House amendments make the following changes to the 4th edition.

Amendment #1 amends Adjustments to Availability, changing the amounts for the Tobacco Master Settlement Agreement (MSA) Funds as follows: for 2013-14, $46,889,357 (was, $115,639,357) and for 2014-15, $22,250,000 (was, $91,000,000). Adds the following amounts for the Diversion of Golden L.E.A.F.: $68,750,000 for 2013-14 and the same amount for 2014-15.

Amendment #1 also makes the following additional changes.

Adds new subsection (g)to Section 2.2, providing that of the annual installment payments to the North Carolina Specific Account that would have been transferred to the Golden L.E.A.F., Inc. under Section 2(b) of SL 1999-2 for fiscal years 2013-14 and 2014-14, the sum of $68,750,000 for fiscal year 2013-14 and the sum of $68,750,000 for fiscal year 2014-15is transferred to the General Fund. Directs that annual installment payments in excess of the amounts specified in this section are to be transferred to the Settlement reserve Fund (GS 143C-9-2).

Adds new subsection (h) to Section 2.2, to require that the Attorney General take all necessary actions to provide notice to the court in the action entitled State of North Carolina v. Phillip Morris Incorporated, et. al., 98 CVS 14377 and to the State Specific Account established under the Master Settlement Agreement of the General Assembly's action regarding the redirection of payments set forth in this section.

Retains the changes to GS 116-29.1(b) to delete the transfer of $8 million from Budget Code 69430 to the University Cancer Research Fund (Cancer Fund) and to also delete theprovision that provided for an appropriation from the General Fund to the Cancer Fund in an amount to equal the difference between $50 million and the amounts transferred under Budget Code 69430 and from the tax on tobacco products other than cigarettes. Deletes the approval of the creation of a nonprofit according to the Consent Decree and Final Judgment and related provisions, the repeal of SL 1999-2, and the changes to GS 143C-9-3(a).

Specifies that totals are to be adjusted accordingly to reflect these changes.

Amendment #2 inserts new Section 6.8, North Carolina Education Lottery, which amends GS 18C-151(a) to require that a contract entered into by the NC State Lottery Commission (Commission)forthe purchase of services, apparatus, supplies, materials, or equipment requiring an estimated aggregate expenditure of $300,000 (was, $90,000) or more may be awarded by the Commission only after the requirements as specified in GS 18C-151 have been met.

Amendment #3 inserts new Section 18A.4, Private Assigned Counsel, directing the Office of Indigent Defense Services (IDS)to issue a request for proposals from private law firms or not-for-profit legal representation organizations to provide all legal services for indigent clients in all judicial districts.Requires IDS to report, by October 1, 2013,to the Joint Legislative Commission on Governmental Operations on the issuance of the request for proposals. Provides guidelines for IDS to apply in entering into contracts to provide representation services, if more efficient than current costs and representation will meet constitutional and statutory standards, and directs IDS to use private assigned counsel funds to enter into these contracts.

Amendment #4 amends Section 11.6(a), UNC Board of Governors Report on Overhead receipts, to delete the requirement that the Board of Governor's annual report contain line item reportsfor facilities and administrative fees, overhead receipts, and expenditures by grant or program.

Amendment #8 amends Section 12H.13.(g) to direct the Department of Health and Human Services (DHHS), Division of Medical Assistance, to implement changes after consultation with the Joint Legislative Oversight Committee on Health and Human Services, (was, to implement changes to the reimbursement rates and methodologies for prescribed drugs)in order to achieve the savings required by this act.Requires that the options selected by DHHSbe implemented to be effective January 1, 2014 (was, provided that the rates and methodologies required by this section are effective January 1, 2014).Prohibits DHHS from considering (1) supplemental rebates for mental health and HIV drugs or (2) payments based on invoice costs in implementing drug reimbursement rates and methodologies under Section 12H.13(g).Makes conforming changes deleting provisions forachieving savings that include changing, creating, oreliminating supplemental rebates for mental health and HIV drugs, and payments based on invoice costs to pharmacists.

Adds new Section 12H.13B, Reduce Cost Savings Through Drug Adjustment By Reducing Funds Appropriated for Expected "Woodwork" Enrollees. Makes adjustments to amounts budgeted elsewhere in this act for fiscal years 2013-14 and 2014-15 as the section title indicates.

Amendment #10 makes changes to new GS 115C-83.4A (Section 8.27.(b)) to provide that schools may identify students for potential enrollment in advanced courses based on criteria established by schools to increase access to advanced courses for their studentsother than student diagnostic tests.

Amendment #12 makes changes to the organization of counties into superior court districts, district court districts, and prosecutorial districts. Authorizes an additional district court judge for district court district 27B, increasing the number ofjudgeships tosix (was, five).Provides that the additional judgeship is to be filled by election of a district court judge in the 2014 general election for a four-year term beginning January 1, 2015. Reduces the number of judgeships for district court district 20A to two (was, three).Decreases the number of full-time assistant district attorneys for prosecutorial district six to 10 (was, 11).Establishes prosecutorial district 16C. Provides that the district attorney positionestablished for district 16C isto be filled by election in the2014 general election for a four-year term beginning January 1, 2015.Makes additional conforming changes and organizational changes.

Amendment #13 inserts new Section 16B.7 to provide that there is no requirement that the following Alcohol Law Enforcement (ALE) positions be eliminated, notwithstanding any other provisions of this act: ALE Assistant Director, Assistant Special Agent in Charge, and Accreditation Manager.Reducing the operating budget for the ALE Section by $456,058 during the 2013-14 fiscal year, and by $456,058 during the2014-15 fiscal year. Authorizes the Department to eliminate positions to meet the reduction required under this section. Makes conforming change that totals be adjusted accordingly.

Amendment #16 amends Section 12B.1(f) that the Division of Child Development and Early Education's NC Pre-K pilot program's report on the status of the program must include the student attendance records, parent satisfaction levels, teacher retention, and provider satisfaction levels for classrooms in the pilot program, (was, attendance information on students in the pilot program)as compared to classrooms having a traditional funding structure.

Amendment #17 adds new Section 15.28C to provide, despite any other provision of this act, $18,000 of the funds appropriated in thisact to the Department of Commerce for the Piedmont Triad Partnership for the 2013-14 fiscal year, is instead appropriated, in nonrecurring funds, to Surry County for the 2013-14 fiscal year. Directs that the appropriate totals be adjusted accordingly.

zHouse amendment #20

Amends the Section titled "Small School System Supplemental Funding" found in Part 8, modifying the allotment formula for small school system supplemental funding to each county school administrative unit for the 2013-14 fiscal year for (1) each county school unit with an average daily membership fewer than 3,175 students, and (2) each county school administrative unit with an average daily membership from 3,175 to 4,000 students if the county in which the local school unit is located has a county-adjusted property tax base per student that is below the State-adjusted property tax base per student if the total average daily membership of all local school units in the county is from 3,239 to 4,080.

Provides that the allocation formula must (1) round all fractions of positions to the next whole position, (2) provide 5.5 additional regular classroom teachers in certain counties, (3) provide additional program enhancement teachers adequate to offer the standard course of study, (4) change the duty-free period allocation to 1 teacher assistant per 400 average daily membership, (5) provide a base for the consolidated funds allotment of $693,954, excluding textbooks, for the 2013-14 fiscal year, and 6) allot vocational education funds for grade 6 as well as 7-12.

Provides a nonsupplant requirement, providing that for the 2013-14 fiscal year, a county in which a local school administrative unit receives funds under this section must use the funds to supplement local current expense funds and cannot supplant local current expense funds. Prohibits the State Board of Education from allocating funds under this allotment to a county found to have used these funds to supplant local per student current expense funds. Requires the State Board of Education to find that a county has used these funds to supplant local current expense funds in the prior year, or the year for which the most recent data are available, if the following apply: (1) the current expense appropriation per student of the county for the current year is less than 95% of the average of the local current expense appropriations per student for the three prior fiscal yearsand (2) the county cannot show that it has remedied the deficiency in funding; or that extraordinary circumstances caused the county to supplant local current expense funds with funds allocated under this allotment.

Includes a phase-out provision for those units that become ineligible because of population increase or an increase in the county-adjusted property tax base per student.

Provides definitions for use in this section, including Average daily membership, County-adjusted property tax base per student, Local current expense funds, Sales assessment ratio studies, State-adjusted property tax base per student, Supplant, and Weighted average of the three most recent annual sales assessment ration studies.

Requires the State Board of Education to report to the Fiscal Research Division by May 1, 2014, if it determines counties have supplanted funds.

Encourages local boards to use at least 20% of the funds to improve the academic performance of children performing at Levels I or II on reading or math end-of-grade tests in grades 3-6.

Provides that if the total average daily membership of all local school administrative units in the county is less than 3,200, then the county school administrative unit within that county is eligible for small school system supplemental funding for the 2014-15 fiscal year.

Amends Section 8.4(b), concerning small school system funding, providing that the maximum small school system dollars per student will be $2,094 (was, $2,300). Amends Section 8.4(d), changing the included date for the nonsupplant requirement to the 2014-15 fiscal year (was, 2013-15 fiscal biennium).

Amends the report requirements of Section 8.4(e), providing that for the 2013-14 fiscal year, the State Board of Education must report to the Fiscal research Division prior to May 1, 2015, if it determines counties have supplanted funds.

House amendment #22

Enacts the "Pilot Program to Raise the High School Dropout Age from Sixteen to Eighteen", comprising Sections 8.49(a) through 8.49 (f). Provides that the State Board of Education (Board) authorizes the Hickory County Public School and the Newton-Conover City Schools to establish the above noted the dropout pilot program. Appropriates from the General Fund to the Board $10,000 for the 2013-14 fiscal year to allocate funds to the participating school systems in order to implement the pilot program. Authorizes the Board to allocate up to $5,000 to each local school administrative unit (unit) for this purpose. Decreases the funds allocated to the At-Risk Student Service Alternative School Allotment by $10,000 for the 2013-14 fiscal year.

Authorizes units to use any other funds available to employ up to three additional teachers and to fund additional student-related costs for the pilot program. Directs the units to partner with Catawba Valley Community College in regards to the pilot program to the extent possible.

Requires the participating units, in collaboration with the Board, to report to the Joint Legislative Education Oversight Committee, the House Appropriations Subcommittee on Education, and the Senate Appropriations Committee on Education/Higher Education on or before January 1, 2016, with the report required to cover specified information, including but not limited to, an analysis of the graduation rate in each unit and the impact of the pilot program on the graduation rate and the teen crime statistics for Catawba County.

Provides that the Board will not allocate the $10,000 in funds unless a copy of a joint resolution, adopted by the Hickory Public Schools and the Newton-Conover City Schools boards of education, setting a date to begin the pilot program, is received.

House amendment #25.

Amends Section 10.15(c), concerning audits of the community college system, providing that a study of the program audit function under GS 115D-5(m) will be conducted by a committee, which will be located administratively in the Community Colleges System Office and composed of 12 members, including the Community Colleges System Office Chief Financial Officer, three State Board of Community College members, three college presidents, three college board of trustee members, the State Auditor or designee, and the State Chief Information Officer or designee. Specifies who will make the appointments of the above individuals. Sets out the processes and procedures of the committee. Directs the committee to minimize the administrative burden on the institutions being audited and to study how funding can be changed to reduce reliance on contact hours. Requires the committee to seek input from community college staff members who assist with the program audits in order to study the problems associated with the audits and discover potential resolutions for those issues. Directs the committee to report results of the study and recommendations to the Joint Legislative Education Oversight Committee by January 1, 2015.

House amendment #26

Inserts new Section 6.19, providing that, notwithstanding any other provision of law, the funds allocated for H 998 for the 2013-14 fiscal year will be reduced by $145,000 if H 392 becomes law. Provides that from the funds appropriated in this act for pending legislation for the 2013-14 fiscal year, $145,000 is allocated for the purposes of H 392.

Amendment #28

Inserts new Section 19.8A, concerning Arts Council Funding, providing that, not withstanding any other provision in the act, the funds appropriated to the Department of Revenue will be reduced by $180,000 in recurring funds for each year of the fiscal biennium. Directs the funds appropriated to the Department of Cultural Resources to be increased by $180,000 in recurring funds each year of the fiscal biennium to fund additional grants within the Grassroots and Basic grants program.