GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1999

S	1 

SENATE BILL 268

Short Title:  Current Operations Appropriations Act/AB.    	(Public)

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Sponsors: Senators Plyler, Perdue, Odom; and Purcell.

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Referred to:  Appropriations/Base Budget.

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March 8, 1999

A BILL TO BE ENTITLED
AN ACT TO MAKE BASE BUDGET APPROPRIATIONS FOR CURRENT OPERATIONS OF STATE DEPARTMENTS, INSTITUTIONS, AND AGENCIES, AND FOR OTHER PURPOSES.
The General Assembly of North Carolina enacts:

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 2.  This act shall be known as the "Current Operations Appropriations Act of 1999".

PART I.  CURRENT OPERATIONS/GENERAL FUND

Section 3.  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:
Current Operations - General Fund	1999-2000	2000-2001

General Assembly	$   35,695,575	$  39,518,408

Judicial Department	337,613,191	340,135,574

Office of the Governor
01.	Office of the Governor	5,317,042	5,335,850
02.	Office of State Budget
and Management	4,167,118	4,268,782
03.	Office of State Planning	2,147,099	2,147,099
04.	Housing Finance 	2,300,000	2,300,000

Office of Juvenile Justice	139,362,976	142,954,868

Office of the Lieutenant Governor	640,485	640,485

Department of Secretary of State	6,284,106	6,196,606

Department of State Auditor	11,656,492	11,656,492

Department of State Treasurer
01.  State Treasurer	7,220,452	7,220,452
02.  Special Contribution	12,294,780	12,294,780

Department of Public Instruction	5,110,110,914	5,217,044,499

Department of Justice	72,243,100	71,491,703

Department of Agriculture and
  Consumer Services	53,561,243	53,518,018

Department of Labor	16,377,025	16,377,025

Department of Insurance
01.  Insurance	21,473,947	21,484,721
02.  Direct Appropriation	4,500,000	4,500,000

Department of Administration	60,114,571	60,379,118

Office of State Controller	10,798,673	10,804,420

Department of Transportation	20,273,881	15,434,165

Department of Environment and
Natural Resources	164,382,835	171,587,758

Office of Administrative Hearings	2,687,664	2,721,970

Rules Review Commission	317,343	309,326

Department of Health and Human Services
01.	DHHS - Administration and Support	88,887,130	89,706,803
02.	Division of Aging	29,742,117	29,742,117
03.	Division of Child Development	306,641,553	393,679,493
04.	Division of Services for the
Deaf and Hard of Hearing	30,919,083	31,551,949
05.	Division of Social Services	166,345,920	178,029,175
06.	Division of Medical Assistance	1,387,825,766	1,537,393,785
07.	Division of Services
for the Blind	17,124,688	17,116,851
08.	Division of Mental Health,
Developmental Disabilities, and
Substance Abuse Services	604,096,546	601,854,542
09.	Division of Facility Services	13,023,597	14,154,302
10.	Division of Vocational
Rehabilitation Services	35,603,999	36,818,515
11.	Division of Public Health	130,695,883	132,338,759
12.	North Carolina Health Choice	23,992,346	25,509,475
Total Department of Health
and Human Services	2,834,898,628	3,087,895,766

Department of Correction	901,841,772	895,737,930

Department of Commerce
01.	Commerce	39,966,085	39,986,167
02.	State Aid to Nonstate
Entities	15,796,251	15,796,251

Department of Revenue	79,323,125	76,604,182

Department of Cultural Resources
01.	Cultural Resources	57,117,617	58,012,004
02.	Roanoke Island Commission	1,826,157	1,826,157

Department of Crime Control
and Public Safety	35,321,574	35,497,624

University of North Carolina - Board
of Governors
01.	General Administration	41,898,523	42,286,513
02.	University Institutional
Programs	64,873,289	59,873,289
03.	Related Educational Programs	81,357,156	81,396,395
04.	University of North Carolina
at Chapel Hill
a.  Academic Affairs	178,251,413	178,466,780
b.  Health Affairs	145,644,409	146,571,909
c.  Area Health Education
    Centers	44,204,579	44,226,821
05.	North Carolina State University
at Raleigh
a.  Academic Affairs	237,158,643	236,735,298
b.  Agricultural Research Service	45,901,566	45,652,502
c.  Agricultural Extension Service	36,257,350	36,151,109
06.	University of North Carolina at
Greensboro	79,410,872	79,443,712
07.	University of North Carolina at
Charlotte	83,584,827	83,786,430
08.	University of North Carolina at
Asheville	22,143,243	22,172,413
09.	University of North Carolina at
Wilmington	50,209,852	50,576,067
10.	East Carolina University
a.  Academic Affairs	102,099,822	102,215,063
b.  Division of Health Affairs	44,331,650	44,329,544
11.	North Carolina Agricultural and
Technical State University	53,794,211	53,760,947
12.	Western Carolina University	47,638,513	47,777,332
13.	Appalachian State University	72,554,778	74,434,861
14.	The University of North
Carolina at Pembroke	20,601,057	20,555,785
15.	Winston-Salem State University	24,206,035	24,268,772
16.	Elizabeth City State
University	19,497,350	19,439,900
17.	Fayetteville State University	26,123,151	26,143,151
18.	North Carolina Central
University	39,500,572	39,246,311
19.	North Carolina School of the
Arts	14,709,745	14,783,973
20.	North Carolina School of
Science and Mathematics	10,391,245	10,432,372
21.	UNC Hospitals at Chapel Hill	39,090,862	41,782,610
Total University of North Carolina	1,625,434,713	1,626,519,859

Department of Community Colleges	578,273,819	578,111,639

State Board of Elections	3,159,660	3,159,660

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

Welfare Reform	412,503	412,503

Reserve for Compensation Increase	477,151,547	776,663,043

Reserve for Compensation Bonus	17,358,550	 - 

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

Special Appropriations	3,080,000	3,080,000

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

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

Reserve for State Health Plan	100,000,000	125,000,000

Debt Service 
01.	Debt Service	195,982,430	294,596,050
02.	Federal	1,155,948	1,155,948

GRAND TOTAL CURRENT OPERATIONS
GENERAL FUND	$ 13,061,000,755	$ 13,831,736,766

PART II.  CURRENT OPERATIONS/HIGHWAY FUND

Section 4.  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.	Division of Highways
a.	Administration and Operations	36,776,534	36,795,820
b.	State 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 Improvements	9,100,000	9,100,000
(07)	Motor Carrier Safety	897,172	897,172
c.	State Funds to Match Federal Highway Aid
(01)	Planning Survey and
Highway Planning Research	2,959,649	2,959,649
d.	State Maintenance
(01)	Primary	114,393,724	114,393,724
(02)	Secondary	195,247,571	195,247,571
(03)	Urban	37,475,926	37,475,926
(04)	Contract Resurfacing	114,952,248	114,952,248
e.	Ferry Operations	18,174,622	18,174,622
03.	Division of Motor Vehicles	92,933,577	92,987,232
04.	Governor's Highway Safety Program	338,121	338,121
05.	State Aid to Municipalities	84,777,000	87,710,000
06.	State Aid for Public Transportation	31,046,921	34,846,921
07.	Salary Adjustments for Highway
Fund Employees	200,000	200,000
08.	Reserve to Correct Occupational
Safety and Health Conditions	425,000	425,000
09.	State Aid to Railroads	23,400,000	25,900,000
10.	Stormwater Discharge Permit	500,000	500,000
11.	Minority Contractor Development	150,000	150,000
12.	DMV Pay Equity	3,390,708	3,390,708
13.	State Fire Protection Grant	150,000	150,000
14.	Reserve for Compensation Increases	27,668,715	25,668,715
15.	DMV Vehicle Seizure	29,182	29,182
16.	State Health Plan	5,000,000	7,000,000
17.	Reserve for General Maintenance	22,319,167	24,681,850
18.	Deferred Equipment Purchases	(6,000,000)	 - 
19.	Additional Administration Transfer	(8,000,000)	(8,000,000)
20.	Administrative Cost Reduction	(9,000,000)	 - 

Appropriations for Other State Agencies
01.	Department of Crime Control and
Public Safety	$ 121,285,445	$121,745,269
02.	Department of Agriculture 
and Consumer Services	3,421,496	3,339,686
03.	Department of Revenue	2,765,685	2,765,685
04.	Department of Environment and Natural
Resources-LUST Trust Fund	6,582,819	7,044,629
05.	Department of Health and Human
Services - Chemical Test Program	419,644	419,644
06.	Global TransPark	1,000,000	1,000,000
07.	Department of Public Instruction	25,926,243	26,201,384
08.	State Treasurer	13,600,000	13,800,000
GRAND TOTAL CURRENT OPERATIONS -
HIGHWAY FUND	$1,149,490,000	$1,180,410,000

PART III.  HIGHWAY TRUST FUND

Section 5.  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 IV.  GENERAL FUND AVAILABILITY STATEMENT

BUDGET REFORM STATEMENTS

Section 6.  The General Fund and availability used in developing the 1999-2001 budget is as shown below:

	1999-2000	2000-2001
	(In Millions)	(In Millions)
(1)	Composition of the 1999-2001
beginning availability:
a.	Revenue collections in 1998-99
in excess of authorized estimates	$238.0	$ - 
b.	Unexpended appropriations
during 1998-99	75.3	 - 
   Subtotal	313.3	 - 
c.	Transfer to Savings Reserve	$40.4	$ - 
d.	Transfer to Reserve for Repair and
Renovations	150.0	 - 
e.	Transfer to Clean Water Management
Reserve	30.0	 - 
Ending Fund Balance	$92.9	$ - 

(2)	Beginning Unrestricted Fund Balance	$92.9	$ - 

Revenues Existing Tax Structure	$12,255.6	$12,995.9
Nontax Revenues	523.7	550.5
Transfer from Highway Trust Fund	170.0	170.0
Disproportionate Share Receipts	105.0	105.0
Highway Fund Transfer	13.6	13.8

Total Availability	$13,160.8 13,835.2

PART V.  GENERAL PROVISIONS

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

Section 7.  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.  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 may not be spent in a manner which would cause a deficit in expenditures.
Pursuant to G.S. 143-34.2, State departments, agencies, institutions, boards, or commissions may make application for, receive, or disburse any form of non-State aid.  All non-State monies received shall be deposited with the State Treasurer unless otherwise provided by State law.  These funds shall be expended in accordance with the terms and conditions of the fund award that are not contrary to the laws of North Carolina. 

INSURANCE AND FIDELITY BONDS

Section 8.  All insurance and all official fidelity and surety bonds authorized for the several departments, institutions, and agencies shall be effected and placed by the Insurance Department, and the cost of placement shall be paid by the affected department, institution, or agency with the approval of the Insurance Commissioner.

AUTHORIZED TRANSFERS

Section 9.  The Director of the Budget may transfer to General Fund budget codes from the General Fund Salary Adjustment Reserves appropriations, 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.
Any remaining appropriations for legislative salary increases not required for that purpose may be used to supplement the Salary Adjustment Fund.  These funds shall first be used to provide reclassifications of those positions already approved by the Office of State Personnel.

EXPENDITURES OF FUNDS IN RESERVES LIMITED

Section 10.  All funds appropriated by this act into reserves may be expended only for the purposes for which the reserves were established, except as otherwise provided.  

Section 11.  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.

PART VI.  PUBLIC EDUCATION

CHARTER SCHOOL ADVISORY COMMITTEE

Section 12.  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. 

LITIGATION RESERVE

Section 13.(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 13.(b)	Subsection (a) of this section becomes effective June 30, 1999.
Section 13.(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.

EXCEPTIONAL CHILDREN

Section 14.  To the extent that funds appropriated for exceptional children other than academically gifted children are adequate to do so, the State Board of Education may allocate the excess of these funds to provide services for severely disabled children in school units and in group homes.

ALTERNATIVE SCHOOLS/AT-RISK STUDENTS

Section 15.  The State Board of Education may use up to two hundred thousand dollars ($200,000) of the funds in the Alternative Schools/At-Risk Students allotment each year for the 1999-2000 and for the 2000-2001 fiscal years to:
(1)	Implement G.S. 115C-12(24), and
(2)	Conduct studies of alternative schools and access to alternative schools, as required by Senate Bill 1260 as enacted by the 1998 Regular Session of the 1997 General Assembly.

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

Section 16.  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.

THREE BY THREE INITIATIVE

Section 17.(a)	Funds appropriated for the 1999-2001 fiscal biennium for the Three By Three Initiative, an extension of the ABC's and the NC HELPS (North Carolina Helping Education in Low Performing Schools) efforts, are directed toward ensuring that every student is performing at or above grade level in reading and mathematics by the end of the third grade as measured by the State end-of-grade tests.  Funds in the amount of seven million seven hundred ninety-one thousand eight hundred two dollars ($7,791,802) for each year of the 1999-2001 biennium are for the purpose of providing extended learning opportunities for K-3 underachieving students before and after school, on Saturdays, and other times as arranged by the school and/or LEA.  These funds will be used to pay teachers to provide individualized instruction through such activities as Saturday academics and after-school tutoring, and for additional days of work outside of the 220 paid days in the school calendar.  These days should be cooperatively planned by the principal and the faculty.
Section 17.(b)	The principal of a school receiving funding through the Three By Three Initiative, in consultation with the faculty and the site-based management team, shall incorporate plans for expending funds allocated in this section in the NC HELPS plan to improve the school.  The plan shall be consistent with the plan adopted by the local board of education pursuant to G.S. 115C-105.37.  The plan shall be submitted to the local superintendent and approved by the local board prior to submission to the State Board of Education.  The plan shall be revised annually.
The State Board of Education shall allocate funds in this section on the basis of additional days for State-paid teachers at the school.
Section 17.(c)	The State Board of Education is encouraged to use federal funds such as Goals 2000 to assist K-3 students to reach the goals of this initiative.

ASSISTANT PRINCIPALS

Section 18.  Of the funds appropriated in this act, the salary differential between assistant principals and teachers shall be increased from one percent (1%) to two percent (2%) on the principal/assistant principal salary schedule effective July 1, 1999.

PART VII.  COMMUNITY COLLEGES

FUNDS TO REWARD EXCELLENCE IN COMMUNITY COLLEGE TEACHING

Section 19.  Of funds appropriated in this act, the State Board of Community Colleges shall distribute, in accordance with State Board policies, a salary increase for teaching faculty members to be given to those who have demonstrated excellence in teaching.  These funds shall not be used for any purpose other than for salary increases and necessary employee contributions provided by this section.

COMMUNITY COLLEGE FUNDING FLEXIBILITY

Section 20.  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 submit an Institutional Effectiveness Plan that indicates to the State Board of Community Colleges how the college will use this funding flexibility to meet the demands of the local community and maintain a presence in all previously funded categorical programs.

PART VIII.  COLLEGES AND UNIVERSITIES

AID TO STUDENTS ATTENDING PRIVATE COLLEGES PROCEDURE

Section 21.(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 each 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 21.(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) per 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 the 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 21.(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 21.(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.

AID TO PRIVATE COLLEGES/LEGISLATIVE TUITION GRANT LIMITATIONS

Section 22.(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 22.(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.

WAKE FOREST AND DUKE MEDICAL SCHOOLS ASSISTANCE/FUNDING FORMULA

Section 23.(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 23.(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.

REWARDING TEACHING EXCELLENCE

Section 24.  Funds appropriated in this act for the Rewarding Teaching Excellence Program shall be distributed according to guidelines established by The University of North Carolina Board of Governors.  These funds shall not be used for any purpose other than for salary increases and necessary employer contributions provided by this section.

PART IX.  DEPARTMENT OF ADMINISTRATION

PARKING REVENUE

Section 25.  The Secretary of Administration may use funds from parking revenue that are in excess of parking system expense requirements to fund the fifteen dollar ($15.00) per month subsidies for vanpools and transit passes.

GOVERNOR'S ADVOCACY COUNCIL FOR PERSONS WITH DISABILITIES

Section 26.  The Department of Health and Human Services shall continue to provide the current office space for the four regional offices of the Governor's Advocacy Council for Persons with Disabilities or office space that is comparable to that now used by the Council.

PART X.  DEPARTMENT OF TRANSPORTATION

GLOBAL TRANSPARK AUTHORITY TO REIMBURSE HIGHWAY FUND FROM FEDERAL SOURCES

Section 27.  When funds are provided from the Highway Fund to the Global TransPark Authority for environmental impact statements or assessments and the Global TransPark Authority applies for and receives reimbursement for those expenses from federal sources up to one million eight hundred thousand dollars ($1,800,000), the federal reimbursements shall be paid over by the Global TransPark Authority into the Highway Fund within 30 days of receipt.  These funds shall be allocated to State-funded maintenance appropriations in the manner approved by the Board of Transportation.

AIRCRAFT AND FERRY ACQUISITIONS

Section 28.  Before approving the purchase of an aircraft from the Equipment Fund or a ferry in a Transportation Improvement Program, the Board of Transportation shall prepare an estimate of the operational costs and capital costs associated with the addition of the aircraft or ferry and shall report those additional costs to the General Assembly pursuant to G.S. 136-12(b) and to the Joint Legislative Commission on Governmental Operations.

HIGHWAY FUND ALLOCATIONS BY CONTROLLER

Section 29.  The Controller of the Department of Transportation shall allocate at the beginning of each fiscal year from the various appropriations made to the Department of Transportation in this act, Titles:
State Construction
State Funds to Match Federal Highway Aid
State Maintenance
Ferry Operations,
sufficient funds to eliminate all overdrafts on State maintenance and construction projects, and these allocations may not be diverted to other purposes.

CASH FLOW HIGHWAY FUND AND HIGHWAY TRUST FUND APPROPRIATIONS

Section 30.  The General Assembly authorizes and certifies anticipated revenues of the Highway Fund as follows:
For Fiscal Year 2001-2002	$1,228.9 Million
For Fiscal Year 2002-2003	$1,271.4 Million
For Fiscal Year 2003-2004	$1,308.1 Million
For Fiscal Year 2004-2005	$1,346.0 Million

Section 31.  The General Assembly authorizes and certifies anticipated revenues of the Highway Trust Fund as follows:
For Fiscal Year 2001-2002	$937.6 Million
For Fiscal Year 2002-2003	$972.4 Million
For Fiscal Year 2003-2004	$1,006.7 Million
For Fiscal Year 2004-2005	$1,036.9 Million

HIGHWAY FUND LIMITATIONS ON OVEREXPENDITURES

Section 32.(a)	Overexpenditures from Section 4 of this act may be made by authorization of the Director of the Budget, Titles:
State Construction Primary Construction
State Construction Urban Construction
Spot Safety Construction
State Construction Access and Public Service Roads
State Funds to Match Federal Highway Aid
State Maintenance
Ferry Operations,
provided that there are corresponding underexpenditures from these same Titles.  Overexpenditures or underexpenditures in any Titles may not vary by more than ten percent (10%) without prior consultation with the Advisory Budget Commission.  Written reports covering overexpenditures or underexpenditures of more than ten percent (10%) shall be made to the Joint Legislative Highway Oversight Committee.  The reports shall be delivered to the Director of the Fiscal Research Division not less than 96 hours prior to the beginning of the Commission's full meeting.
Section 32.(b)	Overexpenditures from Section 4 of this act, Titles:
State Construction Primary Construction
State Construction Urban Construction
Spot Safety Construction
State Construction Access and Public Service Roads
State Funds to Match Federal Highway Aid
State Maintenance
Ferry Operations,
for the purpose of providing additional positions shall be approved by the Director of the Budget and shall be reported on a quarterly basis to the Joint Legislative Highway Oversight Committee and to the Fiscal Research Division.

RESURFACED ROADS MAY BE WIDENED

Section 33.  Of the contract maintenance resurfacing program funds appropriated in this act to the Department of Transportation, an amount not to exceed fifteen percent (15%) of the Board of Transportation's allocation of these funds may be used for widening existing narrow pavements that are scheduled for resurfacing.

HIGHWAY FUND ADJUSTMENTS TO REFLECT ACTUAL REVENUE

Section 34.  Any unreserved credit balance in the Highway Fund on June 30 of each of the fiscal years of this biennium shall support appropriations in the succeeding fiscal year.  If all of the balance is not needed for these appropriations, the Director of the Budget may use the remaining excess to establish a reserve for access and public roads, a reserve for unforeseen happening of a state of affairs requiring prompt action as provided by G.S. 136-44.1, and other required reserves.  If all of the remaining excess is not used to establish these reserves, the remainder shall be allocated to the State-funded maintenance appropriations in the manner approved by the Board of Transportation.  The Board of Transportation shall report monthly to the Joint Legislative Highway Oversight Committee and the Fiscal Research Division about the use of the reserve for highway and maintenance.

DEPARTMENT OF TRANSPORTATION EXEMPTION FROM GENERAL STATUTES FOR EXPERIMENTAL PROJECT–CONGESTION MANAGEMENT

Section 35.  The Department of Transportation may enter into a design-build-warrant contract to develop, with Federal Highway Administration participation under The 1991 Intermodal Surface Transportation Efficiency Act, Title VI, Part B, Sections 6051-6059, a "Congestion Avoidance and Reduction for Autos and Trucks (CARAT)"system of traffic management for the greater Charlotte-Mecklenburg urban areas.  Notwithstanding any other provision of law, contractors, contractors' employees, and Department of Transportation employees involved in this project only do not have to be licensed by occupational licensing boards as "license"and "occupational licensing board"are defined in G.S. 93B-1 and for the purpose of entering into contracts, the Department of Transportation is exempted from the provisions of the following General Statutes: G.S. 136-28.1, 143-52, 143-53, 143-58, 143-128, and 143-129.  These statutory exemptions are limited and available only to the extent necessary to comply with federal rules, regulations, and policies for completion of this project.
The Department of Transportation shall report quarterly to the Joint Legislative Highway Oversight Committee on its efforts to enter into a design-build-warrant contract and to award and construct the project.  The report shall include, but not be limited to, the number of types of firms bidding on the project, special qualifications of the firms bidding, and the effect statutory exemptions might have had on the award and construction of the project and the receipt of federal discretionary funding for the project.

ALLOCATION OF FUNDS FOR DRIVER TRAINING

Section 36.  In allocating funds for driver training, the State Board of Education shall consider the needs of small and low-wealth local school administrative units.

PART XI.  DEPARTMENT OF HEALTH AND HUMAN SERVICES

SERVICES FOR CHILDREN WITH ASSAULTIVE AND VIOLENT BEHAVIOR

Section 37.(a)	Legislative Findings.  The General Assembly finds:
(1)	That there is a need in North Carolina to provide appropriate treatment and education programs to children under the age of 18 who suffer from emotional, mental, or neurological handicaps accompanied by violent or assaultive behavior.
(2)	That children meeting these criterias are defined in G.S. 122C-3 (13a) as Eligible Assaultive and Violent Children; and
(3)	That these children have a need for a variety of services, in addition to those normally provided, that may include, but are not limited to, residential treatment services, educational services, and independent living arrangements.
Section 37.(b)	Funds appropriated by the General Assembly to the Department of Health and Human Services for serving Eligible Assaultive and Violent Children (EAVC) shall be expended only for programs serving Eligible Assaultive and Violent Children including evaluations of potential EAVC clients.  The Department shall reallocate these funds among services to EAVC clients during the year as it deems advisable in order to use the funds efficiently in providing appropriate services to EAVC clients.
Section 37.(c)	Funds for Department of Public Instruction. – Funds appropriated to the Department of Public Instruction in this act for EAVC clients are to establish a supplemental reserve fund to serve Eligible Assaultive and Violent Children.  These funds shall be allocated by the State Board of Education to the local education agencies to serve those EAVC clients who were not included in the regular average daily membership and the census of children with special needs, and to provide the additional program costs which exceed the per pupil allocation from the State Public School Fund and other State and federal funds for children with special needs.
Section 37.(d)	The Department of Health and Human Services shall continue to implement its prospective unit-cost reimbursement system and shall ensure that unit-cost rates reflect reasonable costs by conducting service type rate comparisons budget reviews as may be necessary, and based upon these reviews and comparisons, the Department shall reduce and/or cap rates to programs which are significantly higher than those rates paid to other programs for the same service.  Any exception to this requirement shall be approved by the Director of the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services, and shall be reported in the Department's annual joint report to the Governor and the General Assembly and in any periodic report the Department may make to the Joint Legislative Commission on Governmental Operations.
Section 37.(e)  The Department of Health and Human Services and the Department of Public Education shall submit, by May 1 of each fiscal year, a joint report to the Governor and the General Assembly on the progress achieved in EAVC clients.  The report shall include the following unduplicated data for each area program/authority;  (i) the number of children for whom application is made for EAVC eligibility; (ii) the number of children actually determined to be eligible in each area program/authority; (iii) the number of children served EAVC clients in each area program/authority; (iv) the number of children who remain unserved or for whom additional services are needed in order to be determined to be appropriately served; (v) the types and locations of treatment and education services provided to EAVC clients; (vi) the cost of services, by type, to EAVC clients and the maximum and minimum rates paid to providers for each service; (vii) the number of cases whose treatment costs were in excess of one hundred fifty percent (150%) of the average annual per client expenditure; (viii) information on the impact of treatment and education services on EAVC clients; (ix) an explanation of, and justification for, any waiver of departmental rules that affect the program; and (x) the total State funds expended, by program, on EAVC clients, other than those funds specifically appropriated for the programs and services.
Section 37.(f)  From existing funds available to it, the Department of Health and Human Services shall continue to monitor and document individual clients' progress through the continuum of services.  Standardized measures of functioning shall be administered periodically to each EAVC client and the information generated from these measures shall be used to assess client progress and program effectiveness.
Section 37.(g)  The Departments of Health and Human Services and Public Instruction shall provide periodic reports of expenditures and program effectiveness on behalf of EAVC clients to the Fiscal Research Division.  As part of these reports, the Departments shall explain measures they have taken to control and reduce program expenditures.
Section 37.(h)  To ensure that EAVC clients are appropriately served, no State funds shall be expended on placement and services for EAVC clients except:
(1)	Funds specifically appropriated by the General Assembly for the placement and services of EAVC clients and
(2)	Funds for placement and services for which EAVC clients are otherwise eligible.  This limitation shall not preclude the use of unexpended Willie M. funds from prior fiscal years to cover current or future needs of the Willie M. program subject to approval by the Director of the Budget.  These Willie M. expenditures shall not be subject to the requirements of G.S. 143-18.
Section 37.(i)  Notwithstanding any other provision of law, if the Department of Health and Human Services determines that a local program is not providing appropriate services to Eligible Assaultive and Violent Children the Department may ensure the provision of these services through contracts with public or private agencies or by direct operation by the Department of these programs.

THOMAS S.

Section 38.(a)	Funds appropriated to the Department of Health and Human Services in this act for the 1999-2000 and the 2000-2001 fiscal years for members of the Thomas S. Class as identified in Thomas S. et al. v. Bruton, [Thomas S.C-C-82-0418M (Western District)], shall be expended only for programs serving Thomas S. Class members or for services for those clients who are:
(1)	Adults with mental retardation, or who have been treated as if they had mental retardation, who were admitted to a State psychiatric hospital on or after March 22, 1984, and who are included on the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services' official list of prospective Class members;
(2)	Adults with mental retardation who have a documented history of State psychiatric hospital admissions regardless of admission date and who, without funding support, have a good probability of being readmitted to a State psychiatric hospital;
(3)	Adults with mental retardation who have never been admitted to a State psychiatric hospital but who have a documented history of behavior determined to be of danger to self or others that results in referrals for inpatient psychiatric treatment and who, without funding support, have a good probability of being admitted to a State psychiatric hospital; or
(4)	Adults who are included on the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services' official list of prospective Class members and have yet to be confirmed as Class members, who currently reside in the community, and who have a good probability of being admitted to a facility licensed as 'home for the aged and disabled'.
No more than five percent (5%) of the funds appropriated in this act for the Thomas S. program shall be used for clients meeting the criteria set out in subdivision (2), (3), or (4) of this subsection.
Section 38.(b)	To ensure that Thomas S. Class members are appropriately served, no State funds shall be expended on placement and services for Thomas S. Class members except:
(1)	Funds specifically appropriated by the General Assembly for the placement and services of Thomas S. Class members; and
(2)	Funds for placement and services for which Thomas S. Class members are otherwise eligible.
Section 38.(b1)  Thomas S. Funds may be expended to support services for Thomas S. Class members in adult care homes when the service needs of individual Class members in these homes cannot be met via the established maximum adult care home rate.
Section 38.(c)	The Department of Health and Human Services shall continue to implement a prospective unit-cost reimbursement system and shall ensure that unit-cost rates reflect reasonable costs by conducting cost center service type rate comparisons and cost center line item budget reviews as may be necessary.
Section 38.(d)	Reporting requirements.  The Department of Health and Human Services shall submit by April 1 of each fiscal year a report to the General Assembly on the progress achieved in serving members and prospective members of the Thomas S. Class.  The report shall include the following:
(1)	The number of Thomas S. clients confirmed as Class members;
(2)	The number of individuals identified as prospective Class members;
(3)	The number of Class members or prospective Class members added in the proceeding 12 months due to their admission to a State psychiatric hospital;
(4)	A description of the types of treatment services provided to Class members; and 
(5)	An analysis of the use of funds appropriated for the Class.
Section 38.(e)  Notwithstanding any other provision of law, if the Department of Health and Human Services determines that a local program is not providing minimally adequate services to members of the class identified in Thomas S. et al. v. Burton, [Thomas S. C-C-82-0418M (Western District)], or does not show a willingness to do so, the Department may ensure the provision of these services through contracts with public or private agencies or by direct operation by the Department of such programs.

MIXED BEVERAGE TAX FOR AREA MENTAL HEALTH PROGRAMS

Section 39.  Funds received by the Department of Health and Human Services from the tax levied on mixed beverages under G.S. 18B-804(b)(8) shall be expended by the Department of Health and Human Services as prescribed by G.S. 18B-805(h).  These funds shall be allocated to the area mental health programs for substance abuse services based on need and in accordance with an area program's annual Memorandum of Agreement.

PHYSICIAN SERVICES

Section 40.  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.

PRIVATE AGENCY UNIFORM COST-FINDING REQUIREMENT

Section 41.  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.

NONSUPPLANTING OF MENTAL HEALTH, DEVELOPMENTAL DISABILITIES, AND SUBSTANCE ABUSE FUNDS

Section 42.  The Department of Health and Human Services shall ensure that counties do not reduce county appropriations and expenditures for area mental health, developmental disabilities, and substance abuse authorities because the authorities have received additional State appropriations for services.

CLIENT SERVICES MONITORING

Section 43.  The Department of Health and Human Services, Division of Mental Health, Developmental Disabilities, and Substance Abuse Services shall utilize a system of monitoring and control for client services.  This system shall ascertain whether services are provided in a timely manner.  Notwithstanding any other provisions of law, the Division shall withhold area mental health agencies' administrative funds until services are provided in a timely manner.

TRANSFERS OF CERTAIN FUNDS AUTHORIZED

Section 44.  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 authorities, the Director of the Budget is authorized to 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.

LIABILITY INSURANCE

Section 45.  The Department of Health and Human Services and the Department of Correction may provide medical liability coverage not to exceed one million dollars ($1,000,000) on behalf of employees of the Department licensed to practice medicine or dentistry 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 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.

LIMITATION ON USE OF SPECIAL ALZHEIMER'S UNITS

Section 46.  The Special Alzheimer's Unit established in Wilson by funds appropriated in Chapter 507 of the 1995 Session Laws and the Special Alzheimer's Unit in Black Mountain shall serve only those clients who cannot be served by a similar private facility.

MEDICAID

Section 47A.(a) Funds appropriated in this Title 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.  Administrative days for any period of hospitalization shall be limited to a maximum of three days.
(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 (f) 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 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 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 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 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 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 Plan approved by the Department of Health and Human Services.
(24)	Health Insurance Premiums - Payments to be made in accordance with the 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.  Providers of these services must be certified as meeting program standards of the Department of Health and Human Services.
(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 47A.(b)	Allocation of Nonfederal Cost of Medicaid.  The State shall pay eighty-five (85%); the county shall pay fifteen percent (15%) of the nonfederal costs of all applicable services listed in this section.
Section 47A.(c)	Co-payment for Medicaid Services.  The Department of Health and Human Services may establish co-payment up to the maximum permitted by federal law and regulation.
Section 47A.(d)	Medicaid and Work First Family Assistance Eligibility Standards.  The maximum net family annual income eligibility standards for Medicaid and the Standard of Need for Work First Family Assistance shall be as follows:

       Categorically Needy	Medically Needy
Family	Standard	WFFA Payment
Size	of Need	  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
*(WFFA) Work First Family Assistance; 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 47A.(e)  All Elderly Blind and Disabled Persons who receive Supplemental Security Income are eligible for Medicaid coverage.
Section 47A.(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 to $200.99	$80.00
$201.00 to $300.99	$130.00
$301.00 and greater	$212.00

Section 47A.(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 47A.(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 his 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 47A.(i)  Exceptions to Service Limitations, Eligibility Requirements, and Payments.  Service limitations, eligibility requirements, and payments, 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 47A.(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 47A.(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 47A.(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 47A.(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 47A.(n)  The Department of Health and Human Services shall provide coverage to pregnant women and 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.  Medicaid enrollment of categorically needy families with children shall be continuous for one year without regard to changes in income or assets.
(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 47A.(o)  The Department of Health and Human Services, Division of Medical Assistance, shall provide Medicaid coverage to all elderly 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 47A.(p)  The Department of Health and Human Services may use Medicaid funds budgeted from program services to support the cost of administrative activities to the extent that these administrative activities produce a net savings in services requirements.  Administrative initiatives funded by this section shall be first approved by the Office of State Budget and Management.
Section 47A.(q)  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 experience 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 47A.(r)  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 47A.(s)   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 47A.(t)  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 47A.(u)  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 such 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.

ALLOCATION OF G.S. 143-23.2 MEDICAID FUNDS

Section 47B.  Of the funds transferred to the Department of Health and Human Services for Medicaid programs pursuant to G.S. 143-23.2, forty-four million dollars ($44,000,000) shall be allocated in 1999-2000 fiscal year and twenty-nine million dollars ($29,000,000) shall be allocated in 2000-2001 fiscal year 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 forty-four million dollar ($44,000,000) reduction in general revenue funding for 1999-2000 fiscal year, and the twenty-nine million dollar ($29,000,000) reduction in general revenue funding for 2000-2001 fiscal year effected in this act.

DISPOSITION OF DISPROPORTIONATE SHARE RECEIPT CHANGE

Section 47C.(a)	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 47C.(b) For the 1999-2000 fiscal year, 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.

NONMEDICAID REIMBURSEMENT

Section 48.  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 Thomas S. Class members or adults with mental retardation and mental illness 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	 l0,944	  5,300
3	 6,204	 13,500	  6,400
4	 7,284	 16,092	  7,500
5	 7,824	 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 and for adults in the Atypical Antipsychotic Medication Program in the Division of Mental Health, Developmental Disabilities, and Substance Abuse Services 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.  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 these enrollees who become gainfully employed is as follows:

        Income	State Participation	Client Participation
        (% of poverty)

	0-100%	100%	0%
	101-120%	95%	5%
	121-140%	85%	15%
	141-160%	75%	25%
	161-180%	65%	35%
	181-200%	55%	45%
	201-220%	45%	55%
	221-240%	35%	65%
	241-260%	25%	75%
	261-280%	15%	85%
	281-300%	5%	95%
	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.

ADULT CARE HOMES REIMBURSEMENT RATE/ADULT CARE HOMES ALLOCATION OF NONFEDERAL COST OF MEDICAID PAYMENTS/STAFFING GRANT

Section 49.(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 nine hundred seventy-five dollars ($975.00) per month for ambulatory residents and one thousand seventeen dollars ($1,017) per month for semiambulatory residents.
Section 49.(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, the county matching share shall be capped until it equals fifteen percent (15%) of the nonfederal Medicaid personal care requirements.
Section 49.(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 49.(d)	Effective October 1, 1999, the maximum monthly rate for residents in adult care home facilities shall be nine hundred eighty-five dollars ($985.00) per month per resident.
Section 49.(e)  Effective October 1, 2000, the maximum monthly rate for residents in adult care home facilities shall be one thousand thirty dollars ($1,030) per month per resident.
Section 49.(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, as enacted under subsection (a) of this section.  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.

ADOPTION SUBSIDY

Section 50.  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 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.

FOSTER CARE

Section 51.  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.

CLARIFICATION OF AUTHORIZED ADDITIONAL USE OF HIV FOSTER CARE AND ADOPTIVE FAMILY FUNDS

Section 52.(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 in Chapter 324 of the 1995 Session Laws for this purpose shall be used as follows:
(1)	To provide medical training in avoiding HIV transmission in the home; and
(2)	To provide funds to support positions in the Department of Health and Human Services for the eastern part of North Carolina to enable the case-managing of families with HIV-infected children so that the children and the parents get access to medical care and so that child protective services issues are addressed rapidly and effectively.  The three positions shall be medically based and located:
a.	One in the northeast, covering Northampton, Hertford, Halifax, Gates, Chowan, Perquimans, Pasquotank, Camden, Currituck, Bertie, Wilson, Edgecombe, and Nash Counties;
b.	One in the central east, covering Martin, Pitt, Washington, Tyrrell, Dare, Hyde, Beaufort, Jones, Greene, Craven, and Pamlico Counties; and
c.	One in the southeast, covering New Hanover, Robeson, Brunswick, Carteret, Onslow, Lenoir, Pender, Duplin, Bladen, and Columbus Counties.
Section 52.(b)	The maximum rates for State participation in HIV foster care and adoptions 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.

SENIOR CENTER OUTREACH

Section 53.(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 test "satellite"services provided by existing senior centers to 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 53.(b)	Prior to funds being allocated pursuant to this section for start-up funds for a new senior center, the county commissioners of the county in which the new center will be located shall:
(1)	Formally endorse the need for such 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 53.(c)	State funding shall not exceed ninety percent (90%) of reimbursable costs.

DAY CARE ALLOCATION FORMULA

Section 54.(a)	To simplify current day care allocation methodology and more equitably distribute State day care funds, the Department of Health and Human Services shall apply the following allocation formula to all noncategorical federal and State day care funds used to pay the costs of necessary day 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 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 in the State.
Section 54.(b)	A county's initial allocation shall not be less than that county's total expenditures for child care in fiscal year 1995-96.

DAY CARE FUNDS MATCHING REQUIREMENT

Section 55.  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 day care funds appropriated by this act unless federal law requires such a match.

CHILD DAY CARE REVOLVING LOAN FUND

Section 56.  Notwithstanding any law to the contrary, funds budgeted for the Child Day 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.

DHHS EMPLOYEES/IN-KIND MATCH

Section 57.  Notwithstanding the limitation of G.S. 143B-139.4, the Secretary of the Department of Health and Human Services may assign employees of the Office of Rural Health Development to serve as an in-kind match to nonprofit corporations working to establish health care programs that will improve health care access while controlling costs.

CHILD DAY CARE SUBSIDIES

Section 58.(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 58.(b)	Parents who receive child care subsidy to work, look for work, attend work-related training or education activities, or meet the special developmental needs of their children shall share in the cost of child care.  No fees shall be charged to the client when child day care services are provided to the individuals in the following circumstances:
(1)	When children are receiving day care services in conjunction with protective services as described in 10 NCAC 35E.0106, up to a maximum of 12 months from the time protective services are initiated;
(2)	When day care services are provided as a support to a child receiving Child Welfare Services as described in the North Carolina Division of Social Services Family Services Manual, Volume 1, Chapter II; or
(3)	When a child with no income is living with someone other than the child's biological or adoptive parent or is living with someone who does not have court-ordered responsibility.
Section 58.(c)	Fees 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%

Local departments of social services shall apply this new fee schedule to recipients at the next eligibility review on or after the effective date of this section.
Section 58.(d)	Rules for the monthly schedule of payments for the purchase of day care services for low-income children shall be established by the Social Services Commission pursuant to G.S. 143-153(8)a., in accordance with the following requirements:
(1)	For day care facilities, as defined in G.S. 110-86(3), in which fewer than fifty percent (50%) of the enrollees are subsidized by State or federal funds, the State shall continue to pay the same fee paid by private paying parents for a child in the same age group in the same facility.
(2)	The monthly schedule of payments for the purchase of child day care services for low-income children from providers who have fifty percent (50%) or more children receiving child care subsidized with State or federal funds include:
a.	Provision of payment rates for child care that are tied to the providers regulatory status as follows:
l.	Registered homes and "A"licensed centers receive the market rate or the rate they charge their private paying parents, whichever is lower;
2.	"AA"licensed centers receive one hundred ten percent (110%) of the market rate or the rate they charge private paying parents, whichever is lower; and
3.	Unregistered providers receive fifty percent (50%) of the market rate or the rate they charge their private paying parents, whichever is lower.
b.	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 as follows:
l.	Payment rates shall be set at the statewide market rate for registered homes and "A"licensed centers.
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 58.(e)  Payment rates described in subdivision (2) of subsection (d) of this section shall be applied to all licensed child care centers, including Head Start Wrap Around, that have fifty percent (50%) or more of enrolled children receiving child care subsidies, and to registered family child care homes and unregulated providers that enroll subsidized children.
Section 58.(f)  A market rate shall be calculated for facilities and homes for each county and for each age group or age category of enrollees and shall be representative of fees charged to private paying parents for each age group of enrollees within the county.  The Division shall also calculate a statewide market rate for each age category.  The Division may also calculate regional market rates for each age group and age category.
Section 58.(g)  Facilities licensed pursuant to Article 7 of Chapter 110 of the General Statues may participate in the program that provides for the purchase of care in day care facilities for minor children of needy families.  No separate licensing requirements shall be used to select facilities to participate.  In addition, day care facilities shall be required to meet any additional applicable requirements of federal law or regulations.
Day care homes as defined in G.S. 110-86(4) from which the State purchases day care services shall meet the standards established by the Child Day Care Commission pursuant to G.S. 110-101 and G.S. 110-105.1 and any additional requirements of State law or 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(s) 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 day care rate.

SALARIES, FEES, AND ALLOWANCE

Section 59.  Notwithstanding G.S. 138-5(a)(1), those members of the North Carolina Vocational Rehabilitation Advisory Council, the Statewide Independent Living Council, and the Commission for the Blind, who are unemployed or who must 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) a day for attending these meetings or for performing related duties, as authorized in sections 105 and 705 of P.L. 102-569, the Rehabilitation Act of 1973, 42 U.S.C. § 701, et al., as amended.  This compensation is instead of the compensation specified in G.S. 138-5(a)(1).  Reimbursement for subsistence and travel expenses is as specified in G.S. 138-5.

CHILD PROTECTIVE SERVICES

Section 60.(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 in the county and the number of Child Protective Services workers necessary to meet recommended standards adopted by the North Carolina Association of County Directors of Social Services.
Section 60.(b)	Funds allocated under subsection (a) of this section shall be used by county departments for carrying out investigations of reports of child abuse or neglect or for providing protective or preventive services in which the department confirms abuse, neglect, or dependency.
Section 60.(c)	The Division of Social Services, Department of Health and Human Services, shall establish criteria and guidelines to ensure that the allocations to county departments of social services are used in accordance with this section and that available Federal Emergency Assistance funds for Child Protective Services are maximized.
Section 60.(d)	As long as Federal Emergency Assistance funds are available, counties shall use these federal funds, State Child Protective Services appropriations, and county funds to provide Child Protective Services.

FIRE PROTECTION REVOLVING LOAN FUND

Section 61.  Proceeds from the Fire Protection Revolving Loan Fund, established pursuant to G.S. 122A-5.13, may be used to provide staff support to the North Carolina Housing Finance Agency for loan processing and to the Department of Health and Human Services for review and approval of fire protection plans and inspection of fire protection systems.

FEDERAL ABSTINENCE EDUCATION FUNDS

Section 62.  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 or the 2000-2001 fiscal year, or both, then those funds shall be transferred to the State Board of Education to be administered by the Department of Public Instruction.  The Department 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 shall carefully and strictly follow federal guidelines in implementing and administering the abstinence education grant funds.

WIC PROGRAM FUNDS

Section 63.  Of the funds appropriated to the Department of Health and Human Services for the Women, Infants, and Children (WIC) Program, the sum of one million two hundred eighty thousand dollars ($1,280,000) for the 1999-2000 fiscal year and the sum of one million two hundred eighty thousand dollars ($1,280,000) for the fiscal year 2000-2001 shall, if sufficient federal food funds are available, be used for the WIC Program as follows:
(1)	Not more than $500,000 in each fiscal year shall be used to establish new WIC Programs in Head Start or other private or public nonprofit agencies to serve additional mothers, infants, and children.  The Department shall utilize these funds for local program operations including staff to provide eligibility determination, nutrition education, and health care referrals.  In selecting the new WIC Programs, the Department shall consider accessibility to the target population including location and hours of operation.
(2)	Not more than $250,000 in each fiscal year shall be used to renovate facilities of existing programs where space constraints limit program expansion, and to fund rental costs in areas where accessible donated space is not available.  In selecting the facilities, the Department shall consider accessibility to the target population including location and extended hours of operation.  In determining whether to fund rental of space, the Department shall ensure  that options for using donated accessible space have been considered.  Not more than $75,000 of funds allocated under this subdivision for each fiscal year shall be used for rental of space.
(3)	Not more than $300,000 in each fiscal year shall be used to purchase physician-prescribed special formulas and nutritional supplements for infants, children, and women.
(4)	Not more than $180,000 in each fiscal year shall be used to provide the required State match to the WIC farmers' market project.
(5)	Not more than $50,000 in each fiscal year shall be used for the purpose of establishing and maintaining a Public Health Nutritionist Internship Program.
If sufficient federal food funds are not available, then funds appropriated for the WIC Program under this section shall be used to supplement federal food funds and any balance in funds  remaining  after the supplemental use shall be used in accordance with subdivisions (1) through (5) of this section.

IMMUNIZATION PROGRAM FUNDING

Section 64.(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 64.(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.

EARLY CHILDHOOD EDUCATION AND DEVELOPMENT INITIATIVES QUALITY ASSURANCE/ACCOUNTABILITY

Section 65.  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 eighty-one million three hundred seventy-one thousand eight hundred twenty-six dollars ($81,371,826) for the 1999-2000 fiscal year and the sum of one hundred sixty-eight million four hundred nine thousand seven hundred sixty-six dollars ($168,409,766) for the 2000-2001 fiscal year to be used as follows:
(1)	The sum of $78,928,826 in the 1999-2000 fiscal year and the sum of $164,780,766 in the 2000-2001 fiscal year shall be used to administer and deliver services in all 100 counties.
(2)	The North Carolina Partnership for Children, Inc., shall receive an additional $154,000 in the 2000-2001 fiscal year for the State-level administration of the Program.
(3)	The North Carolina Partnership for Children, Inc., may use the sum of $1,500,000 in fiscal year 1999-2000 and $1,250,000 in the 2000-2001 fiscal year to assist local partnerships in their efforts to develop local collaboration.
(4)	The Department of Health and Human Services shall receive $750,000 in nonrecurring funds in the 2000-2001 fiscal year to conduct a statewide needs and resources assessment.
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 fiscal year 1999-2000 and one million one hundred forty-seven thousand dollars ($1,147,000) in the 2000-2001 fiscal year.

MATCH REQUIREMENTS FOR MEDICAID SERVICES

Section 66.  The Department of Health and Human Services will continue to administer the matching  funds for public Mental Health Services reimbursed by the Medicaid program.  Growth in the nonfederal share of the Medicaid budget for Mental Health Services will be borne equally by the State and county/local entity until the county/local entity share totals fifteen percent (15%) of the nonfederal share of the Medicaid budget for public Mental Health services.

ELIMINATE STATE EMPLOYEES REPORT

Section 67.  G.S. 108A-27.10(b) is repealed.

PART XII.  DEPARTMENT OF AGRICULTURE AND CONSUMER SERVICES

ESTABLISH RENTAL RATES AND FEES

Section 68.  Subject to the provisions of Chapter 146 of the General Statutes, the Board of Agriculture may adopt a schedule of rental rates and related fees and charges for the use of farmers' markets, agricultural centers, and other facilities operated by the Department of Agriculture and Consumer Services.  Such rates, fees, and charges shall not be considered a "rule"as defined in G.S. 150B-2.

AGRICULTURAL FEES AND CHARGES

Section 69.  G.S. 106-6.1 is repealed.

PART XIII.  DEPARTMENT OF COMMERCE

UTILITIES REGULATORY FEE

Section 70.(a)	The percentage rate to be used in calculating the public utility regulatory fee under G.S. 62-302(b)(2) is nine-hundredths percent (0.09%) of each public utility's North Carolina jurisdictional revenues earned during each quarter that begins on or after July 1, 1999.
Section 70.(b)	Section 70 of this act becomes effective July 1, 1999.

WORKER TRAINING TRUST FUND APPROPRIATIONS

Section 71.(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 71.(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)	$1,746,000 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.

SPECIAL EMPLOYMENT SECURITY ADMINISTRATION FUND

Section 72.(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 72.(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.

PETROLEUM OVERCHARGE FUNDS ALLOCATION

Section 73.(a)	The funds and interest thereon received from the case of the United States v. Exxon are deposited in the Special Reserve for Oil Overcharge Funds. There is appropriated from the Special Reserve to the Department of Commerce the sum of one million two hundred thousand dollars ($1,200,000) for the 1999-2000 fiscal year and the sum of one million two hundred thousand dollars ($1,200,000) for the 2000-2001 fiscal year to be used for projects under the State Energy Efficiency Programs.
Section 73.(b)	There is appropriated from funds and interest thereon received from the United States Department of Energy's Stripper Well Litigation (MDL378) that remain in the Special Reserve for Oil Overcharge Funds to the Department of Commerce the sum of one million eight hundred thousand dollars ($1,800,000) for the 1999-2000 fiscal year and the sum of one million eight hundred thousand dollars ($1,800,000) for the 2000-2001 fiscal year to be allocated for the Residential Energy Conservation Assistance Programs (RECAP).
Section 73.(c)	The funds and interest thereon received from the Diamond Shamrock Settlement that remain in a reserve in the Office of State Budget and Management for the Department of Commerce to administer the petroleum overcharge funds pursuant to Section 112 of Chapter 830 of the 1987 Session Laws shall continue to be available to the Department of Commerce on an as-needed basis.

PETROLEUM OVERCHARGE ATTORNEYS' FEES

Section 74.(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 74.(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 74.(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.

INDUSTRIAL DEVELOPMENT FUND/LOCAL MATCH

Section 75.  G.S. 143B-437.01(a) is amended by adding a new subdivision to read:
"(5)	Local governments requesting financial assistance from the Industrial Development Fund shall demonstrate to the satisfaction of the Department that it would be an economic hardship for the local government to match State assistance from the Fund with local funds.  The Department shall develop guidelines for determining hardship."

DEPARTMENT OF COMMERCE BUDGET FLEXIBILITY

Section 76.  Notwithstanding G.S. 143-23 and G.S. 143-27 or any other provision of law, the Department of Commerce may transfer funds and budget receipts within the following divisions: business and industry, international trade and tourism, film, and sports development. Any unexpended appropriation for the fiscal year may be carried forward by the Department to the next fiscal year and may be used for one-time expenditures within these divisions that will not impose additional financial obligations on the State.

WANCHESE SEAFOOD INDUSTRIAL PARK FUNDS

Section 77.  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.

PART XIV.  DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES

FUNDS FOR VOLUNTARY REMEDIAL ACTIONS

Section 78.(a)	During the 1999-2001 fiscal biennium, the Secretary of the Department 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 78.(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 General Assembly.  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.

SUPERFUND PROGRAM FUNDS

Section 79.  The Department of Environment and Natural Resources may use available funds, with the approval of the Office of State Budget and Management, in order to provide the ten percent (10%) cost share required for Superfund cleanups on the National Priority List sites.  These funds may be in addition to those appropriated for this purpose.

WASTE REDUCTION ASSISTANCE TO SMALL BUSINESSES WITH NEED

Section 80.  The Office of Waste Reduction shall, to the extent feasible, give greatest priority to small businesses that can demonstrate financial need when the Office of Waste Reduction awards grants or otherwise provides technical or financial assistance.

GRASSROOTS SCIENCE PROGRAM

Section 81.  Of the funds appropriated in this act to the Department of Environment and Natural Resources for the Grassroots Science Program, the sum of six hundred thirty-five thousand dollars ($635,000) for fiscal year 1999-2000 and the sum of six hundred thirty-five thousand dollars ($635,000) for fiscal year 2000-2001 are allocated as grant-in-aid for each fiscal year as follows:

Catawba Science Center	$50,000
Discovery Place	$50,000
Imagination Station	$50,000
North Carolina Museum of Life and Science	$50,000
Rocky Mount Children's Museum	$50,000
Schiele Museum of Natural History	$50,000
Sci Works Science Center and Environmental
Park of Forsyth County	$50,000
Natural Science Center of Greensboro	$50,000
Western North Carolina Nature Center	$50,000
The Health Adventure Museum of Pack Place Education,
Arts and Science Center, Inc.	$35,000
Cape Fear Museum	$50,000
Museum of Coastal Carolina	$50,000
Iredell County Children's Museum	$50,000

PART XV.  DEPARTMENT OF CULTURAL RESOURCES

DEPARTMENT  OF  CULTURAL  RESOURCES  MAY  RETAIN  HISTORICAL PUBLICATIONS  RECEIPTS

Section 82.  The Historical Publications Section, Division of Archives and History, Department of Cultural Resources, may retain the receipts, including over-realized receipts, from the sale of its publications during each year of the 1999-2001 biennium.  The receipts from the sale of those publications retained by the Historical Publications Section shall not revert but shall be used to reprint the publications.

MUSEUM OF HISTORY RESTAURANT

Section 83.  The Secretary of Cultural Resources shall designate the North Carolina Museum of History Associates, Inc., as the appropriate organization to contract to provide restaurant services for the North Carolina Museum of History, as provided in subdivision (17) of G.S. 121-4.  The North Carolina Museum of History Associates, Inc., shall negotiate a contract based upon the amount of monthly rent and a percentage of gross receipts.  The North Carolina Museum of History Associates, Inc., shall submit to the Joint Legislative Commission on Governmental Operations and the House and Senate Appropriations Subcommittee on General Government by June 30 of each fiscal year a report which shall include (i) an operations report, (ii) a profit and loss statement, and (iii) an analysis of how profits have been expended or reserved to support programs and projects of the North Carolina Museum of History.

PART XVI.  DEPARTMENT OF CORRECTION

MODIFICATION OF FUNDING FORMULA FOR THE NORTH CAROLINA STATE-COUNTY CRIMINAL JUSTICE PARTNERSHIP ACT

Section 84.  Notwithstanding the funding formula set forth in G.S. 143B-273.15, appropriations made to the Department of Correction through the North Carolina State-County Criminal Justice Partnership Act for the 1999-2001 biennium shall be distributed to the counties as specified in G.S. 143B-273.15(2) only, and not as discretionary funds.  The Department may also use funds from the State-County Criminal Justice Partnership Account in order to maintain the counties' allocations of nine million six hundred thousand dollars ($9,600,000) as provided in previous fiscal years.  Appropriations not claimed or expended by the counties during the 1999-2001 biennium shall be distributed as specified in G.S. 143B-273.15(1).

FUNDING OF PRISON ROAD SQUADS

Section 85.  Notwithstanding any other provision of law, the Department of Transportation shall reimburse the Department of Correction for the direct costs of inmate road squads on a cost basis, as provided for in G.S. 148-26.5.

TITLE VII. FUNDS/REPORT

Section 86.  The Department of Correction may use funds available to the Department during the 1999-2001 fiscal biennium for payment to claimants as part of the settlement of the Title VII lawsuit over the recruitment, hiring, and promotion of females in the Department. The Department shall report on any settlement to the Chairs of the Joint Legislative Corrections and Crime Control Oversight Committee.

EMPLOYMENT, EDUCATION, AND TRAINING STANDARDS FOR EMPLOYEES OF DEPARTMENT OF CORRECTION

Section 87.(a)	Effective July 1, 1999, the employees of the Department of Correction are no longer  subject to the authority of the Criminal Justice Education Training and Standards Commission or the Criminal Justice Standards Division of the Department of Justice for any purposes.  The Department of Correction is given the authority to establish an independent, five-member Board, to issue professional certifications to the employees of the Department of Correction. The Board selections shall be made as follows: one each to be appointed by the Secretary from recommendations made by the North Carolina Correctional Association, the North Carolina Probation/Parole Association, the Director of the Division of Prisons, and the Director of Community Corrections.  The Secretary shall appoint a Chair for the Board.  The Board shall have the powers to establish minimum education, experience, and training standards, and to deny, suspend, or revoke a certification for failure to meet the requirements of, or comply with, standards and rules adopted for this purpose, consistent with G.S. 126, for designated employees within the Department of Correction.  The Board shall work with the Secretary of the Department of Correction in the establishment of standards and rules for professional certification.  Notwithstanding any other provision of law, this section shall not restrict or revoke in any way the powers, duties, and benefits of the employees of the Department of Correction.
Section 87.(b)	The Department of Correction may in accordance with existing general statutes use funds appropriated to the department to establish and maintain administrative support staff for this program.

FEDERAL GRANT MATCHING FUNDS

Section 88.  Notwithstanding the provisions of G.S. 148-2, the Department of Correction may use up to the sum of eight hundred seventy-five thousand dollars ($875,000) from funds available to the Department to provide the State match needed in order to receive federal grant funds.  The Department shall report to the Chairs of the Joint Legislative Corrections and Crime Control Oversight Committees, on the grants to be matched using these funds.

PRIVATE PRISON CONTRACTS

Section 89.  The Department of Correction may use funds available if necessary to make a needed modification of the terms of the contracts for the leasing and operation of one or both of the two private confinement facilities in Pamlico and Avery/Mitchell. Prior to taking actions or obligating funds as authorized by this section, the Department of Correction shall report to the Joint Legislative Corrections and Crime Control Oversight Committee on the justification for using available funds to modify the contracts.

PILOT PROGRAMS TO OPERATE EFFICIENTLY

Section 90.  In determining the cost-effectiveness of the pilot programs at Alamance Correctional Center and Union Correctional Center, the Department of Correction shall compare the costs of the pilot programs to the average daily inmate cost of similar security units and to units which are operating the most efficiently in the prison system.

EXEMPTION FROM LICENSURE AND CERTIFICATE OF NEED

Section 91.(a)	Inpatient chemical dependency or substance abuse facilities that provide services exclusively to inmates of the Department of Correction shall be exempt from licensure by the Department of Human Resources under Chapter 122C of the General Statutes.  If an inpatient chemical dependency or substance abuse facility provides services both to inmates of the Department of Correction and to members of the general public, the portion of the facility that serves inmates shall be exempt from licensure.
Section 91.(b)	Any person who contracts to provide inpatient chemical dependency or substance abuse services to inmates of the Department of Correction may construct and operate a new chemical dependency or substance abuse facility for that purpose without first obtaining a certificate of need from the Department of Human Resources pursuant to Article 9 of Chapter 131E of the General Statutes.  However, a new facility or addition developed for that purpose without a certificate of need shall not be licensed pursuant to Chapter 122C of the General Statutes and shall not admit anyone other than inmates unless the owner or operator first obtains a certificate of need.
Section 91.(c)	This section applies to existing facilities, as well as future facilities contracting with the Department of Correction.

REIMBURSE COUNTIES FOR HOUSING AND EXTRAORDINARY MEDICAL COSTS FOR INMATES, PAROLEES, AND POST-RELEASE SUPERVISEES AWAITING TRANSFER TO STATE PRISON SYSTEM

Section 92.  G.S. 148-29 reads as rewritten:
"§ 148-29.  Transportation of convicts to prison; reimbursement to counties; sheriff's expense affidavit.
(a)	The sheriff having in charge any prisoner to be taken to the State prison system shall send the prisoner to the custody of the Department of Correction within five days after sentencing and the disposal of all pending charges against the prisoner, if no appeal has been taken. Beginning on the sixth day after the Division of Prisons has been notified by the sheriff that a prisoner is ready for transfer and the division has informed the sheriff that the prisoner is backlogged for transfer and continuing through the day the prisoner is received by the Division of Prisons, the Department of Correction shall pay the county: 
(1)	A standard sum set by the General Assembly in its appropriations acts for the cost of providing food, clothing, personal items, supervision, and necessary ordinary medical services to the prisoner awaiting transfer to the State prison system; and
(2)	Extraordinary medical costs, as defined in G.S. 148-32.1(a), incurred by prisoners awaiting transfer to the State prison system.
(b)	The sheriff having in charge any parolee or post-release supervisee to be taken to the State prison system shall send the prisoner to the custody of the Department of Correction within five days after the Division of Prisons has been notified by the sheriff that a prisoner is ready for transfer and the Division has informed the sheriff that the prisoner is backlogged for transfer and continuing through the day the prisoner is received by the Division, the Department of Correction shall pay the county: 
(1)	A standard sum set by the General Assembly in its appropriations acts for the cost of providing food, clothing, personal items, supervision, and necessary ordinary medical services to the parolee or post-release supervisee awaiting transfer to the State prison system; and 
(2)	Extraordinary medical costs, as defined in G.S. 148-32.1(a), incurred by parolees or post-release supervisees awaiting transfer to the State prison system.
(c)	The sheriff shall file with the board of commissioners of his county a copy of his affidavit as to necessary guard, together with a copy of his itemized account of expenses, both certified to by him as true copies of those on file in his office."

FUNDING FOR HOUSING INMATES IN COUNTY JAILS AWAITING TRANSFER TO THE STATE PRISON SYSTEM

Section 93.  The Department of Correction may use funds appropriated to the Department for the 1999-2001 biennium to pay the sum of forty dollars ($40.00) per day as reimbursement to counties for the cost of housing convicted inmates and parolees and post-release supervisees awaiting transfer to the State prison system, as provided in G.S. 148-29.  The Department shall report quarterly to the Chairs of the Joint Legislative Corrections and Crime Control Oversight Committee on the expenditure of funds to reimburse counties for prisoners awaiting transfer.

INMATES TO WEAR UNIFORMS AS DESIGNATED BY THE SECRETARY OF CORRECTION

Section 94.  The Secretary of the Department of Correction has the authority to designate the uniforms for inmates confined in the Division of Prisons.  Further, all inmates (working outside prison facilities) will wear uniforms consistent with the Division of Prisons classification policies and procedures.

AUTHORITY TO SEEK RECOVERY OF DAMAGES FROM THIRD PARTIES

Section 95.  G.S 148-19 is amended by adding a new subsection to read:
"( e)	The Secretary of the Department of Correction shall have the authority to seek recovery of costs or damages incurred by the Department from persons when an offender is injured and such costs or damages are attributable to the person from whom recovery is sought."

EXPAND INMATE CONSTRUCTION PROGRAM

Section 96.  The Department of Correction is authorized in accordance with existing general statutes to use funds appropriated to the Department to expand the inmate construction program.  The Department shall report quarterly to the Chairs of the Joint Legislative Corrections and Crime Control Oversight Committee on the inmate construction program.

FINANCE CORRECTION ENTERPRISE PROJECTS

Section 97.  The Department of Correction may finance construction and capital needs projects of Correction Enterprises with funds available to the Department from gifts, grants, receipts, self-liquidating indebtedness, or other funds, or any combination of such funds.
The State Treasurer may enter into or negotiate a note with an acceptable bank or trust company in lieu of issuing bonds for the financing of capital projects.  The terms and conditions or any note of this nature shall be in accordance with the terms and conditions surrounding issuance of bonds.

REMOVE CAP ON PRIVATE PRISON BEDS

Section 98.  G.S. 148-37(g) reads as rewritten:
"(g)	The Secretary of Correction may contract with private for-profit or nonprofit firms for the provision and operation of confinement facilities in the State to house State prisoners when to do so would most economically and effectively promote the purposes served by the Department of Correction. Whenever the Department of Correction determines that new prison facilities are required in addition to existing and planned facilities, the Department may contract for any remaining beds authorized by this section before constructing State-operated facilities.
Contracts entered under the authority of this subsection shall be for a period not to exceed 10 years, shall be renewable from time to time for a period not to exceed 10 years. The Secretary of Correction shall enter contracts under this subsection only if funds are appropriated for this purpose by the General Assembly. Contracts entered under the authority of this subsection may be subject to any requirements for the location of the confinement facilities set forth by the General Assembly in appropriating those funds.
Once the Department has made a determination to contract for additional private prison beds, it shall issue a request for proposals within 30 days of the decision. The request for proposals shall require bids to be submitted within two months, and the Department shall award contracts at the earliest practicable date after the submission of bids. The Secretary of Correction, in consultation with the Chairs of the Joint Legislative Corrections and Crime Control Oversight Committee and the Chairs of the House and Senate Appropriations Subcommittees on Justice and Public Safety, shall make recommendations to the State Purchasing Officer on the final award decision. The State Purchasing Officer shall make the final award decision, and the contract shall then be subject to the approval of the Council of State after consultation with the Joint Legislative Commission on Governmental Operations.
Contracts made under the authority of this subsection may provide the State with an option to purchase the confinement facility or may provide for the purchase of the confinement facility by the State. Contracts made under the authority of this subsection shall state that plans and specifications for private confinement facilities shall be furnished to and reviewed by the Office of State Construction. The Office of State Construction shall inspect and review each project during construction to ensure that the project is suitable for habitation and to determine whether the project would be suitable for future acquisition by the State. All contracts for the housing of State prisoners in private confinement facilities shall require a minimum of ten million dollars ($10,000,000) of occurrence-based liability insurance and shall hold the State harmless and provide reimbursement for all liability arising out of actions caused by operations and employees of the private confinement facility.
Prisoners housed in private confinement facilities pursuant to this subsection shall remain subject to the rules adopted for the conduct of persons committed to the State prison system. The Secretary of Correction may review and approve the design and construction of private confinement facilities before housing State prisoners in these facilities. The rules regarding good time, gain time, and earned credits, discipline, classification, extension of the limits of confinement, transfers, housing arrangements, and eligibility for parole shall apply to inmates housed in private confinement facilities pursuant to this subsection. The operators of private confinement facilities may adopt any other rules as may be necessary for the operation of those facilities with the written approval of the Secretary of Correction. Custodial officials employed by a private confinement facility are agents of the Secretary of Correction and may use those procedures for use of force authorized by the Secretary of Correction to defend themselves, to enforce the observance of discipline in compliance with confinement facility rules, to secure the person of a prisoner, and to prevent escape. Private firms under this subsection shall employ inmate disciplinary and grievance policies of the North Carolina Department of Correction."

PART XVII.  OFFICE OF JUVENILE JUSTICE

SAVE OUR STUDENTS AND FAMILY RESOURCE CENTER GRANT PROGRAMS ADMINISTRATIVE COST LIMITS

Section 99.(a)	Of the funds appropriated to the Office of Juvenile Justice in this act, not more than three hundred fifty thousand dollars ($350,000) for each year of the 1999-2001 fiscal biennium may be used to administer the Save Our Students program, to provide technical assistance to applicants and to local Save Our Students programs, and to evaluate the local Save Our Students programs.  The Department may contract with appropriate public or nonprofit agencies to provide the technical assistance, including training and related services.
Section 99.(b)	Of the funds appropriated in this act to the Department of Health and Human Services for the Family Resource Center Grant program, the Department may use up to two hundred fifty thousand dollars ($250,000) in each fiscal year of the 1999-2001 fiscal biennium to administer the program.

CHANGE THE DUE DATE OF THE SUPPORT OUR STUDENTS ANNUAL REPORT TO THE GOVERNOR AND GENERAL ASSEMBLY

Section 100.  G.S. 143B-152.7 reads as rewritten:
"§ 143B-152.7.  Program evaluation; reporting requirements.
(a)	The Department of Juvenile Justice shall develop and implement an evaluation system that will assess the efficiency and effectiveness of the S.O.S. Program. The Department shall design this system to:
(1)	Provide information to the Office and to the General Assembly on how to improve and refine the programs;
(1a)	Develop information for dissemination to potential grant applicants on the design of programs that experience has shown are likely to be successful;
(2)	Enable the Office and the General Assembly to assess the overall quality, efficiency, and impact of the existing programs;
(3)	Enable the Office and the General Assembly to determine whether to modify the S.O.S. Program; and
(4)	Provide a detailed fiscal analysis of how State funds for these programs were used.
(b)	The Office shall report to the General Assembly and the Joint Legislative Commission on Governmental Operations by May 15, 1994, on its progress in developing the evaluation system and in developing and implementing the program. It shall report prior to February 1, 1995, on the evaluation system developed by the Office and on program implementation. The Office shall present an annual report on February 1 to the General Assembly and to the Joint Legislative Commission on Governmental Operations on the implementation of the program and the results of the program evaluation.
The Office shall also report annually to the Joint Legislative Commission on Governmental Operations and to the Governor on the implementation of the S.O.S. Program.
(c)	A local 501(c)(3) entity or consortium that receives a grant under this Part shall report by August 1 of each year to the Office on the implementation of the program. This report shall demonstrate the extent to which the local S.O.S. Program has met the local needs, goals, and anticipated outcomes as set forth in the grant applications."

PART XVIII.  SALARIES AND BENEFITS

SALARY INCREASES/SALARY-RELATED CONTRIBUTIONS

Section 101.(a)	The Director of the Budget may budget funds appropriated in Sections 3 and 4 of this act for the purpose of providing compensation increases to public school employees, community college institutional personnel, and all other permanent State employees.  Increases shall be granted equating to three percent (3%) funding of current salaries.
Section 101.(b)	Required employer salary-related contributions for employees whose salaries are paid from department, office, institution, or agency receipts shall be paid from the same source as the source of the employees' salary.  If an employee's salary is paid in part from the General Fund or Highway Fund and in part from department, office, institution, or agency receipts, required employer salary-related contributions may be paid from the General Fund or Highway Fund only to the extent of the proportionate part paid from the General Fund or Highway Fund in support of the salary of the employee, and the remainder of the employer's requirements shall be paid from the source that supplies the remainder of the employee's salary.
Section 101.(c)	The State's employer contribution rates budgeted for retirement and related benefits as percentage of covered salaries for the 1999-2000 and 2000-2001 fiscal years are (i) ten and eighty-three hundredths percent (10.83%) - Teachers and State Employees; (ii) fifteen and eighty-three hundredths percent (15.83%) - State Law Enforcement Officers; (iii) nine and thirty-six hundredths percent (9.36%) - University Employees' Optional Retirement System; (iv) twenty-two and sixty-five hundredths percent (22.65%) - Consolidated Judicial Retirement System; and (v) twenty four and fifty-eight hundredths percent (24.58%) - Legislative Retirement System.  Each of the foregoing contribution rates includes two percent (2.0%) for hospital and medical benefits.  The rate for State Law Enforcement Officers, includes five percent (5%) for the Supplements Retirement Income Plan.  The rates for Teachers and State Employees, State Law Enforcement Officers and for the University Employees' Optional Retirement Program includes fifty-two hundredths percent (0.52%) for the Disability Income Plan.

GOVERNOR AND COUNCIL OF STATE

Section 102.(a)	Effective July 1, 1999, G.S. 147-11(a) reads as rewritten:
"(a)	The salary of the Governor shall be one hundred thirteen thousand six hundred fifty-six dollars ($113,656) annually, payable monthly."
Section 102.(b)	The annual salaries for the members of the Council of State, payable monthly, for the 1999-2000 fiscal year beginning July 1, 1999, are:

Council of State	Annual Salary

Lieutenant Governor	$100,310
Attorney General	  100,310
Secretary of State	  100,310
State Treasurer	  100,310
State Auditor	  100,310
Superintendent of Public Instruction	  100,310
Commissioner of Agriculture and Consumer Services	  100,310
Insurance Commissioner	  100,310
Labor Commissioner	  100,310

NONELECTED DEPARTMENT HEADS/SALARY INCREASES

Section 103.  In accordance with G.S. 143B-9, the maximum annual salaries, payable monthly, for the nonelected heads of the principal State departments for the 1999-2000 and 2000-2001 fiscal years are:

Nonelected Department Heads	Annual Salary

Secretary of Administration	$98,003
Secretary of Correction	98,003
Secretary of Crime Control and Public Safety	98,003
Secretary of Cultural Resources	98,003
Secretary of Commerce	98,003
Secretary of Environment and Natural Resources	98,003
Secretary of Health and Human Services	98,003
Secretary of Revenue	98,003
Secretary of Transportation	98,003

CERTAIN EXECUTIVE BRANCH OFFICIALS/SALARY INCREASES

Section 104.  The annual salaries, payable monthly, for the 1999-2000 and 2000-2001 fiscal years for the following executive branch officials are:

Executive Branch Officials	Annual Salary

Chairman, Alcoholic Beverage Control Commission	$ 89,200
State Controller	124,835
Commissioner of Motor Vehicles	89,200
Commissioner of Banks	100,310
Chairman, Employment Security Commission	124,677
State Personnel Director	98,003
Chairman, Parole Commission	81,450
Members of the Parole Commission	75,198
Chairman, Utilities Commission	111,713
Members of the Utilities Commission	100,310
Executive Director, Agency for Public Telecommunications	75,198
General Manager, Ports Railway Commission	67,903
Director, Museum of Art	91,401
Executive Director, Wildlife Resources Commission	76,988
Executive Director, North Carolina Housing
   Finance Agency	110,394
Executive Director, North Carolina Agricultural
   Finance Authority	86,823

JUDICIAL BRANCH OFFICIALS/SALARY INCREASE

Section 105.(a)	The annual salaries, payable monthly, for specified judicial branch officials for the 1999-2000 and 2000-2001 fiscal years are:

Judicial Branch Officials	Annual Salary

Chief Justice, Supreme Court	$113,656
Associate Justice, Supreme Court	110,687
Chief Judge, Court of Appeals	107,919
Judge, Court of Appeals	106,075
Judge, Senior Regular Resident Superior Court	103,193
Judge, Superior Court	100,310
Chief Judge, District Court	91,086
Judge, District Court	88,204
District Attorney	92,931
Administrative Officer of the Courts	103,193
Assistant Administrative Officer of the Courts	86,658
Public Defender	92,931

Section 105.(b)	The district attorney or public defender of a judicial district, with the approval of the Administrative Officer of the Courts, shall set the salaries of assistant district attorneys or assistant public defenders, respectively, in that district such that the average salaries of assistant district attorneys or assistant public defenders in that district do not exceed fifty-seven thousand one hundred sixty-five dollars ($57,165), and the minimum salary of any assistant district attorney or assistant public defender is at least twenty-nine thousand one hundred eighty-four dollars ($29,184) effective July 1, 1999.
Section 105.(c)	The salaries in effect for fiscal year 1999-2000 for permanent, full-time employees of the Judicial Department, except for those whose salaries are itemized in this Part, shall be increased by three percent (3%), commencing July 1, 1999.
Section 105.(d)	The salaries in effect for fiscal year 1999-2000 for all permanent, part-time employees of the Judicial Department shall be increased on and after July 1, 1999, by pro rata amounts of the three percent (3%).

CLERK OF SUPERIOR COURT SALARY INCREASE

Section 106.  Effective July 1, 1999, G.S. 7A-101(a) reads as rewritten:
"(a)	The clerk of superior court is a full-time employee of the State and shall receive an annual salary, payable in equal monthly installments, based on the population of the county as determined in subsection (a1) of this section, according to the following schedule:
Population	Annual SalaryLess than 100,000 		$66,493
	100,000 to 149,999		 74,690
150,000 to 249,999		 82,888
250,000 and above		 91,086.

The salary schedule in this subsection is intended to represent the following percentage of the salary of a chief district court judge:

Population	Annual Salary
Less than 100,000	73%
100,000 to 149,999	82%
150,000 to 249,999	91%
250,000 and above       	100%.

When a county changes from one population group to another, the salary of the clerk shall be changed, on July 1 of the fiscal year for which the change is reported, to the salary appropriate for the new population group, except that the salary of an incumbent clerk shall not be decreased by any change in population group during his continuance in office."

ASSISTANT AND DEPUTY CLERKS OF COURT/SALARY INCREASE

Section 107.  Effective July 1, 1999, G.S. 7A-102(c1) reads as rewritten:
"(c1)	A full-time assistant clerk or a full-time deputy clerk, and up to one full-time deputy clerk serving as head bookkeeper per county, shall be paid an annual salary subject to the following minimum and maximum rates:
Assistant Clerks and Head Bookkeeper	Annual SalaryMinimum		$24,846
Maximum		 43,991
Deputy Clerks	Annual SalaryMinimum		$19,865
Maximum		 33,886.

MAGISTRATES/SALARY INCREASES

Section 108.  Effective July 1, 1999, magistrates shall receive salary increases in the amount of three percent (3%), except that any person entitled to a step increase pursuant to G.S. 7A-171.1 for the 1999-2000 fiscal year shall not receive the three percent (3%) increase provided by this section.

GENERAL ASSEMBLY PRINCIPAL CLERKS

Section 109.  Effective July 1, 1999, G.S. 120-37(c) reads as rewritten:
"(c)	The principal clerks shall be full-time officers. Each principal clerk shall be entitled to other benefits available to permanent legislative employees and shall be paid an annual salary of eighty-four thousand one hundred forty-seven dollars ($84,147) payable monthly. The Legislative Services Commission shall review the salary of the principal clerks prior to submission of the proposed operating budget of the General Assembly to the Governor and Advisory Budget Commission and shall make appropriate recommendations for changes in those salaries. Any changes enacted by the General Assembly shall be by amendment to this paragraph."

SERGEANT-AT-ARMS AND READING CLERKS

Section 110.  Effective July 1, 1999, G.S. 120-37(b) reads as rewritten:
"(b)	The sergeant-at-arms and the reading clerk in each house shall be paid a salary of two hundred seventy-four dollars ($274.00) per week plus subsistence at the same daily rate provided for members of the General Assembly, plus mileage at the rate provided for members of the General Assembly for one round trip only from their homes to Raleigh and return.  The sergeants-at-arms shall serve during sessions of the General Assembly and at such time prior to the convening of, and subsequent to adjournment or recess of, sessions as may be authorized by the Legislative Services Commission.  The reading clerks shall serve during sessions only."

LEGISLATIVE EMPLOYEES

Section 111.  The Legislative Administrative Officer shall increase the salaries of nonelected employees of the General Assembly in effect for fiscal year 1998-99 by three percent.  Nothing in this act limits any of the provisions of G.S. 120-32.

TEACHER SALARY SCHEDULES

Section 112.  Funds are appropriated to the Reserve for Compensation Increase to provide seven and one-half percent (7.5%) funding to increase compensation for education personnel paid from the teacher salary schedule for fiscal year 1999-2000 and approximately seven and six-tenths percent (7.6%) for fiscal year 2000-2001.

SCHOOL-BASED ADMINISTRATOR SALARIES

Section 113.  Funds appropriated to the Reserve for Compensation Increases shall be used in conjunction with the teacher salary schedule for school-based administrators.

SCHOOL CENTRAL OFFICE SALARIES

Section 114.(a)	The following monthly salary ranges apply to public school superintendents, 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 114.(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 this act.
Section 114.(c)	Longevity pay for superintendents, assistant superintendents, associate superintendents, directors/coordinators, supervisors, and finance officers shall be as provided for State employees.
Section 114.(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 114.(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 114.(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.

NONCERTIFIED PUBLIC SCHOOL EMPLOYEES' SALARY INCREASE

Section 115.(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, for all noncertified public school employees, except school bus drivers, whose salaries are supported from the State's General Fund.  These funds shall not be used for any purpose other than for the salary increases and necessary employer contributions provided by this subsection.
Section 115.(b)	The fiscal year 1999-2000 pay rates adopted by local boards of education for school bus drivers shall be increased by at least three percent (3%), to the extent that such rates of pay are supported by the allocation of State funds from the State Board of Education.  Local boards of education shall increase the rates of pay for all school bus drivers who were employed during fiscal year 1998-99 and who continue their employment for fiscal year 1999-2000 by at least three percent (3%).  The Director of the Budget may transfer from the Reserve for Compensation Increase created in this act for fiscal year beginning July 1, 1999, funds necessary to provide the salary increases for school bus drivers whose salaries are supported from the State's General Fund in accordance with the provisions of this subsection.

COMMUNITY COLLEGES PERSONNEL/SALARY INCREASES

Section 116.  The Director of the Budget shall transfer from the Reserve for Compensation Increase, created in this act for fiscal year 1999-2000, funds to the Department of Community Colleges 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 community college institutional personnel supported by State funds.  The State Board of Community Colleges shall establish guidelines for providing their salary increases to community college institutional personnel.  Salary funds shall be used to provide an average annual salary increase of three percent (3%) to all full-time employees and part-time employees on a pro rata basis.

UNIVERSITY OF NORTH CAROLINA SYSTEM/EPA SALARY INCREASES

Section 117.(a)	The Director of the Budget shall transfer to the Board of Governors of The University of North Carolina sufficient funds from the Reserve for Compensation Increase, created in this act for fiscal year 1999-2000, to provide an annual average salary increase of three percent (3%), including funds for the employer's retirement and social security contributions, commencing July 1, 1999, for all employees of The University of North Carolina, as well as employees other than teachers of the North Carolina School of Science and Mathematics, supported by State funds and whose salaries are exempt from the State Personnel Act (EPA).  These funds shall be allocated to individuals according to the rules adopted by the Board of Governors, or the Board of Trustees of the North Carolina School of Science and Mathematics, as appropriate, and may not be used for any purpose other than for salary increases and necessary employer contributions provided by this section.
Section 117.(b)	The Director of the Budget shall transfer to the Board of Governors of The University of North Carolina sufficient funds from the Reserve for Compensation Increase, created in this act for fiscal biennium 1999-2001, to provide an annual average salary increase of seven  and one-half percent (7.5%) in 1999-2000 and seven and six-tenths percent (7.6%) in 2000-2001, including funds for the employer's retirement and social security contributions, commencing July 1, 1999, and July 1, 2000, for all teaching employees of the North Carolina School of Science and Mathematics supported by State funds and whose salaries are exempt from the State Personnel Act (EPA).  These funds shall be allocated to individuals according to the rules adopted by the Board of Trustees of the North Carolina School of Science and Mathematics and may not be used for any purpose other than for salary increases and necessary employer contributions provided by this section.

COMPENSATION BONUS/STATE EMPLOYEES /SCHOOL PERSONNEL

Section 118.(a)	Any person:
(1)	Whose salary is set by or under this act, except for Public School employees paid off the Teacher or Principal/Assistant Principal salary schedules, other than Sections 102, 103, 104, 105(a), 106, 119(a), and 119(c), 119(d), 119(e) except that the exclusion of those under 119(c), 119(d), and 119(e) only applies to whose salaries are set by the State Personnel Act; and
(2)	Who was, on July 1, 1999, a permanent officer or permanent employee shall receive not later than October of 1999 a compensation bonus of one-half percent (1/2%)  except that:
a.	The compensation bonus for persons subject to Section 116 of this act shall be an average of one-half percent (1/2%) per year and shall be allocated in accordance with guidelines adopted by the State Board of Community Colleges; except for teaching faculty at the community colleges.
b.	The compensation bonus for persons subject to Section 117 of this act shall be an average of one-half percent (1/2%) per year and shall be allocated to individuals according to the rules adopted by the Board of Governors, or the Board of Trustees of the North Carolina School of Science and Mathematics, except for teaching faculty of the UNC System as appropriate.
c.	The guidelines and rules adopted under sub-subdivisions a. and b. of this subdivision may cover employees of those institutions whose first day of employment for the 1999-2000 academic year came after July 1, 1999.
Section 118.(a1)	Any person:
(1)	Who did not receive a compensation bonus under subsection (a) of this section; and
(2)	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 Sections 114 through 117 of this act shall receive in the fourth payroll period of the 1999-2000 school year a compensation bonus of one-half percent (1/2%) of the annual salary for that position.
Section 118.(b)	The annual salary on which the percentage compensation bonus is based is the annual salary in effect during the pay period in which the bonus is paid.
Section 118.(c)	The Director of the Budget shall transfer from the Reserve for Compensation Bonus provided by this act sufficient funds to implement this section.

MOST STATE EMPLOYEES

Section 119.(a)	The salaries in effect July 30, 1999, of all permanent full-time State employees whose salaries are set in accordance with the State Personnel Act, and who are paid from the General Fund or the Highway Fund shall be increased, on or after July 1, 1999, unless otherwise provided by this act, pursuant to the Comprehensive Compensation System set forth in G.S. 126-7 and rules adopted by the State Personnel Commission as follows:
(1)	Career growth recognition awards in the amount of two percent (2%);
(2)	A cost-of-living adjustment in the amount of one percent (1%); and
(3)	A performance bonus in the amount of one-half percent (1/2%).
Notwithstanding G.S. 126-7(4a), any permanent full-time State employee whose salary is set in accordance with the State Personnel Act and whose salary is at the top of the salary range or within two percent (2%) of the top of the salary range shall receive a one-time bonus of two percent (2%) less the career growth recognition award the employee receives.  The employee shall receive the career growth bonus at the time the employee is eligible for the career growth recognition award, but not earlier than July 1, 1999.
Section 119.(b)	Except as otherwise provided in this act, salaries in effect June 30, 1999, for permanent full-time State officials and persons in exempt positions that are recommended by the Governor or the Governor and the Advisory Budget Commission and set by the General Assembly shall be increased by three percent (3%) commencing July 1, 1999.
Section 119.(c)	The salaries in effect June 30, 1999, for all permanent part-time State employees shall be increased on and after July 1, 1999, by pro rata amounts of the salary increases provided for permanent full-time employees covered under subsection (a) of this section.
Section 119.(d)	The Director of the Budget may allocate out of special operating funds or from other sources of the employing agency, except tax revenues, sufficient funds to allow a salary increase on and after July 1, 1999, in accordance with subsection (a), (b), or (c) of this section, including funds for the employer's retirement and social security contributions, of the permanent full-time and part-time employees of the agency.
Section 119.(e)  Within regular Executive Budget Act procedures as limited by this act, all State agencies and departments may increase on an equitable basis the rate of pay of temporary and permanent hourly State employees, subject to availability of funds in the particular agency or department, by pro rata amounts of the three percent (3%) salary increase provided for permanent full-time employees covered by the provisions of subsection (a) of this section, commencing July 1, 1999.

ALL STATE-SUPPORTED PERSONNEL

Section 119A.(a)  Salaries and related benefits for positions that are funded partially from the General Fund or Highway Fund and partially from sources other than the General Fund or Highway Fund shall be increased from the General Fund or Highway Fund appropriation only to the extent of the proportionate part of the salaries paid from the General Fund or Highway Fund.
Section 119A.(b)  The granting of the salary increases under this act does not affect the status of eligibility for salary increments for which employees may be eligible unless otherwise required by this act.
Section 119A.(c)  The salary increases provided in this act are to be effective July 1, 1999, do not apply to persons separated from State service due to resignation, dismissal, reduction in force, death, or retirement, whose last workday is prior to July 1,1999, or to employees involved in final written disciplinary procedures.  The employee shall receive the increase on a current basis when the final written disciplinary procedure is resolved.
Payroll checks issued to employees after July 1, 1999, which represent payment of services provided prior to July 1, 1999, shall not be eligible for salary increases provided for in this act.  This subsection shall apply to all employees, subject to or exempt from the State Personnel Act, paid from State funds, including public schools, community colleges, and The University of North Carolina.
Section 119A.(d)  The Director of the Budget shall transfer from the Reserve for Compensation Increase in this act for fiscal year 1999-2000 all funds necessary for the salary increases provided by this act, including funds for the employer's retirement and social security contributions.
Section 119A.(e)  Nothing in this act authorizes the transfer of funds between the General Fund and the Highway Fund for salary increases.

PART XIX.  MISCELLANEOUS PROVISIONS

TRAVEL RATES OF STATE EMPLOYEES

Section 120.  G.S. 138-6(a) reads as rewritten:
"(a)	Travel on official business by the officers and employees of State departments, institutions and agencies which operate from funds deposited with the State Treasurer shall be reimbursed at the following rates:
(1)	For transportation by privately owned automobile, the business standard mileage rate set by the Internal Revenue Service per mile of travel and the actual cost of tolls paid. Any other law which sets a mileage rate by referring to the rate set herein, instead establishes a rate of twenty-five cents (25¢) per mile. No reimbursement shall be made for the use of a personal car in commuting from an employee's home to his duty station in connection with regularly scheduled work hours. Any designation of an employee's home as his duty station by a department head shall require prior approval by the Office of State Budget and Management on an annual basis.
(2)	For bus, railroad, Pullman, or other conveyance, actual fare.
(3)	For expenses incurred for subsistence, payment of eighty-one dollars ($81.00) per day when traveling in-state or ninety-three dollars ($93.00) per day when traveling out-of-state. Payment of sales tax, lodging tax, local tax, or service fees applied to the cost of lodging are to be paid in addition to the daily subsistence amount. The employee may exceed the part of the ceiling allocated for lodging without approval for overexpenditure provided that the total lodging and food reimbursement does not exceed the maximum provided by this subdivision.  When travel involves less than a full day (24-hour period), a reasonable prorated amount shall be paid in accordance with regulations and criteria which shall be promulgated and published by the Director of the Budget. Reimbursement to State employees for lunches eaten while on official business may be made only in the following circumstances:
a.	When an overnight stay is required reimbursement is allowed while an employee is in travel status;
b.	When the cost of the lunch is included as part of a registration fee for a formal congress, conference, assembly, or convocation, by whatever name called. Such assembly must involve the active participation of persons other than the employees of a single State department, institution, or agency and must be necessary for conducting official State business; or
c.	When the State employee is a member of, or providing staff assistance to, a State board, commission, committee, or council which operates from funds deposited with the State Treasurer, and the lunch is preplanned as part of the meeting for the entire board, commission, committee, or council.
(4)	For convention registration fees not to exceed the actual amount expended as shown by a valid receipt or invoice.
(5)	Effective on July 1, 2001, and effective on July 1 of each odd-numbered year thereafter, the Director of the Budget shall revise the amounts of payment of subsistence per day when traveling in-State and out-of-state by an amount equal to the percentage increase in the Consumer Price Index for All Urban Consumers for the most recent 24-month period."

EFFECT OF HEADINGS

Section 121.  The headings to the Parts and sections of this act are a convenience to the reader and are for reference only.  The headings do not expand, limit, or define the text of this act.

MOST TEXT APPLIES ONLY TO 1999-2001

Section 122.  Except for statutory changes or other provisions that clearly indicate an intention to have effects beyond the 1999-2001 biennium, the textual provisions of this act shall apply only to funds appropriated for and activities occurring during the 1999-2001 biennium.

SEVERABILITY CLAUSE

Section 123.  If any section or provision of this act is declared unconstitutional or invalid by the courts, it does not affect the validity of the act as a whole or any part other than the part so declared to be unconstitutional or invalid.

EFFECTIVE DATE

Section 124.  Except as otherwise provided, this act becomes effective July 1, 1999.