NC H1035

Creates new requirement that non-state entities receiving more than $100,000 in state funds annually must deposit funds into interest-bearing accounts, with earned interest classified as state funds usable only for grant-specified purposes.

Allows non-state entities receiving $100,000 or less annually to voluntarily deposit funds in interest-bearing accounts under the same restrictions on interest use.

Permits non-state entities to use up to $250 annually from interest earnings to cover administrative costs directly related to holding state funds.

Requires all state grants to have a two-year duration (unless grant agreement specifies otherwise) after which unspent funds must be returned to the state.

Strengthens enforcement by requiring the Budget Director to report violations to the Attorney General and authorizing suspension, withholding, or recovery of state funds from non-compliant entities that knowingly or willfully fail to submit required information or falsify reports.