HB 7 — LRC/Strengthen Savings Reserve.

GENERAL ASSEMBLY OF NORTH CAROLINA SESSION 2017 H 21 HOUSE BILL 7* Second Edition Engrossed 2/15/17 Short Title:

For a complete list of sponsors, refer to the North Carolina General Assembly web site.

Funds In each fiscal year, funds reserved to the Savings Reserve Account shall be available for expenditure only upon an act of appropriation by the General Assembly.expenditure, in an aggregate amount that does not exceed seven and one-half percent (7.5%) of the prior fiscal year's General Fund operatingnet budgetappropriations appropriations,operating excludingbudget, 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:

(2) To cover the difference between that fiscal year's Generalbase Fund operating budget appropriations,needs excluding departmental receipts, and projected revenue.

(1) 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 operatingnet budgetappropriations appropriations,operating excludingbudget. departmental receipts.

*H7-v-2* General Assembly Of North Carolina Session 2017 (c) Goal for Savings Reserve Account Balance.

– The General Assembly recognizes the need to establish and maintain sufficient reserves to address unanticipated events and *H7-v-1* General Assembly Of North Carolina Session 2017 circumstances such as natural disasters, economic downturns, threats to public safety, health, and welfare, and other emergencies.

(d) SavingsTransfer Reserveof Requirement.Funds Into Savings Reserve.

– 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 revenuesrevenues, 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 (e) of this section then the amount transferred pursuant to this subsection shall be reduced accordingly.

(e) ActualConsensus TransferEstimate. 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.

(f) Evaluation of Savings Reserve.

The recommended balance shall be expressed as a percentage of the prior year General Fund operatingnet budgetappropriations appropriations,operating excludingbudget. departmental receipts.

(g)(f) AdditionalGeneral TransferAssembly ofMay FundsAppropriate byAdditional GeneralFunds. Assembly Permissible.

– Nothing in this section shall be construed to prohibit the General Assembly from directingdepositing the transfer of additional funds into the Savings Reserve.Reserve." SECTION 2.

(h) Applicability.

– Nothing in this section shall be construed to apply to the Highway Fund or the Highway Trust Fund." SECTION 2.

Page 2 House Bill 7*-Second Edition General Assembly Of North Carolina Session 2017 (1a) The Governor's Recommended State Budget shall include a base budget, which shall be presented in the budget support document pursuant to subdivision (2) of this subsection.

… (6) The Governor's Recommended State Budget shall include a transfer to the Savings Reserve of fifteen percent (15%) of the estimated growth in State tax revenuesPage that2 areHouse depositedBill in7*-First theEdition General FundAssembly Of North Carolina Session 2017 revenues for each fiscal year of the upcoming biennium.

143C-4-2(e).143C-4-2(e)." SECTION 4.

(c) This section does not apply to general obligation bond indebtedness of the State serviced by the Highway Fund or Highway Trust Fund or other transportation-related debt financing arrangements." SECTION 4.

143C-4-2(e).143C-4-2(e)." SECTION 5.

House Bill 7*-Second Edition Page 3 General Assembly Of North Carolina Session 2017 (c) This section does not apply to special indebtedness of the State serviced by the Highway Fund or Highway Trust Fund or other transportation-related debt financing arrangements." SECTION 5.

Any cash transferred from reserves or funds, including special funds, shall be fully restored by the end of the fiscal year in which the funds were transferred, House Bill 7*-First Edition Page 3 General Assembly Of North Carolina Session 2017 and interest shall be paid on all cash transferred to the General Fund pursuant to this subdivision from interest-bearing accounts." SECTION 7.

TheSections Office3 of State Budget and Management4 and the Fiscal Research Division shall commence development of thethis methodologyact forbecome arrivingeffective atJuly the1, consensus2017. estimate required in G.S.

143C-4-2(e) as enacted by this act.

SECTION 9.

Sections 8 and 9 of this act are effective when this act becomes law.

Page 4 House Bill 7*-Second7*-First Edition