall comply with the provisions of this subsection. Any such permits shall be issued in the name of the partnership or association.

If the applicant for a special occasion permit is a corporation, each officer, director and stockholder owning ten percent (10%) or more of the corporation's stock, of any class, shall comply with the provisions of this subsection. Any such permits shall be issued in the name of the corporation.

The fee for an application for a special occasion permit shall be ten dollars ($10.00) to provide for the administrative cost of the local law-enforcement agency including purchase of required forms. The fee shall not be refundable even if the permit is denied or is later suspended or revoked. Such permits shall be in addition to and not in lieu of other business licenses and are not transferable.

A special occasion permit shall be valid for 12 months from the date issued, unless earlier surrendered, suspended, or revoked. Application for renewal of a permit for an additional 12 months shall be on a form as approved by the ~~Department of Crime Control and Public Safety~~ State Bureau of Investigation and shall be accompanied by an application fee of ten dollars ($10.00). A renewal fee shall not be refundable.

Each special occasion permit shall be posted in a prominent place on the premises of any show at which the permittee purchases precious metals."

(kk) G.S. 66-166 reads as rewritten:

"§ 66-166. Exemption from permits.

Any merchant claiming an exemption from the requirements of G.S. 66-165, 66-168, and 66-170 due to the percentage of his total business which constitutes precious metals purchases shall file an application therefor with the local law-enforcement agency at the same time as applications for dealers' permits are required to be filed under the provisions of this Article. The application shall be upon a form approved by the ~~Department of Crime Control and Public Safety~~ State Bureau of Investigation and shall contain as a minimum the following information: the name, home address and business address of the applicant; the name and location of the business at its permanent address; the primary nature of the business both as to purchases and sales; the total dollar volume of purchases of precious metals during the 12-month period next preceding the date of application; the total dollar volume of all secondhand goods purchased during the same period by the business; the percentage of precious metals purchases or acquisitions to total purchases or acquisitions of secondhand goods; and the date when the merchant commenced the business under which the exemption is claimed. Such application shall be filed under the same oath as is required for a precious metals dealer permit, shall be notarized, and shall be accompanied by a fee of five dollars ($5.00), which fee shall be retained by the local law-enforcement agency as cost for administering claims for exemptions.

The application for exemption, if granted, shall be valid for a period of 12 months. Thereafter, if the applicant seeks an exemption for the ensuing year he shall file an application for exemption 30 days before the expiration of the prior exemption.

If in any calendar month the percentage of precious metals purchased by an exempted merchant exceeds ten percent (10%) of his total purchases, he shall file notice thereof with the local law-enforcement agency."

(ll) G.S. 66-168 reads as rewritten:

"§ 66-168. Bond or trust account required.

Before any permit shall be issued to a dealer pursuant to G.S. 66-165, the dealer shall execute a satisfactory cash or surety bond or establish a trust account with a licensed and insured bank or savings institution located in the State of North Carolina in the sum of ten thousand dollars ($10,000). The bond or trust account shall be in favor of the State of North Carolina. A surety bond is to be executed by the dealer and by two responsible sureties or a surety company licensed to do business in the State of North Carolina and shall be on a form approved by the ~~Department of Crime Control and Public Safety.~~ State Bureau of Investigation. Any bond shall be kept in full force and effect and shall be delivered to the law-enforcement agency which first issued a current permit to the dealer. A bond or trust account shall be for the faithful performance of the requirements and obligations of the dealer's business in conformity with this Article. Any law-enforcement agency shall have full power and authority to revoke the permit and sue for forfeiture of the bond or trust account upon a breach thereof. Any person who shall have suffered any loss or damage by any act of the permittee that constitutes a violation of this Article shall have the right to institute an action to recover against such permittee and the surety or trust account. Upon termination of the bond or trust account the permit shall become void."

(mm) The catch line of G.S. 122C-408 and G.S. 122C-408(a) reads as rewritten:

"§ 122C-408. Butner Public Safety Division of the Department of ~~Crime Control and Public Safety;~~ Human Resources; jurisdiction; fire and police district.

(a) The Secretary of ~~Crime Control and Public Safety~~ Human Resources may employ special police officers for the territory of the Camp Butner reservation. The territorial jurisdiction of these special police officers shall include: (i) the Camp Butner reservation; (ii) the Lyons Station Sanitary District; and (iii) that part of Granville County adjoining the Butner reservation and the Lyons Station Sanitary District situated north and west of the intersection of Rural Paved Roads 1103 and 1106 and bounded by those roads and the boundaries of the reservation and the sanitary district. The Secretary of ~~Crime Control and Public Safety~~ Human Resources may organize these special police officers into a public safety department for that territory and may establish it as a division within that principal department as permitted by Chapter 143B of the General Statutes."

(nn) G.S. 122C-409 reads as rewritten:

"§ 122C-409. Community of Butner comprehensive emergency management plan.

The ~~Department of Crime Control and Public Safety~~ Department of Human Resources shall establish an emergency management agency as defined in G.S. 166A-4(2) for the Community of Butner and the Camp Butner reservation."

(oo) G.S. 122C-411 reads as rewritten:

"§ 122C-411. Fire protection contracts.

The ~~Department of Crime Control and Public Safety~~ Department of Human Resources may contract with industries in the vicinity of Butner to provide fire protection to those industries. Those contracts shall provide for a payment by any contracting industry calculated on the basis of twenty cents (20¢) per one hundred dollars ($100.00) of assessed valuation."

(pp) G.S. 127A-19 reads as rewritten:

"§ 127A-19. Adjutant General.

The military head of the militia shall be the Adjutant General who shall hold the rank of major general. The Adjutant General shall be appointed by the Governor in his capacity as commander in chief of the ~~militia, in consultation with the Secretary of Crime Control and Public Safety,~~ militia and shall serve at the pleasure of the Governor. No person shall be appointed as Adjutant General who has less than five years' commissioned service in an active status in any component of the armed forces of the United States. The Adjutant General, while holding such office, may be a member of the active national guard or naval militia.

Subject to the approval of the ~~Governor~~ Governor, ~~and in consultation with the Secretary, Department of Crime Control and Public Safety,~~ the Adjutant General may appoint a deputy adjutant general for army national guard and an assistant adjutant general for air national guard, both of whom may hold the rank of brigadier general and who shall serve at the pleasure of the Governor. The Adjutant General may also employ such staff members and other personnel as may be authorized by the Secretary and funded."

(qq) G.S. 127A-20 reads as rewritten:

"§ 127A-20. Administrative and operational relationships of the Adjutant General.

In all administrative and operational matters affecting the militia while under State control, the Adjutant General shall be responsible to and subject to the direction and supervision of the ~~Secretary of Crime Control and Public Safety.~~ Governor."

(tt1) G.S. 127A-21(a) reads as rewritten:

"(a) The Governor of the ~~State,~~ State ~~in consultation with the Secretary of Crime Control and Public Safety,~~ shall appoint, designate, or detail, subject to the approval of the Secretary of the Army and the Secretary of the Air Force, a qualified commissioned officer of the North Carolina national guard who is also a commissioned officer of the army national guard of the United States or the air national guard of the United States, as the case may be, to be the United States property and fiscal officer for North Carolina. If the officer is not on active duty, the President may order him to active duty, with his consent, to serve as a property and fiscal officer."

(tt2) G.S. 127A-22 reads as rewritten:

"§ 127A-22. North Carolina property and fiscal officer.

(a) Upon full mobilization of the North Carolina national guard into federal service to the extent that the functions of a United States property and fiscal officer no longer exist or are authorized under federal statutes, the Governor of the ~~State,~~ State ~~in consultation with the Secretary of Crime Control and Public Safety,~~ may appoint, designate or detail a qualified individual to serve at the pleasure of the Governor as the North Carolina property and fiscal officer for any composition of a nonfederally recognized State national guard or State defense militia organized under the provisions of G.S. 127A-1 et seq.

(b) In consideration of his services for the responsibility, care, utilization, and issue of State or federal facilities and property, under the jurisdiction of the State of North Carolina, the North Carolina property and fiscal officer shall receive from the State such salary as the Governor may authorize to be just and proper; the salary to constitute a charge upon appropriations made to the ~~Department of Crime Control and Public Safety.~~ Office of the Governor.

(c) The property and fiscal officer for North Carolina shall be an employee of the ~~Department of Crime Control and Public Safety.~~ Office of the Governor. He shall be required to give good and sufficient bond to the State, the amount thereof to be determined by the Governor, for the faithful performance of his duties and for the safekeeping and proper distribution of such funds and property entrusted to his care. He shall receipt for and account for all funds and property allotted to his custody from the appropriation for military purposes by State and federal agencies, and shall make such returns and reports through the ~~Secretary of Crime Control and Public Safety~~ Office of the Governor concerning same as may be required by the Governor or State laws."

(tt3) G.S 127A-40(f) reads as rewritten:

"(f) The ~~Secretary of Crime Control and Public Safety~~ Governor shall determine the eligibility of guard members for the benefits herein provided and shall certify those eligible to the State Treasurer. In addition, the ~~Department of Crime Control and Public Safety~~ Office of the Governor shall, on and after July 1, ~~1983,~~ 1993, provide the Department of State Treasurer with an annual census population, by age and the number of years of creditable service, for all former members of the National Guard in receipt of a pension as well as for all active members of the National Guard who are not in receipt of a pension and who have seven and more years of creditable service. The ~~Department of Crime Control and Public Safety~~ Office of the Governor shall also provide the State Treasurer a census population of all former members of the National Guard who are not in receipt of a pension and who have 15 and more years of creditable service. The Department of State Treasurer shall make pension payments to those persons certified from the North Carolina National Guard Pension Fund, which shall include general fund appropriations made to and transferred from the ~~Department of Crime Control and Public Safety.~~ Office of the Governor. The Department of State Treasurer shall have performed an annual actuarial valuation of the fund and shall have the financial responsibility for maintaining the fund on a generally accepted actuarial basis. The ~~Department of Crime Control and Public Safety~~ Office of the Governor shall provide the Department of State Treasurer with whatever assistance is required by the State Treasurer in carrying out his financial responsibilities."

(rr) G.S. 127A-43 reads as rewritten:

"§ 127A-43. North Carolina National Guard Meritorious Service Medal.

There is hereby created the North Carolina National Guard Meritorious Service Medal which shall be of appropriate design, and a ribbon, together with a rosette or other device to be worn in lieu thereof. This medal and appurtenances thereto shall be of a design approved by the Governor or his designated representative. The Governor or his designated representative is authorized to award this medal upon the recommendation of the ~~Secretary of Crime Control and Public Safety in consultation with the~~ Adjutant General and a board of officers appointed by the Adjutant General. Any member or former member of the armed forces discharged under honorable conditions, who has distinguished himself by heroism, meritorious achievement, or meritorious service to the North Carolina national guard, is eligible for this award. The Governor, on his own authority, may award such medal to ~~the Secretary of Crime Control and Public Safety,~~ the Adjutant General or any other active or inactive general officer of the armed forces who has distinguished himself by heroism, meritorious achievement, or meritorious service to the North Carolina national guard. The required heroism, achievement, or service, while of a lesser degree than that required for awarding of the North Carolina Distinguished Service Medal, must nevertheless be accomplished with distinction."

(ss) G.S. 127A-161(3) is repealed.

(tt) G.S. 127A-192(c) is repealed.

(uu) G.S. 127A-195 reads as rewritten:

"§ 127A-195. Administration and funding.

(a) The ~~Secretary of Crime Control and Public Safety~~ Office of the Governor is charged with the administration of the tuition assistance program under this Article. ~~He may delegate administrative tasks to other persons within the Department of Crime Control and Public Safety as he deems best for the orderly administration of this program.~~

(b) The ~~Secretary~~ Office of the Governor shall determine the eligibility of applicants, select the benefit recipients, establish the effective date of the benefit, and may suspend or revoke the benefit if he it finds that the recipient does not maintain an adequate academic status, or if the recipient engages in riots, unlawful demonstrations, the seizure of educational buildings, or otherwise engages in disorderly conduct, breaches of the peace, or unlawful assemblies. The ~~Secretary~~ Office of the Governor shall maintain such records and shall promulgate such rules and regulations as he deems necessary for the orderly administration of this program. The ~~Secretary~~ Office of the Governor may require of business or trade schools or State or private educational institutions such reports and other information as he it may need to carry out the provisions of this Article and he it shall disburse benefit payments for recipients upon certification of enrollment by the enrolling institutions.

(c) All benefit disbursements shall be made to the business or trade school or State or private educational institution concerned, for credit to the tuition account of each recipient.

(d) The participation by any business or trade school or private educational institution in this program shall be subject to the applicable provisions of this Article and to examination by the State Auditor of the accounts of the benefit recipients attending or having attended such private schools or institutions. The ~~Secretary~~ Office of the Governor may defer making an award or may suspend an award in any business or trade school or private educational institution which does not comply with the provisions of this Article relating to said institutions. The manner of payment to any business or trade school or private educational institution shall be as prescribed by the ~~Secretary.~~ Office of the Governor.

(e) Irrespective of other provisions of this Article, the ~~Secretary~~ Office of the Governor may prescribe special procedures for adjusting the accounts of benefit recipients who, for reasons of illness, physical inability to attend classes or for other valid reason satisfactory to the ~~Secretary,~~ Office of the Governor, may withdraw from any business or trade school or State or private educational institution prior to the completion of the term, semester, quarter or other academic period being attended at the time of withdrawal."

(vv) G.S. 143-166.13 reads as rewritten:

"§ 143-166.13. Persons entitled to benefits under Article.

(a) The following persons who are subject to the Criminal Justice Training and Standards Act are entitled to benefits under this Article:

(1) State Government Security Officers, Department of Administration;

(2) State Correctional Officers, Department of ~~Corrections;~~ Correction;

(3) State Probation and Parole Officers, Department of ~~Corrections;~~ Correction;

(4) Sworn State Law-Enforcement Officers with the power of arrest, Department of ~~Corrections;~~ Correction;

(5) Alcohol Law-Enforcement Agents, ~~Department of Crime Control and Public Safety;~~ Alcoholic Beverage Commission;

(6) State Highway Patrol Officers, Department of ~~Crime Control and Public Safety;~~ Transportation;

(7) State Legislative Building Special Police, General Assembly;

(8) Sworn State Law-Enforcement Officers with the power of arrest, Department of Human Resources;

(9) Youth Correctional Officers, Department of Human Resources;

(10) Insurance Investigators, Department of Insurance;

(11) State Bureau of Investigation Officers and Agents, Department of Justice;

(12) Director and Assistant Director, License and Theft Enforcement Section, Division of Motor Vehicles, Department of Transportation;

(13) Members of License and Theft Enforcement Section, Division of Motor Vehicles, Department of Transportation, designated by the Commissioner of Motor Vehicles as either 'inspectors' or uniformed weigh station personnel;

(14) Utilities Commission Transportation Inspectors and Special Investigators;

(15) North Carolina Ports Authority Police, Department of Commerce;

(16) Sworn State Law-Enforcement Officers with the power of arrest, Department of Environment, Health, and Natural Resources;

(17) Sworn State Law-Enforcement Officers with the power of arrest, ~~Department of Crime Control and Public Safety.~~ Butner Public Safety Division, Department of Human Resources."

(ww) G.S. 143-215.93A(a) reads as rewritten:

"(a) Except as provided in subsection (b) of this section, a person is not liable under this Part, Part 2C of this Article, Articles 21 and 21B of this Chapter, other provisions of the General Statutes relating to protection of the environment or public health, Chapter 1B of the General Statutes, or common law causes of action in tort for removal costs or damages which result from, arise out of, or are related to the discharge or threatened discharge of oil, when such removal costs or damages result from acts or omissions in the course of rendering care, assistance, or advice consistent with the National Contingency Plan or as otherwise directed by the President of the United States, the Federal On-Scene Coordinator, the Governor, the Secretary, ~~the Secretary of Crime Control and Public Safety,~~ or any person designated to direct oil discharge removal activities by the President of the United States, the Governor, ~~the Secretary, or the Secretary of Crime Control and Public Safety.~~ or the Secretary."

(xx) Article 19 of Chapter 143A of the General Statutes is repealed.

(yy) G.S. 143B-6(4) is repealed.

(zz) G.S. 143B-181 reads as rewritten:

"§ 143B-181. Governor's Advisory Council on Aging - members; selection; quorum; compensation.

The Governor's Advisory Council on Aging of the Department of Human Resources shall consist of 33 32 members, 29 28 members to be appointed by the Governor, two members to be appointed by the Lieutenant Governor, and two members to be appointed by the Speaker of the House of Representatives. The composition of the Council shall be as follows: one representative of the Department of Administration; one representative of the Department of Cultural Resources; one representative of the Employment Security Commission; one representative of the Teachers' and State Employees' Retirement System; one representative of the Commissioner of Labor; one representative of the Department of Public Education; one representative of the Department of Environment, Health, and Natural Resources; one representative of the Department of Insurance; ~~one representative of the Department of Crime Control and Public Safety;~~ one representative of the Department of Community Colleges; one representative of the School of Public Health of The University of North Carolina; one representative of the School of Social Work of The University of North Carolina; one representative of the Agricultural Extension Service of North Carolina State University; one representative of the collective body of the Medical Society of North Carolina; and 19 members at large. The at large members shall be citizens who are knowledgeable about services supported through the Older Americans Act of 1965, as amended, and shall include persons with greatest economic or social need, minority older persons, and participants in programs under the Older Americans Act of 1965, as amended. The Governor shall appoint 15 members at large who meet these qualifications and are 60 years of age or older. The four remaining members at large, two of whom shall be appointed by the Lieutenant Governor and two of whom shall be appointed by the Speaker of the House of Representatives, shall be broadly representative of the major private agencies and organizations in the State who are experienced in or have demonstrated particular interest in the special concerns of older persons. At least one of each of the at-large appointments of the Lieutenant Governor and the Speaker of the House of Representatives shall be persons 60 years of age or older. The Council shall meet at least quarterly.

Members at large shall be appointed for four-year terms and until their successors are appointed and qualify. Ad interim appointments shall be for the balance of the unexpired term.

The Governor shall have the power to remove any member of the Council from office in accordance with the provisions of G.S. 143B-16 of the Executive Organization Act of 1973.

The Governor shall designate one member of the Council as chairman to serve in such capacity at his pleasure.

Members of the Council shall receive per diem and necessary travel and subsistence expenses in accordance with the provisions of G.S. 138-5.

A majority of the Council shall constitute a quorum for the transaction of business.

All clerical and other services required by the Council shall be supplied by the Secretary of Human Resources."

(aaa) G.S. 143B-285.12(a)(1) reads as rewritten:

"(1) ~~Four~~ Three members from State government: the Secretary or Commissioner of Environment, Health, and Natural Resources, Commerce, ~~Agriculture, and Crime Control and Public Safety.~~ and Agriculture. At the request of such Secretary or Commissioner, the Governor may appoint another official from the same department to serve in his stead."

(bbb) G.S. 147-45 reads as rewritten:

"§ 147-45. Distribution of copies of State publications.

The Secretary of State shall, at the State's expense, as soon as possible after publication, provide such number of copies of the Session Laws and Senate and House Journals to federal, State, and local governmental officials, departments and agencies, and to educational institutions of instruction and exchange use, as is set out in the table below:

Session Assembly

Agency or Institution Laws Journals

Governor, Office of the 3 2

North Carolina Crime Commission 1 0

Adjutant General 2 0

Lieutenant Governor, Office of the 1 1

Secretary of State, Department of the 3 3

Auditor, Department of the State 3 1

Treasurer, Department of the State 3 1

Local Government Commission 2 0

Public Education, Department of 1 0

Superintendent of Public Instruction 3 1

Controller 1 0

Division of Community Colleges 3 1

Regional Service Centers 1 ea. 0

Justice, Department of

Office of the Attorney General 25 3

Budget Bureau (Administration) 1 0

Property Control (Administration) 1 1

State Bureau of Investigation 1 0

Agriculture, Department of 3 1

Labor, Department of 5 1

Insurance, Department of 5 1

Administration, Department of 1 1

Budget Bureau 2 1

Controller 1 0

Property Control 1 0

Purchase and Contract 2 0

Policy and Development 1 0

Veterans Affairs Commission 1 0

Environment, Health, and Natural

Resources, Department of 1 0

Division of Environmental Management 2 0

Board of Environment, Health, and

Natural Resources 1 0

Soil and Water Conservation Commission 1 0

Wildlife Resources Commission 2 0

Revenue, Department of 5 1

Human Resources, Department of 3 0

Board of Human Resources 1 0

Health Services, Division of 3 0

Mental Health, Developmental

Disabilities, and Substance Abuse Services,

Division of 1 0

Social Services, Division of 3 0

Facilities Services, Division of 1 0

Youth Services, Division of 1 0

Hospitals and Institutions 1 ea. 0

Transportation, Department of 1 0

Board of Transportation 3 0

Motor Vehicles, Division of 1 0

Commerce, Department of 1 0

Economic Development, Division of 2 0

State Ports Authority 1 0

Alcoholic Beverage Control Commission,

North Carolina 2 0

Banking Commission 2 0

Utilities Commission 8 1

Industrial Commission 7 0

Labor Force Development Council 1 0

Milk Commission 5 0

Employment Security Commission 1 1

Correction, Department of 1 0

Department of Correction 2 0

Parole Commission 2 0

State Prison 1 0

Correctional Institutions 1 ea. 0

Cultural Resources, Department of 1 0

Archives and History, Division of 5 1

State Library 5 5

Publications Division 1 1

~~Crime Control and Public Safety, Department of~~ 2 1

~~North Carolina Crime Commission~~ 1 0

~~Adjutant General~~ 2 0

Elections, State Board of 2 0

Office of Administrative Hearings 2 0

Legislative Branch

State Senators 1 ea. 1 ea.

State Representatives 1 ea. 1 ea.

Principal Clerk - Senate 1 1

Principal Clerk - House 1 1

Reading Clerk - Senate 1 1

Reading Clerk - House 1 1

Sergeant at Arms - House 1 1

Sergeant at Arms - Senate 1 1

Enrolling Clerk 1 0

Engrossing Clerk 1 0

Indexer of the Laws 1 0

Legislative Building Library 35 15

Judicial System

Justices of the Supreme Court 1 ea. 1 ea.

Judges of the Court of Appeals 1 ea. 1 ea.

Judges of the Superior Court 1 ea. 0

Emergency and Special Judges of the

Superior Court 1 ea. 0

District Court Judges 1 ea. 0

District Attorneys 1 ea. 0

Clerk of the Supreme Court 1 1

Clerk of the Court of Appeals 1 1

Administrative Office of the Courts 4 1

Supreme Court Library AS MANY AS REQUESTED

Colleges and Universities

The University North Carolina System

Administrative Offices 3 0

University of North Carolina, Chapel Hill 65 25

University of North Carolina, Charlotte 3 1

University of North Carolina, Greensboro 3 1

University of North Carolina, Asheville 2 1

University of North Carolina, Wilmington 2 1

North Carolina State University, Raleigh 5 3

Appalachian State University 2 1

East Carolina University 3 2

Elizabeth City State University 2 1

Fayetteville State University 2 1

North Carolina Agricultural and

Technical University 2 1

North Carolina Central University 5 5

Western Carolina University 2 1

Pembroke State University 2 1

Winston-Salem State University 2 1

North Carolina School of the Arts 1 1

Private Institutions

Duke University 6 6

Davidson College 3 2

Wake Forest University 5 5

Lenoir Rhyne College 1 1

Elon College 1 1

Guilford College 1 1

Campbell College 5 5

Wingate College 1 1

Pfeiffer College 1 1

Barber Scotia College 1 1

Atlantic Christian College 1 1

Shaw University 1 1

St. Augustine's College 1 1

J.C. Smith University 1 1

Belmont Abbey College 1 1

Bennett College 1 1

Catawba College 1 1

Gardner-Webb College 1 1

Greensboro College 1 1

High Point College 1 1

Livingstone College 1 1

Mars Hill College 1 1

Meredith College 1 1

Methodist College 1 1

North Carolina Wesleyan College 1 1

Queens College 1 1

Sacred Heart College 1 1

St. Andrews Presbyterian College 1 1

Salem College 1 1

Warren Wilson College 1 1

County and Local Officials

Clerks of the Superior Court 1 ea. 1 ea.

Federal, Out-of-State and Foreign

Secretary to the President 1 0

Secretary of State 1 1

Secretary of Defense 1 0

Secretary of Agriculture 1 0

Secretary of the Interior 1 0

Secretary of Labor 1 1

Secretary of Commerce 1 1

Secretary of the Treasury 1 0

Secretary of Health, Education and Welfare 1 0

Secretary of Housing and Urban Development 1 0

Secretary of Transportation 1 0

Attorney General 1 0

Postmaster General 1 0

Bureau of Census 1 0

Bureau of Public Roads 1 0

Department of Justice 1 0

Department of Internal Revenue 1 0

Veterans' Administration 1 0

Farm Credit Administration 1 0

Securities and Exchange Commission 1 0

Social Security Board 1 0

Environmental Protection Agency 1 0

Library of Congress 8 2

Federal Judges resident in North Carolina 1 ea. 0

Federal District Attorneys resident in

North Carolina 1 ea. 0

Marshal of the United States Supreme Court 1 0

Federal Clerks of Court resident in North Carolina 1 ea. 0

Supreme Court Library exchange list 1 ea. 0

One copy of the Session Laws shall be furnished the head of any department of State government created in the future.

State agencies, institutions, etc., not found in or covered by this list may, upon written request from their respective department head to the Secretary of State, and upon the discretion of the Secretary of State as to need, be issued copies of the Session Laws on a permanent loan basis with the understanding that should said copies be needed they will be recalled."

(ccc) G.S. 164-37 reads as rewritten:

"§ 164-37. Membership; chairman; meetings; quorum.

The Commission shall consist of 27 26 members as follows:

(1) The Chief Justice of the North Carolina Supreme Court shall appoint a sitting or former Justice or judge of the General Court of Justice, who shall serve as Chairman of the Commission;

(2) The Chief Judge of the North Carolina Court of Appeals, or another judge on the Court of Appeals, serving as his designee;

(3) The Secretary of Correction or his designee;

~~(4)~~ ~~The Secretary of Crime Control and Public Safety or his designee;~~

(5) The Chairman of the Parole Commission, or his designee;

(6) The President of the Conference of Superior Court Judges or his designee;

(7) The President of the District Court Judges Association or his designee;

(8) The President of the North Carolina Sheriff's Association or his designee;

(9) The President of the North Carolina Association of Chiefs of Police or his designee;

(10) One member of the public at large, who is not currently licensed to practice law in North Carolina, to be appointed by the Governor;

(11) One member to be appointed by the Lieutenant Governor;

(12) Three members of the House of Representatives, to be appointed by the Speaker of the House;

(13) Three members of the Senate, to be appointed by the President Pro Tempore of the Senate;

(14) The President Pro Tempore of the Senate shall appoint the representative of the North Carolina Community Sentencing Association that is recommended by the President of that organization;

(15) The Speaker of the House of Representatives shall appoint the member of the business community that is recommended by the President of the North Carolina Retail Merchants Association;

(16) The Chief Justice of the North Carolina Supreme Court shall appoint the criminal defense attorney that is recommended by the President of the North Carolina Academy of Trial Lawyers;

(17) The President of the Conference of District Attorneys or his designee;

(18) The Lieutenant Governor shall appoint the member of the North Carolina Victim Assistance Network that is recommended by the President of that organization;

(19) A rehabilitated former prison inmate, to be appointed by the Chairman of the Commission;

(20) The President of the North Carolina Association of County Commissioners or his designee;

(21) The Governor shall appoint the member of the academic community, with a background in criminal justice or corrections policy, that is recommended by the President of The University of North Carolina;

(22) The Attorney General, or a member of his staff, to be appointed by the Attorney General;

(23) The Governor shall appoint the member of the North Carolina Bar Association that is recommended by the President of that organization.

The Commission shall have its initial meeting no later than September 1, 1990, at the call of the Chairman. The Commission shall meet a minimum of four regular meetings each year. The Commission may also hold special meetings at the call of the Chairman, or by any four members of the Commission, upon such notice and in such manner as may be fixed by the rules of the Commission. A majority of the members of the Commission shall constitute a quorum."

(ddd) G.S. 166A-5(2) is repealed.

(eee) This section becomes effective July 1, 1993.

---BUTNER PUBLIC SAFETY STUDY.

Sec. 112.1. The Governor shall examine public safety services in Butner. The study shall provide a detailed evaluation of the following options:

(1) G.S. 153A-301 should be amended to allow counties to create Public Safety Districts, and the creation of such a district in Durham and Granville Counties to serve Butner, which district could levy local property taxes in unincorporated areas for public safety services;

(2) Incorporation of Butner; or

(3) No change.

Sec. 112.2. The results of the study shall be reported to the General Assembly no later than convening of the 1994 Regular Session of the 1993 General Session. The study should address:

(1) Unique needs of the State institutions;

(2) Needs of local residents;

(3) Services that would be provided by an incorporated Town of Butner, such as fire, police protection, water, and sewer;

(4) Services that would be provided by a stand-alone public safety district;

(5) The impact on other local governments of incorporating Butner or establishing a public safety district;

(6) The current cost to local residents;

(7) The tax base; and

(8) Other relevant factors.

Sec. 113. The Governor should provide participation in the study to Granville and Durham Counties, to local residents, and to federal and State institutions at Butner.

Sec. 114. Sections 112.1 through 113 of this act are effective upon ratification.

---PUBLIC SCHOOL GOVERNANCE.

Sec. 115. Section 4(1) of Article IX of the Constitution reads as rewritten:

"(1) Board. The State Board of Education shall consist of the Lieutenant Governor, the Treasurer, and eleven members appointed by the Governor, subject to confirmation by the General Assembly in joint session. The General Assembly shall divide the State into eight educational districts. Of the appointive members of the Board, one shall be appointed from each of the eight educational districts and three shall be appointed from the State at large. Appointments shall be for overlapping terms of eight years. Appointments to fill vacancies shall be made by the Governor for the unexpired terms and shall not be subject to confirmation. The General Assembly shall provide by statute for the appointment of a State Board of Education. The General Assembly may, by statute, grant the Governor the authority to approve or reject any appointments to the Board made by the General Assembly."

Sec. 116. Section 4(2) of Article IX of the Constitution reads as rewritten:

"(2) Superintendent of Public Instruction. The Superintendent of Public Instruction shall be the secretary and chief administrative officer of the State Board of Education. The Superintendent shall be appointed by the State Board of Education and shall serve at the pleasure of the State Board of Education."

Sec. 117. Section 7(1) of Article III of the Constitution reads as rewritten:

"(1) Officers. A Secretary of State, an Auditor, a Treasurer, ~~a Superintendent of Public Instruction,~~ an Attorney General, a Commissioner of Agriculture, a Commissioner of Labor, and a Commissioner of Insurance shall be elected by the qualified voters of the State in 1972 and every four years thereafter, at the same time and places as members of the General Assembly are elected. Their term of office shall be four years and shall commence on the first day of January next after their election and continue until their successors are elected and qualified."

Sec. 118. G.S. 115C-10 reads as rewritten:

"§ 115C-10. Appointment of Board.

The State Board of Education shall consist of the following 15 members: a chair appointed by the Governor, the Lieutenant Governor, the State Treasurer, ~~and 11~~ six members appointed by the Governor, ~~subject to confirmation by the General Assembly in joint session.~~ three members appointed by the General Assembly upon the recommendation of the President Pro Tempore of the Senate, and three members appointed by the General Assembly upon the recommendation of the Speaker of the House of Representatives. Appointments made by the General Assembly shall be made in accordance with G.S. 120-121, except that the members appointed by the General Assembly shall be subject to approval or rejection by the Governor. In making appointments, the Governor and the General Assembly shall take into account the economic and geographic diversity of the State. Not more than one public school employee paid from State or local funds may serve as an appointive member of the State Board of Education. No spouse of any public school employee paid from State or local funds and no employee of the Department of Public Instruction or his spouse, may serve as an appointive member of the State Board of Education. Of the appointive members of the State Board of Education, one shall be appointed from each of the eight educational districts and three shall be appointed as members at large. Appointments shall be for terms of eight years and shall be made in four classes. Appointments to fill vacancies shall be made by the Governor for the unexpired terms and shall not be subject to confirmation.

The Governor shall transmit to the presiding officers of the Senate and the House of Representatives, on or before the sixtieth legislative day of the General Assembly, the names of the persons appointed by him and submitted to the General Assembly for confirmation; thereafter, pursuant to joint resolution, the Senate and the House of Representatives shall meet in joint session for consideration of an action upon such appointments.

Appointments shall be made for staggered terms of four years, except that three initial appointees shall serve one-year terms, three shall serve two-year terms, and three shall serve three-year terms. The initial appointees, except for the chair, shall draw lots to determine the length of their terms. The chair shall serve a four-year term. Initial terms shall commence July 1, 1994.

Appointments to fill vacancies in positions filled by the Governor shall be made by the Governor for the unexpired ~~terms and shall not be subject to confirmation.~~ terms. Appointments to fill vacancies in positions filled by the General Assembly shall be made in accordance with G.S. 120-122."

Sec. 119. G.S. 115C-65 is repealed.

Sec. 120. G.S. 143A-39 reads as rewritten:

"§ 143A-39. Creation.

There is hereby created a Department of Public Education. The head of the Department of Public Education is the State Board of Education. Any provision of G.S. 143A-9 to the contrary notwithstanding, the appointment of the State Board of Education shall be as prescribed in ~~Article IX, Sec. 4(1)~~ ~~of the Constitution.~~ G.S. 115C-10."

Sec. 121. G.S. 120-123 is amended by adding a new subdivision to read:

"(60) The State Board of Education, as established in G.S. 115C-10."

Sec. 122. G.S. 115C-18 reads as rewritten:

"§ 115C-18. ~~Election~~ Appointment of Superintendent of Public Instruction.

The Superintendent of Public Instruction shall be elected by the qualified voters of the State in 1972 and every four years thereafter at the same time and places as members of the General Assembly are elected. His term of office shall be four years and shall commence on the first day of January next after election and continue until his successor is elected and qualified.

If the office of the Superintendent of Public Instruction is vacated by death, resignation, or otherwise, it shall be the duty of the Governor to appoint another to serve until his successor is elected and qualified. Every such vacancy shall be filled by election at the first election for members of the General Assembly that occurs more than 30 days after the vacancy has taken place, and the person chosen shall hold the office for the remainder of the unexpired term fixed in Article III, Sec. 7 of the Constitution of North Carolina. When a vacancy occurs in the office and the term expires on the first day of January succeeding the next election for members of the General Assembly, the Governor shall appoint to fill the vacancy for the unexpired term of the office. Upon the occurrence of a vacancy in the office for any of the causes stated herein, the Governor may appoint an interim officer to perform the duties of that office until a person is appointed or elected pursuant to Article III, Sec. 7 of the Constitution of North Carolina to fill the vacancy and is qualified.

~~The time of the election of the Superintendent of Public Instruction shall be in accordance with the provisions of Article 1 of Subchapter I of Chapter 163 of the General Statutes.~~

~~The election, term and induction into office of the Superintendent of Public Instruction shall be in accordance with the provisions of G.S. 147-4.~~ appointed by the State Board of Education and shall serve at the pleasure of the State Board of Education."

Sec. 123. G.S. 115C-21(a)(5) reads as rewritten:

"(5) To have under his direction, in his capacity as the ~~constitutional head of the public school system,~~ chief administrative officer of the State Board of Education, all those matters relating to the supervision and administration of the public school system."

Sec. 124. G.S. 143A-42 reads as rewritten:

"§ 143A-42. Superintendent of Public Instruction; transfer of office and Department of Public Instruction; powers and duties.

The office of the Superintendent of Public Instruction, as provided for by ~~Article III, Sec. 7,~~ Article IX, Sec. 4(2), of the Constitution, and the Department of Public Instruction are hereby transferred to the Department of Public Education. The Superintendent of Public Instruction shall be the secretary and chief administrative officer of the State Board of Education, and shall have such powers and duties as are conferred by the Constitution, by the State Board of Education, Chapter 115C of the General Statutes, and the laws of this State."

Sec. 125. G.S. 147-3(c)(8) is repealed.

Sec. 126. G.S. 147-4 reads as rewritten:

"§ 147-4. Executive officers - election; term; induction into office.

The executive department shall consist of a Governor, a Lieutenant Governor, a Secretary of State, an Auditor, a Treasurer, ~~a Superintendent of Public Instruction,~~ an Attorney General, a Commissioner of Agriculture, a Commissioner of Insurance, and a Commissioner of Labor, who shall be elected for a term of four years, by the qualified electors of the State, at the same time and places, and in the same manner, as members of the General Assembly are elected. Their term of office shall commence on the first day of January next after their election and continue until their successors are elected and qualified. The persons having the highest number of votes, respectively, shall be declared duly elected, but if two or more be equal and highest in votes for the same office, then one of them shall be chosen by joint ballot of both houses of the General Assembly. Contested elections shall be determined by a joint ballot of both houses of the General Assembly in such manner as shall be prescribed by law."

Sec. 127. G.S. 147-11.1 reads as rewritten:

"§ 147-11.1. Succession to office of Governor; Acting Governor.

(a) Lieutenant Governor. -

(1) The Lieutenant Governor-elect shall become Governor upon the failure of the Governor-elect to qualify. The Lieutenant Governor shall become Governor upon the death, resignation, or removal from office of the Governor. The further order of succession to the office of Governor shall be prescribed by law. A successor shall serve for the remainder of the term of the Governor whom he succeeds and until a new Governor is elected and qualified.

(2) During the absence of the Governor from the State, or during the physical or mental incapacity of the Governor to perform the duties of his office, the Lieutenant Governor shall be Acting Governor. The further order of succession as Acting Governor shall be prescribed by law.

(b) President of Senate, Speaker of the House and Other Officers. -

(1) If, by reason of failure to qualify, death, resignation, or removal from office, there is neither a Governor nor a Lieutenant Governor to discharge the powers and duties of the office of Governor, then the President of the Senate shall, upon his resignation as President of the Senate and as Senator, become Governor.

(2) If, at the time when under subdivision (1) of this subsection the President of the Senate is to become Governor, there is no President of the Senate, or the President of the Senate fails to qualify as Governor, then the Speaker of the House of Representatives shall, upon his resignation as Speaker and as Representative, become Governor.

(3) If, at the time when under subdivision (2) of this subsection the Speaker of the House of Representatives is to become Governor, there is no Speaker of the House of Representatives, or the Speaker of the House of Representatives fails to qualify as Governor, then that officer of the State of North Carolina who is highest on the following list, and who is not under disability to serve as Governor, shall, upon his resignation of the office which places him in the order of succession, become Governor: Secretary of State, Auditor, Treasurer, ~~Superintendent of Public Instruction,~~ Attorney General, Commissioner of Agriculture, Commissioner of Labor, and Commissioner of Insurance.

(1) If, by reason of absence from the State or physical or mental incapacity, there is neither a Governor nor a Lieutenant Governor qualified to discharge the powers and duties of the office of Governor, then the President of the Senate shall become Acting Governor.

(2) If, at the time when under subdivision (1) of this subsection the President of the Senate is to become Acting Governor, there is no President of the Senate, or the President of the Senate fails to qualify as Acting Governor, then the Speaker of the House of Representatives shall become Acting Governor.

(3) If, at the time when under subdivision (2) of this subsection the Speaker of the House of Representatives is to become Acting Governor, there is no Speaker of the House of Representatives, or the Speaker of the House of Representatives fails to qualify as Acting Governor, then that officer of the State of North Carolina who is highest on the following list, and who is not under disability to serve as Acting Governor, shall become Acting Governor: Secretary of State, Auditor, Treasurer, ~~Superintendent of Public Instruction,~~ Attorney General, Commissioner of Agriculture, Commissioner of Labor, and Commissioner of Insurance.

(d) Governor Serving under Subsection (c). - An individual serving as Acting Governor under subsection (c) of this section shall continue to act for the remainder of the term of the Governor whom he succeeds and until a new Governor is elected and qualified, except that:

(1) If his tenure as Acting Governor is founded in whole or in part upon the absence of both the Governor and Lieutenant Governor from the State, then he shall act only until the Governor or Lieutenant Governor returns to the State; and

(2) If his tenure as Acting Governor is founded in whole or in part upon the physical or mental incapacity of the Governor or Lieutenant Governor, then he shall act only until the removal of the incapacity of the Governor or Lieutenant Governor.

(e) Officers to Which Subsections (b), (c) and (d) Applicable. - Subsections (b), (c), and (d) of this section shall apply only to such officers as are eligible to the office of Governor under the Constitution of North Carolina, and only to officers who are not under impeachment by the House of Representatives at the time they are to become Governor or Acting Governor.

(f) Compensation of Acting Governor. - During the period that any individual serves as Acting Governor under subsection (c) of this section, his compensation shall be at the rate then provided by law in the case of the Governor."

Sec. 128. G.S. 163-1 is amended by deleting the entry in the table for "Superintendent of Public Instruction".

Sec. 129. G.S. 163-8 reads as rewritten:

"§ 163-8. Filling vacancies in State executive offices.

If the office of Governor or Lieutenant Governor shall become vacant, the provisions of G.S. 147-11.1 shall apply. If the office of any of the following officers shall be vacated by death, resignation, or otherwise than by expiration of term, it shall be the duty of the Governor to appoint another to serve until his successor is elected and qualified: Secretary of State, Auditor, Treasurer, ~~Superintendent of Public Instruction,~~ Attorney General, Commissioner of Agriculture, Commissioner of Labor, and Commissioner of Insurance. Each such vacancy shall be filled by election at the first election for members of the General Assembly that occurs more than 60 days after the vacancy has taken place, and the person chosen shall hold the office for the remainder of the unexpired four-year term: Provided, that when a vacancy occurs in any of the offices named in this section and the term expires on the first day of January succeeding the next election for members of the General Assembly, the Governor shall appoint to fill the vacancy for the unexpired term of the office.

Upon the occurrence of a vacancy in the office of any one of these officers for any of the causes stated in the preceding paragraph, the Governor may appoint an acting officer to perform the duties of that office until a person is appointed or elected pursuant to this section and Article III, Section 7 of the State Constitution, to fill the vacancy and is qualified."

Sec. 130. G.S. 163-278.27(b)(2) reads as rewritten:

"(2) In the case of a candidate for nomination or election to the office of Governor, Lieutenant Governor, Secretary of State, State Auditor, State Treasurer, ~~State Superintendent of Public Instruction,~~ State Attorney General, State Commissioner of Agriculture, State Commissioner of Labor, State Commissioner of Insurance, and all other State elective offices, Justice of the Supreme Court, Judge of the Court of Appeals, judge of a superior court, judge of a district court, and district attorney of the superior court: report to the district attorney of the prosecutorial district in which Wake County is located;".

Sec. 131. The amendments set out in Sections 115 through 117 of this act shall be submitted to the qualified voters of the State on November 2, 1993, which election shall be conducted under the laws then governing elections in the State. At that election, each qualified voter desiring to vote shall be provided a ballot on which shall be printed the following:

"[ ] FOR constitutional amendments to change the method of appointing the State Board of Education and to make the Superintendent of Public Instruction an appointee of the State Board of Education.

[ ] AGAINST constitutional amendments to change the method of appointing the State Board of Education and to make the Superintendent of Public Instruction an appointee of the State Board of Education."

Those qualified voters favoring the amendments set out in Sections 115 through 117 of this act shall vote by making an X or a check mark in the square beside the statement beginning "FOR", and those qualified voters opposed to those amendments shall vote by making an X or check mark in the square beside the statement beginning "AGAINST".

Notwithstanding the foregoing provisions of this section, voting machines may be used in accordance with rules and regulations prescribed by the State Board of Elections.

Sec. 132. If a majority of votes cast thereon are in favor of the amendments set out in Sections 115 through 117 of this act, the State Board of Elections shall certify the amendments to the Secretary of State, who shall enroll the amendments so certified among the permanent records of his office, and the amendments shall become effective as follows:

(1) The amendment set out in Section 115 of this act shall become effective upon such certification except that the term of office of all members of the State Board of Education who were appointed to the State Board of Education prior to July 1, 1994, and were serving as members on June 30, 1991, shall expire on July 1, 1994.

(2) The amendments set out in Sections 116 and 117 of this act shall become effective on the earlier of January 1, 1997, and the date that a vacancy occurs in the office of Superintendent of Public Instruction, except that there shall be no election held to fill the office of Superintendent for a term beginning on or after December 31, 1996.

Sec. 133. Sections 118 through 130 of this act become effective only if the constitutional amendments set out in Sections 115 through 117 of this act are approved by the voters. If the constitutional amendments are approved by the voters:

(1) Sections 118 through 121 of this act shall become effective July 1, 1994: Provided, however, the General Assembly and the Governor may appoint members to the State Board of Education in accordance with Section 118 of this act, prior to July 1, 1994, for terms of office beginning July 1, 1994.

(2) Sections 122 through 130 of this act shall become effective the earlier of January 1, 1997, and the date that a vacancy occurs in the office of Superintendent of Public Instruction, except that there shall be no election held to fill the office of Superintendent for a term beginning on or after December 31, 1996.

Sec. 134. Sections 115 through 133 of this act are effective upon ratification.

---REORGANIZE DEPT. OF PUBLIC INSTRUCTION.

Sec. 135. (a) The General Assembly finds that certain functional groups in the Department of Public Instruction are not logically grouped and that this misgrouping results in unnecessary management positions and in resources spent unnecessarily on the coordination of activities. The Deputy State Superintendent has a span of control of eight, which is an excessive span of control. The current structure injects an unnecessary layer of management between the State Superintendent and the Superintendent's most key senior managers; therefore:

(1) The eight major areas that report to the Deputy State Superintendent are consolidated into the following three function groups:

a. Program and Teacher Service - This group shall include Curriculum and Instruction, Vocational Education, Media Services, Student Services, and Exceptional Children, in Program Services; Transportation, Child Nutrition, School Planning, and Plant Operations in Auxiliary Services; Teacher Education, Teacher Certification, and Personnel Relations, in Personnel Services; and Supervision of the Technical Assistance Centers.

The General Assembly finds that this consolidation increases coordination among the many consultant groups in the Department that deliver service to local school administrative units. This structure also helps to support the transformation of service delivery recommended by the Government Performance Audit Committee. Also, it establishes a link between the desired quality in programs and the teachers that deliver programs to students.

The Assistant Superintendent positions that oversee Auxiliary Services and Personnel Services are reassigned to executive director level positions at the same salary level.

The Elementary, Middle Grades, High School, and Administration Consultants that report to the Assistant Superintendent are transferred to the Curriculum and Instruction area, so as to reduce the number of professionals that report directly to the Assistant Superintendent over this group.

b. Financial and Internal Support Services - This group shall include State Accounting Services, School Business Services, and Fiscal Control Services, in Financial Services; and Internal Operations, in the Deputy Superintendent's Office. The General Assembly finds that Financial Services already handles the internal accounting and financial responsibilities of the Department and that all internal support services are consolidated by moving the personnel, purchasing, and mailroom responsibilities to this group.

c. Research and Development Group - The General Assembly finds that this group should remain separate to focus attention on student and local school administrative unit performance standards and improvement.

(2) Management Information Services (MIS) shall be organized as a separate unit reporting to the Deputy State Superintendent. The General Assembly finds that placing this function at this level in the organization enables MIS to provide services effectively across the Department. It improves access to information technology and should result in more valuable uses of information technology being developed for more programs.

(3) The following functional areas throughout the Department shall be streamlined as follows:

a. Because the group performs financial functions, the Public School Insurance group in Auxiliary Services are transferred to Financial Services.

b. In order to consolidate and increase coordination of the Child Nutrition programmatic and financial audit functions, three Child Nutrition Auditor positions in the Child Nutrition group in Auxiliary Services are transferred to the Child Nutrition Audit group in Financial Reporting/Audit in the School Business Services area of Financial Services.

c. Two ADM Auditors in the Student Information Management Area of Financial Services are transferred to the School Budgets group in Financial Services. These auditors shall report to the School Budgets Chief Consultant. Because school budget preparation is highly dependent upon ADM information, grouping these functions results in better coordination of information timing and flow.

d. Two Exceptional Children ADM Auditors in the Student Information Management area of Financial Services are transferred to the Exceptional Children group in Program Services because Exceptional Children Consultants deal with exceptional children concerns on a daily basis and can provide valuable information to the ADM Auditors. These two positions shall report to the Director of Exceptional Children.

e. The Citizen Affairs Director position in Internal Operations is transferred to the communications group in the Superintendent's Office.

f. In order to strengthen the user support function in MIS for users in local school administrative units, all employees in the Department that provide system support for MIS users in local school administrative units are grouped as follows:

1. The Applications Programmer and Information Systems Coordinator positions in the Personnel Relations area of Personnel Services are transferred to MIS. These positions shall continue to provide user support for the system that provides human resource data on employees of local school administrative units.

2. A SIMS Special Project Manager, five SIMS user support positions, and one associated clerical position, in the Student Information Management area of Financial Services are transferred to Management Information Systems. These positions shall continue to provide user support for the Student Information Management System.

3. The Student Information Management Chief Consultant position and one associated clerical position are eliminated because all functions in Student Information Management have been transferred to other groups.

4. The Information Center Unit is transferred to Financial Services because the statistical analysis the unit provides is most appropriately located in Finance.

(b) The base budget of the Department of Public Instruction is reduced by eighty-six thousand one hundred ninety-seven dollars ($86,197) for the 1993-94 fiscal year and eighty-six thousand one hundred ninety-seven dollars ($86,197) for the 1994-95 fiscal year due to the decrease in personnel positions mandated by subsection (a) of this section.

---STREAMLINE DPI MANAGEMENT.

Sec. 136. (a) The General Assembly finds that the Department of Public Instruction has a number of management positions with narrow spans of control, which are management positions that manage fewer than six other positions. In a number of cases, there are clusters of management positions with relatively few staff members reporting to them. Many individuals in these management positions with narrow spans of control are spending at least forty percent (40%) of their time on supervision or managerial responsibilities. Given the significant amount of time spent on supervision and the small numbers of staff supervised, there is excess management staffing; therefore, the following positions are eliminated from the Department of Public Instruction:

(1) The Director of School Services and the Director of School Facilities, and three associated clerical positions;

(2) The Budget Management Chief Consultant and the Financial Review Chief Consultant;

(3) The Teacher Education Services Division Director and the LEA Personnel Services Division Director, and two associated clerical positions;

(4) The Management Information Systems Assistant Director; and

(5) The Personnel Management Chief Consultant and the Agency Services Chief Consultant, and two associated clerical positions.

Also, the Transportation Management Information System Project manager shall report to the SIMS Application Development Manager.

(b) The base budget of the Department of Public Instruction is reduced by six hundred eighty-nine thousand five hundred seventy-seven dollars ($689,577) for the 1993-94 fiscal year and six hundred eighty-nine thousand five hundred seventy-seven dollars ($689,577) for the 1994-95 fiscal year due to the decrease in personnel positions mandated by subsection (a) of this section.

---ELIMINATE DPI POSITIONS.

Sec. 137. (a) The General Assembly finds that certain positions in the Department of Public Instruction are underutilized based on the amount of time spent on primary activities and that significant cost savings can be realized by consolidating these activities; therefore:

(1) The Sports Medicine Director position and one associated clerical position in Auxiliary Services are abolished and their responsibilities are transferred to Healthful Living in the Curriculum and Instruction area of Program Services.

(2) The two Desegregation Assistant positions and one associated clerical position in Auxiliary Services are abolished and their responsibilities are transferred to the Student Services area of Program Services.

(3) The Education Planning and Development Consultant position in the Teacher Education area of Personal Services that coordinates activities of the Professional Practices Commission is abolished. The Superintendent of Public Instruction shall transfer the responsibilities assigned to the position to other employees in Teacher Education or to members of the Professional Practices Commission.

(4) The Education Consultant position in the Personnel Relations area of Personnel Services that handles the contract for the teacher fringe benefit package plan is abolished and the responsibilities assigned to the position are transferred to the Salary Administration group in Personnel Services.

(5) The Education Consultant position in the Personnel Relations area of Personnel Services that works on local school administrative unit budget allocations for personnel resources is abolished and the responsibilities assigned to the position are transferred to the School Budget group in Financial Services.

(6) The four Education Consultant positions and two associated clerical positions in the Personnel Relations area of Personnel Services that are primarily responsible for providing technical assistance to school districts regarding personnel policies are abolished. One remaining Education Consultant in the Personnel Relations area of Personnel Services shall (i) inform and distribute information to local school administrative units regarding personnel policies and procedures, and (ii) assist with personnel decisions that are an exception to established policies and procedures.

(7) One part-time and two full-time Consultant positions and one associated clerical position in the Management and Planning group in Internal Operations that coordinate Department of Public Instruction facility plans, social occasions, and other special projects, are abolished and the responsibilities assigned to the positions are transferred to the Superintendent's three clerical support positions.

(b) The base budget of the Department of Public Instruction is reduced by seven hundred fifty-four thousand two hundred twenty-five dollars ($754,225) for the 1993-94 fiscal year and seven hundred fifty-four thousand two hundred twenty-five dollars ($754,225) for the 1994-95 fiscal year due to the decrease in personnel positions mandated by subsection (b) of this section.

---REDUCE DPI CLERICAL POSITIONS.

Sec. 138. (a) As used in this section, the term "clerical position" means any nonprofessional positions that provide secretarial or administrative support to other employees, including Secretary, Administrative Assistant, and Clerk/Typist positions. The term does not include positions that are clerical in nature but have specific functional responsibilities.

Except (i) in areas in which unusual demands are placed on clerical support positions, for the State Superintendent, and (ii) for Assistant Superintendent positions and Director positions that report directly to Assistant Superintendents, the Department of Public Instruction shall follow a one-to-five ratio of clerical to professional positions. To achieve this ratio, the number of clerical positions in the Department is reduced by 90.5 in accordance with Exhibit 5 of the Issue Paper entitled "Organization and Staffing of Department of Public Instruction" of the North Carolina Government Performance Audit Committee.

(b) The base budget of the Department of Public Instruction is reduced by $__________________ for the 1993-94 fiscal year and $______________ for the 1994-95 fiscal year due to the decrease in personnel positions mandated by subsection (a) of this section.

---ENHANCE DPI INTERNAL AUDIT.

Sec. 139. (a) There is appropriated from the General Fund to the Department of Public Education, Department of Public Instruction, the sum of ninety thousand dollars ($90,000) for the 1993-94 fiscal year and the sum of ninety thousand dollars ($90,000) for the 1994-95 fiscal year to strengthen the internal audit function of the Department of Public Instruction. The funds shall be used to add two auditor positions or to contract with the private sector for audit services. The internal audit group shall perform operational and financial control functions for the State Superintendent and the State Superintendent shall use this group to obtain performance information and to address performance concerns.

(b) This section becomes effective July 1, 1993.

---DPI TAC ACTIVITIES.

Sec. 140. (a) The Superintendent of Public Instruction shall reorganize the activities of the Technical Assistance Centers so as to provide services more efficiently and effectively to the local school administrative units. Personnel that perform development activities shall be located in Raleigh. Personnel that provide coordination and monitoring activities and assistance and support to local school administrative units shall be located at the Technical Assistance Areas.

The Technical Assistance Centers shall coordinate the service groups offered at the centers. They shall also serve as the first point of contact for services not offered at the centers and shall contact the appropriate consultants based in Raleigh on behalf of local school administrative units needing those services.

(b) Of the funds appropriated to the Department of Public Education, Department of Public Instruction, for the 1994-95 fiscal year for personnel located in Technical Assistance Centers, the sum of five million one hundred twenty-two thousand six hundred seventy-five dollars ($5,122,675) shall be allocated to the local school administrative units. The local school administrative units shall use these funds to purchase from the Technical Assistance Centers assistance activities that are not provided to all units and that focus on specific needs of the units. The Technical Assistance Centers shall continue to provide coordination and management activities to the local school administrative units without charge.

Effective July 1, 1995, local school administrative units may use one-half of the funds allocated to purchase assistance activities from the Technical Assistance Centers to purchase assistance activities from the centers or to hire consultants to provide the assistance activities.

Effective July 1, 1996, local school administrative units may use the funds allocated to purchase assistance activities from the Technical Assistance Centers to purchase assistance activities from the centers or to hire consultants to provide the assistance activities.

---REORG. DPI STAFF DEV. FUNCTION.

Sec. 141. (a) The General Assembly finds that:

(1) Many principal training activities are provided to individuals that do not currently hold principal positions or are not expected to hold principal positions in the near future;

(2) Principal turnover is relatively low and not expected to increase for five years when many principals will reach retirement age;

(3) The process for selecting potential principals for training may not identify the best individuals for future openings. Participants for training classes are currently nominated by local school administrative units; and

(4) Other independent organizations in the State also provide training for principals and may do a better job of teaching classes than does the Department;

therefore, the Staff Development function at the Department of Public Instruction for principals is eliminated. Staff Development shall be restructured to coordinate all staff development activities offered to local school administrative units. The restructured Staff Development area shall be staffed by one professional position and one clerical position.

The Department shall encourage and develop a better working relationship with outside organizations that provide courses to meet training needs in areas such as principal development.

(b) The base budget of the Department of Public Instruction is reduced by six hundred three thousand three hundred eighty dollars ($603,380) for the 1993-94 fiscal year and six hundred three thousand three hundred eighty dollars ($603,380) for the 1994-95 fiscal year due to the decrease in personnel positions required by Section 1 of this section.

---TEACHER STAFF DEVELOPMENT.

Sec. 142. (a) The State Board of Education shall develop a strategic plan for teacher staff development that identifies the types of training that are necessary at each level to achieve the desired changes in teacher activities. The plan shall address identified needs, goals and objectives, strategies, performance measurements, implementation plans, and cost benefit analyses.

The State Board shall also determine the cost of achieving the desired results.

The State Board shall report prior to March 15, 1994, to the Joint Education Oversight Committee on the strategic plan that it develops.

(b) This section is effective upon ratification.

---SCHOOL STAFF DEV. GROUP.

Sec. 143. (a) The Superintendent of Public Instruction shall establish a staff development advisory group to provide recommendations regarding staff development needs. The group shall consist of eight to twelve representatives of local school administrative units, including small units and units served by each of the technical assistance centers. The Superintendent shall provide Department personnel to assist the advisory group in its work. Based on the recommendations of the advisory group, the Superintendent shall set staff development priorities and communicate those priorities to the local school administrative units.

(b) This section is effective upon ratification.

---TEACHER STAFF DEVELOPMENT.

Sec. 144. (a) The Department of Public Instruction shall evaluate the use of existing and planned telecommunications and long-distance learning systems for teacher staff development to limit expenditures for travel and associated costs. This study shall also evaluate the use of alternative delivery systems such as courses offered through the community colleges and university departments of education. The Department shall report the results of its study to the Joint Legislative Education Oversight Committee prior to March 15, 1994.

(b) This section is effective upon ratification.

---STAFF DEV./PROTECT LEAVE.

Sec. 145. G.S. 115C-302(a)(3) reads as rewritten:

"(3) Notwithstanding any provisions of this section to the contrary no person shall be entitled to pay for any vacation day not earned by that person. The first 10 days of annual vacation leave earned by a teacher during any fiscal year period shall be scheduled to be used in the school calendar adopted by the respective local boards of education. Vacation days shall not be used for extending the term of employment of individuals. Teachers may accumulate annual vacation leave days as follows: annual leave may be accumulated without any applicable maximum until June 30 of each year. On June 30 of each year, any teachers with more than 30 days of accumulated leave shall have the excess accumulation cancelled so that only 30 days are carried forward to July 1 of the same year. All vacation leave taken by the teacher will be upon the authorization of his immediate supervisor and under policies established by the local board of education. If a teacher would otherwise have excess accumulated annual leave cancelled on June 30 of a year because the school calendar and the policies adopted by the local board of education do not permit the teacher to take the annual leave and to participate in five days of staff development in the teacher's content area, the teacher may take the lesser of the number of days that would be cancelled or five days of staff development in the teacher's content area when students are scheduled to be in regular attendance. An employee shall be paid in a lump sum for accumulated annual leave not to exceed a maximum of 240 hours when separated from service due to resignation, dismissal, reduction in force, death, or service retirement. If the last day of terminal leave falls on the last workday in the month, payment shall be made for the remaining nonworkdays in that month. Employees retiring on disability retirement may exhaust annual leave rather than be paid in a lump sum. The provisions of this subdivision shall be accomplished without additional State and local funds being appropriated for this purpose. The State Board of Education shall adopt rules and regulations for the administration of this subdivision."

Sec. 146. There is appropriated from the General Fund to the Department of Public Education, Aid to Local School Administrative Units, the sum of fifteen million dollars ($15,000,000) for the 1993-94 fiscal year and the sum of fifteen million dollars ($15,000,000) for the 1994-95 fiscal year to provide substitute teachers when teachers are participating in staff development activities when students are scheduled to be in regular attendance, as authorized in Section 145 of this act.

Sec. 147. Sections 145 through 146 of this act become effective July 1, 1993.

---STAFF DEV./PROTECT LEAVE.

Sec. 148. G.S. 115C-302(a)(3) reads as rewritten:

"(3) Notwithstanding any provisions of this section to the contrary no person shall be entitled to pay for any vacation day not earned by that person. The first 10 days of annual vacation leave earned by a teacher during any fiscal year period shall be scheduled to be used in the school calendar adopted by the respective local boards of education. Vacation days shall not be used for extending the term of employment of individuals. Teachers may accumulate annual vacation leave days as follows: annual leave may be accumulated without any applicable maximum until June 30 of each year. On June 30 of each year, any teachers with more than 30 days of accumulated leave shall have the excess accumulation cancelled so that only 30 days are carried forward to July 1 of the same year. All vacation leave taken by the teacher will be upon the authorization of his immediate supervisor and under policies established by the local board of education. If a teacher would otherwise have excess accumulated annual leave cancelled on June 30 of a year because the school calendar and the policies adopted by the local board of education do not permit the teacher to take the annual leave and to participate in five days of staff development in the teacher's content area, the teacher may convert to credit toward retirement a number of days used for staff development activity equal to the lesser of five days or the number of days that would otherwise be cancelled. An employee shall be paid in a lump sum for accumulated annual leave not to exceed a maximum of 240 hours when separated from service due to resignation, dismissal, reduction in force, death, or service retirement. If the last day of terminal leave falls on the last workday in the month, payment shall be made for the remaining nonworkdays in that month. Employees retiring on disability retirement may exhaust annual leave rather than be paid in a lump sum. The provisions of this subdivision shall be accomplished without additional State and local funds being appropriated for this purpose. The State Board of Education shall adopt rules and regulations for the administration of this subdivision."

Sec. 149. Section 148 of this act becomes effective July 1, 1993.

---STAFF DEV./PROTECT LEAVE.

Sec. 150. There is appropriated from the General Fund to the Department of Public Education, Aid to Local School Administrative Units, the sum of seventeen million five hundred thousand dollars ($17,500,000) for the 1993-94 fiscal year and the sum of seventeen million five hundred thousand dollars ($17,500,000) for the 1994-95 fiscal year for stipends of fifty dollars ($50.00) per day for teachers participating in staff development in their content areas during nonwork hours. If a teacher would otherwise have excess accumulated annual leave cancelled on June 30 of a year because the school calendar and the policies adopted by the local board of education do not permit the teacher to take the annual leave and to participate in five days of staff development in the teacher's content area, a teacher is eligible for this stipend for staff development completed during nonwork hours for the lesser of five days or the number of days that would otherwise be cancelled.

Sec. 151. Section 150 of this act becomes effective July 1, 1993.

---ENCOURAGE STAFF DEV.

Sec. 152. G.S. 115C-302(a)(1) reads as rewritten:

"(1) Academic Teachers. - Regular state-allotted teachers shall be employed for a period of 10 calendar months. Salary payments to regular state-allotted teachers shall be made monthly at the end of each calendar month of service: Provided, that teachers employed for a period of 10 calendar months in year-round schools shall be paid in 12 equal installments: Provided further, that any individual teacher who is not employed in a year-round school may be paid in 12 monthly installments if the teacher so requests on or before the first day of the school year. Such request shall be filed in the local school administrative unit which employs the teacher. The payment of the annual salary in 12 installments instead of 10 shall not increase or decrease said annual salary nor in any other way alter the contract made between the teacher and the said local school administrative unit; nor shall such payment apply to any teacher who is employed for a period of less than 10 months. Included within the 10 calendar months employment shall be be, to the extent possible, annual vacation leave at the same rate provided for State employees, computed at one twelfth (1/12) of the annual rate for State employees for each calendar month of employment; which shall be provided by each local board of education at a time when students are not scheduled to be in regular attendance. Included within the 10 calendar months employment each local board of education shall designate the same or an equivalent number of legal holidays occurring within the period of employment for academic teachers as those designated by the State Personnel Commission for State employees; on a day that employees are required to report for a workday but pupils are not required to attend school due to inclement weather, a teacher may elect not to report due to hazardous travel conditions and to take one of his annual vacation days or to make up the day at a time agreed upon by the employee and his immediate supervisor or principal. Within policy adopted by the State Board of Education, each local board of education shall develop rules and regulations designating what additional portion of the 10 calendar months not devoted to classroom teaching, holidays, or annual leave shall apply to service rendered before the opening of the school term, during the school term, and after the school term and to fix and regulate the duties of state-allotted teachers during said ~~period, but in~~ period. On at least five of those days, all teachers shall be required to participate in staff development activities in their content areas regardless of whether teachers have annual leave cancelled in accordance with subdivision (3) of this subsection as a result. In no event shall the total number of workdays exceed 200 days. Local boards of education shall consult with the employed public school personnel in the development of the 10-calendar-months schedule."

Sec. 153. Section 152 of this act becomes effective July 1, 1993.

---REDUCE TEACHER CERT. WORK.

Sec. 154. (a) G.S. 115C-296(a) reads as rewritten:

"(a) The State Board of Education shall have entire control of certifying all applicants for teaching positions in all public elementary and high schools of North Carolina; and it shall prescribe the rules and regulations for the renewal and extension of all certificates and shall determine and fix the salary for each grade and type of certificate which it ~~authorizes: Provided, that the~~ authorizes. The rules shall provide that the Department of Public Instruction shall consider for teacher certification only applicants who have jobs or job offers from public or private schools located within North Carolina. The State Board of Education shall require each applicant for an initial certificate or graduate certificate to demonstrate his academic and professional preparation by achieving a prescribed minimum score at least equivalent to that required by the Board on November 30, 1972, on a standard examination appropriate and adequate for that purpose: Provided, further, that in the event the Board shall specify the National Teachers Examination for this purpose, the required minimum score shall not be lower than that which the Board required on November 30, 1972: Provided, further, that the State Board of Education shall not decrease the certification standards for physical education teachers or health education teachers below the standards in effect on June 1, 1988."

(b) Because of the reduction in workload resulting from subsection (a) of this section, one Teacher Certification position and one application processing clerk position in the Teacher Certification area of the Department of Public Instruction are abolished.

(c) The base budget of the Department of Public Instruction is reduced by eighty-six thousand one hundred ninety-seven dollars ($86,197) for the 1993-94 fiscal year and eighty-six thousand one hundred ninety-seven dollars ($86,197) for the 1994-95 fiscal year due to the decrease in personnel positions mandated by subsection (b) of this section.

(d) This section becomes effective July 1, 1993.

---MODIFY TEACHER CERTIFICATION.

Sec. 155. (a) The Department of Public Instruction shall modify the current teacher certification system to improve information needed for staff management. The teacher certification system shall be modified to produce detailed statistics that indicate why productivity rates of the Teacher Certification group have declined, that enable the Department to improve operational decision-making, and that indicate whether staff reductions in the Teacher Certification group are justified.

The Department shall report on the implementation of this section to the Joint Legislative Education Oversight Committee prior to March 31, 1994.

(b) This section becomes effective July 1, 1993.

---BEP FUNDING.

Sec. 156. (a) The General Assembly finds that the funding formulas for the Basic Education Program, which were established in 1984, represented the best ideas and estimates at that time regarding improving student achievement in North Carolina. The formulas did not and could not have considered the significant changes that the State and public education have undergone in the ensuing eight years, such as the economic challenges that the State is facing and educational changes including the increased use of automation in the local school administrative units and the movement to site-based management in the schools. The General Assembly is committed to the improvement of education and to the complete implementation of the strongest possible Basic Education Program; therefore, it is the intent of the General Assembly to complete the funding of the Basic Education Program, as scheduled, for teachers and instructional support personnel. It is the intent of the General Assembly to reconsider the anticipated use of the remainder of the funds scheduled for appropriation under the Basic Education Program and to consider redirecting the funds to other State education needs such as (i) instructional and administrative needs identified through the Annual Report Card or other measures in the School Improvement and Accountability Act of 1989, (ii) funding for small and low wealth local school administrative units, (iii) gaps in the current public education program such as the need for comprehensive preschool programs, and (iv) new educational reforms such as school-linked collaborative services.

(b) This section is effective upon ratification.

---LOCAL FLEXIBILITY/SCHOOL FUNDS.

Sec. 157. (a) The General Assembly finds that it is appropriate to consolidate major nonteaching funding categories in the Public School Fund; therefore, the following existing funding categories in the Public School Fund are combined into the following categories:

(1) School Administration School Administration

Finance Officers

(2) Noncertified Personnel Clerical Assistants

Teacher Assistants

Custodians

(3) Support Services Summer School/Remediation

Dropout Prevention

Community Schools

Duty-Free Period

Sports Medicine

Child Nutrition

Staff Development

Textbooks

Consolidated Allotment

For budgetary reporting and accounting purposes, the local school administrative units shall continue to provide expenditure data at such detailed levels as required by the State Board of Education. Presentation, control, and reporting of salary and salary-related objects of expenditure shall be in accordance with applicable statutes and the directives of the Director of the Budget.

(b) The General Assembly encourages local school administrative units to become more efficient in their current operations by (i) implementing the recommendations in the State Auditor's performance audits, (ii) using the funds in the combined funding category created in subsection (a) of this section to contract out for services where private sector resources are available, and (iii) working with other local school administrative units to deliver shared services.

(c) The General Assembly finds that because of the increased management flexibility provided to local school administrative units in this section, local school administrative units can operate more efficiently; therefore, appropriations to the combined funding categories created in subsection (a) of this section are decreased by five percent (5%). As an incentive to increase this efficiency, the local school administrative units may, notwithstanding any other provision of law, retain at the end of each fiscal year twenty-five percent (25%) of the unencumbered and unexpended funds in the combined funding categories created in subsection (a) of this section.

(d) There is appropriated from the General Fund to the Department of Public Education, the sum of five hundred thousand dollars ($500,000) for the 1993-94 fiscal year and the sum of five hundred thousand dollars ($500,000) for the 1994-95 fiscal year to fund model programs to increase efficiency in local school administrative unit operations and to provide incentive awards to local school administrative units that operate efficiently. The funds shall be awarded by the State Board of Education based upon proposals submitted by the local school administrative units or by multiple local governments in a single county or adjoining counties.

(e) This section becomes effective July 1, 1993.

---STABILIZE SCHOOL ACCOUNTABILITY.

Sec. 158. (a) G.S. 115C-238.1 reads as rewritten:

"§ 115C-238.1. Performance-based Accountability Program; development and implementation by State Board.

The General Assembly believes that all children can learn. It is the intent of the General Assembly that the mission of the public school community is to challenge with high expectations each child to learn, to achieve, and to fulfill his or her potential. With that mission as its guide, the State Board of Education shall develop and implement a Performance-based Accountability Program. The primary goal of the Program shall be to improve student performance. The State Board of Education shall adopt:

(1) Procedures and guidelines through which, beginning with the 1990-91 fiscal year, local school administrative units may participate in the Program;

(2) Guidelines for developing local school improvement plans with three-year student performance goals and annual milestones to measure progress in meeting those goals; and

(3) A set of student performance indicators for measuring and assessing student performance in the participating local school administrative units. These indicators may include attendance rates, dropout rates, test scores, parent involvement, and post-secondary outcomes.

Because local school administrative units need time to adapt to changes in the Performance-based Accountability Program, the General Assembly urges the State Board of Education to minimize departmental changes to the Performance-based Accountability Program until July 1, 1995. It is the intent of the General Assembly also to minimize legislative changes to the Performance-based Accountability Program until July 1, 1995."

(b) G.S. 115C-12(9) reads as rewritten:

"(9) Miscellaneous Powers and Duties. - All the powers and duties exercised by the State Board of Education shall be in conformity with the Constitution and subject to such laws as may be enacted from time to time by the General Assembly. Among such duties are:

a. To certify and regulate the grade and salary of teachers and other school employees.

b. To adopt and supply textbooks.

c. To adopt rules requiring all local boards of education to implement the Basic Education Program on an incremental basis within funds appropriated for that purpose by the General Assembly and by units of local government. Beginning with the 1991-92 school year, the rules shall require each local school administrative unit to implement fully the standard course of study in every school in the State in accordance with the Basic Education Program so that every student in the State shall have equal access to the curriculum as provided in the Basic Education Program and the standard course of study.

The Board shall establish benchmarks by which to measure the progress that each local board of education has made in implementing the Basic Education Program. The Board shall report to the Joint Legislative Education Oversight Committee and to the General Assembly by December 31, 1991, and by February 1 of each subsequent year on each local board's progress in implementing the Basic Education Program, including the use of State and local funds for the Basic Education Program.

The Board shall develop a State accreditation program that meets or exceeds the standards and requirements of the Basic Education Program. The Board shall require each local school administrative unit to comply with the State accreditation program to the extent that funds have been made available to the local school administrative unit for implementation of the Basic Education Program. Because local school administrative units need time to adapt to changes in the State accreditation program, the General Assembly urges the State Board of Education to minimize departmental changes to the Performance-based Accountability Program until July 1, 1995. It is the intent of the General Assembly also to minimize legislative changes to the State accreditation program until July 1, 1995.

The Board shall use the State accreditation program to monitor the implementation of the Basic Education Program.

c1. To issue an annual 'report card' for the State and for each local school administrative unit, assessing each unit's efforts to improve student performance and taking into account progress over the previous years' level of performance and the State's performance in comparison with other states. This assessment shall take into account demographic, economic, and other factors that have been shown to affect student performance. Because local school administrative units need time to adapt to changes in the Performance-based Accountability Program, the General Assembly urges the State Board of Education to minimize departmental changes to the annual report card until July 1, 1995. It is the intent of the General Assembly also to minimize legislative changes to the annual report card until July 1, 1995.

c2. To develop management accountability indicators to measure the efficiency and appropriate use of staff in each school and at the administrative office. Staff development for school administrators shall be a high priority of the Department of Public Instruction.

c3. To develop a system of school building improvement reports for each school building. The purpose of school building improvement reports is to measure improvement in student performance at each school building from year to year, not to compare school buildings. The Board may consider for inclusion in the building reports the following criteria: test scores, the success of graduating students in postsecondary institutions, attendance, graduation and dropout rates, the numbers of children enrolled in free lunch or Chapter 1 programs, the education level of the parents of children enrolled in the school, the teaching experience of the school staff, and whether the building has been successful in meeting the goals of the building and systemwide plans developed in accordance with G.S. 115C-238.1 through G.S. 115C-238.6. Local school administrative units shall produce school building improvement reports by March 15, 1995, and annually thereafter. Each report shall be based on building-level data for the prior school year.

d. To formulate rules and regulations for the enforcement of the compulsory attendance law.

e. To manage and operate a system of insurance for public school property, as provided in Article 38 of this Chapter.

In making substantial policy changes in administration, curriculum, or programs the Board should conduct hearings throughout the regions of the State, whenever feasible, in order that the public may be heard regarding these matters."

---LINK SCHOOL FUNDING/PERFORMANCE.

Sec. 159. (a) G.S. 115C-64.2 reads as rewritten:

"§ 115C-64.2. Development of plans to improve student performance and decrease dropout rates.

(a) Each ~~identified~~ local school administrative unit that is identified as a low performing local school administrative unit shall submit to the State Board of Education a plan for improving student performance and decreasing dropout rates. The plan may include requests for the State Board to waive State laws and regulations so as to grant the unit the fiscal and programmatic flexibility necessary to implement the plan. The State Board may grant such waivers if it finds that the waivers are necessary and appropriate for the unit to improve student performance and decrease dropout rates. The State Board may also withhold State funding from an identified unit if it deems it necessary to make the unit more accountable for the use of State funds.

(b) It is the goal of the General Assembly to provide significant assistance to an identified unit and to enable the unit to implement successfully its improvement plan. To accomplish these goals the Department of Public Instruction shall contact each identified unit, notify it of the services available through the Department to assist the unit in developing its plan and in improving student performance and decreasing dropout rates, and assist the unit in developing and implementing its plan. Department services shall include monitoring the unit's progress, and tutoring and counseling unit personnel in strategies to reach the unit's ~~goals, and providing additional funds to the unit to accomplish approved portions of the plan.~~ goals. The Department shall also make challenge grant funds available to identified units on a competitive basis as an incentive to improve."

(b) There is appropriated from the General Fund to the Department of Public Education, Department of Public Instruction, the sum of one million two hundred fifty thousand dollars ($1,250,000) for the 1993-94 fiscal year and the sum of one million two hundred fifty thousand dollars ($1,250,000) for the 1994-95 fiscal year for incentive grants for local school administrative units identified as low performing local school administrative units.

(c) There is appropriated from the General Fund to the Department of Public Education, Department of Public Instruction, the sum of three hundred fifty thousand dollars ($350,000) for the 1993-94 fiscal year and the sum of three hundred fifty thousand dollars ($350,000) for the 1994-95 fiscal year for incentive grants for local school administrative units identified by the Department of Public Instruction as high performing local school administrative units.

(d) This section becomes effective July 1, 1993.

---SCHOOL ACCOUNTABILITY MANDATORY.

Sec. 160. (a) G.S. 115C-238.2 reads as rewritten:

"§ 115C-238.2. Local participation in the Program ~~voluntary;~~ mandatory; the benefits of ~~local participation.~~ the program.

(a) Local school administrative units ~~may, but are not required to,~~ shall participate in the Performance-based Accountability Program.

(b) ~~Local~~ As a result of the Performance-based Accountability Program, local school administrative ~~units that participate in the Performance-based Accountability Program:~~ units:

(1) Are exempt from State requirements to submit reports and plans, other than local school improvement plans, to the Department of Public Education; they are not exempt from federal requirements to submit reports and plans to the Department.

(2) Are subject to the performance standards but not the opportunity standards or the staffing ratios of the State Accreditation Program. The performance standards in the State Accreditation Program, modified to reflect the results of end-of-course and end-of-grade tests, may serve as the basis for developing the student performance indicators adopted by the State Board of Education pursuant to G.S. 115C-238.1.

(3) May receive funds for differentiated pay for teachers and administrators, in accordance with G.S. 115C-238.4, if they elect to participate in a differentiated pay plan.

(4) May be allowed increased flexibility in the expenditure of State funds, in accordance with G.S. 115C-238.5.

(5) May be granted waivers of certain State laws, regulations, and policies that inhibit their ability to reach local accountability goals, in accordance with G.S. 115C-238.6(a).

(6) Shall continue to use the Teacher Performance Appraisal Instrument (TPAI) for evaluating beginning teachers during the first three years of their employment; they may, however, develop other evaluation approaches for teachers who have attained career status.

The Department of Public Instruction shall provide technical assistance, including the provision of model evaluation processes and instruments, to local school administrative units that elect to develop dual personnel evaluation processes. A dual personnel evaluation process includes (i) an evaluation designed to provide information to guide teachers in their professional growth and development, and (ii) an evaluation to provide information to make personnel decisions pertaining to hiring, termination, promotion, and reassignment."

(b) G.S. 115C-238.3(a) reads as rewritten:

"(a) Development of systemwide plan by the local board of education. - The board of education of a each local school administrative unit ~~that elects to participate in the Program~~ shall develop and submit a local school improvement plan for the entire local school administrative unit to the State Superintendent of Public Instruction before April 15 of the fiscal year preceding the fiscal year in which participation is sought.

A systemwide improvement plan shall remain in effect for no more than three years."

"§ 115C-238.5. Flexible funding.

(a) For fiscal years beginning with the 1990-91 fiscal year, the State Board of Education, only upon the recommendation of the State Superintendent, shall increase flexibility in the use of State funds for schools by combining into a single funding category the existing categories for instructional materials, supplies and equipment, textbooks, testing support, and drivers education except for funds for classroom teachers of drivers education. ~~Only local school administrative units electing to participate in the Performance-based Accountability Program shall be eligible to receive this flexible funding.~~

(b) Notwithstanding subsection (a) of this section, for fiscal years beginning with the 1992-93 fiscal year, State funds for textbooks shall be set out in a separate allotment category.

(c) Local boards of education shall provide maximum flexibility in the use of funds to individual schools to enable them to accomplish their individual schools' goals."

(d) G.S. 115C-238.6(b) reads as rewritten:

"(b) Local school administrative units shall continue to ~~participate in the Program and~~ receive funds for differentiated pay, if their local plans call for differentiated pay, so long as (i) they demonstrate satisfactory progress toward student performance goals set out in their local school improvement plans; or (ii) once their local goals are met, they continue to achieve their local goals and they otherwise demonstrate satisfactory performance, as determined by the State Superintendent in accordance with guidelines set by the State Board of Education.

If the local school administrative units do not achieve their goals after two years, the Department of Public Instruction shall provide them with technical assistance to help them meet their goals. If after one additional year they do not achieve their goals, the State Board of Education shall decide what steps shall be taken to improve the education of students in the unit."

(e) This section becomes effective July 1, 1993.

---RAISE BEP INSTRUCTIONAL STDS.

Sec. 161. (a) G.S. 115C-12(9) is amended by adding a new subdivision to read:

"c4. To establish a regular process, including an advisory panel of accountability experts and public school personnel, to review and revise the minimum standards that appear in the annual report card, the end-of-course and end-of-grade tests, and the Basic Education Program Standard Course of Study. As part of the process, special attention shall be given to the effectiveness of the Basic Education Standard Program Course of Study and local instructional practices, as reflected in assessment results. Also, the use and function of the 'Index of Advantagement' on the annual report cards shall be studied and refined, in collaboration with appropriate State university experts."

(b) This section becomes effective July 1, 1993.

---SCHOOLS/ACCOUNTABILITY.

Sec. 162. (a) There is appropriated from the General Fund to the Department of Public Education, Department of Public Instruction, the sum of three hundred sixty thousand dollars ($360,000) for the 1993-94 fiscal year and the sum of three hundred sixty thousand dollars ($360,000) for the 1994-95 fiscal year to augment the Technical Assistance Center staffs with regional assessment coordinators and accountability experts to help local school administrative units implement the Performance-based Accountability Program and the end-of-course and end-of-grade tests. The Department shall intensify the staff development and communications program to promote the outcomes-based focus of these programs and to assist users of data with interpreting and using the evaluative data.

(b) This section becomes effective July 1, 1993.

---SCHOOL ADMIN. JOB PROTECTION.

Sec. 163. G.S. 115C-325(c)(3) reads as rewritten:

"(3) Ineligible for Career Status. - No superintendent, associate superintendent, assistant superintendent or other school employee who is not a teacher as defined by G.S. 115C-325(a)(6) is eligible to obtain career status or continue in a career status if he no longer performs the responsibilities of a teacher as defined in G.S. 115C-325(a)(6). No person who is promoted to or employed in a principal, director, or supervisor position after July 1, 1995, is eligible to obtain career status as an administrator. If the person acquired career status as a teacher in a local school administrative unit before being promoted to or employed in a principal, director, or supervisor position, the person shall retain career status as a teacher and the person has a right to reassignment to a teaching position in the event the person is not continued in employment as a principal, director, or supervisor."

Sec. 164. G.S. 115C-325(d)(2) reads as rewritten:

"(2) a. The provisions of this subdivision do not apply to a person who is ineligible for career status as provided by G.S. 115C-325(c)(3).

b. Whether or not he has previously attained career status as a teacher, a person who has performed the duties of a principal in the school system for three consecutive years or has performed the duties of a supervisor in the school system for three consecutive years shall not be transferred from that position to a lower paying administrative position or to a lower paying nonadministrative position without his consent except for the reasons given in G.S. 115C-325(e)(1) and in accordance with the provisions for the dismissal of a career teacher set out in this section. Transfer of a principal or a supervisor is not a transfer to a lower paying position if the principal's or supervisor's salary is maintained at the previous salary amount.

When a teacher has performed the duties of supervisor or principal for three consecutive years, the board, near the end of the third year, shall vote upon his employment for the next school year. The board shall give him written notice of that decision by June 1 of his third year of employment as a supervisor or principal. If a majority of the board votes to reemploy the teacher as a principal or supervisor, and it has notified him of that decision, it may not rescind that action but must proceed under the provisions of this section. If a majority of the board votes not to reemploy the teacher as a principal or supervisor, he shall retain career status as a teacher if that status was attained prior to assuming the duties of supervisor or principal. A supervisor or principal who has not held that position for three years and whose contract will not be renewed for the next school year shall be notified by June 1 and shall retain career status as a teacher if that status was attained prior to assuming the duties of supervisor or principal.

A year, for purposes of computing time as a probationary principal or supervisor, shall not be less than 145 workdays performed as a full-time, permanent principal or supervisor in a contract year.

A principal or supervisor who has obtained career status in that position in any North Carolina public school system may be required by the board of education in another school system to serve an additional three-year probationary period in that position before being eligible for career status. However, he may, at the option of the board of education, be granted career status immediately or after serving a probationary period of one or two additional years. A principal or supervisor with career status who resigns and within five years is reemployed by the same school system need not serve another probationary period in that position of more than two years and may, at the option of the board, be reemployed immediately as a career principal or supervisor or be given career status after only one year. In any event, if he is reemployed for a third consecutive year, he shall automatically become a career principal or supervisor."

Sec. 165. G.S. 115C-287 reads as rewritten:

"§ 115C-287. ~~Tenure as principal or supervisor.~~ Method of employment of principals, directors, and supervisors.

(a) Tenure of a principal or supervisor who is not ineligible for career status as provided by G.S. 115C-325(c)(3) shall be determined in accordance with the provisions of G.S. 115C-325.

(b) Local boards of education shall employ principals, directors, and supervisors, who are ineligible for career status as provided by G.S. 115C-325(c)(3), upon the recommendation of the superintendent for a term of two to four years. Contracts shall be renewed only at the end of the contract period. Rolling annual contract renewals are not allowed.

The term of employment shall be stated in a written contract that shall be entered into between the board of education and the administrator. The administrator shall not be dismissed or demoted during the term of the contract except for the grounds and by the procedure by which a career teacher may be dismissed or demoted as set forth in G.S. 115C-325.

If the superintendent elects not to recommend the reemployment of an administrator at the end of the contract's term, the superintendent shall notify the administrator at least 30 days prior to the end of the contract's term that the administrator will not be offered reemployment beyond the contract's term. No action by the board of education shall be necessary.

If the superintendent elects to recommend the reemployment of an administrator for a successive contract or to recommend a new and extended term of an administrator's contract, the superintendent may do so at any time more than 90 days prior to the end of the current contract's term. The board of education may approve or disapprove the superintendent's recommendation for any cause that it deems sufficient. If the board decides not to offer the administrator employment beyond the end of the contract's term, the administrator shall be notified of that fact at least 30 days prior to the end of the contract's term.

If the superintendent or the board of education fails to notify an administrator at least 90 days prior to the end of the contract's term that the administrator will not be offered employment beyond the end of the contract term, the administrator shall be entitled to 90 days of additional employment or severance pay beyond the date the administrator receives notice that the contract will not be renewed.

If the administrator acquired career status prior to appointment as an administrator, an administrator who has not served in a position for four years and whose contract as an administrator is not renewed or extended by the superintendent or the board of education shall be entitled to reassignment and employment in the position of employment in which the administrator previously acquired career status."

Sec. 166. Sections 163 through 165 of this act become effective July 1, 1993.

---NEW SCHOOL ADMIN. CONTRACT PROCESS.

Sec. 167. G.S. 115C-325(c)(3) reads as rewritten:

Sec. 168. G.S 115C-325(d)(2) reads as rewritten:

"(2) a. The provisions of this subdivision do not apply to a person who is ineligible for career status as provided by G.S. 115C-325(c)(3).

A year, for purposes of computing time as a probationary principal or supervisor, shall not be less than 145 workdays performed as a full-time, permanent principal or supervisor in a contract year.

Sec. 169. The State Board of Education, with the assistance of school superintendents and legal advisors, shall develop and propose to the General Assembly policies and procedures to define the contract process and the process for reassignment and dismissal of school administrators. These policies shall cover the use of contracts, including the development of model contracts for use by local school administrative units. The contracts shall ensure the greatest amount of flexibility for local school boards and shall protect the administrators from unjust actions. These contracts shall also provide for due process for disciplinary actions, dismissal, and reassignment. In the course of this study, the State Board shall consider law regarding labor contracts in North Carolina and other states.

The State Board of Education shall report the results of its study to the Joint Legislative Education Oversight Committee prior to March 15, 1994.

Sec. 170. Sections 167 and 168 of this act become effective July 1, 1993. Section 169 of this act is effective upon ratification.

---REVIEW LATERAL ENTRY/PRINCIPALS.

Sec. 171. G.S. 115C-296(c) reads as rewritten:

"(c) It is the policy of the State of North Carolina to encourage lateral entry into the profession of teaching by skilled individuals from the private sector. To this end, before the 1985-86 school year begins, the State Board of Education shall develop criteria and procedures to accomplish the employment of such individuals as classroom teachers. Regardless of credentials or competence, no one shall begin teaching above the middle level of differentiation. Skilled individuals who choose to enter the profession of teaching laterally may be granted a provisional teaching certificate for no more than five years and shall be required to obtain certification before contracting for a sixth year of service with any local administrative unit in this State.

It is further the policy of the State of North Carolina to ensure that local boards of education can provide the strongest possible leadership for schools based upon the identified and changing needs of individual schools. To this end, before the 1994-95 school year begins, the State Board of Education shall carefully review the lateral entry program for administrators to ensure that local boards of education have sufficient flexibility to attract able candidates.

The State Board of Education shall report the results of its review to the Joint Legislative Education Oversight Committee prior to March 31, 1994."

Sec. 172. Section 171 of this act is effective upon ratification.

---CONTINUUM OF EDUCATION PROG.

Sec. 173. (a) A new Chapter is added to the General Statutes to read:

"Chapter 116C.

"Continuum of Education Programs.

"§ 116C-1. Education Cabinet created.

(a) The Education Cabinet is created. The Education Cabinet shall be located administratively within the Office of the Governor but shall exercise its statutory powers independently of the Office of the Governor.

(b) The Education Cabinet shall consist of the Governor, who shall serve as chair, the President of The University of North Carolina, the State Superintendent of Public Instruction, and the President of the North Carolina Community College System. The Education Cabinet shall invite representatives of private education to participate in its deliberations as adjunct members.

(1) Works to resolve issues between existing providers of education.

(2) Sets the agenda for the State Education Commission.

(3) Develops a strategic design for a continuum of education programs, in accordance with G.S. 116C-3.

(4) Studies other issues referred to it by the Governor or the General Assembly.

(d) The Office of the Governor, in coordination with the staffs of The University of North Carolina, the North Carolina Community College System, and the Department of Public Instruction, shall provide staff to the Education Cabinet.

"§ 116C-2. State Education Commission.

The State Education Commission shall consist of the Board of Governors of The University of North Carolina, the State Community College Board, and the State Board of Education. The Governor shall call the meetings of the State Education Commission.

The Commission shall be a forum for airing proposals and engaging in board-to-board dialogue about issues the Education Cabinet is addressing. The agenda for Commission meetings shall be set by the Education Cabinet."

"§ 116C-3. Strategic design for a continuum of education programs.

The Education Cabinet shall develop a strategic design for a continuum of education programs. A continuum of education programs is the complement of programs delivered by the State to learners at all levels.

The new design shall take into account issues raised by the Government Performance Audit Committee of the Legislative Research Commission.

The design process shall:

(1) Include vigorous examination of all programs as if they were being created for the first time.

(2) Compare the existing structures, funding levels, and responsibilities of each system to the new design.

The Education Cabinet shall report to the General Assembly on the strategic design it develops prior to January 1, 1995."

(b) This section is effective upon ratification.

---UNC BOARD OF GOVERNORS' APPOINTMENT PROCESS STUDY.

Sec. 174. (a) The Legislative Research Commission may study the appointment process of the Board of Governors of The University of North Carolina to provide balanced participation of the General Assembly and the Governor. The Committee may report the results of its study to the 1994 Regular Session of the 1993 General Assembly and to the 1995 General Assembly.

(b) This section is effective upon ratification.

---COMMUNITY COLL. GOVERNANCE.

Sec. 175. (a) The General Assembly finds that the North Carolina Community College System is too decentralized and that its governance structure should be modified to create a better balance between central authority and local flexibility. The State Board of Community Colleges shall examine this issue and report to the 1994 Regular Session of the 1993 General Assembly on its recommendations for modifying governance structure to create a better balance between central authority and local flexibility.

(b) This section is effective upon ratification.

---COMM. COLL. COST OF EDUCATION POLICY.

Sec. 176. (a) The General Assembly finds that the tuition policy of the North Carolina Community College System needs to be reexamined in order to reflect better the constitutional mandate to provide higher education free of expense "as far as practicable" by reevaluating the relationship of tuition to the cost of education and by determining what costs must be made up of tuition charged in order to ensure that all eligible North Carolinians are indeed guaranteed a public higher education in the North Carolina Community College System at the lowest possible cost while maintaining a public community college system that is worthy of the support of all North Carolinians.

(b) The General Assembly finds that tuition and required fees charged for community colleges should be a limited amount of resident students' per capita student funding.

(c) The State Board of Community Colleges shall develop a tuition/fee policy consistent with law that limits tuition and required fees to a specific percentage of less than one-fifth of the per capita student funding for resident students attending community colleges.

(d) The State Board of Community Colleges shall present its plan for implementing the tuition adjustments pursuant to this section to the General Assembly by April 1, 1994.

(e) G.S. 115D-5(a) reads as rewritten:

"(a) The State Board of Community Colleges may adopt and execute such policies, regulations and standards concerning the establishment, administration, and operation of institutions as the State Board may deem necessary to insure the quality of educational programs, to promote the systematic meeting of educational needs of the State, and to provide for the equitable distribution of State and federal funds to the several institutions.

The State Board of Community Colleges shall establish standards and scales for salaries and allotments paid from funds administered by the State Board, and all employees of the institutions shall be exempt from the provisions of the State Personnel Act. The State Board shall have authority with respect to individual institutions: to approve sites, buildings, building plans, budgets; to approve the selection of the chief administrative officer; to establish and administer standards for professional personnel, curricula, admissions, and graduation; to regulate the awarding of degrees, diplomas, and certificates; to establish and regulate student tuition and fees ~~and financial accounting procedures.~~ within policies for tuition and fees established by the General Assembly; and to establish and regulate financial accounting procedures."

(f) This section becomes effective July 1, 1993.

---NCCCS TUITION STABILIZED.

Sec. 177. (a) It is the goal of the General Assembly that students in the North Carolina Community College System pay tuition and required fees at the rate of approximately twenty percent (20%) of the cost of education. The tuition of students in the North Carolina Community College System shall be increased proportionately when the cost of education justifies an increase in tuition.

(b) This section becomes effective July 1, 1993.

---NCCCS FUNDING GOAL.

Sec. 178. (a) It is the goal of the General Assembly to increase the per student funding for the North Carolina Community College System, as soon as fiscal conditions permit, to a level more comparable to national averages for similar institutions.

(b) This section becomes effective July 1, 1993.

---NCCCS FUNDING FORMULA.

Sec. 179. (a) The State Board of Community Colleges shall develop a program-based funding system, including a full-time equivalency component and specific goal performance components, in order to encourage the community colleges to meet particular State needs or goals. The State Board of Community Colleges shall propose an initial set of such goals and shall propose revisions of these goals periodically. The State Board of Community Colleges shall report its proposed new funding system to the 1995 General Assembly for its approval.

(b) This section becomes effective July 1, 1993.

---COMM. COLL. MORATORIUM.

Sec. 180. (a) No new community colleges and satellite community college campuses may be established within the North Carolina Community College System. The General Assembly shall lift this moratorium when the system restructuring plan has been adopted by the State Board of Community Colleges.

(b) This section is effective upon ratification.

---GPAC/COMM. COLL. PROGRAM REVIEW.

Sec. 181. (a) The State Board of Community Colleges shall conduct a review of the structure of the community college system. The State Board of Community Colleges shall redefine the structure of the community college system based upon a regional review of program needs in order to facilitate the most efficient use of system resources. The program planning required by this act shall include the defining of enlarged service areas for community colleges based upon the needs of the respective service areas. The planning process utilized by the State Board shall include review of the need to consolidate, eliminate, or modify the status of existing community colleges and satellites. The State Board shall review the distribution of physical facilities, programs, and resources in regions for the purpose of eliminating competition among the community colleges for students in overlapping service areas.

(b) In the defining of new regions for the most efficient functioning of the community college system, the State Board of Community Colleges shall conduct a comprehensive program review designed to eliminate unproductive, low quality, unnecessary, or duplicative programs.

(c) The State Board of Community Colleges shall implement a regional program structure to facilitate effective program planning, efficient use of resources, the implementation of statewide curriculum standards, and consolidated high quality programs. The regional structure shall be the unit used for the purposes of comprehensive planning and budgeting in the community college system. The criteria used by the State Board in determining the manner in which the community college system shall be restructured into newly defined regions may include, in addition to other appropriate criteria, the following:

(1) Location of the nearest college or satellite campus;

(2) New or anticipated population to be served;

(3) Existing and proposed transportation corridors and facilities;

(4) Programs proposed compared to the location of the nearest similar program;

(5) Feasibility of delivering programs using technology;

(6) Use and availability of facilities of local school systems;

(7) Potential impact on enrollment of nearby institutions; and

(8) Geographical redistribution of community colleges that offer college transfer programs.

(d) The State Board of Community Colleges shall establish standards for the periodic review of community college programs including standards for the termination of programs.

(e) The State Board of Community Colleges shall establish within the community college system Centers for Excellence that shall be responsible for the creation of world class model programs to be implemented throughout the community college system at each of the institutions authorized to offer the program. The Centers for Excellence shall design model curricula, establish curriculum standards, and update curricula in response to changes in technologies and market conditions. The Centers for Excellence for each curriculum program area shall be composed of community college faculty members from any community college who are chosen for their individual excellence and leadership.

(f) This section is effective upon ratification.

---GPAC/LOCAL COM. COLL. BOARD.

Sec. 182. (a) G.S. 115D-12(a) reads as rewritten:

"(a) Each community college established or operated pursuant to this Chapter shall be governed by a board of trustees consisting of 13 members, or of additional members if selected according to the special procedure prescribed by the third paragraph of this subsection, who shall be selected by the following agencies.

Group One - four trustees, elected by the board of education of the public school administrative unit located in the administrative area of the institution. If there are two or more public school administrative units, whether city or county units, or both, located within the administrative area, the trustees shall be elected jointly by all of the boards of education of those units, each board having one vote in the election of each trustee, except as provided in G.S. 115D-59. No board of education shall elect any person employed by the board of education to serve as a trustee, however, any such person currently serving on a board of trustees shall be permitted to fulfill the unexpired portion of the trustee's current term. elected by the State Board of Community Colleges.

Group Two - four trustees, elected by the board of commissioners of the county in which the institution is located. Provided, however, if the administrative area of the institution is composed of two or more counties, the trustees shall be elected jointly by the boards of commissioners of all those counties, each board having one vote in the election of each trustee. Provided, also, the county commissioners of the county in which the community college has established a satellite campus may elect an additional two members if the board of trustees of the community college agrees. Should the boards of education or the boards of commissioners involved be unable to agree on one or more trustees the senior resident superior court judge in the superior court district or set of districts as defined in G.S. 7A-41.1 where the institution is located shall fill the position or positions by appointment.

Group Three - four trustees, appointed by the Governor.

Group Four - the president of the student government or the chairman of the executive board of the student body of each community college established pursuant to G.S. 115D shall be an ex officio nonvoting member of the board of trustees of each said institution."

(b) This section is effective upon ratification and applies to terms commencing on and after July 1, 1993.

---COMM. COLL. PRES. SELECTION.

Sec. 183. (a) G.S. 115D-5(a) reads as rewritten:

The State Board of Community Colleges shall establish standards and scales for salaries and allotments paid from funds administered by the State Board, and all employees of the institutions shall be exempt from the provisions of the State Personnel Act. The State Board shall have authority with respect to individual institutions: to approve sites, buildings, building plans, budgets; ~~to approve the selection of the chief administrative officer;~~ to select the president; to establish and administer standards for professional personnel, curricula, admissions, and graduation; to regulate the awarding of degrees, diplomas, and certificates; to establish and regulate student tuition and fees and financial accounting procedures. The process of selecting the president of a community college shall include a procedure by which the local community college board of trustees may select a slate of no less than three nominees for the position of president. This slate shall be submitted to the president of the community college system who will recommend a candidate from the slate for selection by the State Board of Community Colleges."

(b) G.S. 115D-20(1) is repealed.

---COMM. COLLEGE SCHOLARSHIPS.

Sec. 184. (a) The Department of Community Colleges shall develop a plan to establish a Community College System Challenge Grant Scholarship Fund. The plan shall be presented to the 1994 Regular Session of the 1993 General Assembly. The plan shall address initial funding (method and amounts) as well as matching contributions from non-State contributions.

(b) It is the goal of the General Assembly that the Challenge Grant Scholarship Fund be developed for the benefit of needy students in the North Carolina Community College System.

(c) The State Board of Community Colleges shall administer the Challenge Grant Scholarship Fund as a means for augmenting rapidly the principal in the Fund so that the State Board will gain greater resources from which to award aid to a larger number of needy students.

(d) This section is effective upon ratification.

---UNC BD. OF GOV. REVIEW/PLAN.

Sec. 185. (a) The Board of Governors of The University of North Carolina shall review all academic programs, research activities, extension activities, public service activities, and administration and support functions to identify those programs and activities that are of low productivity or low priority, or are unnecessarily redundant. The Board shall develop specific criteria for this one-time review of academic program productivity, and shall develop a process to review all programs and activities biennially. The Board's review shall have as its top priority the potential elimination of nonproductive or redundant graduate, professional, or doctoral programs and the identification of resources and programs that will strengthen undergraduate education.

This review shall be completed by December 31, 1995. The Board shall report to the General Assembly and to the Joint Education Oversight Committee by February 1, 1996, on its findings. The report shall include a plan for program eliminations or reductions and for proposed reallocations of savings.

(b) G.S. 116-11(3) reads as rewritten:

"(3) The Board shall determine the functions, educational activities and academic programs of the constituent institutions. The Board shall also determine the types of degrees to be awarded. The powers herein given to the Board shall not be restricted by any provision of law assigning specific functions or responsibilities to designated institutions, the powers herein given superseding any such provisions of law. The Board, after adequate notice and after affording the institutional board of trustees an opportunity to be heard, shall have authority to withdraw approval of any existing program if it appears that the program is unproductive, excessively costly or unnecessarily duplicative. The Board shall review the productivity of programs every two years, using criteria specifically developed to determine program productivity."

(c) The Board of Governors of The University of North Carolina shall develop a plan for the continued and expanded availability of higher education for all citizens, focusing on the availability of opportunities in underserved areas by means other than the establishment of additional degree programs. The expanded use of video and audio distance learning technology, the expanded use of graduate centers to avoid program duplication, the potential for expanded funding of extension instruction, and increased cooperative programs with the North Carolina Community College System and the public school system should all be considered in developing the plan. The plan shall include proposals for the allocation and funding of students taught by more than one institution of higher education. The plan shall be developed in conjunction with the Education Cabinet and shall be approved by the Cabinet. The plan shall include projected costs, benefits, and a schedule for implementation. The plan shall be provided to the General Assembly by January 1, 1995.

(d) This section becomes effective July 1, 1993.

---UNC TUITION ISSUES.

Sec. 186. (a) The General Assembly finds that the tuition policy at The University of North Carolina, both for undergraduates and graduates, and both for residents and nonresidents, needs to be reexamined in order to reflect better the constitutional mandate to provide higher education free of expense "as far as practicable" by reevaluating the relationship of tuition to cost and by determining what costs must be made up of tuition charged in order to ensure that all eligible North Carolinians are indeed guaranteed a public higher education at the lowest possible cost while maintaining a public higher education system that is worthy of the support of all North Carolinians.

(b) The General Assembly finds that undergraduate resident students of The University of North Carolina should pay at least sixteen percent (16%) of the educational and general costs, excluding financial aid, of the average cost of undergraduate education by level of institution.

(c) The Board of Governors of The University of North Carolina shall develop and implement plans to phase in the attainment of the level of student contribution set forth in subsection (b) of this section. The phasing in shall begin by the 1994-95 academic year and be completed by the 1998-99 academic year.

(d) The General Assembly finds that tuition and required fees should be a limited amount of resident students' costs.

(e) The Board of Governors of The University of North Carolina shall develop a tuition and fee policy consistent with law that limits tuition and required fees to a specific percentage of less than one-fourth of the cost to undergraduate resident students of attending constituent institutions of The University of North Carolina. The Board shall define the elements of cost to be included in this policy's calculations and shall report these elements of cost to the General Assembly.

(f) The Board of Governors of The University of North Carolina shall develop a plan for providing increased State-funded need-based financial aid, with a strong emphasis on a grants program, commensurate with any increase in students' financial needs generated by tuition increases, to students at constituent institutions of The University of North Carolina.

(g) The Board of Governors of The University of North Carolina, in accordance with G.S. 116-143, shall develop higher tuition rates for graduate and professional programs. These rates shall be developed after specific analysis of the cost differences between undergraduate and graduate instruction. The new rates shall be based on this analysis.

(h) The Board of Governors of The University of North Carolina shall present its plan for implementing all the tuition increases pursuant to this section to the General Assembly by April 1, 1994.

(i) G.S. 116-144 reads as rewritten:

"§ 116-144. Higher tuition to be charged nonresidents.

The Board of Governors shall fix the tuition and required fees charged nonresidents of North Carolina who attend the institutions enumerated in G.S. 116-4 at rates higher than the rates charged residents of North ~~Carolina and comparable to the rates charged nonresident students by comparable public institutions nationwide, except that a~~ Carolina. Tuition shall be at rates from approximately seventy-five percent (75%) to one hundred percent (100%) of the educational and general costs of education for the different levels of institutions, taking into consideration the overall tuition and fee charges for comparable institutions in peer states, the need for diversity of the student body, and the mission of the institution. A person who serves as a graduate teaching assistant or graduate research assistant or in a similar instructional or research assignment and is at the same time enrolled as a graduate student in the same institution may, in the discretion of the Board of Governors, be charged a lower rate fixed by the Board, provided the rate is not lower than the North Carolina resident rate."

(j) G.S. 116-11(9)a. reads as rewritten:

"(9) a. The Board of Governors shall develop, prepare and present to the Governor, the Advisory Budget Commission and the General Assembly a single, unified recommended budget for all of public senior higher education. The recommendations shall consist of requests in three general categories: (i) funds for the continuing operation of each constituent institution, (ii) funds for salary increases for employees exempt from the State Personnel Act and (iii) funds requested without reference to constituent institutions, itemized as to priority and covering such areas as new programs and activities, expansions of programs and activities, increases in enrollments, increases to accommodate internal shifts and categories of persons served, capital improvements, improvements in levels of operation and increases to remedy deficiencies, as well as other areas. Funds to be generated from increases in tuition rates shall be applied to category (iii) in the budget proposal, including need-based financial aid in order to implement the Board's plan for providing State-funded need-based financial aid, and shall not supplant General Fund appropriations. The function of the Advisory Budget Commission under this section applies only if the Director of the Budget consults with the Commission in preparation of the budget."

(k) This section becomes effective July 1, 1993.

---AID TO PRIVATE COLL. FOCUS.

Sec. 187. The General Assembly finds that the historical justification for State aid to students in private institutions is still valid and that the level of North Carolina's support to private education is comparable to those of other states with strong public university systems. The General Assembly further finds that sound education policy should drive adjustments to private higher education appropriations rather than budget availability and legislative relations, that sound accountability criteria should be required of private institutions in order for North Carolina students attending these institutions to be eligible to receive State aid, and that State aid to private institutions should be focused on students with demonstrated financial need.

Sec. 188. It is the policy of the General Assembly that all State aid to North Carolina students attending private North Carolina colleges and universities directly improve education quality, extend its benefits, and encourage economical use of State resources by increasing emphasis on accountability.

Sec. 189. The Board of Governors of The University of North Carolina, in consultation with the Area Health Education Centers and the Office of Rural Health, Department of Human Resources, shall review the Medical Student Aid Program to determine if the State's medical professional needs are still being reasonably met by the Program and whether the original critical needs to which the Program was designed to respond still remain. The Board of Governors shall report the results of this review, together with any recommendations, to the General Assembly by April 1, 1994.

Sec. 190. It is the policy of the General Assembly that State funding for North Carolina students with demonstrated financial need in private higher education be a percentage of the average educational and general appropriations for North Carolina students with demonstrated financial need attending public universities.

Sec. 191. Private colleges and universities that have North Carolina students with demonstrated financial need who are eligible to receive State funds shall meet appropriate criteria for the use of these funds. In addition to any other criteria that may be set by the General Assembly, these criteria include:

(1) Maintenance of acceptable minimum admissions requirements, as established by the Board of Governors of The University of North Carolina in consultation with the North Carolina Association of Private Colleges and Universities; and

(2) Maintenance of acceptable student achievement and development levels.

Private colleges and universities that receive State funding for North Carolina students with demonstrated financial need shall make an accountability report annually to the General Assembly by April 1.

Sec. 192. (a) The Legislative Tuition Grant Program is eliminated.

(b) It is the intent of the General Assembly to redesign and expand the Contractual Scholarship Program to ensure that State funds for North Carolina students go only to students with demonstrated financial need and that North Carolina students with demonstrated financial need attending private colleges and universities are given aid in an amount that is a percentage of the average educational and general appropriations for North Carolina students with demonstrated financial need attending public universities.

(c) Effective July 1, 1993, the Contractual Scholarship Program shall be administered by the State Education Assistance Authority. The Authority shall ensure that the intent of this section is carried out and that the allocations from the Program are made to private institutions based on the number of North Carolina students with demonstrated financial need attending these institutions.

(d) Effective July 1, 1993, G.S. 116-19 reads as rewritten:

"§ 116-19. Contracts with private institutions to aid North Carolina students.

In order to encourage and assist private institutions to continue to educate North Carolina students, the ~~Board of Governors of the University of North Carolina~~ State Education Assistance Authority ~~is hereby authorized to~~ may enter into contracts with the institutions under the terms of which an institution receiving any funds that may be appropriated pursuant to this section would agree that, during any fiscal year in which ~~such~~ the funds were received, the institution would provide and administer scholarship funds for ~~needy~~ North Carolina students with demonstrated financial need in an amount at least equal to the amount paid to the institution, pursuant to this section, during the fiscal year. Under the terms of the contracts the ~~Board of Governors of the University of North Carolina~~ State Education Assistance Authority would agree to pay to the institutions, subject to the availability of funds, a fixed sum of money for each North Carolina student with demonstrated financial need enrolled at the institutions for the regular academic ~~year, said~~ year. This sum shall to be determined by appropriations ~~that might be~~ made from time to time by the General Assembly pursuant to this section. Funds appropriated pursuant to this section shall be paid by the ~~Department of Administration to an institution upon recommendation of the Board of Governors of the University of North Carolina and~~ State Education Assistance Authority on certification of the institution showing the number of North Carolina students with demonstrated financial need enrolled at the institution as of October 1 of any year for which funds may be appropriated."

Sec. 193. Sections 187 through 192 of this act become effective July 1, 1993.

---G. A. HUMAN RESOURCES MANAGEMENT.

Sec. 194. (a) G.S. 120-36 reads as rewritten:

"§ 120-36. Legislative Services ~~Officer of the General Assembly.~~ Officer; Human Resources Management Officer; appointment; duties.

(a) The Legislative Services Officer of the General Assembly shall be appointed by and serve at the pleasure of the Legislative Services Commission, and his compensation shall be fixed by the Legislative Services Commission.

(b) The Legislative Services Officer of the General Assembly shall perform such duties as are assigned to him by the Legislative Services Commission and shall be available to the Legislative Research Commission to provide such clerical, printing, drafting, and research duties as are necessary to the proper functions of the Legislative Research Commission.

(c) The Human Resources Management Officer shall be appointed by the Legislative Services Commission and shall serve under the supervision of the Legislative Services Officer. The compensation of the Human Resources Management Officer shall be set by the Legislative Services Commission.

(d) The Human Resources Management Officer shall be responsible for the development, maintenance, and implementation of the following human resources programs for employees of the General Assembly: job descriptions, a classification system, a pay plan, a performance management system, personnel policies and procedures, recruitment and selection, career development, and training. The Human Resources Management Officer shall work in cooperation with the Office of State Personnel regarding human resources management planning and employee training and development."

(b) This section is effective upon ratification.

---LEGISLATIVE PEER REVIEW.

Sec. 195. (a) The General Assembly shall have conducted a peer review of the organizational structure and staffing capabilities and levels required to serve the General Assembly in the future. The review shall be completed by July 1, 1994.

(b) There is appropriated from the General Fund to the General Assembly for fiscal year 1993-94 the sum of fifty thousand dollars ($50,000) to implement this section.

---CLARIF./LSC, LSO, AND LAO DUTIES.

Sec. 196. (a) The Legislative Services Commission shall fill the current vacant position of Legislative Services Officer.

(b) The Legislative Services Commission shall also clarify the roles and responsibilities of the Legislative Services Commission, the Legislative Services Officer, and the Legislative Administrative Officer.

Position Number on Plate

Governor 1

Lieutenant Governor 2

Speaker of the House of Representatives 3

President Pro Tempore of the Senate 4

Secretary of State 5

State Auditor 6

State Treasurer 7

Superintendent of Public Instruction 8

Attorney General 9

Commissioner of Agriculture 10

Commissioner of Labor 11

Commissioner of Insurance 12

Speaker Pro Tempore of the House 13

Legislative ~~Administrative~~ Services Officer 14

Secretary of Administration 15

Secretary of Environment, Health, and Natural Resources 16

Secretary of Revenue 17

Secretary of Human Resources 18

Secretary of Commerce 19

Secretary of Correction 20

Secretary of Cultural Resources 21

Secretary of Crime Control and Public Safety 22

Governor's Staff 23-29

State Budget Officer 30

State Personnel Director 31

Advisory Budget Commission Nonlegislative Member 32-41

Chair of the State Board of Education 42

President of the U.N.C. System 43

Alcoholic Beverage Control Commission 44-46

Assistant Commissioners of Agriculture 47-48

Deputy Secretary of State 49

Deputy State Treasurer 50

Assistant State Treasurer 51

Deputy Commissioner for the Department of Labor 52

Chief Deputy for the Department of Insurance 53

Assistant Commissioner of Insurance 54

Deputies and Assistant to the Attorney General 55-65

Board of Economic Development Nonlegislative Member 66-88

State Ports Authority Nonlegislative Member 89-96

Utilities Commission Member 97-104

Parole Commission Member 105-109

State Board Member, Commission Member, or State

Employee Not Named in List 110-200".

(d) G.S. 120-32.01 reads as rewritten:

"§ 120-32.01. Information to be supplied.

(a) Every State department, State agency, or State institution shall furnish the Legislative ~~Administrative~~ Services Office and the Research, Fiscal Research, and Bill Drafting Divisions any information or records requested by them. Except when accessibility is prohibited by a federal statute, federal regulation or State statute, every State department, State agency, or State institution shall give the Fiscal Research Division access to any data base or stored information maintained by computer, telecommunications, or other electronic data processing equipment, whether stored on tape, disk, or otherwise, and regardless of the medium for storage or transmission.

(b) Notwithstanding subsection (a) of this section, access to the State Personnel Management Information System by the Legislative ~~Administrative~~ Services Office and by the Research and Bill Drafting Divisions shall only be through the Fiscal Research Division."

(e) G.S. 120-32.1 reads as rewritten:

"§ 120-32.1. Use and maintenance of buildings and grounds.

(a) The Legislative Services Commission shall:

(1) Establish policy for the use of the State legislative buildings and grounds;

(2) Maintain and care for the State legislative buildings and grounds, but the Commission may delegate the actual work of the maintenance of those buildings and grounds to the Department of Administration, which shall perform the work as delegated;

(3) Provide security for the State legislative buildings and grounds;

(4) Allocate space within the State legislative buildings and grounds; and

(5) Have the exclusive authority to assign parking space in the State legislative buildings and grounds.

(b) The Legislative ~~Administrative~~ Services Officer shall have posted the rules adopted by the Legislative Services Commission under the authority of this section in a conspicuous place in the State Legislative Building and the Legislative Office Building. The Legislative ~~Administrative~~ Services Officer shall have filed a copy of the rules, certified by the chairman of the Legislative Services Commission, in the office of the Secretary of State and in the office of the Clerk of the Superior Court of Wake County. When so posted and filed, these rules shall constitute notice to all persons of the existence and text of the rules. Any person, whether on his own behalf or for another, or acting as an agent or representative of any person, firm, corporation, partnership or association, who knowingly violates any of the rules adopted, posted and filed under the authority of this section is guilty of a misdemeanor and upon conviction shall be punished by a fine or imprisonment in the discretion of the court, or by both such fine and imprisonment. Any person, firm, corporation, partnership or association who combines, confederates, conspires, aids, abets, solicits, urges, instigates, counsels, advises, encourages or procures another or others to knowingly violate any of the rules adopted, posted and filed under the authority of this section is guilty of a misdemeanor and upon conviction shall be punished by a fine or imprisonment in the discretion of the court, or by both such fine and imprisonment.

(c) The Legislative Services Commission may cause to be removed at the owner's expense any vehicle parked in the State legislative buildings and grounds in violation of the rules of the Legislative Services Commission and may cause to be removed any vehicle parked in any State-owned parking space leased to an employee of the General Assembly where the vehicle is parked without the consent of the employee to whom the space is leased.

(d) For the purposes of this section, the term 'State legislative buildings and grounds' means:

(1) At all times:

a. The State Legislative Building and the area between outer walls of the State Legislative Building and the near curbline of those sections of Jones, Wilmington, Lane, and Salisbury Streets which border land on which the State Legislative Building is situated;

b. The Legislative Office Building and the areas between its outer walls and the near curbline of those sections of Lane and Salisbury Streets that border the land on which it is situated;

c. Any State-owned parking lot which is leased to the General Assembly; and

d. The bridge between the State Legislative Building and the State Governmental Mall.

(2) In addition, the surface area to the far curbline of those sections of Jones, Wilmington, Lane, and Salisbury Streets which border the land on which the State Legislative Building is situated:

a. When the General Assembly is in regular or extra session; and

b. On other days on which one or more standing committees of either or both houses of the General Assembly are meeting and the Legislative ~~Administrative~~ Services Officer determines that additional parking is needed for the functioning of the General Assembly and files notice of the committee's or committees' meetings and his finding that additional parking is needed in the office of the Secretary of State and that of Clerk of the Superior Court of Wake County."

(f) G.S. 120-36.6 reads as rewritten:

"§ 120-36.6. Legislative Fiscal Research staff participation.

Legislative fiscal research staff members may attend all meetings of the Advisory Budget Commission and all hearings conducted by or for the Commission, and may accompany the Commission to inspect the facilities of the State. The Legislative ~~Administrative~~ Services Officer shall designate a member of the Fiscal Research staff, and a member of the General Research or Bill Drafting staff who may attend all meetings of the Board of Awards and Council of State, unless the Board or Council has voted to exclude them from the specific meeting, provided that no final action may be taken while they are so excluded. The Legislative Services Officer and the Director of Fiscal Research shall be notified of all such meetings, hearings and trips in the same manner and at the same time as notice is given to members of the Board, Commission or Council. The Legislative Services Officer and the Director of Fiscal Research shall be provided with a copy of all reports, memoranda, and other informational material which are distributed to the members of the Board, Commission, or Council; these reports, memoranda and materials shall be delivered to the Legislative Services Officer and the Director of Fiscal Research at the same time that they are distributed to the members of the Board, Commission, or Council."

(g) G.S. 120-70.36 reads as rewritten:

"§ 120-70.36. Staffing.

The Legislative ~~Administrative~~ Services Officer shall assign as staff to the Joint Select Committee professional employees of the General Assembly, as approved by the Legislative Services Commission. Clerical staff shall be assigned to the Joint Select Committee through the offices of the Supervisor of Clerks of the Senate and Supervisor of Clerks of the House of Representatives. The expenses of employment of clerical staff shall be borne by the Joint Select Committee."

(h) G.S. 120-70.46 reads as rewritten:

"§ 120-70.46. Staffing.

The Legislative ~~Administrative~~ Services Officer shall assign as staff to the Environmental Review Commission professional employees of the General Assembly, as approved by the Legislative Services Commission. Clerical staff shall be assigned to the Environmental Review Commission through the offices of the Supervisor of Clerks of the Senate and Supervisor of Clerks of the House of Representatives. The expenses of employment of clerical staff shall be borne by the Environmental Review Commission."

(i) G.S. 120-70.52(c) reads as rewritten:

"(c) The Committee shall be funded by appropriations made to the Highway Trust Fund and allocated to the Intrastate System projects. Members of the Committee receive subsistence and travel expenses as provided in G.S. 120-3.1. The Committee may contract for consultants or hire employees in accordance with G.S. 120-32.02. The Legislative Services Commission, through the Legislative ~~Administrative~~ Services Officer, shall assign professional staff to assist the Committee in its work. Upon the direction of the Legislative Services Commission, the Supervisors of Clerks of the Senate and of the House of Representatives shall assign clerical staff to the Committee. The expenses for clerical employees shall be borne by the Committee."

(j) G.S. 120-70.65 reads as rewritten:

"§ 120-70.65. Staffing.

The Legislative ~~Administrative~~ Services Officer shall assign as staff to the Commission professional employees of the General Assembly, as approved by the Legislative Services Commission. Clerical staff shall be assigned to the Commission through the Offices of the Supervisor of Clerks of the Senate and Supervisor of Clerks of the House of Representatives. The expenses of employment of clerical staff shall be borne by the Commission."

(k) G.S. 120-70.82(c) reads as rewritten:

"(c) Members of the Committee receive subsistence and travel expenses as provided in G.S. 120-3.1. The Committee may contract for consultants or hire employees in accordance with G.S. 120-32.02. The Legislative Services Commission, through the Legislative ~~Administrative~~ Services Officer, shall assign professional staff to assist the Committee in its work. Upon the direction of the Legislative Services Commission, the Supervisors of Clerks of the Senate and of the House of Representatives shall assign clerical staff to the Committee. The expenses for clerical employees shall be borne by the Committee."

(l) G.S. 143-8 reads as rewritten:

"§ 143-8. Reporting of legislative and judicial expenditures and financial needs.

On or before the first day of September, biennially, in the even-numbered years, the Legislative ~~Administrative~~ Services Officer shall furnish the Director a detailed statement of expenditures of the General Assembly for the current fiscal biennium, and an estimate of its financial needs, itemized in accordance with the budget classification adopted by the Director and approved and certified by the President pro tempore of the Senate and the Speaker of the House for each year of the ensuing biennium, beginning with the first day of July thereafter. The Administrative Officer of the Courts shall furnish the Director a detailed statement of expenditures of the judiciary, and for each year of the current fiscal biennium an estimate of its financial needs as provided by law, itemized in accordance with the budget classification adopted by the Director and approved and certified by the Chief Justice for each year of the ensuing biennium, beginning with the first day of July thereafter. The Director shall include these estimates and accompanying explanations in the budget submitted with such recommendations as the Director may desire to make in reference thereto."

(m) This section is effective upon ratification.

---LEGISLATIVE SERVICES SCHEDULE.

Sec. 197. (a) G.S. 120-31 is amended by adding a new subsection to read:

"( f) The Legislative Services Commission shall meet at least quarterly, but may provide for cancellation of a meeting if there is no business to transact."

(b) This section is effective upon ratification

---LEGISLATIVE FACILITIES PLAN.

Sec. 198. (a) The Legislative Services Commission shall develop a facilities plan that defines current space needs and plans for future needs for facilities and storage space. This plan shall be completed by July 1, 1994.

(b) This section is effective upon ratification.

---INDEXING OF JOURNALS.

Sec. 199. (a) G.S. 120-28 reads as rewritten:

"§ 120-28. Journals indexed by clerks.

The principal clerks of the two houses of the General Assembly shall provide full and complete indexes for the journals of their respective houses. The indexes for the journals shall be produced in a manner consistent with procedures established by the Legislative Services Commission under G.S. 120-32(7)a."

(b) G.S. 120-32 (7) reads as rewritten:

"(7) a. Provide for the indexing and printing of the session laws of each regular, extra or special session of the General ~~Assembly~~ Assembly, ~~and~~ provide for the printing of the journal of each house of the General Assembly, and establish procedures for the principal clerks of the House of Representatives and the Senate to use in producing uniform indexes,

---IMPLEMENTATION REVIEW OF GPAC

Sec. 200. (a) The Legislative Research Commission may establish a follow-up process, including external review, for the implementation of the recommendations of the Government Performance Audit Committee. The Commission may report the results of its study to the 1994 Regular Session of the 1993 General Assembly and to the 1995 General Assembly.

(b) This section is effective upon ratification.

---SUNSET STATE BOARDS/COMMISSIONS.

Sec. 201. Effective July 1, 1994, the following sections of the General Statutes and Session Laws are repealed:

(1) G.S. 17C-3, G.S. 17C-6 - North Carolina Criminal Justice Education and Training Standards Commission.

(2) G.S. 18B-200 - North Carolina Alcoholic Beverage Control Commission.

(3) G.S. 20-305.4 - Motor Vehicles Dealers' Advisory Board.

(4) G.S. 58-50-150 - North Carolina Small Employer Health Reinsurance Pool.

(5) G.S. 58-78-1, G.S. 58-78-5 - State Fire and Rescue Commission.

(6) G.S. 76A-1, G.S. 76A-2, G.S. 76A-3, G.S. 76A-4 - Cape Fear River Navigation and Pilotage Commission.

(7) G.S. 76A-31, G.S. 76A-32, G.S. 76A-33, G.S. 76A-34 - Morehead City Navigation and Pilotage Commission.

(8) G.S. 96-4(e) - State Employment Advisory Councils.

(9) G.S. 104F-2 - Southeast North Carolina Low-Level Radioactive Waste Management Commission.

(10) G.S. 104G-5 - North Carolina Low-Level Radioactive Waste Management Authority.

(11) G.S. 113-315.25 - North Carolina Seafood Industrial Park Authority.

(12) G.S. 117-1 - Rural Electrification Authority.

(13) G.S. 120-58, G.S. 120-59, G.S. 120-60, G.S. 120-61, G.S. 120-62 - Commission on Children with Special Needs.

(14) G.S. 120-70.70, G.S. 120-70.72, G.S. 120-70.73, G.S. 120-70.75 - Commission on the Family.

(15) G.S. 120-180, G.S. 120-182, G.S. 120-183 - North Carolina Study Commission on Aging.

(16) G.S. 122C-118 - Mental Health, Developmental Disabilities, and Substance Abuse, Area Authorities.

(17) G.S. 122C-431 - North Carolina Alcoholism Research Authority.

(18) Article 1A of Chapter 130A - Health Services Commission.

(19) Part 2 of Article 1B of Chapter 130A - Governor's Council on Physical Fitness and Health.

(20) Part 3 of Article 1B of Chapter 130A - Minority Health Advisory Council.

(21) G.S. 130A-131, G.S. 130A-131.1 - Council on Sickle Cell Syndrome.

(22) G.S. 131E-17, G.S. 131E-18, G.S. 131E-19 - Hospital Authorities.

(23) G.S. 131E-95 - Medical Review Committee.

(24) G.S. 131E-211 - North Carolina Medical Database Commission.

(25) G.S. 135-39, G.S. 135-39.2 - Board of Trustees of the Teachers' and State Employees' Comprehensive Major Medical Plan.

(26) G.S. 143-135.25 - State Building Commission.

(27) Article 29 of Chapter 143 - Commission for the Study of Problems of Care of the Aged and the Intellectually or Physically Handicapped.

(28) G.S. 143-283.1, G.S. 143-283.2 - Governor's Council on Employment of the Handicapped.

(29) G.S. 143-436 - North Carolina Pesticide Board.

(30) G.S. 143-439 - Pesticides Advisory Committee.

(31) G.S. 143-508 - North Carolina Medical Care Commission.

(32) G.S. 143-510 - Emergency Medical Services Advisory Council.

(33) G.S. 143-573 - North Carolina Child Fatality Task Force.

(34) G.S. 143B-30.1 - Rules Review Commission.

(35) G.S. 143B-133 - Veterans' Memorial Commission.

(36) G.S. 143B-147, G.S. 143B-148 - Commission on Mental Health, Developmental Disabilities, and Substance Abuse Services.

(37) G.S. 143B-150.7 - Advisory Committee on Family-Centered Services.

(38) Part 6 of Article 3 of Chapter 143B - Social Services Commission.

(39) Part 7 of Article 3 of Chapter 143B - Commission for the Blind.

(40) G.S. 143B-168.4, G.S. 143B-168.5 - Child Day-Care Commission.

(41) G.S. 143B-177, G.S. 143B-179 - Council on Developmental Disabilities.

(42) G.S. 143B-180, G.S. 143B-181 - Governor's Advisory Council on Aging.

(43) G.S. 143B-181.9A - Advisory Committee on Home and Community Care.

(44) G.S. 143B-265 - Board of Correction.

(45) Part 3 of Article 6 of Chapter 143B - Parole Commission.

(46) G.S. 143B-285.12 - Governor's Waste Management Board.

(47) Part 2 of Article 9 of Chapter 143B - Goals and Policy Board.

(48) Part 3 of Article 9 of Chapter 143B - Capital Planning Commission.

(49) G.S. 143B-393, G.S. 143B-394 - Council on Women.

(50) G.S. 143B-403.1, G.S. 143B-403.2 - Governor's Advocacy Council for Persons with Disabilities.

(51) G.S. 143B-414, G.S. 143B-415 - Governor's Advocacy Council on Children and Youth.

(52) G.S. 143B-426.21(a) - Information Resource Management Commission.

(53) Part 27 of Article 9 of Chapter 143B - Board of Science and Technology.

(54) Part 1A of Article 10 of Chapter 143B - Housing Coordination and Policy Council.

(55) Part 2A of Article 10 of Chapter 143B - Community Development Council.

(56) G.S. 143B-452 - North Carolina State Ports Authority.

(57) G.S. 143B-472.1 - North Carolina Mutual Burial Association Commission.

(58) G.S. 159I-4 - Solid Waste Management Capital Projects Financing Agency.

(59) Chapter 971 of the 1991 Session Laws, 1992 Regular Session - Teacher Training Task Force.

Sec. 202. Effective July 1, 1995, the following sections of the General Statutes and Session Laws are repealed:

(1) G.S. 7A-506, G.S. 7A-507, G.S. 7A-509 - North Carolina Courts Commission.

(2) G.S. 7A-775 - Community Penalties Board.

(3) G.S. 17E-3 - Sheriffs' Education and Training Standards Commission.

(4) G.S. 54-131, G.S. 54-134, G.S. 54-135, G.S. 54-136, G.S. 54-137 - Marketing Associations.

(5) G.S. 58-32-1, G.S. 58-32-5 - Employees Liability Insurance Commission.

(6) Article 2 of Chapter 62 - Utilities Commission.

(7) G.S. 65-49, G.S. 65-54 - North Carolina Cemetery Commission.

(8) G.S. 84-17, G.S. 84-18, G.S. 84-18.1, G.S. 84-19, G.S. 84-20, G.S. 84-22 - State Bar Council.

(9) G.S. 84-24 - Board of Law Examiners.

(10) G.S. 85B-3 - North Carolina Auctioneers Commission.

(11) G.S. 86A-4, G.S. 86A-6, G.S. 86A-7 - State Board Of Barber Examiners.

(12) G.S. 88-13, G.S. 88-14, G.S. 88-15 - State Board Of Cosmetic Art Examiners.

(13) G.S. 89B-3, G.S. 89B-4, G.S. 89B-5 - State Board of Registration for Foresters.

(14) G.S. 89E-4 - North Carolina Board of Licensing Geologists.

(15) G.S. 90A-21 - Water Treatment Facility Operators Board of Certification.

(16) G.S. 90A-50 - State Board of Sanitarian Examiners.

(17) G.S. 90B-5 - North Carolina Certification Board for Social Work.

(18) G.S. 93-12 - Board of Certified Public Accountant Examiners.

(19) G.S. 106-2, G.S. 106-3, G.S. 106-4, G.S. 106-5 - Board of Agriculture.

(20) G.S. 106-266.7 - Milk Commission.

(21) G.S. 106-269, G.S. 106-270 - Board of Crop Seed Improvement.

(22) G.S. 106-407.1 - Public Livestock Advisory Board.

(23) G.S. 106-720 - Northeastern North Carolina Farmers Market Commission.

(24) G.S. 106-727 - Southeastern North Carolina Farmers Market Commission.

(25) G.S. 106-750, G.S. 106-751 - North Carolina Grape Growers Council.

(26) G.S. 113-252, G.S 113-254 - Atlantic States Marine Fisheries Commission.

(27) G.S. 113-259 - South Atlantic Fisheries Management Council.

(28) G.S. 113A-105 - Coastal Resources Advisory Council.

(29) G.S. 115C-87 - Textbook Commission.

(30) G.S. 119-26 - Gasoline and Oil Inspection Board.

(31) G.S. 120-150, G.S. 120-152, G.S. 120-153 - Agriculture and Forestry Awareness Study Committee.

(32) G.S. 122A-4 - North Carolina Housing Finance Agency.

(33) G.S. 122D-4 - North Carolina Agricultural Finance Authority.

(34) G.S. 126-2 - State Personnel Commission.

(35) G.S. 130A-33.30, G.S. 130A-33.31 - Commission of Anatomy.

(36) G.S. 130B-6 - North Carolina Hazardous Waste Management Commission.

(37) G.S. 143-4 - Advisory Budget Commission.

(38) G.S. 143-143.10 - Manufactured Housing Board.

(39) G.S. 143-151.9, G.S. 143-151.10, G.S. 143-151.11 - Code Officials Qualification Board.

(40) G.S. 143-240, G.S. 143-241, G.S. 143-242, G.S. 143-244 - Wildlife Resources Commission.

(41) G.S. 143-492 - Southern Growth Policies Board.

(42) G.S. 143-548 - Business and Consumer Advisory Council.

(43) Part 6 of Article 2 of Chapter 143B - Public Librarian Certification Commission.

(44) G.S. 143B-90 - State Library Commission

(45) Part 17 of Article 2 of Chapter 143B - Roanoke Island Historical Association.

(46) G.S. 143B-289.3, G.S. 143B-289.5, G.S. 143B-289.6, G.S. 143B-289.7 - Marine Fisheries Commission.

(47) G.S. 143B-289.8 - Board of Trustees of the Marine Fisheries Endowment Fund of the Marine Fisheries Commission.

(48) Part 7 of Article 7 of Chapter 143B - Soil and Water Conservation Commission.

(49) Part 8 of Article 7 of Chapter 143B - North Carolina Sedimentation Control Commission.

(50) Part 9 of Article 7 of Chapter 143B - Water Pollution Control System Operators Certification Commission.

(51) G.S. 143B-335, G.S. 143B-336 - North Carolina Zoological Park Council.

(52) Part 8B of Article 9 of Chapter 143B - North Carolina Council on Ocean Affairs.

(53) Part 13 of Article 9 of Chapter 143B - Veterans' Affairs Commission.

(54) G.S. 143B-426.25 - N.C. Farmworker Council.

(55) G.S. 143B-438.4 - State Job Training Coordinating Council.

(56) Part 7 of Article 10 of Chapter 143B - National Park, Parkway and Forests Development Commission.

(57) G.S. 143B-469 - North Carolina Ports Railway Commission.

(58) G.S. 143B-480 - Adjunct Committees of the Governor's Crime Commission. (Judicial Planning Committee, Juvenile Justice Planning Committee, Law Enforcement Planning Committee, Corrections Planning Committee, and Juvenile Code Revision Committee.)

(59) G.S. 157-66 - State Indian Housing Authority.

(60) G.S. 165-26, G.S. 165-27, G.S. 165-29, G.S. 165-30 - Veterans Recreation Authorities.

(61) Chapter 1008 of the 1991 Session Laws, 1992 Regular Session - Inter-agency Task Force on State Agency Oversight of Workplace Safety and Health.

Sec. 203. Effective July 1, 1996, the following sections of the General Statutes are repealed:

(1) G.S. 53-92 - State Banking Commission.

(2) G.S. 54B-53 - Savings Institutions Commission.

(3) G.S. 58-50-120 - Small Employer Carrier Committee.

(4) G.S. 74C-4 - Private Protective Services Board.

(5) G.S. 74D-4 - Alarm Systems Licensing Board.

(6) G.S. 83A-2 - North Carolina Board of Architecture.

(7) G.S. 87-2, G.S. 87-6 - State Licensing Board Of General Contractors.

(8) G.S. 87-16, G.S. 87-17, G.S. 87-18, G.S. 87-19 - State Board of Examiners of Plumbing, Heating, and Fire Sprinkler Contractors.

(9) G.S. 87-39, G.S. 87-40, G.S. 87-41 - State Board of Examiners of Electrical Contractors.

(10) G.S. 87-52, G.S. 87-54, G.S. 87-55 - State Board of Refrigeration Examiners.

(11) G.S. 89A-3 - North Carolina Board of Landscape Architects.

(12) G.S. 89C-4, G.S. 89C-5, G.S. 89C-6, G.S. 89C-7, G.S. 89C-8, G.S. 89C-9 - State Board of Registration for Professional Engineers and Land Surveyors.

(13) G.S. 89D-4 - Landscape Contractors' Registration Board.

(14) G.S. 93A-3 - North Carolina Real Estate Commission.

(15) G.S. 93A-78 - Real Estate Appraisal Board.

(16) G.S. 96-3 - Employment Security Commission.

(17) G.S. 97-77 - Industrial Commission.

(18) G.S. 104E-7, G.S. 104E-8 - North Carolina Radiation Protection Commission.

(19) G.S. 105-269.2 - Tax Review Board.

(20) G.S. 106-465 - Tobacco Boards of Trade.

(21) G.S. 112-7 - State Board of Pensions.

(22) G.S. 116-243 - Board of the North Carolina Arboretum.

(23) G.S. 122C-404 - Community of Butner Planning Commission.

(24) G.S. 139-7 - Soil/Water Conservation District Board of Supervisors.

(25) G.S. 143-215.94O - Petroleum Underground Storage Tank Funds Council.

(26) G.S. 143-370, G.S. 143-372 - Advisory Commission for the Museum of Natural History.

(27) Part 3 of Article 2 of Chapter 143B - Art Museum Building Commission.

(28) Part 4 of Article 2 of Chapter 143B - North Carolina Historical Commission.

(29) G.S. 143B-71, G.S. 143B-72 - Tryon Palace Commission.

(30) G.S. 143B-73, G.S. 143B-73.1, G.S. 143B-74 - U.S.S. North Carolina Battleship Commission.

(31) Part 19 of Article 2 of Chapter 143B - Edenton Historical Commission.

(32) Part 20 of Article 2 of Chapter 143B - Historic Bath Commission.

(33) Part 22 of Article 2 of Chapter 143B - Historic Murfreesboro Commission.

(34) Part 6 of Article 7 of Chapter 143B - North Carolina Mining Commission.

(35) G.S. 143B-356, G.S. 143B-357 - Aeronautics Council.

(36) G.S. 143B-387 - State Youth Council.

(37) G.S. 143B-390.1 - Office Of Marine Affairs.

(38) Part 9 of Article 9 of Chapter 143B - Human Relations Commission.

(39) Part 18 of Article 9 of Chapter 143B - North Carolina Internship Council.

(40) Part 24 of Article 9 of Chapter 143B - Governor's Management Council.

(41) G.S. 143B-434 - Economic Development Board.

(42) G.S. 143B-434.1 - Travel And Tourism Board.

(43) G.S. 143B-439 - Credit Union Commission.

(44) Part 7 of Article 10 of Chapter 143B - North Carolina National Parks, Parkway and Forests Development Council.

(45) G.S. 148-118.6, G.S. 148-118.7 - Grievance Resolution Board.

(46) G.S. 159-3, G.S. 159-5 - Local Government Commission.

(47) G.S. 160A-400.4 - Historic Preservation Commission.

(48) G.S. 160A-451, G.S. 160A-453, G.S. 160A-454 - Community Appearance Commission.

(49) G.S. 164-12, G.S. 164-14, G.S. 164-15, G.S. 164-16, G.S. 164-18, G.S. 164-19 - General Statutes Commission.

Sec. 204. Effective July 1, 1997, the following sections of the General Statutes and Session Laws are repealed:

(1) G.S. 15B-3 - Crime Victims Compensation Commission.

(2) G.S. 63A-3 - Air Cargo Airport Authority.

(3) G.S. 77-3, G.S. 77-34 - Lake Wylie Marine Commission.

(4) G.S. 88A-5 - North Carolina Board of Electrolysis Examiners.

(5) G.S. 90-2, G.S. 90-3, G.S. 90-4, G.S. 90-5 - Board of Medical Examiners.

(6) G.S. 90-22, G.S. 90-23, G.S. 90-24 - State Board Of Dental Examiners.

(7) G.S. 90-85.6, G.S. 90-85.7, G.S. 90-85.8, G.S. 90-85.9, G.S. 90-85.10, G.S. 90-85.11 - Board of Pharmacy.

(8) G.S. 90-116, G.S. 90-117, G.S. 90-117.1, G.S. 90-117.2, G.S. 90-117.3 - Board of Examiners in Optometry.

(9) G.S. 90-130 - Board of Osteopathic Examination and Registration.

(10) G.S. 90-139, G.S. 90-140, G.S. 90-141 - Board of Chiropractic Examiners.

(11) G.S. 90-171.21, G.S. 90-171.22 - Board of Nursing.

(12) G.S. 90-171.60 - Nursing Scholars Commission.

(13) G.S. 90-171.71 - Board of Directors of the Center for Nursing.

(14) G.S. 90-178.4 - Joint Subcommittee of Board of Medical Examiners and Board of Nursing Midwifery Practice Act.

(15) G.S. 90-182, G.S. 90-183, G.S. 90-184 - Veterinary Medical Board.

(16) G.S. 90-202.4 - Board of Podiatry Examiners.

(17) G.S. 90-210.18, G.S. 90-210.19, G.S. 90-210.22 - North Carolina Board of Mortuary Science.

(18) G.S. 90-238, G.S. 90-239 - Board of Opticians.

(19) G.S. 90-270.6, G.S. 90-270.7, G.S. 90-270.8 - Board of Examiners of Practicing Psychologists.

(20) G.S. 90-270.25 - Board of Physical Therapy Examiners.

(21) G.S. 90-270.49, G.S. 90-270.50, G.S. 90-270.51 - Marital and Family Therapy Certification Board.

(22) G.S. 90-270.68 - Board of Occupational Therapy.

(23) G.S. 90-277 - Board of Examiners for Nursing Home Administrators.

(24) G.S. 90-303 - Board of Examiners for Speech and Language Pathologists and Audiologists.

(25) G.S. 90-333 - Board of Registered Practicing Counselors.

(26) G.S. 90-353, G.S.90-354, G.S. 90-355 - North Carolina Board of Dietetics/Nutrition.

(27) G.S. 90-385 - Board of Examiners of Fee-Based Practicing Pastoral Counselors.

(28) G.S. 90C-5 - North Carolina State Board of Therapeutic Recreation Certification.

(29) G.S. 93D-3 - Hearing Aid Dealers and Fitters Board.

(30) G.S. 106-769 - Genetic Engineering Review Board.

(31) G.S. 113A-104 - Coastal Resources Commission.

(32) G.S. 115C-64.4(c) - Public Schools Caretaker Boards.

(33) G.S. 115C-121 - Advocacy Council on Education Services/Exceptional Child.

(34) G.S. 115C-174.1, G.S. 115C-174.2, G.S. 115C-174.3, G.S. 115C-174.4, G.S. 115C-174.5 - Commission on Testing.

(35) G.S. 115C-210, G.S. 115C-210.1, G.S. 115C-210.2, G.S. 115C-210.3 - Advisory Council on Indian Education.

(36) G.S. 115C-325(i) - Professional Review Committee For Public School Teachers.

(37) G.S. 115C-327, G.S. 115C-328 - Personnel Administration Commission For Public School Employees.

(38) G.S. 115C-363.22, G.S. 115C-363.23 - Teaching Fellows Commission.

(39) G.S. 115C-489.4 - Commission on School Facility Needs.

(40) G.S. 115D-2.1 - State Board of Community Colleges.

(41) G.S. 116-3, G.S. 116-5, G.S. 116-6, G.S. 116-6.1, G.S. 116-7, G.S. 116-8, G.S. 116-9, G.S. 116-10 - Board of Governors of The University of North Carolina.

(42) G.S. 116-31, G.S. 116-32 - Boards Of Trustees of The University of North Carolina.

(43) G.S. 116-203 - Education Assistance Authority.

(44) G.S. 120-70.41, G.S. 120-70.42, G.S 120-70.45, G.S. 120-70.46 - Environmental Review Commission.

(45) G.S. 136-17.2 - Board of Transportation.

(46) G.S. 143-136 - North Carolina State Building Code Council.

(47) G.S. 143-261, G.S 143-262, G.S. 143-263, G.S. 143-264, G.S. 143-265 - State Education Commission.

(48) G.S. 143B-282, G.S. 143B-283, G.S. 143B-284, G.S. 143B-285 - Environmental Management Commission.

(49) G.S. 147-54.8 - Constitutional Amendments Publication Commission.

(50) Chapter 869 of the 1991 Session Laws, 1992 Regular Session - Educational Leadership Task Force.

Sec. 205. The General Assembly shall, prior to the proposed expiration date, evaluate each board or commission proposed for abolition by this act, and if it determines that the board or commission has accomplished its mission, that board or commission shall be allowed to expire. Otherwise, the General Assembly shall enact legislation to retain the board, or consider merging it with another board or commission or transferring the function to some executive branch official.

Sec. 206. Sections 201 through 205 of this act are effective upon ratification.

---ORG. & STAFFING ANALYSES BY GOV.

Sec. 207. The Governor shall conduct organizational and staffing analyses of State agencies. The analyses shall use the following guidelines:

(1) Eliminate one-on-one reporting relationships at middle management and supervisory levels.

(2) Achieve spans of control of three to six, with a span of control of three applying to highly technical, policy-sensitive, or nonrepetitive functions.

(3) Consolidate units with small numbers of staff into larger, more efficient units.

Sec. 208. This act is effective upon ratification.

---REORGANIZE DEP'T OF ADMINISTRATION.

Sec. 209. (a) G.S. 143B-367 reads as rewritten:

"§ 143B-367. Duties of the Department.

It shall be the duty of the Department of Administration to ~~serve as a staff agency to the Governor and to~~ provide for such ~~ancillary~~ administrative services as the other departments of State government might need to insure efficient and effective operations."

(b) The Secretary of Administration shall streamline the alignment of functions in the Department of Administration mandated by this section to provide improved management support to agencies across State government.

---TRANSFER DOA ADVOCACY GROUPS.

Sec. 210. (a) Youth Advocacy and Involvement Office transfer. - All of the powers, duties, and functions of the Youth Advocacy and Involvement Office are transferred from the Department of Administration to the Office of the Governor. This transfer shall include all elements of a Type I transfer, as defined in G.S. 143A-6.

(b) North Carolina Human Relations Commission transfer. - All of the powers, duties, and functions of the North Carolina Human Relations Commission, which is described in Part 9 of Article 9 of Chapter 143B of the General Statutes are transferred from the Department of Administration to the Office of the Governor. This transfer shall include all elements of a Type I transfer, as defined in G.S. 143A-6.

(c) North Carolina Council for Women transfer. - All of the powers, duties, and functions of the North Carolina Council for Women, which is described in Part 10 of Article 9 of Chapter 143B of the General Statutes, except for the powers, duties, and functions that deal with the administration of grants for domestic violence and sexual assault centers, are transferred from the Department of Administration to the Office of the Governor. This transfer shall include all elements of a Type I transfer, as defined in G.S. 143A-6.

All of the powers, duties, and functions of the North Carolina Council for Women, which is described in Part 10 of Article 9 of Chapter 143B of the General Statutes, that deal with the administration of grants for domestic violence and sexual assault centers, are transferred from the Department of Administration to the Department of Human Resources, Division of Social Services. This transfer shall include all elements of a Type I transfer, as defined in G.S. 143A-6.

The Director of the Budget shall resolve all conflicts regarding the transfers mandated by this subsection.

(d) Veterans' Affairs Commission transfer. - All of the powers, duties, and functions of the Veterans' Affairs Commission, which is described in Part 13 of Article 9 of Chapter 143B of the General Statutes, are transferred from the Department of Administration to the Office of the Governor. This transfer shall include all elements of a Type I transfer, as defined in G.S. 143A-6.

(e) Governor's Advocacy Council for Persons with Disabilities transfer. - All of the powers, duties, and functions of the Governor's Advocacy Council for Persons with Disabilities, which is described in Part 14A of Article 9 of Chapter 143B of the General Statutes, except the powers, duties, and functions for the programs that deal with assisting the disabled in obtaining housing, employment, and other services, are transferred from the Department of Administration to the Office of the Governor. This transfer shall include all elements of a Type I transfer, as defined in G.S. 143A-6.

All of the powers, duties, and functions of the Governor's Advocacy Council for Persons with Disabilities, which is described in Part 14A of Article 9 of Chapter 143B of the General Statutes, that deal with assisting the disabled in obtaining housing, employment, and other services, are transferred from the Department of Administration to the Department of Human Resources, Vocational Rehabilitation Program. This transfer shall include all elements of a Type I transfer, as defined in G.S. 143A-6.

The Director of the Budget shall resolve all conflicts regarding the transfers mandated by this subsection.

(f) North Carolina State Commission of Indian Affairs transfer. - All of the powers, duties, and functions of the North Carolina State Commission of Indian Affairs described in Part 15 of Article 9 of Chapter 143B of the General Statutes, are transferred from the Department of Administration to the Office of the Governor. This transfer shall include all elements of a Type II transfer, as defined in G.S. 143A-6.

(g) Part 9 of Article 9 of Chapter 143B of the General Statutes, consisting of G.S. 143B-391 and G.S. 143B-392, is recodified and reads as rewritten:

"~~Part 9. North Carolina Human Relations Commission.~~

"~~§ 143B~~rCommission - creation; powers and duties.

There is hereby created the North Carolina Human Relations Commission of the ~~Department of Administration.~~ Office of the Governor. The North Carolina Human Relations Commission shall have the following functions and duties:

(1) To study problems concerning human relations;

(2) To promote equality of opportunity for all citizens;

(3) To promote understanding, respect, and goodwill among all citizens;

(4) To provide channels of communication among the races;

(5) To encourage the employment of qualified people without regard to race;

(6) To encourage youths to become better trained and qualified for employment;

(7) To receive on behalf of the ~~Department of Administration~~ Office of the Governor and to recommend expenditure of gifts and grants from public and private donors;

(8) To enlist the cooperation and assistance of all State and local government officials in the attainment of the objectives of the Commission;

(9) To assist local good neighborhood councils and biracial human relations committees in promoting activities related to the functions of the Commission enumerated above;

(10) To advise the ~~Secretary of Administration~~ Governor upon any matter ~~the Secretary may refer~~ referred to it;

(11) To administer the provisions of the State Fair Housing Act as outlined in Chapter 41A of the General Statutes;

(12) To administer the provisions of Chapter 99D of the General Statutes.

"~~§ 143B~~GCommission - members; selection; quorum; compensation.

(a) The Human Relations Commission of the ~~Department of Administration~~ Office of the Governor shall consist of 20 members. The Governor shall appoint one member from each of the 11 congressional districts, plus five members at large, including the chairperson. The Speaker of the North Carolina House of Representatives shall appoint two members to the Commission. The Lieutenant Governor shall appoint two members to the Commission. The terms of four of the members appointed by the Governor shall expire June 30, 1988. The terms of four of the members appointed by the Governor shall expire June 30, 1987. The terms of four of the members appointed by the Governor shall expire June 30, 1986. The terms of four of the members appointed by the Governor shall expire June 30, 1985. The terms of the members appointed by the Speaker of the North Carolina House of Representatives shall expire June 30, 1986. The terms of the members appointed by the Lieutenant Governor shall expire June 30, 1986. At the end of the respective terms of office of the initial members of the Commission, the appointment of their successors shall be for terms of four years. No member of the commission shall serve more than two consecutive terms. A member having served two consecutive terms shall be eligible for reappointment one year after the expiration of his second term. Any appointment to fill a vacancy on the Commission created by the resignation, dismissal, death, or disability of a member shall be filled in the manner of the original appointment for the unexpired term.

(b) Members of the Commission shall receive per diem and necessary travel and subsistence expenses in accordance with the provisions of G.S. 138-5.

(d) All clerical and support services required by the Commission shall be supplied by the ~~Secretary of the Department of Administration.~~ Office of the Governor."

(h) Part 10 of Article 9 of Chapter 143B of the General Statutes, consisting of G.S. 143B-393 and G.S. 143B-394, is recodified and reads as rewritten:

"~~Part 10. North Carolina Council for Women.~~

"~~§ 143B~~*creation; powers and duties.

There is hereby created the North Carolina Council for Women of the ~~Department of Administration.~~ Office of the Governor. The North Carolina Council for Women shall have the following functions and duties:

(1) To advise the Governor, the principal State departments, and the State legislature concerning the education and employment of women in the State of North Carolina; and

(2) To advise the ~~Secretary of Administration~~ Governor upon any matter ~~the Secretary may refer~~ referred to it; and

(3) To establish programs for the assistance of displaced homemakers as set forth in Part 10B of this Article.

"~~§ 143B~~tmembers; selection; quorum; compensation.

The North Carolina Council for Women of the ~~Department of Administration~~ Office of the Governor shall consist of 20 members appointed by the Governor. The initial members of the Council shall be the appointed members of the North Carolina Council for Women, three of whose appointments expire June 30, 1977, and four of whose appointments expire June 30, 1978. Thirteen additional members shall be appointed in 1977, six of whom shall serve terms expiring June 30, 1978, and seven of whom shall serve terms expiring June 30, 1979. At the ends of the respective terms of office of the initial members of the Council and of the 13 members added in 1977, the appointment of their successors shall be for terms of two years and until their successors are appointed and qualify. Any appointment to fill a vacancy on the Council created by the resignation, dismissal, death, or disability of a member shall be for the balance of the unexpired term. Members of the Council shall be representative of age, sex, ethnic and geographic backgrounds.

The Governor shall have the power to remove any member of the Council from office in accordance with the provisions of G.S. 143B-16 of the Executive Organization Act of 1973.

The Governor shall designate a member of the Council to serve as chairman at the pleasure of the Governor.

Members of the Council shall receive per diem and necessary travel and subsistence expenses in accordance with the provisions of G.S. 138-5.

A majority of the Council shall constitute a quorum for the transaction of business.

All clerical and other services required by the Council shall be supplied by the ~~Secretary of Administration.~~ Office of the Governor."

(i) Part 13 of Article 9 of Chapter 143B of the General Statutes, consisting of G.S. 143B-399, 143B-400, and 143B-401, is recodified and reads as rewritten:

"~~Part 13. Veterans' Affairs Commission.~~

"~~§ 143B~~"creation, powers and duties.

There is hereby created the Veterans' Affairs Commission of the ~~Department of Administration.~~ Office of the Governor. The Veterans' Affairs Commission shall have the following functions and duties:

(1) To advise the Governor on matters relating to the affairs of veterans in North Carolina;

(2) To maintain a continuing review of the operation and budgeting of existing programs for veterans and their dependents in the State and to make any recommendations to the Governor for improvements and additions to such matters to which the Governor shall give due consideration;

(3) To serve collectively as a liaison between the Division of Veterans Affairs and the veterans organizations represented on the Commission;

(4) To promulgate rules and regulations concerning the awarding of scholarships for children of North Carolina veterans as provided by Article 4 of Chapter 165 of the General Statutes of North Carolina. The Commission shall make rules and regulations consistent with the provisions of this Chapter. All rules and regulations not inconsistent with the provisions of this Chapter heretofore adopted by the State Board of Veterans' Affairs shall remain in full force and effect unless and until repealed or superseded by action of the Veterans Affairs Commission. All rules and regulations adopted by the Commission shall be enforced by the Division of Veterans' Affairs;

(4a) To promulgate rules concerning the awarding of the North Carolina Services Medal to all veterans who have served in any period of war as defined in 38 U.S.C. § 101. The award shall be self-financing; those who wish to be awarded the medal shall pay a fee to cover the expenses of producing the medal and awarding the medal. All rules adopted by the Commission with respect to the North Carolina Services Medal shall be implemented and enforced by the Division of Veterans' Affairs; and

(5) To advise the Governor on any matter the Governor may refer to it.

"~~§ 143B~~mmembers; selection; quorum; compensation.

The Veterans' Affairs Commission of the ~~Department of Administration~~ Office of the Governor shall consist of one voting member from each congressional district, all of whom shall be veterans, appointed by the Governor for four-year terms. In making these appointments, the Governor shall insure that both major political parties will be continuously represented on the Veterans' Affairs Commission.

The initial members of the Commission shall be the appointed members of the current Veterans' Affairs Commission who shall serve for the remainder of their current terms and six additional members appointed by the Governor for terms expiring June 30, 1981. Thereafter, all members shall be appointed for terms of four years. Any appointment to fill a vacancy on the Commission created by the resignation, dismissal, death or disability of a member shall be for the balance of the unexpired term. The Governor shall have the power to remove any member of the Commission in accordance with provisions of G.S. 143B-13.

In the event that more than 11 congressional districts are established in the State, the Governor shall on July 1 following the establishment of such additional congressional districts appoint a member of the Commission from that congressional district. If on July 1, 1977, or at any time thereafter due to congressional redistricting, two or more members of the Veterans' Affairs Commission shall reside in the same congressional district then such members shall continue to serve as members of the Commission for a period equal to the remainder of their current terms on the Commission provided that upon the expiration of said term or terms the Governor shall fill such vacancy or vacancies in such a manner as to insure that as expeditiously as possible there is one member of the Veterans' Affairs Commission who is a resident of each congressional district in the State.

The Governor shall designate from the membership of the Commission a chairman and vice-chairman of the Commission who shall serve at the pleasure of the Governor. ~~The Secretary of the Department of Administration or his designee shall serve as secretary of the Commission.~~

Members of the Commission shall receive per diem and necessary travel and subsistence expenses in accordance with provisions of G.S. 138-5.

A majority of the Commission shall constitute a quorum for the transaction of business.

The Veterans' Affairs Commission shall meet at least twice a year and may hold special meetings at any time or place within the State at the call of the chairman, at the call of the ~~Secretary of the Department of Administration~~ Governor or upon the written request of at least six members.

All clerical and other services required by the Commission shall be provided by the ~~Secretary of the Department of Administration.~~ Office of the Governor.

"~~§ 143B~~âCommittee - members; compensation.

The department commander or official head of each veterans' organization which has been chartered by an act of the United States Congress and which is legally constituted and operating in this State pursuant to said charter shall constitute an Advisory Committee to the Veterans' Affairs Commission. Members of the Veterans' Affairs Commission Advisory Committee shall receive per diem and necessary travel and subsistence expenses in accordance with the provisions of G.S. 138-5."

(j) Part 14A of Article 9 of Chapter 143B of the General Statutes, consisting of G.S. 143B-403.1 and G.S. 143B-403.2, is recodified and reads as rewritten:

"~~Part 14A.~~

"~~Governor's Advocacy Council for Persons with Disabilities.~~

"~~§ 143B~~oPersons with Disabilities - creation; powers and duties.

There is hereby created the Governor's Advocacy Council for Persons with Disabilities of the ~~Department of Administration.~~ Office of the Governor. The Council shall have the following functions and duties:

(1) To provide for a statewide protection and advocacy program in accordance with the Developmental Disabilities Assistance and Bill of Rights Act, 42 U.S.C. § 6000, et seq., and Public Law 99-319, as amended, the Protection and Advocacy for the Mentally Ill Act of 1988. In accordance with this Act, the Council shall, among other things, investigate complaints made by or on behalf of incompetent developmentally or mentally disabled persons who reside in facilities for the developmentally or mentally disabled who have no legal guardian or whose guardian is the State or a State designee. Where such a complaint is made to the Council, the Council shall have access to the individual who is the subject of the complaint, and to the records of such individual; provided that an allegedly incompetent client who has no guardian who, in the opinion of the facility director, is competent shall have the opportunity prior to disclosure to deny access to his individual records by making a specific objection to disclosure to the Council. The Council shall keep client information confidential in accordance with 42 U.S.C. § 6000 and implementing rules and regulations, including 45 C.F.R. Part 1386. The Council's authority under this subdivision shall override any contrary provisions of State law and shall apply as long as the Council is designated by the Governor as the Protection and Advocacy Agency under 42 U.S.C. § 6000.

(2) To pursue legal, administrative, or other appropriate remedies to insure the protection of the rights of all developmentally, mentally, physically, emotionally and otherwise disabled persons who are receiving treatment, services, or habilitation from any State, local, or area program;

(3) To review and recommend changes in all laws, rules, regulations, programs and policies of this State or any agency or subdivision thereof to insure the rights of the developmentally, mentally, physically, emotionally and otherwise disabled persons are safeguarded;

(4) To investigate complaints concerning the violation of the rights of the developmentally, mentally, physically, emotionally and otherwise disabled persons and to take appropriate action;

(5) To contract with public agencies or private nonprofit corporations to fulfill any of the functions and duties provided for in subdivisions (2) and (6) and government funded programs;

(6) To aid and assist local advocacy program and the advocacy programs in mental retardation centers, psychiatric hospitals, training schools, and alcoholic rehabilitation centers;

(7) To perform such other functions as are necessary to protect the rights of the developmentally, mentally, physically, emotionally and otherwise disabled or as may be assigned by the ~~Secretary of Administration;~~ Office of the Governor;

(8) To advise and assist the ~~Department of Administration~~ Office of the Governor on the continuing program to promote the employment of the physically, mentally, emotionally, and otherwise handicapped citizens of North Carolina by creating statewide interest in the rehabilitation and employment of the handicapped, and by obtaining and maintaining cooperation with all public and private groups and individuals in this field;

(9) To work in close cooperation with the President's Committee on the Employment of People with Disabilities to carry out more effectively the purpose of Article 29A of Chapter 143 of the General Statutes, and with State and federal agencies having responsibilities for employment and rehabilitation of the handicapped;

(10) To promote and encourage the holding of appropriate ceremonies throughout the State during the 'National Disability Employment Awareness Month,' the purpose of which ceremony shall be to enlist public support for interest in the employment of the developmentally, mentally, physically, emotionally and otherwise disabled; ~~and~~

(10a) To initiate public awareness projects and to make recommendations to the Governor concerning broad policies pertaining to rehabilitation for disabled persons; and

(11) The Council shall advise ~~the Secretary of Administration~~ Governor upon any matter ~~the Secretary may refer~~ referred to it.

"~~§ 143B~~âPersons with Disabilities - members; selection; quorum; compensation.

(a) The Governor's Advocacy Council for Persons with Disabilities of the ~~Department of Administration~~ Office of the Governor shall consist of 21 members, appointed as follows:

(1) Seven members appointed by the Governor;

(2) Seven members appointed by the General Assembly upon the recommendation of the President of the Senate;

(3) Seven members appointed by the General Assembly upon the recommendation of the Speaker of the House of Representatives.

(b) Of the members appointed to the Council, at least 12 shall be disabled persons or family members of disabled persons, with representation as follows:

(1) One representative of persons associated with substance abuse, one representative of persons with sensory impairment, one representative of persons with physical disabilities, one person who shall serve as Chair of the Protection and Advocacy for the Mentally Ill Advisory Committee of the Governor's Advocacy Council for Persons with Disabilities, to be appointed by the Governor;

(2) One representative of persons with mental retardation, one representative of persons with developmental disabilities, one representative of persons with mental illness and one representative of persons with sensory impairment, to be appointed upon recommendation of the President of the Senate; and

(3) One representative of persons with mental retardation, one representative of persons with developmental disabilities, one representative of persons with mental illness, and one representative of persons with physical disabilities, to be appointed upon recommendation of the Speaker of the House of Representatives.

Appointments to the Council under the provisions of this subsection shall be made after consultation with and consideration of recommendations from statewide advocacy and membership organizations associated with persons covered by the federal Developmental Disabilities Assistance and Bill of Rights and the Protection and Advocacy for Mentally Ill Individuals Act.

(c) Members appointed to fit the representative categories shall be initially appointed as terms expire and as vacancies occur, until all categories are filled. Vacancies in appointments made by the General Assembly shall be filled in accordance with G.S. 120-122. An administrator in any branch of State government that delivers services to persons with disabilities is not eligible for membership on the Council.

(d) The initial term for three of the members appointed by the Governor shall be two years. The initial term for the remaining members appointed by the Governor shall be four years. At the end of the respective terms of office of the initial members of the Council, the appointment of all members shall be for terms of four years and until their successors are appointed and qualify. Any appointment to fill a vacancy on the Council created by the resignation, dismissal, death, or disability of a member shall be filled within 60 days after the date on which the vacancy occurs and shall be for the balance of the unexpired term. The initial members appointed by the General Assembly shall serve for terms to expire June 30, 1993. Subsequently, members appointed by the General Assembly shall serve two-year terms beginning July 1, 1993, and biennially thereafter.

The Governor may remove any member of the Council appointed by the Governor.

The Governor shall designate one member of the Council to serve as chair and one member to serve as vice-chair.

Members of the Council shall receive per diem and necessary travel and subsistence expenses in accordance with the provisions of G.S. 138-5.

A majority of the Council shall constitute a quorum for the transaction of business.

All clerical and other services required by the Council shall be supplied by the ~~Secretary of Administration.~~ Office of the Governor."

(k) Part 15 of Article 9 of Chapter 143B of the General Statutes, consisting of G.S. 143B-404 through G.S. 143B-411, is recodified and reads as rewritten:

"~~Part 15. North Carolina State Commission of Indian Affairs.~~

"~~§ 143B~~ Indian Affairs - creation; name.

There is hereby created and established the North Carolina State Commission of Indian Affairs. The Commission shall be administered under the direction and supervision of the ~~Department of Administration~~ Office of the Governor pursuant to G.S. 143A-6(b) and (c).

"~~§ 143B~~aIndian Affairs - purposes for creation.

The purposes of the Commission shall be to deal fairly and effectively with Indian affairs; to bring local, State, and federal resources into focus for the implementation or continuation of meaningful programs for Indian citizens of the State of North Carolina; to provide aid and protection for Indians as needs are demonstrated; to prevent undue hardships; to assist Indian communities in social and economic development; and to promote recognition of and the right of Indians to pursue cultural and religious traditions considered by them to be sacred and meaningful to Native Americans.

"~~§ 143B~~ Indian Affairs - duties; use of funds.

It shall be the duty of the Commission to study, consider, accumulate, compile, assemble and disseminate information on any aspect of Indian affairs; to investigate relief needs of Indians of North Carolina and to provide technical assistance in the preparation of plans for the alleviation of such needs; to confer with appropriate officials of local, State and federal governments and agencies of these governments, and with such congressional committees that may be concerned with Indian affairs to encourage and implement coordination of applicable resources to meet the needs of Indians in North Carolina; to cooperate with and secure the assistance of the local, State and federal governments or any agencies thereof in formulating any such programs, and to coordinate such programs with any programs regarding Indian affairs adopted or planned by the federal government to the end that the State Commission of Indian Affairs secure the full benefit of such programs; to review all proposed or pending State legislation and amendments to existing State legislation affecting Indians in North Carolina; to conduct public hearings on matters relating to Indian affairs and to subpoena any information or documents deemed necessary by the Commission; to study the existing status of recognition of all Indian groups, tribes and communities presently existing in the State of North Carolina; to establish appropriate procedures to provide for legal recognition by the State of presently unrecognized groups; to provide for official State recognition by the Commission of such groups; and to initiate procedures for their recognition by the federal government.

"~~§ 143B~~ Indian Affairs - membership; term of office; chairman; compensation.

(a) The State Commission of Indian Affairs shall consist of two persons appointed by the General Assembly, the Secretary of Human Resources, the Director of the State Employment Security Commission, the Secretary of Administration, the Secretary of Environment, Health, and Natural Resources, the Commissioner of Labor or their designees and 18 representatives of the Indian community. These Indian members shall be selected by tribal or community consent from the Indian groups that are recognized by the State of North Carolina and are principally geographically located as follows: the Coharie of Sampson and Harnett Counties; the Eastern Band of Cherokees; the Haliwa of Halifax, Warren, and adjoining counties; the Lumbees of Robeson, Hoke and Scotland Counties; the Meherrin of Hertford County; the Waccamaw-Siouan from Columbus and Bladen Counties; and the Native Americans located in Cumberland, Guilford and Mecklenburg Counties. The Coharie shall have two members; the Eastern Band of Cherokees, two; the Haliwa, two; the Lumbees, three; the Meherrin, one; the Waccamaw-Siouan, two; the Cumberland County Association for Indian People, two; the Guilford Native Americans, two; the Metrolian Native Americans, two. Of the two appointments made by the General Assembly, one shall be made upon the recommendation of the Speaker, and one shall be made upon recommendation of the President of the Senate. Appointments by the General Assembly shall be made in accordance with G.S. 120-121 and vacancies shall be filled in accordance with G.S. 120-122.

(b) Members serving by virtue of their office within State government shall serve so long as they hold that office. Members representing Indian tribes and groups shall be elected by the tribe or group concerned and shall serve for three-year terms except that at the first election of Commission members by tribes and groups one member from each tribe or group shall be elected to a one-year term, one member from each tribe or group to a two-year term, and one member from the Lumbees to a three-year term. Thereafter, all Commission members will be elected to three-year terms. All members shall hold their offices until their successors are appointed and qualified. Vacancies occurring on the Commission shall be filled by the tribal council or governing body concerned. Any member appointed to fill a vacancy shall be appointed for the remainder of the term of the member causing the vacancy. The Governor shall appoint a chairman of the Commission from among the Indian members of the Commission, subject to ratification by the full Commission. The initial appointments by the General Assembly shall expire on June 30, 1983. Thereafter, successors shall serve for terms of two years.

(c) Commission members who are seated by virtue of their office within the State government shall be compensated at the rate specified in G.S. 138-6. Commission members who are members of the General Assembly shall be compensated at the rate specified in G.S. 120-3.1. Indian members of the commission shall be compensated at the rate specified in G.S. 138-5.

"~~§ 143B~~tIndian Affairs - meetings; quorum; proxy vote.

(a) The Commission shall meet quarterly, and at any other such time that it shall deem necessary. Meetings may be called by the chairman or by a petition signed by a majority of the members of the Commission. Ten days' notice shall be given in writing prior to the meeting date.

(b) Simple majority of the Indian members of the Commission must be present to constitute a quorum.

"~~§ 143B~~oIndian Affairs - reports.

The Commission shall prepare a written annual report giving an account of its proceedings, transactions, findings, and recommendations. This report shall be submitted to the Governor and the legislature. The report will become a matter of public record and will be maintained in the State Historical Archives. It may also be furnished to such other persons or agencies as the Commission may deem proper.

"~~§ 143B~~eIndian Affairs - fiscal records; clerical staff.

Fiscal records shall be kept by the ~~Secretary of Administration.~~ Office of the Governor. The audit report will become a part of the annual report and will be submitted in accordance with the regulations governing preparation and submission of the annual report.

"~~§ 143B-411.~~ § 143A-18.68. North Carolina State Commission of Indian Affairs - executive director; employees.

The Commission may, subject to legislative or other funds that would accrue to the Commission, employ an executive director to carry out the day-to-day responsibilities and business of the Commission. The executive director shall serve at the pleasure of the Commission. The executive director, also subject to legislative or other funds that would accrue to the Commission, may hire additional staff and consultants to assist in the discharge of his responsibilities, as determined by the Commission. The executive director shall not be a member of the Commission, and shall be of Indian descent."

(l) This section becomes effective July 1, 1993.

---TRANSFER OSBM MANAGEMENT SECTION.

Sec. 211. (a) The Management and Productivity Section of the Office of State Budget and Management is transferred from the Office of State Budget and Management to the Department of Administration. This transfer shall include all elements of a Type I transfer, as defined in G.S. 143A-6.

(b) This section becomes effective July 1, 1993.

---TRANSFER SIPS TO ADMIN. DEP'T.

Sec. 212. (a) State Information Processing Services, described in Part 28A of Article 9 of Chapter 143B of the General Statutes, is transferred from the Office of the State Controller to the Department of Administration. This transfer shall include all elements of a Type I transfer, as defined in G.S. 143A-6.

(b) Part 23 of Article 9 of Chapter 143B of the General Statutes reads as rewritten:

"Part 23. Information ~~Technology~~ Resource Management Commission.

"§ 143B-426.21. Information Resource Management Commission.

(a) Creation; Membership. - The Information Resource Management Commission is created in the ~~Office of the State Controller.~~ Department of Administration. The Commission consists of the following members:

(1) Four members of the Council of State, appointed by the Governor.

(2) The Secretary of Administration.

(3) The State Budget Officer.

(4) Two members of the Governor's cabinet, appointed by the Governor.

(5) One citizen of the State of North Carolina with a background in and familiarity with information systems or telecommunications, appointed by the General Assembly upon the recommendation of the President Pro Tempore of the Senate in accordance with G.S. 120-121.

(6) One citizen of the State of North Carolina with a background in and familiarity with information systems or telecommunications, appointed by the General Assembly upon the recommendation of the Speaker of the House of Representatives in accordance with G.S. 120-121.

(7) The Chair of the Governor's Committee on Data Processing and Information Systems.

(8) The Chair of the State Information Processing Services Advisory Board.

Members of the Commission shall not be employed by or serve on the board of directors or other corporate governing body of any information systems, computer hardware, computer software, or telecommunications vendor of goods and services to the State of North Carolina.

The two initial cabinet members appointed by the Governor and the two initial citizen members appointed by the General Assembly shall each serve a term beginning September 1, 1992, and expiring on June 30, 1995. Thereafter, their successors shall be appointed for four-year terms, commencing July 1. Members of the Governor's cabinet shall be disqualified from completing a term of service of the Commission if they are no longer cabinet members.

The appointees by the Governor from the Council of State shall each serve a term beginning on September 1, 1992, and expiring on June 30, 1993. Thereafter, their successors shall be appointed for four-year terms, commencing July 1. Members of the Council of State shall be disqualified from completing a term of service on the Commission if they are no longer members of the Council of State.

Vacancies in the two legislative appointments shall be filled as provided in G.S. 120-122.

The Commission chair shall be elected in the first meeting of each calendar year from among the appointees of the Governor from the Council of State and shall serve a term of one year. The Secretary of Administration shall be secretary to the Commission.

No member of the Information Resource Management Commission shall vote on an action affecting solely his or her own State agency.

(b) Powers and Duties. - The Commission has the following powers and duties:

(1) To develop, approve, and publish a statewide information technology strategy covering the current and following biennium that shall be updated annually and shall be submitted to the General Assembly on the first day of each regular session.

(2) To develop, approve, and sponsor statewide technology initiatives and to report on those initiatives in the annual update of the statewide information technology strategy.

(3) To review and approve biennially the information technology plans of the executive agencies, including their plans for the procurement and use of personal computers and workstations.

(4) To recommend to the Governor and the Office of State Budget and Management the relative priorities across executive agency information technology plans.

(5) To establish a quality assurance policy for all agency information technology projects, information systems training programs, and information systems documentation.

(6) To establish and enforce a quality review and expenditure review procedure for major agency information technology projects.

(7) To review and approve expenditures from appropriations made to the Office of State Budget and Management for the purpose of creating a Computer Reserve Fund.

(8) To develop and promote a policy and procedures for the fair and competitive procurement of information technology consistent with the rules of the Department of Administration and consistent with published industry standards for open systems that provide agencies with a vendor-neutral operating environment where different information technology hardware, software, and networks operate together easily and reliably.

(c) Meetings. - The Information Resources Management Commission shall adopt bylaws containing rules governing its meeting procedures. The Information Resources Management Commission shall meet at least monthly."

"~~(14)~~ (11) Telecommunications for State Agencies. - With respect to State agencies, to exercise general coordinating authority for all telecommunications matters relating to the internal management and operations of these agencies. In discharging that responsibility the ~~State Controller~~ Secretary of Administration may in cooperation with affected State agency heads, do such of the following things as he deems necessary and advisable:

a. Provide for the establishment, management, and operation, through either State ownership or commercial leasing, of the following systems and services as they affect the internal management and operation of State agencies:

1. Central telephone systems and telephone networks;

2. Teleprocessing systems;

3. Teletype and facsimile services;

4. Satellite services;

5. Closed-circuit TV systems;

6. Two-way radio systems;

7. Microwave systems;

8. Related systems based on telecommunication technologies.

b. With the approval of the Information Technology Council, coordinate the development of cost-sharing systems for respective user agencies for their proportionate parts of the cost of maintenance and operation of the systems and services listed in item 'a.' of this subdivision.

c. Assist in the development of coordinated telecommunications services or systems within and among all State agencies and recommend, where appropriate, cooperative utilization of telecommunication facilities by aggregating users.

d. Perform traffic analysis and engineering for all telecommunications services and systems listed in item 'a.' of this subdivision.

e. Pursuant to G.S. 143-49, establish telecommunications specifications and designs so as to promote and support compatibility of the systems within State agencies.

f. Pursuant to G.S. 143-49 and G.S. 143-50, coordinate the review of requests by State agencies for the procurement of telecommunications systems or services.

g. Pursuant to G.S. 143-341 and Chapter 146 of the General Statutes, coordinate the review of requests by State agencies for State government property acquisition, disposition, or construction for telecommunications systems requirements.

h. Provide a periodic inventory of telecommunications costs, facilities, systems, and personnel within State agencies.

i. Promote, coordinate, and assist in the design and engineering of emergency telecommunications systems, including but not limited to the 911 emergency telephone number program, Emergency Medical Services, and other emergency telecommunications services.

j. Perform frequency coordination and management for State agencies and local governments, including all public safety radio service frequencies, in accordance with the rules and regulations of the Federal Communications Commission or any successor federal agency.

k. Advise all State agencies on telecommunications management planning and related matters and provide through the State Personnel Training Center or the State Information Processing Services training to users within State agencies in telecommunications technology and systems.

l. Assist and coordinate the development of policies and long-range plans, consistent with the protection of citizens' rights to privacy and access to information, for the acquisition and use of telecommunications systems; and base such policies and plans on current information about State telecommunications activities in relation to the full range of emerging technologies.

m. Work cooperatively with the North Carolina Agency for Public Telecommunications in furthering the purpose of this subdivision.

The provisions of this subdivision shall not apply to the Criminal Information Division of the Department of Justice or to the Judicial Information System in the Judicial Department."

(d) G.S. 143B-426.39(15) is recodified as G.S. 143-341(12) and reads as rewritten:

"~~(15)~~ (12) ~~Provide~~ Telecommunications for Local Governmental Units. - To provide cities, counties, and other local governmental units with access to a central telecommunications system or service established under subdivision ~~(14)~~ (11) of this section for State agencies. Access shall be provided on the same cost basis that applies to State agencies."

(e) Part 28A of Article 9 of Chapter 143B of the General Statutes reads as rewritten:

"Part 28A. State Information Processing Services.

"§ 143B-426.40. State Information Processing Services.

With respect to all executive departments and agencies of State government, except the Department of Justice and The University of North Carolina, the ~~Office of State Controller~~ Department of Administration shall have the following powers and duties:

(1) To establish and operate information resource centers and services to serve two or more departments on a cost-sharing basis, if the Information Resources Management Commission decides it is advisable from the standpoint of efficiency and economy to establish these centers and services;

(2) With the approval of the Information Resources Management Commission, to charge each department for which services are performed its proportionate part of the cost of maintaining and operating the shared centers and services;

(3) With the approval of the Information Resources Management Commission, to require any department served to transfer to the ~~Office of the State Controller~~ Department of Administration ownership, custody, or control of information processing equipment, supplies, and positions required by the shared centers and services;

(4) With the approval of the Information Resources Management Commission, to adopt reasonable rules for the efficient and economical management and operation of the shared centers, services, and the integrated State telecommunications network;

(5) With the approval of the Information Resources Management Commission, to adopt plans, policies, procedures, and rules for the acquisition, management, and use of information technology resources in the departments affected by this subdivision to facilitate more efficient and economic use of information technology in these departments; and

(6) To develop and promote training programs to efficiently implement, use, and manage information technology resources.

The Department of Revenue is authorized to deviate from this subsection's requirements that departments or agencies consolidate information processing functions on equipment owned, controlled or under custody of the State Information Processing Services. All deviations from this subsection's requirements shall be reported in writing within 15 days by the Department of Revenue to the Information Resources Management Commission and shall be consistent with available funding. The Department of Revenue is authorized to adopt and shall adopt plans, policies, procedures, requirements and rules for the acquisition, management, and use of information processing equipment, information processing programs, data communications capabilities, and information systems personnel in the Department of Revenue. If the plans, policies, procedures, requirements, rules, or standards adopted by the Department of Revenue deviate from the policies, procedures, or guidelines adopted by the State Information Processing Services or the Information Resources Management Commission, those deviations shall be allowed and shall be reported in writing within 15 days by the Department of Revenue to the Information Resources Management Commission. The Department of Revenue and the State Information Processing Services shall develop data communications capabilities between the two computer centers utilizing the North Carolina Integrated Network, subject to a security review by the Secretary of Revenue.

The Department of Revenue shall prepare a plan to allow for substantial recovery and operation of major, critical computer applications. The plan shall include the names of the computer programs, databases, and data communications capabilities, identify the maximum amount of outage that can occur prior to the initiation of the plan and resumption of operation. The plan shall be consistent with commonly accepted practices for disaster recovery in the information processing industry. The plan shall be tested as soon as practical, but not later than six months, after the establishment of the Department of Revenue information processing capability.

No data of a confidential nature, as defined in the General Statutes or federal law, may be entered into or processed through any cost-sharing information resource center or network established under this subdivision until safeguards for the data's security satisfactory to the department head and the ~~State Controller~~ Secretary of Administration have been designed and installed and are fully operational. Nothing in this subsection may be construed to prescribe what programs to satisfy a department's objectives are to be undertaken, nor to remove from the control and administration of the departments the responsibility for program efforts, regardless whether these efforts are specifically required by statute or are administered under the general program authority and responsibility of the department. This subdivision does not affect the provisions of G.S. 147-64.6, G.S. 147-64.7, or G.S. ~~143B-426.39(14).~~ 143-341(11). Notwithstanding any other provision of law, the ~~Office of the State Controller~~ Department of Administration shall provide information technology services on a cost-sharing basis to the General Assembly and its agencies as requested by the Legislative Services Commission."

(f) This section becomes effective July 1, 1993.

---TRANSFER MARINE AFFAIRS TO DEHNR.

Sec. 213. (a) The General Assembly makes the following findings:

(1) The Office of Marine Affairs, Department of Administration operates the State's three aquariums and advises the Secretary of Administration and the Governor on ocean policy.

(2) The Department of Administration provides most of the State's general administrative services. An internal organizational unit should be included within the Department of Administration only if the organizational unit (i) provides a service to other State agencies and does not have program responsibilities, (ii) has attributes that make central provision the most economical way to deliver first-rate management services, and (iii) has little policy implication.

(3) The Office of Marine Affairs does not provide administrative services to State agencies, but does have both program and policy responsibilities.

(4) The Department of Environment, Health, and Natural Resources operates and maintains the State's zoological park, whose functions are similar to those of the aquarium. In addition, both the Department of Environment, Health, and Natural Resources and the Office of Marine Affairs advise the Governor on environmental policy matters which can result in uncoordinated and inconsistent policy direction among State environmental programs. Only one department should be responsible for all environment-related functions.

(5) To improve efficiency, eliminate the fragmentation of the State's marine policy function, and achieve a savings for the State by eliminating unnecessary administrative structures, the aquarium function of the Office of Marine Affairs should be transferred to the Department of Environment, Health, and Natural Resources; the policy function of the Office of Marine Affairs should be eliminated, and six positions within the Office of Marine Affairs should be eliminated.

(b) G.S. 143B-279.3 reads as rewritten:

"§ 143B-279.3. Department of Environment, Health, and Natural Resources - structure.

(a) All functions, powers, duties, and obligations heretofore vested in the following subunits of the following departments are hereby transferred to and vested in the Department of Environment, Health, and Natural Resources by a Type I transfer, as defined in G.S. 143A-6:

(1) Radiation Protection Section, Division of Facility Services, Department of Human Resources.

(2) Division of Health Services, Department of Human Resources.

(3) State Center for Health Statistics, Department of Human Resources.

(4) Coastal Management Division, ~~Department of Natural Resources and Community Development.~~ Department of Environment, Health, and Natural Resources.

(5) Environmental Management Division, ~~Department of Natural Resources and Community Development.~~ Department of Environment, Health, and Natural Resources.

(6) Forest Resources Division, ~~Department of Natural Resources and Community Development.~~ Department of Environment, Health, and Natural Resources.

(7) Land Resources Division, ~~Department of Natural Resources and Community Development.~~ Department of Environment, Health, and Natural Resources.

(8) Marine Fisheries Division, ~~Department of Natural Resources and Community Development.~~ Department of Environment, Health, and Natural Resources.

(9) Parks and Recreation Division, ~~Department of Natural Resources and Community Development.~~ Department of Environment, Health, and Natural Resources.

(10) Soil and Water Conservation Division, ~~Department of Natural Resources and Community Development.~~ Department of Environment, Health, and Natural Resources.

(11) Water Resources Division, ~~Department of Natural Resources and Community Development.~~ Department of Environment, Health, and Natural Resources.

(12) North Carolina Zoological Park, ~~Department of Natural Resources and Community Development.~~ Department of Environment, Health, and Natural Resources.

(13) Albemarle-Pamlico Study.

(14) Office of Marine Affairs, Department of Administration.

(b) All functions, powers, duties, and obligations heretofore vested in the following commissions, boards, councils, and committees of the following departments are hereby transferred to and vested in the Department of Environment, Health, and Natural Resources by a Type II transfer, as defined in G.S. 143A-6:

(1) Governor's Waste Management Board, Department of Human Resources.

(2) Radiation Protection Commission, Department of Human Resources.

(3) Commission for Health Services, Department of Human Resources.

(4) Water Treatment Facility Operators Board of Certification, Department of Human Resources.

(5) Council on Sickle Cell Syndrome, Department of Human Resources.

(6) Perinatal Health Care Programs Advisory Council, Department of Human Resources.

(7) Governor's Council on Physical Fitness and Health, Department of Human Resources.

(8) Commission of Anatomy, Department of Human Resources.

(9) Coastal Resources Commission, ~~Department of Natural Resources and Community Development.~~ Department of Environment, Health, and Natural Resources.

(10) Environmental Management Commission, ~~Department of Natural Resources and Community Development.~~ Department of Environment, Health, and Natural Resources.

(11) Air Quality Council, ~~Department of Natural Resources and Community Development.~~ Department of Environment, Health, and Natural Resources.

(12) Wastewater Treatment Plant Operators Certification Commission, ~~Department of Natural Resources and Community Development.~~ Department of Environment, Health, and Natural Resources.

(13) Forestry Council, ~~Department of Natural Resources and Community Development.~~ Department of Environment, Health, and Natural Resources.

(14) North Carolina Mining Commission, ~~Department of Natural Resources and Community Development.~~ Department of Environment, Health, and Natural Resources.

(15) Advisory Committee on Land Records, ~~Department of Natural Resources and Community Development.~~ Department of Environment, Health, and Natural Resources.

(16) Marine Fisheries Commission, ~~Department of Natural Resources and Community Development.~~ Department of Environment, Health, and Natural Resources.

(17) Parks and Recreation Council, ~~Department of Natural Resources and Community Development.~~ Department of Environment, Health, and Natural Resources.

(18) Board of Trustees of the Recreation and Natural Heritage Trust Fund, ~~Department of Natural Resources and Community Development.~~ Department of Environment, Health, and Natural Resources.

(19) North Carolina Trails Committee, ~~Department of Natural Resources and Community Development.~~ Department of Environment, Health, and Natural Resources.

(20) Sedimentation Control Commission, ~~Department of Natural Resources and Community Development.~~ Department of Environment, Health, and Natural Resources.

(21) State Soil and Water Conservation Commission, ~~Department of Natural Resources and Community Development.~~ Department of Environment, Health, and Natural Resources.

(22) North Carolina Zoological Park Council, ~~Department of Natural Resources and Community Development.~~ Department of Environment, Health, and Natural Resources.

(23) North Carolina Aquariums Commission, Department of Administration.

(c) (1) There is hereby created a division within the environmental area of the Department of Environment, Health, and Natural Resources to be named the Division of Radiation Protection. All functions, powers, duties, and obligations of the Radiation Protection Section of the Division of Facility Services of the Department of Human Resources are transferred in their entirety to the Radiation Protection Division of the Department of Environment, Health, and Natural Resources.

(2) There is hereby created a division within the environmental area of the Department of Environment, Health, and Natural Resources to be named the Division of Solid Waste Management. All functions, powers, duties, and obligations of the Solid Waste Management Section of the Division of Health Services of the Department of Human Resources are transferred in their entirety to the Division of Solid Waste Management of the Department of Environment, Health, and Natural Resources.

(d) The Department of Environment, Health, and Natural Resources is vested with all other functions, powers, duties, and obligations as are conferred by the Constitution and laws of this State."

(b1) G.S. 143B-279.2 is amended by adding a new subdivision to read:

"(1a) To administer the State Outer Continental Shelf (OCS) Task Force and coordinate State participation activities in the federal outer continental shelf resource recovery programs as provided under the OCS Lands Act Amendments of 1978 (43 USC §§ 1801 et seq.) and the OCS Lands Act Amendments of 1986 (43 USC §§ 1331 et seq.);".

(c) Part 8A of Article 9 of Chapter 143B of the General Statutes, G.S. 143B-390.2 through G.S. 143B-390.4, is recodified as Part 5B of Article 7 of Chapter 143B of the General Statutes, G.S. 143B-289.20 through G.S. 143B-289.22.

(d) G.S. 143B-390.2, as recodified as G.S. 143B-289.20 by subsection (c) of this section, reads as rewritten:

"§ 143B-289.20. Office of Marine Affairs - organization; powers and duties.

(a) The Office shall be organized as prescribed by the Secretary of ~~Administration~~ the Department of Environment, Health, and Natural Resources and exercise the following powers and duties:

(1) Repealed by Session Laws 1991, c. 320, s. 3.

(1a) To establish and maintain the North Carolina Aquariums;

(1b) To administer the operations of the North Carolina Aquariums, such administrative duties to include, but not be limited to the following:

a. Adopt goals and objectives for the Aquariums and review and revise these goals and objectives periodically;

b. Review and approve requests for use of the Aquarium facilities and advise the Secretary of ~~Administration~~ the Department of Environment, Health, and Natural Resources on the most appropriate use consistent with the goals and objectives of the Aquariums;

c. Continually review and evaluate the types of projects and programs being carried out in the Aquarium facilities and determine if the operation of the facilities is in compliance with the established goals and objectives;

d. Recommend to the Secretary of ~~Administration~~ the Department of Environment, Health, and Natural Resources any policies and procedures needed to assure effective staff performance and proper liaison among Aquarium facilities in carrying out the overall purposes of the Aquarium programs;

e. Review Aquarium budget submissions to the Secretary of ~~Administration;~~ the Department of Environment, Health, and Natural Resources;

f. Recruit and recommend to the Secretary of ~~Administration~~ the Department of Environment, Health, and Natural Resources candidates for the positions of directors of the North Carolina Aquariums; and

g. Create local advisory committees in accordance with the provisions of G.S. 143B-390.4.

~~(2)~~ ~~Provide staff to the North Carolina Council on Ocean Affairs in furtherance of the Council's statutory powers and duties;~~

~~(3)~~ Advise the Secretary of Administration regarding the analysis, planning and implementation of current and future State and federal goals, policies and programs relating to the ocean and marine resources of North Carolina, such duties to include, but not be limited to, giving advice regarding:

a. ~~Providing recommendations to other educational, informational and policy-making bodies regarding marine and ocean resource issues;~~

b. Administering* the State Outer Continental Shelf (OCS) Task Force and coordinate State participation activities in the federal outer continental shelf resource recovery programs as provided under the OCS Lands Act Amendments of 1978 (43 USC §§ 1801 et seq.) and the OCS Lands Act Amendments of 1986 (43 USC §§ 1331 et seq.); and

c. ~~Coordinating necessary legal or technical research to carry out the duties set forth in this subdivision.~~

(4) to (6) Repealed by Session Laws 1991, c. 320, s. 3.

(7) Assume any other powers and duties assigned to it by the Secretary.

(b) The Secretary may adopt any rules and procedures necessary to implement this section."

(e) G.S. 143B-390.4, as recodified as G.S. 143B-89.22 by subsection (c) of this section, reads as rewritten:

"§ 143B-289.22. Local advisory committees; duties; membership.

Local advisory committees created pursuant to ~~G.S. 143B-390.2(a)(1b)~~ G.S. 143B-289.20(a)(1b) shall assist each North Carolina Aquarium in its efforts to establish projects and programs and to assure adequate citizen-consumer input into those efforts. Members of these committees shall be appointed by the Secretary of ~~Administration~~ the Department of Environment, Health, and Natural Resources for three-year terms from nominations made by the Director of the Office of Marine Affairs. Each committee shall select one of its members to serve as chairperson. Members of the committees shall serve without compensation for services or expenses."

(f) Part 8B of Article 9 of Chapter 143B of the General Statutes is repealed.

(g) Part 8C of Article 9 of Chapter 143B of the General Statutes, G.S. 143B-390.15 through G.S. 143B-390.16, is recodified as Part 28 of Article 7 of Chapter 143B of the General Statutes, G.S. 143B-344.16 through G.S. 143B-344.17.

(h) G.S. 143B-390.16, as recodified as G.S. 143B-344.17 by subsection (g) of this section, reads as rewritten:

"§ 143B-344.17. North Carolina Aquariums Commission - organization, powers, and duties.

(a) The Commission shall consist of 12 members appointed as follows:

(1) Four members appointed by the Governor, including one member designated by the Governor to serve as chair of the Commission and one member appointed upon recommendation of the North Carolina Aquarium Society, Inc., who resides in one of the counties where the North Carolina Aquariums are located: Carteret, Dare, and New Hanover,

(2) Four members appointed by the General Assembly upon the recommendation of the Speaker of the House of Representatives in accordance with G.S. 120-121, including one member appointed upon the recommendation of the North Carolina Aquarium Society, Inc., who resides in another of the counties where the North Carolina Aquariums are located: Carteret, Dare, and New Hanover,

(3) Four members appointed by the General Assembly upon the recommendation of the President Pro Tempore of the Senate in accordance with G.S. 120-121, including one member appointed upon the recommendation of the North Carolina Aquarium Society, Inc., who resides in another of the counties where the North Carolina Aquariums are located: Carteret, Dare, and New Hanover.

(b) Commission members shall serve for terms of four years, beginning July 1, 1992, and may be removed at any time by the appointing authority. If a vacancy on the Commission occurs, the appointing authority shall appoint a replacement to serve for the unexpired term.

(d) The Secretary of ~~Administration~~ the Department of Environment, Health, and Natural Resources shall provide staff support for Commission activities and travel reimbursement for Commission members.

(e) The Commission may recommend a schedule of uniform fees for the North Carolina Aquariums to the Secretary of the Department of ~~Administration~~ Environment, Health, and Natural Resources who may adopt the schedule. The schedule may be revised from time to time by the same procedure.

(f) The North Carolina Special Aquariums Fund, hereafter 'Fund', is hereby created, and shall be a special and nonreverting fund. The Fund shall be used only for repair, maintenance, and educational exhibit construction at existing aquariums. The Fund may also be used to match private funds that are raised for these purposes.

(g) All entrance fee receipts shall be credited to the Fund. The Secretary of ~~Administration~~ the Department of Environment, Health, and Natural Resources may expend monies from the Fund only upon the authorization of the General Assembly."

(i) The Department of Environment, Health, and Natural Resources shall eliminate six positions in the Office of Marine Affairs that handle policy and administrative matters, thus saving the State approximately two hundred thousand dollars ($200,000) annually.

(j) The base budget of the Department of Administration is reduced by two million two hundred seventy-nine thousand seven hundred seventy-seven dollars ($2,279,777) due to the transfer of the aquarium function mandated by this section. The base budget of the Department of Environment, Health, and Natural Resources is increased by two million seventy-nine thousand seven hundred seventy-seven dollars ($2,079,777).

(k) This section becomes effective July 1, 1993.

---TRANSFER INTERGOV'TAL RELATIONS.

Sec. 214. (a) The federal/State relations component of Intergovernmental Relations in the Department of Administration is transferred to the Governor's Office. This transfer has all the elements of a Type I transfer, as defined in G.S. 143A-6.

The Director of the Budget shall resolve all conflicts regarding the transfer mandated by this subsection. Position 4101-0100-0000-031 shall be eliminated and the base budget appropriation for the 1993-94 fiscal year and for the 1994-95 fiscal year shall be decreased by thirty-three thousand five hundred eighteen dollars ($33,518) because of the elimination of the position.

(b) The State/local relations component of Intergovernmental Relations in the Department of Administration is transferred to the Department of Commerce. This transfer has all the elements of a Type I transfer, as defined in G.S. 143A-6.

The Director of the Budget shall resolve all conflicts regarding the transfer mandated by this subsection. Position 4101-0000-0000-013 shall be eliminated and the base budget appropriation for the 1993-94 fiscal year and for the 1994-95 fiscal year shall be decreased by thirty-three thousand five hundred eighteen dollars ($33,518) because of the elimination of the position.

---BANKING REC.

Sec. 215. The General Assembly finds that:

(1) Multiple State agencies and commissions currently exercise regulatory authority over various financial institutions and over businesses that are closely related to those institutions;

(2) Three entities regulate financial institutions in the Department of Commerce, to wit: the Banking Commission, the Credit Union Division, and the Savings Institutions Division;

(3) The Department of Insurance regulates the insurance industry through consumer protection, education, and other regulations; and

(4) Changes in federal regulations, market competition, and industry consolidation have blurred the distinctions between the insurance industry and banks, savings and loans, and credit unions, and these organizations serve many of the same markets.

Sec. 216. The Governor shall study the organization of the State's agencies that regulate financial institutions, including the insurance industry, and shall report his findings and recommendations to the Joint Legislative Commission on Governmental Operations and to the Fiscal Research Division of the Legislative Services Office not later than January 1, 1994. In conducting the study, the Governor shall consider and make recommendations to the General Assembly regarding the feasibility of creating a Department of Financial Institutions.

Sec. 217. Sections 215 and 216 of this act are effective upon ratification.

---ELIMINATE REVENUE FIELD OFFICERS.

Sec. 218. (a) The General Assembly finds that the Department of Revenue has more permanent field offices and suboffices than other states and that overall revenue collections would increase if some of the less efficient permanent field offices were eliminated.

(b) The Department of Revenue shall eliminate the 19 permanent field offices that are within 45 miles of another field office and have average collections of less than three hundred thousand dollars ($300,000) a year. The Department of Revenue shall also eliminate the eight suboffices that do not have free office space. The Department of Revenue shall reassign the revenue officers of the eliminated offices to existing offices that have the potential for higher collections and shall acquire rental office space at these existing offices as necessary.

---EXPAND INTERSTATE TAX AUDITS.

Sec. 219. (a) The General Assembly finds that:

(1) On average, the Department of Revenue's interstate auditors generate more revenue than its in-State auditors.

(2) Several southeastern states have interstate audit divisions larger than that of North Carolina, and other southeastern states plan to expand their interstate audit operations.

(3) The Department of Revenue has had plans to expand its interstate audit division by:

a. Transferring one position to Atlanta.

b. Using an existing vacancy in the interstate audit division to hire an auditor in the New Jersey/New York area.

c. Reclassifying an expected vacancy in the Field Services Division as an out-of-state auditor for the New Jersey/New York area.

d. As three other vacancies occur in the Field Services Division, reclassifying the positions as interstate auditors to be assigned to California, Chicago, and Dallas.

e. Transferring five corporate auditors from the Corporate Income and Franchise Tax Division to the interstate audit division where they will be trained to conduct other types of audits and will assist in training other interstate auditors to conduct corporate audits.

(4) It is the Department of Revenue's goal that each interstate auditor will have assessments of one million dollars ($1,000,000) per year.

(5) If the Department of Revenue carries out its plans described above and reaches its assessment goal for auditors, the interstate audit group could assess up to twenty million dollars ($20,000,000) per year.

(b) The Department of Revenue shall continue and complete its planned expansion of the interstate audit division.

---ELIMINATE DEPUTY SEC. OF REVENUE.

Sec. 220. (a) The General Assembly finds that:

(1) The Deputy Secretary of Revenue has two major responsibilities, that of hearing officer and that of legislative liaison.

(2) The position of Deputy Secretary of Revenue seems unnecessary because the Deputy Secretary performs similar functions as the Tax Administration Division staff.

(3) The staff in the Tax Administration Division is responsible for formulating tax policy, planning and developing strategies for implementing legislation, and commenting on proposed legislation.

(4) The legislative liaison function of the Deputy Secretary of Revenue should be performed by the Tax Administration Division and the position should be reclassified as a hearing officer.

(b) The position of Deputy Secretary of Revenue is reclassified as a hearing officer and moved to the Office of Hearings and Legislative Tax Policy.

(c) The Department of Revenue should provide that the Office of Hearings and Legislative Tax Policy and the Tax Research Division report directly to the Secretary of Revenue. The Department of Revenue should provide that the Security Office reports directly to the Assistant Secretary for Administration.

(d) The base budget of the Department of Revenue is reduced by forty thousand dollars ($40,000) for the 1993-94 fiscal year and forty thousand dollars ($40,000) for the 1994-95 fiscal year due to the reclassification of a personnel position mandated by subsection (b) of this section. This reduction represents the difference between the personnel cost of a Deputy Secretary of Revenue and the personnel cost of a hearing officer.

(e) This section is effective upon ratification.

---ELIMINATE 2 REVENUE POSITIONS.

Sec 221. (a) The General Assembly finds that in two of the Department of Revenue's field offices, the number of auditors and revenue officers does not warrant two supervisors, one for auditors and one for revenue officers.

(b) The Department of Revenue shall eliminate one supervisor position from the Rockingham field office and one supervisor position from the Elizabeth City field office. The Department of Revenue shall designate the remaining supervisor position in each office as the supervisor of the entire office.

(c) The decrease in personnel mandated in Section 2 of this act should result in an annual savings to the General Fund of seventy-four thousand seven hundred two dollars ($74,702). The base budget of the Department of Revenue is reduced by seventy-four thousand seven hundred two dollars ($74,702) for the 1993-94 fiscal year and seventy-four thousand seven hundred two dollars ($74,702) for the 1994-95 fiscal year due to the decrease in personnel mandated in subsection (b) of this section.

(d) This section becomes effective July 1, 1993.

---END IN-PERSON TAXPAYER ASSISTANCE.

Sec. 222. (a) The General Assembly finds that:

(1) Revenue officers spend a significant percentage of their time helping taxpayers complete their tax returns and registering for business.

(2) The taxpayer assistance function is an essential function of the Department of Revenue, but the Department should move toward providing assistance by way of toll-free lines rather than face-to-face in field offices.

(3) By eliminating most face-to-face assistance and replacing it with increased telephone assistance over a five-year period, the Department of Revenue could eliminate 41 positions for a net savings of one million three hundred fifty-nine thousand five hundred seventy-six dollars ($1,359,576) per year after the changes are fully implemented.

(4) After these changes are implemented, taxpayers who are no longer receiving face-to-face assistance should be able to receive the same level of assistance over the telephone.

(5) Telephone lines will be more convenient and efficient for taxpayers because they can receive assistance in their homes rather than waiting in line at a revenue office.

(b) The Department of Revenue, Field Operations Division, shall phase out most personalized, face-to-face taxpayer assistance that is currently provided by revenue officers in the field. Revenue officers should answer simple questions but should not fill out a taxpayer's return. At the appropriate point in the phaseout process, the Department of Revenue shall notify taxpayers to whom tax forms are mailed that revenue officers will no longer be providing this assistance, but the same level of assistance will be provided by telephone.

(c) The Department of Revenue, Field Operations Division, shall increase the scope of assistance currently provided by toll-free telephone lines to include all taxes. The Department of Revenue shall develop performance measures to monitor whether providing assistance by telephone is effective.

(d) Effective July 1, 1993, 10 revenue officer positions in the Field Operations Division of the Department of Revenue are eliminated. Effective July 1, 1994, 10 more revenue officer positions in the Field Operations Division of the Department of Revenue are eliminated. It is the intent of the General Assembly that 10 more revenue officer positions in the Field Operations Division of the Department of Revenue shall be eliminated in each of the following fiscal years: 1995-96 and 1996-97. It is the intent of the General Assembly that six more revenue officer positions in the Field Operations Division of the Department of Revenue shall be eliminated in the 1997-98 fiscal year.

(e) The decrease in personnel provided in Section 4 of this act will result in savings to the General Fund of three hundred thirty-six thousand one hundred fifty-nine dollars ($336,159) in the 1993-94 fiscal year and six hundred seventy-two thousand three hundred eighteen dollars ($672,318) in the 1994-95 fiscal year. The intended personnel reductions in subsection (d) of this act, when combined with the actual reductions for the 1993-95 biennium, will result in the following annual savings to the General Fund:

1995-96 $1,008,477

1996-97 $1,344,636

1997-98 $1,546,331

Each year thereafter $1,546,331.

(f) There is appropriated from the General Fund to the Department of Revenue, Field Operations Division, the sum of thirty-seven thousand three hundred fifty-one dollars ($37,351) for the 1993-94 fiscal year and the sum of seventy-four thousand seven hundred two dollars ($74,702) for the 1994-95 fiscal year to hire one new tax technician beginning in the 1993-94 fiscal year and one additional new tax technician beginning in the 1994-95 fiscal year. It is the intent of the General Assembly to appropriate additional funds to the Field Operations Division of the Department of Revenue so that one more tax technician position shall be added in each of the following fiscal years: 1995-96, 1996-97, and 1997-98. These tax technicians shall provide telephone assistance to taxpayers.

(g) This section becomes effective July 1, 1993.

---INTEGRATED TAX ADMIN. SYSTEM.

Sec 223. (a) The General Assembly finds that:

(1) The Department of Revenue's ongoing functional reorganization is sound and consistent with reorganizations in other states.

(2) Three other southeastern states have indicated that functional organization is effective because duplication of effort is eliminated and taxpayers receive better service because they have a single point of contact.

(3) The success of the Department of Revenue's functional reorganization will depend on its implementation of a new Integrated Tax Administration System (ITAS), a computer-based, fully integrated tax administration system that would support all of the essential functions of tax administration for which the Department is responsible.

(4) The Department of Revenue's current information technology infrastructure is so inefficient and error-prone that the mission of the Department is at risk: the Department's computer hardware is old and unreliable, and the current production tax application systems are written in an outdated language and depend on punch cards or tape which makes processing slow.

(5) The key to establishing a highly efficient and effective Department of Revenue is ITAS, which has the potential, if properly designed and implemented, to boost productivity and reduce staffing costs.

(6) Long-term collections increases and personnel and operational costs savings will significantly exceed the costs of implementing and operating ITAS.

(b) There is appropriated from the General Fund to the Department of Revenue the sum of six million three hundred thousand dollars ($6,300,000) for the 1993-94 fiscal year to implement a new Integrated Tax Administration System (ITAS), a computer-based, fully integrated tax administration system that would support all of the essential functions of tax administration for which the Department is responsible.

(c) As part of its functional reorganization, the Department of Revenue shall implement an in-depth training program to train employees in areas outside their current area of expertise and to keep them continuously updated in changes in the law.

(d) This section becomes effective July 1, 1993.

---LABOR RECS.

Sec. 224. Notwithstanding any other law or Executive Order, the Employment Security Commission of North Carolina is hereby transferred to the Department of Labor by a Type II transfer, as defined in G.S. 143A-6(b). Under this transfer, the Commission shall have the authority to employ, direct, and supervise professional and technical personnel, and shall not be accountable to the Commissioner of Labor in its exercise of quasi-judicial powers authorized by statute.

Sec. 225. G.S. 96-4(a) reads as rewritten:

"(a) Duties and Powers of Commission. - It shall be the duty of the Commission to administer this Chapter. The Commission shall meet at least once in each 60 days and may hold special meetings at any time at the call of the chairman or any three members of the Commission, and the Commission shall have power and authority to adopt, amend, or rescind such rules and regulations, to employ such persons, make such expenditures, require such reports, make such investigations, and take such other action as it deems necessary or suitable in the administration of this Chapter. Such rules and regulations shall be effective upon publication in the manner, not inconsistent with the provisions of this Chapter, which the Commission shall prescribe. The Commission shall determine its own organization and methods of procedure in accordance with the provisions of this Chapter, and shall have an official seal which shall be judicially noticed. The chairman of said Commission shall, except as otherwise provided by the Commission, be vested with all authority of the Commission, including the authority to conduct hearings and make decisions and determinations, when the Commission is not in session and shall execute all orders, rules and regulations established by said Commission. Not later than November 20 preceding the meeting of the General Assembly, the Commission shall submit to the Governor and to the Commissioner of Labor a report covering the administration and operation of this Chapter during the preceding biennium, and shall make such recommendation for amendments to this Chapter as the Commission deems proper. Such report shall include a balance sheet of the moneys in the fund in which there shall be provided, if possible, a reserve against the liability in future years to pay benefits in excess of the then current contributions, which reserve shall be set up by the Commission in accordance with accepted actuarial principles on the basis of statistics of employment, business activity, and other relevant factors for the longest possible period. Whenever the Commission believes that a change in contribution or benefit rates will become necessary to protect the solvency of the fund, it shall promptly so inform the ~~Governor~~ Governor, the Commissioner of Labor, and the legislature, and shall make recommendations to the Governor with respect thereto."

Sec. 226. G.S. 96-5(b) reads as rewritten:

"(b) Replacement of Funds Lost or Improperly Expended. - If any moneys received from the Secretary of Labor under Title III of the Social Security Act, or any unencumbered balances in the Employment Security Administration Fund or any moneys granted to this State pursuant to the provisions of the Wagner-Peyser Act, or any moneys made available by this State or its political subdivisions and matched by such moneys granted to this State pursuant to the provisions of the Wagner-Peyser Act, are found by the Secretary of Labor, because of any action or contingency, to have been lost or expended for purposes other than, or in amounts in excess of those found necessary by the Secretary of Labor for the proper administration of this Chapter, it is the policy of this State that such moneys, not available from the Special Employment Security Administration Fund established by subsection (c) of this section, shall be replaced by moneys appropriated for such purpose from the general funds of this State to the Employment Security Administration Fund for expenditure as provided in subsection (a) of this section. Upon receipt of notice of such a finding by the Secretary of Labor, the Commission shall promptly pay from the Special Employment Security Administration Fund such sum if available in such fund; if not available, it shall promptly report the amount required for such replacement to the Commissioner of Labor and the Governor and the Governor shall, at the earliest opportunity, submit to the legislature a request for the appropriation of such amount."

Sec. 227. G.S. 96-19(b) reads as rewritten:

"(b) The Employment Security Commission may, upon receiving notification from the U.S. Department of Labor that any provision of this Chapter is out of conformity with the requirements of the federal law or of the U.S. Department of Labor, suspend the enforcement of the contested section or provision until the North Carolina Legislature next has an opportunity to make changes in the North Carolina law. The Employment Security Commission shall, in order to implement the above suspension:

(1) Notify the Commissioner of Labor and the Governor's office and provide ~~that office~~ the Commissioner and the Governor with a copy of the determination or notification of the U.S. Department of Labor;

(2) Advise the Governor's ~~office~~ office, and inform the Commissioner of Labor, as to whether the contested portion or provision of the law would, if not enforced, so seriously hamper the operations of the agency as to make it advisable that a special session of the legislature be called;

(3) Take all reasonable steps available to obtain a reprieval from the implementation of any federal conformity failure sanctions until the State legislature has been afforded an opportunity to consider the existing conflict."

Sec. 228. G.S. 143B-428 reads as rewritten:

"§ 143B-428. Department of ~~Economic and Community Development~~Commerce - declaration of policy.

It is hereby declared to be the policy of the State of North Carolina to actively encourage the expansion of existing environmentally sound North Carolina industry; to actively encourage the recruitment of environmentally sound national and international industry into North Carolina through industrial recruitment efforts and through effective advertising, with an emphasis on high-wage-paying industry; ~~to promote the development of North Carolina's labor force to meet the State's growing industrial needs;~~ to cooperate with other State agencies in promoting the development of North Carolina's labor force to address the State's growing industrial needs; to promote the growth and development of our travel and tourist industries; to promote the development of our State ports; to promote the management of North Carolina's energy resources and the development of a State energy policy; and to assure throughout State government, the coordination of North Carolina's economic development efforts."

Sec. 229. G.S. 143B-431(a) reads as rewritten:

"(a) The functions of the Department of Commerce, except as otherwise expressly provided by Article 1 of this Chapter or by the Constitution of North Carolina, shall include:

(1) All of the executive functions of the State in relation to economic development including by way of enumeration and not of limitation, the expansion and recruitment of environmentally sound industry, ~~labor force development,~~ the promotion of and assistance in the orderly development of North Carolina counties and communities, the promotion and growth of the travel and tourism industries, the development of our State's ports, energy resource management and energy policy development;

(2) All functions, powers, duties and obligations heretofore vested in an agency enumerated in Article 15 of Chapter 143A, to wit:

a. The State Board of Alcoholic Control,

b. The North Carolina Utilities Commission,

c. ~~The Employment Security Commission,~~

d. The North Carolina Industrial Commission,

e. State Banking Commission and the Commissioner of Banks,

f. Savings and Loan Association Division,

g. The State Savings Institutions Commission,

h. Credit Union Commission,

i. The North Carolina Milk Commission,

j. The North Carolina Mutual Burial Association Commission,

k. The North Carolina Rural Electrification Authority,

l. The North Carolina State Ports Authority, all of which enumerated agencies are hereby expressly transferred by a Type II transfer, as defined by G.S. 143A-6, to this recreated and reconstituted Department of Commerce; and,

(3) All other functions, powers, duties and obligations as are conferred by this Chapter, delegated or assigned by the Governor and conferred by the Constitution and laws of this State. Any agency transferred to the Department of Commerce by a Type II transfer, as defined by G.S. 143A-6, shall have the authority to employ, direct and supervise professional and technical personnel, and such agencies shall not be accountable to the Secretary of Commerce in their exercise of quasi-judicial powers authorized by statute, notwithstanding any other provisions of this Chapter, provided that the authority of the North Carolina State Ports Authority to employ, direct and supervise personnel shall be as provided in Part 10 of this Article."

Sec. 230. Notwithstanding any other law or Executive Order, the Employment and Training Division of the Department of Commerce is hereby transferred to the Department of Labor by a Type I transfer, as defined in G.S. 143A-6(a); however, under this transfer, the Governor shall retain authority over JTPA activities of the Division to the extent that such authority is required by Public Law 97-300, the Job Training Partnership Act.

Sec. 231. G.S. 143B-432 reads as rewritten:

"§ 143B-432. Transfers to Department of Commerce.

(a) The Division of Economic Development of the Department of Natural and Economic Resources, the Science and Technology Committee of the Department of Natural and Economic Resources, the Science and Technology Research Center of the Department of Natural and Economic Resources, and the North Carolina National Park, Parkway and Forests Development Council of the Department of Natural and Economic Resources are each hereby transferred to the Department of Commerce by a Type I transfer, as defined in G.S. 143A-6.

(b) All functions, powers, duties, and obligations heretofore vested in the following subunits of the Department of Natural Resources and Community Development are hereby transferred to and vested in the Department of Commerce by a Type I transfer as defined in G.S. 143A-6:

(1) Community Assistance Division.

~~(2)~~ ~~Employment and Training Division.~~

(c) All functions, powers, duties, and obligations heretofore vested in the following councils of the Department of Natural Resources and Community Development are hereby transferred to and vested in the Department of Commerce by a Type II transfer as defined in G.S. 143A-6:

(1) Community Development Council.

~~(2)~~ ~~Job Training Coordinating Council~~."

Sec. 232. G.S. 143B-433 reads as rewritten:

"§ 143B-433. Department of Commerce - organization.

The Department of Commerce shall be organized to include:

(a) (1) The North Carolina Alcoholic Beverage Control Commission,

(2) The North Carolina Utilities Commission,

~~(3)~~ ~~The Employment Security Commission,~~

(4) The North Carolina Industrial Commission,

(5) State Banking Commission,

(6) Savings and Loan Association Division,

(7) The State Savings Institutions Commission,

(8) Credit Union Commission,

(9) The North Carolina Milk Commission,

(10) The North Carolina Mutual Burial Association Commission,

(11) North Carolina Cemetery Commission,

(12) The North Carolina Rural Electrification Authority,

(13) Repealed by Session Laws 1985, c. 757, s. 179(d),

(14) North Carolina Science and Technology Research Center,

(15) The North Carolina State Ports Authority,

(16) North Carolina National Park, Parkway and Forests Development Council,

(17) Economic Development Board,

~~(18)~~ ~~Labor Force Development Council,~~

(19) Energy Policy Council,

(20) Energy Division,

(21) Navigation and Pilotage Commissions established by Chapter 76 of the General Statutes,

(22) The North Carolina Technological Development Authority.

(b) Those agencies which are transferred to the Department of Commerce, including the:

(1) Community Assistance Division,

(2) Community Development ~~Council,~~ Council; and

~~(3)~~ ~~Employment and Training Division, and~~

~~(4)~~ ~~Job Training Coordinating Council; and~~

Sec. 233. Notwithstanding any other law or Executive Order, Part 3A of Article 10 of Chapter 143B is recodified as Article 23 of Chapter 95 of the General Statutes and the sections of Part 3A are renumbered as follows:

Old Section Numbers New Section Numbers

143B-438.1 95-260

143B-438.2 95-261

143B-438.3 95-262

143B-438.4 95-263

143B-438.5 95-264

143B-438.6 95-265.

Sec. 234. G.S. 95-263, as recodified by Section 10 of this act, reads as rewritten:

"§ ~~143B~~ (a) ~~The~~ Notwithstanding any other law or Executive Order, the State Job Training Coordinating Council is ~~established within the Department of Commerce.~~ transferred from the Department of Commerce to the Department of Labor. This transfer shall have all the elements of a Type II transfer, as defined in G.S. 143A-6(b); however, under this transfer the Governor shall retain authority over the Council to the extent that such authority is required by Public Law 97-300, the Job Training Partnership Act.

(b) Operating funds and staff for the Council shall be supported with funds from the Job Training Partnership Act.

(d) The ~~initial~~ staffing level of the Council and the level of funding support required shall be determined by the ~~Secretary of Commerce.~~ Commissioner of Labor. However, the staffing level shall not exceed 10 personnel as may be necessary to carry out its functions under this ~~Part~~ Article and the Job Training Partnership Act.

(e) Duties and responsibilities of the Council include but shall not be limited to the following:

(1) Overseeing the meeting of the State's goals for employment and training.

(2) Reviewing the plans and programs of agencies operating federally funded programs related to employment and training and of other agencies providing employment and training-related services in the State that may be funded with State funds.

(3) Conducting studies, preparing reports and analyses, including an annual published report to the Commissioner of Labor, Governor and General Assembly, and providing such advisory services as may be authorized or directed by the Governor.

(4) Recommending the allocation of Job Training Partnership Act funds not subject to the seventy-eight percent (78%) that flows directly to service delivery areas.

(5) Recommending program goals to insure job training for unskilled youth and adults is a matter of the highest priority and encouraging Service Delivery Areas (SDA's) to reflect these goals in their SDA plans.

(6) Developing a long term tracking system to measure the effectiveness of the Job Training Partnership Act with respect to permanent job placements.

(7) Insuring compliance with the provisions of Sections 122(b)(7) A and B and 122(b)(8) of the Job Training Partnership Act no later than May 30 of every year, requiring the following:

a. The identification of, in coordination with the appropriate State agencies, the employment, training, and vocation education needs throughout the State;

b. An assessment of the extent to which employment and training, vocation education, rehabilitation services, public assistance, economic development, and other federal, State, and local programs and services represent a consistent, integrated, and coordinated approach to meeting these needs;

c. Comments on reports required by Sections 105(d)(3) of the Vocational Education Act of 1963 and appropriate recommendations to the Governor and General Assembly.

(8) Annually measuring, to the extent practicable, the increase in employment and earnings and the reductions in welfare dependency by SDA resulting from participating in the Job Training Partnership Act program and reporting those findings to the Commissioner of Labor, Governor and General Assembly.

(9) Annually reporting to the Commissioner of Labor, Governor and General Assembly on funds expended by each SDA for job training services.

(10) Providing management guidance and review of all State administered employment and training programs and encouraging compliance by the SDA's with the goals and purposes outlined by the General Assembly, the Governor, and the State Council.

(11) Repealed by Session Laws 1989, c. 532, s. 2.

(12) Obtaining other information from recipients of Job Training Partnership Act funds, as requested by the Commissioner of Labor, ~~Governor~~ by the Governor, and by the General Assembly.

(13) Overseeing the responsibilities required in the Economic Dislocation and Worker Adjustment Assistance Act (EDWAAA), including the following:

a. Advising the Governor on designation of sub-State areas and sub-State grantees and on the procedure for selecting Private Industry Council (PIC) and Local Employment Organizations (LEO) representatives within sub-State areas relative to grantee designation;

b. Advising the Governor on developing formulas for distributing funds among sub-State areas and formulas for reallocating unexpended funds;

c. Reviewing and commenting to the Commissioner of Labor and the Governor on State and sub-State EDWAAA programs;

d. Reviewing and submitting comments on the State plan prior to submission to the Secretary and on each sub-State plan; and

e. Advising the Governor on the establishment and application of performance standard.

(f) The State Job Training Coordinating Council:

(1) Shall be appointed by the Governor in a manner consistent with Section 122 of Public Law 97-300.

(2) Shall meet at the call of the chairman. A majority of the Council shall constitute a quorum for the transaction of business. Members shall receive per diem and necessary travel and subsistence expenses in accordance with the provisions of G.S. 138-5, 138-6 or 120-3.1, as the case may be.

(3) Repealed by Session Laws 1989, c. 532, s. 2.

(4) May create such committees as may be necessary to the proper conduct of its business. The Governor may establish such additional advisory bodies, in accordance with existing law, related to employment and training as may be necessary and appropriate to the conduct of federally supported employment and training-related programs.

(5) Keep the Commissioner of Labor apprised of all activities, recommendations, and advice provided by the Council to the Governor and the General Assembly."

Sec. 235. G.S. 95-265, as recodified by Section 10 of this act, reads as rewritten:

"§ ~~143B-438.6.~~ 95-265. Employment and Training Grant Program.

(a) There is established in the Department of ~~Commerce,~~ Labor, Employment and Training Division, an Employment and Training Grant Program. The purpose of the program is to make grants available to local agencies operating on behalf of the Private Industry Council serving Job Training Partnership Act service delivery areas. Grant funds shall be allocated for the purpose of enabling recipient agencies to implement local employment and training programs in accordance with existing resources, local needs, local goals, and selected training occupations. The Department shall adopt rules in accordance with Chapter 150B of the General Statutes for administering the Employment and Training Grant Program, which rules shall include procedures for review and approval of grant applications by local agencies and for monitoring use of grant funds by recipient agencies. A State-administered program of performance standards shall be used to measure grant program outcomes.

(b) Use of grant funds: Local agencies may use funds received under this section only for the purpose of upgrading the foundation of basic skills of the adult population and the existing work force in North Carolina. Services that may be provided include participant programs currently available under the federal Job Training Partnership Act that are appropriate for adults; on-the-job training; work experience; adult basic education; skills training, upgrading, and retraining; counseling and screening for job placement; service corps; and related support services. Local agencies may use grant funds to provide services only to individuals who are 18 years of age or older and who either (i) meet the current Federal Job Training Partnership Act definition of 'economically disadvantaged', or (ii) meet the current definition for eligibility under Title III of the Federal Job Training Partnership Act.

(c) Allocation of grants: The Department may reserve and allocate up to five percent (5%) of funds available to the Employment and Training Grant Program for State and local administrative costs to implement the program. The Division of Employment and Training shall allocate employment and training grants to local agencies operating on behalf of the Private Industry Council serving Job Training Partnership Act service delivery areas based on the following formula:

(1) One half of the funds shall be allocated on the basis of the relative excess number of unemployed individuals residing in each county as compared to the total excess number of unemployed individuals in all counties in the State.

'Excess number of unemployed' is defined as the number of unemployed individuals in excess of four and one-half percent (4.5%) of the civilian labor force in each county or the number of unemployed individuals in excess of four and one-half percent (4.5%) of the civilian labor force in each census tract within the county. The following methodology is used to determine the excess number of unemployed:

a. For counties classified as having excess unemployment, the excess number of unemployed is determined by subtracting four and one-half percent (4.5%) of the civilian labor force from the number of unemployed individuals within the county. The difference equals the number of excess unemployed.

b. In situations where the entire county is not classified as having excess unemployment, the excess number of unemployed is determined by census tract unemployment within the county. Census tract data is used to determine which subcounty areas qualify as areas of excess unemployment. In those subcounty areas classified as having excess unemployment (census tracts with four and one-half percent (4.5%) or higher unemployment rates), four and one-half percent (4.5%) of the census tract labor force is subtracted from the number of unemployed individuals within the area of excess unemployment. The subcounty figures of excess number of unemployed within the county are then added together to determine the total excess number of unemployed within the county.

(2) One half of the funds shall be allocated on the basis of the relative number of economically disadvantaged individuals within each county compared to the total number of economically disadvantaged individuals in the State. To determine the number of economically disadvantaged individuals within each county, data from the State Data Center in the Office of State Budget and Management, or from the federal decennial census, whichever is most recent, shall be used.

(d) Reports, Coordination: The Department of ~~Commerce~~ Labor shall report quarterly to the Governor and to the Speaker of the House of Representatives and the President Pro Tempore of the Senate on the North Carolina Employment and Training Grant Program. The Department shall also provide a copy of these quarterly reports to the State Job Training Coordinating Council. The Council shall advise the Department on the merger of the funds provided to implement this section with other employment and training funds to develop comprehensive work-force preparedness initiatives for the State.

(e) Funds appropriated ~~to the Department of Commerce~~ for the Employment and Training Grant Program that are not expended at the end of the fiscal year shall not revert but shall remain available to the Department for the purposes established in this section."

Sec. 236. All statutory authority, powers, duties, functions, records, personnel, property, and unexpended balances of appropriations or other funds of any agency which is transferred pursuant to this act shall be transferred in their entirety.

Sec. 237. Sections 224 through 236 of this act shall not be construed to obligate the General Assembly to make any appropriation to implement the provisions of those sections. Each department and agency to which those sections applies shall implement the provisions of this act from funds otherwise appropriated to that department or agency.

Sec. 238. Sections 224 through 237 of this act become effective July 1, 1993.

---LET AOC STAFF SUPPORT OAH.

Sec. 239. (a) The General Assembly finds that:

(1) 16 of the 40 full-time staff positions at the Office of Administrative Hearings, including three secretaries on personal services contracts, are support-related and perform functions similar to those performed by the staff of the Administrative Office of the Courts;

(2) These 16 positions are responsible for providing secretarial support and research, scheduling cases, and handling budgetary, fiscal, personnel, and other administrative matters;

(3) The Administrative Office of the Courts has a large, well-trained staff and systems in place to support the additional work load from the Office of Administrative Hearings;

(4) Of the 16 support positions at the Office of Administrative Hearings, two would be needed to handle the extra work load at the Administrative Office of the Courts but the remaining 14 could be eliminated;

(5) If the Administrative Office of the Courts provides support services to the Office of Administrative Hearings, the Office of Administrative Hearings would need to move so that it is physically located with the staff of the Administrative Office of the Courts.

(b) The State Property Office shall find suitable space for the Administrative Office of the Courts and the Office of Administrative Hearings so that the Office of Administrative Hearings is physically located with the staff of the Administrative Office of the Courts.

(c) The following two positions are transferred from the Office of Administrative Hearings to the Administrative Office of the Courts: Administrative Assistant II and Clerk/Typist V. The base budget of the Administrative Office of the Courts is increased by ninety-one thousand six hundred thirty-nine dollars ($91,639) for the 1994-95 fiscal year as the result of the transfer of positions required by this section and the base budget of the Office of Administrative Hearings is reduced by the same amount.

(d) The following 14 positions at the Office of Administrative Hearings are eliminated: Deputy Director, Internal Auditor, Administrative Service Manager, Clerk IV, Accounting Technician V, Administrative Assistant III, Clerk Typist V, Chief Hearing Clerk, Clerk IV, Paralegal III, Receptionist Clerk IV, Paralegal II, Administrative Officer II, and Clerk/Typist V. The base budget of the Office of Administrative Hearings is reduced by four hundred fifty-three thousand nine hundred seventy dollars ($453,970) for the 1994-95 fiscal year as the result of the positions eliminated by this subsection.

(e) The Office of Administrative Hearings shall not renew its three personal services contracts for secretarial services.

(f) This section becomes effective July 1, 1994.

---MOVE N.C. REGISTER & CODE.

Sec. 240. (a) The General Assembly finds that:

(1) The Office of Administrative Hearings conducts contested case hearings and publishes the North Carolina Register and the North Carolina Administrative Code;

(2) The Government Performance Audit Committee finds that the Secretary of State has a publications division that performs functions similar to those performed by the publications division of the Office of Administrative Hearings;

(3) For these reasons, the Government Performance Audit Committee recommends that the publication functions of the Office of Administrative Hearings be transferred to the Secretary of State;

(b) G.S. 150B-2(1b) reads as rewritten:

"(1b) 'Codifier of Rules' means the ~~Chief Administrative Law Judge of the Office of Administrative Hearings~~ Secretary of State or a designated representative of the ~~Chief Administrative Law Judge.~~ Secretary of State."

"§ 150B-21.1. Procedure for adopting a temporary rule.

(a) Adoption. - An agency may adopt a temporary rule without prior notice or hearing or upon any abbreviated notice or hearing the agency finds practical when it finds that adherence to the notice and hearing requirements of this Part would be contrary to the public interest and that the immediate adoption of the rule is required by one or more of the following:

(1) A serious and unforeseen threat to the public health, safety, or welfare.

(2) The effective date of a recent act of the General Assembly or the United States Congress.

(3) A recent change in federal or State budgetary policy.

(4) A federal regulation.

(5) A court order.

(6) The need for the rule to become effective the same date as the State Medical Facilities Plan approved by the Governor, if the rule addresses a matter included in the State Medical Facilities Plan.

An agency must prepare a written statement of its findings of need for a temporary rule. The statement must be signed by the head of the agency adopting the rule.

An agency must begin rule-making proceedings for a permanent rule by the day it adopts a temporary rule. An agency begins rule-making proceedings for a permanent rule by submitting to the ~~codifier~~ Codifier of Rules written notice of its intent to adopt a permanent rule.

(b) Review. - When an agency adopts a temporary rule it must submit the ~~rule,~~ rule and the agency's written statement of its findings of need for the ~~rule, and the notice of intent to adopt a permanent rule to the Codifier of Rules.~~ rule to the Chief Administrative Law Judge of the Office of Administrative Hearings. Within one business day after an agency submits a temporary rule, the ~~Codifier of Rules~~ Chief Administrative Law Judge or another administrative law judge designated by the Chief must review the agency's written statement of findings of need for the rule to determine whether the statement of need meets the criteria listed in subsection (a). In reviewing the statement, the ~~Codifier of Rules~~ administrative law judge may consider any information submitted by the agency or another person. If the ~~Codifier of Rules~~ administrative law judge finds that the statement meets the criteria, the ~~Codifier of Rules~~ administrative law judge must notify the head of the agency and direct the Codifier of Rules to enter the rule in the North Carolina Administrative Code.

If the ~~Codifier of Rules~~ administrative law judge finds that the statement does not meet the criteria, the ~~Codifier of Rules~~ administrative law judge must immediately notify the head of the agency. The agency may supplement its statement of need with additional findings or submit a new statement. If the agency provides additional findings or submits a new statement, the ~~Codifier of Rules~~ administrative law judge must review the additional findings or new statement within one business day after the agency submits the additional findings or new statement. If the ~~Codifier of Rules~~ administrative law judge again finds that the statement does not meet the criteria listed in subsection (a), the ~~Codifier of Rules~~ administrative law judge must immediately notify the head of the agency.

If an agency decides not to provide additional findings or submit a new statement when notified by ~~the Codifier of Rules~~ an administrative law judge that the agency's findings of need for a rule do not meet the required criteria, the agency must notify the ~~Codifier of Rules~~ administrative law judge of its decision. The ~~Codifier of Rules~~ administrative law judge must then direct the Codifier of Rules to enter the rule in the North Carolina Administrative Code on the sixth business day after receiving notice of the agency's decision.

(c) Standing. - A person aggrieved by a temporary rule adopted by an agency may file an action for declaratory judgment in Wake County Superior Court pursuant to Article 26 of Chapter 1 of the General Statutes. In the action, the court shall determine whether the agency's written statement of findings of need for the rule meets the criteria listed in subsection (a) and whether the rule meets the standards in G.S. 150B-21.9 that apply to review of a permanent rule. The court may not grant an ex parte temporary restraining order.

Filing a petition for rule making or a request for a declaratory ruling with the agency that adopted the rule is not a prerequisite to filing an action under this subsection. A person who files an action for declaratory judgment under this subsection must serve a copy of the complaint on the agency that adopted the rule being contested, the Chief Administrative Law Judge, the Codifier of Rules, and the Commission.

(d) Effective Date and Expiration. - A temporary rule becomes effective on the date specified in G.S. 150B-21.3. A temporary rule expires on the date specified in the rule or 180 days from the date the rule becomes effective, whichever comes first."

(d) The following four positions at the Office of Administrative Hearings are transferred from that Office to the Office of the Secretary of State: Director of APA Services, Publications Coordinator, Editorial Assistant II, and Editorial Assistant I.

(e) The base budget of the Office of Administrative Hearings is reduced by two hundred eighty thousand two hundred sixty-three dollars ($280,263) for the 1994-95 fiscal year due to the transfer of positions by subsection (g) of this section and the base budget of the Office of the Secretary of State is increased by the same amount.

(f) This section becomes effective July 1, 1994.

---NO OAH HIGH POINT OFFICE.

Sec. 241. (a) The General Assembly finds that:

(1) The Office of Administrative Hearings has a regional office in High Point with a staff of one administrative law judge and one part-time secretary;

(2) The regional High Point Office was established on a trial basis to handle cases in the western part of the State; and

(3) The Government Performance Audit Committee recommends that this regional office be eliminated.

(b) The Office of Administrative Hearings shall close its High Point regional office. The administrative law judge assigned to the regional office is reassigned to the Raleigh office of the Office of Administrative Hearings. The personal services contract of the part-time secretary assigned to the High Point regional office shall not be renewed.

---OAH FEE STRUCTURE.

Sec. 241.1. (a) The General Assembly finds that:

(1) No fees are currently charged in contested cases conducted by the Office of Administrative Hearings;

(2) The Government Performance Audit Committee recommends that 25% of the operating budget of the Office of Administrative Hearings come from user fees;

(3) User fees discourage frivolous cases and reduce reliance on General Fund appropriations.

(b) The Office of Administrative Hearings shall prepare a proposed schedule of fees to apply in contested cases conducted by that Office and must submit the proposed schedule to the General Government Subcommittees of the House and Senate Appropriations Committees of the General Assembly by March 15, 1993. The proposed schedule shall generate approximately 25% of the operating budget of the Office through fees. The fees may be filing fees, costs assessed against the losing party in a contested case, or a combination of these.

---MODIFY AGENCY DECISION PROCESS.

Sec. 242. (a) G.S. 150B-34 reads as rewritten:

"§ 150B-34. Recommended decision or ~~order of administrative law judge.~~ order; reconsideration of decision or order.

"~~(a)~~ Except as provided in G.S. 150B-36(c), in each contested case the presiding administrative law judge shall make a recommended decision or order that contains findings of fact and conclusions of law. The Office of Administrative Hearings must forward a copy of the recommended decision or order to each party. Within 10 days after a party receives the recommended decision or order, the party may apply to the administrative law judge for a new hearing or other appropriate relief allowed under G.S. 1A-1, the Rules of Civil Procedure.

~~(b)~~ ~~Repealed by Session Laws 1991, c. 35, s. 6~~."

(b) G.S. 150B-36 reads as rewritten:

"§ 150B-36. Final decision.

(a) ~~Before the agency makes a final decision, it shall~~ After an agency receives the official record in a contested case, the agency must give each party ~~an opportunity~~ to the contested case 15 days to file exceptions to the decision or order recommended by the administrative law ~~judge,~~ judge and to present written arguments to those in the agency who will make the final decision or order. If none of the parties files exceptions to the recommended decision or order within the 15-day period, the agency is considered to have adopted the administrative law judge's recommended decision or order as the agency's final decision or order.

If a party files in good faith a timely and sufficient affidavit of personal bias or other reason for disqualification of a member of the agency making the final decision, the agency shall determine the matter as a part of the record in the ~~case, and the~~ case. The determination is subject to judicial review at the conclusion of the case.

(b) A final decision or order in a contested case shall be made by the ~~agency in writing after review of~~ agency within the time set by G.S. 150B-44. If the agency does not adopt as its final decision or order the recommended decision or order made in the contested case under subsection (a) of this section, it must make a written final decision or order. In making its final decision or order, the agency may consider only the official record as defined in G.S. 150B-37(a) and the exceptions filed by a party. The final decision or order shall include findings of fact and conclusions of ~~law.~~ law. The findings of fact and conclusions of law made in the contested case by the administrative law judge are binding on the agency in making its final decision or order if they are supported by substantial evidence admissible under G.S. 150B-29(a), 150B-30, or 150B-31 in view of the entire record. If

If the agency does not adopt the administrative law judge's recommended decision or order as its final ~~decision,~~ decision or order, the agency shall state in its decision or order the specific reasons why it did not adopt the administrative law judge's recommended decision. The agency may consider only the official record prepared pursuant to G.S. 150B-37 in making a final decision or order, and the final decision or order shall be supported by substantial evidence admissible under G.S. 150B-29(a), 150B-30, or 150B-31. decision or order. A copy of the agency's decision or order shall be served upon each party personally or by certified mail addressed to the party at the latest address given by the party to the agency, and a copy shall be furnished to ~~his~~ each party's attorney of record and the Office of Administrative Hearings.

(1) A determination that the Office of Administrative Hearings lacks jurisdiction.

(2) An order entered pursuant to the authority in G.S. 7A-759(e).

(3) An order entered pursuant to a written prehearing motion that either dismisses the contested case for failure of the petitioner to prosecute or grants the relief requested when a party does not comply with procedural requirements.

(4) An order entered pursuant to a prehearing motion to dismiss the contested case in accordance with G.S. 1A-1, Rule 12(b) when the order disposes of all issues in the contested case."

"(c) The Office of Administrative Hearings shall forward a copy of the official record to the agency making the final ~~decision and shall forward a copy of the recommended decision to each party.~~ decision."

(d) G.S. 150B-44 reads as rewritten:

"§ 150B-44. Right to judicial intervention when decision unreasonably delayed.

Unreasonable delay on the part of any agency or administrative law judge in taking any required action shall be justification for any person whose rights, duties, or privileges are adversely affected by such delay to seek a court order compelling action by the agency or administrative law judge. An agency that is subject to Article 3 of this Chapter and is not a board or commission has 90 45 days from the day it receives the official record in a contested case from the Office of Administrative Hearings to make a final decision in the case. This time limit may be extended by the parties or, for good cause shown, by the agency for an additional period of up to 90 30 days. An agency that is subject to Article 3 of this Chapter and is a board or commission has 90 45 days from the day it receives the official record in a contested case from the Office of Administrative Hearings or 90 45 days after its next regularly scheduled meeting, whichever is longer, to make a final decision in the case. This time limit may be extended by the parties or, for good cause shown, by the agency for an additional period of up to 90 30 days. If an agency subject to Article 3 of this Chapter has not made a final decision within these time limits, the agency is considered to have adopted the administrative law judge's recommended decision as the agency's final decision. Failure of an agency subject to Article 3A of this Chapter to make a final decision within ~~180~~ 75 days of the close of the contested case hearing is justification for a person whose rights, duties, or privileges are adversely affected by the delay to seek a court order compelling action by the agency or, if the case was heard by an administrative law judge, by the administrative law judge."

(e) G.S. 150B-51 reads as rewritten:

"§ 150B-51. Scope of review.

(a) Initial Determination in Certain Cases. - In reviewing a final decision in a contested case in which an administrative law judge made a recommended decision, the court shall make ~~two~~ three initial determinations. First, the court shall determine whether the agency heard new evidence after receiving the recommended decision. If the court determines that the agency heard new evidence, the court shall reverse the decision or remand the case to the agency to enter a decision in accordance with the evidence in the official record. ~~Second,~~

Second, if the agency did not adopt the recommended decision, the court shall determine whether the administrative law judge's findings of fact and conclusions of law are supported by substantial evidence admissible under G.S. 150B-29(a), 150B-30, or 150B-31 in view of the entire record. If the court determines that the agency failed to adhere to the administrative law judge's findings of fact and conclusions of law that are supported by substantial evidence, the court shall reverse the decision or remand the case to the agency to enter a decision in accordance with the evidence in the official record.

Third, if the agency did not adopt the recommended decision, the court shall determine whether the agency's decision states the specific reasons why the agency did not adopt the recommended decision. If the court determines that the agency did not state specific reasons why it did not adopt a recommended decision, the court shall reverse the decision or remand the case to the agency to enter the specific reasons.

(b) Standard of Review. - After making the determinations, if any, required by subsection (a), the court reviewing a final decision may affirm the decision of the agency or remand the case for further proceedings. It may also reverse or modify the agency's decision if the substantial rights of the petitioners may have been prejudiced because the agency's findings, inferences, conclusions, or decisions are:

(1) In violation of constitutional provisions;

(2) In excess of the statutory authority or jurisdiction of the agency;

(3) Made upon unlawful procedure;

(4) Affected by other error of law;

(5) Unsupported by substantial evidence admissible under G.S. 150B-29(a), 150B-30, or 150B-31 in view of the entire record as submitted; or

(6) Arbitrary or capricious."

(f) This section becomes effective October 1, 1993, and applies to contested cases commenced on or after that date.

---INFO. TECHNOLOGY LEADERSHIP.

Sec. 243. (a) The State Information Processing Services (hereafter referred to as "SIPS" ) shall develop a written plan for a program to provide technical leadership and support in a variety of information technologies to agencies throughout State government. SIPS shall present the written plan to the Information Resource Management Commission (hereafter referred to as "IRMC" ) for approval and implementation not later than December 31, 1993.

(b) SIPS shall prepare a written plan for developing and implementing a training program that will focus its training services in information technologies, software tools, and technical management techniques in which its clients have growing needs. SIPS shall present the written plan to the IRMC for approval and implementation not later than December 31, 1993.

(c) SIPS shall prepare a written plan for setting technical standards for the design, development, and implementation of all new application systems to be run at its data center. SIPS shall present the written plan to the IRMC for approval and implementation not later than December 31, 1993.

(d) SIPS shall prepare a written plan for (i) evaluating the support it provides to Local Area Network (hereafter referred to as "LAN" ) clients and users in State agencies, (ii) determining the most appropriate levels of LAN support it can provide to State agencies, and (iii) deploying LANs in State agencies where LANs are determined to be needed and useful. SIPS shall present the written plan to the IRMC for approval and implementation not later than December 31, 1993.

(e) SIPS shall prepare a written plan for updating its LAN guidelines and standards in such a manner that will support alternative approaches to designing and implementing LANs in State agencies. SIPS shall present the written plan to the IRMC for approval and implementation not later than December 31, 1993.

(f) SIPS shall prepare a written plan for providing training for its staff and for preparing standards and procedures to be used in computer-aided software engineering applications development at SIPS. SIPS shall present the written plan to the IRMC for approval not later than December 31, 1993, and shall implement the plan upon this approval.

(g) This section is effective upon ratification.

---IRMC MANAGEMENT OVERSIGHT.

Sec. 244. (a) The Information Resources Management Commission (hereafter "IRMC" ) shall develop a written plan not later than December 31, 1993, for encouraging all State agencies to establish oversight of the information resource management function within the top management levels of each agency. The IRMC shall present the plan to the Joint Legislative Commission on Governmental Operations not later than December 31, 1993.

(b) This section is effective upon ratification.

---INFO. TECH. BRIEFINGS.

Sec. 245. (a) The Information Resources Management Commission (hereafter referred to as "IRMC" ) shall prepare and adopt a plan for sponsoring periodic briefings for senior executive agency officials, senior judicial branch officials, and members of the General Assembly on major topics, issues, trends, and developments in information technology.

(b) The IRMC shall present the plan for the briefings to the Joint Legislative Commission on Governmental Operations not later than July 1, 1993, and shall implement the plan, incorporating where possible and practicable any revisions suggested by the Joint Legislative Commission on Governmental Operations, immediately after the presentation.

(c) The IRMC shall prepare and deliver a written report to the Joint Legislative Commission on Governmental Operations not later than December 31, 1993, listing (i) the number of such briefings held during 1993, (ii) a brief description of the contents of the briefings, (iii) a list of persons from the three branches of government who attended the meetings, (iv) an evaluation of the effectiveness of the meetings, and (v) plans for future meetings.

(d) This section is effective upon ratification.

---SIPS INTERNAL MANAGEMENT.

Sec. 246. (a) The State Information Processing Services (hereafter referred to as "SIPS" ) shall develop a written plan to strengthen its problem reporting operations. SIPS shall present the written plan to the Information Resource Management Commission (hereafter referred to as "IRMC" ) for approval and implementation not later than December 31, 1993.

(b) SIPS shall develop a plan for a quality assurance operation inside its organizational structure. SIPS shall present the written plan to the IRMC for approval and implementation not later than December 31, 1993.

(c) SIPS shall develop a plan to combine the two sides of its mainframe computer into a single image system. SIPS shall present the written plan to the IRMC for approval and implementation not later than December 31, 1993.

(d) SIPS shall develop a plan to make operational a fully functional change management system concerning its computer resources, telecommunications resources, and consulting services. SIPS shall present the written plan to the IRMC for approval and implementation not later than December 31, 1993.

(e) SIPS shall prepare a written plan for a version/release approach to maintaining all production systems on SIPS' mainframe computers. The plan shall cover production systems maintained either by SIPS or by the agencies using the SIPS mainframe computers. SIPS shall present the written plan to the IRMC for approval and implementation not later than December 31, 1993.

(f) SIPS shall prepare a documented plan for a training program to cross-train its system programmers to provide more backup staff resources for critical systems products and applications. SIPS shall present the written plan concerning the training program to the IRMC for approval and implementation not later than December 31, 1993.

(g) SIPS shall update all job title classifications for its employees, in conjunction with the Office of State Personnel, not later than December 31, 1993.

(h) This section is effective upon ratification.

---PERSONAL COMPUTER PLANNING.

Sec. 246.1. (a) The Information Resources Management Commission (hereafter referred to as "IRMC" ) shall develop procedures for requiring agencies to submit plans for purchasing and using personal computers and workstations before authorizing the agencies to purchase these devices. The IRMC shall present its draft procedures, including drafts of any legislation that would be required to prohibit agency purchases of personal computers and workstations without plans approved by the IRMC, to the Joint Legislative Commission on Government Operations not later than December 31, 1993.

(b) This section is effective upon ratification.

---SIPS RATES AND FINANCES.

Sec. 247. (a) The State Information Processing Services (hereafter referred to as "SIPS" ) shall evaluate and simplify its procedures and processes for billing customers for use of its services. SIPS shall submit a plan for implementing the new billing procedures and processes to the Information Resource Management Commission (hereafter referred to as "IRMC" ) for approval and implementation not later than July 1, 1993.

(b) SIPS shall evaluate and redesign the billing report format that it provides to its customers in order to meet their information needs. SIPS shall submit a plan for implementing the new billing report format to the IRMC for approval and implementation not later than July 1, 1993.

(c) The IRMC shall adopt not later than July 1, 1993, written procedures for setting rates charged to customers of the SIPS computing, consulting, telecommunications, and related services.

(d) The Office of State Controller (hereafter referred to "OSC" ) shall prepare a written plan for assisting State agencies in preparation for the impact of Revision to the United States Office of Management and Budget Circular A-87, "Cost Principles for State and Local Government" as revised. OSC shall submit the plan to the IRMC for approval and implementation not later than July 1, 1993.

(e) SIPS shall prepare an evaluation of costs and benefits of implementing leasing as a financing strategy for purchasing its mainframe computers. This evaluation shall include an analysis of the requirements for annual reserve fund accumulations at SIPS and the effect on total billing rates for SIPS' client agencies. This evaluation shall include an analysis of any statutory changes or constitutional changes that would be required to permit such leasing procedures for mainframe computers. SIPS shall submit the report to the Office of State Budget and Management, the Office of State Controller, the IRMC, and the Joint Legislative Commission on Governmental Operations not later than July 1, 1993.

(f) This section is effective upon ratification.

---SIPS CAPACITY PLANNING.

Sec. 247.1. (a) The State Information Processing Services (hereafter referred to as "SIPS" ) shall prepare and document a plan for developing and implementing a technically competent and adequately staffed performance analysis and capacity planning operation for its information systems and telecommunications networks. As part of its plan, SIPS shall propose to the Information Resource Management Commission (hereafter referred to as "IRMC" ) the implementation of the computer programs necessary to support performance analysis and capacity planning operations. SIPS shall present the written plan to the IRMC for approval and implementation not later than December 31, 1993.

(b) This section is effective upon ratification.

---SIPS CUSTOMER SERVICES.

Sec. 248. (a) The State Information Processing Services (hereafter referred to as "SIPS" ) shall develop a written plan for providing service to its customers that incorporates SIPS needs to be competitive in the total costs of such services to SIPS customers. The plan shall compare SIPS service plans and capabilities with services from alternative sources of technology, such as purchase of service from commercial vendors and purchase of agency computers and networks that are smaller than mainframes. SIPS shall present the written plan to the Information Resource Management Commission (hereafter referred to as "IRMC" ) for approval not later than September 1, 1993.

(b) The State Information Processing Service shall develop a written plan (i) for instituting a client service management program and (ii) for instituting procedures for improving its relations with all of its customers. SIPS shall submit the written plan to the IRMC for approval not later than September 1, 1993, and shall implement the plan upon this approval.

(c) The State Information Processing Service shall develop specific measures of service performance that are oriented to meeting the needs of its clients and shall develop written service level agreements for committing to meet these performance standards when requested to do so by a user of SIPS services. SIPS shall submit the measures of service performance and its plans for instituting service level agreements with clients to the IRMC for approval not later than September 1, 1993, and shall begin the service level agreement process upon approval of its plan by the IRMC.

(d) This section is effective upon ratification.

---AGENCY INFO. TECH. OPERATIONS.

Sec. 249. (a) The Information Resources Management Commission (hereafter referred to as "IRMC" ) shall develop a written plan and guidelines for agencies to adopt a uniform set of policies, procedures, and standards relating to the procurement, management, and use of information and telecommunications technology. The IRMC shall present the written plan and guidelines to the Joint Legislative Commission on Governmental Operations not later than September 30, 1993.

(b) The IRMC shall develop a written plan for encouraging and assisting agencies to link their information technology plans to their program objectives throughout the agency. The IRMC shall deliver its written plan to the Joint Legislative Commission on Governmental Operations not later than September 30, 1993.

(c) The IRMC shall develop a written plan and procedure by which every agency under its jurisdiction shall submit its information technology plans for review and comment by either IRMC staff or information resource managers selected by the IRMC from at least two other agencies. The purpose of these reviews shall be to:

(1) Familiarize agencies with other agencies' information technology operations, and

(2) Provide constructive reviews and suggestions for agencies' information technology operations.

The plan and procedure developed by the IRMC shall result in every agency under its jurisdiction having its information technology plans reviewed at least once every three years. The IRMC shall deliver the written plan for this review procedure to the Joint Legislative Commission on Governmental Operations not later than December 31, 1993.

(d) The State Information Processing Services (hereafter referred to as "SIPS" ) shall prepare a written plan for linking its strategic and operational plans to the information technology plans and policies of its customers and client agencies. SIPS shall deliver this plan to the Information Resources Management Commission not later than December 31, 1993, and shall implement the plan upon receiving approval of the plan.

(e) This section is effective upon ratification.

---INFO. TECH. JOB DESCRIPTIONS.

Sec. 250. (a) The Information Resources Management Commission (hereafter referred to as "IRMC" ), working in coordination with the Office of State Personnel and the personnel officers in the executive agencies, shall develop a written plan for continuously updating information technology position descriptions at the State Information Processing Services and all executive agencies to reflect current qualifications requirements for those positions. The IRMC shall present the results of the initial updating efforts and the plan for continuously revising and updating the position descriptions to the Joint Legislative Commission on Governmental Operations not later than December 31, 1993.

(b) This section is effective upon ratification.

---INFO. TECH. DISASTER RECOV.

Sec. 251. (a) The Information Resources Management Commission (hereafter referred to as "IRMC" ) shall establish policies and guidelines for disaster recovery plans and operations at the State Information Processing Services (hereafter referred to as "SIPS" ). These policies and guidelines shall be established not later than June 30, 1993.

(b) The IRMC shall establish policies and guidelines for State agencies to follow in developing disaster recovery plans and operations. The IRMC shall present these policies and guidelines to the Joint Legislative Commission on Governmental Operations not later than June 30, 1993.

(c) SIPS shall prepare a report on steps it has taken to develop a contract for full-facility disaster recovery services, commonly referred to as a "hot site" facility, that will provide disaster recovery coverage for critical applications on the State computer center's mainframe computer and network as well as disaster recovery coverage for critical applications on other State mainframe computers. SIPS shall deliver the report to the IRMC not later than July 31, 1993.

(d) All State departments under the jurisdiction of the IRMC shall submit to the IRMC their plans for participating in and using the SIPS contract for hot site disaster recovery services to recover any of their applications that are determined by the IRMC or the SIPS hot site contract to be critical to the operations of State government. The State departments shall submit these plans to the IRMC not later than July 31, 1993.

(e) This section is effective upon ratification.

---AGENCY AUDIT RESPONSE.

Sec. 252. (a) Not later than July 1, 1993, the Department of Environment, Health, and Natural Resources, the Department of Human Resources, the Department of Public Instruction, the Department of Revenue, the Department of State Treasurer, the Department of Transportation, the Employment Security Commission, and the Administrative Office of the Courts shall deliver written reports to the Information Resource Management Commission on actions they have taken to address each of the findings and recommendations concerning the management and operation of their respective information systems, as published in the North Carolina General Assembly's Government Performance Audit Committee's Performance Audit of Information Technology and Telecommunications, Volume II, December 1992.

(b) Not later than July 1, 1993, the Legislative Automated Systems Division in the Legislative Services Office shall deliver a written report to the Legislative Services Commission on actions that staff division has taken to address each of the findings and recommendations concerning the management and operation of the North Carolina General Assembly's information systems, as published in the North Carolina General Assembly's Government Performance Audit Committee's Performance Audit of Information Technology and Telecommunications, Volume II, December 1992. This report shall contain any written response to the audit prepared by the Legislative Automated Systems Division, but not included in the North Carolina General Assembly's Government Performance Audit Committee's Performance Audit of Information Technology and Telecommunications, Volume II, December 1992.

(c) Not later than December 31, 1993, the Department of Environment, Health, and Natural Resources, the Department of Human Resources, the Department of Public Instruction, the Department of Revenue, the Department of State Treasurer, the Department of Transportation, the Employment Security Commission, and the Administrative Office of the Courts shall deliver written, updated reports to the Information Resource Management Commission on actions they have taken to address each of the findings and recommendations concerning the management and operation of their respective information systems, as published in the North Carolina General Assembly's Government Performance Audit Committee's Performance Audit of Information Technology and Telecommunications, Volume II, December 1992.

(d) Not later than December 31, 1993, the Legislative Automated Systems Division in the Legislative Services Office shall deliver a written, updated report to the Legislative Services Commission on actions that staff division has taken to address each of the findings and recommendations concerning the management and operation of the North Carolina General Assembly's information systems, as published in the North Carolina General Assembly's Government Performance Audit Committee's Performance Audit of Information Technology and Telecommunications, Volume II, December 1992.

(e) This section is effective upon ratification.

---INFO. STAFF RELOCATION.

Sec. 253. (a) The Information Resources Management Commission (hereafter referred to as "IRMC" ) shall develop a plan for relocating information systems technical staff positions, including but not limited to computer programmers, systems analysts, database administrators, and other data processing specialists, from the agencies in which they now work to the State Information Processing Services wherever feasible.

(b) The plan shall detail (i) the financial savings of each proposed relocation and (ii) other benefits of the proposed centralization, and (iii) projected direct and indirect costs to the State of the proposed centralization.

(c) The IRMC shall present this plan to the Joint Legislative Commission on Governmental Operations not later than December 31, 1993.

(d) This section is effective upon ratification.

---INFO. TECH. MULTIYEAR FUNDS.

Sec. 254. (a) The Fiscal Research Division of the Legislative Services Office shall develop a procedure for funding information technology and telecommunications projects that extend more than two years. The procedure shall include recommendations for any needed changes in the rules of the Senate and House of Representatives, changes in the operation and procedures of budget, appropriations, and finance committees, and changes in the statutes that would be necessary to encourage or permit funding information systems and telecommunications projects that extend more than two years.

(b) The Fiscal Research Division shall deliver its draft procedure for approval to the Legislative Services Commission not later than December 31, 1993.

---ALTERNATIVE INFO. RESOURCES.

Sec. 255. (a) The Information Resources Management Commission (hereafter referred to as "IRMC" ) shall develop a written policy that specifies the conditions under which an agency may purchase, implement, and use mainframe computer resources and telecommunications resources other than those provided by the State Information Processing Services. The IRMC shall deliver the written policy to the Joint Legislative Commission on Government Operations not later than December 31, 1993.

(b) This section is effective upon ratification.

---TELECOMMUNICATIONS REORGANIZATION.

Sec. 256. The Information Resource Management Commission (hereafter referred to as "IRMC" ) shall prepare and adopt, not later than December 31, 1993, written guidelines that specify those responsibilities that pertain to the operation of the State Telecommunication System (hereafter referred to as "STS" ) and those responsibilities that pertain to the operation of the State agency telecommunications functions.

Sec. 257. The State Information Processing Services (hereafter referred to as "SIPS" ) shall prepare a plan for the delivery of telecommunications services to State agencies and include in the plan techniques for ensuring that State agency user needs are given priority over the interests of telecommunications equipment and service vendors. SIPS shall present the plan for delivery of telecommunications services to the IRMC not later than December 31, 1993.

Sec. 258. SIPS shall prepare a plan for implementing its "bandwidth on demand" concept and submit the plan to the IRMC not later than December 31, 1993.

Sec. 259. The IRMC shall prepare a plan for consolidating any multiple voice, video, and data networks within or across State agencies that it deems appropriate to consolidate. Upon adoption of the plan, the IRMC shall present the plan to the Joint Legislative Commission on Governmental Operations.

Sec. 260. SIPS shall evaluate and revise its telecommunications disaster recovery plan and coordinate that plan with the disaster recovery plan for the State computer center. SIPS shall present its revised telecommunications disaster recovery plan to the Information Resources Management Commission not later than December 31, 1993.

Sec. 261. The IRMC and The University of North Carolina jointly shall prepare a written evaluation of the costs, benefits, and feasibility of consolidating the portions of the University of North Carolina Education Computing Service's (hereafter referred to as "UNCECS" ) wide area network that are currently owned by the UNCECS onto the STS's North Carolina Integrated Network (hereafter referred to as "NCIN" ) and the Microelectronics Center of North Carolina (hereafter referred to as "MCNC" ) CONCERT data network. The IRMC and The University of North Carolina shall jointly present the written evaluation to the Joint Legislative Commission on Governmental Operations not later than December 31, 1993.

Sec. 262. The IRMC and the Administrative Office of the Courts jointly shall prepare a written evaluation of the costs, benefits, and feasibility of transferring ownership of the Administrative Office of the Courts' network back to the ownership and management of the State Telecommunications System. The evaluation shall include an independent study verifying that incremental operating costs (including incremental overhead costs) are lower under STS, and a service level agreement between STS and the Administrative Office of the Courts that meets the Administrative Office of the Courts' requirements for network service. The IRMC and the Administrative Office of the Courts jointly shall present the written evaluation to the Joint Legislative Commission on Governmental Operations not later than December 31, 1993.

Sec. 263. The IRMC and the MCNC jointly shall prepare a written evaluation of the costs, benefits, and feasibility of moving ownership and management of the MCNC CONCERT data network, that can be efficiently managed and supported by the STS, over to the STS North Carolina Integrated Network. The IRMC and the MCNC jointly shall present the written evaluation to the Joint Legislative Commission on Governmental Operations not later than December 31, 1993.

Sec. 264. The IRMC and the Department of Justice jointly shall investigate the costs, benefits, and feasibility of transferring the Department of Justice's Police Information Network to the ownership or management of the STS North Carolina Integrated Network. This evaluation shall include investigation of the technical ability of maintaining network security for the Police Information Network, as required by federal government rules and regulations, on a shared physical communications network. The IRMC and the Department of Justice jointly shall present a written report on the results of the investigation to the Joint Legislative Commission on Governmental Operations not later than December 31, 1993.

Sec. 265. The IRMC, the Department of Administration Agency for Public Telecommunications, and the North Carolina Center for Public Television jointly shall develop a written plan and timetable to promote the sharing of facilities and telecommunications resources between the Agency for Public Telecommunications and the North Carolina Center for Public Telecommunications. The IRMC, the Department of Administration Agency for Public Telecommunications, and the North Carolina Center for Public Television jointly shall present the written plan and timetable to the Joint Legislative Commission on Governmental Operations not later than March 31, 1994.

Sec. 266. The IRMC shall prepare a written plan to establish stronger centralized governance over its wide area communications networks. The plan shall include involvement of three organizational components: (i) a Director of Statewide Telecommunications, (ii) a Telecommunications Advisory Board, and (iii) an expansion of IRMC membership to include at least one telecommunications official in State government. The plan for stronger centralized governance shall apply to the wide area communications networks only as the transport mechanism to move information. The IRMC shall present the written plan to the Joint Legislative Commission on Governmental Operations not later than December 31, 1993.

Sec. 267. The IRMC and the STS shall prepare a written needs assessment, requirements analysis, and feasibility study for migrating networks to a new broadband technology that will support activities including, but not limited to, greater use of local area network interconnections, geographic information systems, image processing, video conferencing, State and county library interconnections, and educational television. The written plan shall include an assessment of demand for the increased bandwidth, a comprehensive cost analysis of migrating to a new broadband technology, an assessment of broadband technology's reliability in actual operation, and an assessment of the ability of technology vendors to deliver the network as it has been proposed. The IRMC shall present the written needs assessment, requirements analysis, and feasibility plan to the Joint Legislative Commission on Governmental Operations not later than December 31, 1993.

Sec. 268. The Microelectronics Center of North Carolina shall prepare a written needs assessment, requirements analysis, and feasibility study for replacing and expanding its analog microwave segments with optic fiber provided by a common carrier. Among its topics, the reports shall address current capacity constraints, anticipated capacity constraints over the next five years, and realistic, anticipated demand growth over the next five years. The MCNC shall deliver the written needs assessment, requirements analysis, and feasibility study to the IRMC and the Joint Legislative Commission on Governmental Operations not later than December 31, 1993.

Sec. 269. The IRMC shall direct an evaluation of the three pilot projects currently underway on two-way video teleconferencing for distance learning and remote medical diagnosis. The State shall not replace the funding of the pilot projects from the current grantors or sponsors before the completion of the evaluation, which shall (i) examine the findings and conclusions of the distance learning pilot projects, and (ii) validate the pilot projects' effectiveness in supporting training in schools, homes, and State agencies.

Sec. 270. The IRMC shall direct the Agency for Public Telecommunications in preparing a written needs assessment, requirements analysis, feasibility study, and documented demand analysis of the Agency for Public Telecommunications' proposal to broadcast gavel-to-gavel coverage of General Assembly sessions. Neither the Agency for Public Telecommunications nor any other State agency shall spend State funds for the purchase and installation of satellite receiving equipment nor for the retrofitting of satellite uplinks to accommodate "Ku Band" technology in order to broadcast gavel-to-gavel coverage of General Assembly sessions prior to the completion of the IRMC-directed report. The IRMC and the Agency for Public Telecommunications shall deliver the written report, along with recommendations of the IRMC, to the Joint Legislative Commission on Government Operations not later than December 31, 1993.

Sec. 271. The University of North Carolina shall prepare a written plan for upgrading the University of North Carolina Education Computing Services' LINCNET (i) to support greater bandwidth applications, such as file/catalog transfer, and (ii) to be compatible with the Triangle-area library network, consisting of Duke University, North Carolina State University, and the University of North Carolina at Chapel Hill. The University shall deliver the written plan to the Joint Legislative Commission on Government Operations not later than December 31, 1993.

Sec. 272. The State Telecommunications System shall develop a written plan to pursue a single statewide Centrex tariff with each of the current geographic carriers. The STS shall deliver the written plan to the IRMC not later than December 31, 1993.

Sec. 273. The State Telecommunications System shall develop a plan and a draft request for proposal for a single bulk discount agreement with the long-distance InterExchange Carrier voice telecommunications service. The STS shall deliver the written plan and draft request for proposal to the IRMC for approval not later than December 31, 1993.

Sec. 274. Sections 256 through 273 of this act are effective upon ratification.

---IRMC DUTIES AND AGENCY IRM.

Sec. 275. G.S. 143B-426.21(b) is amended by adding a new subdivision to read:

"(9) To prepare and maintain a statewide data security plan, including data security standards and security audit standards, to protect the integrity and confidentiality of sensitive data and communications that reside on the State's computers and that move through the State's telecommunications networks."

Sec. 276. G.S. 143B-426.21 is amended by adding new subsections to read:

"( d) Agency Information Resource Manager Reports. - Each executive agency shall designate in January of each year to the Information Resource Management Commission the senior staff member in the agency who serves as the Information Resource Manager in the agency. Not later than the last business day of the first month of each calendar quarter, the Information Resource Manager in each agency shall deliver to the Commission a written report summarizing the agency's expenditures in the previous calendar quarter for information technology hardware, information technology software, telecommunications, information technology consulting services, information technology personnel, and other miscellaneous information technology expenses. The report also shall contain brief descriptions of the major information technology initiatives undertaken in the previous calendar quarter and the tangible results from each initiative.

(e) Agency Telecommunications Resource Managers. - Each State agency shall designate in January of each year one of its employees or officials to the Information Resource Management Commission as the Telecommunications Resource Manager for the agency. The person designated by the agency as the Telecommunications Resource Manager may be the same person designated as the agency Information Resource Manager. Any state advisory board or commission that makes recommendations to the State Information Processing Service concerning the operation of its computer and telecommunications resources shall include at least two members from the persons who have been designated as agency telecommunications resource managers.

(f) State Information Processing Services Telecommunications Plans. - The State Information Processing Services (hereafter 'SIPS') shall submit an annual telecommunications plan, including plans for the expenditures and operations of the State Telecommunications System, to the first regularly scheduled meeting of the Information Resource Management Commission each year. The Commission shall incorporate information that it deems relevant and useful from this annual telecommunications plan in the annual statewide information technology strategy presented to the General Assembly on the first day of each regular session.

SIPS shall submit a strategic plan for State telecommunications to the first regularly scheduled meeting of the Information Resource Management Commission each year. The strategic plan shall include statements of direction for the development of voice, data, and video technology to be made available to State government through the State Telecommunications System in the coming three-to-five years. The strategic telecommunications plan shall summarize its anticipated costs and benefits to State government and the citizens of North Carolina. The Commission shall incorporate information that it deems relevant and useful from this strategic telecommunications plan in the annual statewide information technology strategy presented to the General Assembly on the first day of each regular session.

(g) Risk Notifications. - The Information Resources Management Commission shall establish and maintain procedures for periodically identifying (i) agencies facing risks to the continuing operation of their information technology systems or (ii) agencies facing risks to the successful implementation of new information technology applications. Any agency identified and notified by the Commission as facing risks under this subsection shall prepare a written plan to reduce and eliminate these risks. The affected agencies shall deliver their plans to the Commission not later than 90 days after receiving the notification from the Commission."

Sec. 277. Sections 275 and 276 of this act are effective upon ratification.

---ABC RULE AND LAW ENFORCEMENT.

Sec. 278. (a) The Chairman of the North Carolina Alcoholic Beverage Commission, in conjunction with the Secretary of Crime Control and Public Safety and the Director of the State Bureau of Investigation, shall submit a plan, including necessary statutory changes, to the General Assembly, on or before May 1, 1993, providing for:

(1) The phasing out of the Alcoholic Law Enforcement Division of the Department of Crime Control and Public Safety;

(2) Transfer of primary liquor law enforcement to local ABC law enforcement agents and local law enforcement agents;

(3) Transfer of primary responsibility for investigation of inter-county and inter-State alcohol related criminal activities to the State Bureau of Investigation;

(4) Transfer of regulatory and public education responsibilities of the Alcohol Law Enforcement Division to the North Carolina Alcoholic Beverage Commission.

These transfers shall be implemented by the Governor on or before January 1, 1995.

(b) The regulatory staffing for the North Carolina Alcoholic Beverage Commission required by the transfer in subdivision (a)(4) of this section shall consist of no more than 55 regulators and 7 support staff. Existing Alcohol Law Enforcement Division personnel shall be given preference in transferring to the North Carolina Alcoholic Beverage Commission or taking enforcement positions with local ABC boards.

(b1) G.S. 18B-805(b) reads as rewritten:

"(b) Primary Distribution. - Before making any other distribution, a local board shall first pay the following from its gross receipts:

(1) The board shall pay the expenses, including salaries, of operating the local ABC system.

(2) Each month the local board shall pay to the Department of Revenue the taxes due the Department. In addition to the taxes levied under Chapter 105 of the General Statutes, the local board shall pay to the Department one-half of both the mixed beverages surcharge required by G.S. 18B-804(b)(8) and the guest room cabinet surcharge required by G.S. 18B-804(b)(9).

(3) Each month the local board shall pay to the Department of Human Resources ~~five percent (5%)~~ ten percent (10%) of both the mixed beverages surcharge required by G.S. 18B-804(b)(8) and the guest room cabinet surcharge required by G.S. 18B-804(b)(9). The Department of Human Resources shall spend those funds for the treatment of alcoholism or substance abuse, or for research or education on alcohol or substance abuse.

(4) Each month the local board shall pay to the county commissioners of the county where the charge is collected the proceeds from the bottle charge required by G.S. 18B-804(b)(6), to be spent by the county commissioners for the purposes stated in subsection (h) of this section."

(c) There is appropriated from the General Fund to the State Alcoholic Beverage Commission the sum of three million one hundred sixty-five thousand nine hundred twenty-eight dollars ($3,165,928) for the 1993-94 fiscal year and the sum of three million ninety-eight thousand five hundred forty-four dollars ($3,098,544) for the 1994-95 fiscal year to implement the transfers of functions mandated by this section.

(d) There is appropriated from the General Fund to the State Bureau of Investigation the sum of two million eight hundred seven thousand five hundred twenty-one dollars ($2,807,521) for the 1993-94 fiscal year and the sum of two million seven hundred forty-seven thousand seven hundred sixty-six dollars ($2,747,766) for the 1994-95 fiscal year to implement the transfers of functions mandated by this section.

(e) The base budget of the Department of Crime Control and Public Safety is reduced by five million nine hundred seventy-three thousand four hundred forty-nine dollars ($5,973,449) for the 1993-94 fiscal year and by five million eight hundred forty-six thousand three hundred ten dollars ($5,846,310) for the 1994-95 fiscal year due to the decrease in personnel positions as a result of the transfers mandated by this section.

(f) This section is effective upon ratification except for subsections (c) through (e), which shall become effective on July 1, 1993, but only if the transfer of the regulatory and educational functions of the Alcohol Law Enforcement Division to the North Carolina Alcoholic Beverage Commission has been completed.