FILED SENATE
May 1, 2024
GENERAL ASSEMBLY OF NORTH CAROLINA
S.B. 785
SESSION 2023 PRINCIPAL CLERK
S D
SENATE BILL DRS35339-LUa-149C
Short Title: Zero-Based Budgeting. (Public)
Sponsors: Senator Burgin (Primary Sponsor).
Referred to:
1 A BILL TO BE ENTITLED
2 AN ACT TO REQUIRE THE USE OF ZERO-BASED BUDGETING FOR STATE AGENCIES
3 ON A ROTATING BASIS.
4 The General Assembly of North Carolina enacts:
5 SECTION 1. Article 3 of Chapter 143C of the General Statutes is amended by adding
6 a new section to read:
7 "§ 143C-3-3.1. Zero-based budgeting estimates.
8 (a) Commencing with the fiscal year beginning July 1, 2024, in each even-numbered year
9 each State agency of the executive branch designated in a scheduled year, as described in
10 subsection (e) of this section, shall prepare and submit to the Office of State Budget and
11 Management (OSBM) a zero-based budget plan for the fiscal biennium beginning July 1 of the
12 following fiscal year. OSBM shall provide technical assistance to support each State agency in
13 completing its zero-based budget plan. For purposes of this section, the term "zero-based budget"
14 means a budget that reflects the amount of funding deemed necessary to achieve the most
15 cost-effective performance of a State agency pursuant to an accompanying narrative delineating
16 the tasks to be performed by the State agency together with the goals and objectives for the State
17 agency for a period not to exceed two years. The budget shall have a zero dollar amount as its
18 basis and shall not reflect any prior appropriation amount, adjusted or otherwise.
19 (b) At a minimum, a State agency's plan shall contain the following information:
20 (1) A description of those discrete activities that comprise the agency, and a
21 justification for the existence of each activity by reference to statute or other
22 legal authority.
23 (2) For each activity, a quantitative estimate of any adverse impacts that could
24 reasonably be expected should the activity be discontinued, together with a
25 full description of the methods by which the adverse impact is estimated.
26 (3) A list of quantifiable program outcomes that measure the efficiency and
27 effectiveness of each program.
28 (4) For each activity, an itemized account of expenditures that would be required
29 to maintain the activity at the minimum level of service required by the
30 statutory authority, together with a concise statement of the quantity and
31 quality of services required at that minimum level.
32 (5) For each activity, an itemized account of expenditures required to maintain
33 the activity at current levels of service, together with a concise statement of
34 the quantity and quality of services being provided.
35 (6) A ranking of all activities that shows the relative contribution of each activity
36 to the overall goals and purposes of the agency at current service levels.
*DRS35339-LUa-149C*
 General Assembly Of North Carolina Session 2023
1 (c) The Office of State Budget and Management (OSBM) shall submit the zero-based
2 budget plans for those State agencies required to prepare plans pursuant to the schedule set forth
3 in subsection (e) of this section no later than when the Governor presents budget
4 recommendations to the General Assembly under G.S. 143C-3-5.
5 (d) All statutory appropriations, as defined in G.S. 143C-1-1(d), shall be excluded from
6 any zero-based budgeting plans.
7 (e) State agencies shall submit zero-based budget plans pursuant to the following
8 schedule:
9 (1) In 2024, and every eight years thereafter, for the following Divisions within
10 the Department of Health and Human Services:
11 a. Aging and Adult Services.
12 b. Child and Family Well-Being.
13 c. Employment and Independence for People with Disabilities.
14 d. Health Benefits.
15 e. Health Service Regulation.
16 f. Services for the Blind.
17 g. Services for the Deaf and Hard of Hearing.
18 (2) In 2026, and every eight years thereafter, for the following agencies:
19 a. Divisions within the Department of Health and Human Services as
20 follows:
21 1. Central Management and Support.
22 2. Child Development and Early Education.
23 3. Mental Health, Developmental Disabilities, and Substance Use
24 Services.
25 4. Public Health.
26 5. Social Services.
27 b. Department of Public Instruction.
28 (3) In 2028, and every eight years thereafter, for the following agencies:
29 a. Office of Administrative Hearings.
30 b. Department of Adult Correction.
31 c. Department of Commerce.
32 d. Office of the State Controller.
33 e. State Board of Elections.
34 f. Office of State Human Resources.
35 g. Department of Information Technology.
36 h. Department of Justice.
37 i. Department of Natural and Cultural Resources.
38 j. Department of Revenue.
39 k. Department of the Secretary of State.
40 l. Department of State Treasurer.
41 m. Wildlife Resources Commission.
42 (4) In 2030, and every eight years thereafter, for the following agencies:
43 a. Department of Administration.
44 b. Department of Agriculture and Consumer Services.
45 c. Office of State Auditor.
46 d. Office of State Budget and Management.
47 e. Department of Environmental Quality.
48 f. Housing Finance Agency.
49 g. Indigent Defense Services.
50 h. Industrial Commission.
51 i. Department of Insurance.
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1 j. Department of Labor.
2 k. Department of Military and Veterans Affairs.
3 l. Department of Public Safety."
4 SECTION 2. This act is effective when it becomes law.
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