Lasting Economic and Academic Prosperity Act.

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025
S 1
SENATE BILL 618

Short Title: Lasting Economic and Academic Prosperity Act. (Public)
Sponsors: Senators Chitlik, Lowe, and Grafstein (Primary Sponsors).
Referred to: Rules and Operations of the Senate
March 26, 2025
*S618-v-1*
A BILL TO BE ENTITLED 1
AN ACT TO ENACT THE LASTING ECONOMIC AND ACADEMIC PROSPERITY (LEAP) 2
ACT. 3
The General Assembly of North Carolina enacts: 4
SECTION 1. Article 3 of Chapter 143B of the General Statutes is amended by adding 5
a new section to read: 6
"§ 143-168.17. Lasting Economic and Academic Prosperity (LEAP) Endowment Program. 7
(a) Title; Purpose. – This section shall be known and may be cited as the Lasting 8
Economic and Academic Prosperity (LEAP) Act. The purpose of this section is to establish a 9
framework whereby the State may provide funds to be used by the Department of Health and 10
Human Services, Division of Child Development and Early Education , to (i) benefit North 11
Carolina children, (ii) establish and support endeavors to further early childhood development 12
and other interventions that can reasonably be anticipated to result in better educational and 13
life-quality outcomes, (iii) better target philanthropic funding to needed childhood initiatives, 14
and (iv) establish a stable and predictable form of State-match funding to incentivize total 15
philanthropic giving and bridge the gap between current and needed funding for educational and 16
developmental endeavors for the children of the State. 17
(b) Definitions. – The following definitions apply in this section: 18
(1) DCDEE. – The Division of Child Development and Early Education within 19
the Department of Health and Human Services. 20
(2) Endowment. – Funds appropriated to DCDEE by the State for the endowment 21
of the Program. 22
(3) Excluded amount. – Funds raised by DCDEE through fundraising efforts that 23
are separately accounted, and reserved solely, for the Program, including 24
returns or earnings of any kind resulting directly or indirectly from investment 25
of such funds. The term does not include State funds appropriated or allocated 26
to DCDEE or funds raised by DCDEE for other purposes. 27
(4) Investment income. – Returns and earnings of any kind resulting directly or 28
indirectly from investment of the endowment by an independent investment 29
manager as allowed by this section. 30
(5) Program. – The Lasting Economic and Academic Prosperity Endowment 31
Program established in this section. 32
(6) Programmatic funds. – Investment income and excluded amounts not invested 33
with the endowment. 34
General Assembly Of North Carolina Session 2025
Page 2 Senate Bill 618-First Edition
(c) Program. – The Program is established in the Department of Health and Human 1
Services. DCDEE shall develop detailed guidelines to administer, and accomplish the purposes 2
of, the Program. DCDEE, in administering the Program, shall be subject to all of the following: 3
(1) DCDEE shall use the funds as follows: 4
a. Endowment. – The endowment shall be used solely to produce 5
investment income by an independent investment manager, as 6
provided in this section. 7
b. Investment income. – Investment income shall be used to supplement 8
or stabilize funding for any early childhood or child care initiatives 9
administered by DCDEE to maintain and maximize the reach and 10
continuous receipt and impact of those initiatives. 11
c. Excluded amounts. – Excluded amounts may be invested with the 12
endowment or used for the purposes allowed for investment income. 13
(2) DCDEE shall report on (i) investment income earned and (ii) expenditures of 14
programmatic funds to the Joint Legislative Oversight Committee on Health 15
and Human Services and the Fiscal Research Division on or before September 16
15 of each fiscal year and more frequently as requested. 17
(3) DCDEE shall contract with an independent investment manager to manage 18
and invest the endowment for the purpose of generating investment in come. 19
The contract shall establish the annual compensation for the investment 20
manager, including any management fee, which shall reflect asset -based 21
pricing using a tiered structure, with an overall blended rate not to exceed 15 22
basis points. Amounts paid pursuant to this subdivision are overhead and 23
administrative costs of DCDEE. The contract shall require that the investment 24
manager disclose to DCDEE any interest that it or an owner, stockholder, 25
partner, officer, director, member, employee, or agent of t he investment 26
manager has in a recipient of investment income from DCDEE to the extent 27
the investment manager is aware of such recipients. The activities and 28
investments of the investment manager are not subject to the reporting 29
requirements of this section. 30
(4) DCDEE shall maintain separate accounting records for and separate accounts 31
for programmatic funds and shall not commingle programmatic funds with 32
other funds. DCDEE shall maintain records and accounts according to 33
generally accepted accounting principles." 34
SECTION 2. Article 4 of Chapter 143C of the General Statutes is amended by adding 35
a new section to read: 36
"§ 143C-4-2.1. LEAP Reserve. 37
(a) Creation. – The LEAP Reserve is established as a reserve in the General Fund and is 38
a component of the unappropriated General Fund balance. 39
(b) LEAP Reserve Requirement. – Each Current Operations Appropriations Act enacted 40
by the General Assembly shall include a transfer to the LEAP Reserve in an amount equal to the 41
excluded amount, as defined in G.S. 143B-168.17, raised for the LEAP Endowment Pro gram 42
established in that section during the previous fiscal year. Each fiscal year, the Office of the State 43
Controller shall transfer to the LEAP Reserve the amount included for transfer pursuant to this 44
subsection. Funds transferred to the LEAP Reserve pu rsuant to this subsection are hereby 45
appropriated to the Department of Health and Human Services, Division of Child Development 46
and Early Education, in the year transferred for purposes consistent with the LEAP Endowment 47
Program. 48
(c) Transfers of Funds to LEAP Reserve. – Each fiscal year, the Office of State Controller 49
shall transfer to the LEAP Reserve the amount included for transfer pursuant to subsection (b) of 50
this section. 51
General Assembly Of North Carolina Session 2025
Senate Bill 618-First Edition Page 3
(d) Additional Transfer of Funds by General Assembly Permissible. – Nothing in this 1
section shall be construed to prohibit the General Assembly from directing the transfer of 2
additional funds into the LEAP Reserve." 3
SECTION 3. There is appropriated from the General Fund to the Department of 4
Health and Human Services the recurring sum of four hundred fifty thousand dollars ($450,000) 5
for the 2025-2026 fiscal year and the recurring sum of four hundred seventy -two thousand five 6
hundred dollars ($472,500) for the 2026-2027 fiscal year to be allocated to the Division of Child 7
Development and Early Education to be used for fundraising efforts for the LEAP Endowment 8
Program established in G.S. 143-168.17. It is the intent of the Gener al Assembly to appropriate 9
future amounts for the purposes described in this section for a minimum of eight additional years, 10
with each year having a five percent (5%) increase over the previous year's appropriation. 11
SECTION 4. Section 2 of this act becomes effective July 1, 2025. The remainder of 12
this act is effective when it becomes law. 13