GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 2019

 

HOUSE BILL 231

RATIFIED BILL

 

 

AN ACT, consistent with house bill 966 OF THE 2019 REGULAR SESSION, to appropriate funds to provide legislatively mandated salary increases to employees of the university of north carolina system and the north carolina community college system and to PROVIDE ONE‑TIME COST‑OF‑LIVING SUPPLEMENTS FOR RETIREES OF THE TEACHERS' AND STATE EMPLOYEES' RETIREMENT SYSTEM, THE CONSOLIDATED JUDICIAL RETIREMENT SYSTEM, AND THE LEGISLATIVE RETIREMENT SYSTEM.

 

The General Assembly of North Carolina enacts:

 

PART I. community college and unc APPROPRIATIONS

SECTION 1.1.  Community College Salary Increase. – Effective July 1, 2019, there is appropriated from the General Fund to the North Carolina Community College System the sum of twelve million four hundred thousand dollars ($12,400,000) for the 2019‑2020 fiscal year and the sum of twenty‑four million eight hundred thousand dollars ($24,800,000) for the 2020‑2021 fiscal year to provide legislatively mandated salary increases for State‑funded employees as authorized by this act.

SECTION 1.2.(a)  UNC Salary Increase. – Effective July 1, 2019, there is appropriated from the General Fund to the Board of Governors of The University of North Carolina the sum of fifteen million dollars ($15,000,000) in recurring funds for the 2019‑2020 fiscal year and the sum of thirty million dollars ($30,000,000) in recurring funds for the 2020‑2021 fiscal year to provide legislatively mandated salary increases for State employees as authorized by this act.

SECTION 1.2.(b)  UNC Faculty Retention. – Effective July 1, 2019, there is appropriated from the General Fund to the Board of Governors of The University of North Carolina the sum of six million dollars ($6,000,000) in recurring funds for the 2019‑2020 fiscal year and the sum of eleven million four hundred thirty‑three thousand four hundred thirteen dollars ($11,433,413) for the 2020‑2021 fiscal year to provide funds for faculty retention in The University of North Carolina system.

 

PART II. COMMUNITY COLLEGES

SECTION 2.1.(a)  For the 2019‑2021 fiscal biennium, the community college boards of trustees may provide personnel a salary increase pursuant to the policies adopted by the State Board of Community Colleges. Funds for compensation increases may be used for any one or more of the following purposes: (i) merit pay, (ii) across‑the‑board increases, (iii) recruitment bonuses, (iv) retention increases, and (v) any other compensation increase pursuant to policies adopted by the State Board of Community Colleges. The State Board of Community Colleges shall report to the General Assembly and the Fiscal Research Division on the use of these funds by no later than March 1, 2020, and March 1, 2021.

SECTION 2.1.(b)  Effective July 1, 2019, the minimum salaries for nine‑month, full‑time curriculum community college faculty for the 2019‑2021 fiscal biennium are as follows:

 

Education Level                                                                                              Minimum Salary

Vocational Diploma/Certificate or Less                                                           $37,581

Associate Degree or Equivalent                                                                         38,103

Bachelor's Degree                                                                                               40,371

Master's Degree or Education Specialist                                                            42,382

Doctoral Degree                                                                                                  45,282

No full‑time faculty member shall earn less than the minimum salary for his or her education level.

The pro rata hourly rate of the minimum salary for each education level shall be used to determine the minimum salary for part‑time faculty members.

 

PART III. UNIVERSITY OF NORTH CAROLINA SYSTEM

SECTION 3.1.  For the 2019‑2021 fiscal biennium, the Board of Governors of The University of North Carolina may provide employees with salary increases pursuant to the policies adopted by the Board. Funds for compensation increases may be used for any one or more of the following purposes: (i) merit pay, (ii) across‑the‑board increases, (iii) recruitment bonuses, (iv) retention increases, and (v) any other compensation increase pursuant to those policies. The Board of Governors of The University of North Carolina shall report to the General Assembly and the Fiscal Research Division on the compensation increases awarded by no later than March 1, 2020, and March 1, 2021.

 

PART IV. special annual leave

SECTION 4.1.(a)  Special Annual Leave. – Any person who is (i) a full‑time permanent employee of The University of North Carolina or a community college institution on July 1, 2019, and (ii) eligible to earn annual leave shall have a one‑time additional five days of annual leave credited on July 1, 2019.

SECTION 4.1.(b)  The additional leave granted in this section shall be accounted for separately in the same manner as the leave provided by Section 35.26 of S.L. 2018‑5 and shall remain available during the length of the employee's employment, notwithstanding any other limitation on the total number of days of annual leave that may be carried forward. Part‑time permanent employees shall receive a pro rata amount of the five days awarded by this section.

SECTION 4.1.(c)  The additional leave awarded under this section has no cash value and is not eligible for cash in. If not used prior to the time of separation or retirement, the bonus leave cannot be paid out and is lost.

SECTION 4.1.(d)  Notwithstanding any provision of G.S. 126‑8 to the contrary, any vacation leave remaining on December 31 of each year in excess of 30 days shall be reduced by the number of days awarded in this section that were actually used by the employee during the year, such that the calculation of vacation leave days that would convert to sick leave shall reflect a deduction of those days of special annual leave awarded in this section that were used by the employee during the year.

SECTION 4.1.(e)  The number of days awarded by this section that carry forward to each following year shall equal the number of days awarded in this section remaining on December 31 of each year plus the number of days awarded in this section that were deducted from vacation leave in excess of 30 days for the calculation of sick leave.

SECTION 4.1.(f)  No employee may be required to take the additional leave awarded by this section.

 

part v. retirees' cost‑of‑living supplement

SECTION 5.1.(a)  If House Bill 966, 2019 Regular Session, becomes law, then Section 38.23 of that act is repealed.

SECTION 5.1.(b)  G.S. 135‑5 is amended by adding new subsections to read:

(xxx)  On or before December 31, 2019, a one‑time cost‑of‑living supplement payment shall be made to or on account of beneficiaries who are living as of November 1, 2019, and whose retirement commenced on or before November 1, 2019. The payment shall be one‑half of one percent (0.50%) of the beneficiary's annual retirement allowance payable as of November 1, 2019, and shall not be prorated for date of retirement commencement. If the beneficiary dies before the payment is made, then the payment shall be payable to the member's legal representative. No beneficiary shall be deemed to have acquired a vested right to any future supplemental payments.

(yyy)    After September 1, 2020, but on or before October 31, 2020, a one‑time cost‑of‑living supplement payment shall be made to or on account of beneficiaries who are living as of September 1, 2020, and whose retirement commenced on or before September 1, 2020. The payment shall be one‑half of one percent (0.50%) of the beneficiary's annual retirement allowance payable as of September 1, 2020, and shall not be prorated for date of retirement commencement. If the beneficiary dies before the payment is made, then the payment shall be payable to the member's legal representative. No beneficiary shall be deemed to have acquired a vested right to any future supplemental payments.

SECTION 5.1.(c)  G.S. 135‑65 is amended by adding new subsections to read:

(ii)      On or before December 31, 2019, a one‑time cost‑of‑living supplement payment shall be made to or on account of beneficiaries who are living as of November 1, 2019, and whose retirement commenced on or before November 1, 2019. The payment shall be one‑half of one percent (0.50%) of the beneficiary's annual retirement allowance payable as of November 1, 2019, and shall not be prorated for date of retirement commencement. If the beneficiary dies before the payment is made, then the payment shall be payable to the member's legal representative. No beneficiary shall be deemed to have acquired a vested right to any future supplemental payments.

(jj)        After September 1, 2020, but on or before October 31, 2020, a one‑time cost‑of‑living supplement payment shall be made to or on account of beneficiaries who are living as of September 1, 2020, and whose retirement commenced on or before September 1, 2020. The payment shall be one‑half of one percent (0.50%) of the beneficiary's annual retirement allowance payable as of September 1, 2020, and shall not be prorated for date of retirement commencement. If the beneficiary dies before the payment is made, then the payment shall be payable to the member's legal representative. No beneficiary shall be deemed to have acquired a vested right to any future supplemental payments.

SECTION 5.1.(d)  G.S. 120‑4.22A is amended by adding new subsections to read:

(cc)     In accordance with subsection (a) of this section, on or before December 31, 2019, a one‑time cost‑of‑living supplement payment shall be made to or on account of beneficiaries who are living as of November 1, 2019, and whose retirement commenced on or before November 1, 2019. The payment shall be one‑half of one percent (0.50%) of the beneficiary's annual retirement allowance payable as of November 1, 2019, and shall not be prorated for date of retirement commencement. If the beneficiary dies before the payment is made, then the payment shall be payable to the member's legal representative. No beneficiary shall be deemed to have acquired a vested right to any future supplemental payments.

(dd)     In accordance with subsection (a) of this section, after September 1, 2020, but on or before October 31, 2020, a one‑time cost‑of‑living supplement payment shall be made to or on account of beneficiaries who are living as of September 1, 2020, and whose retirement commenced on or before September 1, 2020. The payment shall be one‑half of one percent (0.50%) of the beneficiary's annual retirement allowance payable as of September 1, 2020, and shall not be prorated for date of retirement commencement. If the beneficiary dies before the payment is made, then the payment shall be payable to the member's legal representative. No beneficiary shall be deemed to have acquired a vested right to any future supplemental payments.

SECTION 5.1.(e)  Notwithstanding any other provision of law to the contrary, in order to administer the one‑time cost‑of‑living supplement for retirees provided for in this section, the Retirement Systems Division of the Department of State Treasurer may increase receipts from the retirement assets of the corresponding retirement system or pay costs associated with the administration of the payment directly from the retirement assets.

 

APPROPRIATION FOR SUPPLEMENT

SECTION 5.2.  There is appropriated from the General Fund to the Office of State Budget and Management the sum of seventeen million three hundred sixty‑three thousand three hundred six dollars ($17,363,306) in nonrecurring funds for the 2019‑2020 fiscal year and the sum of seventeen million three hundred sixty‑three thousand three hundred six dollars ($17,363,306) in nonrecurring funds for the 2020‑2021 fiscal year to be held in reserve to implement the one‑time cost‑of‑living supplements authorized by this section.

 

SALARY‑RELATED CONTRIBUTIONS

SECTION 5.3.(a)  Subsections (b) and (c) of Section 3.15 of S.L. 2019‑209 are repealed.

SECTION 5.3.(b)  If House Bill 966, 2019 Regular Session, becomes law, then Section 38.22 of that act is repealed.

SECTION 5.3.(c)  Effective July 1, 2019, the State's employer contribution rates budgeted for retirement and related benefits as a percentage of covered salaries for the 2019‑2020 fiscal year for teachers and State employees, State law enforcement officers (LEOs), the University and Community Colleges Optional Retirement Programs (ORPs), the Consolidated Judicial Retirement System (CJRS), and the Legislative Retirement System (LRS) are as set forth below:

Teachers                State           ORPs          CJRS         LRS

and State                LEOs

Employees

Retirement                       13.13%               13.13%        6.84%         33.91%      26.79%

Disability                           0.10%                 0.10%        0.10%           0.00%        0.00%

Death                                  0.16%                 0.16%        0.00%           0.00%        0.00%

Retiree Health                    6.47%                 6.47%        6.47%           6.47%        6.47%

NC 401(k)                          0.00%                 5.00%        0.00%           0.00%        0.00%

 

Total Contribution

Rate                                 19.86%               24.86%      13.41%         40.38%      33.26%

 

Portion of Rate That

Is Non‑Recurring             0.16%                 0.16%        0.00%           0.31%        0.33%

The rate for teachers and State employees and State law enforcement officers includes one one‑hundredth percent (0.01%) for the Qualified Excess Benefit Arrangement.

SECTION 5.3.(d)  Effective July 1, 2020, the State's employer contribution rates budgeted for retirement and related benefits as a percentage of covered salaries for the 2020‑2021 fiscal year for teachers and State employees, State law enforcement officers (LEOs), the University and Community Colleges Optional Retirement Programs (ORPs), the Consolidated Judicial Retirement System (CJRS), and the Legislative Retirement System (LRS) are as set forth below:

Teachers                State           ORPs          CJRS         LRS

and State                LEOs

Employees

Retirement                       14.52%               14.52%        6.84%         36.31%      29.33%

Disability                           0.10%                 0.10%        0.10%           0.00%        0.00%

Death                                  0.16%                 0.16%        0.00%           0.00%        0.00%

Retiree Health                    6.82%                 6.82%        6.82%           6.82%        6.82%

NC 401(k)                          0.00%                 5.00%        0.00%           0.00%        0.00%

 

Total Contribution

Rate                                 21.60%               26.60%      13.76%         43.13%      36.15%

 

Portion of Rate That

Is Non‑Recurring             0.16%                 0.16%        0.00%           0.31%        0.33%

The rate for teachers and State employees and State law enforcement officers includes one one‑hundredth percent (0.01%) for the Qualified Excess Benefit Arrangement.

 

part vI. miscellaneous provisions

SECTION 6.1.  The legislative salary increases provided by this act in each year of the 2019‑2021 fiscal biennium do not apply to persons separated from service due to resignation, dismissal, reduction in force, death, or retirement or whose last workday is prior to June 30, 2019, for the 2019‑2020 fiscal year or June 30, 2020, for the 2020‑2021 fiscal year. For the 2019‑2021 fiscal biennium, payroll checks issued to employees after July 1, 2019, and July 1, 2020, respectively, that represent payment of services provided prior to July 1 of each year shall not be eligible for salary increases provided for in this act.

SECTION 6.2.  If any provision of this act and G.S. 143C‑5‑4 are in conflict, the provisions of this act shall prevail. If House Bill 966, 2019 Regular Session, becomes law, then Parts I, II, III, and IV and Sections 5.2 and 6.1 of this act are repealed.

SECTION 6.3.  This act becomes effective July 1, 2019.

In the General Assembly read three times and ratified this the 31st day of October, 2019.

 

 

                                                                    s/  Philip E. Berger

                                                                         President Pro Tempore of the Senate

 

 

                                                                    s/  Tim Moore

                                                                         Speaker of the House of Representatives

 

 

 

 

                                                                        _____________________________________

                                                                         Roy Cooper

                                                                         Governor

 

 

Approved __________.m. this ______________ day of ___________________, 2019