Bill Summary – FastDemocracy

H.B. 591
                          GENERAL ASSEMBLY OF NORTH CAROLINA
                                                                                              Apr 15, 2021
                                      SESSION 2021                                      HOUSE PRINCIPAL CLERK
     H                                                                                                 D
                                  HOUSE BILL DRH40252-MKa-96A
     Short Title:   Fines and Forfeitures/Payment to Schools.                                    (Public)
     Sponsors:      Representative Gailliard.
     Referred to:
                                    A BILL TO BE ENTITLED
 AN ACT TO DIRECT EXCESS RECEIPTS IN THE CIVIL PENALTY AND FORFEITURE
     FUND TO BE TRANSFERRED TO THE SCHOOL TECHNOLOGY FUND IN THE
     SAME FISCAL YEAR AND ANY CAPITAL FUNDS FOR SCHOOL TECHNOLOGY TO
     BE USED TOWARD PAYMENT OF THE 2019 COURT JUDGMENT ON CIVIL
     PENALTIES, FINES, AND FORFEITURES AND TO DIRECT THE LEGISLATIVE
     RESEARCH COMMISSION TO STUDY WAYS TO SATISFY THE REMAINDER OF
     THE JUDGMENT.
             Whereas, Section 7 of Article IX of the North Carolina Constitution requires that
 public schools receive the clear proceeds of all penalties and forfeitures and of all fines collected
 in several counties for any breach of the penal laws of the State; and
             Whereas, in 1996, the North Carolina Supreme Court ruled in Craven County Board
 of Education v. Boyles that civil fines imposed by State agencies should be treated the same as
 criminal fines and that those fines belong to the public schools; and
             Whereas, on August 8, 2008, the Wake County Superior Court ordered a
 Memorandum of Decision and Judgment in North Carolina School Boards Association v. Moore;
 and
             Whereas, the Memorandum of Decision and Judgment stipulated that $747,883,074
 in fines and forfeitures had been wrongly withheld by the State of North Carolina and that these
 funds should have been received by the local school administrative units; and
             Whereas, the Memorandum of Decision and Judgment ordered that all proceeds from
 the judgment be used for school technology; and
             Whereas, in 2009, the General Assembly appropriated $18,183,251 from parking
 fines held in escrow by The University of North Carolina to begin paying off the judgment; and
             Whereas, in 2019, the Wake County Superior Court ordered in North Carolina School
 Boards Association et al. v. Folwell in an Order Granting Judgment that the Plaintiffs obtained a
 valid judgment in the sum of $747,883,074 on August 8, 2008, and that $729,699,823 of that
 judgment remained unpaid and entered a judgment for that amount on March 6, 2019, to be paid
 by the State of North Carolina; and
             Whereas, no additional funds have been allocated by the State of North Carolina to
 pay off the judgment; and
             Whereas, the State of North Carolina still owes $729,699,823 for school technology;
 Now, therefore,
 The General Assembly of North Carolina enacts:
             SECTION 1.(a) G.S. 115C-457.3 is amended by adding a new subsection to read:
                                  *DRH40252-MKa-96A*
     General Assembly Of North Carolina                                                    Session 2021
      "(c) Any amount of funds in excess of the appropriation made by the General Assembly
 for a fiscal year in the Current Operations Appropriations Act pursuant to subsection (a) of this
 section shall be transferred to the School Technology Fund established pursuant to
 G.S. 115C-102.6D in the same fiscal year in which the excess funds are collected."
              SECTION 1.(b) Notwithstanding G.S. 115C-102.6D(b), in any fiscal year in which
 excess funds are transferred to the School Technology Fund pursuant to G.S. 115C-457.3(c), as
 enacted by subsection (a) of this section, the Department of Public Instruction shall allocate those
 funds to local school administrative units on a per pupil basis to be credited toward the remaining
 judgment ordered in North Carolina School Boards Association, et al. v. Folwell, 18 CVS 009586
 (Wake County), until such time that judgment has been satisfied. Upon the transfer of excess
 funds to the School Technology Fund in accordance with G.S. 115C-457.3, the Department of
 Public Instruction shall send written notice to the North Carolina School Boards Association.
              SECTION 2. In any fiscal year that funds are appropriated by the General Assembly
 from a source other than the Civil Penalty and Forfeiture Fund for capital improvements for
 school technology for local school administrative units, those funds shall be credited toward the
 remaining judgment ordered in North Carolina School Boards Association, et al. v. Folwell, 18
 CVS 009586 (Wake County), until such time that judgment has been satisfied. Within 60 days
 after the end of each fiscal year, the Department of Public Instruction shall send written notice to
 North Carolina School Boards Association of any funds credited toward the remaining judgment
 pursuant to this section.
              SECTION 3.(a) The Legislative Research Commission (Commission) shall study
 ways the State of North Carolina shall satisfy the remainder of the judgment ordered in North
 Carolina School Boards Association, et al. v. Folwell, 18 CVS 009586 (Wake County), including
 at least the following:
              (1)    Sources of funding to satisfy the judgment.
              (2)    A time line for payments to be made that shall not exceed a 10-year period.
              SECTION 3.(b) By March 15, 2022, the Commission shall report the results of its
 study and its recommendations to the 2021 General Assembly.
              SECTION 4. This act is effective when it becomes law.
     Page 2                                                                      DRH40252-MKa-96A
Statutes affected: 
Filed: 115C-457.3
Edition 1: 115C-457.3