S.L. 1999-237

SESSION 1999

SESSION LAW 1999-237

AN ACT TO APPROPRIATE FUNDS FOR CURRENT OPERATIONS AND CAPITAL IMPROVEMENTS OF STATE DEPARTMENTS, INSTITUTIONS, AND AGENCIES, AND FOR OTHER PURPOSES.

The General Assembly of North Carolina enacts:

PART I. INTRODUCTION AND TITLE OF ACT

INTRODUCTION

Section 1. The appropriations made in this act are for maximum amounts necessary to provide the services and accomplish the purposes described in the budget. Savings shall be effected where the total amounts appropriated are not required to perform these services and accomplish these purposes and, except as allowed by the Executive Budget Act, or this act, the savings shall revert to the appropriate fund at the end of each fiscal year.

TITLE OF ACT

Section 1.1. This act shall be known as "The Current Operations and Capital Improvements Appropriations Act of 1999."

PART II. CURRENT OPERATIONS/GENERAL FUND

Section 2. Appropriations from the General Fund of the State for the maintenance of the State departments, institutions, and agencies, and for other purposes as enumerated are made for the biennium ending June 30, 2001, according to the following schedule:

1999-2000 2000-2001

General Assembly $34,980,575 $39,518,408

Office of the Governor:

01. Office of the Governor 5,263,364 5,282,172

02. Office of State Budget and Management 4,146,118 4,247,782

03. Office of State Planning 2,147,099 2,147,099

04. Special Appropriations 5,655,000 3,080,000

Office of Lieutenant Governor 640,485 640,485

Department of Secretary of State 6,688,118 6,455,933

Department of State Auditor 11,614,631 11,608,041

Department of State Treasurer

01. State Treasurer 6,810,844 6,568,253

02. Special Appropriations 12,294,780 12,294,780

Department of Insurance

01. Insurance 22,008,763 21,599,037

02. Special Appropriations 4,500,000 4,500,000

Department of Administration 60,947,632 60,089,326

Office of State Controller 11,482,568 11,488,315

Office of Administrative Hearings 2,757,199 2,786,455

Rules Review Commission 317,343 309,326

Department of Cultural Resources

01. Cultural Resources 69,888,077 58,182,464

02. Roanoke Island Commission 1,826,157 1,826,157

Department of Revenue 79,017,984 75,505,633

State Board of Elections 3,199,660 3,199,660

Judicial Department 340,410,625 347,361,291

Office of Juvenile Justice 135,991,466 140,018,378

Department of Justice 73,151,122 72,575,950

Department of Correction 891,377,319 889,943,525

Department of Crime Control and Public Safety 36,791,794 36,267,844

Department of Health and Human Services

01. DHHS - Administration and Support 93,086,130 89,806,803

02. Division of Aging 30,042,117 29,792,117

03. Division of Child Development 286,012,727 305,441,553

04. Division of Services for the Deaf and

Hard of Hearing 31,604,083 31,989,549

05. Division of Social Services 150,394,120 185,459,375

06. Division of Medical Assistance 1,348,453,847 1,539,549,270

07. Division of Services for the Blind 17,462,992 17,455,155

08. Division of Mental Health, Developmental

Disabilities, and Substance

Abuse Services 614,290,187 607,658,021

09. Division of Facility Services 10,937,289 11,198,856

10. Division of Vocational Rehabilitation

Services 39,041,887 38,256,403

11. Division of Public Health 133,361,183 131,979,059

12. North Carolina Health Choice 22,092,346 25,509,475

Total Department of Health

and Human Services 2,776,778,908 3,014,095,636

Department of Public Education 5,262,627,676 5,277,518,248

Community Colleges System Office 579,803,851 591,015,693

University of North Carolina - Board of Governors

01. General Administration 41,659,202 42,077,020

02. University Institutional Programs 94,684,274 92,064,402

03. Related Educational Programs 85,975,006 88,964,245

04. University of North Carolina at Chapel Hill

a. Academic Affairs 177,293,233 177,575,523

b. Health Affairs 144,910,088 145,843,687

c. Area Health Education Centers 44,094,068 44,116,310

05. North Carolina State University at Raleigh

a. Academic Affairs 234,331,766 235,906,137

b. Agricultural Research Service 45,549,404 45,422,994

c. Agricultural Extension Service 36,031,921 35,969,822

06. University of North Carolina at Greensboro 78,810,304 79,052,368

07. University of North Carolina at Charlotte 83,166,903 83,378,506

08. University of North Carolina at Asheville 22,017,704 22,061,697

09. University of North Carolina

at Wilmington 49,957,856 50,325,018

10. East Carolina University

a. Academic Affairs 101,589,323 101,704,564

b. Division of Health Affairs 41,109,992 44,107,886

11. North Carolina Agricultural

and Technical State

University 53,492,454 53,491,976

12. Western Carolina University 47,364,534 47,539,139

13. Appalachian State University 72,063,889 74,072,087

14. University of North Carolina at Pembroke 20,456,907 20,452,780

15. Winston-Salem State University 24,000,509 24,147,742

16. Elizabeth City State University 19,279,750 19,342,413

17. Fayetteville State University 25,992,535 26,012,535

18. North Carolina Central University 39,206,985 39,048,808

19. North Carolina School of the Arts 14,463,446 14,710,424

20. North Carolina School of Science

and Mathematics 10,391,245 10,432,372

21. University of North Carolina Hospitals

at Chapel Hill 36,351,025 39,042,772

Total University of North Carolina 1,644,244,323 1,656,863,227

Office of the Governor - Housing Finance 11,300,000 5,300,000

Department of Agriculture and Consumer

Services 56,813,419 54,146,601

Department of Labor 16,469,251 16,369,251

Department of Environment and

Natural Resources 156,016,907 157,700,273

Department of Commerce

01. Commerce 47,198,448 43,745,365

02. State Aid to Non-State Entities 11,100,000 5,200,000

03. Rural Economic Development Center 7,257,338 4,257,338

04. Biotechnology Center 9,638,913 7,638,913

05. State Information Processing Services 3,596,000 -0-

Department of Transportation 20,973,881 15,434,165

Contingency and Emergency 1,125,000 1,125,000

Welfare Reform 412,503 412,503

Reserve for Compensation Increase -

1998-99 continued 63,627,578 63,627,578

Reserve for Compensation Increase - 1999-2000 397,600,000 397,600,000

Reserve for Compensation Bonus 16,400,000 -0-

Reserve for SPA Minimum Salary 100,000 100,000

Reserve for Salary Adjustments 3,944,303 4,444,303

Reserve for Consolidated Mail Services (1,000,000) (1,500,000)

Reserve for Judicial Retirement Adjustment (900,000) (900,000)

Reserve for Positions Vacated by Retirement (12,709,439) (12,709,439)

Reserve for State Health Plan 110,000,000 147,000,000

Reserve for Retirees Health Benefits (144,000,000) -0-

Debt Service

01. Debt Service 191,910,930 290,709,550

02. Federal Reimbursement 1,155,948 1,155,948

GRAND TOTAL CURRENT OPERATIONS -

GENERAL FUND $13,055,394,461 $13,557,846,467

PART III. CURRENT OPERATIONS AND EXPANSION/HIGHWAY FUND

Section 3. Appropriations from the Highway Fund of the State for the maintenance and operation of the Department of Transportation, and for other purposes as enumerated, are made for the biennium ending June 30, 2001, according to the following schedule:

Current Operations - Highway Fund 1999-2000 2000-2001

Department of Transportation

01. Administration 64,405,831 64,409,242

02. Operations 36,476,296 36,495,582

03. Construction and Maintenance

a. Construction

(01) Primary Construction - -

(02) Secondary Construction 84,777,000 87,710,000

(03) Urban Construction 14,000,000 14,000,000

(04) Access and Public

Service Roads 2,000,000 2,000,000

(05) Discretionary Fund 10,000,000 10,000,000

(06) Spot Safety Construction 9,100,000 9,100,000

b. State Funds to Match Federal

Highway Aid 3,856,821 3,856,821

c. State Maintenance 463,069,469 462,069,469

d. Ferry Operations 18,174,622 18,174,622

e. Capital Improvements -0- -0-

f. State Aid to Municipalities 84,777,000 87,710,000

g. State Aid for Public

Transportation and Railroads 57,081,326 54,554,009

h. OSHA - State 425,000 425,000

04. Governor's Highway Safety Program 338,121 338,121

05. Division of Motor Vehicles 91,133,577 92,987,232

06. Reserves and Transfers 215,074,937 237,579,902

GRAND TOTAL CURRENT OPERATIONS

AND EXPANSION 1,154,690,000 1,181,410,000

PART IV. HIGHWAY TRUST FUND

Section 4 Appropriations from the Highway Trust Fund are made for the fiscal biennium ending June 30, 2001, according to the following schedule:

Highway Trust Fund 1999-2000 2000-2001

01. Intrastate System 401,102,481 419,674,677

02. Secondary Roads Construction 75,899,292 78,524,234

03. Urban Loops 162,189,139 169,698,962

04. State Aid - Municipalities 42,085,006 44,033,663

05. Program Administration 28,768,082 30,128,464

06. Transfer to General Fund 170,000,000 170,000,000

GRAND TOTAL - HIGHWAY TRUST FUND 880,044,000 912,060,000

PART V. BLOCK GRANT FUNDS

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

DHHS BLOCK GRANT PROVISIONS

Section 5.(a) Appropriations from federal block grant funds are made for the fiscal year ending June 30, 2000, according to the following schedule:

COMMUNITY SERVICES BLOCK GRANT

01. Community Action Agencies $ 11,827,604

02. Limited Purpose Agencies 651,534

03. Department of Health and Human Services

to administer and monitor the activities of the

Community Services Block Grant 551,534

TOTAL COMMUNITY SERVICES BLOCK GRANT $ 13,030,672

SOCIAL SERVICES BLOCK GRANT

01. County departments of social services $ 30,395,663

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

02. Allocation for in-home services provided

by county departments of social services 2,101,113

03. Division of Mental Health, Developmental

Disabilities, and Substance Abuse Services 4,764,124

04. Division of Services for the Blind 3,205,711

05. Office of Juvenile Justice 950,674

06. Division of Facility Services 343,341

07. Division of Aging - Home and Community

Care Block Grant 1,915,234

08. Transfer from TANF Block Grant for

Child Care Subsidies 10,971,241

09. Division of Vocational Rehabilitation -

United Cerebral Palsy 71,484

10. State administration 1,954,237

11. Child Medical Evaluation Program 238,321

12. Adult day care services 2,255,301

13. County departments of social services for

child abuse prevention and

permanency planning 394,841

14. Transfer to Preventive Health Services

Block Grant for emergency medical services 213,128

15. Transfer to Preventive Health Services Block

Grant for AIDS education, counseling, and

testing 66,939

16. Department of Administration

for the N.C. Commission of Indian Affairs

In-Home Services Program for the elderly 203,198

17. Division of Vocational Rehabilitation -

Easter Seals Society 116,779

18. UNC-CH CARES Program for training and

consultation services 247,920

19. Transfer from TANF Block Grant for Allocation

to the Adolescent Pregnancy Prevention Program 239,261

20. Office of the Secretary - Office of Economic

Opportunity for N.C. Senior Citizens'

Federation for outreach services to

low-income elderly persons 41,302

21. County departments of social services

for child welfare improvements

(Transfer from TANF - $300,000) 2,211,687

22. Transfer from TANF Block Grant for Division

of Mental Health, Developmental Disabilities,

and Substance Abuse Services for juvenile

offenders 1,182,280

23. Transfer from TANF Block Grant for

Enhanced Employee Assistance Program 1,000,000

24. Transfer from TANF Block Grant for

Division of Social Services - Child

Caring Agencies 1,500,000

25. Division of Mental Health,

Developmental Disabilities, and

Substance Abuse Services - Developmentally

Disabled Waiting List for services 5,000,000

26. Transfer from TANF Block Grant to

Enhance Special Children Adoption Fund 1,900,000

27. Transfer from TANF Block Grant for

Local County Child Welfare Workers 1,427,550

TOTAL SOCIAL SERVICES BLOCK GRANT $ 74,911,329

LOW-INCOME ENERGY BLOCK GRANT

01. Energy Assistance Programs $ 7,530,047

02. Crisis Intervention 7,370,681

03. Administration 1,992,076

04. Department of Commerce -

Weatherization Program 2,988,114

05. Department of Administration -

N.C. Commission of Indian Affairs 39,841

TOTAL LOW-INCOME ENERGY BLOCK GRANT $ 19,920,759

MENTAL HEALTH SERVICES BLOCK GRANT

01. Provision of community-based

services in accordance with the

Mental Health Study Commission's

Adult Severe and Persistently

Mentally Ill Plan $ 3,895,179

02. Provision of community-based

services in accordance with the

Mental Health Study Commission's

Child Mental Health Plan 1,913,917

03. Administration 689,735

TOTAL MENTAL HEALTH SERVICES BLOCK GRANT $ 6,498,831

SUBSTANCE ABUSE PREVENTION

AND TREATMENT BLOCK GRANT

01. Provision of community-based alcohol and

drug abuse services, tuberculosis services, and

services provided by the Alcohol, Drug Abuse

Treatment Centers $ 15,350,132

02. Continuation of services for

pregnant women and women

with dependent children 6,567,532

03. Continuation and expansion of

services to IV drug abusers and others

at risk for HIV diseases 5,390,497

04. Provision of services in accordance with

the Mental Health Study Commission's

Child and Adolescent Alcohol and Other

Drug Abuse Plan 7,454,702

05. Juvenile Services - Family Focus 893,811

06. Juvenile offender services and substance

abuse pilot 300,000

07. Administration 2,623,049

TOTAL SUBSTANCE ABUSE PREVENTION

AND TREATMENT BLOCK GRANT $ 38,579,723

CHILD CARE AND DEVELOPMENT FUND BLOCK GRANT

01. Child care subsidies $112,624,103

02. Quality and availability initiatives 11,378,046

03. Administrative expenses 6,526,429

04. Transfer from TANF Block Grant for

child care subsidies 51,669,460

05. Transfer from TANF Block Grant for

child care rate increases and quality

initiatives 12,482,188

TOTAL CHILD CARE AND DEVELOPMENT FUND

BLOCK GRANT $194,680,226

TEMPORARY ASSISTANCE TO NEEDY FAMILIES

(TANF) BLOCK GRANT

01. Work First Cash Assistance

Standard Counties $133,436,855

Electing Counties 43,787,170

02. Work First County Block Grants 62,086,434

03. Transfer to the Child Care and

Development Fund Block Grant

for child care subsidies 51,669,460

04. Allocation to the Division of Mental

Health, Developmental Disabilities, and

Substance Abuse Services for Work First

substance abuse screening, diagnostic, and

support treatment services and drug testing 3,500,000

05. Allocation to the Division of Social

Services for Work First Evaluation 1,000,000

06. Allocation to the Division of Social

Services for staff development 500,000

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

08. Transfer to the Social Services Block Grant

for substance abuse services for juveniles 1,182,280

09. Transfer to the Social Services Block Grant

for the Special Children Adoption Fund 2,200,000

10. Employment Security Commission -

First Stop Employment Assistance 4,100,000

11. Transfer to Social Services Block Grant -

Enhanced Employee Assistance Program 1,000,000

12. Work First Job Retention and Follow-Up

Initiatives 1,677,529

13. Allocation to the Division of Public Health

for teen pregnancy prevention 2,000,000

14. Transfer to Social Services Block Grant

for Child Caring Agencies 1,500,000

15. Child Care Subsidies for TANF Recipients 15,000,000

16. Work First Business Council 100,000

17. Work First Housing Initiative 3,000,000

18. Transfer to Child Care and Development Fund

Block Grant for Child Care Rate Increases 12,482,188

19. Allocation to the Division of Social

Services for Domestic Violence 1,000,000

20. Implementation of HB 1159 - Protection

from Violent Caregivers 160,000

21. Transfer to Social Services Block Grant for

Additional County Foster Care and Adoption

Workers 1,427,550

22. Intensive Family Preservation Program

Expansion 2,000,000

23. Contract for MOE Analysis and Assistance 500,000

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

25. Community Colleges - Enhanced Pathways 500,000

26. Transfer to Social Services Block Grant for

Child Care Subsidies 10,971,241

27. Transfer to Social Services Block Grant for

County Departments of Social Services for

Children's Services 4,500,000

28. Transfer to Social Services Block Grant for

Adolescent Pregnancy Prevention Program 239,261

TOTAL TEMPORARY ASSISTANCE TO NEEDY FAMILIES

(TANF) BLOCK GRANT $364,119,968

MATERNAL AND CHILD HEALTH BLOCK GRANT

01. Healthy Mothers/Healthy Children

Block Grants to Local Health Departments $ 9,838,074

02. High Risk Maternity Clinic Services,

Perinatal Education and Training,

Childhood Injury Prevention,

Public Information and Education, and

Technical Assistance to Local Health

Departments 1,910,747

03. Services to Children With Special Health

Care Needs 5,035,209

TOTAL MATERNAL AND CHILD

HEALTH BLOCK GRANT $ 16,784,030

PREVENTIVE HEALTH SERVICES BLOCK GRANT

01. Transfer from Social Services

Block Grant -

Emergency Medical Services $ 213,128

02. Hypertension and Statewide

Health Promotion Programs 3,364,469

03. Dental Health for Fluoridation

of Water Supplies 216,123

04. Rape Prevention and Rape

Crisis Programs 190,134

05. Rape Prevention and Rape Education 1,159,292

06. Transfer from Social Services

Block Grant -

AIDS/HIV Education, Counseling,

and Testing 66,939

07. Office of Minority Health and

Minority Health Council 179,784

08. Administrative and Indirect Cost 209,914

TOTAL PREVENTIVE HEALTH SERVICES BLOCK GRANT $ 5,599,783

Section 5.(b) Decreases in Federal Fund Availability. - If the United States Congress reduces federal fund availability in the Social Services Block Grant below the amounts appropriated in this section, then the Department of Health and Human Services shall allocate these decreases giving priority first to those direct services mandated by State or federal law, then to those programs providing direct services that have demonstrated effectiveness in meeting the federally and State-mandated services goals established for the Social Services Block Grant. The Department shall not include transfers from TANF for specified purposes in any calculations of reductions to the Social Services Block Grant.

If the United States Congress reduces the amount of TANF funds below the amounts appropriated in this section after the effective date of this act, then the Department shall allocate the decrease in funds after considering any underutilization of the budget and the effectiveness of the current level of services. Any TANF Block Grant fund changes shall be reported to the Senate Appropriations Committee on Human Resources, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division.

The Department of Health and Human Services shall make a report in collaboration with all other State and local agencies and public and private entities (i) that are impacted by the Social Services or TANF Block Grants and (ii) that will be affected by future reductions in either of these block grants detailing plans for dealing with future reductions or adjustments in either of these block grants, including plans for programs funded wholly or in part with transfers from the TANF Block Grant.

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

Section 5.(c) Increases in Federal Fund Availability. - Any block grant funds appropriated by the United States Congress in addition to the funds specified in this act shall be expended by the Department of Health and Human Services, with the approval of the Office of State Budget and Management, provided the resultant increases are in accordance with federal block grant requirements and are within the scope of the block grant plan approved by the General Assembly.

Section 5.(d) Changes to the budgeted allocations to the block grants appropriated in this act due to decreases or increases in federal funds shall be reported immediately to the Senate Appropriations Committee on Human Resources, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division.

Section 5.(e) Limitations on Preventive Health Services Block Grant Funds. - Twenty-five percent (25%) of funds allocated for Rape Prevention and Rape Education shall be allocated as grants to nonprofit organizations to provide rape prevention and education programs targeted for middle, junior high, and high school students.

If federal funds are received under the Maternal and Child Health Block Grant for abstinence education, pursuant to section 912 of Public Law 104-193 (42 U.S.C. § 710), for the 1999-2000 fiscal year, then those funds shall be transferred to the State Board of Education to be administered by the Department of Public Instruction. The Department of Public Instruction shall use the funds to establish an Abstinence Until Marriage Education Program and shall delegate to one or more persons the responsibility of implementing the program and G.S. 115C-81(e1)(4). The Department of Public Instruction shall carefully and strictly follow federal guidelines in implementing and administering the abstinence education grant funds.

Section 5.(f) The sum of one million dollars ($1,000,000) appropriated to the Department of Health and Human Services, Division of Social Services, in the TANF Block Grant for the 1999-2000 fiscal year for the evaluation of the Work First Program shall be used to do each of the following:

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

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

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

The Department of Health and Human Services shall make a report on its progress in complying with this subsection to the Senate Appropriations Committee on Human Resources, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division no later than May 1, 2000.

Section 5.(g) The sum of one million six hundred seventy-seven thousand five hundred twenty-nine dollars ($1,677,529) appropriated to the Department of Health and Human Services, Division of Social Services, in this section in the TANF Block Grant in the 1999-2000 fiscal year for the Work First job retention and follow-up model programs shall be used to implement pilots and strategies that support TANF recipients in attaining and maintaining self-sufficiency through job retention, family support services, and pre- and post-TANF follow-up.

The Department of Health and Human Services shall make a report on its use of TANF funds for the Work First job retention pilots. This report shall include each of the following:

(1) A description of the clients served by the program. This description shall include demographic and geographic information about the clients.

(2) A description of services provided by the program.

(3) The effectiveness of services to clients. Effectiveness of services to clients shall be measured, in part, by the percentage of clients who remain employed at intervals of six months and one year after commencement of employment.

(4) The estimated cost of services per client.

(5) A description of the development and design of the program and of any evaluation mechanisms.

(6) A description of coordination efforts among local departments of social services with other human services agencies.

(7) A description of progress in achieving other outcome goals such as family economic progress and child/family well-being.

This report shall be made to the Senate Appropriations Committee on Human Resources, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division no later than May 1, 2000.

Section 5.(h) The sum of two million dollars ($2,000,000) appropriated to the Department of Health and Human Services, Division of Public Health, in this section in the TANF Block Grant for the 1999-2000 fiscal year for teen pregnancy prevention shall be used to develop and implement local programs and initiatives aimed at reducing teen pregnancy. The programs developed with these funds shall be based on model programs that have been proven successful by extensive evaluation. The programs and initiatives shall include:

(1) Adolescent parenting programs.

(2) Adolescent pregnancy prevention programs.

(3) Local coalition programs combining adolescent parenting and adolescent pregnancy prevention components.

(4) Teen care coordination projects.

(5) A media campaign to raise awareness of teens and their parents.

The Department of Health and Human Services shall report on the use of these funds and the effectiveness of the funded programs and initiatives in reducing teen pregnancy to the Senate Appropriations Committee on Human Resources, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division no later than April 1, 2000.

Section 5.(i) The sum of two million eight hundred eleven thousand six hundred eighty-seven dollars ($2,811,687) appropriated in this section (i) in the Social Services Block Grant and (ii) in the TANF Block Grant transferred to the Social Services Block Grant to the Department of Health and Human Services, Special Children Adoption Fund, for the 1999-2000 fiscal year shall be used to implement this subsection. The Division of Social Services, in consultation with the North Carolina Association of County Directors of Social Services and representatives of licensed private adoption agencies and licensed child caring agencies, shall develop guidelines for the awarding of funds to licensed public and private adoption agencies and licensed child caring agencies upon successful placement for adoption of children described in G.S. 108A-50 and in foster care. Payments received from the Special Children Adoption Fund by participating agencies shall be used to enhance the adoption services program. No local match shall be required as a condition for receipt of these funds.

Section 5.(j) If funds appropriated through the Child Care and Development Fund for any program cannot be obligated or spent in that program within the obligation or liquidation periods allowed by the federal grants, the Department may move funds to other programs, in accordance with federal requirements of the grant, in order to use the federal funds fully.

Section 5.(k) The sum of one million five hundred thousand dollars ($1,500,000) appropriated in this act in the TANF Block Grant and transferred to the Social Services Block Grant to the Department of Health and Human Services, Division of Social Services, for Child Caring Agencies for the 1999-2000 fiscal year shall be allocated to the State Private Child Caring Agencies Fund. These funds shall be combined with all other funds allocated to the State Private Child Caring Agencies Fund for the reimbursement of the State's portion of the cost of care for the placement of certain children by the county departments of social services who are not eligible for federal IV-E funds. These funds shall not be used to match other federal funds.

Section 5.(l) The sum of one million dollars ($1,000,000) appropriated in this section in the TANF Block Grant and transferred to the Social Services Block Grant to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, shall be used for the Enhanced Employee Assistance Program, to continue a grant program of financial incentives for private businesses employing former and current Work First recipients. These grants may supply funds to private employers who agree to hire former or current Work First recipients or their spouses at entry-level positions and wages and to supply enhanced grant funds to private employers who agree to hire former or current Work First recipients or their spouses at a level higher than entry-level position, paying more than the minimum wage, including fringe benefits.

Section 5.(m) The sum of one million four hundred twenty-seven thousand five hundred fifty dollars ($1,427,550) appropriated in this act in the TANF Block Grant transferred to the Social Services Block Grant to the Department of Health and Human Services, Division of Social Services, for the 1999-2000 fiscal year for Child Welfare Improvements shall be allocated to the county departments of social services for hiring or contracting additional staff on or after January 1, 2000, to recruit, train, license, and support prospective foster and adoptive families, and to provide interstate and post-adoption services.

Section 5.(n) The sum of two million dollars ($2,000,000) appropriated in this act in the TANF Block Grant to the Department of Health and Human Services, Division of Social Services, for the 1999-2000 fiscal year for the Intensive Family Preservation Services (IFPS) Program shall be used by the Division, in consultation with local departments of social services and other human services agencies, to plan and implement a revised IFPS Program.

Notwithstanding the provisions of G.S. 143B-150.6, the Program shall provide intensive services to children and families in cases of neglect and dependency where a child is at imminent risk of removal from the home and to children and families in cases of abuse where a child is not at imminent risk of removal. The Program shall be developed and implemented on a regional basis in areas of high foster care placements as compared to the numbers of children substantiated for abuse, neglect, or dependency. The revised IFPS Program shall ensure the application of standardized assessment criteria for determining imminent risk and clear criteria for determining out-of-home placement.

The Department shall reexamine the existing IFPS Program design to ensure the application of a standardized assessment of imminent risk and clear criteria for placement. Additionally, the Department shall assess the education and skill levels required of staff providing intensive family preservation services in existing programs.

The Department shall develop a revised evaluation model for the current and expanded IFPS Program. This evaluation shall not include area mental health or juvenile justice programs. The model shall be scientifically rigorous, including the use of treatment control groups, a review and description of interventions provided to families as compared to customary services provided to other child welfare children and families, and data regarding the number and type of referrals made for other human services and the utilization of those services.

The Department may use funds appropriated under this subsection to establish up to three additional staff positions in the Division of Social Services for the IFPS Program.

The Department shall report on the use of the funds appropriated under this subsection, including the revised evaluation model and IFPS Program, to the Senate Appropriations Committee on Human Resources, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division no later than May 1, 2000.

Section 5.(o) The Department of Health and Human Services and the Employment Security Commission shall report on the use of funds appropriated under this section from the TANF Block Grant to the First Stop Employment Assistance Program. This report shall include each of the following:

(1) The number of clients served since the inception of the program by fiscal year.

(2) The amount of funds expended each fiscal year.

(3) A description of the clients served. This description shall include demographic information about these clients.

(4) A description of coordination efforts with other human services agencies, including local departments of social services.

(5) A description of specific services provided to both initial and intensive First Stop clients.

(6) The placement rates of clients in both the initial and intensive programs.

(7) Statistics related to job retention, measured at least at intervals of six months and one year after the commencement of employment.

(8) Statistics related to the wage history of clients.

(9) Any other information the Department and the Employment Security Commission find relevant to an evaluation of the program.

Section 5.(p) The sum of one million dollars ($1,000,000) appropriated in this section to the Department of Health and Human Services in the TANF Block Grant for Boys and Girls Clubs shall be used to make grants for approved programs. The Department of Health and Human Services, in accordance with federal regulations for the use of TANF Block Grant funds, shall develop and implement a grant program to award funds to the Boys and Girls Clubs across the State in order to implement programs that improve the motivation, performance, and self-esteem of youth and to implement other initiatives that would be expected to reduce school dropout and teen pregnancy rates. Additionally, in developing the grant program, the Department shall encourage and facilitate collaboration between the Boys and Girls Clubs and Support Our Students, Communities in Schools, and similar programs to submit joint applications for the funds if appropriate. The Department shall report on its progress in complying with this subsection to the Senate Appropriations Committee on Human Resources, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division no later that May 1, 2000.

Section 5.(q) The sum of one million dollars ($1,000,000) appropriated in this section to the Department of Health and Human Services, Division of Social Services, for domestic violence programs shall be used to develop and implement a grant program to support programs which provide domestic violence services and to support programs aimed at preventing domestic violence. The Department, in consultation with the North Carolina Council for Women, the Governor's Crime Commission, local domestic violence programs, and other human services programs, shall develop a process to award grants to community-based organizations that demonstrate the ability to collaborate and coordinate services with other local human service organizations to serve children and families where domestic violence has occurred or is occurring. The Department shall report to the Senate Appropriations Committee on Human Resources, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division on its use of these funds no later than May 1, 2000.

Section 5.(r) G.S. 143-16.1(b) reads as rewritten:

"(b) The Secretary of each State agency that receives and administers federal Block Grant funds shall prepare and submit the agency's Block Grant plans to the Fiscal Research Division of the General Assembly not later than February 20 of each odd-numbered calendar year and not later than April 20 of each ~~fiscal~~ even-numbered calendar year. The agency shall submit a separate Block Grant plan for each Block Grant received and administered by the agency, and each plan shall include, but not be limited to, the following:

(1) A delineation of the proposed dollar amount allocations by activity and by category, including dollar amounts to be used for administrative costs; and

(2) A comparison of the proposed funding with two prior years' program budgets.

The Director of the Budget shall review for accuracy, consistency, and uniformity each State agency's Block Grant plans prior to submission of the plans to the General Assembly."

Section 5.(s) Payment for subsidized child care services provided with federal TANF funds shall comply with all regulations and policies issued by the Division of Child Development for the subsidized child care program.

Requested by: Representatives Fox, Owens, Easterling, Hardaway, Redwine, Senators Martin of Pitt, Plyler, Perdue, Odom

NER BLOCK GRANT FUNDS

Section 5.1.(a) Appropriations from federal block grant funds are made for the fiscal year ending June 30, 2000, according to the following schedule:

WELFARE TO WORK BLOCK GRANT $ 23,663,882

COMMUNITY DEVELOPMENT BLOCK GRANT

01. State Administration 1,000,000

02. Urgent Needs and Contingency 1,306,500

03. Community Empowerment 871,000

04. Economic Development 8,710,000

05. Community Revitalization 20,033,000

06. State Technical Assistance 450,000

07. Housing Development 3,484,000

08. Infrastructure 9,145,500

TOTAL COMMUNITY DEVELOPMENT

BLOCK GRANT - 2000 Program Year $ 45,000,000

Section 5.1.(b) Decreases in Federal Fund Availability. -

Decreases in federal fund availability for the Community Development Block Grants. - If federal funds are reduced below the amounts specified above after the effective date of this act, then every program in each of these federal block grants shall be reduced by the same percentage as the reduction in federal funds.

Section 5.1.(c) Increases in Federal Fund Availability for Community Development Block Grant. -

Any block grant funds appropriated by the Congress of the United States in addition to the funds specified in this section shall be expended as follows: - Each program category under the Community Development Block Grant shall be increased by the same percentage as the increase in federal funds.

Section 5.1.(d) Limitations on Community Development Block Grant Funds. - Of the funds appropriated in this section for the Community Development Block Grant, the following shall be allocated in each category for each program year: up to one million dollars ($1,000,000) may be used for State administration; up to one million three hundred six thousand five hundred dollars ($1,306,500) may be used for Urgent Needs and Contingency; up to eight hundred seventy-one thousand dollars ($871,000) may be used for Community Empowerment; up to eight million seven hundred ten thousand dollars ($8,710,000) may be used for Economic Development; not less than twenty million thirty-three thousand dollars ($20,033,000) shall be used for Community Revitalization; up to four hundred fifty thousand dollars ($450,000) may be used for State Technical Assistance; up to three million four hundred eighty-four thousand dollars ($3,484,000) may be used for Housing Development; up to nine million one hundred forty-five thousand dollars ($9,145,000) may be used for infrastructure. If federal block grant funds are reduced or increased by the Congress of the United States after the effective date of this act, then these reductions or increases shall be allocated in accordance with subsection (b) or (c) of this section, as applicable.

Section 5.1.(e) Increase Capacity for Nonprofit Organizations. - Assistance to increase capacity for nonprofit organizations to carry out eligible activities with units of local government is an allowable activity under any program category, in accordance with federal regulations. Community Empowerment category funds not obligated as of December 31, 1999, may be used to fund assistance to increase capacity for projects in any category.

Section 5.1.(f) Welfare to Work Block Grant. - The Department of Commerce, the Employment Security Commission, and the Department of Health and Human Services may identify within their respective budgets sources of State funds which may be used as a match for the federal Welfare-to-Work Block Grant.

Requested by: Representatives Fox, Owens, Easterling, Hardaway, Redwine, Senators Martin of Pitt, Plyler, Perdue, Odom

COMMUNITY DEVELOPMENT BLOCK GRANT/CHANGES TO PREVIOUS BLOCK GRANT PLANS

Section 5.2. Notwithstanding any other provision of law, Community Development Block Grant funds allocated pursuant to Section 5.1 of S.L. 1998-212 which represent an increase in the State's federal grant shall be allocated in a manner to ensure that twenty percent (20%) of such funds are allocated to the Economic Development program category. The remaining increase in federal grant funds, and funds not obligated under any Block Grant category at the close of the 1998 program year, may be allocated to the Housing Development program category.

PART VI. GENERAL FUND AND HIGHWAY FUND AVAILABILITY STATEMENTS

Requested by: Representatives Easterling, Hardaway, Redwine, Senators Plyler, Perdue, Odom

GENERAL FUND AVAILABILITY STATEMENT

Section 6.(a) The General Fund availability used in developing the 1999-2001, biennial budget is shown below:

1999-2000 2000-2001

($ Millions) ($ Millions)

Budget Reform Statement

(01) Composition of the 1999-2000

beginning availability:

a. Unappropriated balance 0.2

b. Revenue collections in 1998-99

in excess of authorized

estimates 333.9

c. Unexpended appropriations

during 1998-99 106.3

Subtotal 440.4

d. Transfer to Reserve for

Repairs and Renovations (150.00)

e. Transfer to Clean Water

Management Trust Fund (30.0)

f. Transfer to Savings Reserve --

Ending Fund Balance 260.4

(02) Beginning Unrestricted Fund Balance 260.4 0.0

Revenues Based on Existing Tax

Structure 12,368.4 13,105.0

Revenues - Gains on Asset Sale (RJR) 69.0 --

Nontax Revenues 523.8 550.5

Disproportionate Share Receipts 105.0 105.0

Transfer from Highway Trust Fund 170.0 170.0

Transfer from Highway Fund 13.6 13.8

Subtotal 13,249.7 13,944.3

Transfer from Disproportionate

Share Receipts Reserve 20.0 0.0

Transfer from Flexible Benefit Reserve 1.3 0.0

Total Availability 13,531.5 13,944.3

Section 6.(b) The State Controller shall transfer from the Flexible Benefits Reserve to the General Fund nontax revenues the sum of one million two hundred seventy-three thousand dollars ($1,273,000) during fiscal year 1999-2000.

Section 6.(c) There is transferred from General Fund availability for the 1999-2000 fiscal year to the Department of State Treasurer, Reserve for the Bailey/Emory/Patton Cases Refunds, the sum of three hundred ninety-nine million dollars ($399,000,000). These funds are hereby appropriated and shall be held in reserve and allocated pursuant to the Consent Order entered in the Bailey/Emory/Patton cases, 92 CVS 10221, 94 CVS 06904, 95 CVS 06625, 95 CVS 08230, 98 CVS 00738, and 95 CVS 04346, in Wake County Superior Court on 10 June 1998.

Section 6.(d) Notwithstanding G.S. 143-15.2 and G.S. 143-15.3, for the 1998-1999 fiscal year only, funds shall not be reserved to the Savings Reserve Account, and the State Controller shall not transfer funds from the unreserved credit balance to the Savings Reserve Account. This subsection becomes effective June 30, 1999.

Section 6.(e) Disproportionate Share Receipts reserved at the end of the 1998-99 fiscal year shall be deposited with the Department of State Treasurer as a nontax revenue for the 1999-2000 fiscal year.

Section 6.(f) For the 1999-2000 and 2000-2001 fiscal years, as it receives funds associated with Disproportionate Share Payments from the State hospitals, the Department of Health and Human Services, Division of Medical Assistance, shall deposit up to one hundred five million dollars ($105,000,000) of these Disproportionate Share Payments to the Department of State Treasurer for deposit as nontax revenues. Any Disproportionate Share Payments collected in excess of the one hundred five million dollars ($105,000,000) shall be reserved by the State Treasurer for future appropriations.

Section 6.(g) G.S. 143-15.3C reads as rewritten:

"§ 143-15.3C. Work First Reserve Fund.

(a) The State Controller shall establish a restricted reserve in the General Fund to be known as the Work First Reserve Fund. Funds from the Work First Reserve Fund shall not be expended until appropriated by the General Assembly. At the end of each fiscal year, the State Controller shall reserve State funds into this reserve in an amount equalling one-fourth of any Work First Program funds from State General Fund appropriations remaining unexpended at the end of the fiscal year, up to a maximum balance in the account of fifty million dollars ($50,000,000). The General Assembly may appropriate additional funds into this reserve.

~~(b)~~ ~~Funds in the Work First Reserve Fund shall be used only for the purposes described in Title IV of the Social Security Act and only as provided in G.S. 108A-27.16.~~

~~(c)~~ The Director of the Budget shall report to the Joint Legislative Commission on Governmental Operations, the Joint Legislative Public Assistance Commission, and the House and Senate Appropriations Subcommittees on Human Resources prior to using the funds described in subsection (a) of this section."

Section 6.(h) G.S. 108A-27.16 is repealed.

Requested by: Representatives Easterling, Hardaway, Redwine, Senators Plyler, Perdue, Odom

HIGHWAY FUND AVAILABILITY

Section 6.1. The Highway Fund appropriations availability used in developing the 1999-2001 biennial Highway Fund budget is shown below:

1999-2000 2000-2001

Beginning Credit Balance - -

Estimated Revenue 1,149,490,000 1,194,410,000

Additional Reversions 5,200,000 -

TOTAL HIGHWAY FUND AVAILABILITY $1,154,690,000 $1,194,410,000

Requested by: Representatives Easterling, Hardaway, Redwine, Senators Plyler, Perdue, Odom

STUDY HOMESTEAD EXEMPTION

Section 6.2. The General Assembly shall study options for providing homestead property tax relief to low-income elderly and disabled citizens. The Speaker of the House of Representatives and the President Pro Tempore of the Senate shall designate an appropriate committee to conduct the study. The study shall include consideration of all of the following options: increasing the homestead exemption amount, increasing the income threshold for qualifying for the exemption, indexing the exemption amount and income threshold, excluding social security from income in determining the income threshold, and amending the North Carolina Constitution to allow counties the option of making one or more of these changes on a local level. The committee shall report its findings and recommendations to the General Assembly by May 1, 2000. Any proposals recommended in the report shall be accompanied by an estimate of their fiscal impact on the State and on local governments.

PART VII. GENERAL PROVISIONS

Requested by: Representatives Easterling, Hardaway, Redwine, Senators Plyler, Perdue, Odom

SPECIAL FUNDS, FEDERAL FUNDS, AND DEPARTMENTAL RECEIPTS/AUTHORIZATION FOR EXPENDITURES

Section 7.(a) There is appropriated out of the cash balances, federal receipts, and departmental receipts available to each department, sufficient amounts to carry on authorized activities included under each department's operations. All these cash balances, federal receipts, and departmental receipts shall be expended and reported in accordance with provisions of the Executive Budget Act, except as otherwise provided by statute, and shall be expended at the level of service authorized by the General Assembly. If the receipts, other than gifts and grants that are unanticipated and are for a specific purpose only, collected in a fiscal year by an institution, department, or agency exceed the receipts certified for it in General Fund Codes or Highway Fund Codes, then the Director of the Budget shall decrease the amount he allots to that institution, department, or agency from appropriations from that Fund by the amount of the excess, unless the Director of the Budget finds that the appropriations from the Fund are necessary to maintain the function that generated the receipts at the level anticipated in the certified Budget Codes for that Fund.

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

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

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

The Office of State Budget and Management shall report to the Joint Legislative Commission on Governmental Operations and to the Fiscal Research Division of the Legislative Services Office within 30 days after the end of each quarter the General Fund Codes or Highway Fund Codes that did not result in a corresponding reduced allotment from appropriations from that Fund.

Section 7.(b) The Director of the Budget shall develop necessary budget controls, regulations, and systems to ensure that these funds and other State funds subject to the Executive Budget Act, are not spent in a manner which would cause a deficit in expenditures.

Requested by: Representatives Easterling, Hardaway, Redwine, Senators Plyler, Perdue, Odom

INSURANCE AND FIDELITY BONDS

Section 7.1. All insurance and all official fidelity and surety bonds authorized for the several departments, institutions, and agencies shall be effected and placed by the Department of Insurance, and the cost of placement shall be paid by the affected department, institution, or agency with the approval of the Insurance Commissioner.

Requested by: Representatives Easterling, Hardaway, Redwine, Senators Plyler, Perdue, Odom

CONTINGENCY AND EMERGENCY FUND ALLOCATIONS

Section 7.2. Of the funds appropriated in this act to the Contingency and Emergency Fund, the sum of nine hundred thousand dollars ($900,000) for the 1999-2000 fiscal year and the sum of nine hundred thousand dollars ($900,000) for the 2000-2001 fiscal year shall be designated for emergency allocations, which are for expenditures:

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

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

(3) Required to call out the National Guard.

Two hundred twenty-five thousand dollars ($225,000) for the 1999-2000 fiscal year and two hundred twenty-five thousand dollars ($225,000) for the 2000-2001 fiscal year shall be designated for other allocations from the Contingency and Emergency Fund.

Requested by: Representatives Easterling, Hardaway, Redwine, Senators Plyler, Perdue, Odom

AUTHORIZED TRANSFERS

Section 7.3. The Director of the Budget may transfer to General Fund budget codes from the General Fund Salary Adjustment Reserves appropriation, and may transfer to Highway Fund budget codes from the Highway Fund Salary Adjustment Reserve appropriation amounts required to support approved salary adjustments made necessary by difficulties in recruiting and holding qualified employees in State government. The funds may be transferred only when salary reserve funds in individual operating budgets are not available.

Requested by: Representatives Easterling, Hardaway, Redwine, Senators Plyler, Perdue, Odom

EXPENDITURES OF FUNDS IN RESERVES LIMITED

Section 7.4. All funds appropriated by this act into reserves may be expended only for the purposes for which the reserves were established.

Requested by: Representatives Easterling, Hardaway, Redwine, Senators Plyler, Perdue, Odom

STATE MONEY RECIPIENTS/CONFLICT OF INTEREST POLICY

Section 7.5. Each private, nonprofit entity eligible to receive State funds, either by General Assembly appropriation, or by grant, loan, or other allocation from a State agency, before funds may be disbursed to the entity, shall file with the disbursing agency a notarized copy of that entity's policy addressing conflicts of interest that may arise involving the entity's management employees and the members of its board of directors or other governing body. The policy shall address situations where any of these individuals may directly or indirectly benefit, except as the entity's employees or members of the board or other governing body, from the entity's disbursing of State funds, and shall include actions to be taken by the entity or the individual, or both, to avoid conflicts of interest and the appearance of impropriety.

Requested by: Representatives Easterling, Hardaway, Redwine, Senators Plyler, Perdue, Odom

BUDGETING OF PILOT PROGRAMS

Section 7.6.(a) Any program designated by the General Assembly as experimental, model, or pilot shall be shown as a separate budget item and shall be considered as an expansion item until a succeeding General Assembly reapproves it.

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

Section 7.6.(b) The Governor shall submit to the General Assembly with his proposed budget a report of which items in the proposed budget are subject to the provisions of this section.

Requested by: Representatives Easterling, Hardaway, Redwine, Senators Plyler, Perdue, Odom

AUTHORIZATION OF PRIVATE LICENSE TAGS ON STATE-OWNED MOTOR VEHICLES

Section 7.7.(a) Pursuant to the provisions of G.S. 14-250, for the 1999-2001 fiscal biennium, the General Assembly authorizes the use of private license tags on State-owned motor vehicles only for the State Highway Patrol and for the following:

Department Exemption Category Number

Motor Vehicles License and Theft 97

Justice SBI Agents 277

Correction Probation/Parole Surveillance

Officers (intensive probation) 25

Crime Control and

Public Safety ALE Officers 92

Revenue 22

Capitol Area Police 2

Wildlife Resources

Commission Wildlife Enforcement Officers 12.

Section 7.7.(b) The 92 ALE vehicles authorized by this section to use private license tags shall be distributed as follows:

(1) 54 among Agent I officers;

(2) 20 among Agent II officers;

(3) 1 to the Deputy Director;

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

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

Section 7.7.(c) Except as provided in this section, all State-owned motor vehicles shall bear permanent registration plates issued under G.S. 20-84.

Section 7.7.(d) The Fiscal Research Division of the North Carolina General Assembly shall study the need for confidential, private, and fictitious license plates issued under the several controlling statutes and shall recommend to the Joint Legislative Commission on Governmental Operations no later than April 30, 2000, such changes as may be necessary to clarify and consolidate existing legal provisions affecting the authorization and use of such license plates.

Requested by: Representatives Easterling, Hardaway, Redwine, Senators Plyler, Perdue, Odom

COMPREHENSIVE REVIEW OF ENVIRONMENTAL STUDIES

Section 7.8. On or before April 15, 2000, the Secretary of Environment and Natural Resources shall furnish to the Speaker of the House of Representatives, the President Pro Tempore of the Senate, the Chairs of the House of Representatives and Senate Appropriations Subcommittees on Natural and Economic Resources, the Environmental Review Commission, and the Division of Fiscal Research a written report containing the following information:

(1) An itemized list of all environmental studies authorized by the General Assembly during the period from July 1, 1979, to April 1, 2000.

(2) The identity of individuals and organizations who served as principal investigators or who managed the research activity for each study.

(3) A summary of the cost of each research study and the funding sources from which the costs were paid.

(4) A synopsis of the findings, conclusions, and recommendations of each study.

(5) An explanation of actions taken by the Department in response to the findings, recommendations, and conclusions contained in each study, including any changes in administrative rules or departmental policies, guidelines, and procedures.

(6) A report of the status, preliminary conclusions, and estimated time of completion for all studies that are currently in progress.

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Plyler, Perdue, Odom, Martin of Guilford

APPROVE TEMPORARY ASSISTANCE FOR NEEDY FAMILIES STATE PLAN

Section 7.10. (a) The Department of Health and Human Services shall amend the State Plan titled "North Carolina's Temporary Assistance for Needy Families State Plan FY 1998-2000", as approved by the General Assembly in Section 12.27A(a) of S.L. 1998-212, to extend the Plan's application to the two-year federal fiscal period commencing October 1, 1999, and ending September 30, 2001. The Department shall submit the State Plan as amended by this act and by any other act of the 1999 General Assembly to the United States Department of Health and Human Services as North Carolina's Temporary Assistance for Needy Families State Plan effective through September 30, 2001. The General Assembly approves the State Plan submitted in accordance with this section.

Section 7.10. (b) G.S. 108A-27.2(4) reads as rewritten:

"The Department shall have the following general duties with respect to the Work First Program:

…

(4) Establish a schedule for counties to submit their County Plans to ensure that all Standard County Plans are adopted by the Standard Program Counties by January 15 of each ~~even-numbered~~ odd-numbered year and all Electing County Plans are adopted by Electing Counties by February 1 of each ~~even-numbered~~ odd-numbered year and review and then recommend a State Plan to the General Assembly;".

Section 7.10. (c) Section 12.27A(g1) of S.L. 1998-212 reads as rewritten:

"(g1) The counties approved as Electing Counties in North Carolina's Temporary Assistance for Needy Families State Plan FY ~~1998-2000~~ 1998-2001 as approved by this section are: Alamance, Caldwell, Caswell, Chatham, Cherokee, Davie, Forsyth, Henderson, Iredell, Lincoln, Macon, McDowell, New Hanover, Polk, Randolph, Rutherford, Sampson, Stokes, Surry, Transylvania, and Wilkes."

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

AUTHORIZE TRANSFER TO MEET MAINTENANCE OF EFFORT REQUIREMENTS OF TEMPORARY ASSISTANCE FOR NEEDY FAMILIES

Section 7.11. Notwithstanding any other provision of law to the contrary, to the extent necessary to meet federal maintenance of effort requirements for Temporary Assistance for Needy Families (TANF), the Department of Health and Human Services may, for the first quarter of the 1999-2000 fiscal year only, use State funds for the TANF Work First Family Assistance.

PART VIII. PUBLIC SCHOOLS

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Hardaway, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

CHARTER SCHOOL ADVISORY COMMITTEE/CHARTER SCHOOL EVALUATION

Section 8.(a) The State Board of Education may spend up to fifty thousand dollars ($50,000) each year from State Aid to Local School Administrative Units for the 1999-2000 and 2000-2001 fiscal years to continue support of a charter school advisory committee.

Section 8.(b) The State Board of Education may spend up to one hundred fifty thousand dollars ($150,000) each year from State Aid to Local School Administrative Units for the 1999-2000 and 2000-2001 fiscal years to conduct an evaluation of charter schools.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Hardaway, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

LITIGATION RESERVE

Section 8.1.(a) Funds in the State Board of Education's Litigation Reserve that are not expended or encumbered on June 30, 1999, shall not revert on July 1, 1999, but shall remain available for expenditure until June 30, 2000.

Section 8.1.(b) Subsection (a) of this section becomes effective June 30, 1999.

Section 8.1.(c) The State Board of Education may expend up to five hundred thousand dollars ($500,000) for the 1999-2000 fiscal year from unexpended funds for certified employees' salaries to pay expenses related to pending litigation.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Hardaway, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

EXCEPTIONAL CHILDREN

Section 8.2. The funds appropriated for exceptional children in this section shall be allocated as follows:

(1) Each local school administrative unit shall receive for academically gifted children the sum of seven hundred eighty-nine dollars and seventy-eight cents ($789.78) per child for four percent (4%) of the 1999-2000 allocated average daily membership in the local school administrative unit, regardless of the number of children identified as academically gifted in the local school administrative unit. The total number of children for which funds shall be allocated pursuant to this subdivision is 50,755 for the 1999-2000 school year.

(2) Each local school administrative unit shall receive for children with special needs the sum of two thousand three hundred seventy-four dollars and seventeen cents ($2,374.17) per child for the lesser of (i) all children who are identified as children with special needs or (ii) twelve and five-tenths percent (12.5%) of the 1999-2000 allocated average daily membership in the local school administrative unit. The maximum number of children for which funds shall be allocated pursuant to this subdivision is 151,965 for the 1999-2000 school year.

The dollar amounts allocated under this section for exceptional children shall also increase in accordance with legislative salary increments for personnel who serve exceptional children.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Hardaway, Redwine, Moore, Senators Lee, Dalton, Plyler, Perdue, Odom

ALTERNATIVE SCHOOLS/AT-RISK STUDENTS

Section 8.3. The State Board of Education may use up to two hundred thousand dollars ($200,000) of the funds in the Alternative Schools/At-Risk Student allotment each year for the 1999-2000 and for the 2000-2001 fiscal years to implement G.S. 115C-12(24).

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Hardaway, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

UNIFORM EDUCATION REPORTING SYSTEM (UERS)/STUDENT INFORMATION MANAGEMENT SYSTEM (SIMS) FUNDS

Section 8.4.(a) Funds appropriated for the Uniform Education Reporting System and the Student Information Management System shall not revert at the end of the 1999-2000 and 2000-2001 fiscal years, but shall remain available until expended.

Section 8.4.(b) This section becomes effective June 30, 1999.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Hardaway, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

SUPPLEMENTAL FUNDING IN LOW-WEALTH COUNTIES

Section 8.5.(a) Funds for Supplemental Funding. - The General Assembly finds that it is appropriate to provide supplemental funds in low-wealth counties to allow those counties to enhance the instructional program and student achievement; therefore, funds are appropriated to State Aid to Local School Administrative Units for the 1999-2000 fiscal year and the 2000-2001 fiscal year to be used for supplemental funds for schools.

Section 8.5.(b) Use of Funds for Supplemental Funding. - All funds received pursuant to this section shall be used only (i) to provide instructional positions, instructional support positions, teacher assistant positions, clerical positions, instructional supplies and equipment, staff development, and textbooks, and (ii) for salary supplements for instructional personnel and instructional support personnel.

Local boards of education are encouraged to use at least twenty percent (20%) of the funds received pursuant to this section to improve the academic performance of children who are performing at Level I or II on either reading or mathematics end-of-grade tests in grades 3-8 and children who are performing at Level I or II on the writing tests in grades 4 and 7. Local boards of education shall report to the State Board of Education on an annual basis on funds used for this purpose, and the State Board shall report this information to the Joint Legislative Education Oversight Committee.

Section 8.5.(c) Definitions. - As used in this section:

(1) "Anticipated county property tax revenue availability" means the county-adjusted property tax base multiplied by the effective State average tax rate.

(2) "Anticipated total county revenue availability" means the sum of the:

a. Anticipated county property tax revenue availability,

b. Local sales and use taxes received by the county that are levied under Chapter 1096 of the 1967 Session Laws or under Subchapter VIII of Chapter 105 of the General Statutes,

c. Food stamp exemption reimbursement received by the county under G.S. 105-164.44C,

d. Homestead exemption reimbursement received by the county under G.S. 105-277.1A,

e. Inventory tax reimbursement received by the county under G.S. 105-275.1 and G.S. 105-277.001,

f. Intangibles tax distribution and reimbursement received by the county under G.S. 105-275.2, and

g. Fines and forfeitures deposited in the county school fund for the most recent year for which data are available.

(3) "Anticipated total county revenue availability per student" means the anticipated total county revenue availability for the county divided by the average daily membership of the county.

(4) "Anticipated State average revenue availability per student" means the sum of all anticipated total county revenue availability divided by the average daily membership for the State.

(5) "Average daily membership" means average daily membership as defined in the North Carolina Public Schools Allotment Policy Manual, adopted by the State Board of Education. If a county contains only part of a local school administrative unit, the average daily membership of that county includes all students who reside within the county and attend that local school administrative unit.

(6) "County-adjusted property tax base" shall be computed as follows:

a. Subtract the present-use value of agricultural land, horticultural land, and forestland in the county, as defined in G.S. 105-277.2, from the total assessed real property valuation of the county,

b. Adjust the resulting amount by multiplying by a weighted average of the three most recent annual sales assessment ratio studies,

c. Add to the resulting amount the:

1. Present-use value of agricultural land, horticultural land, and forestland, as defined in G.S. 105-277.2,

2. Value of property of public service companies, determined in accordance with Article 23 of Chapter 105 of the General Statutes, and

3. Personal property value for the county.

(7) "County-adjusted property tax base per square mile" means the county-adjusted property tax base divided by the number of square miles of land area in the county.

(8) "County wealth as a percentage of State average wealth" shall be computed as follows:

a. Compute the percentage that the county per capita income is of the State per capita income and weight the resulting percentage by a factor of five-tenths,

b. Compute the percentage that the anticipated total county revenue availability per student is of the anticipated State average revenue availability per student and weight the resulting percentage by a factor of four-tenths,

c. Compute the percentage that the county-adjusted property tax base per square mile is of the State-adjusted property tax base per square mile and weight the resulting percentage by a factor of one-tenth,

d. Add the three weighted percentages to derive the county wealth as a percentage of the State average wealth.

(9) "Effective county tax rate" means the actual county tax rate multiplied by a weighted average of the three most recent annual sales assessment ratio studies.

(10) "Effective State average tax rate" means the average of effective county tax rates for all counties.

(10a) "Local current expense funds" means the most recent county current expense appropriations to public schools, as reported by local boards of education in the audit report filed with the Secretary of the Local Government Commission pursuant to G.S. 115C-447.

(11) "Per capita income" means the average for the most recent three years for which data are available of the per capita income according to the most recent report of the United States Department of Commerce, Bureau of Economic Analysis, including any reported modifications for prior years as outlined in the most recent report.

(12) "Sales assessment ratio studies" means sales assessment ratio studies performed by the Department of Revenue under G.S. 105-289(h).

(13) "State average current expense appropriations per student" means the most recent State total of county current expense appropriations to public schools, as reported by local boards of education in the audit report filed with the Secretary of the Local Government Commission pursuant to G.S. 115C-447.

(14) "State average adjusted property tax base per square mile" means the sum of the county-adjusted property tax bases for all counties divided by the number of square miles of land area in the State.

(14a) "Supplant" means to decrease local per student current expense appropriations from one fiscal year to the next fiscal year.

(15) "Weighted average of the three most recent annual sales assessment ratio studies" means the weighted average of the three most recent annual sales assessment ratio studies in the most recent years for which county current expense appropriations and adjusted property tax valuations are available. If real property in a county has been revalued one year prior to the most recent sales assessment ratio study, a weighted average of the two most recent sales assessment ratios shall be used. If property has been revalued the year of the most recent sales assessment ratio study, the sales assessment ratio for the year of revaluation shall be used.

Section 8.5.(d) Eligibility for Funds. - Except as provided in subsection (h) of this section, the State Board of Education shall allocate these funds to local school administrative units located in whole or in part in counties in which the county wealth as a percentage of the State average wealth is less than one hundred percent (100%).

Section 8.5.(e) Allocation of Funds. - Except as provided in subsection (g) of this section, the amount received per average daily membership for a county shall be the difference between the State average current expense appropriations per student and the current expense appropriations per student that the county could provide given the county's wealth and an average effort to fund public schools. (To derive the current expense appropriations per student that the county could be able to provide given the county's wealth and an average effort to fund public schools, multiply the county wealth as a percentage of State average wealth by the State average current expense appropriations per student.)

The funds for the local school administrative units located in whole or in part in the county shall be allocated to each local school administrative unit, located in whole or in part in the county, based on the average daily membership of the county's students in the school units.

If the funds appropriated for supplemental funding are not adequate to fund the formula fully, each local school administrative unit shall receive a pro rata share of the funds appropriated for supplemental funding.

Section 8.5.(f) Formula for Distribution of Supplemental Funding Pursuant to This Section Only. - The formula in this section is solely a basis for distribution of supplemental funding for low-wealth counties and is not intended to reflect any measure of the adequacy of the educational program or funding for public schools. The formula is also not intended to reflect any commitment by the General Assembly to appropriate any additional supplemental funds for low-wealth counties.

Section 8.5.(g) Minimum Effort Required. - Counties that had effective tax rates in the 1996-97 fiscal year that were above the State average effective tax rate but that had effective rates below the State average in the 1997-98 fiscal year or thereafter shall receive reduced funding under this section. This reduction in funding shall be determined by subtracting the amount that the county would have received pursuant to Section 17.1(g) of Chapter 507 of the 1995 Session Laws from the amount that the county would have received if qualified for full funding and multiplying the difference by ten percent (10%). This method of calculating reduced funding shall apply one time only.

This method of calculating reduced funding shall not apply in cases in which the effective tax rate fell below the statewide average effective tax rate as a result of a reduction in the actual property tax rate. In these cases, the minimum effort required shall be calculated in accordance with Section 17.1(g) of Chapter 507 of the 1995 Session Laws.

If the county documents that it has increased the per student appropriation to the school current expense fund in the current fiscal year, the State Board of Education shall include this additional per pupil appropriation when calculating minimum effort pursuant to Section 17.1(g) of Chapter 507 of the 1995 Session Laws.

Section 8.5.(h) Nonsupplant Requirement. - A county in which a local school administrative unit receives funds under this section shall use the funds to supplement local current expense funds and shall not supplant local current expense funds. For the 1999-2001 fiscal biennium, the State Board of Education shall not allocate funds under this section to a county found to have used these funds to supplant local per student current expense funds. The State Board of Education shall make a finding that a county has used these funds to supplant local current expense funds in the prior year, or the year for which the most recent data are available, if:

(1) The current expense appropriation per student of the county for the current year is less than ninety-five percent (95%) of the average of the local current expense appropriations per student for the three prior fiscal years; and

(2) The county cannot show (i) that it has remedied the deficiency in funding, or (ii) that extraordinary circumstances caused the county to supplant local current expense funds with funds allocated under this section.

The State Board of Education shall adopt rules to implement this section.

Section 8.5.(i) Reports. - The State Board of Education shall report to the Joint Legislative Education Oversight Committee prior to May 1, 2000, if it determines that counties have supplanted funds.

Section 8.5.(j) Department of Revenue Reports. - The Department of Revenue shall provide to the Department of Public Instruction a preliminary report for the current fiscal year of the assessed value of the property tax base for each county prior to March 1 of each year and a final report prior to May 1 of each year. The reports shall include for each county the annual sales assessment ratio and the taxable values of (i) total real property, (ii) the portion of total real property represented by the present-use value of agricultural land, horticultural land, and forestland as defined in G.S. 105-277.2, (iii) property of public service companies determined in accordance with Article 23 of Chapter 105 of the General Statutes, and (iv) personal property.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Hardaway, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

SMALL SCHOOL SYSTEM SUPPLEMENTAL FUNDING

Section 8.6.(a) Funds for Small School Systems. - Except as provided in subsection (b) of this section, the State Board of Education shall allocate funds appropriated for small school system supplemental funding (i) to each county school administrative unit with an average daily membership of fewer than 3,150 students and (ii) to each county school administrative unit with an average daily membership of from 3,150 to 4,000 students if the county in which the local school administrative unit is located has a county-adjusted property tax base per student that is below the State-adjusted property tax base per student and if the total average daily membership of all local school administrative units located within the county is from 3,150 to 4,000 students. The allocation formula shall:

(1) Round all fractions of positions to the next whole position.

(2) Provide five and one-half additional regular classroom teachers in counties in which the average daily membership per square mile is greater than four, and seven additional regular classroom teachers in counties in which the average daily membership per square mile is four or fewer.

(3) Provide additional program enhancement teachers adequate to offer the standard course of study.

(4) Change the duty-free period allocation to one teacher assistant per 400 average daily membership.

(5) Provide a base for the consolidated funds allotment of at least three hundred fifty-five thousand dollars ($355,000), excluding textbooks.

(6) Allot vocational education funds for grade 6 as well as for grades 7-12.

If funds appropriated for each fiscal year for small school system supplemental funding are not adequate to fund fully the program, the State Board of Education shall reduce the amount allocated to each county school administrative unit on a pro rata basis. This formula is solely a basis for distribution of supplemental funding for certain county school administrative units and is not intended to reflect any measure of the adequacy of the educational program or funding for public schools. The formula is also not intended to reflect any commitment by the General Assembly to appropriate any additional supplemental funds for such county administrative units.

Section 8.6.(b) Nonsupplant Requirement. - A county in which a local school administrative unit receives funds under this section shall use the funds to supplement local current expense funds and shall not supplant local current expense funds. For the 1999-2001 fiscal biennium, the State Board of Education shall not allocate funds under this section to a county found to have used these funds to supplant local per student current expense funds. The State Board of Education shall make a finding that a county has used these funds to supplant local current expense funds in the prior year, or the year for which the most recent data are available, if:

The State Board of Education shall adopt rules to implement this section.

Section 8.6.(c) Phase-Out Provisions. - If a local school administrative unit becomes ineligible for funding under this formula solely because of an increase in the county-adjusted property tax base per student of the county in which the local school administrative unit is located, funding for that unit shall be phased out over a two-year period. For the first year of ineligibility, the unit shall receive the same amount it received for the prior fiscal year. For the second year of ineligibility, it shall receive one-half of that amount.

If a local school administrative unit becomes ineligible for funding under this formula solely because of an increase in the population of the county in which the local school administrative unit is located, funding for that unit shall be continued for five years after the unit becomes ineligible.

Section 8.6.(d) Definitions. - As used in this section:

(1) "Average daily membership" means within two percent (2%) of the average daily membership as defined in the North Carolina Public Schools Allotment Policy Manual, adopted by the State Board of Education.

(2) "County-adjusted property tax base per student" means the total assessed property valuation for each county, adjusted using a weighted average of the three most recent annual sales assessment ratio studies, divided by the total number of students in average daily membership who reside within the county.

(2a) "Local current expense funds" means the most recent county current expense appropriations to public schools, as reported by local boards of education in the audit report filed with the Secretary of the Local Government Commission pursuant to G.S. 115C-447.

(3) "Sales assessment ratio studies" means sales assessment ratio studies performed by the Department of Revenue under G.S. 105-289(h).

(4) "State adjusted property tax base per student" means the sum of all county adjusted property tax bases divided by the total number of students in average daily membership who reside within the State.

(4a) "Supplant" means to decrease local per student current expense appropriations from one fiscal year to the next fiscal year.

(5) "Weighted average of the three most recent annual sales assessment ratio studies" means the weighted average of the three most recent annual sales assessment ratio studies in the most recent years for which county current expense appropriations and adjusted property tax valuations are available. If real property in a county has been revalued one year prior to the most recent sales assessment ratio study, a weighted average of the two most recent sales assessment ratios shall be used. If property has been revalued during the year of the most recent sales assessment ratio study, the sales assessment ratio for the year of revaluation shall be used.

Section 8.6.(e) Reports. - The State Board of Education shall report to the Joint Legislative Education Oversight Committee prior to May 1, 2000, if it determines that counties have supplanted funds.

Section 8.6.(f) Use of Funds. - Local boards of education are encouraged to use at least twenty percent (20%) of the funds they receive pursuant to this section to improve the academic performance of children who are performing at Level I or II on either reading or mathematics end-of-grade tests in grades 3-8 and children who are performing at Level I or II on the writing tests in grades 4 and 7. Local boards of education shall report to the State Board of Education on an annual basis on funds used for this purpose and the State Board shall report this information to the Joint Legislative Education Oversight Committee.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Hardaway, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

FUNDS FOR NATIONAL BOARD FOR PROFESSIONAL TEACHING STANDARDS

Section 8.7.(a) Funds appropriated to the Department of Public Instruction in this act shall be used to pay for the National Board for Professional Teaching Standards (NBPTS) participation fee and for up to three days of approved paid leave for teachers participating in the NBPTS program during the 1999-2000 school year and the 2000-2001 fiscal year for State-paid teachers who (i) have completed three years of teaching in North Carolina schools operated by local boards of education, the Department of Health and Human Services, the Department of Correction, or The University of North Carolina, or affiliated with The University of North Carolina, prior to application for NBPTS certification, and (ii) have not previously received State funds for participating in any certification area in the NBPTS program. Teachers participating in the program shall take paid leave only with the approval of their supervisors.

A teacher for whom the State pays the participation fee (i) who does not complete the process or (ii) who completes the process but does not teach in a North Carolina public school for at least one year after completing the process, shall repay the certification fee to the State. Repayment is not required if the process is not completed or the teacher fails to teach for one year due to the death or disability of the teacher or other extenuating circumstances as may be recognized by the State Board.

Section 8.7.(b) The State Board shall adopt policies and guidelines to implement this section.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Hardaway, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

FUNDS TO IMPLEMENT THE ABCs OF PUBLIC EDUCATION PROGRAM

Section 8.8.(a) Of the funds appropriated to State Aid to Local School Administrative Units, the State Board of Education shall provide incentive funding for schools that meet or exceed the projected levels of improvement in student performance, in accordance with the ABCs of Public Education Program. In accordance with State Board of Education policy, incentive awards in schools that achieve higher than expected improvements may be up to: (i) one thousand five hundred dollars ($1,500) for each teacher and for certified personnel; and (ii) five hundred dollars ($500.00) for each teacher assistant. In accordance with State Board of Education policy, incentive awards in schools that meet the expected improvements may be up to: (i) seven hundred fifty dollars ($750.00) for each teacher and for certified personnel; and (ii) three hundred seventy-five dollars ($375.00) for each teacher assistant.

Section 8.8.(b) The State Board of Education may use funds appropriated to State Aid to Local School Administrative Units for assistance teams to low-performing schools.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Hardaway, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

SUBSTITUTE TEACHERS

Section 8.9. If the average number of days teachers are absent in a local school administrative unit is higher than the statewide average, the local board of education shall determine the reasons unit average is high and shall develop a plan for decreasing the unit average.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Hardaway, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

LIMITED ENGLISH PROFICIENCY

Section 8.10.(a) The State Board of Education shall develop guidelines for identifying and providing services to students with limited proficiency in the English language.

The State Board shall allocate these funds to local school administrative units and to charter schools under a formula that takes into account the average percentage of students in the units or the charters over the past three years who have limited English proficiency. If data for the prior three years are not available, the State Board shall use the most recent reliable data. The State Board shall allocate funds to a unit or a charter school only if (i) average daily membership of the unit or the charter school includes at least 20 students with limited English proficiency or (ii) students with limited English proficiency comprise at least two and one-half percent (2 1/2%) of the average daily membership of the unit or charter school. No unit or charter school shall receive funds for more than ten and six-tenths percent (10.6%) of its average daily membership.

Local school administrative units shall use funds allocated to them to pay for classroom teachers, teacher assistants, textbooks, classroom materials/instructional supplies/equipment, and staff development for students with limited English proficiency.

A county in which a local school administrative unit receives funds under this section shall use the funds to supplement local current expense funds and shall not supplant local current expense funds.

Section 8.10.(b) The State Board of Education shall survey local school administrative units to determine whether schools are able to recruit and retain English as a Second Language (ESL) certified teachers. The State Board shall provide the results of this survey to the Joint Legislative Education Oversight Committee prior to March 15, 2000.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Hardaway, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

EXPENDITURES FOR DRIVING EDUCATION CERTIFICATES/TEACHER RECRUITMENT

Section 8.11.(a) The State Board of Education may use funds appropriated for drivers education for the 1999-2000 fiscal year and for the 2000-2001 fiscal year for driving eligibility certificates.

Section 8.11.(b) The State Board of Education may use up to two hundred thousand dollars ($200,000) of the funds appropriated for State Aid to Local School Administrative Units for the 1999-2000 fiscal year and for the 2000-2001 fiscal year to enable teachers who have received NBPTS certification or who have otherwise received special recognition to advise the State Board of Education on teacher recruitment and other strategic priorities of the State Board.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Hardaway, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

TEACHING FELLOWS ADMINISTRATIVE COSTS

Section 8.12. G.S. 115C-363.23A(f) reads as rewritten:

"(f) All funds appropriated to or otherwise received by the Teaching Fellows Program for scholarships, all funds received as repayment of scholarship loans, and all interest earned on these funds, shall be placed in a revolving fund. This revolving fund shall be used for scholarship loans granted under the Teaching Fellows Program. With the prior approval of the General Assembly in the Current Operations Appropriations Act, the revolving fund may also be used for campus and summer program support, and costs related to disbursement of awards and collection of loan repayments.

The Public School Forum, as administrator for the Teaching Fellows Program, may use up to one hundred fifty thousand dollars ($150,000) annually from the fund balance for costs associated with administration of the Teaching Fellows Program. These funds are in addition to funds required for collection costs related to loan repayments."

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Hardaway, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

TEACHER SALARY SCHEDULES

Section 8.13.(a) Effective for the 1999-2000 school year, the Director of the Budget may transfer from the Reserve for Compensation Increase for the 1999-2000 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 four and one-half percent (4.5%) of base salary for 25 or more years of State service, commencing July 1, 1999, 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. The longevity payment shall be paid in a lump sum once a year.

Section 8.13.(b) For the 1999-2000 school year, the following monthly salary schedules shall apply to certified personnel of the public schools who are classified as teachers. The schedule contains 30 steps with each step corresponding to one year of teaching experience.

1999-2000 Monthly Salary Schedule

"A" Teachers

Years of "A" NBPTS

Experience Teachers Certification

0 $2,405 N/A

1 $2,447 N/A

2 $2,490 N/A

3 $2,668 $2,988

4 $2,824 $3,162

5 $2,951 $3,305

6 $3,052 $3,418

7 $3,099 $3,470

8 $3,147 $3,524

9 $3,196 $3,579

10 $3,245 $3,634

11 $3,294 $3,689

12 $3,344 $3,745

13 $3,396 $3,803

14 $3,449 $3,862

15 $3,503 $3,923

16 $3,558 $3,984

17 $3,614 $4,047

18 $3,671 $4,111

19 $3,729 $4,176

20 $3,789 $4,243

21 $3,850 $4,312

22 $3,913 $4,382

23 $3,976 $4,453

24 $4,040 $4,524

25 $4,105 $4,597

26 $4,172 $4,672

27 $4,241 $4,749

28 $4,311 $4,828

29+ $4,382 $4,907

1999-2000 Monthly Salary Schedule

"G" Teachers

Years of "G" NBPTS

Experience Teachers Certification

0 $2,555 N/A

1 $2,600 N/A

2 $2,646 N/A

3 $2,835 $3,175

4 $3,001 $3,361

5 $3,135 $3,511

6 $3,243 $3,632

7 $3,293 $3,688

8 $3,344 $3,745

9 $3,396 $3,803

10 $3,448 $3,861

11 $3,500 $3,920

12 $3,553 $3,979

13 $3,608 $4,040

14 $3,665 $4,104

15 $3,722 $4,168

16 $3,780 $4,233

17 $3,840 $4,300

18 $3,900 $4,368

19 $3,962 $4,437

20 $4,026 $4,509

21 $4,091 $4,581

22 $4,158 $4,656

23 $4,225 $4,732

24 $4,293 $4,808

25 $4,362 $4,885

26 $4,433 $4,964

27 $4,506 $5,046

28 $4,580 $5,129

29+ $4,656 $5,214

Section 8.13.(b1) Certified public school teachers with certification based on academic preparation at the six-year degree level shall receive a salary supplement of one hundred twenty-six dollars ($126.00) per month in addition to the compensation provided for certified personnel of the public schools who are classified as "G" teachers. Certified public school teachers with certification based on academic preparation at the doctoral degree level shall receive a salary supplement of two hundred fifty-three dollars ($253.00) per month in addition to the compensation provided for certified personnel of the public schools who are classified as "G" teachers.

Section 8.13.(c) Effective for the 1999-2000 school year, the first step of the salary schedule for school psychologists shall be equivalent to Step 5, corresponding to five years of experience, on the salary schedule established in this section for certified personnel of the public schools who are classified as "G" teachers. Certified psychologists shall be placed on the salary schedule at an appropriate step based on their years of experience. Certified psychologists shall receive longevity payments based on years of State service in the same manner as teachers.

Certified psychologists with certification based on academic preparation at the six-year degree level shall receive a salary supplement of one hundred twenty-six dollars ($126.00) per month in addition to the compensation provided for certified psychologists. Certified psychologists with certification based on academic preparation at the doctoral degree level shall receive a salary supplement of two hundred fifty-three dollars ($253.00) per month in addition to the compensation provided for certified psychologists.

Section 8.13.(d) Effective for the 1999-2000 school year, speech pathologists who are certified as speech pathologists at the masters degree level and audiologists who are certified as audiologists at the masters degree level and who are employed in the public schools as speech and language specialists and audiologists shall be paid on the school psychologist salary schedule.

Speech pathologists and audiologists with certification based on academic preparation at the six-year degree level shall receive a salary supplement of one hundred twenty-six dollars ($126.00) per month in addition to the compensation provided for speech pathologists and audiologists. Speech pathologists and audiologists with certification based on academic preparation at the doctoral degree level shall receive a salary supplement of two hundred fifty-three dollars ($253.00) per month in addition to the compensation provided for speech pathologists and audiologists.

Section 8.13.(e) Certified school nurses who are employed in the public schools as nurses shall be paid on the "G" salary schedule.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Hardaway, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

SCHOOL-BASED ADMINISTRATOR SALARIES

Section 8.14.(a) Funds appropriated to the Reserve for Compensation Increase shall be used for the implementation of the salary schedule for school-based administrators as provided in this section. These funds shall be used for State-paid employees only.

Section 8.14.(b) The base salary schedule for school-based administrators shall apply only to principals and assistant principals. The base salary schedule for the 1999-2000 fiscal year, commencing July 1, 1999, is as follows:

1999-2000

Principal and Assistant Principal Salary Schedules

Classification

1 1 2 3 4 5

Yrs. Assist Prin I Prin II Prin III Prin IV Prin V

of Exp Principal (0-10) (11-21) (22-32) (33-43) (44-54)

4 $3,031 - - - - -

5 $3,166 - - - - -

6 $3,275 - - - - -

7 $3,326 - - - - -

8 $3,377 $3,377 - - - -

9 $3,430 $3,430 - - - -

10 $3,482 $3,482 $3,535 - - -

11 $3,535 $3,535 $3,589 - - -

12 $3,589 $3,589 $3,644 $3,702 - -

13 $3,644 $3,644 $3,702 $3,759 $3,818 -

14 $3,702 $3,702 $3,759 $3,818 $3,878 $3,939

15 $3,759 $3,759 $3,818 $3,878 $3,939 $4,002

16 $3,818 $3,818 $3,878 $3,939 $4,002 $4,066

17 $3,878 $3,878 $3,939 $4,002 $4,066 $4,132

18 $3,939 $3,939 $4,002 $4,066 $4,132 $4,200

19 $4,002 $4,002 $4,066 $4,132 $4,200 $4,267

20 $4,066 $4,066 $4,132 $4,200 $4,267 $4,336

21 $4,132 $4,132 $4,200 $4,267 $4,336 $4,406

22 $4,200 $4,200 $4,267 $4,336 $4,406 $4,477

23 $4,267 $4,267 $4,336 $4,406 $4,477 $4,551

24 $4,336 $4,336 $4,406 $4,477 $4,551 $4,626

25 $4,406 $4,406 $4,477 $4,551 $4,626 $4,703

26 $4,477 $4,477 $4,551 $4,626 $4,703 $4,797

27 $4,551 $4,551 $4,626 $4,703 $4,797 $4,893

28 $4,626 $4,626 $4,703 $4,797 $4,893 $4,991

29 $4,703 $4,703 $4,797 $4,893 $4,991 $5,091

30 $4,797 $4,797 $4,893 $4,991 $5,091 $5,193

31 $4,893 $4,893 $4,991 $5,091 $5,193 $5,297

32 $4,991 $5,091 $5,193 $5,297 $5,403

33 $5,193 $5,297 $5,403 $5,511

34 $5,297 $5,403 $5,511 $5,621

35 $5,511 $5,621 $5,733

36 $5,621 $5,733 $5,848

37 $5,848 $5,965

38 $6,084

1999-2000

Principal and Assistant Principal Salary Schedules

Classification

6 7 8

Yrs. Prin VI Prin VII Prin VIII

of Exp (55-65) (66-100) (101+)

4 - - -

5 - - -

6 - - -

7 - - -

8 - - -

9 - - -

10 - - -

11 - - -

12 - - -

13 - - -

14 - - -

15 - - -

16 $4,132 - -

17 $4,200 $4,336 -

18 $4,267 $4,406 $4,477

19 $4,336 $4,477 $4,551

20 $4,406 $4,551 $4,626

21 $4,477 $4,626 $4,703

22 $4,551 $4,703 $4,797

23 $4,626 $4,797 $4,893

24 $4,703 $4,893 $4,991

25 $4,797 $4,991 $5,091

26 $4,893 $5,091 $5,193

27 $4,991 $5,193 $5,297

28 $5,091 $5,297 $5,403

29 $5,193 $5,403 $5,511

30 $5,297 $5,511 $5,621

31 $5,403 $5,621 $5,733

32 $5,511 $5,733 $5,848

33 $5,621 $5,848 $5,965

34 $5,733 $5,965 $6,084

35 $5,848 $6,084 $6,206

36 $5,965 $6,206 $6,330

37 $6,084 $6,330 $6,457

38 $6,206 $6,457 $6,586

39 $6,330 $6,586 $6,718

40 $6,457 $6,718 $6,852

41 $6,852 $6,989

Section 8.14.(c) The appropriate classification for placement of principals and assistant principals on the salary schedule, except for principals in alternative schools, shall be determined in accordance with the following schedule:

Number of Teachers

Classification Supervised

Assistant Principal

Principal I Fewer than 11 Teachers

Principal II 11-21 Teachers

Principal III 22-32 Teachers

Principal IV 33-43 Teachers

Principal V 44-54 Teachers

Principal VI 55-65 Teachers

Principal VII 66-100 Teachers

Principal VIII More than 100 Teachers

The number of teachers supervised includes teachers and assistant principals paid from State funds only; it does not include teachers or assistant principals paid from non-State funds or the principal or teacher assistants.

The beginning classification for principals in alternative schools shall be the Principal III level. Principals in alternative schools who supervise 33 or more teachers shall be classified according to the number of teachers supervised.

Section 8.14.(d) A principal shall be placed on the step on the salary schedule that reflects total number of years of experience as a certificated employee of the public schools and an additional step for every three years of experience as a principal.

Section 8.14.(e) For the 1999-2000 fiscal year, a principal or assistant principal shall be placed on the appropriate step plus one percent (1%) if:

(1) The employee's school met or exceeded the projected levels of improvement in student performance for the 1997-98 fiscal year, in accordance with the ABCs of Public Education Program; or

(2) The local board of education found in 1997-98 that the employee's school met objectively measurable goals set by the local board of education for maintaining a safe and orderly school; or

(3) The employee's school met or exceeded the projected levels of improvement in student performance for the 1998-99 fiscal year, in accordance with the ABCs of Public Education Program; or

(4) The local board of education found in 1998-99 that the employee's school met objectively measurable goals set by the local board of education for maintaining a safe and orderly school.

The principal or assistant principal shall be placed on the appropriate step plus an additional one percent (1%) for meeting each additional condition set out in subdivisions (1) through (4). Under no circumstance shall placement of a principal or assistant principal be higher than four percent (4%) above the appropriate step on the salary schedule.

Section 8.14.(f) For the 1999-2000 fiscal year, a principal or assistant principal shall receive a lump-sum payment of:

(1) One percent (1%) of his or her State-paid salary if the employee's school meets or exceeds the projected levels of improvement in student performance for the 1999-2000 fiscal year, in accordance with the ABCs of Public Education Program.

(2) One percent (1%) of his or her State-paid salary if the local board of education finds that the employee's school has met the 1999-2000 goals of the local plan for maintaining a safe and orderly school.

The principal or assistant principal shall receive a lump-sum payment of two percent (2%) if the conditions set out in both subdivisions (1) and (2) are satisfied.

The lump sum shall be paid as determined by guidelines adopted by the State Board. Except as provided in subsection (l) of this section, placement on the salary schedule in the following year shall be based upon these increases.

Section 8.14.(g) Principals and assistant principals with certification based on academic preparation at the six-year degree level shall be paid a salary supplement of one hundred twenty-six dollars ($126.00) per month and at the doctoral degree level shall be paid a salary supplement of two hundred fifty-three dollars ($253.00) per month.

Section 8.14.(h) There shall be no State requirement that superintendents in each local school unit shall receive in State-paid salary at least one percent (1%) more than the highest paid principal receives in State salary in that school unit: Provided, however, the additional State-paid salary a superintendent who was employed by a local school administrative unit for the 1992-93 fiscal year received because of that requirement shall not be reduced because of this subsection for subsequent fiscal years that the superintendent is employed by that local school administrative unit so long as the superintendent is entitled to at least that amount of additional State-paid salary under the rules in effect for the 1992-93 fiscal year.

Section 8.14.(i) Longevity pay for principals and assistant principals shall be as provided for State employees under the State Personnel Act.

Section 8.14.(j)

(1) If a principal is reassigned to a higher job classification because the principal is transferred to a school within a local school administrative unit with a larger number of State-allotted teachers, the principal shall be placed on the salary schedule as if the principal had served the principal's entire career as a principal at the higher job classification.

(2) If a principal is reassigned to a lower job classification because the principal is transferred to a school within a local school administrative unit with a smaller number of State-allotted teachers, the principal shall be placed on the salary schedule as if the principal had served the principal's entire career as a principal at the lower job classification.

This subdivision applies to all transfers on or after the effective date of this section, except transfers in school systems that have been created, or will be created, by merging two or more school systems. Transfers in these merged systems are exempt from the provisions of this subdivision for one calendar year following the date of the merger.

Section 8.14.(k) Participants in an approved full-time masters in school administration program shall receive up to a 10-month stipend at the beginning salary of an assistant principal during the internship period of the masters program. Certification of eligible full-time interns shall be supplied to the Department of Public Instruction by the Principal's Fellow Program or a school of education where the intern participates in a full-time masters in school administration.

Section 8.14.(l) During the 1999-2000 fiscal year, the placement on the salary schedule of an administrator with a one-year provisional assistant principal's certificate shall be at the entry-level salary for an assistant principal or the appropriate step on the teacher salary schedule, whichever is higher. Lump-sum payments received pursuant to subsection (f) of this section shall not be considered in placing the employee on the salary schedule in subsequent years that the employee is employed under either a provisional or a full certificate.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Hardaway, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

SCHOOL CENTRAL OFFICE SALARIES

Section 8.15.(a) The following monthly salary ranges apply to assistant superintendents, associate superintendents, directors/coordinators, supervisors, and finance officers for the 1999-2000 fiscal year, beginning July 1, 1999:

(1) School Administrator I: $2,932 - $5,003

(2) School Administrator II: $3,112 - $5,310

(3) School Administrator III: $3,303 - $5,636

(4) School Administrator IV: $3,436 - $5,863

(5) School Administrator V: $3,574 - $6,101

(6) School Administrator VI: $3,792 - $6,475

(7) School Administrator VII: $3,945 - $6,737

The local board of education shall determine the appropriate category and placement for each assistant superintendent, associate superintendent, director/coordinator, supervisor, or finance officer within the salary ranges and within funds appropriated by the General Assembly for central office administrators and superintendents. The category in which an employee is placed shall be included in the contract of any employee hired on or after July 1, 1999.

Section 8.15.(b) The following monthly salary ranges apply to public school superintendents for the 1999-2000 fiscal year, beginning July 1, 1999:

(1) Superintendent I (Up to 2,500 ADM): $4,187 - $7,150

(2) Superintendent II (2,501 - 5,000 ADM): $4,445 - $7,585

(3) Superintendent III (5,001 - 10,000 ADM): $4,716 - $8,050

(4) Superintendent IV (10,001 - 25,000 ADM): $5,005 - $8,542

(5) Superintendent V (Over 25,000 ADM): $5,312 - $9,066

The local board of education shall determine the appropriate category and placement for the superintendent based on the average daily membership of the local school administrative unit and within funds appropriated by the General Assembly for central office administrators and superintendents.

Notwithstanding the provisions of this subsection, a local board of education may pay an amount in excess of the applicable range to a superintendent who is entitled to receive the higher amount under Section 8.14 of this act.

Section 8.15.(c) Longevity pay for superintendents, assistant superintendents, associate superintendents, directors/coordinators, supervisors, and finance officers shall be as provided for State employees under the State Personnel Act.

Section 8.15.(d) Superintendents, assistant superintendents, associate superintendents, directors/coordinators, supervisors, and finance officers with certification based on academic preparation at the six-year degree level shall receive a salary supplement of one hundred twenty-six dollars ($126.00) per month in addition to the compensation provided for pursuant to this section. Superintendents, assistant superintendents, associate superintendents, directors/coordinators, supervisors, and finance officers with certification based on academic preparation at the doctoral degree level shall receive a salary supplement of two hundred fifty-three dollars ($253.00) per month in addition to the compensation provided for under this section.

Section 8.15.(e) The State Board shall not permit local school administrative units to transfer State funds from other funding categories for salaries for public school central office administrators.

Section 8.15.(f) The Director of the Budget shall transfer from the Reserve for Compensation Increase created in this act for fiscal year 1999-2000, beginning July 1, 1999, funds necessary to provide an average annual salary increase of three percent (3%), including funds for the employer's retirement and social security contributions, commencing July 1, 1999, for all permanent full-time personnel paid from the Central Office Allotment. The State Board of Education shall allocate these funds to local school administrative units. The local boards of education shall establish guidelines for providing their salary increases to these personnel.

Section 8.15.(g) Any person who was employed on July 1, 1999, as a permanent public school employee whose salary is set by or under this section shall receive a compensation bonus, payable at the end of the first pay period, of one hundred twenty-five dollars ($125.00). For permanent part-time employees, the compensation bonus provided by this section shall be adjusted pro rata. Notwithstanding G.S. 135-1(7a), the compensation bonus provided by this section is not compensation under Article 1 of Chapter 135 of the General Statutes, the Teachers' and State Employees' Retirement System.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Hardaway, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

NONCERTIFIED PERSONNEL SALARY FUNDS/TEACHER ASSISTANT SALARY FUNDS

Section 8.16.(a) The Director of the Budget may transfer from the Reserve for Compensation Increase created in this act for fiscal year 1999-2000, commencing July 1, 1999, funds necessary to provide a salary increase of three percent (3%), including funds for the employer's retirement and social security contributions, commencing July 1, 1999, for all noncertified public school employees whose salaries are supported from the State's General Fund. Local boards of education shall increase the rates of pay for all such employees who were employed during fiscal year 1998-99 and who continue their employment for fiscal year 1999-2000 by at least three percent (3%), commencing July 1, 1999. These funds shall not be used for any purpose other than for the salary increases and necessary employer contributions provided by this section.

The State Board of Education may enact or create salary ranges for noncertified personnel to support increases of three percent (3%) for the 1999-2000 fiscal year.

Section 8.16.(b) Effective July 1, 1999, any person who was employed on the first day of the 1999-2000 school year as a permanent public school employee whose salary is set by or under this section shall receive a compensation bonus, payable at the end of the employee's first pay period, of one hundred twenty-five dollars ($125.00). For permanent part-time employees, the compensation bonus provided by this section shall be adjusted pro rata. Notwithstanding G.S. 135-1(7a), the compensation bonus provided by this section is not compensation under Article 1 of Chapter 135 of the General Statutes, the Teachers' and State Employees' Retirement System.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Hardaway, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

STUDENT ACCOUNTABILITY STANDARDS

Section 8.17. Funds appropriated for the 1999-2001 fiscal biennium for Student Accountability Standards shall be used to assist students in performing at or above grade level in reading and mathematics in grades 3-8 as measured by the State's end-of-grade tests. The State Board of Education shall allocate these funds to local school administrative units based on the number of students who score at Level I or Level II on either reading or mathematics end-of-grade tests in grades 3-8. Funds in this allocation category shall be spent only to improve the academic performance of children who are performing at Level I or II on either reading or mathematics end-of-grade tests in grades 3-8 and children who are performing at Level I or II on the writing tests in grades 4 and 7. These funds shall not be transferred to other allocation categories or otherwise used for other purposes. Except as otherwise provided by law, local boards of education may transfer other funds available to them into this allocation category.

The principal of a school receiving these funds, in consultation with the faculty and the site-based management team, shall implement plans for expending these funds to improve the performance of students.

Continuation budget funds previously appropriated for NC Helps and for the middle school pilot project shall be transferred to this allocation category.

Local boards of education are encouraged to use federal funds such as Goals 2000 and Title I Comprehensive School Reform Development Funds and to examine the use of State funds to ensure that every student is performing at or above grade level in reading and mathematics.

The State Board of Education shall report to the Joint Legislative Education Oversight Committee prior to the convening of the 2000 Regular Session of the General Assembly on the implementation of this section. The report may include recommendations regarding the transfer of other funds into this allocation category.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Hardaway, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

APPROPRIATION OF FUNDS FROM STATE LITERARY FUND

Section 8.18. There is appropriated from the State Literary Fund to the Department of Public Instruction the sum of two million five hundred thousand dollars ($2,500,000) for the 1999-2000 fiscal year for aid to local school administrative units.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Hardaway, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

TRANSFER FROM UNEMPLOYMENT RESERVE FUND

Section 8.19. The State Board of Education shall transfer the sum of eight hundred fifty thousand dollars ($850,000) from the Unemployment Reserve Fund to the General Fund in the 1999-2000 fiscal year. Of the funds appropriated in Section 2 of this act to the Department of Public Instruction, the sum of eight hundred fifty thousand dollars ($850,000) in fiscal year 1999-2000 is to be used as a part of State Aid to Local School Administrative Units. These funds are intended to provide educational programs similar to the State and federal programs that comprise the unemployment reserve.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Hardaway, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

HIGH SCHOOL EXIT EXAMS

Section 8.20. Of the funds appropriated to State Aid to Local School Administrative Units, the State Board of Education may use up to two million dollars ($2,000,000) for the 1999-2000 fiscal year to develop a high school exit examination.

The State Board of Education shall report to the Joint Legislative Education Oversight Committee prior to the expenditure of these funds.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Hardaway, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

CENTRAL OFFICE ADMINISTRATOR SALARY STUDY

Section 8.21. The Joint Legislative Education Oversight Committee shall study the issue of salaries for school central office to provide full funding of the central office funding and the need to provide additional funding for this purpose. The Department of Public Instruction shall provide to the Committee all information and data requested to perform the study. The Committee shall report the results of this study to the General Assembly prior to the convening of the 2000 Regular Session of the General Assembly.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Hardaway, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

MENTOR PROGRAM STUDY

Section 8.22. The State Board of Education shall study the mentor program for teachers with initial certification. In the course of the study the State Board of Education shall consider:

(1) Whether there is sufficient release time for the mentor and the teacher with initial certification to work together;

(2) Whether the mentor and the teacher with initial certification are in the same school and are teaching in the same grade level and area of certification; and

(3) The level of satisfaction with the program of mentors and initially certified teachers participating in the program.

The State Board of Education shall report the results of the study to the Joint Legislative Education Oversight Committee prior to the convening of the 2000 Regular Session of the General Assembly.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Hardaway, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

NEED FOR SCHOOL NURSES/STUDY

Section 8.23. The Joint Legislative Education Oversight Committee shall examine the need for additional nurses in the public schools. If the Committee finds that additional nurses are necessary, the Committee shall forward the results of the study to public and private entities concerned about issues related to health care.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Hardaway, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

STUDY OF SCHOOL TRANSPORTATION FOR CHILDREN WITH SPECIAL NEEDS

Section 8.24. The State Board of Education shall study the issue of school transportation for children with special needs. In the course of the study, the State Board shall consider the difficulty local school administrative units are having in meeting the length of school day requirements for these children. The State Board shall report the results of the study and its recommendations to the Joint Legislative Education Oversight Committee prior to January 1, 2000.

The State Board of Education may spend up to fifty thousand dollars ($50,000) from funds appropriated for public school transportation to perform this study.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Hardaway, Redwine, Senators Lee, Dalton, Carter, Plyler, Perdue, Odom

STRENGTHEN ALTERNATIVE SCHOOLS/ALTERNATIVE LEARNING PROGRAMS

Section 8.25.(a) G.S. 115C-47(32a) reads as rewritten:

"§ 115C-47. Powers and duties generally.

In addition to the powers and duties designated in G.S. 115C-36, local boards of education shall have the power or duty:

…

(32a) To Establish Alternative Learning Programs and Develop Policies and ~~Guidelines for Alternative Learning Programs.~~Guidelines. - ~~Local boards~~ Each local board of education ~~are encouraged to~~ shall establish at least alternative learning ~~programs. If these programs are established, local boards of education~~ programs and shall adopt guidelines for assigning students to ~~them.~~ alternative learning programs. These guidelines shall include (i) a description of the programs and services to be provided, (ii) a process for ensuring that an assignment is appropriate for the student and that the student's parents are involved in the decision, and (iii) strategies for providing alternative learning programs, when feasible and appropriate, for students who are subject to long-term suspension or expulsion. In developing these guidelines, local boards ~~are encouraged to~~ shall consider the State Board's policies and guidelines developed under G.S. 115C-12(24). Upon adoption of policies and guidelines under this subdivision, local boards are encouraged to incorporate them in their safe school plans developed under G.S. 115C-105.47.

The General Assembly urges local boards to adopt policies that prohibit superintendents from assigning to any alternative learning program any professional public school employee who has received within the last three years a rating on a formal evaluation that is less than above standard."

Section 8.25.(b) G.S. 115C-105.26 is amended by adding a new subsection to read:

"(c1) The State Board also may grant requests received from local boards for waivers of State laws, rules, or policies that require that each local school administrative unit provide at least one alternative school or at least one alternative learning program."

Section 8.25.(c) G.S. 115C-105.25(b) is amended by adding a new subdivision to read:

"(9) Funds allocated in the Alternative Schools/At-Risk Student allotment shall be spent only for alternative learning programs, at-risk students, and school safety programs."

Section 8.25.(d) G.S. 115C-12(24) reads as rewritten:

"§ 115C-12. Powers and duties of the Board generally.

The general supervision and administration of the free public school system shall be vested in the State Board of Education. The State Board of Education shall establish policy for the system of free public schools, subject to laws enacted by the General Assembly. The powers and duties of the State Board of Education are defined as follows:

…

(24) Duty to Develop Policies and Guidelines for Alternative Learning Programs, Provide Technical Assistance on Implementation of Programs, and Evaluate Programs. - The State Board of Education shall adopt guidelines for assigning students to alternative learning programs. These guidelines shall include (i) a description of the programs and services that are recommended to be provided in alternative learning programs and (ii) a process for ensuring that an assignment is appropriate for the student and that the student's parents are involved in the decision. The State Board also shall adopt policies that define what constitutes an alternative school and an alternative learning program.

The State Board of Education shall provide technical support to local school administrative units to assist them in developing and implementing alternative schools and alternative learning programs.

The State Board of Education shall also adopt guidelines to require that local school administrative units shall use (i) the teachers allocated for students assigned to alternative learning programs pursuant to the regular teacher allotment and (ii) the teachers allocated for students assigned to alternative learning programs only to serve the needs of these students. The State Board shall evaluate the effectiveness of alternative learning programs and, in its discretion, of any other programs funded from the Alternative Schools/At-Risk Student allotment. Local school administrative units shall report to the State Board of Education on how funds in the Alternative Schools/At-Risk Student allotment are spent and shall otherwise cooperate with the State Board of Education in evaluating the alternative learning programs."

Section 8.25.(e) The State Board of Education shall review the qualifications of teachers assigned to alternative schools and alternative learning programs. The State Board shall include this information in the annual report to the Joint Legislative Education Oversight Committee on alternative schools and alternative learning programs prior to the convening of the 2000 Regular Session of the 1999 General Assembly.

Section 8.25.(f) The provisions in subsection (a) of this section that amend G.S. 115C-47(32a) to require at least one alternative school or alternative learning program in each local school administrative unit become effective July 1, 2000. The remainder of this section becomes effective July 1, 1999.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Hardaway, Redwine, Adams, Berry, Howard, McAllister, Senators Lee, Dalton, Plyler, Perdue, Odom

EXPAND SCHOOL BREAKFAST PROGRAM

Section 8.26.(a) The State Board of Education shall expand the school breakfast program to all students in kindergarten, prior to the beginning of the 2000-2001 school year. Any school that serves kindergarten students is eligible to receive funds under the program for the 1999-2000 fiscal year for those students. Schools participating in the program shall provide breakfast, without charge, to all kindergarten students.

If these funds are not adequate to expand the program to all students in schools that elect to participate for the 1999-2000 school year, the Board of Education shall give priority to schools with a high concentration of children who qualify for free or reduced price lunches.

Section 8.26.(b) This section becomes effective January 1, 2000.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Hardaway, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

WILLIE M. FUNDS/STATE AID TO LOCAL SCHOOL ADMINISTRATIVE UNITS

Section 8.27. Funds appropriated to State Aid to Local School Administrative Units to provide services to Willie M. class members shall be spent only to provide services that are required by State and federal law to (i) children with special needs who were identified as members of the class at the time of dissolution of the class, and (ii) other children with special needs.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Hardaway, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

CHARTER SCHOOLS/ADM REDUCTION

Section 8.28.(a) If the projected average daily membership of schools other than charter schools in a county school administrative unit with 3,000 or fewer students is decreased by more than four percent (4%) due to projected shifts of enrollment to charter schools, the State Board of Education may use funds appropriated to State Aid to Local School Administrative Units for the 1999-2000 fiscal year to reduce the loss of funds to the schools other than charter schools in the unit to a maximum of four percent (4%). This section applies to the 1999-2000 fiscal year only.

Section 8.28.(b) The State Board of Education shall study the fiscal impact of charter schools on local school administrative units. The State Board of Education shall report the results of the study to the Joint Legislative Education Oversight Committee prior to the convening of the 2000 Regular Session of the General Assembly.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Hardaway, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

TEXTBOOK COMMISSION MEMBERSHIP EXPANSION

Section 8.30.(a) G.S. 115C-87 reads as rewritten:

"§ 115C-87. Appointment of Textbook Commission.

Shortly after assuming office, the Governor shall appoint a Textbook Commission of 14 23 members who shall hold office for four years, or until their successors are appointed and qualified. The members of the Commission shall be appointed by the Governor upon recommendation of the Superintendent. ~~Six~~ Five of these members shall be teachers or principals in ~~the elementary grades;~~ grades K-5; five shall be teachers or principals in ~~the high school grades; one shall be a superintendent of a local school administrative unit;~~ grades 6-8; four shall be superintendents, teachers, or principals in grades 9-12; one shall be a superintendent of a local school administrative unit, ~~one~~ three shall be ~~the parent of an elementary student, grades K-6,~~ parents of students in grades K-5 at the time of appointment; ~~and one shall be the parent of a high school student, grades 7-12,~~ three shall be parents of students in grades 6-8 at the time of ~~appointment.~~ appointment; and two shall be parents of students in grades 9-12 at the time of appointment. The Governor shall fill all vacancies by appointment for the unexpired term. The Commission shall elect a chairman, subject to the approval of the Superintendent. The Commission shall meet four times a year or at the call of the chair. The members shall be entitled to compensation for each day spent on the work of the Commission as approved by the Board and to reimbursement for travel and subsistence expense incurred in the performance of their duties at the rates specified in G.S. 138-5(a). ~~Such compensation~~ Compensation shall be paid from funds available to the State Board of Education."

Section 8.30.(b) G.S. 115C-88 reads as rewritten:

"§ 115C-88. Commission to evaluate textbooks offered for adoption.

(a) The ~~members of the Commission who are teachers, principals or the parent of students~~ Commission shall evaluate all textbooks offered for adoption.

Each proposed textbook shall be read by at least one expert certified in the discipline for which the textbook would be used. The Commission may use external experts if no Commission member or advisory committee member qualifies as an expert certified in a particular discipline.

The Commission may consider any review of a proposed textbook by other experts certified in the discipline who are not involved in the textbook adoption process. However, these reviews may not substitute for the direct examination of the proposed textbook by a Commission member, an advisory committee member, or any other expert retained by the Commission.

(b) Each member shall examine carefully and file a written evaluation of each ~~textbook offered for adoption.~~ proposed textbook for which the member is responsible.

The evaluation report shall give special consideration to the suitability of the textbook to the instructional level for which it is offered, the content or subject matter, whether the textbook is aligned with the Standard Course of Study, and other criteria prescribed by the Board.

Each evaluation report shall be signed by the member making the report and filed with the Board not later than a day fixed by the Board when the call for adoption is made."

Section 8.30.(c) This section becomes effective January 1, 2000. Notwithstanding G.S. 115C-87, the additional members appointed to the Textbook Commission under this section shall hold office until the new Governor takes office in 2001 and their successors are appointed and qualified.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Hardaway, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

DIFFERENTIATED DIPLOMA STUDY

Section 8.31.(a) The Joint Legislative Education Oversight Committee may study the issue of differentiated high school diplomas. The Committee may report any findings and recommendations to the General Assembly prior to the convening of the 2000 Regular Session of the 1999 General Assembly, or prior to the convening of the 2001 General Assembly.

Section 8.31.(b) The State Board of Education shall report to the Joint Legislative Education Oversight Committee prior to implementing a differentiated diploma plan.

Requested by: Representatives Moore, Easterling, Hardaway, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

TEACHER ASSISTANT SALARY STUDY

Section 8.32. The Joint Legislative Education Oversight Committee shall review information and reports provided by the State Board of Education and shall conduct any further study the Committee deems necessary regarding the establishment of a teacher assistant salary schedule. The Committee shall report its findings and a recommendation on the establishment of a teacher assistant salary schedule to the General Assembly prior to the convening of the 2000 Regular Session of the 1999 General Assembly.

Requested by: Representatives Redwine, Easterling, Hardaway, Senators Lee, Dalton, Plyler, Perdue, Odom

STUDY OF THE RELATIONSHIP BETWEEN SCHOOL SIZE AND STUDENT BEHAVIOR AND PERFORMANCE

Section 8.33. The State Board of Education shall study the relationship between school size and the behavior and academic performance of students at the school. The State Board shall report the results of the study to the Joint Legislative Education Oversight Committee prior to April 15, 2000.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Hardaway, Redwine, Senators Reeves, Lee, Dalton, Plyler, Perdue, Odom

COOPERATION IN EDUCATION INFORMATION TECHNOLOGY

Section 8.34. On or before January 1, 2000, the Education Cabinet shall submit a report to the General Assembly:

(1) Specifying those functions involving information technology systems, procedures and procurements that are amenable to collaboration among the North Carolina Community Colleges System Office, North Carolina community colleges, the Department of Public Instruction, local school administrative units, and The University of North Carolina and its constituent institutions;

(2) Recommending approaches to facilitate collaboration in these functions; and

(3) Including any necessary proposed legislation to accomplish that purpose.

The report shall be submitted to the Chairs of the Senate and House Information Technology Standing Committees, the House Appropriations Subcommittee on Education, the Senate Appropriations Subcommittee on Education/Higher Education, the House Committee on Education, the Senate Committee on Education/Higher Education, the Fiscal Research Division, and the Information Services Division of the General Assembly.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Hardaway, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

ESTABLISH A PILOT PROGRAM TO TEST AND EVALUATE A REVISED SCHOOL ACCOUNTABILITY MODEL FOR THE ABCs PLAN

Section 8.36. The State Board of Education shall establish a pilot program in up to five local school administrative units for the purpose of determining whether revisions in the present school accountability model under the ABCs Plan are likely to result in more students demonstrating mastery of grade level subject matter and skills on the end-of-grade tests or demonstrating mastery of course subject matter or skills on end-of-course tests. The State Board, in selecting pilot sites, shall consider geographical areas of the State and urban and rural areas.

The revised school accountability model shall be common for all schools in all local school administrative units that participate in the pilot program. For purposes of the pilot program, the State Board shall disaggregate student performance within designated demographic groups or designated student performance level groups or both. The pilot school accountability model shall take into account student performance for each designated group and shall incorporate that performance in the overall school accountability model for the pilot program. The statewide ABCs Plan school accountability model also shall apply to the participating schools.

During the 1999-2000 school year, the State Board shall select local school administrative units to participate in the pilot program. The units shall be located geographically throughout the State, have different demographic profiles, and must have volunteered to participate in the program. A local board shall submit an application to the State Board in order to be considered for participation in the pilot program. Before a local board may submit an application to the State Board, it shall hold a public meeting and pass a resolution specifically approving its participation in the pilot program. The State Board shall implement the pilot program in the participating units during the 2000-2001 school year.

Personnel in schools that participate in the pilot program and that achieve the pilot program school accountability goals shall be eligible to receive financial awards for that achievement. Personnel in schools that participate in the pilot program and that achieve the statewide ABCs Plan school accountability goals also shall be eligible to receive financial awards under G.S. 115C-105.36. The financial awards for achieving the pilot program goals shall be separate from and in addition to the financial awards that are provided under G.S. 115C-105.36. All other statutory and regulatory provisions of the statewide ABCs Plan school accountability model shall apply to local school administrative units, schools, and school personnel that participate in the pilot program. Notwithstanding any other law and in accordance with G.S. 115C-325(a)(4), the following shall not constitute a demotion: the reduction or elimination of bonus payments under the pilot program; the termination of the pilot program in a local school administrative unit or all participating units; or the statewide implementation of the pilot program school accountability model in the place of or as incorporated into the current ABCs Plan school accountability standards.

The State Board shall set a uniform level of financial awards for personnel in schools that achieve the pilot program goals, and the awards may be up to seven hundred fifty dollars ($750.00) for each teacher and certified personnel and up to three hundred twenty-five dollars ($325.00) for each teacher assistant. The State Board shall establish a match of twenty-five percent (25%) in local funds for participating school units that do not qualify for Low-Wealth or Small School supplemental funding. The match shall be used to meet the pilot program financial awards level in those school units.

The State Board shall evaluate the pilot program on an annual basis regarding its implementation in each participating unit, the student performance achieved by schools participating in the pilot, whether the student performance of students who qualify for free or reduced lunch is improved, and how the student performance in pilot program schools compares with the statewide results under the ABCs Plan. The State Board also shall determine whether the pilot program should be continued or terminated in each unit. The State Board may, in its discretion, terminate the pilot program in a local school administrative unit. The State Board shall terminate the pilot program in a local school administrative unit at the request of the unit's local board of education. However, the State Board shall not terminate a pilot program in a participating unit during the school year.

The State Board shall make a preliminary report to the Joint Legislative Education Oversight Committee by November 15, 1999, and prior to the selection of any local school administrative units to participate in the pilot program regarding the development of the revised school accountability model for the pilot program and the selection of local school administrative units to participate in the program. The Committee shall review the report and may make any recommendations to the State Board the Committee deems appropriate. The State Board shall report again to the Joint Legislative Education Oversight Committee prior to March 15, 2000, regarding the selection of participating school administrative units, the implementation of the pilot program, the estimated cost of providing bonuses under the pilot program, and possible sources of funds for the bonuses. The State Board also shall report to the Joint Legislative Education Oversight Committee by October 15, 2001, and annually thereafter, its findings and recommendations regarding the continued implementation, expansion, and modification of the pilot program.

The Joint Legislative Education Oversight Committee shall study issues related to the development of a revised school accountability model including the disagregation of student performance, models used in other states, and possible sources of funds for bonuses under a revised mode. The Committee may report its findings and recommendations to the 2000 Regular Session of the General Assembly, or to the 2001 General Assembly.

This section becomes effective July 1, 1999, and expires with the payment of pilot program incentive awards for the 2004-2005 school year.

PART IX. COMMUNITY COLLEGES

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Hardaway, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

EMPLOYMENT OF COMMUNITY COLLEGE FACULTY/STUDY

Section 9. The State Board of Community Colleges shall contract with an outside consultant to study the issue of whether the Community College System should employ faculty members for less than 12 months instead of on a 12-month basis since the Community College System now operates on a semester system instead of a quarter system. The consultant also shall consider how much additional supplemental funding for summer term would be required if the Community College System employed faculty members for less than 12 months and needed to employ a portion of the faculty for the summer term.

The State Board shall use funds from the State Board Reserve to implement this section.

The State Board shall report to the Joint Legislative Appropriations Subcommittees on Education and the Fiscal Research Division prior to April 30, 2000, on the results of this study. It is the intent of the General Assembly, in considering the results of this study and other recommendations regarding community college faculty salaries, to provide for changes in the salary of community college faculty that result in an enhancement of salary for community college faculty.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Moore, Easterling, Hardaway, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

COOPERATIVE HIGH SCHOOL EDUCATION PROGRAM ACCOUNTABILITY

Section 9.1. Section 10.7 of the Current Operations Appropriations and Capital Improvement Appropriations Act of 1998 directed the State Board of Community Colleges and the State Board of Education to create a joint task force to study the existing policies for cooperative high school education programs and to recommend changes necessary to improve the programs' success and accountability. Section 10.7 further directed the Boards to report their findings and recommendations to the Joint Legislative Education Oversight Committee and the Fiscal Research Division prior to March 1, 1999.

The General Assembly finds that the study submitted by the Boards inadequately addressed the concerns of the General Assembly; therefore, the General Assembly hereby requests that the Boards jointly reconsider existing policies for cooperative high school education programs. The General Assembly further requests that the Boards make a preliminary report to the Joint Legislative Education Oversight Committee and the Fiscal Research Division prior to November 15, 1999, and a final report prior to April 15, 2000. The report shall include findings and recommendations that will enable the State to achieve the goal of the General Assembly to increase the number of qualified high school students participating in cooperative high school education programs that are provided by local community colleges. These programs should be cost-effective programs and should not duplicate high school Advanced Placement courses that are currently being offered or that could feasibly be offered. These programs should provide additional higher education opportunities for qualified high school students while minimizing overlapping costs to the State for public schools and community colleges.

After submission of the final report, the Joint Legislative Education Oversight Committee shall review the report and the success, or lack thereof, of this cooperative program. In the event the Committee finds that the report inadequately addresses the existing policies for cooperative high school education programs, or that there is an inadequate level of coordination between the high school, and community colleges, the Committee shall make a recommendation to the General Assembly as to how much, if any, downward adjustment should be made in appropriations to the respective agencies for failure to adequately develop and implement this program. This downward adjustment would be recommended due to the fact that this study, and the implementation thereof, is anticipated to be funded and implemented from current personnel and resources, and failure to adequately implement the program signifies a misuse of resources for which a downward adjustment in appropriations should be made.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Hardaway, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

IMPLEMENTATION OF PERFORMANCE BUDGETING

Section 9.2.(a) It is the intent of the General Assembly that the the State Board of Community Colleges implement the findings of the consultant's Phase IV Funding Study Report, prepared by the State Board and submitted to the Education Appropriations Subcommittee, on performance budgeting; therefore, Chapter 115D of the General Statutes is amended by adding a new section to read:

"§ 115D-31.3. Performance budgeting.

(a) The State Board of Community Colleges shall create new accountability measures and performance standards to be used for performance budgeting for the Community College System. The results of a survey may be used as a performance standard only if the survey is statistically valid. The State Board of Community Colleges shall review annually the accountability measures and performance standards to ensure that they are appropriate for use in performance budgeting.

(b) Notwithstanding any other provision of law, the State Board shall authorize each institution meeting the new performance standards to carryforward funds remaining in its budget at the end of each fiscal year in an amount not to exceed two percent (2%) of the State funds allocated to the institution for that fiscal year. The funds carried forward shall be used for the purchase of equipment and initial program start-up costs excluding regular faculty salaries. These funds shall not be used for continuing salary increases or for other obligations beyond the fiscal year into which they were carried forward. These funds shall be encumbered within 12 months of the fiscal year into which they were carried forward.

(c) The five required performance measures are (i) progress of basic skills students, (ii) passing rate for licensure and certification examinations, (iii) goal completion of program completers, (iv) employment status of graduates, and (v) performance of students who transfer to the university system. Colleges may choose one other performance measure from the list contained in the State Board's Phase 4 Funding Formula Study, which was presented to the Joint Legislative Education Oversight Committee. Successful performance on each of the six performance measures shall allow a college to retain and carry forward up to one-third of one percent (1/3 of 1%) of its final fiscal year General Fund appropriations into the next fiscal year.

(d) Each college shall publish its performance on these six measures in its catalog each year beginning with the 2001 academic year."

Section 9.2.(b) The State Board of Community Colleges shall report to the Joint Legislative Education Oversight Committee and to the Fiscal Research Division prior to March 1, on an annual basis, on the implementation of this provision.

Section 9.2.(c) This section becomes effective July 1, 1999. The State Board of Community Colleges shall authorize institutions meeting the new performance standards to carry forward funds from the 2000-2001 fiscal year to the 2001-2002 fiscal year and at the end of subsequent fiscal years.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Hardaway, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

OVER-REALIZED TUITION AND FEE RECEIPTS TRANSFERRED TO THE EQUIPMENT RESERVE FUND

Section 9.3.(a) G.S. 115D-31 is amended by adding a new subsection to read:

"(e) If receipts for community college tuition and fees exceed the amount certified in General Fund Codes at the end of a fiscal year, the State Board of Community Colleges shall transfer the amount of receipts and fees above those budgeted to the Equipment Reserve Fund."

Section 9.3.(b) If receipts for community college tuition and fees exceed the amount certified in General Fund Codes at the end of the 1998-99 fiscal year, the State Board of Community Colleges shall transfer the amount of receipts and fees above those budgeted to the Equipment Reserve Fund.

Section 9.3.(c) Section 9.3.(b) becomes effective June 30, 1999.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Hardaway, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

FINANCIAL ASSISTANCE FOR COMMUNITY COLLEGE STUDENTS

Section 9.4.(a) Of the funds appropriated to the Community Colleges System Office for the 1999-2001 fiscal biennium, the sum of five million dollars ($5,000,000) for the 1999-2000 fiscal year and the sum of five million dollars ($5,000,000) for the 2000-2001 fiscal year shall be used to provide the largest financial need-based student assistance program in the history of the North Carolina Community College System.

Students must apply for federal Pell Grants to be eligible for this program. It is the intent of the General Assembly that the Community College System make these financial aid funds available to the neediest students who are not eligible for other financial aid programs that fully cover the required educational expenses of these students. The State Board may use some of these funds as short-term loans to students who anticipate receiving the federal HOPE or Lifetime Learning Tax Credits.

The State Board of Community Colleges shall adopt rules and policies for the disbursement of the need-based financial assistance. The State Board may contract with the State Education Assistance Authority for administration of these financial assistance funds. These funds shall not revert at the end of each fiscal year but shall remain available until expended for need-based financial assistance.

Section 9.4.(b) The State Board of Community Colleges shall ensure that at least one counselor is available at each college to inform students about federal programs and funds available to assist community college students including, but not limited to, Pell Grants and HOPE and Lifetime Learning Tax Credits and to actively encourage students to utilize these federal programs and funds.

Section 9.4.(c) G.S. 115D-40 is repealed.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Hardaway, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

COMMUNITY COLLEGE FUNDING FLEXIBILITY

Section 9.5. A local community college may use all State funds allocated to it, except for Literacy Funds and Funds for New and Expanding Industries, for any authorized purpose that is consistent with the college's Institutional Effectiveness Plan. Each local community college shall include in its Institutional Effectiveness Plan a section on how funding flexibility allows the college to meet the demands of the local community and to maintain a presence in all previously funded categorical programs.

The State Board may examine new State Aid allocation options that more closely align the allocation and expenditure of State-appropriated resources.

Funds appropriated for salary increases shall be used only for salary increases and necessary employer contributions.

The General Assembly recognizes that the Community College System has been required to transfer funds from the faculty salary line item in the funding formula during prior fiscal years to make up shortfalls in instructional and administrative support and in other cost items. To enable the Community College System to pay respectable faculty salaries and at the same time maintain the quality of the instructional programs, the General Assembly is providing an additional eight million dollars ($8,000,000) in expansion funds for instructional and administrative support and an additional ten million dollars ($10,000,000) in expansion funds for other cost items. It is the intent of the General Assembly that no transfers be made from the formula salary line item and that faculty salary funds be used to enhance full-time and part-time faculty salaries and, where appropriate, to move part-time faculty members to full-time faculty status. Therefore, transfers made in college budgets from faculty salaries to other purposes shall be made only after public notice and notice to the faculty. No more than two percent (2%) systemwide may be transferred from faculty salaries without the approval of the State Board of Community Colleges. The State Board shall report on any such transfers above two percent (2%) systemwide to the Joint Legislative Commission on Governmental Operations at its next meeting.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Hardaway, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

STATE BOARD RESERVE ALLOCATIONS

Section 9.6.(a) The State Board of Community Colleges shall use funds from the State Board Reserve in the amount of one hundred thousand dollars ($100,000) for each fiscal year to assist small rural low-wealth community colleges with operation and maintenance of plant costs if they need to assist new or expanding industries in their service delivery areas.

Section 9.6.(b) The State Board of Community Colleges shall use funds from the State Board Reserve in the amount of forty thousand dollars ($40,000) for the 1999-2000 fiscal year to support the recruitment activities of the North Carolina Industries for Technical Education (NCITE). NCITE recruits students to community colleges with Heavy Equipment and Transportation Technology Programs in an effort to revitalize those programs.

Section 9.6.(c) The State Board of Community Colleges, in consultation with Cape Fear Community College, Brunswick Community College, and Southeastern Community College, shall use funds from the State Board Reserve in the amount of one hundred thousand dollars ($100,000) for the 1999-2000 fiscal year for planning a Southeastern North Carolina Regional Fire Training Program and twenty thousand dollars ($20,000) for the 1999-2000 fiscal year for other fire training programs.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Owens, Easterling, Hardaway, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

PERMIT TRANSFERS OF FUNDS TO THE NEW AND EXPANDING INDUSTRY TRAINING PROGRAM

Section 9.7. The General Assembly finds that the New and Expanding Industry Training Program:

(1) Assists companies creating new jobs in North Carolina by providing training for new employees;

(2) Provides customized training to new or prospective employees in specific job skills needed by new or expanding industries; and

(3) Supports local, regional, and State economic development goals by offering entry-level training at no cost to companies that are creating new jobs in the State.

The General Assembly further finds that due to the extraordinary growth of new and expanding industry in the State, funds appropriated to the Program may be inadequate to meet demand for Program services during the 1999-2000 fiscal year; therefore, notwithstanding G.S. 143-16.3, G.S. 143-23, or any other provision of law, the Director of the Budget may, after consultation with the Joint Legislative Commission on Governmental Operations, transfer funds from any agency or program funded from the General Fund to the New and Expanding Industry Training Program to supplement the needs of this Program during the 1999-2000 fiscal year.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Moore, Easterling, Hardaway, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

ADULT EDUCATION PROGRAM/REVIEW

Section 9.8. The State Board of Community Colleges shall review the Adult High School Program to determine the extent to which the Program is aligned with recent public school reforms including course content standards, end-of-course tests, appropriate aspects of the high school accountability system, publication of test results, and high school exit exams that will be implemented by 2003. After completion of this review, the Board shall direct and advise local colleges on steps necessary to ensure that the Program is adequately aligned with recent public school reforms.

The Board shall report to the Joint Legislative Education Oversight Committee prior to April 15, 2000, on the implementation of this section.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Hardaway, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

MANAGEMENT INFORMATION SYSTEM FUNDS

Section 9.9.(a) Funds appropriated for the Community College System Office Management Information System shall not revert at the end of the 1999-2000 and 2000-2001 fiscal years but shall remain available until expended.

Section 9.9.(b) This section becomes effective June 30, 1999.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Gillespie, Thompson, Buchanan, Easterling, Hardaway, Redwine, Senators Lee, Dalton, Garwood, Plyler, Perdue, Odom

EXTEND COMMUNITY COLLEGE BOND MATCH DEADLINE

Section 9.10.(a) Section 6(b)IV of Chapter 542 of the 1993 Session Laws, as added by Section 4 of Chapter 515 of the 1995 Session Laws and rewritten by Section 10(a) of S.L. 1998-212, reads as rewritten:

"IV. If the State Board of Community Colleges determines that a community college has not met the matching requirements of G.S. 115D-31(a)(1) by July 1, ~~1999,~~ 2000, with respect to a capital improvement project for which bond proceeds are allocated in subdivision I or pursuant to subdivision II of this subsection, the Board shall certify that fact to the State Treasurer by October 1, ~~1999.~~ 2000. All of these bond proceeds with respect to which the Board certifies that the matching requirement has not been met by July 1, ~~1999,~~ 2000, shall be placed by the State Treasurer in a special account within the Community Colleges Bond Fund and shall be used for making grants to community colleges. Bond proceeds in the special account shall be allocated among the community colleges in accordance with the following conditions:

(1) The State Board of Community Colleges shall generate, by October 1, ~~1999,~~ 2000, a priority ranking of legitimate community college capital improvement needs using a formula based on objective meaningful factors relevant to capital needs, including space to population ratio, population served ratio, capacity enrollment ratio, local to State and vocational education ratios, type of project, and readiness to implement.

(2) The State Board of Community Colleges shall provide the State Treasurer a projected allocation of the proceeds in the special account in accordance with this priority ranking, except that:

a. No projected allocation shall be made for a community college that the Board certified in accordance with this subdivision IV had failed to meet a matching requirement.

b. No more than four million dollars ($4,000,000) shall be allocated to a single community college.

c. Funds shall not be allocated for more than one project per community college.

(3) The proceeds of grants made from bond proceeds in the special account shall be allocated and expended for paying the cost of community college capital improvements in accordance with this allocation by the State Board of Community Colleges, to the extent and as provided in this act. The Director of the Budget is empowered, when the Director of the Budget determines it is in the best interest of the State and the North Carolina Community College System to do so, and if the cost of a particular project is less than the projected allocation, to use the excess funds to increase the size of that project or increase the size of any other project itemized in this section, or to increase the amount allocated to a particular community college within the aggregate amount of funds available under this section. The Director of the Budget shall consult with the Advisory Budget Commission and the Joint Legislative Commission on Governmental Operations before making these changes."

Section 9.10.(b) This section becomes effective June 30, 1999.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Hardaway, Redwine, Senators Perdue, Dalton, Lee, Plyler, Odom, Kerr

EMPLOYMENT SECURITY COMMISSION TRAINING AND EMPLOYMENT ACCOUNT FUNDS

Section 9.11.(a) Contingent upon enactment of House Bill 275, 1999 General Assembly, there is appropriated from the Employment Security Commission Training and Employment Account created in G.S. 96-6.1, as enacted by House Bill 275, 1999 General Assembly, to the Community Colleges System Office the sum of twenty-two million dollars ($22,000,000) for the 1999-2000 fiscal year and the sum of fifty-six million five hundred thousand dollars ($56,500,000) for the 2000-2001 fiscal year. If House Bill 275, 1999 Session, provides an expenditure schedule or source of funds different from that provided in this section, then House Bill 275, 1999 Session, prevails to the extent of the conflict. These funds shall be used as follows:

1999-2000 2000-2001

1. Nonreverting Equipment,

Technology, and MIS Reserve $12,000,000 $42,500,000

2. Nonreverting Start-Up Fund

for Regional and Cooperative

Initiatives $ 3,000,000 $ 3,000,000

3. New and Expanding Industry

Training Program $ 6,000,000 $ 9,000,000

4. Enhanced Focused Industrial

Training Programs $ 1,000,000 $ 2,000,000

TOTAL: $22,000,000 $56,500,000

Funds allocated for the Nonreverting Start-Up Fund for Regional and Cooperative Initiatives shall be used for community college projects that foster regional cooperation among community colleges, between public schools and community colleges, and between universities and community colleges.

Section 9.11.(b) Contingent upon enactment of House Bill 275, 1999 General Assembly, there is appropriated from the Employment Security Commission Training and Employment Account created in G.S. 96-6.1, as enacted by House Bill 275, 1999 General Assembly, to the Employment Security Commission the sum of five million five hundred thousand dollars ($5,500,000) for the 1999-2000 fiscal year and the sum of fourteen million one hundred thousand dollars ($14,100,000) for the 2000-2001 fiscal year for the costs of collecting and administering the new training and reemployment contribution and for enhanced reemployment services.

Section 9.11.(c) To the extent that the State receives more in the Employment Security Commission Training and Employment Account than the funds appropriated in subsections (a) and (b) of this section:

(1) Eighty percent (80%) of these funds are hereby appropriated for the 1999-2000 fiscal year and the 2000-2001 fiscal year to the Community Colleges System Office for the purposes set out in subsection (a) of this section and the State Board of Community Colleges may allocate the additional funds for those purposes; and

(2) Twenty percent (20%) of these funds are hereby appropriated to the Employment Security Commission for the 1999-2000 fiscal year and the 2000-2001 fiscal year, and it may allocate the additional funds for those purposes.

Section 9.11.(d) Funds appropriated in this section shall be used for nonrecurring expenses only and shall not obligate the State financially in future fiscal years. Funds appropriated in this section shall not be used to supplant funds from other sources.

Section 9.11.(e) The Community Colleges System Office and the Employment Security Commission shall report to the Joint Legislative Education Oversight Committee prior to May 1, 2000, on proposed expenditures of these funds and prior to May 1 of subsequent years on actual expenditures.

Section 9.11.(f) The Community Colleges System Office, the Department of Commerce, and the Employment Security Commission shall jointly develop a list of options for delivering workforce training more efficiently and more effectively. These options shall include one-stop job placement and career centers. The Community Colleges System Office, the Department of Commerce, and the Employment Security Commission shall report on these options to the Joint Legislative Education Oversight Committee prior to May 1, 2000.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Hardaway, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

CLARIFICATION OF CERTAIN COMMUNITY COLLEGE APPROPRIATIONS

Section 9.12. Notwithstanding G.S. 115D-31 or any other provision of law, no non-State match is required for funds appropriated in S.L. 1998-212 for community college capital projects or for community college matching scholarship endowment funds, or for funds appropriated in this act for grants-in-aid for community colleges.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Hardaway, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

COMMUNITY COLLEGE RESERVE FUNDS DO NOT REVERT

Section 9.13.(a) Funds appropriated to the Anson-Union Community College Reserve in S.L. 1998-212 shall not revert at the end of the fiscal year but shall remain available for expenditure by the new community college.

Section 9.13.(b) This section becomes effective June 30, 1999.

Requested by: Representatives Easterling, Hardaway, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom

COMMUNITY COLLEGE CONSTRUCTION FLEXIBILITY/STUDY

Section 9.14. The Joint Legislative Education Oversight Committee may study the need to streamline the community college capital construction process. In the course of the study, the Committee may consider the need to authorize pilot sites to determine the effect of various options for streamlining the process. The Committee may report its findings and recommendations to the General Assembly prior to May 1, 2000.

Requested by: Representatives Easterling, Hardaway, Redwine, Senators Kerr, Plyler Perdue, Odom

NO TUITION OR FEES FOR VOLUNTEER FIREFIGHTERS AND EMS WORKERS

Section 9.15. Notwithstanding G.S. 115D-5 or any other provision of law, the State Board of Community Colleges shall not charge tuition or fees to volunteer firefighters and volunteer EMS workers for courses required for certification.

PART X. UNIVERSITIES

Requested by: Representatives Rogers, Boyd-McIntyre, Oldham, Easterling, Hardaway, Redwine, Senators Lee, Dalton, Perdue, Plyler, Odom

AID TO STUDENTS ATTENDING PRIVATE COLLEGES PROCEDURE

Section 10.(a) Funds appropriated in this act to the Board of Governors of The University of North Carolina for aid to private colleges shall be disbursed in accordance with the provisions of G.S. 116-19, 116-21, and 116-22. These funds shall provide up to one thousand fifty dollars ($1,050) per full-time equivalent North Carolina undergraduate student enrolled at a private institution as of October 1, 1999, for the 1999-2000 fiscal year and up to one thousand fifty dollars ($1,050) per full-time equivalent North Carolina undergraduate student enrolled at a private institution as of October 1, 2000, for the 2000-2001 fiscal year.

These funds shall be placed in a separate, identifiable account in each eligible institution's budget or chart of accounts. All funds in this account shall be provided as scholarship funds for needy North Carolina students during the fiscal year. Each student awarded a scholarship from this account shall be notified of the source of the funds and of the amount of the award. Funds not utilized under G.S. 116-19 shall be available for the tuition grant program as defined in subsection (b) of this section.

Section 10.(b) In addition to any funds appropriated pursuant to G.S. 116-19 and in addition to all other financial assistance made available to private educational institutions located within the State, or to students attending these institutions, there is granted to each full-time North Carolina undergraduate student attending an approved institution as defined in G.S. 116-22, a sum, not to exceed one thousand seven hundred fifty dollars ($1,750) for the 1999-2000 academic year and one thousand seven hundred fifty dollars ($1,750) for the 2000-2001 academic year, which shall be distributed to the student as hereinafter provided.

The tuition grants provided for in this section shall be administered by the State Education Assistance Authority pursuant to rules adopted by the State Education Assistance Authority not inconsistent with this section. The State Education Assistance Authority shall not approve any grant until it receives proper certification from an approved institution that the student applying for the grant is an eligible student. Upon receipt of the certification, the State Education Assistance Authority shall remit at such times as it shall prescribe the grant to the approved institution on behalf, and to the credit, of the student.

In the event a student on whose behalf a grant has been paid is not enrolled and carrying a minimum academic load as of the tenth classroom day following the beginning of the school term for which the grant was paid, the institution shall refund the full amount of the grant to the State Education Assistance Authority. Each approved institution shall be subject to examination by the State Auditor for the purpose of determining whether the institution has properly certified eligibility and enrollment of students and credited grants paid on behalf of the students.

In the event there are not sufficient funds to provide each eligible student with a full grant:

(1) The Board of Governors of The University of North Carolina, with the approval of the Office of State Budget and Management, may transfer available funds to meet the needs of the programs provided by subsections (a) and (b) of this section; and

(2) Each eligible student shall receive a pro rata share of funds then available for the remainder of the academic year within the fiscal period covered by the current appropriation.

Any remaining funds shall revert to the General Fund.

Section 10.(c) Expenditures made pursuant to this section may be used only for secular educational purposes at nonprofit institutions of higher learning. Expenditures made pursuant to this section shall not be used for any student who:

(1) Is incarcerated in a State or federal correctional facility for committing a Class A, B, B1, or B2 felony; or

(2) Is incarcerated in a State or federal correctional facility for committing a Class C through I felony and is not eligible for parole or release within 10 years.

Section 10.(d) The State Education Assistance Authority shall document the number of full-time equivalent North Carolina undergraduate students that are enrolled in off-campus programs and the State funds collected by each institution pursuant to G.S. 116-19 for those students. The State Education Assistance Authority shall also document the number of scholarships and the amount of the scholarships that are awarded under G.S. 116-19 to students enrolled in off-campus programs. An "off-campus program" is any program offered for degree credit away from the institution's main permanent campus.

The State Education Assistance Authority shall include in its annual report to the Joint Legislative Education Oversight Committee the information it has compiled and its findings regarding this program.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Hardaway, Redwine, Senators Dalton, Lee, Perdue, Plyler, Odom

AID TO PRIVATE COLLEGES/LEGISLATIVE TUITION GRANT LIMITATIONS

Section 10.1.(a) No Legislative Tuition Grant funds shall be expended for a program at an off-campus site of a private institution, as defined in G.S. 116-22(1), established after May 15, 1987, unless (i) the private institution offering the program has previously notified and secured agreement from other private institutions operating degree programs in the county in which the off-campus program is located or operating in the counties adjacent to that county or (ii) the degree program is neither available nor planned in the county with the off-campus site or in the counties adjacent to that county.

An "off-campus program" is any program offered for degree credit away from the institution's main, permanent campus.

Section 10.1.(b) Any member of the armed services, as defined in G.S. 116-143.3(a), abiding in this State incident to active military duty, who does not qualify as a resident for tuition purposes, as defined under G.S. 116-143.1, is eligible for a legislative tuition grant pursuant to this section if the member is enrolled as a full-time student. The member's legislative tuition grant shall not exceed the cost of tuition less any tuition assistance paid by the member's employer.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Hardaway, Redwine, Senators Dalton, Lee, Perdue, Plyler, Odom

WAKE FOREST AND DUKE MEDICAL SCHOOLS ASSISTANCE/FUNDING FORMULA

Section 10.2.(a) Funds appropriated in this act to the Board of Governors of The University of North Carolina for continuation of financial assistance to the medical schools of Duke University and Wake Forest University shall be disbursed on certifications of the respective schools of medicine that show the number of North Carolina residents as first-year, second-year, third-year, and fourth-year students in the medical school as of November 1, 1999, and November 1, 2000. Disbursement to Wake Forest University shall be made in the amount of eight thousand dollars ($8,000) for each medical student who is a North Carolina resident, one thousand dollars ($1,000) of which shall be placed by the school in a fund to be used to provide financial aid to needy North Carolina students who are enrolled in the medical school. The maximum aid given to any student from this fund in a given year may not exceed the amount of the difference in tuition and academic fees charged by the school and those charged at the School of Medicine at the University of North Carolina at Chapel Hill.

Disbursement to Duke University shall be made in the amount of five thousand dollars ($5,000) for each medical student who is a North Carolina resident, five hundred dollars ($500.00) of which shall be placed by the school in a fund to be used to provide student financial aid to financially needy North Carolina students who are enrolled in the medical school. No individual student may be awarded assistance from this fund in excess of two thousand dollars ($2,000) each year. In addition to this basic disbursement for each year of the biennium, a disbursement of one thousand dollars ($1,000) shall be made for each medical student who is a North Carolina resident in the first-year, second-year, third-year, and fourth-year classes to the extent that enrollment of each of those classes exceeds 30 North Carolina students.

The Board of Governors shall establish the criteria for determining the eligibility for financial aid of needy North Carolina students who are enrolled in the medical schools and shall review the grants or awards to eligible students. The Board of Governors shall adopt rules for determining which students are residents of North Carolina for the purposes of these programs. The Board shall also make any regulations as necessary to ensure that these funds are used directly for instruction in the medical programs of the schools and not for religious or other nonpublic purposes. The Board shall encourage the two schools to orient students toward primary care, consistent with the directives of G.S. 143-613(a). The two schools shall supply information necessary for the Board to comply with G.S. 143-613(d).

Section 10.2.(b) If the funds appropriated in this act to the Board of Governors of The University of North Carolina for continuation of financial assistance to the medical schools of Duke University and Wake Forest University are insufficient to cover the enrolled students in accordance with this section, then the Board of Governors may transfer unused funds from other programs in the Related Educational Programs budget code to cover the extra students.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Hardaway, Redwine, Senators Dalton, Lee, Perdue, Plyler, Odom

REWARDING TEACHING EXCELLENCE PROGRAM FUNDS

Section 10.3. Funds appropriated in this act for the Rewarding Teaching Excellence Program shall be distributed according to guidelines established by the Board of Governors of The University of North Carolina. These funds shall not be used for any purpose other than for salary increases and necessary employer contributions provided by this section.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Hardaway, Redwine, Senators Dalton, Lee, Perdue, Plyler, Odom

SCHOLARSHIP FUND BALANCES

Section 10.6. Fund balances remaining in the Social Workers' Education Loan Fund shall be transferred to the Nursing Scholars Program fund balance to implement the reductions in appropriations for scholarships in the 1999-2000 fiscal year.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Hardaway, Redwine, Senators Dalton, Lee, Perdue, Plyler, Odom, Warren

EAST CAROLINA UNIVERSITY MEDICAL SCHOOL

Section 10.7. East Carolina University shall transfer two million dollars ($2,000,000) from the East Carolina University Medicare Reimbursement Trust Fund (26066) established by G.S. 116-36.6 to the East Carolina University School of Medicine General Fund operating fund (16066) for current expenses for fiscal year 1999-2000.

Requested by: Representatives Hardaway, Boyd-McIntyre, Oldham, Rogers, Easterling, Hardaway, Redwine, Senators Dalton, Lee, Ballance, Dannelly, Jordan, Lucas, Martin of Guilford, Shaw of Cumberland, Perdue, Plyler, Odom

UNC ENROLLMENT PLANNING

Section 10.8.(a) The University of North Carolina faces an increase in student enrollment of 48,000 students over the next 10 years, primarily at the undergraduate level. The Board of Governors of The University of North Carolina has adopted plans for meeting this large increase. These plans call for 10 constituent institutions to enroll a larger share of the new enrollments. Of these 10 institutions, seven currently have underutilized capacity. These seven schools (Elizabeth City State University, Fayetteville State University, North Carolina Agricultural and Technical State University, North Carolina Central University, the University of North Carolina at Pembroke, Western Carolina University, and Winston-Salem State University) are expected to grow by twenty percent (20%) by fall, 2003.

Section 10.8.(b) Of the funds appropriated to the Board of Governors of The University of North Carolina for a "Strategic Initiatives Reserve", for the 1999-2000 fiscal year, the sum of two million dollars ($2,000,000) of the reserve shall be used to perform campus assessments and develop enrollment growth plans for the seven constituent institutions designated as growing twenty percent (20%) by fall, 2003 in the Board of Governors' enrollment plan. The Board of Governors shall report to the Joint Legislative Education Oversight Committee by April 15, 2000, on the use of the funds and on any additional needs identified by the plans.

Section 10.8.(c) Of the funds appropriated to the Board of Governors of The University of North Carolina, the sum of three million dollars ($3,000,000) in continuing operating funds shall be allocated to carry out the Board of Governors' plans for those campuses planning for rapid enrollment growth whose current enrollment is less than 5,000 full-time equivalent (FTE) students. The intent for this allocation is to promote greater operating efficiencies through budget flexibility for those constituent institutions lacking sufficient size to provide for economies of scale.

Section 10.8.(d) Of the funds appropriated to the Board of Governors of The University of North Carolina, the sum of three million dollars ($3,000,000) in continuing operating funds shall be allocated for improvement of faculty instruction at the seven campuses targeted for major enrollment growth. The improvements shall be based on plans approved by the Board of Governors for hiring of new faculty, salary improvements, faculty development, or other initiatives that will improve instruction for students, especially undergraduate students. The Board of Governors shall report to the Joint Legislative Education Oversight Committee by April 15, 2000, on the allocation and proposed use of these funds.

Section 10.8.(e) Of the funds appropriated to the Board of Governors of The University of North Carolina, the sum of two million dollars ($2,000,000) in continuing operating funds shall be allocated for the enhancement of development offices at the smaller institutions. The goal of this funding is to increase the ability of these institutions to raise funds from the private sector and enhance the institutions' abilities to leverage State and other resources with private donations.

Section 10.8.(f) Of the funds appropriated to the Board of Governors of The University of North Carolina, the sum of one million dollars ($1,000,000) in continuing operating funds shall be allocated to further develop facilities management support for the smaller campuses facing rapid growth and having greater than average needs for renovation and repair of existing facilities. Funds may be allocated directly to the institutions needing assistance or may be dedicated to providing the assistance needed by other methods. The Board of Governors shall report to the Joint Legislative Education Oversight Committee on the allocation and use of these funds by April 15, 2000.

Section 10.8.(g) Of the funds appropriated by this act to the Board of Governors of The University of North Carolina, the sum of one million dollars ($1,000,000) shall be used on a continuing basis by the Board of Governors to prevent reductions in faculty positions for the seven growth constituent institutions identified in subsection (a) of this section if these institutions are projected to have budget reductions based on current enrollment estimates.

The Board of Governors shall report to the Joint Legislative Education Oversight Committee by December 15 of each year on enrollment planning, current and anticipated growth, and management of capacity to meet the demands for higher education in North Carolina. These reports shall continue through December 2005.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Hardaway, Redwine, Senators Dalton, Lee, Perdue, Plyler, Odom

GRADUATE TUITION REMISSION

Section 10.9. Of the funds appropriated by this act to the Board of Governors of The University of North Carolina the sum of three million five hundred thousand dollars ($3,500,000) shall be allocated to campuses having graduate programs and students eligible for graduate tuition remission or resident graduate tuition awards. None of these funds may be allocated to the Research I institutions.

Requested by: Representatives Redwine, Boyd-McIntyre, Oldham, Rogers, Easterling, Hardaway, Senators Dalton, Lee, Perdue, Plyler, Odom

UNC-WILMINGTON RETAIN LAND SALE PROCEEDS

Section 10.10. The University of North Carolina at Wilmington may retain the proceeds from the sale of real property which is the site of the old Marine Science Center near Wrightsville Beach to use for the completion and equipping of the new Marine Science Center currently under construction.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Hardaway, Redwine, Senators Lee, Dalton, Perdue, Plyler, Odom

EXPLANATION OF FEDERAL TAX CREDITS AVAILABLE FOR EDUCATIONAL PURPOSES

Section 10.11. Each constituent institution of The University of North Carolina and each community college shall provide to students and their families a brief, clear explanation of federal tax credits (the HOPE and Lifetime Learning Credits) that are available for educational purposes. The explanation shall include the limitations of the credits as well as examples of the potential benefits under certain tax situations. The constituent institution shall provide the tax credit information to the student and the student's parents when the institution notifies each of the amount of tuition and fees paid for a calendar year.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Hardaway, Redwine, Senators Dalton, Lee, Perdue, Plyler, Odom

NORTH CAROLINA PROGRESS BOARD

Section 10.12.(a) Part 2A of Article 9 of Chapter 143B of the General Statutes reads as rewritten:

"Part 2A. North Carolina Progress Board.

"§ 143B-372.1. North Carolina Progress Board.

(a) ~~There~~ The North Carolina Progress Board is ~~established within the Department of Administration the North Carolina Progress Board.~~ established. The Board shall be located administratively in the ~~Department of Administration~~ Board of Governors of The University of North Carolina and is located at North Carolina State University, but shall exercise all its prescribed statutory powers independently of the ~~Department of Administration.~~ Board of Governors.

(b) The North Carolina Progress Board shall consist of 14 21 members of statewide prominence as follows:

(1) The Governor, ex officio;

(2) ~~Seven~~ Eight persons appointed by the Governor, none of whom shall be State employees or officers;

(3) ~~Three~~ Four persons appointed by the Speaker of the House of ~~Representatives; and~~ Representatives, one of whom shall be a member of the House of Representatives;

(4) ~~Three~~ Four persons appointed by the President Pro Tempore of the ~~Senate.~~ Senate, one of whom shall be a member of the Senate; and

(5) Four persons appointed by the North Carolina Progress Board.

(c) The Governor shall be chair of the North Carolina Progress Board. The Governor shall appoint a vice-chair from among the membership of the North Carolina Progress Board to serve at the pleasure of the Governor. The North Carolina Progress Board may elect such other officers as it sees fit.

(d) The North Carolina Progress Board shall meet at least twice annually on the call of the chair or as additionally provided by the North Carolina Progress Board. A quorum is ~~eight~~ 11 members of the Board. Members may not send designees to board meetings, nor may they vote by proxy.

(e) ~~Initial~~ Board appointments shall be for terms to begin ~~July 1, 1995.~~ July 1, 1999, with subsequent appointments to be made as terms expire or resignations occur. Of the Governor's appointments, ~~four~~ two shall be for one-year terms, two shall be for two-year ~~terms~~ terms, two shall be for three-year terms, and ~~three~~ two shall be for four-year terms. Of the appointments made by the Speaker of the House of ~~Representatives and~~ Representatives, the President Pro Tempore of the Senate, and the North Carolina Progress Board, one member appointed by each shall be appointed for a one-year term, one member appointed by each shall be appointed ~~one shall be~~ for a two-year ~~term~~ term, one member appointed by each shall be appointed for a three-year term, and ~~two shall be~~ one member appointed by each shall be appointed for a four-year term. As terms expire, successors shall be appointed for four-year terms.

(f) No member may be appointed to more than two consecutive terms. A member of the House of Representatives appointed by the Speaker of the House vacates membership on the North Carolina Progress Board when that person is no longer a member of the House of Representatives, except that if that person is in office at the expiration of the term of office in the House of Representatives but has not been elected to the next term, that person shall continue to serve until the convening of the regular session. A member of the Senate appointed by the President Pro Tempore of the Senate vacates membership on the North Carolina Progress Board when that person is no longer a member of the Senate, except that if that person is in office at the expiration of the term of office in the Senate but has not been elected to the next term, that person shall continue to serve until the convening of the regular session.

"§ 143B-372.2. Responsibilities.

(a) The General Assembly notes that the Commission for a Competitive North Carolina developed goals in the following categories:

(1) Healthy Children and Families;

(2) Quality Education for All;

(3) A High Performance Workforce;

(4) A Prosperous Economy;

(5) A Sustainable Environment;

(6) Technology and Infrastructure Development;

(7) Safe and Vibrant Communities; and

(8) Active Citizenship/Accountable Government.

The Commission for a Competitive North Carolina adopted a report which established major goals and ways to measure progress toward these goals.

(a1) The General Assembly finds that the North Carolina Progress Board developed a report that focused on four of the Commission's recommended topics and issued 16 major targets for 2010. The objectives of the targets are to drive the State toward (i) a more expansive vision of education and environmental protection, (ii) strengthening families, and (iii) bringing more people into the economic mainstream.

(b) The General Assembly finds that:

(1) The North Carolina economy of the future can provide unparalleled opportunity while maintaining North Carolina's traditional values, if the State pursues the future with clarity of purpose and perseverance;

(2) The North Carolina economy is in the midst of a massive transition created by technological changes, global competition, and new production practices; and

(3) In order to maintain employment opportunities, increase income levels, reduce poverty, and generate the public revenues necessary to provide public services, North Carolina must increasingly rely on an economy which adds value to its natural and human resources and provides a diverse mix of products.

(1) Encourage the discussion and understanding of critical global and national social and economic trends that will affect North Carolina in the coming decades;

(2) Examine the report of the Commission for a Competitive North ~~Carolina;~~ Carolina and the 1997 report of the North Carolina Progress Board to the General Assembly;

(3) Track the eight issue areas set out in subsection (a) of this ~~section;~~ section and the objectives set out in subsection (a1) of this section and other issues identified by the Progress Board. The Progress Board may, upon vote of the Board, add to those issues identified by its predecessor Commission and Board;

(4) Hold public hearings and other methods of public ~~participation~~ participation, including educational and outreach programs, to secure the views of citizens on priority goals for North ~~Carolina;~~ Carolina and to disseminate findings and recommendations to policymakers;

(5) Formulate and submit to North Carolinians a report every five years, beginning 2001, that updates the 20- to 30-year vision for North Carolina and that describes and explains a vision for North Carolina's progress over the next 20 to 30 years;

(6) Submit a report to the ~~1997 Regular Session of the~~ General Assembly prior to its ~~convening,~~ convening the regular session every odd-numbered year, which reports on social and economic trends and issues specific targets and milestones to accomplish its mission;

(7) Recommend how the targets and milestones can be applied to increase the accountability of government to the people of this State; ~~and~~

(8) Report periodically to the people of North Carolina on progress toward meeting goals, targets, and ~~milestones.~~ milestones;

(9) Undertake new and ongoing policy research and benchmarking studies;

(10) Publish and distribute periodic reports on policies, performance improvement, and best practices for meeting the long-term goals for the State; and

(11) May apply for and accept gifts or grants.

(d) The Regular Session of the General Assembly shall further define the mission of the North Carolina Progress Board in continuing its work.

(e) The General Assembly, after adopting the initial set of goals and measures as proposed or amended, may alter the goals and measures.

"§ 143B-372.3. Staff.

(a) ~~The North Carolina Progress Board may hire an executive director, who may be dismissed by the North Carolina Progress Board.~~ The Chancellor of North Carolina State University shall appoint an Executive Director who shall serve at the pleasure of the Chancellor. The Executive Director shall report to the North Carolina Progress ~~Board.~~ Board and the Chancellor. The Executive Director shall hire or contract with support ~~staff and may dismiss them.~~ staff, who shall work at the pleasure of the Executive Director.

(b) There may be an Executive Staff Committee to assist the North Carolina Progress Board which shall consist of the Executive Director, if hired, the State Budget Officer, the State Planning Officer, and the Director of Fiscal Research.

~~(c)~~ ~~The State Budget Office and the State Planning Office shall also provide staff support to the North Carolina Progress Board.~~ The Office of State Budget and Management and the Office of State Planning shall also provide support, information, reports, and other assistance to the North Carolina Progress Board as requested."

Section 10.12.(b) Funds appropriated for the 1998-99 fiscal year in S.L. 1998-212 for operating support of the North Carolina Progress Board to the Department of Commerce that are unexpended as of June 30, 1999, shall not revert but shall be transferred to North Carolina State University to support the operations of the North Carolina Progress Board. This section is effective June 30, 1999.

Requested by: Representatives Easterling, Hardaway, Redwine, Senators Lee, Dalton, Perdue, Plyler, Odom, Rand

UNC OVERHEAD RECEIPTS

Section 10.13. Effective July 1, 1999, all overhead receipts earned by constituent institutions of The University of North Carolina shall be retained at the campus earning the receipts.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Hardaway, Redwine, Senators Dalton, Lee, Perdue, Plyler, Odom

UNC GENERAL ADMINISTRATION FLEXIBILITY

Section 10.14.(a) G.S. 116-30.3 is amended by adding a new subsection to read:

"(e) Notwithstanding G.S. 143-18, of the General Fund current operations appropriations credit balance remaining in Budget Code 16010 of the Office of General Administration of The University of North Carolina, any amount of the General Fund appropriation for that fiscal year may be carried forward in that budget code to the next fiscal year and may be used for one-time expenditures that will not impose additional financial obligations on the State. However, the amount carried forward under this subsection shall not exceed two and one-half percent (2 1/2%) of the General Fund appropriation. The Director of the Budget, under the authority set forth in G.S. 143-25, shall establish the General Fund current operations credit balance remaining in Budget Code 16010 of the Office of General Administration of The University of North Carolina. The funds shall not be used to support positions."

Section 10.14.(b) G.S. 116-14 reads as rewritten:

"§ 116-14. President and staff.

(a) The Board shall elect a President of the University of North Carolina. He The President shall be the chief administrative officer of the University.

(b) The President shall be assisted by such professional staff members as may be deemed necessary to carry out the provisions of this Article, who shall be elected by the Board on nomination of the President. The Board shall fix the compensation of the staff members it elects. These staff members shall include a senior vice-president and such other vice-presidents and officers as may be deemed desirable. Provision shall be made for persons of high competence and strong professional experience in such areas as academic affairs, public service programs, business and financial affairs, institutional studies and long-range planning, student affairs, research, legal affairs, health affairs and institutional development, and for State and federal programs administered by the Board. In addition, the President shall be assisted by such other employees as may be needed to carry out the provisions of this Article, who shall be subject to the provisions of Chapter 126 of the General Statutes. The staff complement shall be established by the Board on recommendation of the President to insure that there are persons on the staff who have the professional competence and experience to carry out the duties assigned and to insure that there are persons on the staff who are familiar with the problems and capabilities of all of the principal types of institutions represented in the system. Subject to approval by the Board, the President may establish and abolish employment positions within the staff complement authorized by this subsection in the manner of and under the conditions prescribed by G.S. 116-30.4 for special responsibility constituent institutions.

(b1) The President shall receive General Fund appropriations made by the General Assembly for continuing operations of The University of North Carolina that are administered by the President and the President's staff complement established pursuant to G.S. 116-14(b) in the form of a single sum to Budget Code 16010 of The University of North Carolina in the manner and under the conditions prescribed by G.S. 116-30.2. The President, with respect to the foregoing appropriations, shall have the same duties and responsibilities that are prescribed by G.S. 116-30.2 for the Chancellor of a special responsibility constituent institution. The President may establish procedures for transferring funds from Budget Code 16010 to the constituent institutions for nonrecurring expenditures. The President may identify funds for capital improvement projects from Budget Code 16010, and the capital improvement projects may be established following the procedures set out in in G.S. 143-18.1.

(b2) The President, in consultation with the State Auditor and the Director of the Office of State Personnel, shall ascertain that the management staff and internal financial controls are in place and continue in place to successfully administer the additional authority authorized under G.S. 116-14(b1) and G.S. 116-30.3(e). All actions taken by the President pursuant to G.S. 116-14(b1) and G.S. 116-30.3(e) are subject to audit by the State Auditor.

(c) The President, with the approval of the Board, shall appoint an advisory committee composed of representative presidents of the private colleges and universities and may appoint such additional advisory committees as are deemed necessary or desirable."

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Hardaway, Redwine, Senators Dalton, Lee, Perdue, Plyler, Odom, Warren, Martin of Guilford, Hagan, Garrou, Ballance, Dannelly, Jordan, Lucas, Shaw of Cumberland

UNC NEW DEGREE PROGRAM FUNDS

Section 10.16. Of the funds appropriated to the Board of Governors of The University of North Carolina for the 1999-2000 and the 2000-2001 fiscal years, the sum of one million three hundred forty thousand dollars ($1,340,000) is to be used for new program development. For the 1999-2000 fiscal year the Board shall allocate these funds to support newly authorized programs at East Carolina University, Elizabeth City State University, North Carolina Agricultural and Technical State University, North Carolina State University, the University of North Carolina at Charlotte, and Winston-Salem State University.

Requested by: Representatives Wright, Easterling, Hardaway, Redwine, Senators Dalton, Lee, Perdue, Plyler, Odom

MARTIN LUTHER KING RACE RELATIONS RESEARCH CENTER/STUDY SITE LOCATION

Section 10.17. The Board of Governors of The University of North Carolina shall conduct a site study to determine where the Martin Luther King Race Relations Research Center should be located. The Board of Governors shall submit in writing to the 1999 General Assembly, Regular Session 2000 its findings and recommendation regarding the site location.

Requested by: Representatives Blue, Easterling, Hardaway, Redwine, Senators Plyler, Perdue, Odom, Ballance

NCCU BIOMEDICAL/BIOTECHNOLOGY RESEARCH INSTITUTE FUNDS

Section 10.18. Of the funds appropriated by this act to the Board of Governors of The University of North Carolina the sum of one million five hundred thousand dollars ($1,500,000) for the 1999-2000 fiscal year and the sum of three hundred fifty thousand dollars ($350,000) for the 2000-2001 fiscal year shall be allocated to North Carolina Central University for the operations of the Biomedical/Biotechnology Research Institute.

Requested by: Representatives Boyd-McIntyre, Oldham, Rogers, Easterling, Hardaway, Redwine, Senators Lee, Dalton, Plyler, Perdue, Odom, Rand

FACULTY SALARY STUDY

Section 10.20.(a) In order to attract and retain the best academic professionals, maintain the level of excellence for which North Carolina's public universities are known, and maximize the learning opportunities for students, the Board of Governors of The University of North Carolina shall study the salaries and other compensation of faculty of the constituent institutions of The University of North Carolina. The Board shall evaluate the salaries and other compensation of faculty for each institution in comparison to other peer institutions within the State, region, and country and shall make recommendations on appropriate adjustments to faculty salaries and other compensation to achieve competitive levels with other peer institutions and maintain and enhance academic excellence on each campus within The University of North Carolina System. In addition, the Board shall identify revenue options for funding adjustments to faculty salaries and other compensation to achieve the recommended adjustments.

Section 10.20.(b) The Board of Governors shall report its findings and recommendations to the Joint Legislative Commission on Governmental Operations and the Joint Legislative Education Oversight Committee no later than December 1, 1999.

Requested by: Representatives Easterling, Hardaway, Redwine, Senators Hartsell, Lee, Dalton, Perdue, Plyler, Odom

STUDY PREPAID TUITION PLANS AND COLLEGE SAVINGS PLANS

Section 10.21. The Board of Governors of The University of North Carolina shall study the structure, management, and use of prepaid tuition plans and college savings plans in North Carolina and make recommendations to the Joint Legislative Education Oversight Committee regarding how to make the plans more attractive to parents and grandparents in saving for college costs. In conducting the study, the Board of Governors shall consult with private colleges and universities and the Community Colleges System Office and shall also consider similar plans of other states, including Iowa and New York. The Board of Governors shall report its recommendations to the Joint Legislative Education Oversight Committee by April 1, 2000.

Requested by: Representatives Easterling, Hardaway, Redwine, Senators Plyler, Perdue, Odom, Weinstein, Martin of Guilford, Hagan

UNC CARRYFORWARD

Section 10.22.(a) Of the funds remaining in The University of North Carolina General Administration General Fund budget code 16010 credit balance on June 30, 1999, an amount of four hundred thousand dollars ($400,000) shall not revert to the General Fund but shall be carried forward for allocation by the Board of Governors. These funds may be used to assist the University of North Carolina at Pembroke in funding an addition to the Chancellor's residence and to assist North Carolina Agricultural and Technical State University in purchasing a new Chancellor's residence.

Section 10.22.(b) This section becomes effective June 30, 1999.

Requested by: Representatives Easterling, Hardaway, Redwine, Senators Kerr, Perdue, Plyler, Odom, Dalton, Lee

UNC ANOREXIA/BULIMIA ENDOWED CHAIR

Section 10.23. Of the funds appropriated from the General Fund to the Board of Governors of The University of North Carolina the sum of four hundred thousand dollars ($400,000) for the 1999-2000 fiscal year shall be used to endow a chair for the study of anorexia and bulimia at the University of North Carolina at Chapel Hill School of Medicine, provided that the sum of two hundred thousand dollars ($200,000) is raised by The Anorexia/Bulimia Foundation of North Carolina or other private sources to match this appropriation. These funds shall not revert but shall be held in trust pending the receipt of the required matching funds.

PART XI. DEPARTMENT OF HEALTH AND HUMAN SERVICES

SUBPART 1. ADMINISTRATION

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

RECODIFICATION OF ADMINISTRATIVE RULES

Section 11. The Codifier of Rules may reorganize Titles 10 and 15A of the North Carolina Administrative Code to reflect the recent reorganization of the Department of Health and Human Services and the Department of Environment and Natural Resources. The reorganization of the Code may include replacing Title 10 with a new Title 10A if desirable for clarity. The Codifier of Rules may make changes in the text of the affected rules to reflect changes in organizational structure of the Department of Health and Human Services and the Department of Environment and Natural Resources. So long as the changes in text do not change the substance of the rules, the reorganization by the Codifier is exempt from the requirements of Chapter 150B of the General Statutes and does not require the review or approval of the Rules Review Commission.

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Forrester, Plyler, Perdue, Odom

PRESCRIPTION DRUG ASSISTANCE PROGRAM

Section 11.1.(a) Of the funds appropriated in this act to the Department of Health and Human Services, the sum of five hundred thousand dollars ($500,000) for the 1999-2000 fiscal year and the sum of five hundred thousand dollars ($500,000) for the 2000-2001 fiscal year shall be used to pay the cost of outpatient prescription drugs for persons:

(1) Over the age of 65 years and not eligible for full Medicaid benefits;

(2) Whose income is not more than one hundred fifty percent (150%) of the federal poverty level; and

(3) Who have been diagnosed with cardiovascular disease or diabetes.

These funds shall be used to pay the cost of outpatient prescription drugs for the treatment of cardiovascular disease or diabetes. Payment shall be not more than the Medicaid cost including rebates. The Department shall develop criteria to maximize the efficient and effective distribution of these drugs.

Section 11.1.(b) The Department of Health and Human Services shall work with the Fiscal Research Division of the Legislative Services Office to develop a proposal for the establishment of a prescription drug assistance program. The purpose of the program shall be to serve low-income elderly and disabled persons who are not eligible for Medicaid and who need prescription drugs to treat a condition which, if left untreated, could result in the person's admission to a nursing facility or otherwise qualifying for Medicaid. The Department shall utilize the expertise of the Prescription Drug Work Group which authored "A Study of Options for Making Prescription Drugs More Affordable for Older Adults" to complete the analysis necessary for developing the proposal. In developing the proposal, the Department shall do the following:

(1) Identify health conditions that need prescription drug treatment and, if not treated, that can lead to nursing home admission or otherwise qualifying the person for Medicaid;

(2) Identify the group of low-income elderly and disabled persons in most need of assistance;

(3) Estimate the number of persons potentially eligible for assistance under the program;

(4) Identify appropriate limitations on levels of assistance;

(5) Estimate the cost of providing drug assistance and the cost of administering the program;

(6) Review similar programs in other states;

(7) Develop a simple and cost-effective system for administering a drug assistance program;

(8) Develop a timetable for program implementation; and

(9) Conduct other activities that will assist in the development of the proposal.

Section 11.1.(c) Not later than May 1, 2000, the Department shall report to the 1999 General Assembly, Regular Session 2000, with a complete proposal for a prescription drug assistance program. The report shall include several options for consideration by the General Assembly.

The Department of Health and Human Services shall explore ways to develop this public/private partnership so that private funds may be made available for this purpose in future fiscal years.

Requested by: Representatives Earle, Nye, Cansler, Easterling, Hardaway, Redwine, Baddour, Senators Martin of Guilford, Purcell, Plyler, Perdue, Odom

STUDY ON TRAUMATIC BRAIN INJURY

Section 11.2. The Department of Health and Human Services shall study the following:

(1) The long-range costs of treating and caring for persons with Traumatic Brain Injury; and

(2) The feasibility and cost to the State of obtaining a Home and Community-Based Medicaid Waiver to provide Medicaid services to 100 individuals with Traumatic Brain Injury and for administrative support to manage the waiver.

The Department shall report the results of its study to the House of Representatives Appropriations Subcommittee on Health and Human Services and the Senate Appropriations Committee on Human Resources by May 1, 2000.

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

DHHS EMPLOYEES/IN-KIND MATCH

Section 11.3. G.S. 143B-139.4 reads as rewritten:

"§ 143B-139.4. Department of Health and Human Services; authority to assist private nonprofit ~~foundations.~~ organizations.

(a) The Secretary of the Department of Health and Human Services may allow employees of the Department or provide other appropriate services to assist any private nonprofit ~~foundation~~ organization which works directly with services or programs of the Department and whose sole purpose is to support the services and programs of the Department. A Department employee shall be allowed to work with ~~a foundation~~ an organization no more than twenty hours in any one month. These services are not subject to the provisions of Chapter 150B of the General Statutes.

(b) The board of directors of each private, nonprofit ~~foundation~~ organization shall secure and pay for the services of the State Auditor's Office or employ a certified public accountant to conduct an annual audit of the financial accounts of the ~~foundation.~~ organization. The board of directors shall transmit to the Secretary of the Department a copy of the annual financial audit report of the private nonprofit ~~foundation.~~ organization.

(c) Notwithstanding the limitations of subsection (a) of this section, the Secretary of the Department of Health and Human Services may assign employees of the Office of Rural Health and Resource Development to serve as in-kind match to nonprofit organizations working to establish health care programs that will improve health care access while controlling costs."

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

ESTABLISHMENT OF DIVISION OF EDUCATION SERVICES/REVIEW OF DISABILITY SERVICES

Section 11.4.(a) Notwithstanding any other provision of law, the Secretary of the Department of Health and Human Services shall create a Division of Education Services to manage the Governor Morehead School and the three residential schools for the deaf. The Secretary may include in this new Division any or all of the schools and educational programs currently managed by the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services.

The purpose of creating a Division of Education Services is to focus management attention and resources on the following:

(1) Improving student academic and postsecondary outcomes.

(2) Increasing staff development and training.

(3) Achieving administrative consistency and access to expert support services across campuses.

(4) Strengthening collaborative relationships with local education agencies and with the State Board of Education.

The Department's goals and plans for this new Division shall be consistent with the recommendations proposed by the Department in its report entitled, "Program Review of Disability Services," dated April 14, 1999.

The Division of Education Services shall be led by a Superintendent of Education Services. The Superintendent shall have a strong background in public education. The Superintendent shall implement a support team of managers and specialists at the division-level which will include, at a minimum, individual managers responsible for business management services, clinical services, and early intervention services.

The Secretary shall make a progress report on the establishment and staffing of the Division of Education Services to the Senate Appropriations Committee on Human Resources, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division no later than April 1, 2000.

The Secretary shall continue to review, evaluate, and recommend opportunities for improving the utilization of campus resources for the benefit of special needs children statewide, including the possibilities for year-round schooling and postsecondary transitional programming. The Secretary shall report the results of this review to the Senate Appropriations Committee on Human Resources and the House of Representatives Appropriations Subcommittee on Health and Human Services no later than April 1, 2000. The State Board of Education and the superintendents of the local education agencies in which the residential schools are located shall cooperate in this effort.

Section 11.4.(b) G.S. 143B-216.33(a)(2) is repealed.

Section 11.4.(c) The Secretary of the Department of Health and Human Services shall evaluate opportunities, within the limits of existing law, for reorganizing the administration and delivery of the Department's services to visually impaired, deaf and hard of hearing, and vocational rehabilitation clients. The goals of this evaluation shall be to improve services to clients and to maximize the use of existing resources for the benefit of clients served. The Secretary shall report any reorganization resulting from this evaluation to the Senate Appropriations Committee on Human Resources and the House of Representatives Appropriations Subcommittee on Health and Human Services no later than April 1, 2000. Any reorganization under this subsection shall be within the limits of existing law.

Section 11.4.(d) The Department of Health and Human Services shall conduct a comprehensive review of the adequacy and effectiveness of its programs and services for deaf-blind adults and children. This review shall do each of the following:

(1) Identify gaps in delivering a continuum of services to deaf-blind individuals, including intervention and communication services, education services, housing, independent living services, employment, transportation, case management services, and consumer education and assistance.

(2) Assess the appropriateness, quality, and timeliness of available services, including requirements for staff development and training.

(3) Evaluate the effectiveness of various service delivery models.

(4) Ensure an effective organizational structure within the Department for managing the administration and delivery of these services.

The Department shall report its findings and recommendations to the members of the Senate Appropriations Committee on Human Resources, the House of Representative Subcommittee on Health and Human Services, and the Fiscal Research Division no later than April 1, 2000.

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

ABCs PLAN IN DHHS SCHOOLS

Section 11.5.(a) The Department of Health and Human Services shall retain any unobligated portion of the nonrecurring funds appropriated by the 1997 General Assembly, 1998 Regular Session, to implement the ABCs Plan in the Governor Morehead School and the Schools for the Deaf.

Section. 11.5.(b) This section becomes effective June 30, 1999.

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

PROCEDURE FOR AWARD OF HUMAN SERVICES GRANTS

Section 11.6. Of the funds appropriated in this act to the Department of Health and Human Services the sum of four million dollars ($4,000,000) for the 1999-2000 fiscal year shall be used for grants for programs that provide services to older adults, adults with disabilities, at-risk children, and youth and families.

In awarding grants, the Secretary shall consider the merits of the program, the benefit to the State and local communities of the program, and the cost of the program.

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

NONMEDICAID REIMBURSEMENT CHANGES

Section 11.7. Providers of medical services under the various State programs, other than Medicaid, offering medical care to citizens of the State shall be reimbursed at rates no more than those under the North Carolina Medical Assistance Program. Hospitals that provide psychiatric inpatient care for multiply diagnosed adults who were identified as members of the Thomas S. class at the time of dissolution of the class, and other multiply diagnosed adults may be paid an additional incentive payment not to exceed fifteen percent (15%) of their regular daily per diem reimbursement.

The Department of Health and Human Services may reimburse hospitals at the full prospective per diem rates without regard to the Medical Assistance Program's annual limits on hospital days. When the Medical Assistance Program's per diem rates for inpatient services and its interim rates for outpatient services are used to reimburse providers in non-Medicaid medical service programs, retroactive adjustments to claims already paid shall not be required.

Notwithstanding the provisions of paragraph one, the Department of Health and Human Services may negotiate with providers of medical services under the various Department of Health and Human Services programs, other than Medicaid, for rates as close as possible to Medicaid rates for the following purposes: contracts or agreements for medical services and purchases of medical equipment and other medical supplies. These negotiated rates are allowable only to meet the medical needs of its non-Medicaid eligible patients, residents, and clients who require such services which cannot be provided when limited to the Medicaid rate.

Maximum net family annual income eligibility standards for services in these programs shall be as follows:

Medical Eye All

Family Size Care Adults Rehabilitation Other

1 $ 4,860 $ 8,364 $ 4,200

2 5,940 10,944 5,300

3 6,204 13,500 6,400

4 7,284 16,092 7,500

5 7,821 18,648 7,900

6 8,220 21,228 8,300

7 8,772 21,708 8,800

8 9,312 22,220 9,300

The eligibility level for children in the Medical Eye Care Program in the Division of Services for the Blind shall be one hundred percent (100%) of the federal poverty guidelines, as revised annually by the United States Department of Health and Human Services and in effect on July 1 of each fiscal year. The eligibility level for adults in the Atypical Antipsychotic Medication Program in the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services shall be one hundred twenty-five percent (125%) of the federal poverty guidelines, as revised annually by the United States Department of Health and Human Services and in effect on July 1 of each fiscal year. Additionally, those adults enrolled in the Atypical Antipsychotic Medication Program who become gainfully employed may continue to be eligible to receive State support, in decreasing amounts, for the purchase of atypical antipsychotic medication and related services up to three hundred percent (300%) of the poverty level.

State financial participation in the Atypical Antipsychotic Medication Program for those enrollees who become gainfully employed is as follows:

Income State Participation Client Participation

(% of poverty)

0-125% 100% 0%

126-140% 90% 10%

141-160% 80% 20%

161-180% 70% 30%

181-200% 60% 40%

201-220% 50% 50%

221-240% 40% 60%

241-260% 30% 70%

261-280% 20% 80%

281-300% 10% 90%

301%-over 0% 100%.

The Department of Health and Human Services shall contract at, or as close as possible to, Medicaid rates for medical services provided to residents of State facilities of the Department.

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

LONG-TERM CARE CONTINUUM OF CARE

Section 11.7A.(a) The Department of Health and Human Services shall, in cooperation with other appropriate State and local agencies and representatives of consumer and provider organizations, develop a system that provides a continuum of long-term care for elderly and disabled individuals and their families. The Department shall define the system of long-term care services to include:

(1) A structure and means for screening, assessment, and care management across settings of care;

(2) A process to determine outcome measures for care;

(3) An integrated data system to track expenditures, consumer characteristics, and consumer outcomes;

(4) Relationships between the Department and the State's universities to provide policy analysis and program evaluation support for the development of long-term care system reforms;

(5) An implementation plan that addresses testing of models, reviewing existing models, evaluation of components, and steps needed to achieve development of a coordinated system; and

(6) Provision for consumer, provider, and agency input into the system design and implementation development.

Effective January 1, 2001, the system developed by the Department shall do the following:

(1) Implement the initial phase of a comprehensive data system that tracks long-term care expenditures, services, consumer profiles, and consumer preferences; and

(2) Develop a system of statewide long-term care services coordination and case management to minimize administrative costs, improve access to services, and minimize obstacles to the delivery of long-term care services to people in need.

Section 11.7A.(b) Prior to and during implementation of the system, the Department shall pursue strategies to provide alternative financing of long-term care services by shifting the balance of the financial responsibility for payment of long-term care services from public to private sources by promoting public-private partnerships and personal responsibility for long-term care. These strategies may include:

(1) Flexible use of reverse mortgages;

(2) Private insurance coverage for long-term care;

(3) Tax credits or employment programs such as medical savings accounts and deferred compensation plans for long-term care;

(4) Changes in Medicaid eligibility and asset protection requirements that increase consumers' financial responsibility for their long-term care such as revising the rules relating to the transfer of assets and estate recovery policies.

Section 11.7A.(c) Not later than April 15, 2000, the Department shall submit a progress report to the General Assembly, to the Chairs of the House Appropriations Subcommittee on Health and Human Services and the Senate Appropriations Committee on Human Resources, and to the North Carolina Study Commission on Aging, on the development of the system required under subsection (a) of this section and whether a single division of the Department is an appropriate organizational structure for coordination of all long-term care in North Carolina. The progress report shall include a proposed budget and budget management plan for all publicly financed long-term care services available to older North Carolinians.

SUBPART 2. MEDICAL ASSISTANCE

Requested by: Representatives Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

TRANSFER OF CERTAIN FUNDS AUTHORIZED

Section 11.7B. In order to assure maximum utilization of funds in county departments of social services, county or district health agencies, and area mental health, developmental disabilities, and substance abuse services authorities, the Director of the Budget may transfer excess funds appropriated to a specific service, program, or fund, whether specified service in a block grant plan or General Fund appropriation, into another service, program, or fund for local services within the budget of the respective State agency.

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

AUTHORIZATION TO EXPAND TRANSITIONAL MEDICAID

Section 11.8. Effective no earlier than October 1, 1999, the Department of Health and Human Services shall expand transitional Medicaid benefits for Work First families, including parents, from 12 months to 24 months. The Department shall structure the expansion in a way that maximizes the federal fund share in transitional Medicaid for 24 months. The Department shall apply for federal approval or waiver, as necessary, to effectuate the expansion required in this section.

Requested by: Representatives Earle, Nye, Alexander, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Purcell, Plyler, Perdue, Odom

ADDITIONAL DENTAL BENEFITS UNDER HEALTH INSURANCE PROGRAM FOR CHILDREN

Section 11.9. G.S. 108A-70.21(b)(1) reads as rewritten:

"(1) Dental: Oral examinations, teeth cleaning, and scaling twice during a 12-month period, full mouth X rays once every 60 months, supplemental bitewing X rays showing the back of the teeth once during a 12-month period, fluoride applications ~~once~~ twice during a 12-month period, sealants, simple extractions, therapeutic pulpotomies, prefabricated stainless steel crowns, and routine fillings of amalgam or other tooth-colored filling material to restore diseased teeth. No benefits are to be provided for services under this subsection that are not performed by or upon the direction of a dentist, doctor, or other professional provider approved by the Plan nor for services and materials that do not meet the standards accepted by the American Dental Association."

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

ALLOCATION OF G.S. 143-23.2 MEDICAID FUNDS

Section 11.10.(a) Of the funds transferred to the Department of Health and Human Services for Medicaid programs pursuant to G.S. 143-23.2, the sum of eighty-four million dollars ($84,000,000) for the 1999-2000 fiscal year and the sum of twenty-nine million dollars ($29,000,000) for the 2000-2001 fiscal year shall be allocated as prescribed by G.S. 143-23.2(b) for Medicaid programs. Notwithstanding the prescription in G.S. 143-23.2(b) that these funds not reduce State general revenue funding, these funds shall replace the reduction in general revenue funding effected in this act.

Section 11.10.(b) G.S. 143-23.2(b) reads as rewritten:

"(b) Contributed funds shall be subject to the Department of Health and Human Services administrative control and shall be allocated only as specifically as provided in the current operations appropriations act, except such contributions shall not reduce State general revenue funding. At the end of any fiscal year, the unobligated balance of any such funds shall not revert to the General Fund, but shall be reappropriated for these purposes in the next fiscal year."

Requested by: Representatives Nye, Earle, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

STUDY INCREASE IN RESOURCE LIMITS FOR AGED, BLIND, DISABLED PERSONS TO QUALIFY FOR MEDICAID

Section 11.11. The Department of Health and Human Services shall conduct a study of the feasibility and cost to triple the amount of the resource limits for aged, blind, and disabled persons to qualify for Medicaid. The Department shall report the results of its study to members of the House Appropriations Subcommittee on Health and Human Services and the members of the Senate Appropriations Committee on Human Resources not later than May 1, 2000.

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

MEDICAID ANTICIPATED CHANGES

Section 11.12.(a) Funds appropriated in this act for services provided in accordance with Title XIX of the Social Security Act (Medicaid) are for both the categorically needy and the medically needy. Funds appropriated for these services shall be expended in accordance with the following schedule of services and payment bases. All services and payments are subject to the language at the end of this subsection.

Services and payment bases:

(1) Hospital-Inpatient - Payment for hospital inpatient services will be prescribed in the State Plan as established by the Department of Health and Human Services.

(2) Hospital-Outpatient - Eighty percent (80%) of allowable costs or a prospective reimbursement plan as established by the Department of Health and Human Services.

(3) Nursing Facilities - Payment for nursing facility services will be prescribed in the State Plan as established by the Department of Health and Human Services. Nursing facilities providing services to Medicaid recipients who also qualify for Medicare, must be enrolled in the Medicare program as a condition of participation in the Medicaid program. State facilities are not subject to the requirement to enroll in the Medicare program.

(4) Intermediate Care Facilities for the Mentally Retarded - As prescribed in the State Plan as established by the Department of Health and Human Services.

(5) Drugs - Drug costs as allowed by federal regulations plus a professional services fee per month excluding refills for the same drug or generic equivalent during the same month. Reimbursement shall be available for up to six prescriptions per recipient, per month, including refills. Payments for drugs are subject to the provisions of subsection (h) of this section and to the provisions at the end of subsection (a) of this section, or in accordance with the State Plan adopted by the Department of Health and Human Services consistent with federal reimbursement regulations. Payment of the professional services fee shall be made in accordance with the State Plan adopted by the Department of Health and Human Services, consistent with federal reimbursement regulations. The professional services fee shall be five dollars and sixty cents ($5.60) per prescription. Adjustments to the professional services fee shall be established by the General Assembly.

(6) Physicians, Chiropractors, Podiatrists, Optometrists, Dentists, Certified Nurse Midwife Services - Fee schedules as developed by the Department of Health and Human Services. Payments for dental services are subject to the provisions of subsection (g) of this section.

(7) Community Alternative Program, EPSDT Screens - Payment to be made in accordance with rate schedule developed by the Department of Health and Human Services.

(8) Home Health and Related Services, Private Duty Nursing, Clinic Services, Prepaid Health Plans, Durable Medical Equipment - Payment to be made according to reimbursement plans developed by the Department of Health and Human Services.

(9) Medicare Buy-In - Social Security Administration premium.

(10) Ambulance Services - Uniform fee schedules as developed by the Department of Health and Human Services.

(11) Hearing Aids - Actual cost plus a dispensing fee.

(12) Rural Health Clinic Services - Provider-based, reasonable cost; nonprovider-based, single-cost reimbursement rate per clinic visit.

(13) Family Planning - Negotiated rate for local health departments. For other providers - see specific services, for instance, hospitals, physicians.

(14) Independent Laboratory and X-Ray Services - Uniform fee schedules as developed by the Department of Health and Human Services.

(15) Optical Supplies - One hundred percent (100%) of reasonable wholesale cost of materials.

(16) Ambulatory Surgical Centers - Payment as prescribed in the reimbursement plan established by the Department of Health and Human Services.

(17) Medicare Crossover Claims - An amount up to the actual coinsurance or deductible or both, in accordance with the State Plan, as approved by the Department of Health and Human Services.

(18) Physical Therapy and Speech Therapy - Services limited to EPSDT eligible children. Payments are to be made only to qualified providers at rates negotiated by the Department of Health and Human Services.

(19) Personal Care Services - Payment in accordance with the State Plan approved by the Department of Health and Human Services.

(20) Case Management Services - Reimbursement in accordance with the availability of funds to be transferred within the Department of Health and Human Services.

(21) Hospice - Services may be provided in accordance with the State Plan developed by the Department of Health and Human Services.

(22) Other Mental Health Services - Unless otherwise covered by this section, coverage is limited to agencies meeting the requirements of the rules established by the Commission for Mental Health, Developmental Disabilities, and Substance Abuse Services, and reimbursement is made in accordance with a State Plan developed by the Department of Health and Human Services not to exceed the upper limits established in federal regulations.

(23) Medically Necessary Prosthetics or Orthotics for EPSDT Eligible Children - Reimbursement in accordance with the State Plan approved by the Department of Health and Human Services.

(24) Health Insurance Premiums - Payments to be made in accordance with the State Plan adopted by the Department of Health and Human Services consistent with federal regulations.

(25) Medical Care/Other Remedial Care - Services not covered elsewhere in this section include related services in schools; health professional services provided outside the clinic setting to meet maternal and infant health goals; and services to meet federal EPSDT mandates. Services addressed by this paragraph are limited to those prescribed in the State Plan as established by the Department of Health and Human Services. Except for related services in schools, providers of these services shall be certified as meeting program standards of the Department of Health and Human Services, Division of Women's and Children's Health.

(26) Pregnancy Related Services - Covered services for pregnant women shall include nutritional counseling, psychosocial counseling, and predelivery and postpartum home visits by maternity care coordinators and public health nurses.

Services and payment bases may be changed with the approval of the Director of the Budget.

Reimbursement is available for up to 24 visits per recipient per year to any one or combination of the following: physicians, clinics, hospital outpatient, optometrists, chiropractors, and podiatrists. Prenatal services, all EPSDT children, and emergency rooms are exempt from the visit limitations contained in this paragraph. Exceptions may be authorized by the Department of Health and Human Services where the life of the patient would be threatened without such additional care. Any person who is determined by the Department to be exempt from the 24-visit limitation may also be exempt from the six-prescription limitation.

Section 11.12.(b) Allocation of Nonfederal Cost of Medicaid. The State shall pay eighty-five percent (85%); the county shall pay fifteen percent (15%) of the nonfederal costs of all applicable services listed in this section.

Section 11.12.(c) Copayment for Medicaid Services. The Department of Health and Human Services may establish copayment up to the maximum permitted by federal law and regulation.

Section 11.12.(d) Medicaid and Work First Family Assistance, Income Eligibility Standards. The maximum net family annual income eligibility standards for Medicaid and Work First Family Assistance and the Standard of Need for Work First Family Assistance shall be as follows:

Categorically Needy Medically Needy

WFFA*

Family Standard Families and

Size of Need Children Income

Level AA, AB, AD*

1 $ 4,344 $ 2,172 $ 2,900

2 5,664 2,832 3,800

3 6,528 3,264 4,400

4 7,128 3,564 4,800

5 7,776 3,888 5,200

6 8,376 4,188 5,600

7 8,952 4,476 6,000

8 9,256 4,680 6,300

*Work First Family Assistance (WFFA); Aid to the Aged (AA); Aid to the Blind (AB); and Aid to the Disabled (AD).

The payment level for Work First Family Assistance shall be fifty percent (50%) of the standard of need.

These standards may be changed with the approval of the Director of the Budget with the advice of the Advisory Budget Commission.

Section 11.12.(e) The Department of Health and Human Services, Division of Medical Assistance, shall provide Medicaid coverage to all elderly, blind, and disabled people who have incomes equal to or less than one hundred percent (100%) of the federal poverty guidelines, as revised each April 1.

Section 11.12.(f) ICF and ICF/MR Work Incentive Allowances. The Department of Health and Human Services may provide an incentive allowance to Medicaid-eligible recipients of ICF and ICF/MR facilities who are regularly engaged in work activities as part of their developmental plan and for whom retention of additional income contributes to their achievement of independence. The State funds required to match the federal funds that are required by these allowances shall be provided from savings within the Medicaid budget or from other unbudgeted funds available to the Department. The incentive allowances may be as follows:

Monthly Net Wages Monthly Incentive Allowance

$1.00 to $100.99 Up to $50.00

$101.00 - $200.99 $80.00

$201.00 to $300.99 $130.00

$301.00 and greater $212.00.

Section 11.12.(g) Dental Coverage Limits. Dental services shall be provided on a restricted basis in accordance with rules adopted by the Department to implement this subsection.

Section 11.12.(h) Dispensing of Generic Drugs. Notwithstanding G.S. 90-85.27 through G.S. 90-85.31, under the Medical Assistance Program (Title XIX of the Social Security Act) a prescription order for a drug designated by a trade or brand name shall be considered to be an order for the drug by its established or generic name, except when the prescriber personally indicates, either orally or in the prescriber's own handwriting on the prescription order, 'dispense as written' or words of similar meaning. Generic drugs, when available in the pharmacy, shall be dispensed at a lower cost to the Medical Assistance Program rather than trade or brand name drugs, subject to the prescriber's 'dispense as written' order as noted above.

As used in this subsection 'brand name' means the proprietary name the manufacturer places upon a drug product or on its container, label, or wrapping at the time of packaging; and 'established name' has the same meaning as in section 502(e)(3) of the Federal Food, Drug, and Cosmetic Act as amended, 21 U.S.C. § 352(e)(3).

Section 11.12.(i) Exceptions to Service Limitations, Eligibility Requirements, and Payments. Service limitations, eligibility requirements, and payments bases in this section may be waived by the Department of Health and Human Services, with the approval of the Director of the Budget, to allow the Department to carry out pilot programs for prepaid health plans, managed care plans, or community-based services programs in accordance with plans approved by the United States Department of Health and Human Services, or when the Department determines that such a waiver will result in a reduction in the total Medicaid costs for the recipient.

Section 11.12.(j) Volume Purchase Plans and Single Source Procurement. The Department of Health and Human Services, Division of Medical Assistance, may, subject to the approval of a change in the State Medicaid Plan, contract for services, medical equipment, supplies, and appliances by implementation of volume purchase plans, single source procurement, or other similar processes in order to improve cost containment.

Section 11.12.(k) Cost Containment Programs. The Department of Health and Human Services, Division of Medical Assistance, may undertake cost containment programs including preadmissions to hospitals and prior approval for certain outpatient surgeries before they may be performed in an inpatient setting.

Section 11.12.(l) For all Medicaid eligibility classifications for which the federal poverty level is used as an income limit for eligibility determination, the income limits will be updated each April 1 immediately following publication of federal poverty guidelines.

Section 11.12.(m) The Department of Health and Human Services shall provide Medicaid to 19-, 20-, and 21-year olds in accordance with federal rules and regulations.

Section 11.12.(n) The Department of Health and Human Services shall provide coverage to pregnant women and to children according to the following schedule:

(1) Pregnant women with incomes equal to or less than one hundred eighty-five percent (185%) of the federal poverty guidelines as revised each April 1 shall be covered for Medicaid benefits.

(2) Infants under the age of 1 with family incomes equal to or less than one hundred eighty-five percent (185%) of the federal poverty guidelines as revised each April 1 shall be covered for Medicaid benefits.

(3) Children aged 1 through 5 with family incomes equal to or less than one hundred thirty-three percent (133%) of the federal poverty guidelines as revised each April 1 shall be covered for Medicaid benefits.

(4) Children aged 6 through 18 with family incomes equal to or less than the federal poverty guidelines as revised each April 1 shall be covered for Medicaid benefits.

(5) The Department of Health and Human Services shall provide Medicaid coverage for adoptive children with special or rehabilitative needs regardless of the adoptive family's income.

Services to pregnant women eligible under this subsection continue throughout the pregnancy but include only those related to pregnancy and to those other conditions determined by the Department as conditions that may complicate pregnancy. In order to reduce county administrative costs and to expedite the provision of medical services to pregnant women, to infants, and to children described in subdivisions (3) and (4) of this subsection, no resources test shall be applied.

Section 11.12.(o) Medicaid enrollment of categorically needy families with children shall be continuous for one year without regard to changes in income or assets.

Section 11.12.(p) The Department of Health and Human Services shall submit a monthly status report on expenditures for acute care and long-term care services to the Fiscal Research Division and to the Office of State Budget and Management. This report shall include an analysis of budgeted versus actual expenditures for eligibles by category and for long-term care beds. In addition, the Department shall revise the program's projected spending for the current fiscal year and the estimated spending for the subsequent fiscal year on a quarterly basis. Reports for the preceding month shall be forwarded to the Fiscal Research Division and to the Office of State Budget and Management no later than the third Thursday of the month.

Section 11.12.(q) The Division of Medical Assistance, Department of Health and Human Services, may provide incentives to counties that successfully recover fraudulently spent Medicaid funds by sharing State savings with counties responsible for the recovery of the fraudulently spent funds.

Section 11.12.(r) If first approved by the Office of State Budget and Management, the Division of Medical Assistance, Department of Health and Human Services, may use funds that are identified to support the cost of development and acquisition of equipment and software through contractual means to improve and enhance information systems that provide management information and claims processing.

Section 11.12.(s) The Division of Medical Assistance, Department of Health and Human Services, may administer Medicaid estate recovery mandated by the Omnibus Budget Reconciliation Act of 1993, (OBRA 1993), 42 U.S.C. § 1396p(b), and G.S. 108-70.5 using temporary rules pending approval of final rules promulgated pursuant to Chapter 150B of the General Statutes.

Section 11.12.(t) The Department of Health and Human Services may adopt temporary rules according to the procedures established in G.S. 150B-21.1 when it finds that these rules are necessary to maximize receipt of federal funds, to reduce Medicaid expenditures, and to reduce fraud and abuse. Prior to the filing of these temporary rules with the Office of Administrative Hearings, the Department shall consult with the Office of State Budget and Management on the possible fiscal impact of the temporary rule and its effect on State appropriations and local governments.

Section 11.12.(u) The Department shall report to the Fiscal Research Division of the Legislative Services Office and to the House of Representatives Appropriations Subcommittee on Health and Human Services and the Senate Appropriations Committee on Human Resources or the Joint Legislative Health Care Oversight Committee on any change it anticipates making in the Medicaid program that impacts the type or level of service, reimbursement methods, or waivers, any of which require a change in the State Plan or other approval by the Health Care Financing Administration. The reports shall be provided at the same time they are submitted to HCFA for approval.

Section 11.12.(v) If the Department of Health and Human Services obtains a Medicaid waiver to implement two long-term care pilot projects, then the Department shall report the particulars of the waiver, the pilot projects, and the status of implementation to members of the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Human Resources, and the Study Commission on Aging within 30 days of receiving the waiver. The Department shall not expand the pilot project beyond the two initial pilots without first reporting the proposed expansion to the members of the House of Representatives Appropriations Subcommittee on Health and Human Services and the Senate Appropriations Committee on Human Resources.

Section 11.12.(w) The Department of Health and Human Services shall study the effect of subsection (o) of this section on both the Medicaid program and the Health Insurance Program for Children. The Department shall make an interim report on the results of this study to the members of the House of Representatives Appropriations Subcommittee on Health and Human Services and the Senate Appropriations Committee on Human Resources by October 1, 1999, and shall make a final report by January 1, 2000.

Requested by: Representatives Earle, Nye, Gillespie, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

DEPARTMENTAL STUDY/MEDICAID COVERAGE FOR MEDICALLY NECESSARY PROSTHETICS OR ORTHOTICS

Section 11.13. The Department of Health and Human Services shall study providing Medicaid coverage for medically necessary prosthetics or orthotics for Medicaid eligible persons age 21 and older. The Department shall report its findings and recommendations, including the cost of providing these benefits, to the members of the House Appropriations Subcommittee on Health and Human Services and the Senate Appropriations Committee on Human Resources not later than May 1, 2000.

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

DENTIST PARTICIPATION IN MEDICAID

Section 11.14. The Joint Legislative Health Care Oversight Committee shall review the report of the North Carolina Institute of Medicine's Task Force on Dental Care Access and other reports and information pertinent to access to dental care and shall consider the findings and recommendations of these reports. The Committee shall report its recommendations resulting from this review to the House Appropriations Subcommittee on Health and Human Services and the Senate Appropriations Committee on Human Resources not later than May 1, 2000.

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

UTILIZATION IMPACT ON INFLATIONARY INCREASES FOR HOSPITALS AND NURSING HOMES

Section 11.14A. To the extent, funds are available from utilization decreases in the Medicaid program, the Department of Health and Human Services, Division of Medical Assistance, may use up to five million forty-four thousand nine hundred twenty dollars ($5,044,920) for the 1999-2000 fiscal year to fund inflationary increases for hospitals and nursing homes.

SUBPART 3. AGING

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

SENIOR CENTER OUTREACH

Section 11.15.(a) Funds appropriated to the Department of Health and Human Services, Division of Aging, for the 1999-2001 fiscal biennium, shall be used by the Division of Aging to enhance senior center programs as follows:

(1) To expand the outreach capacity of senior centers to reach unserved or underserved areas; or

(2) To provide start-up funds for new senior centers.

All of these funds shall be allocated by October 1 of each fiscal year.

Section 11.15.(b) Prior to funds being allocated pursuant to this section for start-up funds for a new senior center, the board of commissioners of the county in which the new center will be located shall:

(1) Formally endorse the need for a center;

(2) Formally agree on the sponsoring agency for the center; and

(3) Make a formal commitment to use local funds to support the ongoing operation of the center.

Section 11.15.(c) State funding shall not exceed ninety percent (90%) of reimbursable costs.

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

FUNDS FOR ALZHEIMER'S ASSOCIATION CHAPTERS IN NC

Section 11.16. Of the funds appropriated in this act to the Department of Health and Human Services, Division of Aging, the sum of one hundred fifty thousand dollars ($150,000) for the 1999-2000 fiscal year and the sum of one hundred fifty thousand dollars ($150,000) for the 2000-2001 fiscal year shall be allocated among the three chapters of the Alzheimer's Association, as follows:

(1) $50,000 in each fiscal year for the Western Alzheimer's Chapter;

(2) $50,000 in each fiscal year for the Southern Piedmont Alzheimer's Chapter; and

(3) $50,000 in each fiscal year for the Eastern Alzheimer's Chapter.

Before funds may be allocated to any chapter under this section, the chapter shall submit to the Division of Aging, for its approval, a plan for the use of these funds.

SUBPART 4. FACILITY SERVICES

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

FIRE PROTECTION FUND

Section 11.17. G.S. 122A-5.13 is amended by adding a new subsection to read:

"(c) Proceeds from the Fire Protection Fund, not to exceed ten thousand dollars ($10,000) annually, may be used to provide staff support to the North Carolina Housing Finance Agency for loan processing under this section and to the Department of Health and Human Services for review and approval of fire protection plans and inspection of fire protection systems."

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

TRANSFER BINGO PROGRAM TO CRIME CONTROL AND PUBLIC SAFETY

Section 11.18. The Bingo Program in the Department of Health and Human Services, Division of Facility Services, and all functions, powers, duties, and obligations vested in the Department of Health and Human Services for the Bingo Program, are transferred to and vested in the Department of Crime Control and Public Safety by a Type I transfer, as defined in G.S. 143A-6.

Requested by: Representatives Earle, Nye, Cansler, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

PLAN FOR ACCREDITATION OF ADULT CARE HOMES AND ASSISTED LIVING FACILITIES

Section 11.20. The Department of Health and Human Services shall study and develop a plan and criteria for accreditation of adult care homes and assisted living facilities. The plan shall provide for enhanced payments to adult care homes and assisted living facilities which meet accreditation criteria.

The Department shall report the findings and recommendations of its study, including the plan developed, to the Joint Legislative Health Care Oversight Committee and to the North Carolina Study Commission on Aging no later than April 1, 2000.

SUBPART 5. SOCIAL SERVICES

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

SPECIAL ASSISTANCE DEMONSTRATION PROJECT

Section 11.21. The Department of Health and Human Services may use funds from the existing State/County Special Assistance for Adults budget to provide Special Assistance payments to eligible individuals in in-home living arrangements. These payments may be made for up to 400 individuals. These payments may be made for up to a two-year period beginning July 1, 1999, and ending June 30, 2001. To the maximum extent possible, the Department shall consider geographic balance in the dispersion of payments to individuals across the State. The Department shall make an interim report to the cochairs of the House of Representatives Appropriations Committee, the cochairs of the House of Representatives Appropriations Subcommittee on Health and Human Services and the cochairs of the Senate Appropriations Committee, the Chair of the Senate Appropriations Committee on Human Resources by June 30, 2000, and a final report by October 1, 2001. This report shall include the following information:

(1) A description of cost savings that could occur by allowing individuals eligible for State/County Special Assistance the option of remaining in the home.

(2) Which activities of daily living or other need criteria are reliable indicators for identifying individuals with the greatest need for income supplements for in-home living arrangements.

(3) How much case management is needed and which types of individuals are most in need of case management.

(4) The geographic location of individuals receiving payments under this section.

(5) A description of the services purchased with these payments.

(6) A description of the income levels of individuals who receive payments under this section and the impact on the Medicaid program.

(7) Findings and recommendations as to the feasibility of continuing or expanding the demonstration program.

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

ADULT CARE HOMES REIMBURSEMENT RATE/ADULT CARE HOMES ALLOCATION OF NONFEDERAL COST OF MEDICAID PAYMENTS/STAFFING GRANT

Section 11.22.(a) The eligibility of Special Assistance recipients residing in adult care homes on August 1, 1995, shall not be affected by an income reduction in the Special Assistance eligibility criteria resulting from adoption of the Rate Setting Methodology Report and Related Services, providing these recipients are otherwise eligible. The maximum monthly rate for these residents in adult care home facilities shall be one thousand two hundred thirty-one dollars ($1,231) per month per resident.

Section 11.22.(b) Effective August 1, 1995, the State shall pay fifty percent (50%) and the county shall pay fifty percent (50%) of the nonfederal costs of Medicaid services paid to adult care home facilities. As Medicaid personal care requirements increase due to increases in inflation and the number of eligibles, the county matching share shall be capped until it equals fifteen percent (15%) of the nonfederal Medicaid personal care requirements.

Section 11.22.(c) Effective October 1, 1998, the maximum monthly rate for residents in adult care home facilities shall be nine hundred fifty-six dollars ($956.00) per month per resident.

Section 11.22.(d) Effective October 1, 1999, the maximum monthly rate for residents in adult care home facilities shall be nine hundred eighty-two dollars ($982.00) per month per resident.

Section 11.22.(e) Effective October 1, 2000, the maximum monthly rate for residents in adult care home facilities shall be one thousand sixteen dollars ($1,016) per month per resident.

Section 11.22.(f) Of the funds appropriated in this act to the Department of Health and Human Services, the sum of two million dollars ($2,000,000) for the 1999-2000 fiscal year and the sum of five hundred thousand dollars ($500,000) for July through September of the 2000-2001 fiscal year, shall be used by the Department for staffing grants for adult care homes as authorized under this subsection. These funds shall be matched equally by county funds. Effective January 1, 1999, grants shall be awarded to those adult care homes that are required to add staff or that have added staff in order to comply with the increase in third shift staffing requirements under G.S. 131D-4.3(a)(5), from eight hours of aide duty per 50 or fewer residents to eight hours of aide duty per 30 or fewer residents. The Department shall determine eligibility for these grants based upon factors which shall include:

(1) Licensed capacity as of August 1, 1998,

(2) Occupancy rate, and

(3) Percentage of residents receiving State and county special assistance of the total residents in the adult care home.

Adult care homes that receive staffing grants under this subsection shall provide documentation to the Department showing that the home has complied with staffing ratios established under G.S. 131D-4.3(a)(5). An adult care home that receives grant funds under this subsection and is found by the Department not to have complied with staffing requirements of G.S. 131D-4.3(a)(5) shall refund to the Department a prorated share of the staffing grant funds received by the adult care home. The Department shall incorporate the staffing grants authorized under this subsection into the existing Special Assistance payment methodology or the Medicaid Personal Care Services reimbursement methodology effective October 1, 2000.

Section 11.22.(g) Effective January 1, 2000, the Department of Health and Human Services may transfer funds from the State/County Special Assistance program to support expansion of Medicaid Personal Care Services for residents of adult care homes.

Section 11.22.(h) Effective January 1, 2000, the State shall pay fifty percent (50%) and the county shall pay fifty percent (50%) of the nonfederal share of new levels of Medicaid Personal Care Services paid to adult care homes. Effective July 1, 2001, the State shall pay fifty-seven percent (57%) and each county shall pay forty-three percent (43%) of the nonfederal share of new levels of Medicaid Personal Care Services paid to adult care homes. Each year thereafter, the State share of the nonfederal cost will increase by seven percent (7%) until the county share equals fifteen percent (15%) of the nonfederal share of new levels of Medicaid Personal Care Services.

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Perdue, Plyler, Odom

ADULT CARE HOME RESIDENT ASSESSMENT SERVICES

Section 11.22A. Funds appropriated in this act to the Department of Health and Human Services, Division of Social Services, for adult care home positions in the Department and in county departments of social services shall be used for personnel trained in the medical and social needs of older adults and disabled persons in adult care homes to evaluate individuals requesting State/County Special Assistance to pay for care in adult care homes. One of the functions of these personnel shall be to develop and collect data on the appropriate level of care and placement in the long-term care system, including identifying individuals who pose a risk to other residents and who may need further mental health assessment and treatment. These personnel shall also provide technical assistance to adult care homes on how to conduct functional assessments and develop care plans, and shall assist in monitoring the Special Assistance Demonstration Project.

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

FOSTER CARE ASSISTANCE PAYMENTS

Section 11.23. The maximum rates for State participation in the foster care assistance program are established on a graduated scale as follows:

(1) $315.00 per child per month for children aged birth through 5;

(2) $365.00 per child per month for children aged 6 through 12; and

(3) $415.00 per child per month for children aged 13 through 18.

Of these amounts, fifteen dollars ($15.00) is a special needs allowance for the child.

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

ADOPTION ASSISTANCE PAYMENTS

Section 11.24. The maximum rates for State participation in the adoption assistance program are established on a graduated scale as follows:

(1) $315.00 per child per month for children aged birth through five;

(2) $365.00 per child per month for children aged six through 12; and

(3) $415.00 per child per month for children aged 13 through 18.

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

AUTHORIZED ADDITIONAL USE OF HIV FOSTER CARE AND ADOPTIVE FAMILY FUNDS

Section 11.25.(a) In addition to providing board payments to foster and adoptive families of HIV-infected children, as prescribed in Chapter 324 of the 1995 Session Laws, any additional funds remaining that were appropriated for this purpose shall be used to provide medical training in avoiding HIV transmission in the home.

Section 11.25.(b) The maximum rates for State participation in HIV foster care and adoption assistance are established on a graduated scale as follows:

(1) $800.00 per month per child with indeterminate HIV status;

(2) $1,000 per month per child confirmed HIV-infected, asymptomatic;

(3) $1,200 per month per child confirmed HIV-infected, symptomatic; and

(4) $1,600 per month per child terminally ill with complex care needs.

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

CHILD PROTECTIVE SERVICES

Section 11.26.(a) The funds appropriated in this act to the Department of Health and Human Services, Division of Social Services, for the 1999-2001 fiscal biennium for Child Protective Services shall be allocated to county departments of social services based upon a formula which takes into consideration the number of Child Protective Services cases and the number of Child Protective Services workers and supervisors necessary to meet recommended standards adopted by the North Carolina Association of County Directors of Social Services.

Section 11.26.(b) Funds allocated under subsection (a) of this section shall be used by county departments of social services for carrying out investigative assessments of child abuse or neglect or for providing protective or preventive services in cases in which the department confirms abuse, neglect, or dependency.

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

CHILD WELFARE SYSTEM PILOTS

Section 11.27.(a) The Department of Health and Human Services, Division of Social Services, shall develop a plan, working with local departments of social services, to implement a dual response system of child protection in no fewer than two and no more than five demonstration areas in this State. The plan should provide for the pilots to implement dual response systems in which:

(1) Local child protective services and law enforcement work together as coinvestigators in serious abuse cases; and

(2) Local departments of social services respond to reports of child abuse or neglect with a family assessment and services approach.

Section 11.27.(b) The Department of Health and Human Services shall plan for the development of data collection processes that would enable the General Assembly to assess the impact of these pilots on:

(1) Child safety;

(2) Timeliness of response;

(3) Timeliness of services;

(4) Coordination of local human services;

(5) Cost-effectiveness;

(6) Any other related issues.

Section 11.27.(c) The Department of Health and Human Services may proceed to implement the pilot dual response systems if non-State funds are identified for this purpose.

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

CHILD WELFARE SYSTEM IMPROVEMENTS

Section 11.28.(a) The Division of Social Services, Department of Health and Human Services, shall report semiannually to the members of the Senate Appropriations Committee on Human Resources, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division on the activities of the State Child Fatality Review Team and shall provide a final report to the Senate Appropriations Committee on Human Resources and the House of Representatives Appropriations Subcommittee on Health and Human Services no later than April 1, 2000, including recommendations for changes in the statewide child protection system.

Section 11.28.(b) Subsection (d) of Section 11.57 of S.L. 1997-443, as amended by Section 12.22 of S.L. 1998-212, reads as rewritten:

"(d) Notwithstanding G.S. 131D-10.6A, the Division of Social Services shall establish training requirements for child welfare services staff initially hired on and after January 1, 1998. The minimum training requirements established by the Division shall be as follows:

(1) Child welfare services workers must complete a minimum of 72 hours of preservice training before assuming direct client contact responsibilities;

(2) Child protective services workers must complete a minimum of 18 hours of additional training that the Division determines is necessary to adequately meet training needs;

(3) Foster care and adoption social workers must complete a minimum of 39 hours of additional training that the Division determines is necessary to adequately meet training needs;

(4) Child Welfare Services supervisors must complete a minimum of 72 hours of preservice training before assuming supervisory responsibilities, and a minimum of 54 hours of additional training that the Division determines is necessary to adequately meet training needs; and

(5) Child welfare services staff must complete 24 hours of continuing education annually thereafter.

The Division of Social Services may grant an exception in whole or in part to the minimum 72 hours of preservice training for child welfare workers who satisfactorily complete or are enrolled in a masters or bachelors degree program after July 1, 1999, from an accredited North Carolina social work program pursuant to the Council on Social Work Education. The program's curricula must cover the specific preservice training requirements as established by the Division.

The Division of Social Services shall ensure that training opportunities are available for county departments of social services and consolidated human services agencies to meet the training requirements of this subsection.

This subsection shall continue in effect until explicitly repealed."

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

LIMITATIONS ON STATE ABORTION FUND

Section 11.29. The limitations on funding of the performance of abortion established in Section 23.27 of Chapter 324 of the 1995 Session Laws, as amended by Section 23.8A of Chapter 507 of the 1995 Session Laws, apply to the 1999-2000 and 2000-2001 fiscal years.

Requested by: Representatives Redwine, Earle, Nye, Easterling, Hardaway, Senators Martin of Guilford, Plyler, Perdue, Odom

CHILD CARING INSTITUTION RULES EFFECTIVE

Section 11.30. Notwithstanding G.S. 150B-21.3(b), Administrative Rules 10 NCAC 41S and 41T, adopted by the Social Services Commission on January 13, 1999, and approved by the Rules Review Commission on February 18, 1999, and Administrative Rules 10 NCAC 41E, 41G, and 41R, repealed by the Social Services Commission on January 13, 1999, and approved by the Rules Review Commission on February 18, 1999, become effective July 1, 1999.

Requested by: Representatives Howard, Berry, Gardner, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

WORK FIRST PROGRAM INTEGRITY ACTIVITIES FUNDS

Section 11.31. Funds appropriated in this act to the Department of Health and Human Services, Division of Social Services, in the amount of two million five hundred thousand dollars ($2,500,000) for program integrity activities in each county shall be given to the counties in a lump sum, and unexpended funds shall revert to the General Fund.

SUBPART 6. MENTAL HEALTH, DEVELOPMENTAL DISABILITIES, AND SUBSTANCE ABUSE SERVICES

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

PHYSICIAN SERVICES

Section 11.32. With the approval of the Office of State Budget and Management, the Department of Health and Human Services may use funds appropriated in this act for across-the-board salary increases and performance pay to offset similar increases in the costs of contracting with private and independent universities for the provision of physician services to clients in facilities operated by the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services. This offsetting shall be done in the same manner as is currently done with constituent institutions of The University of North Carolina.

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

LIABILITY INSURANCE

Section 11.33. The Secretary of the Department of Health and Human Services, the Secretary of the Department of Environment and Natural Resources, and the Secretary of the Department of Correction may provide medical liability coverage not to exceed one million dollars ($1,000,000) per incident on behalf of employees of the Departments licensed to practice medicine or dentistry, all licensed physicians who are faculty members of The University of North Carolina who work on contract for the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services for incidents that occur in Division programs, and on behalf of physicians in all residency training programs from The University of North Carolina who are in training at institutions operated by the Department of Health and Human Services. This coverage may include commercial insurance or self-insurance and shall cover these individuals for their acts or omissions only while they are engaged in providing medical and dental services pursuant to their State employment or training.

The coverage provided under this section shall not cover any individual for any act or omission that the individual knows or reasonably should know constitutes a violation of the applicable criminal laws of any state or the United States, or that arises out of any sexual, fraudulent, criminal, or malicious act, or out of any act amounting to willful or wanton negligence.

The coverage provided pursuant to this section shall not require any additional appropriations and shall not apply to any individual providing contractual service to the Department of Health and Human Services, the Department of Environment and Natural Resources, or the Department of Correction, with the exception that coverage may include physicians in all residency training programs from The University of North Carolina who are in training at institutions operated by the Department of Health and Human Services and licensed physicians who are faculty members of The University of North Carolina who work for the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services.

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

PRIVATE AGENCY UNIFORM COST FINDING REQUIREMENT

Section 11.34. To ensure uniformity in rates charged to area programs and funded with State-allocated resources, the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services of the Department of Health and Human Services may require a private agency that provides services under contract with two or more area programs, except for hospital services that have an established Medicaid rate, to complete an agency-wide uniform cost finding in accordance with G.S. 122C-143.2(a) and G.S. 122C-147.2. The resulting cost shall be the maximum included for the private agency in the contracting area program's unit cost finding.

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

FUNDS TO REDUCE WAITING LIST FOR SERVICES FOR DEVELOPMENTALLY DISABLED PERSONS

Section 11.35. Of the funds appropriated in this act to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, the sum of six million dollars ($6,000,000) for the 1999-2000 fiscal year and the sum of six million dollars ($6,000,000) for the 2000-2001 fiscal year shall be used to provide family support services to developmentally disabled individuals who are not eligible for the Medicaid Community Alternative Program for Mentally Retarded/Developmentally Disabled Persons and who are on the Department's waiting list for services. Services to persons on the waiting list shall be provided without regard to when the individual's name was added to the waiting list.

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

STUDY OF STATE PSYCHIATRIC HOSPITALS/AREA MENTAL HEALTH PROGRAMS

Section 11.36. In accordance with Section 12.35A of S.L. 1998-212, the State Auditor shall make the following reports to the members of the Senate Appropriations Committee on Human Resources and the House of Representatives Appropriations Subcommittee on Health and Human Services:

(1) Final report on the study of State psychiatric hospitals not later than December 1, 1999, and

(2) Second interim report on the study of the area mental health programs not later than November 1, 1999, and a final report not later than April 1, 2000.

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

BUTNER COMMUNITY LAND RESERVATION

Section 11.37. The Department of Health and Human Services shall reserve and dedicate the following described land for the construction of a Community Building and related facilities to serve the Butner Reservation:

"Approximately 2 acres, on the east side it borders Central Avenue with a line running along the Wallace Bradshur property on the north back to the tree line next to the ADATC. From there it follows the tree line south and west to and including the softball field. From the softball field it turns east to the State Employees Credit Union and follows the Credit Union property on the south side back to Central Avenue."

This land shall be reserved and dedicated for the project which shall be funded with contributions from Granville County, contributions from the residents of the Butner Reservation, the use of cablevision franchise rebate funds received by the Department of Health and Human Services on behalf of the Butner Reservation, and other public and private sources.

The Butner Planning Council shall advise the Secretary of Health and Human Services, through resolutions adopted by the Council, regarding the use of this reserved and dedicated land, the construction of the Community Building, and the expenditure of the cablevision franchise rebate funds.

The Department of Health and Human Services shall reserve and dedicate the above described property for the above described purposes until the time, if any, that a permanent local government is established on the Butner Reservation at which time the land shall be transferred to the local government.

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

MENTAL HEALTH FUNDS FOR CRISIS SERVICES

Section 11.38. Purposes for which funds are appropriated in this act to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, for the development of local crisis services shall include, but not be limited to, meeting the short-term crisis needs of mentally retarded children determined by the Division to need crisis services. The Division shall pursue the use of available State resources and services for these children, including mental retardation centers, for short-term crisis treatment for appropriate minors, as determined by the Division.

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

MENTAL HEALTH RESERVE FOR MEDICAID MATCH

Section 11.39.(a) Of the funds appropriated in this act to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services for the 1999-2000 fiscal year, the Department shall transfer to the Mental Health Restricted Reserve not more than the amount of actual expenditures for Medicaid payments for the 1998-99 fiscal year for services provided by area mental health authorities. The Department shall transfer from the Division of Medical Assistance the estimated amount needed to match Medicaid payments for the former Carolina Alternatives Programs. The Department shall not transfer from area program allocations funds to cover Medicaid payment expenditures that exceed the amount of funds in the Reserve for the 1999-2000 fiscal year.

Section 11.39.(b) Any nonfederal increases in the cost of Medicaid services provided by area mental health authorities will be borne in equal parts by the State and county funding entity until the county share reaches fifteen percent (15%) of the nonfederal share.

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

USE OF WILLIE M./THOMAS S. FUNDS

Section 11.40.(a) Funds appropriated in this act to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, for the 1999-2000 fiscal year and the 2000-2001 fiscal year to provide services for Willie M. class members shall be used for services required by State and federal law to children who were identified as members of the class at the time of dissolution of the class, and may be used for services required by State and federal law to violent and assaultive children and other children at risk for institutionalization.

The Department shall transition the formerly court-mandated Willie M. program into the larger mental health disability service areas in order to maximize the efficient and effective use of the funds while also continuing services to former class members.

Section 11.40.(b) Funds appropriated in this act to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, for the 1999-2000 fiscal year and the 2000-2001 fiscal year for services to Thomas S. class members shall be used for services required by State and federal law to adults who were identified as members of the class at the time of dissolution of the class, and may be used for services required by State and federal law to other multiply diagnosed adults.

Section 11.40.(c) If funds appropriated in this act to the Department of Health and Human Services for services to former Willie M. class members are insufficient to provide services required by State and federal law to other children at risk for institutionalization, or if funds appropriated in this act to the Department for services to former Thomas S. class members are insufficient to provide services required by State and federal law to other multiply diagnosed adults, then the Department may use funds available not exceeding four million nine hundred thousand dollars ($4,900,000) to the extent necessary for services to other children at risk for institutionalization or to other multiply diagnosed adults.

Section 11.40.(d) The Department shall examine State and local administration of Willie M. and Thomas S. services in order to identify organizational or operational changes that may be made and other efficiencies that may be realized as a result of dissolution of the Willie M. and Thomas S. classes. Not later than May 1, 2000, the Department shall report to the members of the House Appropriations Subcommittee on Health and Human Services and the Senate Appropriations Committee on Human Resources on the status of its compliance with this section and its proposed plans for maximizing the efficient and effective use of funds appropriated for these services in the future.

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

AUTHORITY TO ACCESS CASH RESERVES OF DMH/DD/SAS AREA PROGRAM FOUNDATIONS FOR REIMBURSEMENT FOR DISALLOWED EXPENDITURES

Section 11.41. Part 2 of Article 4 of Chapter 122C of the General Statutes is amended by adding the following new section to read:

"§ 122C-123A. Area authority reimbursement to State for disallowed expenditures.

Any funds or part thereof of an area authority that are transferred by the area authority to any entity including a firm, partnership, corporation, company, association, joint stock association, agency, or nonprofit private foundation shall be subject to reimbursement by the area authority to the State when expenditures of the area authority are disallowed pursuant to a State or federal audit."

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

EARLY INTERVENTION SERVICES

Section 11.42.(a) Of the funds appropriated in this act to the Department of Health and Human Services, the sum of two hundred three thousand dollars ($203,000) for the 1999-2000 fiscal year and the sum of six hundred ten thousand dollars ($610,000) for the 2000-2001 fiscal year shall be used to implement two recommendations from the Interagency Coordinating Council's "Study on Early Intervention Services for Children Ages Birth to Five Years," dated March 1999. The Department of Health and Human Services, the Department of Public Instruction, and The University of North Carolina's Division TEACCH (Treatment and Education of Autistic and other Communications Handicapped Children and Adults), shall participate jointly, in collaboration with the Interagency Coordinating Council, in the planning, design, and implementation of the following provisions:

(1) Of the funds allocated by this subsection, the sum of seventy-eight thousand dollars ($78,000) in the 1999-2000 fiscal year and the sum of one hundred ten thousand dollars ($110,000) in the 2000-2001 fiscal year shall be used to plan, design, and implement an integrated, interagency database for children with or at risk for disabilities who receive early intervention services. The purpose of the database is to:

a. Assist in identifying gaps in services;

b. Project and plan for future service needs;

c. Improve the quality and accessibility of services; and

d. Document outcomes of early intervention services.

This database shall be compatible with the State Board of Education's new Student Information Management System. These agencies shall initiate use of the database in a pilot program in at least one community by July 1, 2000, and shall evaluate this pilot for statewide implementation by July 1, 2001. The agencies shall submit a progress report by April 1, 2000, to the Senate Appropriations Committee on Human Resources, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division.

(2) Of the funds allocated by this subsection, the sum of one hundred twenty-five thousand dollars ($125,000) in fiscal year 1999-2000 and the sum of five hundred thousand dollars ($500,000) in fiscal year 2000-2001 shall be used to plan for and implement regional transdisciplinary teams to provide training, technical assistance, and other support services to existing early intervention agencies and providers. The teams will maintain expertise on low incidence populations, such as children with visual and hearing impairments, autism, and child mental health needs. These agencies shall implement a pilot program establishing a regional transdisciplinary team no later than March 2000. These agencies shall submit an interim report by March 15, 2000, and a final plan for statewide implementation of the transdisciplinary teams by March 15, 2001, to the Senate Appropriations Committee on Human Resources, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division.

Section 11.42.(b) The North Carolina Schools for the Deaf and other agencies providing early intervention services to children from birth through five years of age shall implement procedures to ensure that:

(1) Parents of children newly identified with hearing loss and determined to be eligible for services are informed of the services available to them through Beginnings for Parents of Hearing Impaired Children, Inc.; and

(2) Beginnings for Parents of Hearing Impaired Children, Inc., with the consent of parents, is notified of these children in a timely and appropriate manner.

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

BROUGHTON HOSPITAL FUNDS/NONREVERT

Section 11.42A.(a) Of the funds appropriated to the Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services for the 1998-99 fiscal year, the sum of four hundred thousand dollars ($400,000) shall not revert on June 30, 1999, but shall remain available to Broughton Hospital to be used for the following purposes:

(1) Patient room privacy partitions;

(2) Hospital beds;

(3) Security fencing and video monitoring equipment;

(4) Relocation and update of the pharmacy department; and

(5) Replacement of outdated and deteriorated dental equipment.

Section 11.42A.(b) This section becomes effective June 30, 1999.

SUBPART 7. CHILD DEVELOPMENT

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

CHILD CARE ALLOCATION FORMULA

Section 11.43.(a) To simplify current child care allocation methodology and more equitably distribute State child care funds, the Department of Health and Human Services shall apply the following allocation formula to all noncategorical federal and State child care funds used to pay the costs of necessary child care for minor children of needy families:

(1) One-third of budgeted funds shall be distributed according to the county's population in relation to the total population of the State;

(2) One-third of the budgeted funds shall be distributed according to the number of children under 6 years of age in a county who are living in families whose income is below the State poverty level in relation to the total number of children under 6 years of age in the State in families whose income is below the poverty level; and

(3) One-third of budgeted funds shall be distributed according to the number of working mothers with children under 6 years of age in a county in relation to the total number of working mothers with children under 6 years of age in the State.

Section 11.43.(b) A county's initial allocation shall not be less than that county's total expenditures for both FSA and non-FSA child care in fiscal year 1995-96.

Section 11.43.(c) The Department of Health and Human Services may re-allocate child care subsidy funds in order to meet the child care needs of low income families.

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

CHILD CARE FUNDS MATCHING REQUIREMENT

Section 11.44. No local matching funds may be required by the Department of Health and Human Services as a condition of any locality's receiving any State child care funds appropriated by this act unless federal law requires such a match. This shall not prohibit any locality from spending local funds for child care services.

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

CHILD CARE REVOLVING LOAN FUND

Section 11.45. Notwithstanding any law to the contrary, funds budgeted for the Child Care Revolving Loan Fund may be transferred to and invested by the financial institution contracted to operate the Fund. The principal and any income to the Fund may be used to make loans, reduce loan interest to borrowers, serve as collateral for borrowers, pay the contractor's cost of operating the Fund, or to pay the Department's cost of administering the program.

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

CHILD CARE MARKET RATE FUNDS

Section 11.46. The sum of three million three hundred thousand dollars ($3,300,000) appropriated to the Division of Social Services in this act shall be transferred to the Division of Child Development to fund the nonfederal share of the child care market rate increase.

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

CHILD CARE SUBSIDIES

Section 11.47.(a) The maximum gross annual income for initial eligibility, adjusted biennially, for subsidized child care services shall be seventy-five percent (75%) of the State median income, adjusted for family size.

Section 11.47.(b) Fees for families who are required to share in the cost of care shall be established based on a percent of gross family income and adjusted for family size. Fees shall be determined as follows:

FAMILY SIZE PERCENT OF GROSS FAMILY INCOME

1-3 9%

4-5 8%

6 or more 7%

Section 11.47.(c) Payments for the purchase of child care services for low-income children shall be in accordance with the following requirements:

(1) Effective October 1, 1999, religious-sponsored child care facilities operating pursuant to G.S. 110-106 and licensed child care centers and homes that meet the minimum licensing standards that are participating in the subsidized child care program shall be paid the county market rate or the rate they charge privately paying parents, whichever is lower.

(2) Effective October 1, 1999, religious-sponsored child care facilities operating pursuant to G.S. 110-106 and licensed child care centers and homes that are receiving a higher rate than the market rates that will be implemented with this provision shall continue to receive that higher rate for a period of three years from the effective date of this section.

(3) Effective October 1, 1999, licensed child care centers with two or more stars may receive a higher payment rate per child per month as follows: two stars - $14.00, three stars - $17.00, four stars - $20.00, and five stars - $23.00. Effective January 1, 2000, licensed child care homes with two or more stars may receive a higher payment rate per child per month as follows: two stars - $14.00, three stars - $17.00, four stars - $20.00, and five stars - $23.00.

(4) Nonlicensed homes shall receive fifty percent (50%) of the county market rate or the rate they charge privately paying parents, whichever is lower.

(5) Maximum payment rates shall also be calculated periodically by the Division of Child Development for transportation to and from child care provided by the child care provider, individual transporter, or transportation agency, and for fees charged by providers to parents. These payment rates shall be based upon information collected by market rate surveys.

Section 11.47.(d) Provision of payment rates for child care providers in counties who do not have at least 75 children in each age group for center-based and home-based care are as follows:

(1) Payment rates shall be set at the statewide market rate for licensed child care centers and homes.

(2) If it can be demonstrated that the application of the statewide market rate to a county with fewer than 75 children in each age group is lower than the county market rate and would inhibit the ability of the county to purchase child care for low-income children, then the county market rate may be applied.

Section 11.47.(e) A market rate shall be calculated for child care centers and homes that meet minimum licensing standards for each county and for each age group or age category of enrollees and shall be representative of fees charged to unsubsidized privately paying parents for each age group of enrollees within the county. The Division of Child Development shall also calculate a statewide market rate for each age category. The Division of Child Development may also calculate regional market rates for each age group and age category.

Section 11.47.(f) Facilities licensed pursuant to Article 7 of Chapter 110 of the General Statutes and facilities operated pursuant to G.S. 110-106 may participate in the program that provides for the purchase of care in child care facilities for minor children of needy families. No separate licensing requirements shall be used to select facilities to participate. In addition, child care facilities shall be required to meet any additional applicable requirements of federal law or regulations. Child care arrangements exempt from State regulation pursuant to Article 7 of Chapter 110 of the General Statutes shall meet the requirements established by other State law and by the Social Services Commission.

County departments of social services or other local contracting agencies shall not use a provider's failure to comply with requirements in addition to those specified in this subsection as a condition for reducing the provider's subsidized child care rate.

Section 11.47.(g) Payment for subsidized child care services provided with Work First Block Grant funds shall comply with all regulations and policies issued by the Division of Child Development for the subsidized child care program.

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

EARLY CHILDHOOD EDUCATION AND DEVELOPMENT INITIATIVES

Section 11.48.(a) G.S. 143B-168.12(a)(1), as amended by Section 24 of S.L. 1999-84, reads as rewritten:

"(1) The North Carolina Partnership shall have a Board of Directors consisting of the following 25 members:

a. The Secretary of Health and Human Services, ex officio, or the Secretary's designee;

b. Repealed by Session Laws 1997, c. 443, s. 11A.105.

c. The Superintendent of Public Instruction, ex officio, or the Superintendent's designee;

d. The President of the Community Colleges System, ex officio, or the President's designee;

e. Three members of the public, including one child care provider, one other who is a parent, and one other who is a board chair of a local partnership serving on the North Carolina Partnership local partnership advisory committee, appointed by the General Assembly upon recommendation of the President Pro Tempore of the Senate;

f. Three members of the public, including one who is a parent, one other who is a representative of the faith community, and one other who is a board chair of a local partnership serving on the North Carolina Partnership local partnership advisory committee, appointed by the General Assembly upon recommendation of the Speaker of the House of Representatives;

g. Twelve members, appointed by the Governor. Three of these 12 members shall be members of the party other than the Governor's party, appointed by the Governor. Seven of these 12 members shall be appointed as follows: one who is a child care provider, one other who is a pediatrician, one other who is a health care provider, one other who is a parent, one other who is a member of the business community, one other who is a member representing a philanthropic agency, and one other who is an early childhood educator;

h. Repealed by Session Laws 1998-212, s. 12.37B(a).

h1. The Chair of the North Carolina Partnership Board shall be appointed by the Governor;

i. Repealed by Session Laws 1998-212, s. 12.37B(a).

j. One member of the public appointed by the General Assembly upon recommendation of the Majority Leader of the Senate;

k. One member of the public appointed by the General Assembly upon recommendation of the Majority Leader of the House of Representatives;

l. One member of the public appointed by the General Assembly upon recommendation of the Minority Leader of the Senate; and

m. One member of the public appointed by the General Assembly upon recommendation of the Minority Leader of the House of Representatives.

All members appointed to succeed the initial members and members appointed thereafter shall be appointed for three-year terms. Members may succeed themselves.

All appointed board members shall avoid conflicts of interests and the appearance of impropriety. Should instances arise when a conflict may be perceived, any individual who may benefit directly or indirectly from the North Carolina Partnership's disbursement of funds shall abstain from participating in any decision or deliberations by the North Carolina Partnership regarding the disbursement of funds.

All ex officio members are voting members. Each ex officio member may be represented by a designee. These designees shall be voting members. No members of the General Assembly shall serve as members.

The North Carolina Partnership may establish a nominating committee and, in making their recommendations of members to be appointed by the General Assembly or by the Governor, the President Pro Tempore of the Senate, the Speaker of the House of Representatives, the Majority Leader of the Senate, the Majority Leader of the House of Representatives, the Minority Leader of the Senate, the Minority Leader of the House of Representatives, and the Governor shall consult with and consider the recommendations of this nominating committee.

The North Carolina Partnership may establish a policy on members' attendance, which policy shall include provisions for reporting absences of at least three meetings immediately to the appropriate appointing authority.

Members who miss more than three consecutive meetings without excuse or members who vacate their membership shall be replaced by the appropriate appointing authority, and the replacing member shall serve either until the General Assembly and the Governor can appoint a successor or until the replaced member's term expires, whichever is earlier.

The North Carolina Partnership shall establish a policy on membership of the local board, which policy shall include the requirement that all local board ~~members~~ members, other than any member appointed because of a position held by that individual, be residents of the county or the partnership region they are representing. Within these requirements for local board membership, the North Carolina Partnership shall allow local partnerships that are regional to have flexibility in the composition of their boards so that all counties in the region have adequate representation.

All appointed local board members shall avoid conflicts of interests and the appearance of impropriety. Should instances arise when a conflict may be perceived, any individual who may benefit directly or indirectly from the partnership's disbursement of funds shall abstain from participating in any decision or deliberations by the partnership regarding the disbursement of funds."

Section 11.48.(b) The General Assembly finds that it is essential to continue developing comprehensive programs that provide high quality early childhood education and development services locally for children and their families. The General Assembly intends to expand the Early Childhood Education and Development Initiatives Program (the "Program") in a manner which ensures quality assurance and performance-based accountability for the Program.

Section 11.48.(c) Notwithstanding any provision of Part 10B of Article 3 of Chapter 143B of the General Statutes or any other provision of law or policy, the Department of Health and Human Services and the North Carolina Partnership for Children, Inc., jointly shall continue to implement the recommendations contained in the Smart Start Performance Audit prepared pursuant to Section 27A(1)b. of Chapter 324 of the 1995 Session Laws, as modified by Section 24.29 of Chapter 18 of the Session Laws, Second Extra Session 1996. The North Carolina Partnership for Children, Inc., shall continue to report quarterly to the Joint Legislative Commission on Governmental Operations on its progress toward full implementation of the modified audit recommendations.

Section 11.48.(d) The Joint Legislative Commission on Governmental Operations shall, consistent with current law, continue to be the legislative oversight body for the Program. The President Pro Tempore of the Senate and the Speaker of the House of Representatives may appoint a subcommittee of the Joint Legislative Commission on Governmental Operations to carry out this function. This subcommittee may conduct all initial reviews of plans, reports, and budgets relating to the Program and shall make recommendations to the Joint Legislative Commission on Governmental Operations.

Section 11.48.(e) Administrative costs shall be equivalent to, on an average statewide basis for all local partnerships, not more than eight percent (8%) of the total statewide allocation to all local partnerships. What counts as administrative costs shall be as defined in the Smart Start Performance Audit.

Section 11.48.(f) Any local partnership, before receiving State funds, shall be required annually to submit a plan and budget for State funds for appropriate programs to the North Carolina Partnership for Children, Inc., and the Joint Legislative Commission on Governmental Operations. State funds to implement the programs shall not be allocated to a local partnership until the program plan is approved by the North Carolina Partnership for Children, Inc.

Section 11.48.(g) The North Carolina Partnership for Children, Inc., and all local partnerships shall use competitive bidding practices in contracting for goods and services on contract amounts as follows:

(1) For amounts of five thousand dollars ($5,000) or less, the procedures specified by a written policy to be developed by the Board of Directors of the North Carolina Partnership for Children, Inc.;

(2) For amounts greater than five thousand dollars ($5,000) but less than fifteen thousand dollars ($15,000), three written quotes;

(3) For amounts of fifteen thousand dollars ($15,000) or more but less than forty thousand dollars ($40,000), a request for proposal process; and

(4) For amounts of forty thousand dollars ($40,000) or more, request for proposal process and advertising in a major newspaper.

Section 11.48.(h) The role of the North Carolina Partnership for Children, Inc., shall continue to be expanded to incorporate all the aspects of the new role determined for the Partnership in the Smart Start Performance Audit recommendations and to provide technical assistance to local partnerships, assess outcome goals for children and families, ensure that statewide goals and legislative guidelines are being met, help establish policies and outcome measures, obtain non-State resources for early childhood and family services, and document and verify the cumulative contributions received by the partnerships.

Section 11.48.(i) The North Carolina Partnership for Children, Inc., and all local partnerships shall, in the aggregate, be required to match no less than fifty percent (50%) of the total amount budgeted for the Program in each fiscal year of the biennium as follows: contributions of cash equal to at least ten percent (10%) and in-kind donated resources equal to no more than ten percent (10%) for a total match requirement of twenty percent (20%) for each fiscal year. Any program funding expended for child care subsidies during the previous 12 months is excluded from the match requirement of this subsection. Only in-kind contributions that are quantifiable, as determined in the Smart Start Performance Audit, shall be applied to the in-kind match requirement. Expenses, including both those paid by cash and in-kind contributions, incurred by other participating non-State entities contracting with the North Carolina Partnership for Children, Inc., or the local partnerships, also may be considered resources available to meet the required private match. In order to qualify to meet the required private match, the expenses shall:

(1) Be verifiable from the contractor's records;

(2) If in-kind, be quantifiable in accordance with generally accepted accounting principles for nonprofit organizations;

(3) Not include expenses funded by State funds;

(4) Be supplemental to and not supplant preexisting resources for related program activities;

(5) Be incurred as a direct result of the Early Childhood Initiatives Program and be necessary and reasonable for the proper and efficient accomplishment of the Program's objectives;

(6) Be otherwise allowable under federal or State law;

(7) Be required and described in the contractual agreements approved by the North Carolina Partnership for Children, Inc., or the local partnership; and

(8) Be reported to the North Carolina Partnership for Children, Inc., or the local partnership by the contractor in the same manner as reimbursable expenses.

The North Carolina Partnership for Children, Inc., shall establish uniform guidelines and reporting format for local partnerships to document the qualifying expenses occurring at the contractor level. Local partnerships shall monitor qualifying expenses to ensure they have occurred and meet the requirements prescribed in this subsection.

Failure to obtain a twenty percent (20%) match by May 1 of each fiscal year shall result in a dollar-for-dollar reduction in the appropriation for the Program for the next fiscal year. The North Carolina Partnership for Children, Inc., shall be responsible for compiling information on the private cash and in-kind contributions into a report that is submitted to the Joint Legislative Commission on Governmental Operations in a format that allows verification by the Department of Revenue. The same match requirements shall apply to any expansion funds appropriated by the General Assembly.

Section 11.48.(j) Counties participating in the Program may use the county's allocation of State and federal child care funds to subsidize child care according to the county's Early Childhood Education and Development Initiatives Plan as approved by the North Carolina Partnership for Children, Inc. The use of federal funds shall be consistent with the appropriate federal regulations. Child care providers shall, at a minimum, comply with the applicable requirements for State licensure pursuant to Article 7 of Chapter 110 of the General Statutes, with other applicable requirements of State law or rule, including rules adopted for nonlicensed child care by the Social Services Commission, and with applicable federal regulations.

Section 11.48.(k) The Department of Health and Human Services shall continue to implement the performance-based evaluation system.

Section 11.48.(l) The Frank Porter Graham Child Development Center shall continue its evaluation of the Program. Notwithstanding any policy to the contrary, the Frank Porter Graham Child Development Center may use any method legally available to it to track children who are participating or who have participated in any Early Childhood Education and Development Initiative in order to carry out its ongoing evaluation of the Program.

Section 11.48.(m) There is allocated from the funds appropriated to the Department of Health and Human Services, Division of Child Development, in this act, the sum of fifty-nine million five hundred thousand dollars ($59,500,000) for the 1999-2000 fiscal year and the sum of seventy-eight million nine hundred twenty-eight thousand eight hundred twenty-six dollars ($78,928,826) for the 2000-2001 fiscal year to be used as follows:

(1) The sum of fifty-eight million dollars ($58,000,000) in the 1999-2000 fiscal year and the sum of seventy-eight million nine hundred twenty-eight thousand eight hundred twenty-six dollars ($78,928,826) in the 2000-2001 fiscal year shall be used to administer and deliver services in all 100 counties. These funds may be used as financial incentives to encourage regionalization at the local level and to complete development of contracting and accounting systems at the local level. Any funds used to encourage regionalization or to complete development of contracting and accounting systems at the local level shall not be included in computations affecting the administrative cost limitations under subsection (e) of this section.

(2) The North Carolina Partnership for Children, Inc., may use the sum of one million five hundred thousand dollars ($1,500,000) in the 1999-2000 fiscal year to assist local partnerships in their efforts to develop local collaboration.

Section 11.48.(n) Of the funds appropriated to the Department of Health and Human Services for the Program for the 1999-2001 biennium, the Frank Porter Graham Child Development Center shall receive the sum of one million fifteen thousand dollars ($1,015,000) in the 1999-2000 fiscal year and the sum of one million fifteen thousand dollars ($1,015,000) in the 2000-2001 fiscal year.

Section 11.48.(o) G.S. 143B-168.15(g) reads as rewritten:

"(g) Not less than thirty percent (30%) of each local partnership's direct services allocation shall be used to expand child care subsidies. To the extent practicable, these funds shall be used to enhance the affordability, availability, and quality of child care services as described in this section. The local partnerships shall give priority for the use of these funds to augmenting the State's supplemental subsidy payment rate per child per month for licensed child care centers and homes earning a rated license that exceeds the minimum licensing standards."

SUBPART 8. VOCATIONAL REHABILITATION

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

REIMBURSEMENT AND COMPENSATION OF MEMBERS OF THE NORTH CAROLINA VOCATIONAL REHABILITATION COUNCIL, THE STATEWIDE INDEPENDENT LIVING COUNCIL, AND THE COMMISSION FOR THE BLIND

Section 11.49. G.S. 138-5(a) reads as rewritten:

"(a) Except as provided in subsections (c) and (f) of this section, members of State boards, commissions, committees and councils which operate from funds deposited with the State Treasurer shall be compensated for their services at the following rates:

(1) ~~Compensation~~ Except as otherwise provided by this subdivision, compensation at the rate of fifteen dollars ($15.00) per diem for each day of ~~service;~~ service. Members of the North Carolina Vocational Rehabilitation Council, the Statewide Independent Living Council, and the Commission for the Blind who are unemployed or who shall forfeit wages from other employment to attend Council or Commission meetings or to perform related duties, may receive compensation not to exceed fifty dollars ($50.00) per diem for attending these meetings or performing related duties, as authorized by sections 105 and 705 of the Rehabilitation Act of 1973, P.L. 102-569, 42 U.S.C. § 701, et seq., as amended.

(2) Reimbursement of subsistence expenses at the rates allowed to State officers and employees by subdivision (3) of G.S. 138-6(a).

(3) Reimbursement of travel expenses at the rates allowed to State officers and employees by subdivisions (1) and (2) of G.S. 138-6(a).

(4) For convention registration fees, the actual amount expended, as shown by receipt."

SUBPART 9. DEAF AND HARD OF HEARING SERVICES

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

FAMILY SUPPORT/DEAF AND HARD OF HEARING SERVICES CONTRACT

Section 11.50. Of the funds appropriated in this act to the Division of Services for the Deaf and the Hard of Hearing, Department of Health and Human Services, for family support services, the sum of five hundred three thousand two hundred thirty-eight dollars ($503,238) for the 1999-2000 fiscal year and the sum of five hundred three thousand two hundred thirty-eight dollars ($503,238) for the 2000-2001 fiscal year shall be used to contract with a private, nonprofit corporation licensed to do business in North Carolina to perform those services, including family support and advocacy services as well as technical assistance to professionals who work with families of hearing-impaired children aged birth to 21 years.

SUBPART 10. SERVICES FOR THE BLIND

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

SERVICES FOR BLIND/EXTENDED SERVICE PROVIDER POSITIONS

Section 11.51. Of the funds appropriated in this act to the Department of Health and Human Services, Division of Services for the Blind, the sum of two hundred fifty thousand dollars ($250,000) in each fiscal year of the 1999-2001 biennium shall be used to maintain extended service provider positions at local, nonprofit-supported employment programs.

SUBPART 11. PUBLIC HEALTH

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

IMMUNIZATION PROGRAM RESTITUTION POLICY

Section 11.52. In implementing the restitution procedures adopted pursuant to Section 12.52(d) of S.L. 1998-212, the Department of Health and Human Services shall require restitution from immunization program providers when vaccine in the provider's inventory has become spoiled or unstable due to the provider's negligence and unreasonable failure to properly handle or store the vaccine.

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

IMMUNIZATION PROGRAM FUNDING

Section 11.53.(a) Of the funds appropriated to the Department of Health and Human Services for the 1999-2001 fiscal biennium for childhood immunization programs for positions, operating support, equipment, and pharmaceuticals, the sum of up to one million dollars ($1,000,000) each fiscal year may be used for projects and activities that are also designed to increase childhood immunization rates in North Carolina. These projects and activities shall include the following:

(1) Outreach efforts at the State and local levels to improve service delivery of vaccines. Outreach efforts may include educational seminars, media advertising, support services to parents to enable children to be transported to clinics, longer operating hours for clinics, and mobile vaccine units; and

(2) Continued development of an automated immunization registry.

Section 11.53.(b) Funds authorized to be used for immunization efforts under subsection (a) of this section shall not be used to fund additional State positions in the Department of Health and Human Services.

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

INTENSIVE HOME VISITATION PROGRAM FOR CHILDREN

Section 11.54.(a) Notwithstanding G.S. 143-15.3C, there is appropriated from the Work First Reserve Fund to the Department of Health and Human Services the sum of nine hundred forty-five thousand dollars ($945,000) for the 1999-2000 fiscal year. These funds shall be used to match federal funds in the Intensive Home Visitation Program for Children.

Section 11.54.(b) Not later than April 1, 2000, the Department of Health and Human Services shall report to the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Human Resources, and the Fiscal Research Division on the following:

(1) Preliminary maternal outcome data, including adequacy of prenatal care, breast feeding, return to school or work, use of contraception, occurrence of repeat pregnancy, substance abuse, domestic violence, parenting knowledge, parenting satisfaction, and use of government programs;

(2) Preliminary child outcome data, including birth weight and gestational age, quality of the home environment, home safety, reported and substantiated episodes of child abuse or neglect, episodes of injury and ingestions, and hospitalizations;

(3) Evidence of the efficacy of the Linkages Model when compared to the Healthy Families Model and the traditional Olds Model and, to the extent evidence is available, to the targeted population at large; and

(4) The progress that has been made in implementing intensive home visitation programs in participating counties, including information on the number of families being served and the extent to which county programs rely upon Medicaid to sustain themselves.

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

AIDS DRUG ASSISTANCE PROGRAM (ADAP)

Section 11.55.(a) The Department of Health and Human Services shall develop and implement a cost-containment plan for the purpose of serving additional clients of the AIDS Drug Assistance Program (ADAP). In developing the Plan, the Department shall do the following:

(1) Explore the feasibility of obtaining a Medicaid expansion waiver;

(2) Estimate the potential cost savings to the State of participating in the 340B Drug Pricing Program by studying various ways of adhering to program requirements while also realizing cost savings;

(3) Examine, for possible adoption, ADAP and other similar program cost-saving strategies in other states, including, but not limited to, restrictive formularies, prescription limitations, insurance continuity, and insurance purchasing programs, and biannual or quarterly reauthorizations; and

(4) Conduct other activities that will assist in the development of a viable plan.

Section 11.55.(b) The Department shall implement cost-containment programs or mechanisms, other than the current pharmaceutical rebates approach, by July 1, 1999, and shall report to the members of the Senate Appropriations Committee on Human Resources, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division not later than May 15, 2000, on the following:

(1) The realized and projected savings;

(2) Findings from subdivisions (1), (2), and (3) of subsection (a) of this section; and

(3) Recommendations for legislative action.

Section 11.55.(c) Savings realized through cost-containment measures shall be used to serve additional ADAP participants in each fiscal year. Funds not expended for authorized program costs shall revert to the General Fund.

Section 11.55.(d) The Department shall also develop a comprehensive information system on AIDS/HIV clients receiving services from the State. This system shall include information on program usage patterns of ADAP participants, including, but not limited to, frequency of prescription purchases, and types of medications prescribed. The Department shall also develop a plan for promoting patient adherence to physician treatment recommendations. In developing the plan, the Department shall identify ways of obtaining information without interfering with physician-patient confidentiality. The Department shall report on this plan to the members of the House of Representatives Appropriations Subcommittee on Health and Human Services, the Senate Appropriations Committee on Human Resources, and the Fiscal Research Division not later than May 15, 2000.

Section 11.55.(e) For the 1999-2000 fiscal year, HIV-positive individuals with incomes at or below one hundred twenty-five percent (125%) of the federal poverty level are eligible for participation in ADAP. Notwithstanding any other provision of law, eligibility for participation in ADAP during the 1999-2000 fiscal year shall not be extended to individuals with incomes above one hundred twenty-five percent (125%) of the federal poverty level. All individuals who are eligible for participation in ADAP shall be served by the Department of Health and Human Services. If sufficient funds are not available from funds allocated to ADAP, the Department of Health and Human Services shall transfer available funds from other programs within the Department to meet the funding needs of ADAP.

Section 11.55.(f) The Department of Health and Human Services shall study the estimated participation rates and costs if eligibility for participation in ADAP were raised to two hundred percent (200%) or to two hundred fifty percent (250%) of the federal poverty level. The Department of Health and Human Services shall report the findings of this study to the Senate Appropriations Committee on Human Resources, the House of Representatives Appropriations Subcommittee on Health and Human Services, and the Fiscal Research Division not later than May 15, 2000.

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

HIV/STD PREVENTION SERVICES/EVALUATION AND ACCOUNTABILITY OF GRANTEES

Section 11.56.(a) The Department of Health and Human Services, Division of Public Health, shall continue the practice of contracting with community-based organizations, local health departments, and other entities to provide services to high-risk individuals. Contracts shall require quarterly reports to the Department on the entity's use of funds, number of clients served under the contract, details on program expenditures, and any other information needed by the Department to enable it to evaluate the efficiency and effectiveness of the entity's use of funds and provision of services. Entities under contract with the Department shall provide to the Department, at least annually, a copy of the entity's financial statement and most recent audit report.

Section 11.56.(b) If the entity with which the Department of Health and Human Services contracts in accordance with subsection (a) of this section is a nonprofit organization, then the entity shall also provide the same quarterly report to the appropriate local health department for information purposes only.

Section 11.56.(c) The Department of Health and Human Services shall adopt standards for the annual evaluation and certification of entities with which the Department contracts under this section. The evaluation and certification standards shall provide sanctions, including discontinuing of funding, for an entity's failure to comply with DHHS standards and State law. The Department shall adopt the standards not later than July 1, 1999, and the standards shall apply to contracts entered into on and after January 1, 2000.

Section 11.56.(d) The Department of Health and Human Services shall report to the House of Representatives Appropriations Subcommittee on Health and Human Services and the Senate Appropriations Committee on Human Resources no later than July 1, 1999, on the standards adopted, on entities currently under contract with the Department, and on those entities' experience in providing effective and efficient services under contract with the Department.

Section 11.56.(e) Effective January 1, 2000, the Department of Health and Human Services shall not allocate HIV Prevention Funds to any entity unless the entity has met the certification standards adopted by the Department.

Requested by: Representatives Earle, Nye, Justus, Easterling, Hardaway, Redwine, Senators Warren, Martin of Guilford, Plyler, Perdue, Odom

EXTEND HEART DISEASE AND STROKE PREVENTION TASK FORCE

Section 11.57. Subsections (l) and (m) of Section 26.9 of Chapter 507 of the 1995 Session Laws, as amended by Section 15.25 of S.L. 1997-443, read as rewritten:

"(l) The Task Force shall submit to the Governor and to the General Assembly a preliminary report by January 1, 1996; an interim report within the first week of the convening of the 1997 General Assembly; a second interim report within the first week of the convening of the 1997 General Assembly, Regular Session 1998; a third interim report within the first week of the convening of the 1999 General Assembly, a fourth interim report within the first week of the convening of the 2000 General Assembly; a fifth interim report within the first week of the convening of the 2001 General Assembly, and a final report by June 30, ~~1999.~~ 2001. The reports shall address the Plan, actions and resources needed to fully implement the Plan, and progress in achieving implementation of the Plan to reduce the occurrence of and burden from heart disease and stroke in North Carolina. The reports shall include an accounting of funds expended and anticipated funding needs for full implementation of recommended plans and programs.

(m) Upon submission of its final report to the Governor and the ~~1999~~ 2001 General Assembly, the Task Force shall expire."

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Foxx, Plyler, Perdue, Odom

OSTEOPOROSIS PROGRAM FUNDS

Section 11.58.(a) Of the funds appropriated in this act to the Department of Health and Human Services, Division of Public Health, the sum of one hundred fifty thousand dollars ($150,000) for the 1999-2000 fiscal year shall be allocated for the continuing work of the Osteoporosis Task Force established by Section 15.32 of S.L. 1997-443.

Section 11.58.(b) The Task Force shall submit a progress report to members of the House of Representatives Appropriations Subcommittee on Health and Human Services and the Senate Appropriations Committee on Human Resources, the Governor, and the Fiscal Research Division not later than April 1, 2000. The progress report shall address:

(1) Progress being made in fulfilling the duties of the Task Force and in developing the Osteoporosis Prevention Plan,

(2) The anticipated time frame for completion of the Prevention Plan, and

(3) Recommended strategies or actions to reduce the occurrence of and burdens suffered from osteoporosis by citizens of this State.

The Task Force shall submit its final report to the 1999 General Assembly, the Governor, and the Fiscal Research Division not later than October 1, 2000.

Section 11.58.(c) Subsection (m) of Section 15.32 of S.L. 1997-443 reads as rewritten:

"(m) Upon submission of its final report to the Governor and the 1999 General Assembly, Regular Session 2000, the Task Force shall expire."

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

PUBLIC HEALTH PREVENTION ACTIVITIES REPORT

Section 11.60.(a) By April 15, 2000, and more frequently as requested, the Department of Health and Human Services, Division of Public Health, shall report on the activities of each of the following:

(1) Kenneth C. Royall, Jr. Children's Vision Screening Improvement Program;

(2) North Carolina Healthy Start Foundation; and

(3) Adolescent Pregnancy Prevention Coalition of North Carolina.

Section 11.60.(b) The report shall include the following information for each of the organizations named in subsection (a) of this section:

(1) How organization initiatives, singularly or in concert with other programs, contribute to the Department's overall goal of reducing teen pregnancy and infant mortality, and addressing vision problems of children in North Carolina. This information shall also include data and research that supports the approach the Department has taken in achieving its goal;

(2) Output data demonstrating the effects of the organization's activities;

(3) State fiscal year 1998-99 program objectives and activities;

(4) State fiscal year 1998-99 itemized expenditures and fund sources;

(5) State fiscal year 1999-2000 planned objectives, activities, and accomplishments; and

(6) State fiscal year 1999-2000 estimated itemized expenditures and fund sources, including actual expenditures and fund sources through April 15, 2000.

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

COMMUNICABLE DISEASE CONTROL AID TO COUNTIES FLEXIBILITY

Section. 11.61.(a) For the 1999-2000 and 2000-2001 fiscal years, the Department of Health and Human Services may combine and allocate funds appropriated for Aid to Counties in the Acute Communicable Disease Control Fund, the Tuberculosis Control Fund, and the Sexually Transmitted Disease Control Fund into one Acute Communicable Disease Control Aid to Counties Grant. Communicable Disease Aid to Counties funding to local health departments and other authorized recipients will be based on a general communicable disease formula to be developed by the Department of Health and Human Services.

Section 11.61.(b) The Department of Health and Human Services, in conjunction with local health departments, will maintain a system to monitor and identify Aid to Counties communicable disease expenditures by each communicable disease group.

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

TRANSFER FUNDS DESIGNATED FOR THE CHEMICAL ALCOHOL TESTING PROGRAM

Section 11.62.(a) The Administrative Office of the Courts shall transfer all funds collected under G.S. 20-16.5(j) that are designated for the chemical alcohol testing program to the Department of Health and Human Services on a monthly basis.

Section 11.62.(b) Any funds collected under G.S. 20-16.5(j) that are designated for the chemical alcohol testing program of the Department of Health and Human Services and are not needed for that program shall be transferred annually to the Governor's Highway Safety program for grants to local law enforcement agencies for training and enforcement of the laws on driving while impaired. The Governor's Highway Safety Program shall expend funds transferred to it under this section within 13 months of receipt of the funds. Amounts received by the Governor's Highway Safety Program shall not revert until the June 30 following the 13-month period.

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

HEALTHY MOTHERS/HEALTHY CHILDREN GRANT PROGRAM

Section 11.63.(a) The Department of Health and Human Services may initiate a Healthy Mothers/Healthy Children Grant Program in up to eight local health departments. The Department may consolidate federal Maternal and Child Health Block Grant funds and State funds appropriated for the Maternal Health, Women's Preventive Health, Child Health, Child Service Coordination and Immunization programs into a Healthy Mothers/Healthy Children Grant Program for each participating local health department. Local health departments participating in the Healthy Mothers/Healthy Children Grant Program may use grant funds to do any of the following:

(1) Improve the health status of women of childbearing age by expanding preventive health services and reducing and/or controlling health risk factors.

(2) Reduce infant mortality and morbidity by preventing high-risk pregnancies, improving the health status of women before pregnancy, improving access to prenatal care, reducing prematurity, and improving survival rates of preterm and other high-risk infants.

(3) Reduce mortality and morbidity among children and youth by reducing the incidence of communicable disease and other preventable conditions, the occurrence and severity of injuries, the incidence of genetic disorders, and the incidence of chronic illnesses and developmental disabilities.

(4) Enhance the health and functional status of children and youth with chronic handicapping conditions by reducing the severity of the conditions through the provision of early identification, diagnosis, treatment, and care coordination services.

Section 11.63.(b) The Department shall not include federal categorical funds, competitive special project funds, and funds for regionalized services in grant funds awarded to local health departments under the Healthy Mothers/Healthy Children Grant Program.

Section 11.63.(c) The Department shall require participating local health departments to identify and report expenditures by program in order to monitor and track the use of Healthy Mothers/Healthy Children Grant Program funds to meet federal and State reporting requirements. In addition, the Department shall require local health departments to report on the administrative, programmatic, and health outcome benefits which are realized by providing localities greater flexibility.

Section 11.63.(d) The Department shall report to members of the House of Representatives Appropriations Subcommittee on Health and Human Services and the Senate Appropriations Committee on Human Resources on the implementation of the Healthy Mothers/Healthy Children Grant Program not later than April 1, 2000.

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Plyler, Perdue, Odom

PREVENTIVE HEALTH PROGRAM PLAN

Section 11.64. The Department of Health and Human Services shall develop a plan to reduce duplication among preventive health programs and initiatives, focusing on task forces, advisory committees, local health departments, and other entities supported by and within the Chronic Disease Prevention and Control Section of the Division of Public Health. In developing the plan, the Department shall do the following:

(1) Examine the goals of each program or initiative to identify areas of commonality and differences;

(2) Explore alternative ways of organizing the Section to achieve greater efficiency and effectiveness.

The Department shall report on the development of its plan to members of the House of Representatives Appropriations Subcommittee on Health and Human Services and the Senate Appropriations Committee on Human Resources, and the Fiscal Research Division not later than April 1, 2000.

Requested by: Representatives Earle, Nye, Easterling, Hardaway, Redwine, Senators Martin of Guilford, Perdue, Plyler, Odom

ACCESS TO PREVENTIVE DENTAL CARE/HEALTH DEPARTMENTS

Section 11.65. G.S. 90-233(a) reads as rewritten:

"(a) A dental hygienist may practice only under the supervision of one or more licensed dentists. ~~Provided, however, that this~~ This subsection ~~(a)~~ shall be deemed to be complied with in the case of dental hygienists employed by ~~the Department of Health and Human Services~~ or under contract with a local health department or State government dental public health program and especially trained by ~~said Department~~ the Dental Health Section of the Department of Health and Human Services as public health ~~hygienists~~ hygienists, while performing their duties ~~in the public schools~~ for the persons officially served by the local health department or State government program under the direction of a duly licensed ~~dentist.~~ dentist employed by that program or by the Dental Health Section of the Department of Health and Human Services."

PART XII. HOUSING FINANCE AGENCY

Requested by: Representatives Fox, Owens, Easterling, Hardaway, Redwine, Senators Martin of Pitt, Plyler, Perdue, Odom

HOME PROGRAM MATCHING FUNDS

Section 12.(a) Funds appropriated in this act to the Housing Finance Agency for the federal HOME Program shall be used to match federal funds appropriated for the HOME Program. In allocating State funds appropriated to match federal HOME Program funds, the Agency shall give priority to HOME Program projects, as follows:

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

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

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

Section 12.(b) If the United States Congress changes the HOME Program such that matching funds are not required for a given program year, then the Agency shall not spend the matching funds appropriated under this act for that program year.

Section 12.(c) Funds appropriated in this act to match federal HOME Program funds shall not revert to the General Fund on June 30, 2000, or on June 30, 2001.

Requested by: Representatives Clary, Fox, Owens, Easterling, Hardaway, Redwine, Senators Martin of Pitt, Plyler, Perdue, Odom

AFFORDABLE ELDERLY HOUSING FUNDS

Section 12.1. Of the funds appropriated in this act to the Housing Finance Agency for the Housing Trust Fund, the sum of two million five hundred thousand dollars ($2,500,000) for the 1999-2000 fiscal year and five hundred thousand dollars ($500,000) for the 2000-2001 fiscal year shall be used for affordable housing for the elderly.

PART XIII. DEPARTMENT OF AGRICULTURE AND CONSUMER SERVICES

Requested by: Representatives Fox, Owens, Easterling, Hardaway, Redwine, Senators Martin of Pitt, Plyler, Perdue, Odom

STATE BUDGET STUDY OF AGRICULTURAL LOANS AND GRANTS PROGRAM

Section 13.1. The Office of State Budget and Management shall study all private and public farm loans and grants programs available throughout the State, including those available through the Department of Agriculture and Consumer Services, under Article 2 of Chapter 137 of the General Statutes and under Chapter 122D of the General Statutes, to determine the effectiveness and efficiency of each of these programs, whether any duplication exists among any of these programs, and whether any consolidation of any of these programs is warranted. No later than May 1, 2000, the Office of State Budget and Management shall report its findings and any recommendations to the Fiscal Research Division.

Requested by: Representatives Fox, Owens, Easterling, Hardaway, Redwine, Senators Martin of Pitt, Plyler, Perdue, Odom

ASSISTANCE FOR SMALL, FAMILY FARMS

Section 13.2. Of the funds appropriated in this act to the Department of Agriculture and Consumer Services for the 1999-2000 fiscal year, the sum of fifty thousand dollars ($50,000) shall be used to provide assistance to farmers who operate small, family farms. By March 1, 2000, the Department shall report to the Joint Legislative Commission on Governmental Operations, the Appropriations Subcommittees on Natural and Economic Resources in both the House of Representatives and the Senate, and the Fiscal Research Division on the use of these funds, including the number and geographic location of the small, family farms assisted through this allocation of funds, the type of assistance provided, and any other information or indicators that demonstrate the overall impact of this allocation of funds.

Requested by: Representatives Fox, Owens, Easterling, Hardaway, Redwine, Senators Martin of Pitt, Plyler, Perdue, Odom

GUIDELINES FOR GRANTS FOR LOCAL AGRICULTURAL FAIRS

Section 13.3. The Department of Agriculture and Consumer Services shall adopt guidelines for the disbursement of funds appropriated to the Department for grants for local agricultural fairs.

Requested by: Representatives Fox, Owens, Easterling, Hardaway, Redwine, Senators Martin of Pitt, Plyler, Perdue, Odom

SOUTHERN DAIRY COMPACT COMMISSION FUNDS

Section 13.4.(a) Of the funds appropriated in this act to the Department of Agriculture and Consumer Services, the sum of five hundred thousand dollars ($500,000) for the 1999-2000 fiscal year shall be credited to a nonreverting reserve within the Department of Agriculture and Consumer Services for the start-up costs of the Southern Dairy Compact Commission, to be established pursuant to Section 4 of Article III of the Southern Dairy Compact, as set forth in G.S. 106-810, and the initial costs of administration and enforcement of the Southern Dairy Compact.

Section 13.4.(b) The Director of the Budget shall make no disbursements from the reserve established in subsection (a) of this section to the Southern Dairy Compact Commission unless Congress ratifies legislation authorizing the operation of the Southern Dairy Compact, and the State of North Carolina and the Southern Dairy Compact Commission enter into a contract, approved by the Attorney General and the Commissioner of Agriculture, that contains all of the following provisions:

(1) That the administrative headquarters of the Southern Dairy Compact Commission shall be located within this State.

(2) That all funds disbursed from the reserve to the Southern Dairy Compact Commission shall be repaid to the State, plus interest at an amount to be agreed upon by the parties, from revenue pledged by the Commission, assessments collected by the Commission, or the reserve of the Commission, in accordance with a repayment schedule to be agreed upon by the parties.

(3) That the Southern Dairy Compact Commission shall issue notes to the State of North Carolina in the amount of the funds disbursed from the reserve under this section.

(4) That, prior to each disbursement, the Southern Dairy Compact Commission shall itemize the needs of the Commission to be served by the requested disbursement and an itemized list showing how the most recent disbursement was spent.

Section 13.4.(c) The contract under this section shall not contain any provision that prevents another participating state, as defined in Section 2 of Article II of the Southern Dairy Compact as set forth in G.S. 106-810, from providing some or all of the start-up costs of the Southern Dairy Compact Commission or its initial costs of administration and enforcement of the Southern Dairy Compact.

Section 13.4.(d) All sums repaid to the State pursuant to the contract under this section shall be credited to the General Fund.

Section 13.4.(e) Any funds not disbursed from the reserve under this section by the end of the term of years provided in the contract under this section shall revert at the end of that fiscal year.

Section 13.4.(f) Upon the failure of Congress to ratify legislation authorizing the operation of the Southern Dairy Compact by June 30, 2001, all funds in the reserve shall revert to the General Fund.

Requested by: Representatives Fox, Owens, Easterling, Hardaway, Redwine, Senators Martin of Pitt, Plyler, Perdue, Odom

LOAN PROGRAM FOR SMALL, FAMILY-OWNED FARMS

Section 13.5.(a) The funds appropriated in this act to the North Carolina Rural Rehabilitation Corporation within the Department of Agriculture and Consumer Services for the 1999-2000 fiscal year shall be used to make loans to those farmers of small, family-owned farms having financial difficulty as shown by their inability to obtain affordable conventional loans from other sources.

Section 13.5.(b) The term of the loans under subsection (a) of this section shall not exceed 20 years. These loans shall be provided in accordance with the lending requirements of the North Carolina Rural Rehabilitation Corporation pursuant to Article 2 of Chapter 137 of the General Statutes.

Section 13.5.(c) The Department of Agriculture and Consumer Services shall adopt rules to implement this section.

Section 13.5.(d) Subsection (b) of Section 13.8 of S.L. 1998-212 is repealed.

Requested by: Representatives Fox, Owens, Easterling, Hardaway, Redwine, Senators Perdue, Odom

MANDATORY EQUINE INFECTIOUS ANEMIA TESTING FUNDS

Section 13.6.(a) No later than October 1, 1999, the Board of Agriculture shall adopt rules pursuant to its authority under G.S. 106-405.17 to provide for the mandatory testing of equines for equine infectious anemia prior to sale or prior to exhibition or assembly at public stables or other public places.

Section 13.6.(b) Funds appropriated in this act to the Department of Agriculture and Consumer Services for the 1999-2000 fiscal year and for the 2000-2001 fiscal year shall be used for the costs of enforcing the mandatory testing program under subsection (a) of this section.

Requested by: Representatives Fox, Owens, Easterling, Hardaway, Redwine, Senators Martin of Pitt, Plyler, Perdue, Odom, Kerr

INCREASE GRAPE GROWERS FUNDS

Section 13.7. G.S. 105-113.81A reads as rewritten:

"§ 105-113.81A. Distribution of part of wine taxes attributable to North Carolina wine.

The Secretary shall on a quarterly basis credit to the Department of Agriculture and Consumer Services ninety-four percent (94%) of the net proceeds of the excise tax collected on unfortified wine bottled in North Carolina during the previous quarter and ninety-five percent (95%) of the net proceeds of the excise tax collected on fortified wine bottled in North Carolina during the previous quarter, except that the amount credited to the Department of Agriculture and Consumer Services under this section shall not exceed ~~one hundred fifty thousand dollars ($150,000)~~ one hundred seventy-five thousand dollars ($175,000) per fiscal year. The Department of Agriculture and Consumer Services shall allocate the funds received under this section to the North Carolina Grape Growers Council to be used to promote the North Carolina grape and wine industry and to contract for research and development services to improve viticultural and enological practices in North Carolina. Any funds credited to the Department of Agriculture and Consumer Services under this section that are not expended by June 30 of any fiscal year may not revert to the General Fund, but shall remain available to the Department for the uses set forth in this section."

PART XIV. DEPARTMENT OF LABOR

Requested by: Representatives Fox, Owens, Easterling, Hardaway, Redwine, Senators Martin of Pitt, Plyler, Perdue, Odom

DEPARTMENT OF LABOR/BUDGET OVER-REALIZED INDIRECT COST RECEIPTS

Section 14. The Department of Labor may budget over-realized indirect cost receipts up to two hundred thousand dollars ($200,000) in the 1999-2000 fiscal year and up to three hundred thousand dollars ($300,000) in the 2000-2001 fiscal year to fund departmental technology needs.

Requested by: Representatives Earle, Fox, Owens, Easterling, Hardaway, Redwine, Senators Martin of Pitt, Plyler, Perdue, Odom

YOUTH EMPLOYMENT CERTIFICATES

Section 14.1. G.S. 95-25.5(a) reads as rewritten:

"(a) No youth under 18 years of age shall be employed by any employer in any occupation without a youth employment certificate unless specifically exempted. The Commissioner of Labor shall prescribe regulations for youths and employers concerning the issuance, maintenance and revocation of certificates. Certificates will be issued, subject to review by the Department of Labor, by county directors of social services and such of their designees as are approved by the Commissioner; provided, the Commissioner may ~~by regulation require that the Department of Labor issue certificates for occupations with unusual or unique characteristics.~~ also issue certificates, both directly and electronically."

PART XV. DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES

Requested by: Representatives Fox, Owens, Easterling, Hardaway, Redwine, Senators Martin of Pitt, Plyler, Perdue, Odom

SPECIAL RESERVE FUNDS FOR FOREST SEEDLING PROGRAM/BLADEN LAKES STATE FOREST

Section 15. G.S. 113-36 reads as rewritten:

"§ 113-36. Applications of proceeds from sale of products.

(a) Application of Proceeds Generally. - Except as provided in ~~subsection (b) of~~ this section, all money received from the sale of wood, timber, minerals, or other products from the State forests shall be paid into the State treasury and to the credit of the Department; and such money shall be expended in carrying out the purposes of this Article and of forestry in general, under the direction of the Secretary.

(b) Tree Cone and Seed Purchase Fund. - A percentage of the money obtained from the sale of seedlings and remaining unobligated at the end of a fiscal year, shall be placed in a special, continuing and nonreverting Tree Cone and Seed Purchase Fund under the control and direction of the Secretary. The percentage of the sales placed in the fund shall not exceed ten percent (10%). At the beginning of each fiscal year, the Secretary shall select the percentage for the upcoming fiscal year depending upon the anticipated costs of tree cones and seeds which the department must purchase. Money in this fund shall not be allowed to accumulate in excess of the amount needed to purchase a four-year supply of tree cones and seed, and shall be used for no purpose other than the purchase of tree cones and seeds.

(c) Forest Seedling Nursery Program Fund. - The Forest Seedling Nursery Program Fund is created within the Department of Environment and Natural Resources, Division of Forest Resources, as a special revenue fund. Except as provided in subsection (b) of this section, this Fund shall consist of receipts from the sale of seed and seedlings as authorized in G.S. 113-35 and any gifts, bequests, or grants for the benefit of this Fund. No General Fund appropriations shall be credited to this Fund. Any balance remaining in this Fund at the end of any fiscal year shall not revert. The Department may use this Fund only to develop, improve, repair, maintain, operate, or otherwise invest in the Forest Seedling Nursery Program.

(d) Bladen Lakes State Forest Fund. - The Bladen Lakes State Forest Fund is created within the Department of Environment and Natural Resources, Division of Forest Resources, as a special revenue fund. This Fund shall consist of receipts from the sale of forest products from Bladen Lakes State Forest as authorized in G.S. 113-35 and any gifts, bequests, or grants for the benefit of this Fund. No General Fund appropriations shall be credited to this Fund. Any balance remaining in this Fund at the end of any fiscal year shall not revert. The Department may use this Fund only to develop, improve, repair, maintain, operate, or otherwise invest in the Bladen Lakes State Forest."

Requested by: Representatives Fox, Owens, Easterling, Hardaway, Redwine, Senators Martin of Pitt, Plyler, Perdue, Odom

STATEWIDE BEAVER DAMAGE CONTROL PROGRAM FUNDS

Section 15.1.(a) Of the funds appropriated in this act to the Wildlife Resources Commission, the sum of five hundred thousand dollars ($500,000) for the 1999-2000 fiscal year and the sum of five hundred thousand dollars ($500,000) for the 2000-2001 fiscal year shall be used to provide the State share necessary to support the beaver damage control program established in G.S. 113-291.10, provided the sum of at least twenty-five thousand dollars ($25,000) in federal funds is available each fiscal year of the biennium to provide the federal share.

Section 15.1.(b) G.S. 113-291.10(a) reads as rewritten:

"(a) There is established the Beaver Damage Control Advisory Board. The Board shall consist of nine members, as follows:

(1) The Executive Director of the North Carolina Wildlife Resources Commission, or his designee, who shall serve as chair;

(2) The Commissioner of Agriculture, or a designee;

(3) The Director of the Division of Forest Resources of the Department of Environment and Natural Resources, or a designee;

(4) The Director of the Soil and Water Conservation Division of the Department of Environment and Natural Resources, or a designee;

(5) The Director of the North Carolina Cooperative Extension Service, or a designee;

(6) The Secretary of Transportation, or a designee;

(7) The State Director of the ~~Animal Damage Control~~ Wildlife Services Division of the Animal and Plant Health Inspection Service, U.S. Department of Agriculture, or a designee;

(8) The President of the North Carolina Farm Bureau Federation, Inc., or a designee, representing private landowners; and

(9) A representative of the North Carolina Forestry Association."

Section 15.1.(c) G.S. 113-291.10(c) reads as rewritten:

"(c) The Wildlife Resources Commission shall implement the program, and may enter a cooperative agreement with the ~~Animal Damage Control~~ Wildlife Services Division of the Animal and Plant Health Inspection Service, United States Department of Agriculture, to accomplish the program."

Requested by: Representatives Fox, Owens, Easterling, Hardaway, Redwine, Senators Martin of Pitt, Plyler, Perdue, Odom

GRASSROOTS SCIENCE PROGRAM

Section 15.2. Of the funds appropriated in this act to the Department of Environment and Natural Resources for the Grassroots Science Program, the sum of three million six hundred seventy thousand dollars ($3,670,000) for fiscal year 1999-2000 and the sum of three million four hundred twenty thousand dollars ($3,420,000) for fiscal year 2000-2001 are allocated as grant-in-aid for each fiscal year as follows:

1999-2000 2000-2001

Aurora Fossil Museum $64,066 $64,066

Cape Fear Museum $203,944 $203,944

Catawba Science Center $179,172 $179,172

Colburn Gem and Mineral Museum, Inc. $63,942 $63,942

Discovery Place $776,577 $776,577

Granville County Museum Commission,

Inc. - Harris Gallery $54,420 $54,420

The Health Adventure Museum of Pack

Place Education, Arts and

Science Center, Inc. $210,860 $210,860

Imagination Station $108,202 $108,202

Iredell County Children's Museum $56,243 $56,243

Museum of Coastal Carolina $318,274 $68,274

Natural Science Center of Greensboro $321,802 $321,802

North Carolina Museum of Life

and Science $465,240 $465,240

Rocky Mount Children's Museum $98,007 $98,007

Schiele Museum of Natural History $381,489 $381,489

Sci Works Science Center and

Environmental Park of Forsyth County $247,501 $247,501

Western North Carolina Nature Center $120,261 $120,261

Total $3,670,000 $3,420,000

Requested by: Representatives Baker, Fox, Owens, Easterling, Hardaway, Redwine, Senators Martin of Pitt, Plyler, Perdue, Odom

TOWN FORK CREEK SOIL CONSERVATION PROJECT

Section 15.3.(a) Section 15.11 of S.L. 1997-443 reads as rewritten:

"Section 15.11. (a) The funds placed in a reserve account in the Department of Environment, Health, and Natural Resources pursuant to Section 26.3(c) of Chapter 507 of the 1995 Session Laws shall not revert until June 30, ~~1999.~~ 2001. Those funds are reallocated as follows:

(1) Five hundred four thousand five hundred sixty dollars ($504,560) to the Stokes County Water and Sewer Authority, Inc., for the Germanton Water Project.

(2) Nine hundred thirty thousand six hundred eighty dollars ($930,680) to the Stokes County Water and Sewer Authority, Inc., for the Madison Connection Project.

(3) Eighty thousand dollars ($80,000) to the Stokes County Water and Sewer Authority, Inc., for the Dan River Project.

(4) Thirty thousand dollars ($30,000) to the Department of Environment, Health, and Natural Resources for the Limestone Creek small watershed project in Duplin County.

(5) Three hundred forty thousand six hundred forty dollars ($340,640) to the Department of Environment, Health, and Natural Resources for the Deep Creek small watershed project in Yadkin County.

(b) The Department of Environment, Health, and Natural Resources and the Stokes County Water and Sewer Authority, Inc., shall report by October 1 and March 1 of each fiscal year to the Joint Legislative Commission on Governmental Operations, the Fiscal Research Division of the General Assembly, and the Office of State Budget and Management regarding the use of the funds reallocated by this section. Each report shall include all of the following:

(1) The estimated cost of each project.

(2) The date that work on each project began or is expected to begin.

(3) The date that work on each project was completed or is expected to be completed.

(4) The actual cost of each project."

Section 15.3.(b) This section becomes effective June 30, 1999.

Requested by: Representatives Fox, Owens, Baker, Easterling, Hardaway, Redwine, Senators Martin of Pitt, Plyler, Perdue, Odom

MEADOW BRANCH WATER PROJECT AND DEEP CREEK PROJECT/EXTEND REVERSION DATE

Section 15.4.(a) Section 107(b) of Chapter 561 of the 1993 Session Laws as rewritten by Section 26.1 of Chapter 507 of the 1995 Session Laws and Section 15.46 of S.L. 1997-443 reads as rewritten:

"(b) Where the actual costs are different from the estimated costs under subsection (a) of this section, the Department may adjust the allocations among projects as needed. If any projects listed in subsection (a) of this section are delayed and the budgeted State funds cannot be used during the 1993-94 fiscal year, or if the projects listed in subsection (a) of this section are accomplished at a lower cost, the Department may use the resulting fund availability to fund:

(1) Corps of Engineers project feasibility studies, or

(2) Corps of Engineers projects whose schedules have advanced and require State matching funds in fiscal year 1993-94, or

(3) State-local Water Resources Development Projects.

Funds, except those allocated in subdivisions (a)(14), (15), (16), and (17) of this section, not expended or encumbered for these purposes shall revert to the General Fund at the end of the 1994-95 fiscal year. The funds allocated in subdivisions (a)(14), and (16) of this section shall not revert until June 30, 1997. The funds allocated in subdivisions (15) and (17) of this section shall not revert until June 30, ~~1999.~~ 2001."

Section 15.4.(b) Subsection (b) of Section 27.12 of Chapter 507 of the 1995 Session Laws reads as rewritten:

"(b) Where the actual costs are different from the estimated costs under subsection (a) of this section, the Department may adjust the allocations among projects as needed. If any projects listed in subsection (a) of this section are delayed and the budgeted State funds cannot be used during the 1995-96 fiscal year, or if the projects listed in subsection (a) of this section are accomplished at a lower cost, the Department may use the resulting fund availability to fund any of the following:

(1) Corps of Engineers project feasibility studies.

(2) Corps of Engineers projects whose schedules have advanced and require State matching funds in fiscal year 1995-96.

(3) State-local Water Resources Development Projects.

(4) Soil Conservation Projects whose schedules have advanced and require State matching funds in fiscal year 1995-96.

~~Funds~~ Funds, except those allocated in subdivision (a)(12) of this section, not expended or encumbered for these purposes shall revert to the General Fund at the end of the 1996-97 fiscal year. The funds allocated in subdivision (a)(12) of this section shall not revert until June 30, 2001."

Section 15.4.(c) Subsection (b) of Section 34.7 of S.L. 1997-443 reads as rewritten:

"(b) Where the actual costs are different from the estimated costs under subsection (a) of this section, the Department may adjust the allocations among projects as needed. If any projects listed in subsection (a) of this section are delayed and the budgeted State funds cannot be used during the 1997-98 fiscal year, or if the projects listed in subsection (a) of this section are accomplished at a lower cost, the Department may use the resulting fund availability to fund any of the following:

(1) Corps of Engineers project feasibility studies.

(2) Corps of Engineers projects whose schedules have advanced and require State matching funds in fiscal year 1997-98.

(3) State-local Water Resources Development Projects.

~~Funds~~ Funds, except those allocated in subdivision (a)(18) of this section, not expended or encumbered for these purposes shall revert to the General Fund at the end of the 1998-99 fiscal year. The funds allocated in subdivision (a)(18) of this section shall not revert until June 30, 2001."

Section 15.4.(d) This section becomes effective June 30, 1999.

Requested by: Representatives Fox, Owens, Easterling, Hardaway, Redwine, Senators Martin of Pitt, Plyler, Perdue, Odom

NER INTERIM STUDY OF DENR ORGANIZATION

Section 15.5. During the interim between the Session of the 1999 General Assembly and the 2000 Regular Session of the 1999 General Assembly, the Appropriations Subcommittees on Natural and Economic Resources in both the Senate and the House of Representatives shall study the current organization of the Department of Environment and Natural Resources to determine its effectiveness and efficiency and shall report any recommendations, including any legislative proposals, to the 2000 Regular Session of the 1999 General Assembly no later than May 1, 2000. The Appropriations Subcommittees on Natural and Economic Resources in both the House of Representatives and the Senate may obtain assistance from any resources outside the General Assembly that the Subcommittees determine are needed to adequately perform their study.

Requested by: Representatives Fox, Owens, Easterling, Hardaway, Redwine, Senators Martin of Pitt, Plyler, Perdue, Odom

SUPERFUND PROGRAM/INACTIVE HAZARDOUS SITES FUNDS

Section 15.6.(a) The Department of Environment and Natural Resources may use available funds, with the approval of the Office of State Budget and Management, to provide the ten percent (10%) cost share required for Superfund cleanups on the National Priority List sites, to pay the operating and maintenance costs associated with these Superfund cleanups, and for the cleanup of priority inactive hazardous substance or waste disposal sites under Part 3 of Article 9 of Chapter 130A of the General Statutes. These funds may be in addition to those appropriated for this purpose.

Section 15.6.(b) The Department of Environment and Natural Resources and the Office of State Budget and Management shall report to the Environmental Review Commission and the Joint Legislative Commission on Governmental Operations the amount and the source of the funds used pursuant to subsection (a) of this section within 30 days of the expenditure of these funds.

Requested by: Representatives Fox, Owens, Easterling, Hardaway, Redwine, Senators Martin of Pitt, Plyler, Perdue, Odom

FUNDS FOR VOLUNTARY REMEDIAL ACTIONS

Section 15.7.(a) During the 1999-2001 fiscal biennium, the Secretary of Environment and Natural Resources may contribute from the Inactive Hazardous Sites Cleanup Fund up to ten percent (10%) of the cost each fiscal year, not to exceed fifty thousand dollars ($50,000) per site, of implementing a voluntary remedial action program at up to three high-priority sites that substantially endanger public health or the environment.

Section 15.7.(b) No later than April 1 of each year of the 1999-2001 fiscal biennium, the Department of Environment and Natural Resources shall report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division. Each report shall contain the location of the sites for which a voluntary remedial action program was implemented under subsection (a) of this section, the rationale for the State contributing to the cost of that remedial action, and the amount of the contribution made from the Inactive Hazardous Sites Cleanup Fund.

Requested by: Representatives Fox, Owens, Easterling, Hardaway, Redwine, Senators Martin of Pitt, Plyler, Perdue, Odom

DENR POSITION FOR SCRAP TIRE PROGRAM

Section 15.8. Notwithstanding the provisions of G.S. 130A-309.63, the Department of Environment and Natural Resources may use funds in the Scrap Tire Disposal Account that, pursuant to G.S. 130A-309.63(d), are to be used for the cleanup of scrap tire collection sites to maintain and support a position for the 1999-2000 fiscal year and for the 2000-2001 fiscal year to provide regulatory assistance to local governments to develop programs to prevent scrap tires from outside the State from being presented for free disposal and to complete the cleanup of nuisance tire collection sites.

Requested by: Representatives Fox, Owens, Easterling, Hardaway, Redwine, Senators Martin of Pitt, Plyler, Perdue, Odom

POLLUTION PREVENTION AND ENVIRONMENTAL ASSISTANCE TO SMALL BUSINESSES WITH NEED

Section 15.9. The Division of Pollution Prevention and Environmental Assistance of the Department of Environment and Natural Resources shall, to the extent feasible, give greatest priority to small businesses that can demonstrate financial need when the Division of Pollution Prevention and Environmental Assistance awards grants or otherwise provides technical or financial assistance.

Requested by: Representatives Fox, Owens, Easterling, Hardaway, Redwine, Senators Martin of Pitt, Plyler, Perdue, Odom

DENR STUDY ONE-STOP PERMIT PROCESS

Section 15.10. The Department of Environment and Natural Resources shall study the feasibility and benefits of implementing a one-stop permit system to improve coordination within the Department with respect to processing environmental permit applications, communication with the regulated community, and regulatory compliance. The Department shall consider the State of New Jersey's ONE STOP program, which uses a project team composed of permitting, compliance, and enforcement staff to review the permit application, as a model. No later than February 15, 2000, the Department shall report to the Environmental Review Commission, the Joint Legislative Commission on Governmental Operations, the Appropriations Subcommittees on Natural and Economic Resources in both the House of Representatives and the Senate, and the Fiscal Research Division on their findings and recommendations.

Requested by: Representatives Fox, Owens, Easterling, Hardaway, Redwine, Senators Martin of Pitt, Plyler, Perdue, Odom

REPEAL DUPLICATE REPORTING REQUIREMENT FOR CLEAN WATER MANAGEMENT TRUST FUND

Section 15.11. G.S. 113-145.6(i) is repealed.

Requested by: Representatives Fox, Owens, Easterling, Hardaway, Redwine, Senators Martin of Pitt, Plyler, Perdue, Odom

ENVIRONMENTAL EDUCATION GRANTS

Section 15.12.(a) Of the two hundred thousand dollars ($200,000) appropriated in this act to the Department of Environment and Natural Resources for the 1999-2000 fiscal year for environmental education grants, up to fifty thousand dollars ($50,000) may be used by the Department for the 1999-2000 fiscal year for the costs of administering the environmental education grants. The remainder of these funds shall be used to provide grants to promote environmental education throughout the State. Grants under this section may be awarded to:

(1) Schools, community organizations, and environmental education centers for the development of environmental education library collections; or

(2) School groups for field trips to environmental education centers across the State, provided the activities of the field trip are correlated with the Department of Public Instruction's curriculum objectives.

Section 15.12.(b) The Department of Environment and Natural Resources shall report to the Joint Legislative Commission on Governmental Operations, the Environmental Review Commission, and the Fiscal Research Division by January 1, 2000, and again by July 1, 2000, on the grant program. The report shall include a list of amounts awarded and project descriptions for each grant recipient.

Requested by: Representatives Fox, Owens, Easterling, Hardaway, Redwine, Senators Martin of Pitt, Plyler, Perdue, Odom

PARTNERSHIP FOR THE SOUNDS

Section 15.13.(a) Subject to subsection (c) of this section, the Partnership for the Sounds, Inc., shall, no later than January 15, 2000, submit a report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division that provides the following information:

(1) Program activities, objectives, and accomplishments for the 1998-99 fiscal year;

(2) Itemized expenditures and fund sources for the 1998-99 fiscal year;

(3) Planned activities, objectives, and accomplishments for the 1999-2000 fiscal year, including actual results through December 31, 1999; and

(4) Estimated itemized expenditures and fund sources for the 1999-2000 fiscal year, including actual expenditures and fund sources through December 31, 1999.

Section 15.13.(b) Subject to subsection (c) of this section, the Partnership for the Sounds, Inc., shall, no later than January 15, 2001, submit a report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division that provides the following information:

(1) Program activities, objectives, and accomplishments for the 1999-2000 fiscal year;

(2) Itemized expenditures and fund sources for the 1999-2000 fiscal year;

(3) Planned activities, objectives, and accomplishments for the 2000-2001 fiscal year, including actual results through December 31, 2000; and

(4) Estimated itemized expenditures and fund sources for the 2000-2001 fiscal year, including actual expenditures and fund sources through December 31, 2000.

Section 15.13.(c) The Partnership for the Sounds, Inc., shall provide additional reports to the Joint Legislative Commission on Governmental Operations or the Fiscal Research Division upon request.

Section 15.13.(d) The Partnership for the Sounds, Inc., shall provide a copy of its annual audited financial statement to the Fiscal Research Division within 30 days of issuing the financial statement.

Requested by: Representatives Fox, Owens, Easterling, Hardaway, Redwine, Hackney, Senators Martin of Pitt, Plyler, Perdue, Odom

NORTH CAROLINA WATER QUALITY WORKGROUP INITIATIVE/RIVERNET MONITORING SYSTEM PILOT PROGRAM/RESEARCH FUNDS

Section 15.14.(a) The Department of Environment and Natural Resources and North Carolina State University shall jointly establish the North Carolina Water Quality Workgroup. The Workgroup shall work collaboratively with the appropriate divisions of the Department of Environment and Natural Resources and North Carolina State University, the Scientific Advisory Council on Water Resources and Coastal Fisheries Management, the Environmental Management Commission, and the Environmental Review Commission to identify the scientific and State agency databases that can be used to formulate public policy regarding the State's water quality, evaluate those databases to determine the information gaps in those databases, and establish the priorities for obtaining the information lacking in those databases. The Workgroup shall have the following duties:

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

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

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

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

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

Section 15.14.(b) The North Carolina Water Quality Workgroup shall be composed of no more than 15 members. Those members shall be jointly appointed by the Chancellor of North Carolina State University and the Secretary of Environment and Natural Resources. Any person appointed as a member of the Workgroup shall be knowledgeable in one of the following areas:

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

(2) Nutrient Management.

(3) Water Pollution Control.

(4) Waste Management.

(5) Groundwater Resources.

(6) Stream Hydrology.

(7) Aquatic Biology.

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

Section 15.14.(c) North Carolina State University shall provide meeting facilities for the North Carolina Water Quality Workgroup as requested by the Chair.

Section 15.14.(d) The members of the North Carolina Water Quality Workgroup shall elect a Chair. The Chair shall call meetings of the Workgroup and set the meeting agenda.

Section 15.14.(e) The Chair of the North Carolina Water Quality Workgroup shall report each year by January 30 to the Scientific Advisory Council on Water Resources and Coastal Fisheries Management, to the Environmental Review Commission, to the Cochairs of the House of Representatives and Senate Appropriations Subcommittees on Natural and Economic Resources, and to the Chancellor of North Carolina State University or the Chancellor's designee on the previous year's activities, findings, and recommendations of the North Carolina Water Quality Workgroup.

Section 15.14.(f) The North Carolina Water Quality Workgroup shall develop a water quality monitoring system to be known as Rivernet that effectively uses the combined resources of North Carolina State University and State agencies. The Rivernet system shall be designed to implement advances in monitoring technology and information management systems with web-based data dissemination in the waters that are impaired based on the criteria of the State's basinwide water quality management plans. Water quality and nutrient parameters shall be continuously monitored at each station, and the data shall be sent back to a centralized computer server.

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

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

Section 15.14.(g) For the 1999-2001 biennium, the North Carolina Water Quality Workgroup shall select as a pilot project site an area of impaired waters within one of the State's river basins based on criteria of the State's basinwide water quality management plans and shall implement a Rivernet monitoring system pilot project in those waters.

Section 15.14.(h) Of the funds appropriated by this act to the Department of Environment and Natural Resources, the sum of one million two hundred thousand dollars ($1,200,000) for the 1999-2000 fiscal year and the sum of seven hundred thousand dollars ($700,000) for the 2000-2001 fiscal year shall be used to implement this section. Those funds shall be allocated as follows:

(1) $300,000 shall be transferred for the 1999-2000 fiscal year and $300,000 for the 2000-2001 fiscal year to the Board of Governors of The University of North Carolina for North Carolina State University to use for operating costs of the Rivernet monitoring system and pilot project including personnel to maintain the system, archive, and disseminate the data.

(2) $500,000 for the 1999-2000 fiscal year only shall be transferred to the Board of Governors of The University of North Carolina to be used by North Carolina State University for the purchase of monitoring equipment, installation of the data transfer network, and for the installation of the computer hardware and software to archive the data and sustain the web-based data system.

(3) $400,000 for the 1999-2000 fiscal year and $400,000 for the 2000-2001 fiscal year shall be held in a reserve fund to be administered by the Scientific Advisory Council on Water Resources and Coastal Fisheries Management. Monies in the fund shall be used only for research projects recommended by the North Carolina Water Quality Workgroup. The Workgroup shall consider only new studies that promote collaborative work among the Department of Environment and Natural Resources and any constituent institution of The University of North Carolina to collectively close knowledge policy gaps with regard to the State's water quality and the nutrient levels of impaired waters.

Requested by: Representatives Fox, Owens, Easterling, Hardaway, Redwine, Senators Martin of Pitt, Plyler, Perdue, Odom

PITT LANDFILL REIMBURSEMENT FUNDS

Section 15.15. Notwithstanding G.S. 130A-309.83, three hundred thousand dollars ($300,000) of the funds credited to an account established under G.S. 130A-309.83 shall be transferred to the Department of Environment and Natural Resources for the 1999-2000 fiscal year to be used to partially reimburse Pitt County for the substantial costs Pitt County has incurred to monitor, investigate, and contain contamination caused by the disposal of hazardous waste at its county landfill in 1979 at the State's urging and with the State's assurance of protection.

Requested by: Representatives Fox, Owens, Easterling, Hardaway, Redwine, Senators Martin of Pitt, Ballance, Plyler, Perdue, Odom

WARREN COUNTY PCB LANDFILL DETOXIFICATION FUNDS

Section 15.16. Notwithstanding G.S. 130A-309.83, one million dollars ($1,000,000) of the funds credited to an account established under G.S. 130A-309.83 shall be transferred to the Department of Environment and Natural Resources for the 1999-2000 fiscal year and placed in the nonreverting reserve established under Section 29.9(a) of S.L. 1998-212 to be used for the detoxification of the Warren County polychlorinated biphenyl (PCB) landfill consistent with the provisions of Section 29.9 of S.L. 1998-212.

Requested by: Representatives Fox, Owens, Easterling, Hardaway, Redwine, Senators Martin of Pitt, Plyler, Perdue, Odom

FOOD SERVICE AT NORTH CAROLINA AQUARIUMS

Section 15.17.(a) Notwithstanding Article 3 of Chapter 111 of the General Statutes, the North Carolina Aquariums may operate or contract for the operation of food or vending services at the North Carolina Aquariums. Notwithstanding G.S. 111-43, the net proceeds of revenue generated by food and vending services that are provided at the North Carolina Aquariums and are operated by or whose operation is contracted for by the Division of North Carolina Aquariums shall be credited to the North Carolina Aquariums Fund.

Section 15.17.(b) This section shall not be construed to alter any contract for food or vending services at the North Carolina Aquariums that is in force at the time this section becomes law.

Section 15.17.(c) The Revisor of Statutes shall codify this section in Article 3 of Chapter 111 of the General Statutes.

Requested by: Representatives Fox, Owens, Easterling, Hardaway, Redwine, Senators Martin of Pitt, Perdue, Plyler, Odom

BEACH AND MOUNTAIN RESTORATION PLAN

Section 15.18. The Department of Environment and Natural Resources shall evaluate the current condition of North Carolina's beaches and mountains and shall develop recommendations for a State plan to address issues of environmental protection, conservation, preservation, and restoration. The recommendations shall include proposed State, federal, and local government sources of funding for implementation of the plan.

The Department shall report the results of the evaluation and its recommendations to the Environmental Review Commission and the Joint Legislative Commission on Governmental Operations prior to April 15, 2000.

Requested by: Representatives Fox, Owens, Easterling, Hardaway, Redwine, Senators Martin of Pitt, Plyler, Perdue, Odom

BASINWIDE INFORMATION MANAGEMENT SYSTEM

Section 15.19.(a) Notwithstanding G.S. 143-16.3, the Department of Environment and Natural Resources may use up to eight hundred ninety thousand dollars ($890,000) in available funds as provided by subsection (b) of this section for the 1999-2000 fiscal year to continue development of the Basinwide Information Management System to facilitate access to environmental programs, information, and data. These funds may be used in addition to any federal funds received by the Department for this purpose.

Section 15.19.(b) No funds shall be diverted from programs or activities authorized by the General Assembly in this act to implement this section, unless those funds would otherwise revert. No programs or activities authorized by the General Assembly shall be delayed to implement this section.

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Requested by: Representatives Fox, Owens, Easterling, Hardaway, Redwine, Senators Martin of Pitt, Plyler, Perdue, Odom

DEPARTMENT OF COMMERCE BUDGET REVISIONS

Section 16. The Department of Commerce, in consultation with and upon approval of the Office of State Budget and Management, shall make the necessary revisions to its budget to ensure that positions and related operating funds are budgeted in the appropriate fund codes of the divisions to which the positions are assigned and the operating expenses support. These revisions should result in a departmental budget that accurately reflects the Department's organizational structure and lines of management. The budget revisions shall be submitted to and approved by the Office of State Budget and Management not later than January 1, 2000. The Department of Commerce shall submit to the Joint Legislative Commission on Governmental Operations and to the Fiscal Research Division a progress report no later than October 15, 1999, and a final report no later than January 15, 2000, on all budget revisions made to implement this section.

Requested by: Representatives Fox, Owens, Easterling, Hardaway, Redwine, Senators Martin of Pitt, Plyler, Perdue, Odom

WANCHESE SEAFOOD INDUSTRIAL PARK FUNDS

Section 16.1. Of the funds appropriated in this act to the Department of Commerce for the Wanchese Seafood Industrial Park, the sum of one hundred twenty-one thousand one hundred twenty dollars ($121,120) for the 1999-2000 fiscal year and the sum of one hundred twenty-one thousand one hundred twenty dollars ($121,120) for the 2000-2001 fiscal year may be expended by the North Carolina Seafood Industrial Park Authority for operations, maintenance, repair, and capital improvements in accordance with Article 23C of Chapter 113 of the General Statutes, in addition to funds available to the Authority for these purposes.

Requested by: Representatives Fox, Owens, Easterling, Hardaway, Redwine, Senators Martin of Pitt, Plyler, Perdue, Odom

INDUSTRIAL RECRUITMENT COMPETITIVE FUND

Section 16.2.(a) Funds appropriated in this act to the Department of Commerce for the Industrial Recruitment Competitive Fund shall be used to continue the Fund. The purpose of the Fund is to provide financial assistance to those businesses or industries deemed by the Governor to be vital to a healthy and growing State economy and that are making significant efforts to establish or expand in North Carolina. Monies allocated from the Fund shall be used for the following purposes:

(1) Installation or purchase of equipment;

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

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

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

Section 16.2.(b) The Department of Commerce shall report on or before October 1, 1999, and quarterly thereafter to the Joint Legislative Commission on Governmental Operations and to the Fiscal Research Division on the commitment, allocation, and use of funds allocated from the Industrial Recruitment Competitive Fund.

Requested by: Representatives Fox, Owens, Easterling, Hardaway, Redwine, Senators Martin of Pitt, Plyler, Perdue, Odom

REGIONAL ECONOMIC DEVELOPMENT COMMISSION ALLOCATIONS

Section 16.3.(a) Funds appropriated in this act to the Department of Commerce for regional economic development commissions shall be allocated to the following commissions in accordance with subsection (b) of this section: Western North Carolina Regional Economic Development Commission, Research Triangle Regional Commission, Southeastern North Carolina Regional Economic Development Commission, Piedmont Triad Partnership, Northeastern North Carolina Regional Economic Development Commission, Global TransPark Development Commission, and Carolinas Partnership, Inc.

Section 16.3.(b) Funds appropriated pursuant to subsection (a) of this section shall be allocated to each regional economic development commission as follows:

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

(2) Next, the Department shall subtract from funds allocated to the Global TransPark Development Zone the sum of two hundred forty thousand three hundred fifty dollars ($240,350) in each fiscal year, which sum represents the interest earnings in each fiscal year on the estimated balance of seven million five hundred thousand dollars ($7,500,000) appropriated to the Global TransPark Development Zone in Section 6 of Chapter 561 of the 1993 Session Laws; and

(3) Next, the Department shall redistribute the sum of two hundred forty thousand three hundred fifty dollars ($240,350) in each fiscal year to the seven regional economic development commissions named in subsection (a) of this section. Each commission's share of this redistribution shall be determined according to the enterprise factor formula set out in subdivision (1) of this subsection. This redistribution shall be in addition to each commission's allocation determined under subdivision (1) of this subsection.

Requested by: Representatives Fox, Owens, Easterling, Hardaway, Redwine, Senators Martin of Pitt, Plyler, Perdue, Odom

REGIONAL COMMISSION REPORTS

Section 16.4.(a) Each regional economic development commission receiving a grant-in-aid from the Department of Commerce shall:

(1) By January 15, 2000, and more frequently as requested, report to the Joint Legislative Commission on Governmental Operations, the Fiscal Research Division, and the Department of Commerce the following information:

a. State fiscal year 1998-99 program activities, objectives, and accomplishments;

b. State fiscal year 1998-99 itemized expenditures and fund sources;

c. State fiscal year 1999-2000 planned activities, objectives, and accomplishments as specified in subdivisions (b)(1) through (b)(6) of this section including actual results through December 31, 1999;

d. State fiscal year 1999-2000 estimated itemized expenditures and fund sources including actual expenditures and fund sources through December 31, 1999.

(2) By January 15, 2001, and more frequently as requested, report to the Joint Legislative Commission on Governmental Operations, the Fiscal Research Division, and the Department of Commerce the following information:

a. State fiscal year 1999-2000 program activities, objectives, and accomplishments;

b. State fiscal year 1999-2000 itemized expenditures and fund sources;

c. State fiscal year 2000-2001 planned activities, objectives, and accomplishments as specified in subdivisions (b)(1) through (b)(6) of this section including actual results through December 31, 2000;

d. State fiscal year 2000-2001 estimated itemized expenditures and fund sources including actual expenditures and fund sources through December 31, 2000.

(3) Provide to the Fiscal Research Division and the Department of Commerce a copy of its annual audited financial statement within 30 days of issuance of the statement.

Section 16.4.(b) Each regional economic development commission receiving a grant-in-aid from the Department of Commerce in each fiscal year of the 1999-2001 biennium shall by January 15 of each fiscal year report to the Department of Commerce the following information for the most recently completed fiscal year:

(1) The number of and description of marketing outreach events including trade shows, recruitment missions, and related activities;

(2) The number of jobs saved;

(3) The amount of investment and number of jobs created by the direct efforts of a commission;

(4) Initiatives undertaken to establish certified sites and shell buildings;

(5) The number of referrals or leads handled that were generated by the Department of Commerce;

(6) The number and listing of available sites and buildings within the region served by a commission;

(7) A listing of major accomplishments.

Requested by: Representatives Fox, Owens, Easterling, Hardaway, Redwine, Senators Martin of Pitt, Plyler, Perdue, Odom

REPEAL STATUTORY REPORTING REQUIREMENTS FOR REGIONAL ECONOMIC DEVELOPMENT COMMISSIONS

Section 16.5.(a) G.S. 158-8.1(e) reads as rewritten:

"(e) In addition to the powers and duties granted to economic development commissions in this Article, the Western North Carolina Regional Economic Development Commission shall:

(1) Survey Western North Carolina and determine the assets, liabilities, and resources that the region contributes to the economic development process.

(2) Develop and evaluate alternatives for Western North Carolina economic development.

(3) Develop a preferred economic development plan for the region and establish strategies for implementing the plan.

(4) Coordinate activities with and enter into contracts with any nonprofit corporation created to assist the Commission in carrying out its powers and duties.

~~(5)~~ ~~Report to the General Assembly by March 31 each year on the work of the Commission~~."

Section 16.5.(b) G.S. 158-8.2(f) reads as rewritten:

"(f) In addition to the powers and duties granted to economic development commissions in this Article, the Northeastern North Carolina Regional Economic Development Commission shall:

(1) Adopt and implement an economic development program, with the assistance of the economic development advisory board, as follows:

a. Survey northeastern North Carolina and determine the assets, liabilities, and resources that the region contributes to the economic development process;

b. Enhance economic development activities that use the area's natural resources;

c. Develop and evaluate alternatives for northeastern North Carolina economic development;

d. Develop a preferred economic development plan for the region and establish strategies for implementing the plan;

e. Conduct feasibility studies to determine the nature and placement of economic developments for maximum economic impact;

f. Identify potential sites for economic development; and

g. Carry out other activities to develop and promote economic development;

(2) Adopt and implement a tourism development program, with the advice and assistance of the tourism advisory board, as follows:

a. Adopt, implement, and update a water-based tourism development strategy;

b. Provide assistance to developers with requirements for tourism development, as deemed necessary by the Commission;

c. Conduct feasibility studies to determine the nature and placement of tourism developments for maximum economic impact;

d. Identify sites for tourism development; and

e. Carry out other activities to develop and promote water-based tourism; and

(3) Coordinate activities with and enter into contracts with any nonprofit corporation created to assist the Commission in carrying out its powers and ~~duties; and~~ duties.

~~(4)~~ ~~Report to the General Assembly by March 31 each year on the work of the Commission~~."

Section 16.5.(c) G.S. 158-8.3(e) reads as rewritten:

"(e) In addition to the powers and duties granted to economic development commissions in this Article, the Southeastern North Carolina Regional Economic Development Commission shall:

(1) Survey southeastern North Carolina and determine the assets, liabilities, and resources that the region contributes to the economic development process;

(2) Develop and evaluate alternatives for southeastern North Carolina economic development;

(3) Develop a preferred economic development plan for the region and establish strategies for implementing the plan; and

(4) Coordinate activities with and enter into contracts with any nonprofit corporation created to assist the Commission in carrying out its powers and ~~duties; and~~ duties.

~~(5)~~ ~~Report to the General Assembly by March 31 each year on the work of the Commission~~."

Requested by: Representatives Fox, Owens, Easterling, Hardaway, Redwine, Senators Martin of Pitt, Plyler, Perdue, Odom

MODIFY NORTHEAST REGIONAL ECONOMIC DEVELOPMENT COMMISSION

Section 16.6.(a) G.S. 158-8.2, as amended by Section 16.5(b) of this act, reads as rewritten:

"§ 158-8.2. Creation of Northeastern North Carolina Regional Economic Development Commission.

(a) There is created the Northeastern North Carolina Regional Economic Development Commission to facilitate economic development ~~and tourism development~~ in Beaufort, Bertie, Camden, Chowan, Currituck, Dare, Gates, Halifax, Hertford, Hyde, Martin, Northampton, Pasquotank, Perquimans, Tyrrell, and Washington Counties, and any other county assigned to the Commission by the Department of Commerce as authorized by law. The Commission shall be located administratively in the Department of Commerce but shall exercise its statutory powers and duties independently of the Department of Commerce. Funds appropriated for the Commission by the General Assembly shall be disbursed directly to the Commission at the beginning of each fiscal year.

(b) The Commission shall consist of 18 appointed members and ~~two~~ one ex officio ~~members,~~ member, as ~~follows:~~ provided below. Each appointed member shall be an experienced business person who resides for most of the year in one or more of the counties that are members of the Commission.

(1) Six members shall be appointed by the Governor, including one developer of northeastern North Carolina, one banker, one county commissioner from Camden, Currituck, Pasquotank, or Perquimans Counties, or from the county or counties assigned to the Commission by the Department of Commerce as authorized by law, and one county commissioner from Beaufort, Bertie, Chowan, or Martin Counties, or from the county or counties assigned to the Commission by the Department of Commerce as authorized by law. Governor.

(2) Six members shall be 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 developer of northeastern North Carolina, one banker, and one county commissioner from Dare, Hyde, Tyrrell, or Washington Counties.~~ 120-121.

(3) Six members shall be 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 developer of northeastern North Carolina, one banker, and one county commissioner from Halifax, Hertford, Gates, or Northampton Counties.~~ 120-121.

(4) The Secretary of Commerce, or a designee.

~~(5)~~ ~~The Secretary of Cultural Resources, or a designee.~~

Any person appointed to the Commission ~~in a categorical appointment as~~ who is also a county commissioner may hold ~~such~~ that office in addition to the offices permitted by G.S. 128-1.1. The appointing authorities are encouraged to discuss and coordinate their appointments in an effort to ensure as many counties served by the Commission are represented among the membership of the Commission.

(c) The appointing authority shall designate two of the initial appointees pursuant to subdivision (b)(1), one of the initial appointees pursuant to subdivision (b)(2), two of the initial appointees pursuant to subdivision (b)(3), and two of the initial appointees pursuant to subdivision (b)(4) to serve for terms ending June 30, 1995; the remainder of the initial appointees shall serve for terms ending June 30, 1997. Their successors shall serve for four-year terms ending on June 30 quadrennially thereafter. All members shall serve staggered two-year terms ending on June 30 biennially.

(d) Any appointment to fill a vacancy on the Commission shall be for the balance of the unexpired term. Vacancies in appointments made by the General Assembly shall be in accordance with G.S. 120-122.

(d1) The initial meeting shall be called by the Secretary of the Department of Commerce. The Commission shall meet no less than quarterly.

(e) The Commission shall appoint an economic development advisory board made up of no more than seven members to advise and assist the Commission in adopting and implementing an economic development program. The Commission shall also appoint a tourism advisory board made up of no more than seven members to advise and assist the Commission in adopting and implementing a tourism development program. Members of the Commission may serve on these advisory boards. elect annually from among its membership a four-member executive committee consisting of a chair, a vice-chair, a secretary, and a treasurer. Members shall serve one-year terms on the executive committee. The executive committee shall meet no less than quarterly.

(f) In addition to the powers and duties granted to economic development commissions in this Article, the Northeastern North Carolina Regional Economic Development Commission shall:

(1) Adopt and implement an economic development program, with the assistance of the economic development advisory board, as follows:

a. Survey northeastern North Carolina and determine the assets, liabilities, and resources that the region contributes to the economic development process;

b. Enhance economic development activities that use the area's natural resources;

c. Develop and evaluate alternatives for northeastern North Carolina economic development;

d. Develop a preferred economic development plan for the region and establish strategies for implementing the plan;

e. Conduct feasibility studies to determine the nature and placement of economic developments for maximum economic impact;

f. Identify potential sites for economic development; and

g. Carry out other activities to develop and promote economic ~~development;~~ development.

~~(2)~~ ~~Adopt and implement a tourism development program, with the advice and assistance of the tourism advisory board, as follows:~~

a. ~~Adopt, implement, and update a water-based tourism development strategy;~~

b. ~~Provide assistance to developers with requirements for tourism development, as deemed necessary by the Commission;~~

c. ~~Conduct feasibility studies to determine the nature and placement of tourism developments for maximum economic impact;~~

d. ~~Identify sites for tourism development; and~~

e. ~~Carry out other activities to develop and promote water-based tourism;~~

(3) Coordinate activities with and enter into contracts with any nonprofit corporation created to assist the Commission in carrying out its powers and duties.

(g) Within the limits of funds available, the Commission may hire and fix the compensation of any personnel necessary to its operations, contract with consultants for any services as it may require, and contract with the State of North Carolina or the federal government, or any agency or department thereof, for any services as may be provided by those agencies. The Commission shall hire an employee to serve as president and chief executive officer. The Commission may carry out the provisions of any contracts it may enter.

Within the limits of funds available, the Commission may lease, rent, purchase, or otherwise obtain suitable quarters and office space for its staff, and may lease, rent, or purchase necessary furniture, fixtures, and other equipment.

(h) Members of the Commission who are State employees shall receive travel expenses as provided in G.S. 138-6. Other Commission members shall receive per diem of one hundred dollars ($100.00) a day for each day of service when the Commission meets and shall be reimbursed for travel and subsistence as provided in G.S. 138-5. The Commission may adopt policies authorizing additional per diem of one hundred dollars ($100.00) a day for non-State employee members' additional days of service including Commission subcommittee meetings or other Commission activities, plus reimbursement for related travel and subsistence as provided in G.S. 138-5. Members of the advisory boards who are State employees shall receive travel expenses as provided in G.S. 138-6 for participating in meetings and other official activities authorized by the Commission. Other members of the advisory boards shall receive per diem and travel expenses as provided in G.S. 138-5 for participating in meetings and other official activities authorized by the Commission."

Section 16.6.(b) The Northeastern North Carolina Regional Economic Development Commission shall make the transition from the former membership to the new membership provided in this section as follows:

(1) The present executive committee shall serve until a new executive committee is elected.

(2) The Governor and the General Assembly shall make the appointments provided in G.S. 158-8.2(b)(1) through (3) for terms beginning July 1, 1999. Each appointing authority shall designate one-half of the appointees to serve initial terms of three years and shall designate the remaining appointees to serve two-year terms. Their successors shall serve two-year terms.

(3) On the date the members of the Commission appointed pursuant to this section take office, the terms of all current members of the Commission appointed before the effective date of this act expire.

Requested by: Representatives Hackney, Fox, Owens, Easterling, Hardaway, Redwine, Insko, Senators Martin of Pitt, Lee, Perdue, Plyler, Odom

CREATE A COMMISSION TO ADDRESS SMART GROWTH, GROWTH MANAGEMENT, AND DEVELOPMENT ISSUES

Section 16.7.(a) Of the funds appropriated in this act to the Department of Commerce, the sum of two hundred thousand dollars ($200,000) shall be transferred to the General Assembly to be used for the operating expenses of the Commission to Address Smart Growth, Growth Management, and Development Issues, as established in this section.

Section 16.7.(b) Commission Established. - There is established a Commission to Address Smart Growth, Growth Management, and Development Issues.

Section 16.7.(c) Membership. - The Commission shall consist of 37 members who shall represent, insofar as practicable, the diverse interests and geographic regions of the State. It shall include representatives from government, business, environmental interests, the professions, and citizens. The following members or their designees shall serve as ex officio members:

(1) The Lieutenant Governor;

(2) The Secretary of the Department of Transportation;

(3) The Secretary of the Department of Commerce; and

(4) The Secretary of the Department of Environment and Natural Resources.

The remaining members shall be appointed as follows:

(1) Four representatives from the North Carolina League of Municipalities who have knowledge about issues of urban growth management and development, two of whom shall be appointed by the President Pro Tempore of the Senate and two of whom shall be appointed by the Speaker of the House of Representatives;

(2) Four representatives from the North Carolina Association of County Commissioners, two of whom shall be appointed by the President Pro Tempore of the Senate and two of whom shall be appointed by the Speaker of the House of Representatives;

(3) Three representatives from environmental advocacy groups appointed by the Governor, one of whom has expertise in statewide issues of water quality, air quality, and urban development and two of whom have expertise in regional environmental issues;

(4) One representative from the North Carolina Chapter of the American Planning Association, appointed by the Governor;

(5) One representative from the North Carolina Home Builders Association, appointed by the Governor;

(6) One representative from the Mortgage Bankers Association, appointed by the Speaker of the House of Representatives;

(7) One representative who is a residential or commercial developer, appointed by the President Pro Tempore of the Senate;

(8) One representative from North Carolina Citizens for Business and Industry, appointed by the Governor;

(9) One representative from the North Carolina Farm Bureau Federation, Inc., appointed by the Governor;

(10) One representative from the American Lung Association who is a resident of this State, appointed by the President Pro Tempore of the Senate;

(11) A physician from a medical school in this State knowledgeable in the diagnosis and treatment of respiratory illness, appointed by the Speaker of the House of Representatives;

(12) One representative from the North Carolina Chapter of the American Institute of Architects with expertise in traditional neighborhood development, appointed by the Governor;

(13) One representative from the North Carolina Chapter of the American Society of Landscape Architects, appointed by the Governor;

(14) One representative from the North Carolina Association of Realtors, appointed by the Governor;

(15) Three representatives from lead regional organizations who have experience with regional planning, one of whom is appointed by the President Pro Tempore of the Senate, one of whom is appointed by the Speaker of the House of Representatives, and one of whom is appointed by the Governor;

(16) One representative from the North Carolina Travel and Tourism Board who has expertise in rural, nature-based tourism, appointed by the Speaker of the House of Representatives;

(17) One representative from the Rural Economic Development Center, appointed by the President Pro Tempore of the Senate;

(18) One public member, appointed by the President Pro Tempore of the Senate;

(19) One public member, appointed by the Speaker of the House of Representatives; and

(20) Four members of the Senate appointed by the President Pro Tempore of the Senate and four members of the House of Representatives appointed by the Speaker of the House of Representatives.

Appointments to the Commission shall be made not later than September 1, 1999. A vacancy in the Commission or as chair of the Commission resulting from the resignation of a member or otherwise shall be filled in the same manner in which the original appointment was made.

Section 16.7.(d) Duties of Commission. - The Commission shall study growth, growth management, and development issues and recommend initiatives to promote comprehensive and coordinated local, regional, and State planning, and growth management to:

(1) Preserve natural and cultural resources;

(2) Promote smarter infrastructure and transportation planning;

(3) Foster more balanced economic development in rural and urban areas;

(4) Foster compatible land-use patterns;

(5) Preserve and improve air quality in this State;

(6) Protect housing affordability and assure consumer choice; and

(7) Enhance the quality of life for the citizens of North Carolina.

Section 16.7.(e) Further Study Issues. - The Commission may address all issues deemed necessary to implement coordinated planning and growth but shall study and evaluate in particular:

(1) The legislation proposed by House Bill 1468, 1999 Regular Session, and legislation in other states regarding smart growth and growth management, including Maryland's Smart Growth and Neighborhood Conservation Act of 1997, Tennessee's Public Law 1101 of 1998, and further including similar legislation enacted in New Jersey and Washington.

(2) The present and projected effects of population growth and urban development on the capacity of the State's infrastructure, environment, and economy, particularly those resulting from land use and transportation in the high growth and urbanized metropolitan regions.

(3) Options and/or guidelines for long-term, strategic planning for the efficient growth of urban, rural, retirement, and resort areas of the State, including land-use management and the transfer of development rights.

(4) Incentives to encourage local governments to develop and implement sound land-use management practices.

(5) Planning and growth management goals and processes, including urban growth planning directed toward existing infrastructure and regionally significant infrastructure, and with appropriate attention to regionally significant environmentally sensitive lands.

(6) The relationship and consistency between local and regional land use, infrastructure, preservation of high-quality farmland, and natural resource/open space plans ensured by a cross-acceptance process in which local, State, and regional representatives reach consensus about areas designated for urbanization, provision of regionally significant infrastructure, and protection of regionally significant environmentally sensitive lands.

(7) Funding requirements for implementation of comprehensive planning and alternative means for meeting those requirements, including consideration of appropriate State, regional, and local responsibilities, to include procedures for directing State expenditures within the metropolitan regions for infrastructure to the region's locally designated and regionally conformed urban growth areas and targeting the expenditure of environmental protection funds to designated environmentally sensitive lands and significant rural lands.

(8) Development of recommendations for funding sources for regional infrastructure, land acquisition needs, and assistance to local government for implementing plans.

(9) Incentives to promote the continued use of farmlands for agriculture and the maintenance of the agricultural economy.

Section 16.7.(f) Consultation. - The Commission shall consult with appropriate State departments, agencies, and board representatives on issues related to transportation, economic development, education infrastructure, technology, natural resource conservation and management, affordable housing, and neighborhood awareness issues.

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

Section 16.7.(h) Expenses of Members. - Members of the Commission shall receive per diem, subsistence, and travel allowances in accordance with G.S. 120-3.1, 138-5, or 138-6, as appropriate.

Section 16.7.(i) Chair; Meetings. - The President Pro Tempore of the Senate and the Speaker of the House of Representatives shall each designate one member to serve as cochair of the Commission.

The Lieutenant Governor shall call the initial meeting of the Commission on or before October 1, 1999. The Commission shall subsequently meet upon such notice and in such manner as its members determine. A majority of the members of the Commission shall constitute a quorum.

Section 16.7.(j) Subcommittees. - The Commission may appoint subcommittees of its members and other knowledgeable persons or experts to assist it, including persons with expertise in traditional architectural neighborhood development, in rural, nature-based tourism, and in regional planning. It may also appoint a Technical Advisory Board, if deemed desirable by its members to have an ongoing body of technical experts.

Section 16.7.(k) Citizen Participation. - The Commission shall establish a process of citizen participation that assures the citizens of North Carolina of the opportunity to be informed of and contribute to the work of the Commission. It shall hold meetings throughout the State.

Section 16.7.(l) Cooperation by Government Agencies. - The Commission may call upon any department, agency, institution, or officer of the State or any political subdivision thereof for facilities, data, or other assistance.

Section 16.7.(m) Funding. - The Commission may apply for, receive, and accept grants of non-State funds, or other contributions as appropriate to assist in the performance of its duties.

Requested by: Representatives Fox, Owens, Easterling, Hardaway, Redwine, Senators Martin of Pitt, Perdue, Plyler, Odom

MARKETING OF GLOBAL TRANSPARK

Section 16.8.(a) Section 15.2 of S.L. 1998-212 is repealed.

Section 16.8.(b) Of the funds appropriated in this act to the Department of Commerce, the sum of one hundred seventy-two thousand thirty-six dollars ($172,036) for the 1999-2000 fiscal year and the sum of one hundred seventy-two thousand thirty-six dollars ($172,036) for the 2000-2001 fiscal year shall be transferred to the Global TransPark Authority to market the Global TransPark.

Requested by: Representatives Fox, Owens, Easterling, Hardaway, Redwine, Senators Martin of Pitt, Plyler, Perdue, Odom

PETROLEUM OVERCHARGE ATTORNEYS' FEES

Section 16.9.(a) Unless prohibited by federal law, rule, or regulation, or preexisting settlement agreement, no later than October 1, 1989, the North Carolina Attorney General shall direct the withdrawal of all funds received in the cases of United States v. Exxon and Stripper Well that are held in accounts or reserves located out-of-state for payment of attorneys' fees and reasonable expenses incurred in connection with oil overcharge litigation authorized by the Attorney General. The Attorney General shall deposit these funds, and all funds to be received from Petroleum Overcharge Funds in the future for attorneys' fees and reasonable expenses, into the Special Reserve for Oil Overcharge Funds.

Section 16.9.(b) All attorneys' fees and reasonable expenses incurred in connection with oil overcharge litigation shall be paid by the State Treasurer from Petroleum Overcharge Funds that have been received by this State and deposited into the Special Reserve for Oil Overcharge Funds.

Section 16.9.(c) Notwithstanding any other provision of law, the Attorney General may authorize the payment of attorneys' fees and reasonable expenses from the Special Reserve for Oil Overcharge Funds without further action of the General Assembly, and funds are hereby appropriated from the Special Reserve for Oil Overcharge Funds for the 1999-2000 fiscal year and for the 2000-2001 fiscal year for that purpose.

Requested by: Representatives Fox, Owens, Easterling, Hardaway, Redwine, Senators Martin of Pitt, Plyler, Perdue, Odom

AUTHORIZATION TO REALLOCATE PREVIOUSLY APPROPRIATED PETROLEUM OVERCHARGE FUNDS

Section 16.9A. Funds previously appropriated to the Department of Commerce from the case of United States v. Exxon and from the United States Department of Energy's Stripper Well Litigation for projects under the State Energy Conservation Plan, the Energy Extension Service Program, or the Institutional Conservation Program may be reallocated by the Department of Commerce to be used for projects under the State Energy Efficiency Programs.

Requested by: Representatives Fox, Owens, Easterling, Hardaway, Redwine, Senators Martin of Pitt, Plyler, Perdue, Odom

PETROLEUM OVERCHARGE FUNDS ALLOCATION

Section 16.10.(a) Any funds remaining in the Special Reserve for Oil Overcharge Funds on and after June 30, 1999, may be expended only as authorized by the General Assembly. All interest or income accruing from all deposits or investments of cash balances shall be credited to the Special Reserve Oil Overcharge Funds.

Section 16.10.(b) The Department of Commerce shall do the following:

(1) By January 15, 2000, and more frequently as requested, report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division the following information:

a. A description of program activities, objectives, and accomplishments supported with petroleum overcharge funds for the State fiscal year 1998-99;

b. An itemized list of the actual expenditures from each of the petroleum overcharge accounts for each of the activities supported with petroleum overcharge funds for the State fiscal year 1998-99, including any expenditures for administrative costs;

c. A list of the cash balances remaining in each of the petroleum overcharge accounts at the end of the State fiscal year 1998-99, including the amount of funds which are obligated; and

d. A description of planned activities, objectives, and accomplishments, including the amount of petroleum overcharge funds budgeted for each activity for State fiscal year 1999-2000.

(2) By January 15, 2001, and more frequently if requested, report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division the following information:

a. A description of program activities, objectives, and accomplishments supported with petroleum overcharge funds for the State fiscal year 1999-2000;

b. An itemized list of the actual expenditures from each of the petroleum overcharge accounts for each of the activities supported with petroleum overcharge funds for the State fiscal year 1999-2000, including any expenditures for administrative costs;

c. A list of the cash balances remaining in each of the petroleum overcharge accounts at the end of the State fiscal year 1999-2000, including the amount of funds which are obligated; and

d. A description of planned activities, objectives, and accomplishments, including the amount of petroleum overcharge funds budgeted for each activity for State fiscal year 2000-2001.

Requested by: Representatives Fox, Owens, Easterling, Hardaway, Redwine, Senators Martin of Pitt, Plyler, Perdue, Odom

NER INTERIM STUDY OF ENERGY DIVISION OF DEPARTMENT OF COMMERCE

Section 16.11. During the interim between the Session of the 1999 General Assembly and the 2000 Regular Session of the 1999 General Assembly, the House of Representatives Appropriations Subcommittee on Natural and Economic Resources and the Senate Appropriations Committee on Natural and Economic Resources shall study the current organization and responsibilities of the Division of Energy of the Department of Commerce to determine its effectiveness and efficiency in managing the State's energy programs and administering Petroleum Overcharge funds, and shall report any recommendations, including legislative proposals, to the 2000 Regular Session of the 1999 General Assembly no later than May 1, 2000. In conducting the study the committees may obtain assistance from any resources outside the General Assembly that the committees determine are needed to adequately perform the study.

Requested by: Representatives Fox, Owens, Easterling, Hardaway, Redwine, Senators Martin of Pitt, Plyler, Perdue, Odom

SPECIAL EMPLOYMENT SECURITY ADMINISTRATION FUND

Section 16.12.(a) Notwithstanding G.S. 96-5(c), there is appropriated from the Special Employment Security Administration Fund to the Employment Security Commission of North Carolina, the sum of two million dollars ($2,000,000) for the 1999-2000 fiscal year and the sum of two million dollars ($2,000,000) for the 2000-2001 fiscal year for administration of the Employment Services and Unemployment Insurance Programs.

Section 16.12.(b) Supplemental federal funds or other additional funds received by the Employment Security Commission for similar purposes shall be expended prior to the expenditure of funds appropriated by this section.

Requested by: Representatives Fox, Owens, Easterling, Hardaway, Redwine, Senators Martin of Pitt, Plyler, Perdue, Odom

AUTHORIZATION TO EXPEND REED ACT FUNDS

Section 16.13. Of the funds credited to and held in this State's account in the Unemployment Trust Fund by the Secretary of the Treasury of the United States pursuant to and in accordance with section 903 of the Social Security Act, the Employment Security Commission of North Carolina may expend the sum of five hundred twenty-five thousand one hundred twenty-three dollars ($525,123) for the 1999-2000 fiscal year for automation purposes.

Requested by: Representatives Fox, Owens, Easterling, Hardaway, Redwine, Senators Martin of Pitt, Plyler, Perdue, Odom

WORKER TRAINING TRUST FUND APPROPRIATIONS

Section 16.14.(a) There is appropriated from the Worker Training Trust Fund to the Employment Security Commission of North Carolina the sum of six million two hundred ninety-six thousand seven hundred forty dollars ($6,296,740) for the 1999-2000 fiscal year for the operation of local offices and the sum of six million two hundred ninety-six thousand seven hundred forty dollars ($6,296,740) for the 2000-2001 fiscal year for the operation of local offices.

Section 16.14.(b) Notwithstanding the provisions of G.S. 96-5(f), there is appropriated from the Worker Training Trust Fund to the following agencies the following sums for the 1999-2000 and the 2000-2001 fiscal years for the following purposes:

(1) $2,400,000 for the 1999-2000 fiscal year and $2,400,000 for the 2000-2001 fiscal year to the Department of Commerce, Division of Employment and Training, for the Employment and Training Grant Program;

(2) $1,000,000 for the 1999-2000 fiscal year and $1,000,000 for the 2000-2001 fiscal year to the Department of Labor for customized training of the unemployed and the working poor for specific jobs needed by employers through the Department's Bureau for Training Initiatives;

(3) $2,046,000 for the 1999-2000 fiscal year and $1,746,000 for the 2000-2001 fiscal year to the Department of Community Colleges to continue the Focused Industrial Training Program;

(4) $225,000 for the 1999-2000 fiscal year and $225,000 for the 2000-2001 fiscal year to the Employment Security Commission for the State Occupational Information Coordinating Committee to develop and operate an interagency system to track former participants in State education and training programs;

(5) $400,000 for the 1999-2000 fiscal year and $400,000 for the 2000-2001 fiscal year to the Department of Community Colleges for a training program in entrepreneurial skills to be operated by North Carolina REAL Enterprises;

(6) $60,000 for the 1999-2000 fiscal year and $60,000 for the 2000-2001 fiscal year to the Office of State Budget and Management to maintain compliance with Chapter 96 of the General Statutes, which directs the Office of State Budget and Management to employ the Common Follow-Up Management Information System to evaluate the effectiveness of the State's job training, education, and placement programs; and

(7) $1,000,000 for the 1999-2000 fiscal year and $1,000,000 for the 2000-2001 fiscal year to the Department of Labor to expand the Apprenticeship Program. It is intended that the appropriation of funds in this subdivision will result in the Department of Labor serving a benchmark performance level of 10,000 adult and youth apprentices by the year 2000 and maintained or improved thereafter.

Requested by: Representatives Fox, Owens, Easterling, Hardaway, Redwine, Senators Martin of Pitt, Plyler, Perdue, Odom

WORKFORCE DEVELOPMENT COMMISSION

Section 16.15.(a) Part 3A of Article 10 of Chapter 143B of the General Statutes is repealed.

Section 16.15.(b) Article 10 of Chapter 143B of the General Statutes is amended by adding a new Part to read:

"Part 3B. Workforce Development.

"§ 143B-438.10. Commission on Workforce Development.

(a) Creation and Duties. - There is created within the Department of Commerce the North Carolina Commission on Workforce Development. The Commission shall have the following powers and duties:

(1) To develop strategies to produce a skilled, competitive workforce that meets the needs of the State's changing economy.

(2) To advise the Governor, the General Assembly, State and local agencies, and the business sector regarding policies and programs to enhance the State's workforce.

(3) To coordinate and develop strategies for cooperation between the academic, governmental, and business sectors.

(4) To establish, develop, and provide ongoing oversight of the 'One-Stop Delivery System' for employment and training services in the State.

(5) To develop a unified State plan for workforce training and development.

(6) To review the plans and programs of agencies, boards, and organizations operating federally funded or State-funded workforce development programs for effectiveness, duplication, fiscal accountability, and coordination.

(7) To develop and continuously improve performance measures to assess the effectiveness of workforce training and employment in the State.

(8) To submit to the Governor and to the General Assembly by April 1, 2000, and biennially thereafter, a comprehensive Workforce Development Plan that shall include at least the following:

a. Goals and objectives for the biennium.

b. An assessment of current workforce programs and policies.

c. An assessment of the delivery of employment and training services to special populations, such as youth and dislocated workers.

d. Recommendations for policy, program, or funding changes.

(9) To serve as the State's Workforce Investment Board for purposes of the federal Workforce Investment Act of 1998.

(b) Membership; Terms. - The Commission on Workforce Development shall consist of 38 members appointed as follows:

(1) By virtue of their offices, the following department and agency heads or their respective designees shall serve on the Commission: the Secretary of the Department of Health and Human Services, the Chair of the Employment Security Commission, the Superintendent of Public Instruction, the President of the Community Colleges System Office, the Commissioner of the Department of Labor, and the Secretary of the Department of Commerce.

(2) The Governor shall appoint 32 members as follows:

a. Six members representing public, postsecondary, and vocational education.

b. Two members representing community-based organizations.

c. Six members representing labor.

d. Eighteen members representing business and industry.

(3) The terms of the members appointed by the Governor shall be for four years.

(c) Appointment of Chair; Meetings. - The Governor shall appoint the Chair of the Commission from among the business and industry members, and that person shall serve at the pleasure of the Governor. The Commission shall meet at least quarterly upon the call of the Chair.

(d) Staff; Funding. - The clerical and professional staff to the Commission shall be provided by the Department of Commerce. Funding for the Commission shall derive from State and federal resources as allowable and from the partner agencies to the Commission. Members of the Commission shall receive necessary travel and subsistence in accordance with State law.

"§ 143B-438.11. Local Workforce Development Boards.

(a) Duties. - Local Workforce Development Boards shall have the following powers and duties:

(1) To develop policy and act as the governing body for local workforce development.

(2) To provide planning, oversight, and evaluation of local workforce development programs, including the local One-Stop Delivery System.

(3) To provide advice regarding workforce policy and programs to local elected officials, employers, education and employment training agencies, and citizens.

(4) To develop a local plan in coordination with the appropriate community partners to address the workforce development needs of the service area.

(5) To develop linkages with economic development efforts and activities in the service area and promote cooperation and coordination among public organizations, education agencies, and private businesses.

(6) To review local agency plans and grant applications for workforce development programs for coordination and achievement of local goals and needs.

(7) To serve as the Workforce Investment Board for the designated substate area for the purpose of the federal Workforce Investment Act of 1998.

(b) Members. - Members of local Workforce Development Boards shall be appointed by local elected officials in accordance with criteria established by the Governor and with provisions of the federal Workforce Investment Act. The local Workforce Development Boards shall have a majority of business members and shall also include representation of workforce and education providers, labor organizations, community-based organizations, and economic development boards as determined by local elected officials. The Chairs of the local Workforce Development Boards shall be selected from among the business members.

"§ 143B-438.12. Federal Program Administration.

(a) Federal Workforce Investment Act. - In accordance with the federal Workforce Investment Act, the Commission on Workforce Development shall develop a Five-Year Strategic Plan to be submitted to the U.S. Secretary of Labor. The Strategic Plan shall describe the workforce development activities to be undertaken in the State to implement the federal Workforce Investment Act and how special populations shall be served.

(b) Other Workforce Grant Applications. - The Commission on Workforce Development may submit grant applications for workforce development initiatives and may manage the initiatives and demonstration projects.

"§ 143B-438.13. Employment and Training Grant Program.

(a) Employment and Training Grant Program. - There is established in the Department of Commerce, Division of Employment and Training, an Employment and Training Grant Program. Grant funds shall be allocated to local Workforce Development Boards for the purposes 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 State program of workforce performance standards shall be used to measure grant program outcomes.

(b) Use of Grant Funds. - Local agencies may use funds received under this section for the purpose of providing services, such as training, education, placement, and supportive services. Local agencies may use grant funds to provide services only to individuals who are (i) 18 years of age or older and meet the federal Workforce Investment Act, title I adult eligibility definitions, or meet the federal Workforce Investment Act, title I dislocated worker eligibility definitions, or (ii) incumbent workers with annual family incomes at or below two hundred percent (200%) of poverty guidelines established by the federal Department of Health and Human Services.

(c) Allocation of Grants. - The Department of Commerce may reserve and allocate up to ten percent (10%) of the 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 grant funds to local Workforce Development Boards serving federal Workforce Investment Act local workforce investment areas based on the following formula:

(1) One-half of the funds shall be allocated on the basis of the relative share of the local workforce investment area's share of federal Workforce Investment Act, title I adult funds as compared to the total of all local areas adult shares under the federal Workforce Investment Act, title I.

(2) One-half of the funds shall be allocated on the basis of the relative share of the local workforce investment area's share of federal Workforce Investment Act, title I dislocated worker funds as compared to the total of all local areas dislocated worker shares under the federal Workforce Investment Act, title I.

(3) Local workforce investment area adult and dislocated shares shall be calculated using the current year's allocations to local areas under the federal Workforce Investment Act, title I.

(d) Reports and Coordination. - The Department of Commerce 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 North Carolina Commission on Workforce Development.

(e) Nonreverting Funds. - 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 to the General Fund, but shall remain available to the Department for the purposes established in this section."

Section 16.15.(c) The Commission on Workforce Preparedness appointed in accordance with Executive Order #4 of March 10, 1993, shall continue to serve as the State's Commission on Workforce Development until January 1, 2001, or until appointments to the North Carolina Commission on Workforce Development created by this section are made consistent with the provisions of G.S. 143B-438.10, whichever comes first.

Requested by: Representatives Fox, Owens, Easterling, Hardaway, Redwine, Senators Martin of Pitt, Perdue, Plyler, Odom

TOURISM PROMOTION FUNDS

Section 16.16. Funds appropriated in this act to the Department of Commerce for tourism promotion grants shall be allocated according to per capita income, unemployment, and population growth in an effort to direct funds to counties most in need in terms of lowest per capita income, highest unemployment, and slowest population growth, in the following manner:

(1) Counties 1 through 20 are each eligible to receive a maximum grant of seven thousand five hundred dollars ($7,500) for each fiscal year, provided these funds are matched on the basis of one non-State dollar ($1.00) for every four State dollars ($4.00).

(2) Counties 21 through 50 are each eligible to receive a maximum grant of three thousand five hundred dollars ($3,500) for two of the next three fiscal years, provided these funds are matched on the basis of one non-State dollar ($1.00) for every three State dollars ($3.00).

(3) Counties 51 through 100 are each eligible to receive a maximum grant of three thousand five hundred dollars ($3,500) for alternating fiscal years, beginning with the 1991-92 fiscal year, provided these funds are matched on the basis of four non-State dollars ($4.00) for every State dollar ($1.00).

Requested by: Representatives Fox, Owens, Easterling, Hardaway, Redwine, Senators Martin of Pitt, Perdue, Plyler, Odom

RURAL TOURISM DEVELOPMENT FUNDS

Section 16.17. Of the funds appropriated in this act to the Department of Commerce for the 1999-2000 fiscal year, the sum of three hundred thousand dollars ($300,000) shall be used for the Rural Tourism Development Grant Program. The Department shall establish and implement this Program to provide grants to local governments and nonprofit organizations to encourage the development of new tourism projects and activities in rural areas of the State. The Department shall develop procedures for the administration and distribution of funds allocated to the Rural Tourism Development Program under the following guidelines:

(1) Eligible organizations shall make application under procedures established by the Department;

(2) Eligible organizations shall be nonprofit tourism-related organizations located in the State's rural regions;

(3) Priority shall be given to eligible organizations that have significant involvement of travel and tourism-related businesses;

(4) Priority shall be given to eligible organizations serving economically distressed rural counties;

(5) Priority shall be given to eligible organizations that match funds; and

(6) Funds shall not be used for renting or purchasing land or buildings, or for financing debt.

No recipient or new tourism project shall receive a total of more than fifty thousand dollars ($50,000) of these grant funds for the 1999-2000 fiscal year.

Requested by: Representatives Fox, Owens, Easterling, Hardaway, Redwine, Senators Plyler, Perdue, Odom

CREDIT ENHANCEMENT FOR TOURISM DEVELOPMENT PROJECTS

Section 16.18.(a) The Department of State Treasurer and the Department of Commerce shall jointly develop legislative proposals for credit enhancement for tourism development projects in rural counties of the State. The credit enhancement may be in the form of State revenue bonds, other State debt, State loan guarantees, or other mechanisms. The proposals shall be designed to provide incentives for tourism development that would be similar or comparable to existing tax-exempt, industrial revenue bonds available for manufacturing projects. In developing the proposals, the two Departments shall examine credit enhancement mechanisms employed in other states.

Section 16.18.(b) The two Departments shall jointly report their findings and recommendations to the Joint Legislative Commission on Governmental Operations by May 1, 2000. Each legislative proposal shall be accompanied by draft legislation and by a fiscal estimate of its cost to the General Fund.

Requested by: Representatives Fox, Owens, Easterling, Hardaway, Redwine, Senators Martin of Pitt, Plyler, Perdue, Odom

HERITAGE TOURISM FUNDS

Section 16.19.(a) Of the funds remaining in the General Fund operating budget of the Department of Commerce as of June 30, 1999, the sum of one hundred thirty-nine thousand two hundred thirty-three dollars ($139,233) shall not revert and shall be reallocated by the Department to the following Heritage Tourism locations:

(1) Newbold-White House $40,138.

(2) Hope Plantation 30,249.

(3) Historic Murfreesboro 29,624.

(4) Smoky Mountain Host 39,222.

Section 16.19.(b) This section becomes effective June 30, 1999.

Requested by: Representatives Fox, Owens, Easterling, Hardaway, Redwine, Senators Martin of Pitt, Plyler, Perdue, Odom

CENTER FOR ENTREPRENEURSHIP AND TECHNOLOGY REPORT

Section 16.20. The Center for Entrepreneurship and Technology, a Division of the Department of Commerce, shall do the following:

(1) By January 15, 2000, and more frequently as requested, report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division the following information:

a. State fiscal year 1998-99 program activities, objectives, and accomplishments;

b. State fiscal year 1998-99 itemized expenditures and fund sources;

c. State fiscal year 1999-2000 planned activities, objectives, and accomplishments including actual results through December 31, 1999; and

d. State fiscal year 1999-2000 estimated itemized expenditures and fund sources including actual expenditures and fund sources through December 31, 1999; and

(2) By January 15, 2001, and more frequently as requested, report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division the following information:

a. State fiscal year 1999-2000 program activities, objectives, and accomplishments;

b. State fiscal year 1999-2000 itemized expenditures and fund sources;

c. State fiscal year 2000-2001 planned activities, objectives, and accomplishments including actual results through December 31, 2000; and

d. State fiscal year 2000-2001 estimated itemized expenditures and fund sources including actual expenditures and fund sources through December 31, 2000.

Requested by: Representatives Fox, Owens, Easterling, Hardaway, Redwine, Senators Martin of Pitt, Plyler, Perdue, Odom

NC REAL ENTERPRISES REPORTING

Section 16.21. NC REAL Enterprises shall do the following:

(1) By January 15, 2000, and more frequently as requested, report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division the following information:

a. State fiscal year 1998-99 program activities, objectives, and accomplishments;

b. State fiscal year 1998-99 itemized expenditures and fund sources;

c. State fiscal year 1999-2000 planned activities, objectives, and accomplishments including actual results through December 31, 1999; and

d. State fiscal year 1999-2000 estimated itemized expenditures and fund sources including actual expenditures and fund sources through December 31, 1999;

(2) By January 15, 2001, and more frequently as requested, report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division the following information:

a. State fiscal year 1999-2000 program activities, objectives, and accomplishments;

b. State fiscal year 1999-2000 itemized expenditures and fund sources;

c. State fiscal year 2000-2001 planned activities, objectives, and accomplishments, including actual results through December 31, 2000; and

d. State fiscal year 2000-2001 estimated itemized expenditures and fund sources, including actual expenditures and fund sources through December 31, 2000; and

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

Requested by: Representatives Fox, Owens, Easterling, Hardaway, Redwine, Senators Martin of Pitt, Plyler, Perdue, Odom

BIOTECHNOLOGY CENTER

Section 16.22.(a) The North Carolina Biotechnology Center shall recapture funds spent in support of successful research and development efforts in the for-profit private sector.

Section 16.22.(b) The North Carolina Biotechnology Center shall provide funding for biotechnology, biomedical, and related bioscience applications under its Business and Science Technology Programs.

Section 16.22.(c) The North Carolina Biotechnology Center shall: