North Carolina § 143C-4-2 - Savings Reserve.

§ 143C-4-2. Savings Reserve.

Creation. - The Savings Reserve is established as a reserve in the General Fund and is a component of the unappropriated General Fund balance. General Use of Funds. - In each fiscal year, funds reserved to the Savings Reserve shall be available for expenditure in an aggregate amount that does not exceed seven and one-half percent (7.5%) of the prior fiscal year's General Fund operating budget appropriations, excluding departmental receipts, upon appropriation by a majority vote of the membership of the Senate and House of Representatives present and voting for any of the following purposes: To cover a decline in General Fund revenue from one fiscal year to another. To cover the difference between that fiscal year's General Fund operating budget appropriations, excluding departmental receipts, and projected revenue. To pay costs imposed by a court or administrative order. To provide relief and assistance from the effects of an emergency, as that term is defined in G.S. 166A-19.3. Extraordinary Use of Funds. - In each fiscal year, funds reserved to the Savings Reserve shall be available for expenditure upon a two-thirds vote of the membership of the Senate and House of Representatives present and voting for any of the following purposes: To use for any of the purposes set forth in subdivisions (1) through (4) of subsection (b) of this section in an aggregate amount that exceeds seven and one-half percent (7.5%) of the prior fiscal year's General Fund operating budget appropriations, excluding departmental receipts. For a purpose not set forth in subdivisions (1) through (4) of subsection (b) of this section in any amount. Repealed by Session Laws 2017-5, s. 1, effective October 1, 2017. Savings Reserve Requirement. - Each Current Operations Appropriations Act enacted by the General Assembly shall include a transfer to the Savings Reserve of fifteen percent (15%) of each fiscal year's estimated growth in State tax revenues that are deposited in the General Fund, except that if that transfer would cause the balance of the Reserve to exceed the recommended Savings Reserve balance developed pursuant to subsection (f) of this section then the amount transferred pursuant to this subsection shall be reduced accordingly. Actual Transfer of Funds to Savings Reserve. - Each fiscal year, the Office of State Controller shall transfer to the Savings Reserve the estimated growth amount required by subsection (d) of this section. Upon calculation of the actual growth in State tax revenues that are deposited in the General Fund, the Office of State Controller shall adjust the amount of the transfer to the Savings Reserve to achieve an amount equivalent to fifteen percent (15%) of the actual growth. Evaluation of Savings Reserve. - The Office of State Budget and Management and the Fiscal Research Division of the General Assembly shall jointly develop and annually produce an evaluation of the adequacy of the Savings Reserve based on the volatility of North Carolina's General Fund tax structure, which shall take into consideration relevant statistical and economic literature. After completing the evaluation, these entities may revise the methodology as needed to estimate the target for the Savings Reserve balance, which shall be calculated so as to be sufficient to cover two years of need for nine out of 10 scenarios involving a decline in General Fund revenue from one fiscal year to the next fiscal year. The recommended balance shall be expressed as a percentage of the prior year General Fund operating budget appropriations, excluding departmental receipts. The Office of State Budget and Management shall report this percentage to the Chairs of the House of Representatives and Senate Appropriations and Finance Committees no later than February 1 of each year. Additional Transfer of Funds by General Assembly Permissible. - Nothing in this section shall be construed to prohibit the General Assembly from directing the transfer of additional funds into the Savings Reserve. Applicability. - Nothing in this section shall be construed to apply to the Highway Fund or the Highway Trust Fund. Unfunded Liability Solvency Reserve Full-Growth Transfer Requirement. - If, and to the extent that, the balance of the Savings Reserve is at or above the recommended Savings Reserve balance developed under subsection (f) of this section as of the last day of the fiscal year, the Current Operations Appropriations Act for the succeeding fiscal year shall include a transfer to the Unfunded Liability Solvency Reserve of fifteen percent (15%) of the succeeding fiscal year's estimated growth in State tax revenues that are deposited in the General Fund. Unfunded Liability Solvency Reserve Partial Growth Transfer Requirement. - If, and to the extent that, the balance of the Savings Reserve is below the recommended Savings Reserve balance developed under subsection (f) of this section as of the last day of the fiscal year, prior to the transfer of fifteen percent (15%) of the succeeding fiscal year's estimated growth in State tax revenues that are deposited in the General Fund, then the following shall apply: If, upon transfer to the Savings Reserve funds in the amount of fifteen percent (15%) of estimated growth in State tax revenues deposited in the General Fund, the balance of the Savings Reserve is above the recommended Savings Reserve balance developed under subsection (f) of this section, then the Current Operations Appropriations Act shall include a transfer to the Unfunded Liability Solvency Reserve of an amount equal to the difference between the recommended balance of the Savings Reserve developed under subsection (f) of this section and the balance of the Savings Reserve upon transfer of fifteen percent (15%) of estimated growth in State tax revenues. If, upon transfer to the Savings Reserve funds in the amount of fifteen percent (15%) of estimated growth in State tax revenues deposited in the General Fund, the balance of Savings Reserves is at or below the recommended Savings Reserve balance developed under subsection (f) of this section, then no such transfer described in subdivision (1) of this subsection shall occur. History (2006-203, s. 3; 2017-5, s. 1; 2018-30, s. 2(c).) Cross References. - As to procedures to be followed when the Current Operations Appropriations Act does not become law prior to the end of certain fiscal years, see G.S. 143C-5-4 . Editor's Note. - Session Laws 2010-31, s. 2.2(c), provides: "Notwithstanding G.S. 143C-4-2 , the State Controller shall not transfer funds to the Savings Reserve Account on June 30, 2010. This subsection becomes effective June 30, 2010." Session Laws 2010-31, s. 1.1, provides: "This act shall be known as the 'Current Operations and Capital Improvements Appropriations Act of 2010'." Session Laws 2010-31, s. 32.3, provides: "Except for statutory changes or other provisions that clearly indicate an intention to have effects beyond the 2010-2011 fiscal year, the textual provisions of this act apply only to funds appropriated for, and activities occurring during, the 2010-2011 fiscal year." Session Laws 2010-31, s. 32.6, is a severability clause. Session Laws 2011-145, s. 2.2(m), as amended by Session Laws 2011-395, s. 5(b), provides: "Notwithstanding G.S. 143C-4-2 , the State Controller shall transfer only one hundred eighty-three million six hundred fifty thousand dollars ($183,650,000) from the unreserved fund balance to the Savings Reserve Account on June 30, 2011. This is not an 'appropriation made by law,' as that phrase is used in Section 7(1) of Article V of the North Carolina Constitution. This subsection becomes effective June 30, 2011." Session Laws 2011-145, s. 1.1, provides: "This act shall be known as the 'Current Operations and Capital Improvements Appropriations Act of 2011.'" Session Laws 2011-145, s. 32.2, provides: "Except for statutory changes or other provisions that clearly indicate an intention to have effects beyond the 2011-2013 fiscal biennium, the textual provisions of this act apply only to funds appropriated for, and activities occurring during, the 2011-2013 fiscal biennium." Session Laws 2011-145, s. 32.5, is a severability clause. Session Laws 2012-142, s. 2.2(d), provides: "Notwithstanding G.S. 143C-4-2 and pursuant to subsection (a) of this section, the State Controller shall transfer one hundred twenty-three million one hundred seventy thousand nine hundred twenty-four dollars ($123,170,924) from the unreserved fund balance to the Savings Reserve Account on June 30, 2012." "This is not an 'appropriation made by law,' as that phrase is used in Section 7(1) of Article V of the North Carolina Constitution." Session Laws 2012-142, s. 1.2, provides: "This act shall be known as 'The Current Operations and Capital Improvements Appropriations Act of 2012.'" Session Laws 2012-142, s. 27.4, provides: "Except for statutory changes or other provisions that clearly indicate an intention to have effects beyond the 2012-2013 fiscal year, the textual provisions of this act apply only to funds appropriated for, and activities occurring during, the 2012-2013 fiscal year." Session Laws 2012-142, s. 27.7, is a severability clause. Session Laws 2013-360, s. 2.2(d), as amended by Session Laws 2014-100, s. 2.2(c), provides: "Notwithstanding G.S. 143C-4-2 , the State Controller shall transfer a total of two hundred thirty-two million five hundred thirty-seven thousand nine hundred forty-two dollars ($232,537,942) from the unreserved fund balance to the Savings Reserve Account on June 30, 2013; the State Controller shall not transfer funds from the unreserved fund balance to the Savings Reserve Account for the 2014-2015 fiscal year on June 30, 2014. The transfer for the 2013-2014 fiscal year is not an "appropriation made by law," as that phrase is used in Section 7(1) of Article V of the North Carolina Constitution. This subsection becomes effective June 30, 2013." Session Laws 2013-360, s. 1.1, provides: "This act shall be known as the 'Current Operations and Capital Improvements Appropriations Act of 2013.'" Session Laws 2013-360, s. 38.2, provides: "Except for statutory changes or other provisions that clearly indicate an intention to have effects beyond the 2013-2015 fiscal biennium, the textual provisions of this act apply only to funds appropriated for, and activities occurring during, the 2013-2015 fiscal biennium." Session Laws 2013-360, s. 38.5, is a severability clause. Session Laws 2014-100, s. 6.7(a)-(g), provides: " (a) Finding. - The General Assembly finds that State budgeting is more transparent when the enacted budget for any given fiscal year appropriates all State funds intended for expenditure during that fiscal year, including funds encumbered in prior fiscal years, funds carried forward from prior fiscal years pursuant to statutory authority, and unearned revenue earned in a prior fiscal year. "(b) Review of Current Practices. - The Office of State Budget and Management and the Office of the State Controller, in consultation with the Fiscal Research Division, shall examine all of the following: "(1) How funds in the General Fund are currently accounted for, including practices relating to (i) the reversion of appropriated funds to the General Fund, (ii) the appropriation of funds to pay obligations incurred in prior fiscal years, (iii) the movement of funds into and out of special funds, and (iv) related matters. "(2) How the practices examined pursuant to subdivision (1) of this section compare with those of other states. "(3) Whether any statutory or administrative changes would improve the transparency and accounting accuracy of the General Fund. "(4) Whether the practices examined pursuant to subdivision (1) of this section comply with applicable standards of the Governmental Accounting Standards Board. "(c) Pilot Program. - The Office of State Budget and Management and the Office of the State Controller, in consultation with the Fiscal Research Division, may establish and operate a pilot program to test measures for improving the extent to which funds that are to be spent in a given fiscal year are properly budgeted in that fiscal year. The pilot program may be subject to the following: "(1) The pilot program may include the following programs and funds: "a. Some or all of the grant programs and special funds within the Department of Environment and Natural Resources. "b. Some or all of the unexpended appropriations carried forward by The University of North Carolina pursuant to G.S. 116-30.3 . "c. Any other programs and funds that are deemed to be suitable for inclusion in the pilot program. "(2) Funds and programs that are included in the pilot program may be subject to the following requirements: "a. An alternative liquidation period for encumbered funds that do not revert at the end of the 2014-2015 fiscal year under G.S. 143C-1-2(b) . "b. A requirement (i) that The University of North Carolina prepare an estimate of the amount of funds it anticipates will be carried forward into the 2015-2016 fiscal year pursuant to G.S. 116-30.3 and (ii) that this estimate be submitted to the Office of State Budget and Management and to the Fiscal Research Division no later than March 1, 2015. "(d) Report. - No later than October 1, 2015, the Office of State Budget and Management and the Office of the State Controller, in consultation with the Fiscal Research Division, shall report the results of the review and pilot program required by this section to the chairs of the Senate Appropriations•ase Budget Committee, to the chairs of the House Appropriations Committee, and to the Director of the Budget. The report may include a recommendation to extend the pilot program for an additional fiscal year, if this is deemed desirable. "(e) Recommendations for an Alternative Pilot Program. - If the Office of State Budget and Management and the Office of the State Controller, in consultation with the General Assembly's Fiscal Research Division, determine that the pilot program required by this section cannot be implemented, they shall report the reasons for reaching this conclusion, along with any other findings and recommendations for future action, to the chairs of the Senate Appropriations•ase Budget Committee, to the chairs of the House Appropriations Committee, and to the Director of the Budget no later than February 1, 2015. If a report is submitted pursuant to this subsection, then the pilot program required by subsection (c) of this section shall not be implemented, but the review required by subsection (b) of this section shall nonetheless be performed. "(f) Expiration of Pilot Program. - The pilot program required by this section shall expire upon the submission of the report required by subsection (d) of this section or the submission pursuant to subsection (e) of this section stating that the pilot program cannot be implemented." "(g) Effective Date. - This section is effective when it becomes law and applies to funds appropriated for the 2014-2015 fiscal year and subsequent fiscal years." Session Laws 2014-100, s. 6.7 became effective July 1, 2014. Session Laws 2014-100, s. 1.1, provides: "This act shall be known as 'The Current Operations and Capital Improvements Appropriations Act of 2014.'" Session Laws 2014-100, s. 38.4, provides: "Except for statutory changes or other provisions that clearly indicate an intention to have effects beyond the 2014-2015 fiscal year, the textual provisions of this act apply only to funds appropriated for, and activities occurring during, the 2014-2015 fiscal year." Session Laws 2014-100, s. 38.7, is a severability clause. Session Laws 2015-133, s. 5(b), provides: "Notwithstanding G.S. 143C-4-2 , for the 2014-2015 fiscal year only, funds shall not be reserved to the Savings Reserve Account, and the State Controller shall not transfer funds from the unreserved credit balance to the Savings Reserve Account on June 30, 2015." Session Laws 2015-241, s. 2.2(e), provides: "Notwithstanding G.S. 143C-4-2 , the State Controller shall transfer a total of two hundred million dollars ($200,000,000) from the unreserved fund balance to the Savings Reserve Account on June 30, 2015. This transfer is not an "appropriation made by law," as that phrase is used in Section 7(1) of Article V of the North Carolina Constitution. This subsection becomes effective June 30, 2015." Session Laws 2015-241, s. 1.1, provides: "This act shall be known as 'The Current Operations and Capital Improvements Appropriations Act of 2015.' " Session Laws 2015-241, s. 33.4, provides: "Except for statutory changes or other provisions that clearly indicate an intention to have effects beyond the 2015-2017 fiscal biennium, the textual provisions of this act apply only to funds appropriated for, and activities occurring during, the 2015-2017 fiscal biennium." Session Laws 2015-241, s. 33.6, is a severability clause. Session Laws 2016-94, s. 2.2(c), provides: "Notwithstanding G.S. 143C-4-2 , the State Controller shall transfer a total of four hundred seventy-three million six hundred sixteen thousand eight hundred one dollars ($473,616,801) from the unreserved fund balance to the Savings Reserve Account on June 30, 2016. This transfer is not an 'appropriation made by law,' as that phrase is used in Section 7(1) of Article V of the North Carolina Constitution. This subsection becomes effective June 30, 2016." Session Laws 2016-94, s. 1.2, provides: "This act shall be known as the 'Current Operations and Capital Improvements Appropriations Act of 2016.'" Session Laws 2016-94, s. 39.4, provides: "Except for statutory changes or other provisions that clearly indicate an intention to have effects beyond the 2016-2017 fiscal year, the textual provisions of this act apply only to funds appropriated for, and activities occurring during, the 2016-2017 fiscal year." Session Laws 2016-94, s. 39.7, is a severability clause. Session Laws 2017-5, s. 7, provides: "During the 2019 Regular Session of the General Assembly, it is the intent of the General Assembly to study whether the changes to the Savings Reserve enacted in this act have successfully accomplished its purpose of establishing and maintaining sufficient reserves to address unanticipated events and circumstances, such as natural disasters, economic downturns, threats to public safety, health, and welfare, and other emergencies." Session Laws 2017-5, s. 8, provides: "The Office of State Budget and Management and the Fiscal Research Division shall commence development of the methodology for arriving at the consensus estimate required in G.S. 143C-4-2(f) , as enacted by this act." Session Laws 2017-57, s. 2.2(c), provides: "Notwithstanding G.S. 143C-4-2 , the State Controller shall transfer a total of three hundred sixty-three million nine hundred twenty-eight thousand three hundred seventy dollars ($363,928,370) from the unreserved fund balance to the Savings Reserve Account on June 30, 2017. This transfer is not an "appropriation made by law," as that phrase is used in Section 7(1) of Article V of the North Carolina Constitution. This subsection becomes effective June 30, 2017." Session Laws 2017-57, s. 1.1, provides: "This act shall be known as the 'Current Operations Appropriations Act of 2017.'" Session Laws 2017-57, s. 39.4, provides: "Except for statutory changes or other provisions that clearly indicate an intention to have effects beyond the 2017-2019 fiscal biennium, the textual provisions of this act apply only to funds appropriated for, and activities occurring during, the 2017-2019 fiscal biennium." Session Laws 2017-57, s. 39.6, is a severability clause. Session Laws 2018-5, s. 2.2(d), provides: "Notwithstanding any provision of G.S. 143C-4-2 to the contrary, the State Controller shall transfer the sum of fifty-nine million seven hundred fifty-five thousand two hundred thirty dollars ($59,755,230) in nonrecurring funds for the 2018-2019 fiscal year from the Savings Reserve to the State Emergency Response/Disaster Relief Reserve in the General Fund." Session Laws 2018-5, s. 1.1, provides: "This act shall be known as the 'Current Operations Appropriations Act of 2018.'" Session Laws 2018-5, s. 39.4, provides: "Except for statutory changes or other provisions that clearly indicate an intention to have effects beyond the 2018-2019 fiscal year, the textual provisions of this act apply only to funds appropriated for, and activities occurring during, the 2018-2019 fiscal year." Session Laws 2018-5, s. 39.7, is a severability clause. Session Laws 2018-134, 3rd Ex. Sess., s. 1.1, provides: "This act shall be known as 'The Hurricane Florence Emergency Response Act.'" Session Laws 2018-134, 3rd Ex. Sess., s. 4.1, provides: "Notwithstanding G.S. 143C-4-2 , the State Controller shall transfer the sum of fifty-six million five hundred thousand dollars ($56,500,000) for the 2018-2019 fiscal year from the Savings Reserve in the General Fund to the Hurricane Florence Disaster Recovery Fund and these funds are appropriated within the Fund and shall be allocated as follows: "(1) Six million five hundred thousand dollars ($6,500,000) to the Department of Public Instruction to supplement or replace lost compensation of school lunch employees due to school closures resulting from Hurricane Florence. "(2) Fifty million dollars ($50,000,000) for the following purposes related to Hurricane Florence: "a. To provide the State match for federal disaster assistance programs. "b. To pay for the costs and the relief and assistance authorized by G.S. 166A-19.42(b) . This sub-subdivision applies to the North Carolina counties that are or become designated under a major disaster declaration by the President of the United States under the Stafford Act (P.L. 93-288) as a result of Hurricane Florence." Session Laws 2018-134, 3rd Ex. Sess., s. 5.2, provides: "It is the intent of the General Assembly to review in 2018 and 2019 the funds appropriated by Congress for disaster relief and to consider actions needed to address any remaining unmet needs. It is also the intent of the General Assembly to review the adequacy of the measures funded by Section 4.1 of this act at that time." Session Laws 2018-138, s. 1.5, provides: "Notwithstanding Section 4.1 of S.L. 2018-134 and Section 4.1 of S.L. 2018-136, of the funds appropriated in the Hurricane Florence Disaster Recovery Fund to the Department of Public Safety for state match for federal disaster assistance the following may be used as follows: "(1) Up to twenty million dollars ($20,000,000) may be made available by the Office of Recovery and Resiliency in the Department of Public Safety (Office) to provide loans to local governments in counties designated under a major disaster declaration by the President of the United States under the Stafford Act (P.L. 93-288) as a result of Hurricane Florence to assist with cash flow management while the local governments await federal reimbursement. The Office shall enter into agreements with local governments to ensure the proper use of the funds and the return of the funds to the State once the local governments have received federal reimbursement. The Office shall operate the program on a revolving loan fund basis to assist the maximum number of local governments possible. Funds returned to the State shall be deposited in the Hurricane Florence Disaster Recovery Fund created in S.L. 2018-136. "(2) Five million dollars ($5,000,000) to the Back@Home North Carolina in the Department of Health and Human Services, a time-limited program, to prevent homelessness and create stability and long-term self-sufficiency for individuals displaced by Hurricane Florence." Effect of Amendments. - Session Laws 2017-5, s. 1, effective October 1, 2017, rewrote this section. Session Laws 2018-30, s. 2(c), effective October 1, 2018, added subsections (i) and (j).