North Carolina 2019-2020 Session Status: Enacted Bipartisan · 3 D · 1 I cosponsors

HB 777 — Pay Increases/SBI & ALE.

Last action — Signed by Gov. 8/30/2019

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    Introduced
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    Passed House
  4. ✓
    Passed Senate
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    To Executive
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    Enacted

This bill has been enacted into law. Introduced April 15, 2019. Enacted.

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Likely to advance 98% · high confidence

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High

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  • Enacted

    Current position in the legislative process.

  • 14 sponsors

    3 primary, 11 co-sponsors signed on.

  • Bipartisan support

    Sponsored across 2 parties (3 D · 1 I) — cross-party backing.

  • Cleared a recorded vote

    Passed 2 recorded votes so far.

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Bill Text

What changed in the latest version

90 added · 1140 removed

Plain-language change summary

The amendment to HB 777 adds a provision allowing individuals who were initially classified as part-time but actually worked at least 1,000 hours in a calendar year to buy back credit for membership service. This change is important because it provides an opportunity for those workers to enhance their retirement benefits, correcting an oversight where they were deemed ineligible despite meeting the necessary work hours. It sets a maximum limit of five years for the amount of service credit they can purchase, ensuring the policy remains structured.

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GENERAL ASSEMBLY OF NORTH CAROLINA SESSION 2019 H 2 HOUSE BILL 777 Senate Pensions and Retirement and Aging Committee Substitute Adopted 6/20/19 Short TitleVarious Retirement Chngs/Wastewater Reform.
GENERAL ASSEMBLY OF NORTH CAROLINA SESSION 2019 H 1 HOUSE BILL 777 Short Title:
Purchase Opt/Credit for Prior Year FT Service.
Representatives Belk, Gill, Hurley, and Martin (Primary Sponsors).
For a complete list of sponsors, refer to the North Carolina General Assembly web site.
April 16, 2019 A BILL TO BE ENTITLED AN ACT TO AMEND THE LAWS GOVERNING THE PURCHASE OF OMITTED MEMBERSHIP SERVICE IN THE TEACHERS' AND STATE EMPLOYEES' RETIREMENT SYSTEM AND THE LOCAL GOVERNMENTAL EMPLOYEES' RETIREMENT SYSTEM;
Pensions and Retirement, if favorable, Rules, Calendar, and Operations of the House April 16, 2019 A BILL TO BE ENTITLED AN ACT TO ALLOW FOR THE PURCHASE OF CREDITABLE SERVICE IN THE TEACHERS' AND STATE EMPLOYEES' RETIREMENT SYSTEM AND THE LOCAL GOVERNMENTAL EMPLOYEES' RETIREMENT SYSTEM FOR SERVICE IN A PRIOR YEAR WHEN THAT SERVICEWAS ASSUMED TOBE PART-TIME BUTWAS ACTUALLY FULL-TIME SERVICE.
TO MAKE CHANGES TO THE UNCLAIMED PROPERTY STATUTES;
TO REQUIRE STRESS TESTING FOR THE TEACHERS' AND STATE EMPLOYEES' RETIREMENT SYSTEM, AS RECOMMENDED BY THE PEW FOUNDATION;
TO MAKE TECHNICAL CORRECTIONS TO THE LAWS PERTAINING TO THE TEACHERS' AND STATE EMPLOYEES' RETIREMENT SYSTEM, THE LOCAL GOVERNMENTAL EMPLOYEES' RETIREMENT SYSTEM, THE CONSOLIDATED JUDICIAL RETIREMENT SYSTEM, THE NORTH CAROLINA NATIONAL GUARD PENSION FUND, THE NORTH CAROLINA PUBLIC SCHOOL TEACHERS' AND PROFESSIONAL EDUCATORS' INVESTMENT PLAN, AND THE NORTH CAROLINA STATE HEALTH PLAN FOR TEACHERS AND STATE EMPLOYEES;
TO IMPROVE VIABILITY OF THE WATER AND WASTEWATER SYSTEMS OF CERTAIN UNITS OF LOCAL GOVERNMENT BY REQUIRING LOCAL GOVERNMENT COMMISSION APPROVAL OF GRANT APPLICATIONS;
TO REQUIRE CERTAIN WATER AND WASTEWATER SYSTEMS TO UNDERGO A REVIEW OF INFRASTRUCTURE MANAGEMENT, ORGANIZATIONAL MANAGEMENT, AND FINANCIAL MANAGEMENT;
TO CREATE THE VIABLE UTILITY RESERVE TO PROVIDE GRANT MONEY FOR LOCAL GOVERNMENT UNITS;
TO PROVIDE A STATUTORY PROCESS FOR MERGER AND DISSOLUTION OF WATER AND WASTEWATER SYSTEMS ESTABLISHED UNDER CHAPTER 162A OF THE GENERAL STATUTES;
TO PROMOTE THE IMPORTANCE OF INTERLOCAL AGREEMENTS TO THE OPERATION OF WATER AND WASTEWATER SYSTEMS;
AND TO STUDY SUB-BASIN TRANSFERS AND HISTORICAL CHARTERS.
PART I.
SECTION 1.(a) G.S.
OMITTED MEMBERSHIP SERVICE SECTION 1.(a) G.S.
135-4 is amended by adding a new subsection to read:
135-4(v) reads as rewritten:
"(p2) Credit For Prior Year Full-time Service.
"(v) Omitted Membership Service.
– An individual who was not eligible to earn membership service in a calendar year due to the anticipation that the individual would not meet the definition of employee under G.S.
– A member who had service as an employee as defined in G.S.
135-1 because that individual would not work at least 30 hours per week for nine or more months in that calendar year may purchase creditable service for that calendar year if that individual did work at least 30 hours per week for nine or more months in that calendar year.
135-1(10) and G.S.
The following requirements apply to this purchase of creditable service:
128-21(10) or as a teacher as defined in G.S.
(1) No later than January 31 of each year, all employers shall provide written notification of the total hours worked in the preceding calendar year to any individual who worked at least 30 hours per week for nine or more months in the preceding calendar year who was classified as part-time and who was not eligible to earn membership service due to that classification.
135-1(25) and who was omitted from contributing membership through error may be allowed membership service, after submitting clear and convincing evidence of the error, as follows:
Employers must send a copy of each notification to the Retirement Systems Division no later than January 31 of each year.
*H777-v-2* General Assembly Of North Carolina Session 2019 (1) Within 90 days of the omission, by the payment of employee and employer contributions that would have been paid;
(2) An individual who received the written notification under subdivision (1) of this section may purchase the applicable amount of creditable service based upon the hours that the individual actually worked in the preceding calendar year.
or (2) After 90 days and prior to three years of the omission, by the payment of the employee and employer contributions that would have been paid plus interest compounded annually at a rate equal to the greater of the average yield on the pension accumulation fund for the preceding calendar year or the actuarial investment rate-of-return assumption, as adopted by the Board of Trustees;
The creditable service must be purchased as a lump sum in an amount equal to the employee contributions that would have been required had the individual been earning membership service in that preceding calendar year.
or (3) After three years of the omission, by the payment of an amount equal to the full cost of the service credits calculated on the basis of the assumptions used for the purposes of the actuarial valuation of the system's liabilities, and shall take into account the additional retirement allowance arising on account of such additional service credit commencing at the earliest age at which a member could retire on an unreduced retirement allowance, as determined by the Board of Trustees upon the advice of the consulting actuary, plus an administrative fee to be set by the Board of Trustees.
Purchases made under this subdivision must be made and paid in full within 30 days of receipt of the written notification.
Notwithstanding the foregoing provisions of this subdivision that provide for the purchase of service credits, the terms "full cost", "full liability", and "full actuarial cost" include assumed annual post-retirement allowance increases, as determined bythe Board of Trustees, from the earliest age at which a member could retire on an unreduced service allowance.
Any service not purchased by this deadline may be eligible for purchase under subsection (p1) of this section.
Nothing contained in this subsection shall prevent an employer or member from paying all or a part of the cost of the omitted membership service;
(3) Upon receipt of the full payment as required by subdivision (2) of this subsection, the Retirement Systems Division shall issue an invoice to the *H777-v-1* General Assembly Of North Carolina Session 2019 employer in the amount that the employer would have contributed had the individual been earning membership service in the preceding calendar year.
and to the extent paid by the employer, the cost paid by the employer shall be credited to the pension accumulation fund;
(4) Employers of any individual purchasing service credit under this section shall remit in one lump sum the amount that the employer would have contributed had the individual been earning membership service in the preceding calendar year.
and to the extent paid by the member, the cost paid by the members shall be credited to the member's annuity savings account;
Payments must be made and paid in full within 30 days of receipt of the invoice from the Retirement Systems Division under subdivision (3) of this subsection.
provided, however, an employer does not discriminate against any member or group of members in his employ in paying all or any part of the cost of the omitted membership service.
(5) The cumulative amount of creditable service purchased under this subsection may not exceed a total of five years.
Upon request from an employee, an employer shall provide written notification of the total hours worked in the preceding 12 months to an employee in a position classified as part-time.
(6) This subsection does not apply to retired members." SECTION 1.(b) G.S.
An employer shall provide a copy of the notification to the Retirement Systems Division upon request.
128-26 is amended by adding a new subsection to read:
In the event that an employee was classified as part-time in error and was not eligible to earn membership service due to that error, and the employee has paid a lump sum equal to the applicable employee contributions as set forth in subdivision (2) of this subsection within one year of the omission, the employer shall be required to pay the applicable employer contributions as set forth in subdivision (2) of this section." SECTION 1.(b) G.S.
"(p1) Credit For Prior Year Full-time Service.
128-26(m) reads as rewritten:
– An individual who was not eligible to earn membership service in a calendar year due to the anticipation that the individual would not meet the definition of employee under G.S.
"(m) Omitted Membership Service.
128-21 because that individual held a position that was anticipated to require less than 1,000 hours work in that calendar year may purchase creditable service for that calendar year if that individual did work at least 1,000 hours in that calendar year.
– A member who had service as an employee as defined in G.S.
The following requirements apply to this purchase of creditable service:
135-1(10) and G.S.
(1) No later than January 31 of each year, all employers shall provide written notification of the total hours worked in the preceding calendar year to any individualwhoworkedat least1,000hoursintheprecedingcalendar yearwho was classified as part-time and who was not eligible to earn membership service due to that classification.
128-21(10) or as a teacher as defined in G.S.
Employers must send a copy of each notification to the Retirement Systems Division no later than January 31 of each year.
135-1(25) and who was omitted from contributing membership through error may be allowed membership service, after submitting clear and convincing evidence of the error, as follows:
(2) An individual who received the written notification under subdivision (1) of this section may purchase the applicable amount of creditable service based upon the hours that the individual actually worked in the preceding calendar year.
(1) within 90 days of the omission, by the payment of employee and employer contributions that would have been paid;
The creditable service must be purchased as a lump sum in an amount equal to the employee contributions that would have been required had the individual been earning membership service in that preceding calendar year.
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or (2) after 90 days and prior to three years of the omission, by the payment of the employee and employer contributions that would have been paid plus interest compounded annually at a rate equal to the greater of the average yield on the pension accumulation fund for the preceding calendar year or the actuarial investment rate-of-return assumption, as adopted by the Board of Trustees;
Purchases made under this subdivision must be made and paid in full within 30 days of receipt of the written notification.
or (3) after three years of the omission, by the payment of an amount equal to the full cost of the service credits calculated on the basis of the assumptions used for the purposes of the actuarial valuation of the System's liabilities, and shall take into account the additional retirement allowance arising on account of such additional service credit commencing at the earliest age at which a Page 2 House Bill 777-Second Edition General Assembly Of North Carolina Session 2019 member could retire on an unreduced retirement allowance, as determined by the Board of Trustees upon the advice of the consulting actuary, plus an administrative fee to be set by the Board of Trustees.
Any service not purchased by this deadline maybe eligible for purchase under subsection (p) of this section.
Notwithstanding the foregoing provisions of this subdivision that provide for the purchase of service credits, the terms "full cost", "full liability", and "full actuarial cost" include assumed annual post-retirement allowance increases, as determined bythe Board of Trustees, from the earliest age at which a member could retire on an unreduced service allowance.
(3) Upon receipt of the full payment as required by subdivision (2) of this subsection, the Retirement Systems Division shall issue an invoice to the employer in the amount that the employer would have contributed had the individual been earning membership service in the preceding calendar year.
Nothing contained in this subsection shall prevent an employer or member from paying all or a part of the cost of the omitted membership service;
(4) Employers of any individual purchasing service credit under this section shall remit in one lump sum the amount that the employer would have contributed had the individual been earning membership service in the preceding calendar year.
and to the extent paid by the employer, the cost paid by the employer shall be credited to the pension accumulation fund;
Payments must be made and paid in full within 30 days of receipt of the invoice from the Retirement Systems Division under subdivision (3) of this subsection.
and to the extent paid by the member, the cost paid by the members shall be credited to the member's annuity savings account;
(5) The cumulative amount of creditable service purchased under this subsection may not exceed a total of five years.
provided, however, an employer does not discriminate against any member or group of members in his employ in paying all or any part of the cost of the omitted membership service.
(6) This subsection does not apply to retired members." SECTION2.
In the event an employer pays all or a part of the full actuarial cost as determinedinsubdivision(3)ofthissubsection,theemployermay,atitsoption,paysuchamount either in a lump sum or by increasing its "accrued liability contribution" for the remainder of its accrued liability period.
This act becomeseffectiveJanuary1,2021, and applies to thepurchase of service for work performed on or after January 1, 2020.
In the event an employer has satisfied its accrued liability contribution, the employer may amortize its portion of the full actuarial cost over a period not to exceed ten years.
Page 2 House Bill 777-First Edition
The expense of making an actuarial valuation to determine the accrued liability contribution or the additional accrued liability contribution, required to amortize the portion of the full actuarial cost paid by the employer, shall be paid by the employer in a lump sum at the time of the actuarial valuation.
Upon request from an employee, an employer shall provide written notification of the total hours worked in the preceding 12 months to an employee in a position classified as part-time.
An employer shall provide a copy of the notification to the Retirement Systems Division upon request.
In the event that an employee was classified as part-time in error and was not eligible to earn membership service due to that error, and the employee has paid a lump sum equal to the applicable employee contributions as set forth in subdivision (2) of this subsection within one year of the omission, the employer shall be required to pay the applicable employer contributions as set forth in subdivision (2) of this subsection." SECTION 1.(c) This section becomes effective January 1, 2021, and applies to the purchase of service for work performed on or after January 1, 2020.
PART II.
UNCLAIMED REAL AND PERSONAL PROPERTY SECTION 2.(a) The title of Article 1 of Chapter 116B of the General Statutes is renamed to be "General." SECTION 2.(b) G.S.
116B-1 is recodified as G.S.
116B-2.1.
SECTION 2.(c) G.S.
116B-2 is recodified as G.S.
116B-2.2.
SECTION 2.(d) G.S.
116B-2.1, as recodified by subsection (b) of this section, through G.S.
116B-8, are recodified into a new Article 1A of Chapter 116B of the General Statutes to be named "Escheats." SECTION 2.(e) G.S.
116B-2.2, as recodified by subsection (c) of this section, reads as rewritten:
"§ 116B-2.2.
Unclaimed real and personal property escheats to the Escheat Fund.
Whenever the owner of anyreal or personal propertysituated or located within this State dies intestate,ordiestestatebutdidnotdisposeofallrealorpersonalpropertybywill,withoutleaving surviving any heirs, as defined in G.S.
29-2(3), to inherit said property under the laws of this State, such real and personal property shall escheat.
The State Treasurer shall have the right to institute a civil action in the superior court of any county in which such real or personal property is situated, against any administrator, executor, and unknown heirs or unknown claimants as party defendants, which unknown heirs or unknown claimants may be served with summons and House Bill 777-Second Edition Page 3 General Assembly Of North Carolina Session 2019 notice of such action by publication as is now provided by the laws of this State.
If an administrator or executor has been appointed, he shall make a determination that there are no known heirs or unknown claimants and shall inform the State Treasurer of that determination.
The superior court in which such civil action is instituted shall have the authority to enter a judgment therein declaring the real and personal property unclaimed as having escheated, and the real propertymaybe sold accordingto the provisions of G.S.
116B-1.
G.S.
116-2.1.
A default final judgment may be entered by the clerk of the superior court in such cases when no answer is filed by the administrator, executor, unknown heirs or unknown claimants to the complaint, or if any answer is filed, the allegations of the complaint are either admitted or not denied by such party defendants, and no claim is made in the answer to the propertyleft bysaid deceased person.
The funds derived from such sale shall be paid into the Escheat Fund where said funds, together with all other escheated funds, shall be held without liability for profit or interest, subject to any just claims therefor." SECTION 2.(f) G.S.
116B-3 reads as rewritten:
"§ 116B-3.
Unclaimed personalty on settlements of decedents' estates to the Escheat Fund.
All sums of money or other personal estate of whatever kind which shall remain in the hands of any administrator, executor, administrator c.t.a., or personal representative when the administration of an estate of a person dying intestate, or partially intestate, without leaving any knownheirs to inherit same,is readyto be closed, unrecovered orunclaimedbysuit, bycreditors, heirs, or others entitled thereto, shall, prior to the closing of the administration of the estate, be paid or delivered by such administrator or executor to the State Treasurer as an escheat and shall be included in the disbursements in the final account of such estate.
In such cases as above described, the State Treasurer is authorized to demand, sue for, recover, and collect such unclaimed moneys or other personal estate of whatever kind from any administrator or executor after the estate is readyto be closed, or from the clerk of the superior court if the unclaimed assets have been paid over to him, and the State Treasurer shall hold the same without liabilityfor profit or interest, subject to any just claims therefor.
The provisions of this section and G.S.
116B-2 G.S.
116B-2.2 shall apply to the estate of a person missing for 30 days or more and the State Treasurer may bring an action to have a receiver appointed in such case under the provisions of Chapter 28C, Estates of Missing Persons." SECTION 2.(g) G.S.
29-12 reads as rewritten:
"§ 29-12.
Escheats.
If there is no person entitled to take under G.S.
29-14 or G.S.
29-15, or if in case of an intestate born out of wedlock, there is no one entitled to take under G.S.
29-21 or G.S.
29-22, the net estate shall escheat as provided in G.S.
116B-2.G.S.
116B-2.2." SECTION3.
Article1ofChapter116BoftheGeneralStatutesisamendedbyadding a new section to read:
"§ 116B-1.1.
Policy and interpretation.
The policy of the State is to recover and transfer property to rightful owners in a manner that is consistent with the interest of the rightful owners.
Where the rightful owner cannot be appropriatelydetermined, it isthepolicyof theStatethat all benefits realized from anyunclaimed or abandoned property shall accrue to the benefit of higher education for the residents of the State.
This Chapter shall be liberally interpreted in a manner that fulfills these purposes." SECTION 4.
G.S.
116B-64 reads as rewritten:
"§ 116B-64.
Income Loss, income, or gain accruing after payment or delivery.
If property other than money is delivered to the Treasurer under this Chapter, the owner is entitled to receive from the Treasurer any income or gain realized or accruing on the property at or before liquidation or conversion of the property into money.
If the property is interest-bearing or pays dividends, the interest or dividends shall be paid until the date on which the amount of thedeposits, accounts, orfunds,ortheshares must beremittedordelivered totheTreasurerunder Page 4 House Bill 777-Second Edition General Assembly Of North Carolina Session 2019 G.S.
116B-61.
Otherwise, when propertyis delivered or paid to the Treasurer, the Treasurer shall hold the property without liability for income loss, income, or gain." SECTION 5.
G.S.
116B-75(b) reads as rewritten:
"(b) The Treasurer may order a person required to report, pay, or deliver property under this Chapter, or an officer or employee of the person, or a person having possession, custody, care, or control of records relevant to the matter under inquiry, or any other person having knowledge of the property or records, to (i) appear before the Treasurer, at a time and place named in the order, and to (ii) produce the records and to reports and records, (iii) make the requiredpayments,(iv)maketherequireddeliveryofproperty, and(v)givesuchtestimonyunder oath or affirmation relevant to the inquiry.
For purposes of this subsection, the Treasurer may administer oaths or affirmations.
If a person refuses to obey an order of the Treasurer, the Treasurer may apply to the Superior Court of Wake County for an order requiring the person to obey the order of the Treasurer.
Failure to comply with the court order is punishable for contempt." SECTION 6.(a) G.S.
116B-60(a) reads as rewritten:
"(a) A holder of property presumed abandoned shall make file a report to in an electronic format prescribed by the Treasurer concerning the property.
Holders reporting 50 or more property owner records shall file the report in an electronic format prescribed by the Treasurer.
Holders reporting less than 50 property owner records may file the report electronically.
Holders reporting electronically may shall file an electronic certification and verification in order to comply with subsection (f) of this section." SECTION 6.(b) This section is effective January1, 2020, and applies to reports filed on or after that date.
SECTION 7.
G.S.
116B-60(b1) reads as rewritten:
"(b1) Amounts With the exception of property subject to G.S.
116B-53(c)(4), 116B-53(c)(5), and 116B-53(c)(5a), amounts due an apparent owner less than fifty dollars ($50.00) may be reported in an aggregate amount without furnishing any of the information required by subsection (b) of this section." SECTION 8.(a) G.S.
116B-63 reads as rewritten:
"§ 116B-63.
Custody by State;
recovery by holder;
defense of holder.
(a) In this section, payment or delivery is made in "good faith" if:if all of the following apply:
(1) Payment or delivery was made in a reasonable attempt to comply with this Chapter;Chapter.
(2) The holder was not then in breach of a fiduciary obligation with respect to the property and had a reasonable basis for believing, based on the facts then known, that the property was presumed abandoned;
andabandoned.
(3) There is no showing that the records under which the payment or deliverywas made did not meet reasonable commercial standards of practice.
(b) Upon payment or deliveryof propertyto the Treasurer, the State assumes custodyand responsibility for the safekeeping of the property.
A holder who pays or delivers property to the Treasurer in good faith is relieved of all liability arising thereafter with respect to the property.
(c) A holder who has paid money to the Treasurer pursuant to this Chapter may subsequently make payment to a person reasonably appearing to the holder to be entitled to payment.
Upon a filing with the Treasurer by the holder on a form prescribed by the Treasurer of proof of payment and proof that the payee was entitled to the payment, the Treasurer shall promptly reimburse the holder for the payment without imposing a fee or other charge.
If reimbursement is sought for a payment made on a negotiable instrument, including a traveler's check or money order, the holder must be reimbursed upon filing proof with the Treasurer that the instrument was duly presented and that payment was made to a person who reasonably House Bill 777-Second Edition Page 5 General Assembly Of North Carolina Session 2019 appeared to be entitled to payment.
The holder must be reimbursed for payment made even if the payment was made to a person whose claim was barred under G.S.
116B-71(a).
(d) A holder who has delivered property other than money to the Treasurer pursuant to this Chapter may reclaim the property if it is still in the possession of the Treasurer, without payinganyfeeorothercharge,uponfilingproofthattheapparentownerhas claimedtheproperty from the holder.
(d1) A holder who has in good faith paid or delivered property to the Treasurer in error may request a refund from the Treasurer.
Upon a filing with the Treasurer by the holder of proof of the error on a form prescribed by the Treasurer, the Treasurer may refund the holder.
(e) The Treasurer may accept a holder's affidavit as sufficient proof of the holder's right to recover money and property under this section.
(f) If a holder pays or delivers property to the Treasurer in good faith and thereafter another person claims the property from the holder or another state claims the moneyor property underitslawsrelatingto escheatorabandonedorunclaimedproperty,theTreasurer,uponwritten notice of the claim, shall defend the holder against the claim and indemnify the holder against any liability on the claim resulting from payment or delivery of the property to the Treasurer." SECTION 8.(b) This section is effective when it becomes law and applies to filings made on or after that date.
PART III.
REQUIRE STRESS TESTING OF THE RETIREMENT SYSTEM AS RECOMMENDED BY THE PEW FOUNDATION SECTION 9.(a) G.S.
135-6(n) reads as rewritten:
"(n) In 1943, and at least once in each five-year period thereafter, the actuary shall make complete an actuarial investigation into experience review of the mortality, service and compensation experience of the members and beneficiaries of the Retirement System, and shall make a valuation of the assets and liabilities of the funds of the System, and taking into account the result of such investigation and valuation, the Board of Trustees shall:shall do all of the following:
(1) Adopt for the Retirement System such mortality, service and other tables as shall be deemed necessary;
andnecessary.
(2) Certify the rates of contributions payable by the State of North Carolina on account of new entrants at various ages." SECTION 9.(b) G.S.
135-6 is amended by adding two new subsections to read:
"(n1) Prior to undertaking each quinquennial actuarial experience review, as required by this section, the Board of Trustees shall provide the General Assemblyand the Governor a report that includes all of the following, as these items apply to the Retirement System:
(1) A description of, and the process used to determine, the investment return assumption utilized by the Board of Trustees when determining the contribution rates.
(1a) An estimate of the range of likely employer contributions over 20 years based on analysis that simulates the volatility of annual investment returns above and below the expected rate, applying methodology determined by the actuary.
(2) Projections of assets, liabilities, pension debt, service costs, employee contributions, employer contributions, net amortization, benefit payments, payroll, and funded ratio for the Retirement System for each of the next 30 years based upon the then-current actuarial assumptions, including the assumed rate of return.
(3) Projections of assets, liabilities, pension debt, service costs, employee contributions, employer contributions, net amortization, benefit payments, payroll, and funded ratio for the Retirement System assuming that investment Page 6 House Bill 777-Second Edition General Assembly Of North Carolina Session 2019 returns are two and four percentage points lower than the assumed rate of return and that the State makes employer contributions meeting all of the following:
a.
The contributions are based upon the then-current funding policy for the Retirement System.
b.
The contributions are held constant at the levels calculated for subdivision (2) of this subsection.
c.
Thecontributionsneverexceedfifteenpercent(15%)ofprojectedtotal revenue available for appropriation by the General Assembly.
(4) Estimates for assets, liabilities, pension debt, service costs, employee contributions, employer contributions, net amortization, benefit payments, payroll, and funded ratio for the Retirement System, if there is a one-year loss on planned investments of twentypercent (20%) followed bya 20-year period of investment returns two percentage points below plan assumptions, with the following assumptions regarding contributions:
a.
The contributions are based upon the then-current funding policy for the Retirement System.
b.
The contributions are held constant at the levels calculated for subdivision (2) of this subsection.
c.
Thecontributionsneverexceedfifteenpercent(15%)ofprojectedtotal revenue available for appropriation by the General Assembly.
(5) The estimated actuarially accrued liability, the total plan normal cost for all benefit tiers if multiple tiers exist, and the employer normal cost for all benefit tiers if multiple tiers exist, calculated using all of the following:
a.
A discount rate equal to the assumed rate of return.
If the discount rate used by the Retirement System is different from the investment return assumption, then the report shall provide a calculation of actuarially accrued liability based upon a discount rate that is two percent (2%) and four percent (4%) above and below the long-term rate of return actually used by the Board of Trustees.
b.
The 10-year average of the yield of 30-year treasury notes.
(6) A description of the amortization period for any unfunded liabilities utilized by the Board of Trustees when determining the contribution rates.
(7) A calculation of the contribution rates based on an amortization period equal to the estimated average remaining service periods of employees covered by the contributions.
(8) A description of the interest assumption rate utilized by the Board of Trustees for reporting liabilities and the process used to determine that assumption.
(9) The market value of the assets controlled by the Board of Trustees and an explanation of how the actuarial value assigned to those assets differs from the market value of those assets.
(10) An assessment of how the changes of assumptions adopted by the Board of Trustees in the experience review affect any of the other results in the report.
(11) Any additional information deemed useful by the Board of Trustees or the Investment AdvisoryCommittee under G.S.
147-69.2 to evaluate or adjust the investment policystatement orto evaluateadherenceto orrisk associated with statutory constraints on investments.
(12) Any additional information deemed useful bythe Board to evaluate current or prospective funding or contribution policies.
(n2) With regards to payment for the administration of subsections (n), (n1), and (o) of this section, the Retirement Systems Division of the Department of State Treasurer may increase House Bill 777-Second Edition Page 7 General Assembly Of North Carolina Session 2019 receipts from the retirement assets of the corresponding retirement system or may pay the costs directly from the retirement assets." 4 PART IV.
TECHNICAL CHANGES SECTION 10.(a) G.S.
135-48.8(a) reads as rewritten:
"(a) The State of North Carolina deems it to be in the public interest for individual North Carolina firefighters, rescue squad workers, and members of the National Guard, and certain of theirdependents,whoarenoteligibleforanyother typeofcomprehensive grouphealthinsurance or other comprehensive group health benefits, and who have been without any form of group health insurance or other comprehensive group health benefit coverage for at least six consecutive months, to be given the opportunity to participate in the benefits provided by the State Health Plan for Teachers and State Employees.
Coverage under the Plan shall be voluntary for eligible firefighters, rescue squad workers, and members of the National Guard who elect participation in the Plan for themselves and their eligible dependents." SECTION 10.(b) G.S.
135-48.40(d)(13) reads as rewritten:
"(13) The following persons, their eligible spouses, and eligible dependent children, provided that the person seeking coverage as a subscriber (i) is not eligible for another comprehensive group health benefit plan and (ii) has been without coverage under a comprehensive group health benefit plan for at least six consecutive months:
a.
Firefighters.
b.
Rescue squad workers.
c.
Persons receiving a pension from the North Carolina Firefighters' and Rescue Squad Workers' Pension Fund.
d.
Members of the North Carolina National Guard.
e.
Retirees of the North Carolina National Guard with 20 years of service.
For the purposes of this subdivision, Medicare benefits, Civilian Health and Medical Program of the Uniformed Services (CHAMPUS) benefits, and other Uniformed Services benefits shall be considered comprehensive group health benefit plans.
The Plan may require certification of persons seeking coverage under this subdivision.
Nothing in this section shall be construed to either (i) permit a person to enroll or (ii) require the Plan to enroll a person in the Plan when that enrollment may jeopardize the Plan's preferential tax exempt status as a governmental plan under the Internal Revenue Code." SECTION 11.
G.S.
135-66 reads as rewritten:
"§ 135-66.
Administration;
management of funds.funds;
method of financing.
(a) The State Treasurer shall be the custodian of the assets of this Retirement System and shall invest them in accordancewith theprovisions ofG.S.
147-69.2and 147-69.3.G.S.
147.69.3.
(b) The assets of this Retirement System shall include employers' contributions held with the Pension Accumulation Fund established under G.S.
135-8 and employees' contributions held in the Annuity Savings Fund similarly established under G.S.
135-8.
(c) The Board of Trustees shall have performed an annual actuarial valuation of the System and shall have the financial responsibility for maintaining the System on a generally accepted actuarial basis.
(d) An actuarially determined employer contribution shall be calculated annually by the actuary using assumptions and a cost method approved by the Actuarial Standards Board of the American Academy of Actuaries and selected by the Board of Trustees.
(e) Notwithstanding Chapter 150B of the General Statutes, the Board of Trustees may adopt a contribution policy that would recommend a contribution not less than the actuarially determined employer contribution.
Page 8 House Bill 777-Second Edition General Assembly Of North Carolina Session 2019 (f) The recommended employer contribution rate by the Board of Trustees each year shall not be less than the actuarially determined employer contribution." SECTION 12.(a) G.S.
127A-40(f) reads as rewritten:
"(f) The Board of Trustees of the Teachers'and State Employees'Retirement System shall administer the provisions of this section.
The Secretary of Public Safety shall determine the eligibility of North Carolina National Guard members for the benefits provided in this section and shall certify those eligible to the Board of Trustees.
In addition, the Department of Public Safety shall, on and after July 1, 1983, provide the Board of Trustees with an annual census population, by age and the number of years of creditable service, for all former members of the North Carolina National Guard in receipt of a pension as well as for all active members of the North Carolina National Guard who are not in receipt of a pension and who have seven and more years of creditable service.
The Department of Public Safety shall also provide the Board of Trustees an annual census population of all former members of the North Carolina National Guard who are not in receipt of a pension and who have 15 and more years of creditable service.
The Department of State Treasurer shall make pension payments to those persons certified from the North Carolina National Guard Pension Fund, which shall include general fund appropriations made to the Department of State Treasurer.
The Board of Trustees shall have performed an annual actuarial valuation of the fund and shall have the financial responsibilityfor maintaining the fund on a generally accepted actuarial basis.
The Department of Public Safety shall provide the Department of State Treasurer with whatever assistance is required by the State Treasurer in carrying out the State Treasurer's and the Board of Trustees' financial responsibilities.Fund." SECTION 12.(b) Article 3 of Chapter 127A of the General Statutes is amended by adding a new section to read:
"§ 127A-40.1.
North Carolina National Guard Pension Fund.
(a) As used in this section, the term "Board of Trustees" means the Board of Trustees of the Teachers' and State Employees' Retirement System.
(b) The North Carolina National Guard Pension Fund shall include general fund appropriations made to the Department of State Treasurer and held with the Pension Accumulation Fund of the Teachers' and State Employees' Retirement System.
(c) The Board of Trustees shall have performed an annual actuarial valuation of the Fund and shall have the financial responsibility for maintaining the Fund on a generally accepted actuarial basis.
(d) An actuarially determined employer contribution shall be calculated annually by the actuary using assumptions and a cost method approved by the Actuarial Standards Board of the American Academy of Actuaries and selected by the Board of Trustees.
(e) Notwithstanding Chapter 150B of the General Statutes, the Board of Trustees may adopt a contribution policy that would recommend a contribution not less than the actuarially determined employer contribution.
(f) The recommended employer contribution rate by the Board of Trustees each year shall not be less than the actuarially determined employer contribution.
(g) TheDepartment ofPublicSafetyshall providethe Department ofStateTreasurerwith any assistance required by the State Treasurer in carrying out the financial responsibilities of the State Treasurer or the Board of Trustees." SECTION 13.(a) G.S.
135-8 is amended by adding a new subsection to read:
"(f1) Felony Forfeiture Impact on Contribution-Based Benefit Cap.
– If an employer made contributions on account of a retiree subject to the contribution-based benefit cap under G.S.
135-8(f)(2)f.
and that retiree later forfeits retirement benefits under G.S.
128-38.4, 128-38.3A, 135-18.10A, 135-18.30, 135-75.1, or 135-75.1A, then the Retirement Systems Division may provide a credit to the employer.
This credit shall be calculated in an amount reflecting the impact of the forfeiture on the amount due under G.S.
135-4(jj)." House Bill 777-Second Edition Page 9 General Assembly Of North Carolina Session 2019 SECTION 13.(b) G.S.
128-30 is amended by adding a new subsection to read:
"(g1) Felony Forfeiture Impact on Contribution-Based Benefit Cap.
– If an employer made contributions on account of a retiree subject to the contribution-based benefit cap under G.S.
135-8(f)(2)f.
and that retiree later forfeits retirement benefits under G.S.
128-38.4, 128-38.3A, 135-18.10A, 135-18.30, 135-75.1, or 135-75.1A, then the Retirement Systems Division may provide a credit to the employer.
This credit shall be calculated in an amount reflecting the impact of the forfeiture on the amount due under G.S.
128-26(y)." SECTION 14.(a) Article 1 of Chapter 135 of the General Statutes is amended by adding a new section to read:
"§ 135-5.5.
Inactive employers.
(a) An employer shall be considered an inactive employer if all of the following criteria are met:
(1) The employer has no employees that qualify for membership in any System under this Chapter.
(2) The employer has made no employer contributions for at least one month.
(3) The employer makes a request in writing to the Retirement Systems Division of the Department of State Treasurer to be made inactive.
(4) The Retirement Systems Division of the State Treasurer has reviewed the employer request to become inactive and has granted that request.
The Retirement Systems Division shall provide written notification to the requesting employer of any decisions made under this section.
(b) Not later than April 30 of each calendar year, the Retirement Systems Division of the Department of State Treasurer shall make a report to the Board on all employers who were determined to be inactive employers in that preceding calendar year." SECTION 14.(b) Article 3 of Chapter 128 of the General Statutes is amended by adding a new section to read:
"§ 128-23.1.
Inactive employers.
(a) An employer shall be considered an inactive employer if all of the following criteria are met:
(1) TheemployerhasnoemployeesthatqualifyformembershipintheRetirement System.
(2) The employer has made no employer contributions for at least one month.
(3) The employer makes a request in writing to the Retirement Systems Division of the Department of State Treasurer to be made inactive.
(4) The Retirement Systems Division of the State Treasurer has reviewed the employer request to become inactive and has granted that request.
The Retirement Systems Division shall provide written notification to the requesting employer of any decisions made under this section.
(b) Not later than April 30 of each calendar year, the Retirement Systems Division of the Department of State Treasurer shall make a report to the Board on all employers who were determined to be inactive employers in that preceding calendar year." SECTION 15.(a) G.S.
159-33.1 reads as rewritten:
"§ 159-33.1.
Semiannual reports of financial information.
The finance officer of each unit and public authority shall submit to the secretary on January 1 and July 1 of each year (or such year, or other dates as the secretary may prescribe) prescribe, a statement of financial information concerning the unit or public authority.
The secretary may prescribe the information to be included in the statement and may prescribe the form of the statement;
provided, however, the secretary shall prescribe that the finance officer of each city and county shall include in the statement the total revenues received from building inspections, by type, source, and the total expenditures paid from all revenues received, by type.object." SECTION 15.(b) This section is effective June 30, 2019.
Page 10 House Bill 777-Second Edition General Assembly Of North Carolina Session 2019 SECTION 16.
G.S.
135-18.1(a) reads as rewritten:
"(a) Any person who is a member of the Teachers' and State Employees' Retirement System of North Carolina on July 1, 1951, and who was previously a member of the North Carolina Governmental Employees' Retirement System, hereafter in this section referred to as thelocal system, shall be entitled to transferto this RetirementSystem his credits formembership and prior service in the local system as of the date of termination of membership in the local system, notwithstanding that his membership in the local system may have been terminated prior to July 1, 1951:
Provided, such member shall deposit in this Retirement System prior to January 1, 1952, the full amount of any accumulated contributions standing to his credit in, or previously withdrawn from, the local system and shall apply to the Board of Trustees of this Retirement System for a transfer of credit from the local system.
Any Prior to retirement, any person who was a member of the North Carolina Governmental Employees' Retirement System and who becomes a member of this Retirement System on or after July 1, 1951, shall be entitled prior to his retirement to transfer to this Retirement System his or her credits for membership and prior serviceinthelocalsystem:Provided,theactualtransferofemploymentis madewhilehis account in the local system is active and such person shall request the local system to transfer his accumulated contributions, interest, and service credits to this Retirement System;
provided further, with respect to any person who becomes a member of this Retirement System after July 1, 1969, the local system agrees to transfer to this Retirement System the amount of reserve held in the local system as a result of previous contributions of the employer on behalf of the transferring employee.
For the purposes of this section, the term "local system" means the North Carolina Governmental Employees' Retirement System." SECTION 17.(a) G.S.
135-5.2 is repealed.
SECTION 17.(b) G.S.
135-13 is repealed.
SECTION 17.(c) G.S.
135-14 is repealed.
SECTION 17.(d) G.S.
135-14.1 is repealed.
SECTION 17.(e) G.S.
135-16 is repealed.
SECTION 17.(f) G.S.
135-18.3 is repealed.
SECTION 17.(g) G.S.
135-18.5 is repealed.
SECTION 18.
G.S.
135-16.1 reads as rewritten:
"§ 135-16.1.
Blind or visually impaired employees.vendors.
(a) On July 1, 1971, all blind or visually impaired employees employed by the Department of Health and Human Services shall be enrolled as members of the Teachers' and State Employees' Retirement System.
All such employees shall be given full credit for all service theretoforeasemployees oftheDepartmentofHealthandHumanServices.Allretiredemployees drawing or receiving benefits from and under the private retirement plan purportedly created on December 6, 1966, by the Bureau of Employment for the Blind Division pursuant to a trust agreement purportedly entered into with a private banking institution as trustee shall continue to be paid by the Teachers' and State Employees' Retirement System benefits in the same amount which they purportedly were entitled to under the private retirement plan and trust agreement, except that such retired persons shall be eligible for such annual cost-of-living increases as may be provided for retirement members of the Teachers' and State Employees' Retirement System under the provisions of this Article.
(b) Upon the enrollment of the employees in the Teachers' and State Employees' Retirement System, the purported private retirement plan and trust agreement hereinabove referred to shall be dissolved and terminated.
(c) Notwithstanding the foregoing, blind persons Persons licensed by the State and operating vending facilities under contract with the Department of Health and Human Services, Division of Services for the Blind and its successors, hereinafter referred to as licensed vendors, sowhoarelicensed on and afterOctober1,1983,shall not bemembersoftheRetirement System.
House Bill 777-Second Edition Page 11 General Assembly Of North Carolina Session 2019 All licensed vendors in service or who are members of the Retirement System before October 1, 1983, shall make an irrevocable election to do one of the following:
(1) Continue contributing membership service as if an employee under the same conditions and requirements as are otherwise provided, and have the rights of a member to all benefits and a retirement allowance;
(2) Receive a return of accumulated contributions with cessation of contributing membership service, under G.S.
135-5(f), and in any event with regular interest regardless of membership service;
or (3) Terminatecontributingmembershipserviceandbeentitledalternativelyto the benefits and allowances provided under G.S.
135-3(8) or 135-5(a)." SECTION 19.
G.S.
128-23(b) reads as rewritten:
"(b) Pursuant to the favorable vote of a majorityof the employees of the county, the board of commissioners of any county may, by resolution legally adopted and approved by the Board of Trustees, elect to have its employees become eligible to participate in the Retirement System.
Each county is authorized to make appropriations for these purposes and to fund them by levy of propertytaxes pursuant to G.S.
153-65 as authorized by Article 7 of Chapter 153A of the General Statutes and by the allocation of other revenues whose use is not otherwise restricted by law." SECTION 20.
G.S.
115D-25.4 is amended by adding a new subsection to read:
"(c) The administrative costs of the North Carolina Public School Teachers' and Professional Educators' Investment Plan maybe charged to members or deducted from members' accounts in accordance with nondiscriminatory procedures established by the Department of State Treasurer and Board of Trustees." SECTION 21.(a) G.S.
135-6.1 is amended by adding a new subsection to read:
"(e1) The Retirement Systems Division of the Department of State Treasurer may disclose toemployersand formeremployersthatmadeacontributionforan employeeorformeremployee to the Retirement System any information that is not public under this Section regarding that employee necessary to conduct the business of the Retirement System.
Employers and former employers in receipt of this information shall treat the information as confidential and this information shall not be a public record." SECTION 21.(b) G.S.
135-8(f)(2)f.
reads as rewritten:
"f.
Each employer shall transmit to the Retirement System on account of each member who retires on or after January 1, 2015, having earned his or her last month of membership service as an employee of that employer the lump sum payment, as calculated under G.S.
135 4(jj) for inclusion in the Pension Accumulation Fund, that would have been necessary in order for the retirement system to restore the member's retirement allowance to the pre cap amount.
Employers are not required to make contributions on account of any retiree who became a member on or after January 1, 2015, and who earned at least five years of membership service in the Retirement System after January 1, 2015.
The retirement allowance of a member with a final average compensation of more than one hundred thousand dollars ($100,000), as hereinafter indexed, shall not be subject to the contribution based benefit cap if the compensation was earned from multiple simultaneous employers, unless an employer's share of the average final compensation exceeds one hundred thousand dollars ($100,000).
An employer is not required to make contributions on account of any retiree whose final average compensation exceeds one hundred thousand dollars ($100,000), as hereinafter indexed, based upon compensation earned from multiple simultaneous employers, unless that employer's share of the average final compensation exceeds one Page 12 House Bill 777-Second Edition General Assembly Of North Carolina Session 2019 hundred thousand dollars ($100,000), as provided and indexed under G.S.
135 5(a3).
Under such rules as the Board of Trustees shall adopt, the Retirement System shall report monthly to each employer a list of those members for whom the employer made a contribution to the Retirement System in the preceding month that are most likely to require an additional employer contribution should they elect to retire in the following 12 months, if applicable.
Reports received under this section shall not be public records.
Employers or former employers in receipt of a report under this section shall treat the report, and the information contained within that report, as confidential and as though it were still held by the Retirement System under G.S.
135-6.1." SECTION 21.(c) G.S.
135-8(j) reads as rewritten:
"(j) Pension Spiking Report.
– Upon receipt of a report from the Retirement System generated pursuant to G.S.
135-8(f)(2)f., containing a list of employees for whom the employer made a contribution to the North Carolina Teachers' and State Employees' Retirement System that is likelyto require an additional employer contribution should the employee elect to retire in the following 12 months, the employer's chief financial officer shall transmit a copy of the report tothechiefexecutiveoftheemployer,aswellastothegoverningbodyoftheemployer,including any board which exercises financial oversight of the employer, if applicable.
the employer has a governing body.
Reports received under this section shall not be public records.
Employers or former employers in receipt of a report under this section shall treat the report, and the information contained within that report, as confidential and as though it were still held by the Retirement System under G.S.
135-6.1." SECTION 21.(d) G.S.
128-33.1 is amended by adding a new subsection to read:
"(e1) The Retirement Systems Division of the Department of State Treasurer may disclose to employers or former employers that made a contribution for an employee or former employee to the Retirement System any information not public under this Section regarding that employee necessary to conduct the business of the Retirement System.
Employers and former employers in receipt of this information shall treat the information as confidential and this information shall not be a public record." SECTION 21.(e) G.S.
128-30(g)(2)b.
reads as rewritten:
"b.
Each employer shall transmit to the Retirement System on account of each member who retires on or after January 1, 2015, having earned his or her last month of membership service as an employee of that employer the lump sum payment, as calculated under G.S.
128-26(y) for inclusion in the Pension Accumulation Fund, that would have been necessary in order for the retirement system to restore the member's retirement allowance to the pre-cap amount.
Employers are not required to make contributions on account of any retiree who became a member on or after January 1, 2015, and who earned at least five years of membership service in the Retirement System after January 1, 2015.
The retirement allowance of a member with a final average compensation of more than one hundred thousand dollars ($100,000), as hereinafter indexed, shall not be subject to the contribution-based benefit cap if the compensation was earned from multiple simultaneous employers, unless an employer's share of the average final compensation exceeds one hundred thousand dollars ($100,000).
An employer is not required to make contributions on account of any retiree whose final average compensation exceeds one hundred thousand dollars ($100,000), as hereinafter indexed, based upon House Bill 777-Second Edition Page 13 General Assembly Of North Carolina Session 2019 compensation earned from multiple simultaneous employers, unless that employer's share of the average final compensation exceeds one hundred thousand dollars ($100,000), as provided and indexed under G.S.
128-27(a3).
Under such rules as the Board of Trustees shall adopt, the Retirement System shall report monthly to each employer a list of those members for whom the employer made a contribution to the Retirement System in the preceding month that are most likely to require an additional employer contribution should they elect to retire in the following 12 months, if applicable.
Reports received under this section shall not be public records.
Employers or former employers in receipt of a report under this section shall treat the report, and the information contained within that report, as confidential and as though it were still held by the Retirement System under G.S.
128-33.1." SECTION 21.(f) G.S.
128-30(j) reads as rewritten:
"(j) Pension Spiking Report.
– Upon receipt of a report from the Retirement System generated pursuant to G.S.
128-30(g)(2)b., containing alist ofemployees forwhomthe employer made a contribution to the North Carolina Local Governmental Employees' Retirement System that is likelyto require an additional employer contribution should the employee elect to retire in the following 12 months, the employer's chief financial officer shall transmit a copy of the report to the governing bodyof the employer, if applicable.
the employer has a governingbody.
Reports received under this section shall not be public records.
Employers and former employers in receipt of a report under this section shall treat the report, and the information contained within that report, as confidential and as though it were still held by the Retirement System under G.S.
128-33.1." SECTION 22.
G.S.
135-48.47 reads as rewritten:
"§ 135-48.47.
Participation in State Health Plan by local government employees and dependents.
… (d) Local governmentsparticipatinginthePlanasofApril1,2016,mayelectto withdraw from participating in the Plan effective January 1, 2017.
Notice of withdrawal must be given by the local government to the Plan no later than September 15, 2016.
(e) Except as permitted under subsection (d) of this section, a local government unit's election to participate in the Plan is irrevocable." SECTION 23.
G.S.
147-69.7(b)(1)f.
reads as rewritten:
"f.
With respect to the Retirement Systems defined in G.S.
147-69.2(d) G.S.
147-69.2(b)(8) and any other pension plans, the adequacy of funding for the Retirement Systems based on reasonable actuarial factors." SECTION 24.
G.S.
1-359(d) reads as rewritten:
"(d) In addition to the intercept authority under G.S.
135-8(f) and G.S.
128-30(g), when the Teachers' and State Employees' Retirement System of North Carolina, the Disability Income Plan of North Carolina, or the North Carolina Local Government Employees' Retirement System prevails in a civil action against a participating employer, as defined under G.S.
35-1 G.S.
135-1 or G.S.
128-21, to collect monies owed, the Teachers' and State Employees' Retirement System of North Carolina, the Disability Income Plan of North Carolina, or the North Carolina Local Government Employees' Retirement System may attach or garnish the employer's credit card receipts or other third-party payments in payment of the amount owed in the manner provided bysubsection (a) of this section.
Direct receipt bythe Teachers' and State Employees' Retirement System of North Carolina, the Disability Income Plan of North Carolina, or the North Carolina Page 14 House Bill 777-Second Edition General Assembly Of North Carolina Session 2019 Local Government Employees' Retirement System is a sufficient discharge for the amount paid by a credit card company, clearinghouse, or third-party payment processor." 4 PART V.
WATER/WASTEWATER PUBLIC ENTERPRISE REFORM SECTION 25.(a) G.S.
159G-20 reads as rewritten:
"§ 159G-20.
Definitions.
The following definitions apply in this Chapter:
… (4a) Distressed unit.
– A public water system or wastewater system operated by a local government unit exhibiting signs of failure to identify or address those financial or operating needs necessary to enable that system to become or to remain a local government unit generating sufficient revenues to adequately fund management and operations, personnel, appropriate levels of maintenance, and reinvestment that facilitate the provision of reliable water or wastewater services.
… (13) Local government unit.
– Any of the following:
a.
A city as defined in G.S.
160A-1.
b.
A county.
c.
A consolidated city-county as defined in G.S.
160B-2.
d.
A county water and sewer district created pursuant to Article 6 of Chapter 162A of the General Statutes.Any of the following entities created pursuant to Chapter 162A of the General Statutes:
1.
A water and sewer authority created pursuant to Article 1.
2.
A metropolitan water district created pursuant to Article 4.
3.
A metropolitan sewerage district created pursuant to Article 5.
4.
A metropolitan water and sewerage district created pursuant to Article 5A.
5.
A county water and sewer district created pursuant to Article 6.
e.
A metropolitan sewerage district or a metropolitan water district created pursuant to Article 4 of Chapter 162A of the General Statutes.
f.
A water and sewer authority created under Article 1 of Chapter 162A of the General Statutes.
g.
A sanitary district created pursuant to Part 2 of Article 2 of Chapter 130A of the General Statutes.
h.
A joint agency created pursuant to Part 1 or Part 5 of Article 20 of Chapter 160A of the General Statutes.
i.
A joint agency that was created by agreement between two cities and towns to operate an airport pursuant to G.S.
63-56 and that provided drinking water and wastewater services off the airport premises before 1 January 1995.
… (22a) Viable Utility Reserve.
– The Viable Utility Reserve established in G.S.
159G-22 as an account in the Water Infrastructure Fund.
…." SECTION 25.(b) G.S.
159G-22 is amended by adding two new subsections to read:
"(h) Viable Utility Reserve.
– The Viable Utility Reserve is established as an account within the Water Infrastructure Fund.
The account is established to receive appropriated State funds to be used for grants to local government units for those purposes authorized under this House Bill 777-Second Edition Page 15 General Assembly Of North Carolina Session 2019 Article.
Revenue credited to the Viable Utility Reserve is neither received from the federal government nor provided as a match for federal funds.
(i) Viable Utility Accounts.
– The Department is directed to establish accounts within the Viable Utility Reserve to administer grants for public water systems or wastewater systems owned by local government units." SECTION 25.(c) G.S.
159G-30 reads as rewritten:
"§ 159G-30.
Department's responsibility.
The Department, through the Division of Water Infrastructure, Division, administers loans the following:
(1) Loans and grants made from the CWSRF, the DWSRF, the Wastewater Reserve, and the Drinking Water Reserve and shall administer the Reserve.
(2) The award of funds by the State Water Infrastructure Authority from the CommunityDevelopment Block Grant program to local government units for infrastructure projects.
(3) Grants made from the Viable Utility Reserve." SECTION 25.(d) G.S.
159G-31 is amended by adding a new subsection to read:
"(d) A local government unit is eligible to apply for a grant from the Viable Utility Reserve." SECTION 25.(e) G.S.
159G-32 is amended by adding a new subsection to read:
"(d) Viable Utility Reserve.
– The Department is authorized to make grants from the Viable Utility Reserve to do any of the following:
(1) Provide physical interconnection and extension of public water or wastewater infrastructure to provide regional service.
(2) Rehabilitate existing public water or wastewater infrastructure.
(3) Decentralize an existing public water system or wastewater system into smaller viable parts.
(4) Fund a study of any one or more of the following:
a.
Rates.
b.
Asset inventory and assessment.
c.
Merger and regionalization options.
(5) Fund other options deemed feasible which results in local government units generating sufficient revenues to adequately fund management and operations, personnel, appropriate levels of maintenance, and reinvestment that facilitate the provision of reliable water or wastewater services." SECTION 25.(f) Article 2 of Chapter 159G of the General Statutes is amended by adding a new section to read:
"§ 159G-34.5.
Grant types available from Viable Utility Reserve.
(a) The Department is authorized to make the following types of grants from the Viable Utility Reserve:
(1) Asset assessment and rate study grant.
– An asset inventory and assessment grant is available to inventory the existing public water or wastewater system, or both, document the condition of the inventoried infrastructure, and conduct a rate study to determine a rate structure sufficient to prevent the local government unit from becoming a distressed unit.
(2) Merger/regionalization feasibility grant.
– A merger/regionalization grant is available to determine the feasibility of consolidating the management of multiple water or wastewater systems into a single operation or to provide regional treatment or water supply and the best way of carrying out the consolidation orregionalization.TheDepartment shall not make a grant under this subdivision for a merger or regionalization proposal that would result in a new surface water transfer regulated under G.S.
143-215.22L.
Page 16 House Bill 777-Second Edition General Assembly Of North Carolina Session 2019 (3) Project grant.
–Aproject grantisavailableforaportionofthecostsofapublic water system or wastewater system project as defined in G.S.
159G-32(d).
(b) A grant awarded from the Viable Utility Reserve may be awarded to a regional council of government created under Part 2 of Article 20 of Chapter 160A of the General Statutes or to a regional planning commission created under Article 19 of Chapter 153A of the General Statutes, if the Department and the Local Government Commission determine it is in the best interest of the local government unit.
(c) Each type of grant must be administered through a separate account within the Viable Utility Reserve." SECTION 25.(g) G.S.
159G-35 reads as rewritten:
"§ 159G-35.
Criteria for loans and grants.
(a) CWSRF and DWSRF.
– Federal law determines the criteria for awarding a loan or grant from the CWSRF or the DWSRF.
An award of a loan or grant from one of these accounts must meet the criteria set under federal law.
The Department is directed to establish through negotiation with the United States Environmental Protection Agency the criteria for evaluating applications for loans and grants from the CWSRF and the DWSRF and the priority assigned to the criteria.
The Department must incorporate the negotiated criteria and priorities in the Capitalization Grant Operating Agreement between the Department and the United States Environmental Protection Agency.
The criteria and priorities incorporated in the Agreement apply to a loan or grant from the CWSRF or the DWSRF.
The priority considerations in G.S.
159G-23 do not apply to a loan or grant from the CWSRF or the DWSRF.
(b) Certain Reserves.
– The priority considerations in G.S.
159G-23 apply to a loan or grant from the Wastewater Reserve or the Drinking Water Reserve.
The Department may establish by rule other criteria that apply to a loan or grant from the Wastewater Reserve or the Drinking Water Reserve.
(c) Viable UtilityReserve.
– The Local Government Commission and the Authorityshall jointly develop evaluation criteria for grants from the Viable Utility Reserve.
These evaluation criteria shall be used to review applications and award grants as provided in G.S.
159G-39." SECTION 25.(h) G.S.
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Action History

  1. Signed by Gov. 8/30/2019

  2. Ch. SL 2019-211

  3. Conf Report Adopted

  4. Ordered Enrolled

  5. Ratified

  6. Pres. To Gov. 8/28/2019

  7. Reptd Fav For Adoption

  8. Cal Pursuant Rule 44(d)

  9. Placed On Cal For 08/28/2019

  10. Conf Report Adopted

  11. Conf Com Reported

  12. Rule 44b

  13. Re-ref Com On Appropriations

  14. Conf Com Reported

  15. Placed On Cal For 08/27/2019

  16. Conf Com Appointed

  17. Withdrawn From Com

  18. Added to Calendar

  19. Failed Concur In S Com Sub

  20. Conf Com Appointed

  21. Special Message Sent To House

  22. Special Message Received For Concurrence in S Com Sub

  23. Ruled Material

  24. Ref To Com On Rules, Calendar, and Operations of the House

  25. Passed 3rd Reading

  26. Engrossed

  27. Amend Adopted A1

  28. Amend Adopted A2

  29. Passed 2nd Reading

  30. Placed On Cal For 07/08/2019

  31. Reptd Fav

  32. Reptd Fav

  33. Re-ref Com On Rules and Operations of the Senate

  34. Withdrawn From Com

  35. Re-ref to Finance. If fav, re-ref to Rules and Operations of the Senate

  36. Reptd Fav Com Substitute

  37. Com Substitute Adopted

  38. Re-ref Com On Rules and Operations of the Senate

  39. Withdrawn From Com

  40. Re-ref to Pensions and Retirement and Aging. If fav, re-ref to Rules and Operations of the Senate

  41. Passed 2nd Reading

  42. Passed 3rd Reading

  43. Special Message Sent To Senate

  44. Special Message Received From House

  45. Passed 1st Reading

  46. Ref To Com On Rules and Operations of the Senate

  47. Reptd Fav

  48. Re-ref Com On Rules, Calendar, and Operations of the House

  49. Reptd Fav

  50. Cal Pursuant Rule 36(b)

  51. Placed On Cal For 05/07/2019

  52. Passed 1st Reading

  53. Ref to the Com on Pensions and Retirement, if favorable, Rules, Calendar, and Operations of the House

  54. Filed

Sponsors

Sponsorship breakdown

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3 sponsors · 11 co-sponsors · 165 not signed on

Sponsors (3)

Co-sponsors (11)

Not signed on (165)

165 members have not signed on to this bill.

Show all 165 →

"Not signed on" means a member has not sponsored or co-sponsored this bill — it does not imply opposition. Members flagged Voted No have a recorded No vote on this bill.

Whip count is in markup. Polling the chamber and every recorded vote this session. Only the first open is slow. It’s instant for you after this. Calling the roll · Tallying · Engrossing

Votes

C RPT Adoption

Passed 114 Yea · 0 Nay · 6 Other
Party YeaNayPresentNot Voting
Democratic 23001
Republican 35000
Unaffiliated 54005
U 2000
Total 114006
% of votes cast 95%0%0%5%
How each member voted (120)
Member Party Vote
Autry — Yea
Beasley — Yea
Black — Yea
Brewer — Yea
Clemmons — Yea
Farmer-Butterfield — Yea
Fisher — Yea
Floyd — Yea
Gailliard — Yea
Garrison — Yea
Gill — Yea
Graham — Yea
Harris — Yea
Holley — Yea
Hunt — Yea
Hunter — Yea
Insko — Yea
Jackson — Yea
Lucas — Yea
Martin — Yea
Montgomery — Yea
Queen — Yea
Russell — Yea
Terry — Yea
vonHaefen — Yea
Wray — Yea
Boles — Yea
Bumgardner — Yea
Carter — Yea
Cleveland — Yea
Davis — Yea
Faircloth — Yea
Fraley — Yea
Grange — Yea
Hardister — Yea
Horn — Yea
Hurley — Yea
L. Johnson — Yea
Lewis — Yea
McElraft — Yea
McGrady — Yea
McNeill — Yea
Moore — Yea
Presnell — Yea
Rogers — Yea
Saine — Yea
Sasser — Yea
Speciale — Yea
Szoka — Yea
Yarborough — Yea
Zachary — Yea
Richardson — Not Voting
Conrad — Not Voting
Dobson — Not Voting
Elmore — Not Voting
Murphy — Not Voting
C. Smith — Yea
K. Smith — Yea
R. Smith — Yea
Allison A. Dahle Democratic Yea
Amos L. Quick, III Democratic Yea
Becky Carney Democratic Yea
Brandon Lofton Democratic Yea
Brian Turner Democratic Yea
Carolyn G. Logan Democratic Yea
Cecil Brockman Democratic Not Voting
Cynthia Ball Democratic Yea
Dante Pittman Democratic Yea
Deb Butler Democratic Yea
Eric Ager Democratic Yea
Gale Adcock Democratic Yea
Garland E. Pierce Democratic Yea
Graig Meyer Democratic Yea
Joe John Democratic Yea
Marcia Morey Democratic Yea
Mary Belk Democratic Yea
Pricey Harrison Democratic Yea
Robert T. Reives, II Democratic Yea
Shelly Willingham Democratic Yea
Sydney Batch Democratic Yea
Terence Everitt Democratic Yea
Tracy Clark Democratic Yea
Zack Hawkins Democratic Yea
Bobby Hanig Republican Yea
Brenden H. Jones Republican Yea
Chris Humphrey Republican Yea
Dean Arp Republican Yea
Dennis Riddell Republican Yea
Destin Hall Republican Yea
Donna McDowell White Republican Yea
Donny Lambeth Republican Yea
Edward C. Goodwin Republican Yea
Frank Iler Republican Yea
Harry Warren Republican Yea
Hugh Blackwell Republican Yea
Jake Johnson Republican Yea
Jay Adams Republican Yea
Jeffrey C. McNeely Republican Yea
Jimmy Dixon Republican Yea
John A. Torbett Republican Yea
John R. Bell, IV Republican Yea
John Sauls Republican Yea
Julia C. Howard Republican Yea
Keith Kidwell Republican Yea
Kelly E. Hastings Republican Yea
Kevin Corbin Republican Yea
Kyle Hall Republican Yea
Larry C. Strickland Republican Yea
Larry W. Potts Republican Yea
Lisa S. Barnes Republican Yea
Mark Brody Republican Yea
Mitchell S. Setzer Republican Yea
Phil Shepard Republican Yea
Sarah Stevens Republican Yea
Stephen M. Ross Republican Yea
Steve Jarvis Republican Yea
W. Ted Alexander Republican Yea
William D. Brisson Republican Yea
Carla D. Cunningham U Yea
Nasif Majeed U Yea

Official roll call →

Conference Rpt Motion 8 To Adopt

Passed 46 Yea · 0 Nay · 4 Other
Party YeaNayPresentNot Voting
Democratic 8000
Unaffiliated 26003
Republican 12001
Total 46004
% of votes cast 92%0%0%8%
How each member voted (50)
Member Party Vote
Fitch — Yea
Foushee — Yea
Marcus — Yea
McKissick — Yea
Nickel — Yea
Peterson — Yea
Searcy — Yea
Smith — Yea
VanDuyn — Yea
Woodard — Yea
Ballard — Yea
Bishop — Yea
Brown — Yea
Edwards — Yea
Gallimore — Yea
Gunn — Yea
Harrington — Yea
Horner — Yea
Johnson — Yea
Krawiec — Yea
Newton — Yea
Perry — Yea
Steinburg — Yea
Wells — Yea
deViere — Not Voting
J. Davis — Not Voting
Tillman — Not Voting
D. Davis — Yea
J. Jackson — Yea
Dan Blue Democratic Yea
Gladys A. Robinson Democratic Yea
Jay J. Chaudhuri Democratic Yea
Joyce Waddell Democratic Yea
Michael Garrett Democratic Yea
Mujtaba A. Mohammed Democratic Yea
Paul A. Lowe, Jr. Democratic Yea
Tracy Clark Democratic Yea
Bill Rabon Republican Yea
Brent Jackson Republican Yea
Carl Ford Republican Yea
Danny Earl Britt, Jr. Republican Yea
Jim Burgin Republican Yea
Norman W. Sanderson Republican Yea
Phil Berger Republican Yea
Ralph Hise Republican Yea
Tom McInnis Republican Yea
Vickie Sawyer Republican Not Voting
W. Ted Alexander Republican Yea
W. Ted Alexander Republican Yea
Warren Daniel Republican Yea

Official roll call →

Subjects

public-safety labor
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Frequently asked questions

Who sponsors HB 777?
HB 777 is sponsored by Mary Belk (Democratic), Gill, Hurley, Martin, Carla D. Cunningham (U), Floyd, Graham, Holley, Hunt, Insko, Lucas, Cecil Brockman (Democratic), Becky Carney (Democratic), and R. Smith.
What is the current status of HB 777?
This bill has been enacted into law. Introduced April 15, 2019. Enacted.
Where can I track HB 777?
Track HB 777 free on One Click Politics — get push/email alerts when it moves.

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