Enacts new GS 143C-4-8 establishing the Unfunded Liability Solvency Reserve (Reserve), an employee benefits trust, in the General Fund. Specifies that the Reserve will receive the following funds: (1) any amounts appropriated by the General Assembly; (2) funds that are appropriated on the last day of each fiscal year according to the following formula: a. if the General Fund tax‑supported debt service is less than 4% of the most recent Debt Affordability Advisory Committee (DAAC) Revenues, then an appropriation shall be made equal to the difference between 4% of DAAC Revenues and the actual General Fund tax‑supported debt service; b. if the General Fund tax‑supported debt service is greater than or equal to 4% of the most recent DAAC Revenues, then no appropriation shall be made for that fiscal year; and (3) 25% of the unreserved fund balance of the current fiscal year not otherwise designated must be placed in the Reserve the next fiscal year. Defines DAAC revenues as General Fund tax revenues, including individual income tax, corporate income tax, sales and use tax, franchise tax, insurance tax, beverage tax, tobacco products tax, other taxes, investment income, and miscellaneous revenues, as calculated in the DAAC study report issued pursuant to GS 142‑101(e).

Limits the use of funds in the Reserve to transfers to the (1) Health Benefit Fund or (2) the Retirement System for the purpose of reducing the unfunded liabilities of those two funds. Requires that funds in the Reserve be appropriated by the end of the next fiscal year after the funds entered the Reserve. Prohibits transfers from the Reserve to the Health Benefit Fund and the Retirement System from supplanting employer contributions otherwise designated for the Health Benefit Fund or Retirement System. Allows transfers from the Reserve only upon the following conditions: (1) the portion of the State's employer contribution rate provided to the Health Benefit Fund is not less than the cost of the premiums for the retirees served by the Retiree Health Benefit Fund in the most recent plan year; (2) the portion of the State's employer contribution rate provided to the Retirement System in effect at the time of the transfer is equal to or greater than the rate certified under GS 135‑8 as necessary by the Board of Trustees of the Retirement System; (3) transfers from the Reserves must not be used to pay the cost of benefit enhancements commencing after July 1, 2017.

Requires that on the first day of each fiscal year, the total balance of the Reserve as of the last day of the preceding fiscal year be used to appropriate an additional employer contribution to the Health Benefit Trust and the Retirement System, with the additional contribution to be calculated as specified in the act.

The following changes are made only if H7 (LRC/Strengthen Savings Reserve) becomes law.

Amends GS 142-15.4 by adding that if, and to the extent that, the balance of the Savings Reserve is at or above the recommended Savings Reserve balance developed, whenever general obligation bonds issued or incurred by the State are refinanced, then: (1) the General Assembly must not reduce the funds appropriated for serving the refinanced debt during the fiscal biennium in which the refinancing occurs; (2) the State Controller must, in conjunction with the State Treasurer, periodically transfer the savings resulting from the refinancing of the debt to the Unfunded Liability Solvency Reserve during the fiscal biennium in which the refinancing occurs; and (3) in the fiscal biennium immediately following the refinancing, the Director of the Budget must adjust the amount of debt service funded in the base budget so that it aligns with the actual debt service needs.

Amends GS 142-96 by adding that if, and to the extent that, the balance of the Savings Reserve is at or above the recommended Savings Reserve balance, whenever special indebtedness issued or incurred by the State is refinanced, then:(1) the General Assembly must not reduce the funds appropriated for serving the refinanced debt during the fiscal biennium in which the refinancing occurs; (2) the State Controller must, in conjunction with the State Treasurer, periodically transfer the savings resulting from the refinancing of the debt to the Unfunded Liability Solvency Reserve during the fiscal biennium in which the refinancing occurs; and (3) in the fiscal biennium immediately following the refinancing, the Director of the Budget must adjust the amount of debt service funded in the base budget so that it aligns with the actual debt service needs.

Amends GS 143C-4-2 by adding the following: if, and to the extent that, the balance of the Savings Reserve is at or above the recommended Savings Reserve balance as of the last day of the fiscal year, the Current Operations Appropriations Act for the succeeding fiscal year must include a transfer to the Unfunded Liability Solvency Reserve of 15% of the succeeding fiscal year's estimated growth in State tax revenues deposited in the General Fund. Also sets out transfers that must be made when the balance of the Savings Reserve is below the recommended Savings Reserve balance as of the last day of the fiscal year, before the transfer of 15% of the succeeding fiscal year's estimated growth in State tax revenues deposited in the General Fund. 

Amends new GS 143C-4-8(c) by making a conforming change, adding that the Reserve will also receive funds transferred under GS 142-15.5 (appears to intend GS 142-15.4), GS 142-96, and GS 143C-4-2.

Effective July 1, 2017.