The North Carolina Constitution requires that public schools receive “the proceeds of all penalties and forfeitures and of all fines collected for any breach of the penal laws of the State.”
1996: The North Carolina Supreme Court rules that administrative (civil) fines levied by State agencies should be treated the same as criminal fines and should go to public schools per the North Carolina Constitution.
1997: The General Assembly creates the Civil Penalty and Forfeiture Fund and declares that all civil penalties collected by State agencies should be paid into the fund to be used exclusively for school technology. However, some State agencies take the position that certain penalties do not qualify. Based on this interpretation, several types of civil fines are collected but not deposited into the fund for school technology.
1998: The North Carolina School Boards Association (NCSBA) and 20 individual school boards file suit against the State to recover the monies withheld and diverted elsewhere by seven State agencies.
2005: The N.C. Supreme Court unanimously upholds lower court rulings in favor of the plaintiffs (school boards) that most of the withheld monies owed to public schools were diverted to other purposes in violation of the N.C. Constitution. The case is remanded to Superior Court to determine how much the State entities owe in withheld civil fines.
2005-2008: Both sides and Superior Court Judge Howard Manning repeatedly meet to determine if the two parties can reach a settlement.
2008: Judge Manning enters an order – based on information provided by the defendants – that civil penalties collected by State agencies between January 1996 and June 2005 and not shared with public schools amounts to more than $747 million. He also orders that it be designated for school technology. Judge Manning does not give the State a payment deadline but states that “satisfaction will depend on the manner in which the General Assembly elects to carry out its constitutional duty.”
2009: Lawmakers direct $18.1 million in parking fines held in escrow by the UNC system to go into the civil penalty fund.
2009-2018: Legislation to address the court judgment is introduced in 2009-10, 2011-12, 2013-14, 2015-16, and 2017-18. One of the bills passes one chamber. None become law.
2019: A consent order is entered to extend the enforceability of the existing $729.7 million unpaid 2008 court judgment to prevent it from expiring. Both sides agree to the amount still owed.